NOVEMBER 10, 1905
The Commoner.
9
"BUSINESS ETHICS" DOES NOT SPELL "ROBBERY
J
Among tho comments on the disclosures con
cerning the management of insurance companies
in New York, none is more entertaining than that
made in "Public Opinion" of September 23.
"Public Opinion" says that these practices "ap
pear devious if not technically illegal." Then it
Bays:
The truth is that modern business has
developed so rapidly on the practical side
that our ethical code has not been able to
keep paco with it. Business men have seen
plainly enough the advantage of pursuing
this or that policy, but since they are better
trained in "doing" than in thinking, they have
not correlated their newer methods with tho
general conceptions of what is best for man
kind as a whole. In modern business on a
large scale the effects of financial operations
are taken account of rather in their rela
tions to companies, corporations, or general
business than in their relations to individuals.
Hence ethical considerations which are per
fectly plain where individuals are concerned
have often 'been lost sight of. There has
been a confusionof thought about these ques
tions. The confusion has been worse con
founded by men who, having a glimmer of
the true relations of things, have preferred
the material bliss of continued ignorance to
the personal consequences that might come
from squarely facing the situation. It is time
for clear thinking. Business ethics must go
through a process of readjustment to new
conditions.
It is absurd to say as "Public Opinion" does
Jn effect say that it is possible for men to
be so busy that they forget to be honest, or that
an increase in the volume or range of business
necessarily means a decrease in the size of the
business man's conscience. The practices ex
posed in the insurance inquiry do not represent
business; they do not represent the development
of commerce. They come under the head of
larceny larceny on a large scale, to be sure,
but larceny nevertheless. In these insurance
company transactions the "effects of financial
operations?' vere taken account of "in their re
lations to the individual," and the men who en
gineered the deals saw to it that the money
went into the pockets of the preferred individuals.
These men were not indulging in "tho material
bliss of continued ignorance." They had for
many years exercised control over United States
senators and members of the house of repre
sentatives; they had exercised control over law
makers, courts and executives, and in several
presidential campaigns, posing as champions of
the national honor and as defenders of the busi
ness interests of the country, they aided very
materially in pulling tho wool over tho eyes of
tho majority of tho American people. They
thought they were licensed to proy upon the help
less people whose money was entrusted to their
care, and even now, in tho face of all tho serious
revelations concerning tho dishonesty of theso
men, some people are greatly offended when it
is suggested that they bo taken to the crim
inal courts to answer for their crimes. Indeed,
some object to the demand made by policyholders
that Mr. McCall retire from his position as presi
dent of his company, while others protest when
it is suggested that Chauncoy M. Depew sur
render his commission as a member of the United
States senate.
"Public Opinion" is mistaken if it believes
that business ethics must go through a process
of readjustment. There are hundreds of thou
sands of successful business men all over this
world today who could not be Induced under any
circumstances to engage in tho dishonorable
practices pursued by those valiant contributors
to republican campaign funds.
"Deal honestly, hurt nobody, and give every
one his just due" that Is descriptive of business
ethics as we were taught It at the mother's knee,
as we learned it from the honest merchant in
the counting room or as it is understood by the
men in all vocations of life and tho thief on the
highway as well as the robber in insurance cir
cles, understands the rule.
When an officer of the Mercantile Trust com
pany, wrote to the Equitable and asked for
$600,000, and then tho same man as an officer of
the Equitable signed checks paying the money
to the Mercantile Trust company that was not
business ethics. It was one of tho worst cases
of frenzied finance.
When Chauncey M. Depew drew from the
Equitable society a salary of twenty thousand
dollars a year, ostensibly as an "attorney," but
in reality as a participant in the "divide," and
when that $250,000 loan was made on the Depew
town lots, that was not business ethics. It was
so far removed from business ethics that Mr.
Depew should long ago have been driven from
the United States senate.
Directors of an insuranco company paid
$80,000 for two old corporation ' charters. Or
ganizing upon these charters two trust companies
they issued stock and sold nearly one-third of this
stock to their insurance company at five times
its par value. That was not In line with busi
ness ethics. It was plain stealing.
Directors of several of these insurance com
panies used their policyholders money to or
ganize syndicates, and paying over these trust
funds to subsidiary companies they reaped an
enormous profit at the expense of the policy
holders. There was no business ethics about
that It was robbery on a largo scalo.
Tho prcsldont of ono of these Insuranco com
panies testified tbat ho had paid $100,000 of tho
policyhblders' money to ono Androw Hamilton,
and was unable to give any account as to tho dis
position of tho money. No business ethics there.
Simply, in polito terms, tho misappropriation o
other people's money.
Tho president of one of those companies testi
fied that ho paid tho republican national com
mittee In three presidential campaigns nearly
$150,000. This money belonged to the. policy
holders, many of whom were not in sympathy
with the republican party. This unauthorized
use of tho policyholders' money was not In lino
with business ethics. It was characteristic of tho
highwayman who requires his victim to stand
and deliver.
Tho president of an insuranco company paid
out of his policyholders' money $320,000 for tho
purpose of compensating a trust company for
the loss it lind sustained In a certain speculation.
Every one knows that that was not in line with
business ethics. Who will say it was not plain
theft.
It has been shown that one of those insur
ance companies used policyholders' money to en
gage in enormous speculations and then paid to
outsiders posing as brokers from one-half to two
thirds of tho profits. No ono will seriously claim
that that was in lino with business ethics, nnd
few will seriously deny that it was dishonesty.
Testimony before tho insurance commlttco
has disclosed that accounts and annual statements
of these insuranco companies havo been frequently
falsified in order that the public might bo de
ceived. Such falsification does not point to a
necessity for an Improvement In business ethics,
but suggests rather that somebody ought to bo
sent to tho penitentiary.
The revelations of tho iniquities which havo
for many years been indulged in by these frenzied
financiers are so serious that thoy call for prompt
and unequivocal condemnation rather than any
thing that may bo construed as an apology. Tho
highwayman who covers his victim with a pistol
and requires him to deliver property, the bur
glar who breaks into the dwelling house to tako
that which does not belong to him, tho pick
pocket who sneaks the valuables of his victim
these are handled without gloves. Why should
any more mercy bo shown tho well-dressed rascal
who robs the widows and orphans among his
policyholders of money with which to build up
gigantic syndicates, and then robs these widows
and orphans of more money for the benefit of a
political party that will shield him in his law
lessness all the time pretending that he is tho
protector of these helpless creatures rather thaij,
the despoiler of their hard-earned savings.
CONSTITUTION AND DECLARATION
The policies of this nation must be con
trolled by the principles upon which the nation
was founded if popular government is to sur
vive. Justice Matthews of the United States su
preme court, delivering an opinion which has
since been approvingly quoted by Justice Brewer
said:
"When we consider the nature and theory
of our institutions of government, the prin
ciples upon which they are supposed to rest
and reviewthe history of their development,
we are constrained to conclude that they
do not mean to leave room for the play and
action of purely personal and arbitrary
power. The first official action of the nation
declared the foundation of the government
in these words: 'We hold these truths to
bo self-evident, that all men are created
equal, that they are endowed by their creator
with certain unalienable rights, that among
these are life, liberty and the pursuit of
happiness.' While such declaration of prin
ciples may not have the force of organic
law, or be made the basis of Judical decision
as to the limits of right and duty, and while
in all cases reference must be had to the
organic law of the nation for such limits,
yet the latter is but ,the body and the letter,
of which the former is the thought and the
spirit. And it is always safe to read the
letter of the constitution in tne spirit of the
Declaration of Independence. No duty rests
more imperatively upon the courts than the
enforcement of those constitutional provisions
intended to secure that equality of rights
which is the foundation of free government."
The importance of linking together the Dec
laration of Independence and the constitution is
Bhown in recent American history. So long as
we read our constitution, frame our laws and
conform our executive action in accordance with
the spirit of the declaration every Individual and
every interest subject to United States jurisdic
tion is safe. There is danger when the two are
separated.
The republican party has separated the con
stitution from the declaration, and having weak
ened the structure to that extent has not hesi
tated to repudiate the constitution as it has re
pudiated the declaration. Every constitutional
paragraph that has conflicted with the purpose
of republican leaders has been violated. The
legislative powers granted exclusively to congress
have repeatedly been usurped by the executive.
In the face of an explicit prohibition In the con
stitution an export tax has been levied, and in
the arrangement of tariff duties preferences have
been given to one port over another. Treaties
have been undertaken by the executive alone,
and without the advice of the senate. The right
of trial by jury has been denied to the people
of our new possessions; and although our con
stitution declares that there shall be no slavery
in the United States or any place subject to their
jurisdiction, the republican party is responsible
for the agreement wherein it was provided that
on territory subject to United States jurisdic
tion territory over which the American flag
floated slaves should have the privilege of pur
chasing their freedom by "paying to tho master
the usual market price."
JJJ
PAUL MORTON'S PHILOSOPHY
We are told by Harper's Weekly that Edward
Lefevre asked Paul Morton, president of tho
Equitable Life Assurance society, "What is your
philosophy of life?" Mr. Morton replied: "Did
you ever hear the western advice, 'So live your
life each day that you can at any time, look any
damn man in the eyes and tell him to go to hell?'
That's my philosophy of life."
The ability to follow Paul Morton's philos
ophy does not necessarily imply upright conduct.
John A. McCall, George W. Perkins, Richard A.
McCurdy, and every one of these insurance mag
nates who have been converting to their own
use the money of their policyholders have, at
least by their conduct, giveri to their helpless
victims Paul Morton's more or less eloquent ad
monition. All the time they havo not only been "
able to "look any man in the eyes," but they
have actually pretended to have a monopoly up
on the patriotism and the integrity of the coun
try. Paul Morton's philosophy couched in Paul
Morton's choicest language Is very "fetching;"
but not every man who has Indulged In that phi
losophy Is possessed of Immaculate virtue.
Such philosophy is sometimes put forth
for the purpose of concealing dishonest schemes
already accomplished and in the hope of making
possible the plans of plunder for the future.
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