Part 2

In the mighty and blinding rush of that whirlwind of enterprise and achievement things were done--generally without any attempt at concealment, in the open light of day for everyone to behold--which would not accord with our present ethical and legal standards, and public opinion permitted them to be done.

To quote one instance out of many: Campaign contributions by corporations were a recognized and almost universal practice. The acceptance of such contributions did not shock the most tender political conscience. Now they are rightly forbidden, and what up to a few short years ago was not only not prohibited but sanctioned by the custom of a generation and more, is now made and considered a crime.

Then suddenly a mirror was held up by influences sufficiently powerful to cause the mad race to halt for a moment and to compel the concentrated attention of all the people. And that mirror clearly showed, perhaps it even magnified, the blemishes on that which it reflected.

With their recognition came stern insistence upon change, and very quickly the realization of that demand. That is the normal process of civilization in its march forward and upward.

And I claim that Finance has been as quick and willing as any other element in the community to discern the moral obligations of the new era brought about within the last ten years and to align itself on their side.

As soon as the meaning of the laws under which business was to be conducted had come to be reasonably defined, as soon as it became apparent that the latitude tacitly permitted during the pioneer period must end, finance fell into line with the new spirit and has kept in line.

I say this notwithstanding the various investigations that have since taken place, nearly all of which have dealt with incidents that occurred several years ago.

And in this connection I would add that it is difficult to imagine anything more unfair than the theory and method of these investigations as all too frequently conducted.

The appeal all too often is to the gallery, hungry for sensation; the method--to wash as much soiled linen as possible in public (even, if necessary, to make clean linen appear soiled), and to use a profusion of soap and water quite out of proportion to the actual cleaning to be done.

To innocent transactions it is sought to give a sinister meaning; what lapses, faults or wrongs may be discovered are given exaggerated portent and significance.

The Chairman is out to make a record, or to fortify a preconceived notion or accomplish a preconceived purpose.

Counsel is out to make a record. The principal witnesses are placed in the position of defendants at the bar without being protected by any of the safeguards which are thrown around defendants in a court of law.

To complete the picture, I must--saving your presence--add this other patch of black: The reporting is very frequently, if not generally, done by young men not very familiar with matters of finance and in search of incident and of high light rather than of the neutral tints of a sober and even record; and the job of headlining seems somehow to be entrusted always to a mortal enemy of the particular witnesses of each session, selected with great care for his ingenuity in compressing the maximum of poison gases into a few explosive words.

It may all be legitimate, according to political standards, but it is not justice, and what of benefit is accomplished could equally well be obtained, whatever of guilt is to be revealed could equally well and probably better be disclosed, without resorting to inflammatory appeal and without, by assault or innuendo, recklessly and often indiscriminately besmirching reputations and hurting before the whole world the good name of American business.

I do not know of any similar method and practice and spirit of conducting investigations in any other country.

By all means let us delve deep wherever we have reason to suspect that guilt lies buried. Let us take short cuts to arrive at the truth, but let us be sure that it is the truth that we shall meet at the end of our road, and not a mongrel thing wearing some of the garments of truth, but some others, too, belonging to that trinity of unlovely sisters, passion, prejudice and self-seeking.

III

In many ways, in many instances, wrong impressions about finance have been given to the public, sometimes from ignorance, sometimes with malice aforethought, sometimes for political purposes.

The fact is that the men in charge of our financial affairs are, and to be successful, must be every whit as honorable, as patriotic, as right thinking, as anxious for the good opinions of their fellowmen as those in other walks of life.

In every time of crisis or difficulty in the nation's history, from the War of Independence to the present European War, financiers have given striking proof of their devotion of the public weal, and they may be depended upon to do so whenever and howsoever called upon.

American finance has rendered immense services to the country, and its record--considering especially the gross faultiness of the laws under which it had to work before the passage of the Federal Reserve Act, and in some respects still has to work--compares by no means unfavorably with that of finance in Europe.

There has been no gambling frenzy in the financial markets of America within the memory of this generation equalling the recklessness and magnitude of England's South African mining craze with its record of questionable episodes, some of them involving great names; no scandal comparable to the Panama scandal, the copper collapse, the Cronier failure, and similar events in France; no bank failure as disgraceful and ruinous as that of the Leipziger Bank and two or three others within the last dozen years in Germany. No combination exists in this country remotely approaching the monopolistic control exercised by several of the so-called cartels and syndicates of Europe.

One of the reasons why finance so frequently has been the target for popular attack is that it deals with the tangible expression of wealth, and in the popular mind pre-eminently personifies wealth, and is widely looked upon as an easy way to acquire wealth without adequate service.

Yet it is a fact that there are very few financial houses of great wealth. All of the very greatest fortunes of the country, and in fact most of the great fortunes, have been made, not in finance, but in trade, industries and inventions.

A similar exaggerated view prevails as to the power of finance.

It is true there have been men in finance from time to time, though very rarely indeed, who did exercise exceedingly great power, such as, in our generation, the late J. P. Morgan and E. H. Harriman.

But the power of those men rested not in their being financiers, but in the compelling force of their unique personalities. They were born leaders of men and they would have been acknowledged leaders and exercised the power of such leadership in whatever walk of life they might have selected as theirs.

As I have said before, the capacity of the financier is dependent upon the confidence of the financial community and the investing public, just as the capacity of the banks is dependent upon the confidence of the depositing public. Take away confidence and what remains is only that limited degree of power or influence which mere wealth may give.