COLLECTION RATING Percentage of money outstanding at the end of January, 1909, to the total amount of the bills rendered subscribers for the month, and percentage of number of unpaid accounts at the end of January to the number of accounts. THE PACIFIC TELEPHONE MAGAZINE Volume 2. APRIL, 1909 The Other Side Number 10 During the past few years criticism has been rampant in connection with corporations and corporation management. It is true that in some instances investigation has disclosed irregularities deserving of prompt and effective correction, but as yet it has been found impossible to eliminate the weaknesses of human nature either in individual or corporate activities. The thoughtless, reader who has formed his opinions from the headlines of yellow newspapers has possibly come to a belief that a few individuals in the financial world, through combination and unscrupulous methods, are forging shackles of industrial serfdom for all time upon "the people." The sensational space writer, the muck-raker and the politician with his affection for "the people," can certainly claim a degree of doubtful satisfaction in that they have brought about certain results, and it is well to consider who has been affected thereby. The corporation has been found to be the most convenient form of business arrangement. Results are possible under combination which cannot be otherwise attained. Shareholders, busy in their own limited spheres of action, must of necessity entrust the investment of their accumulations to others. Two and onehalf million investors own the corporations of America. One-half the workers of this country whose compensation is received in the form of wages or salaries draw these incomes through organ 4 ized industries. The close competition of the business world, the demand for executive ability and economy of management render necessary a centralization of control, but statistics show that this means anything but a centralization of ownership. The so-called steel trust now distributes dividends to 110,000 investors, 27,000 of these being added in the panic year of 1907. The stockholders of the Pennsylvania Railroad increased in four years from 42,000 to 60,000. Seven large railroads of the country having 92,000 shareholders in 1904 have increased this number to 152,000, a gain of 65 per cent. Approximately 3000 additional stockholders have become partners in the operations of the American Telephone and Telegraph Company during the past year, there being now 26,370 shareholders with an average holding of 60 shares each. How often have we been told that this Company is a "Boston affair," controlled by a financial coterie of that city, but the truth is that while there are a few heavy stockholders, mostly New Englanders, their combined holdings are only one-tenth as large as those of the other 26,000 investors in There are over the Company's stock. 70,000 stockholders in the entire Bell system. It is estimated that the ownership of the banks of this country is divided among 400,000 shareholders. Through the life insurance companies. with their millions of policy holders and the banks with their millions of depositors, it is a safe assumption that over 15,000,000 people, not directly interested in corporate securities, are indirect participants in corporation profits on account of the investment of savings in these securities, which represent for the most part the accumulations of individual self-denial, thrift and enterprise, and which in great degree constitute the protection of the helpless and dependent. It is the corporation which goes forward in the new country, and villages, homes, churches, schoolhouses and new forms of employment follow. It is well to remember that corporations cannot carry out great improvements without the sale of their stock and bonds. Earnings are not sufficient for extensions of magnitude. Capital is timid and in the face of reckless or ill-considered legislative interference, actual or threatened, will avoid these securities. Continuous agitation retards development and removes iniative. Depression and idleness follow. Mr. Theodore P. Shonts is authority for the statement that contemplated improvements in railroad work involving the expenditure of hundreds of millions of dollars have been recently abandoned on account of the spirit which seems to have taken possession of those whose duty it is to carefully consider proposed legislation. Men will not undertake tasks involving ability, enterprise, resource and patience when at the end they have nothing to expect but harsh treatment thinly disguised as “regulation" amounting oftentimes to practical confiscation. There is no opposition. to such regulation as the public welfare may require, but regulation should also mean protection of legitimate operations. It should not be a cloak for unwarranted legislative action which assumes that enterprise and the possession of property are crimes, and which in truth is but the reflection of the whims and jealousies of the envious, the lazy and the discontented. Publicity and not concealment is the policy of the intelligently managed corporation. The average citizen who gains his livelihood through the corporation or industries dependent upon its prosperity, or, being an indirect beneficiary from its operations, joins in the unthinking criticism of the ignorant or malicious, is in the same category as that intelligent individual who seated on the limb of the tree, sawed it off between himself and the trunk. The policy of this Company in connection with the ideas herein suggested is set forth as follows in a late statement |