Financial Legislation and its Limitations. 



25 



tion by regulation of the form of business, rather than (what is 

 the manifest duty of legislation) by the simplifying, expediting, 

 and sharpening of remedies between man and man for wrong- 

 doing. Democratic tenderness at the possibility of ofifending a 

 citizen who is a voter, has played its part in this misdirected law- 

 giving, which has erected in the corporation a man of straw who 

 can be clubbed when evil occurs. Thereby the sense of justice is 

 sought to be appeased, for the moment, at least, under the 

 erroneous impression that a transgressor has been punished. 



The object of legislation should be to recognize a clear dis- 

 tinction between organisation for the purposes of production, on 

 the one hand, and individual responsibility on the other. The 

 former should not be allowed to interfere with or to obscure the 

 latter. The fact that stockholder's responsibility is qualified 

 should not destroy the amount of personal responsibility to be 

 located somewhere in connection with an enterprise. Some one 

 must always be found who completes the full original amount. 

 Apparently, the proper person is the corporation officer. In case 

 he has small pecuniary interest in the concern and possesses no 

 other attainable property, obviously the only way of enforcing 

 responsibility is by criminal process against the person. No 

 organization for production should be allowed to stand between 

 the wrongdoer and his punishment. The official who loots the 

 stockholders through the fiction of a corporation, unearned ser- 

 vices, or a construction company or similar misuse of the purposes 

 of the corporation form, should not be protected. The capitalist 

 who sets up directors of straw should be considered to have done 

 whatever they do. The courts have heretofore assumed a weak 

 attitude toward evil-doers of this stripe, not because they were 

 blind to the offense, but because they could not see their way 

 out of the corporation legislation, for the fiction of a corporate 

 person or entity has very naturally, in the minds of men of the 

 legal profession, overshadowed the plain economic undertaking, 

 which is unthinkable unless located in natural persons. If, how- 

 ever, they had recognized from the first, that incorporation zi^as 

 primarily for the purpose of production, and that, zvhen it comes 

 to a question of responsibility for zurongdoing (a department of 



139 



but it is open 

 to question 

 whether suffi- 

 cient effort 

 has been 

 made to hold 

 the individ- 

 uals economic- 

 ally responsi- 

 ble, up to the 

 highest ideals 

 of trustee- 

 ship. 



