Free company

“ These twenty-four gentlemen administer that corporation as if it belonged to them. The amazing thing to me is that the people of the United States have not seen that the administration of a great business like that is not a private affair; it is a public affair.
I have been told by a great many men that the idea I have, that by restoring competition you can restore industrial freedom, is based upon a failure to observe the actual happenings of the last decades in this country; because, they say, it is just free competition that has made it possible for the big to crush the little. ”

“ The practice of permitting the free holding of stock by corporations, and especially by holding corporations, has been undoubtedly harmful to the public, and to the public morals, and has been the main cause making possible the speedy acquisition of immense private fortunes. ”

“ In discussing this theme, we must not make an indiscriminate attack upon corporations. The corporation limited to its proper uses is one of the most valuable of the many useful creations of law. One class of corporations has played a most important and conspicuous part in securing the liberties of mankind. It was the municipal corporations—the free cities and chartered towns—that preserved and developed the spirit of freedom during the darkness of the Middle Ages, and powerfully aided in the overthrow of the feudal system. ”

“ But it is said, that if the doctrine contended for be not true, then every grant to a corporation becomes, ipso facto, a monopoly or exclusive privilege. The grant of a bank, or of an insurance company, or of a manufacturing company, becomes a monopoly, and excludes all injurious competition. ”

“ An artificial person of this sort is now recognized under most systems of law. It can be formed, as a rule, only with the consent of the sovereign power, and is described as a 'societe,' or 'compagnie,' 'anonyme,' an 'Actiengesellschaft,' or 'joint-stock company limited.' A less pure form of such a corporation is a company the shareholders in which incur an unlimited personal liability. ”

“ The advantages incident to the position of a freeman of the Company consist of the eligibility to participate in the various charitable funds held by the Company in trust for their members, and to become liverymen of the Company. ”

“ The decision, freeing the Corporation from the stigma of illegality and, by inference, endorsing its policies, left the big company at liberty to develop and expand within the legitimate lines it had always followed. ”

“ The field for business enterprise has been open to individuals, partnerships, and corporations; they have entered it fearlessly, and a free-for-all competition has resulted. This free action is in process of being repressed by chartered bodies of capitalists, the great corporations, whom the law still treats [Pg 377] somewhat as though in its collective entirety each one were an individual. They are building up a semi-public power—a quasi-state within the general state—and besides vitiating the action of economic laws, are perverting governments. ”

“ Although the value of this instrumentality in commerce and industry was fully recognized, incorporation for business was commonly denied long after it had been freely granted for religious, educational, and charitable purposes. [2] by corporations. So at first the corporate of encroachment upon the liberties and opportunities of the individual. Fear of the subjection of labor to capital. Fear of monopoly. Fear that the absorption of capital by corporations, and their perpetual life, might bring evils similar to those which attended mortmain. ”

“ There is nothing to interfere, even indirectly, with the liberty of the corporation in dealing with its employee, beyond giving him, instead of what formerly was called a 'reference' or 'character,' a brief statement of his service with the company according to the truth, a word of introduction, to be his credentials, where otherwise the opportunity of future employment easily might be barred or impeded. ”

“ The workman must at all times, be "free to sell his services in the open market," and the employer must be equally "free" to conduct his business as he saw fit. The days of the Mercantile System, when the state had regulated the industrial life of the entire community, were coming to an end. ”

“ The Growing Field of Action by Corporations.—Until recently there has been comparatively little production in the hands of corporations great enough to be exempt from the same economic laws which apply to a blacksmith, a carpenter, or a tailor. Individual enterprise and generally free competition have prevailed. The state has not checked them and the great aggregations of capital to which we give the name "trusts" have not, in this earlier period, been present in force enough to check them. ”

“ The argument supposes the corporation to have been originated for the management of an individual concern, to be founded upon contract between individuals, having private trade and private profit for its great end and principal object. ”

“ It cannot even hold its glebe tenaciously enough to prevent the freehold falling into abeyance whenever a parson dies.
When we turn from this mere ghost of a fiction to a true corporation, a corporation aggregate, surely the main phenomenon that requires explanation, that sets us talking of personality and, it may be, of fictitious personality, is this, that we can conceive and do conceive that legal transactions, or acts in the law, can take place and do often take place between the corporation of the one part and some or all of the corporators of the other part. ”

“ It should not be forgotten that the agent of a private company is also a representative of that larger and more powerful corporation which we call the state. The private company can do no more than outline his duty and discharge him for dereliction; the public corporation not only prescribes his duty but imprisons or hangs him for neglect; the private company is itself but a creation of the state which exercises over it autocratic power while shirking responsibility. ”

“ It is to prevent this reduction of price, and consequently of wages and profit, by restraining that free competition which would most certainly occasion it, that all corporations, and the greater part of corporation laws, have been established. In order to erect a corporation, no other authority in ancient times was requisite, in many parts of Europe, but that of the town-corporate in which it was established. ”

“ We see, then, what this company ought to be, what any corporation ought to be: a concern that is square, and always on the level, with every man doing his part. You do not need to take my word for it, you see from the illustration of the table that the interest of every man is sacrificed when any other principle governs. ”

“ On the one hand, the approved methods of corporation finance may in some measure be resorted to by a private firm, Without formal conversion of the concern into the corporate form; and on the other hand, an incorporated company may continue to carry on its business after the manner usual with privately owned concerns. ”

“ Its creation (except where the corporation is sole) is the investing of two or more persons with the capacity to act as a single individual, with a common name, and the privilege of succession in its members without dissolution, and with a limited individual liability. The right and privilege, or the franchise, as it may be termed, of being a corporation, is of great value to its members, and is considered as property separate and distinct from the property which the corporation itself may acquire. ”

“ The Consolidated Companies considers itself bound to use franchise privileges and corporate organization for the equal benefit of all those who contribute of their capital, with due regard for those public interests which corporations are created to serve, and to rest content with a fair return upon its own capital and a reasonable compensation for their services, on the part of the officers of the enterprises of which it assumes the responsibility and direction. ”

“ There is no manager of a corporation who knows his business and is fit for his place who will not sooner lose millions in resisting a strike than save something in yielding to one.” — “All mercantile corporations (including railroad and telegraph companies) exist for the purpose of making profits; to impose upon them conditions incompatible with profits is to convert them, against the will of their members, into philanthropic organizations — something which neither law nor public opinion has any right to do.” ”

“ The typical business corporation of the last century, owned by a small group of individuals, managed by their owners, and limited in size by their personal wealth, is being supplanted by huge concerns in which the lives of tens or hundreds of thousands of employees and the property of tens or hundreds of thousands of investors are subjected, through the corporate mechanism, to the control of a few men. ”

“ In America there are very few corporations which have private visitors, and, in the absence of such, the state is the visitor of all corporations.'
In no case or authority that we have been able to find has there been a definition of this right which would include the private right of the shareholder to have an examination of the business in which he is interested, and the right of discovery of the methods and means by which the agents of the corporation are conducting its affairs. ”

“ In other words, a corporate franchise has no reason for being, except as it is in effect a pledge on the part of the corporation to do a public service to the greater advantage of the public than could otherwise be secured. Any theory of corporations, or of contracts smuggled into the doctrine of corporations, which denies to the public the right to get itself better served by adjustment of claims and termination of contract and franchise, is fiction for the gullible. ”

“ The relations between the employer and the employed, between the owners of aggregated capital and the units of organized labor, between the small producer, the small trader, the consumer, and the great transporting and manufacturing and distributing agencies, all present new questions for the solution of which the old reliance upon the free action of individual wills appears quite inadequate. ”

“ That among the consumers' societies there are many which do not set themselves out to increase their members' incomes, but simply aim at selling at a low price, or have one of the various other aims which we shall consider later ; That among the three million co-operators there are many who are only co-operators in name, and, since they never go to the shop, obtain no bonus. It is the nature and honour of free social institutions that they can be useful only to those who wish and know how to use them, and they cannot be asked to give their services to those who do not want them. ”

“ The legal fiction of a soulless corporation is the expression of a biting social fact. The corporation has no soul. It has no heart. It is only a brain and a muscular, grasping hand.
And so it is that in dealing with employés and in dealing with the public our corporations are in fact too often a tyranny remorseless as that against which our fathers rebelled in 1776. ”

“ A corporation without shareholders, without officers to manage its business, without property with which to do business, and without the right lawfully to do business, is dissolved by the operation of the law which brings this condition into existence. ”

“ A further word should be given to the origin of the business corporation, an almost accidental event, which has affected the world of trade and affairs more than the invention of printing, of the bill of exchange, and the Law Merchant combined. It would have been perfectly possible for the world to get on and do business without the modern corporation—without the invention of a fictitious person clothed with the enormously powerful attributes of immortality and irresponsibility. ”

“ In England we are within a measurable distance of the statement that the only persons known to our law are men and certain organized groups of men which are known as corporations aggregate. Could we make that statement, then we might discuss the question whether the organized group of men has not a will of its own-a real, not a fictitious, will of its own-which is really distinct from the several wills of its members. As it is, however, the corporation sole stops, or seems to stop, the way. It prejudices us in favour of the Fiction Theory. ”

“ For instance, no one would dare to assume personal responsibility for the debts of a railroad, nor could such an enterprise be managed if every transfer of interest dissolved the company. The desired limitation of responsibility and facility of transfer of interest are secured by the formation of corporations. ”

“ Or it might grant the privilege to private corporations whose shares are owned mainly by those who manage them and to corporations engaged in co-operative undertakings, while denying the privilege to other concerns called private, but whose shares are listed on a stock exchange-corporations financed by the public, largely through the aid of investment bankers. ”

“ Business of all sorts is now to a great extent carried on in the name of corporations, in order that the proprietors may escape personal responsibility. How can the individual, who is personally responsible for his contracts, successfully compete with a corporation run by persons who incur no such responsibility? ”

“ For, independently of the many serious and insurmountable objections, which its own conduct has furnished, it cannot be supposed that the grant to this corporation of exclusive privileges, at the expense of the rest of the community, for twenty years, can give it a right to demand the still further enjoyment of its profitable monopoly. ”