Main Street and Wall Street

A Blessed Companion Is a Book.

by W. Z. Ripley. Boston: Little, Brown & Co. 1927. Large 12mo. xiii+351 pp. $2.50. An Atlantic Monthly Press Publication.
SEVENTEEN years ago Woodrow Wilson wrote an address on the theme that we have witnessed in modern business the submergence of the individual within the organization, and yet the increase, to an extraordinary degree, of the power of the individual who happens to control the organization. Now, Professor Ripley has written a book on the same subject, and has included the Wilson paper as its first chapter. When that paper was presented in 1910 it caught the momentary attention of a restricted group of earnest listeners, and then promptly became lost in the files of the printed proceedings of the meeting.
The Ripley book is certainly no better written than the Wilson paper, nor is its author more distinguished, nor is the theme more timely now than it was then, but the book will not soon drop out of sight or be forgotten. It is eminently readable. The author names names and gives dates. He vigorously denounces well-known corporations. His style ranges from lively to lurid, and from vivid to vicious.
Professor Ripley is a successful moral crusader, and he has all the keen insight into the mental processes of the normal man which that implies. There are probably at the present time some three million persons in this country who own corporate securities, and hence sometimes buy and sell them. Broadly speaking, no one of them ever bought or sold as advantageously as he might have done, and most of them have more than once felt aggrieved because of losses sustained or of failure to realize possible profits. Such disappointments are major or minor calamities, and where human agency is involved the causes of calamity are delusively obvious. Professor Ripley brings comfort by pointing out the culprits and vigorously scourging them with harsh adjectives, and a considerable number of the three million will buy his book to enjoy watching him do it.
Five major campaigns are waged in the volume. One is against nonvoting stock which may result in disfranchising the stockholders and vesting all real control in the hands of a few insiders. Another is against the issuance of non-par stock which may be the cause of misleading inferences as to the true value of the assets of the company. A rather less militant attack is made against the growth and financial structure of public utility holding companies. The fourth campaign is a mighty one directed against the charter-mongering practices of state governments which grant progressively excessive power and privilege to corporations. Finally attack is made against the inadequate and sometimes misleading reporting to the public of the facts about the assets, operations, and profits of business concerns.
Much attention is given to suggested remedies, including pitiless publicity in corporation reporting. supervised perhaps by the Federal Trade Commission, the general stiffening of corporation laws through Federal action, and the creation of a system of checks and balances in corporate management by instituting new groups of outsiders to keep a continuing cheek on the administration of the insiders.
The suggested remedies will be much criticized, as such suggestions always are. In the very nature of the case, they constitute the most vulnerable features of this stimulating book. It Is perhaps fair to make the comment that the constructive and remedial suggestions do not appear to have much relation to the long history of impressive improvement that has taken place in the management of corporations in America. This book is in reality only a new and different installment in the continuous stream of complaint against corporation management that has been going on in this country for more than a century.
A hundred years ago corporations were under attack as being inherently vicious. At the time of the Civil War it was commonly believed that most corporations were frauds, and the business records of that time go far to substantiate the belief. As recently as thirty years ago responsible business periodicals were still printing editorials deploring the admission to trading on the stock exchange of the shares of industrial companies, because it was argued that such securities were merely snares to trap the unwary. Such conditions are no longer general. A great and continuous improvement in corporate responsibility and morality has taken place. One might wish that Professor Ripley had told us why it has taken place, and whether or not presently applicable lessons can be learned from studying the process.
LEONARD P. AYRES