Corporations Externalizing Machines

Roosevelt persuaded Congress to create a Bureau of Corporations to investigate and regulate big business, then brought an anti-trust suit against J.P. Morgan's Northern Securities Company, a railroad trust controlled by the Wall Street financier, with the United States Supreme Court upholding the closure of the trust in the case of Northern Securities Co. v. United States issued in 1904. During Roosevelt's Administration, over 40 major corporations were sued for antitrust or price-fixing violations. Roosevelt greatly expanded the powers of the government within the economy, often by endorsing new power for organized labor to organize and put forth leverage against employers. By supporting labor in the settlement of the Anthracite Coal Strike of 1902, Roosevelt became the first president to assume such a direct role in intervening in labor disputes, including the threatened use of the U.S. Army to seize the coal mines and operate them until the owners agreed to arbitration to settle the strike. Rosevelt unlike many of his successors really took advantage of the power given to him as president. During his presidency he revived the Sherman Antitrust Act ,which was an act that sought to prevent companies from combining into trusts and gaining monopolies. Roosevelt was also one to enforce the Hepburn Act, which allowed the Interstate Commmerce Commission to regulate railroads. The railroads had allied themselves with large

This essay will explain the concepts of separate personality and limited liability and their significance in company law. The principle of separate personality is defined in the Companies Act 2006(CA) ; “subscribers to the memorandum, together with such other persons as may from time to time become members of the company are a body corporate by the name contained in memorandum.” This essentially means that a company is a separate legal personality to its members and therefore can itself be sued and enter into contracts. This theory was birthed into company law through the case of Salomon v Salomon and Co LTD 1872. This case involved a company entering liquidation and the unsecured creditors not being able to claim assets to compensate them. The issue in this case was whether Mr Salomon owed the money or the company did. In the end, the House of Lords held that the company was not an agent of Mr Salomon and so the debts were that of the company thus creating the “corporate Veil” .

When Woodrow Wilson was inaugurated in 1913, he stated in his address that, “We shall deal with our economic system as it is and as it may be modified, not as it might be if we had a clean sheet of paper to write upon” (First Inaugural Address, online). He did just that when he passed the Clayton Antitrust Act in October 1914. The Sherman Antitrust Act was passed in 1890, but it was very vague in the way it described monopolies (Clayton Antitrust Act, online). Big business took advantage of the loopholes, which diminished competition (Clayton Antitrust Act, online). Although Roosevelt and Taft successfully busted about 150 trusts, big businesses continued to grow and our entire economic system remained in the hands of a few men (Taft Biography, online; T. Roosevelt – Section 8, online; Clayton Antitrust, online). Wilson requested Congress to modify the Sherman Antitrust Act, and the Clayton Antitrust Act was born (Clayton Antitrust, online). It is “An Act To supplement existing laws against unlawful restraints and monopolies, and for other purposes” (HR 15657, online). The Sherman Act simply declared monopolies illegal, while the Clayton Act declared activities linked with monopolies to be illegal (Clayton Antitrust Act, online). Such activities include mergers and acquisitions that are intended “substantially to lessen competition, or to tend to create a monopoly” (HR 15657, online). The Federal Trade Commission Act, passed about a month before the Clayton Act, banned

Recovering from the Gilded Age and the abundance of corruption, the Progressive era Presidents had to satisfy American whose feelings toward government were bitter. In order to separate themselves from the past presidents, Roosevelt, Taft and Wilson enacted many reforms in the areas of economics, politics, and most importantly social interaction that produced more successes that out weighed the limitations present at the time. The reforms created by the Progressive Era changed America into a more regulated and fair business environment. Prior to the 1900’s, America was run by “robber barons” or wealthy capitalist that used the law to knock out competitions. Many big companies used laws such as the Sherman Anti- Trust Act to take down labor

Reformer Ida B. Tarbell was a muckracker who wrote for McClure’s Magazine in the 1920s. As a muckracker, Tarbell would bring to light issues affected the American people. More specifically, in her “History of the Standard Oil Company”, Tarbell documented how Rockefeller ruthlessly squeezed out competitors with unfair business practices. With Tarbell’s writings, the middle class was able to respond with great moral exhortation. In addition Tarbell exposed the corruption of these companies such as Rockefeller’s oil company to a large audience of citizens and placed politicians under great duress to serve the interests of the people. For example, President Theodore Roosevelt fought to end the trusts and was known as a “trust buster” (Doc. A). Roosevelt was adamant about getting rid of the bad trusts and keeping the “good trusts”. In 1890, Congress passed the Sherman Antitrust Act in an attempt to break up massive monopolies dominating the American economy. The Sherman Antitrust Act was unsuccessful because it did not include a method of enforcement; however that was not the last attempt to bring about an end to bad trusts. In 1914, President Wilson gained passage of the Clayton Antitrust Act. This act was more strict than that of the Sherman Antitrust Act barring companies from creating a monopoly on products (Doc. E). President Wilson was ultimately successful in the passage of

In 1907, an economic/political reform cartoon was printed in the Washington Post. It illustrates Teddy Roosevelt holding a rifle while attacking bad trusts. TR was also known as the “trust-buster”. This cartoon demonstrates the bad trusts are a threat to society, and the government must be more powerful than big businesses. In 1914, the Clayton Antitrust Act was developed, “ That it should be unlawful for any person engaged in commerce, in the course of such commerce , either directly or indirectly to discriminate in price..( Document E)” This document price discrimination is unlawful, and monopolies were illegal. It also infers that conflict of interest was an issue as well, and shouldn’t be allowed because it caused greater

“We demand that big business give the people a square deal; in return we must insist that when any one engaged in big business honestly endeavors to do right he shall himself be given a square deal.” (Teddy Roosevelt). Teddy Roosevelt emphasized the fact that big business had not been giving its workers or its consumers a fair deal and that big business had been taking power away from the people. The Gilded Age began an era of big business that negatively affected the working class men, women and family. During the rise of big business the power between individuals started to greatly differ as the rich got more power and the poor got less, with the rich’s newly found wealth their trusts were able to control whole industries and finally the

The development of new technological advancements gave rise to cities and factories transforming our once agricultural society into an Industrial society full of opportunities. However, it wasn’t long before monopolies began to take over the American economy and forced consumers to pay high prices for items they utilized on a regular basis. For example, in 1884 Messrs. Vanderbilt, Sloan, and other owners of coal lands and coal railroads created a binding arrangement to fix prices, by preventing mining of coal in order to later increase their prices during the winter months (Lloyd 1). “A “trust” was a monopoly or cartel associated with the large corporations of the Gilded and Progressive Eras who entered into agreements—legal or otherwise—or consolidations to exercise exclusive control over a specific product or industry under the control of a single entity” (Andrew et al. 1). Two well-known monopolies were Andrew Carnegie’s Carnegie Steel and John D. Rockefeller’s Standard Oil Company, which controlled every aspect of business, so much so that they frequently inflated prices, bullied their rivals, and bribed politicians. It was clear trusts were exerting too much power over people’s lives, therefore, reformers were determined to take them down. Luckily for them, President Theodore Roosevelt strongly believed in government

In the post-Civil War United States, corporations grew significantly in numbers, size, and influence. This led to a drastic increase in the production of American goods, unskilled labor, and overall total amount of wealth in the United States. During this period known as the “Gilded Age”, the presence of big business resulted in in economic and social class divisions and widespread political corruption that led to the establishment of many political and economic organizations that wanted to reduce the influence of big business on America.

Theodore Roosevelt was a “trust buster” and strongly believed that monopolies should be broken up, and that competition was a good, healthy thing for the economy. Document 5 specifically talks about this. It is Teddy Roosevelt saying law should be made to “encourage corporations which do their honest duty” and “discriminate sharply against those organized in the spirit of mere greed”. The greedy few shouldn’t hold all the power. By creating laws to regulate businesses this also begs the question about how much the government should be involved in company’s affairs, which was a heated social topic. Roosevelt believed that the government should be the “referee” between business and the people. There also was the important establishment of the Federal Reserve System. The Federal Reserve System was essential the “banker’s bank”, and was used to regulate the money supply and stimulate the economy. The progressives also introduced the Progressive Income Tax, or 16th amendment. This allowed Congress to have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. The graduated income tax takes a higher percentage in tax as the amount of income increases. All these reforms helped stimulate the economy and helped the U.S. get rid of some of its

Nowadays, after the passing of several bills constraining the actions of corporations, acting in a similar manner would pose several legal and ethical issues. This is why, Freeman argues, this ancient idea of managerial capitalism is no longer effective.

In the book, The Corporation Joel Bakan presents arguments, that corporations are nothing but institutional pathological psychopaths that are “a dangerous possessor of the great power it wields over people and societies.” Their main responsibility is maximizing profit for their stockholders and ignoring the means to achieve this goal, portrays them as “psychopathic.” Bakan argues that, corporations are psychopaths, corporate social responsibility is illegal, and that corporations are able to manipulate anyone, even the government.

The principal motivation of corporate executives and decision makers for committing organizationally-based business crimes is pure greed, whether it be for the benefit of the company or individual. Two cases come to mind. The first is the Ford Pinto fiasco of the 1970s and 1980s. Ford has a gas tank design flaw in the pinto that caused many horrific burn deaths and injuries. Instead of fixing the problem, the leaders of Ford decided to take the cheaper way out and pay injury and death claims instead. Greed caused the company to spend $49.5 million instead of ethically spending $137 million to fix the flaw (Afflitto, 2015).

In the Encyclopaedia of White-Collar Crime, co-authors Jurg Gerber and Eric. L Jensen define corporate crime as “violations of federal or state laws that are committed by employees on behalf of the company rather than simply for their own gain.” The definition and classification of what falls under a corporate crime is highly problematic in that corporations can afford defence lawyers that can find loopholes in the legislation in order to avoid charges. Even more perplexing, is that “corporations define the laws under which they live” according to Russell Mokhiber report’s Top 100 Corporate Criminals of the Decade (1996) published in the Corporate Crime Reporter. Mokhiber introduces the example that “the automobile industry... has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and wilful

I have to say that this was a very intriguing video and makes you think. The message of the video appears to be that corporations are legal entity's created for the purpose of protecting the owners from liability. Also, a corporation has no integrity in nature, it has no capacity to form a conscience, as a result, freeing its owners from moral and/or ethical liability for its actions. The video reveals the obvious fact that the owners are obligated by stockholders to instruct the corporation to make as much money as legally possible, taking advantage of, if need be, the laws and labor forces within foreign nations that can provide a product at a cost that will produce the kind of profit desired. Wal-Mart, for example, seeks price and will