Apbil 9, 1909] 



SCIENCE 



565 



artificial and unscientific conception, say 

 in the greed of monopoly, and have vaunted 

 themselves with pride of power unbalanced 

 by the laws of nature, to that extent have 

 they implanted in them the seeds of eco- 

 nomic death. 



Darwin tells us that for survival two 

 factors are necessary — continuity of type 

 and adaptation to the conditions of exist- 

 ence. Now the work of science in the 

 world's evolution of the type of industry 

 which makes for the maximum general wel- 

 fare is to increase the degree of adaptabil- 

 ity so that the historic type may have the 

 greatest facility of adjustment to actual 

 and prospective needs. Size is the condi- 

 tion of survival. But size uncemented by 

 the scientific spirit, unchartered on the sea 

 of enterprise by the directing captaincy of 

 research, is either doomed to wreck or dry 

 rot. The rise of the corporation, in which 

 form free capital now seeks its widest in- 

 vestment, is the outcome of a search for a 

 type of industrial organization in which 

 the science of the laborato'ry and the sav- 

 ings of the people may be incorporated 

 under responsible management. 



FOUE CRITERIA OF CORPORATE SURVIVAL 



This brings me to the point of stating 

 the criteria of survival and development 

 to which the modern business corporation 

 must conform. For I think we all recog- 

 nize that, although under corporate form, 

 the western world has made unparalleled 

 progress in investment, still the main pur- 

 poses of investment, namely, personal 

 profit and popular well-being, will not, at 

 this stage of the world's democracy, con- 

 sent to sacrifice the latter wholly for the 

 former. The corporation will survive only 

 as it serves its function of economic prog- 

 ress, both by being a better producer of 

 wealth out of natural resources and by 

 being a better distributor of wealth, once 

 created, as a product of the unified re- 



sources of the community. In short, the 

 corporation as an investment institution 

 gathers into itself the surplus resources of 

 the people, on the at least implied promise 

 of bringing them better returns for its use 

 than they can win working alone. The 

 fulfillment of that obligation, whether re- 

 garded as moral or legal, is possible only 

 on condition that it meet to a reasonable 

 degree four distinct criteria of business 

 experience. 



Investment within each particular field 

 must no longer hazard the certainty of the 

 outcome on individual management di- 

 vorced from contact with those who 

 furnished the means necessary to bring 

 labor and capital together under respon- 

 sible control and cooperation. That busi- 

 ness management of entrusted capital may 

 enjoy the certitudes of regular returns it 

 must rest upon scientific, not individual, 

 foundations. Thus will investment of 

 popular savings be lifted out of the boggy 

 ways of speculative risks and be raised to 

 the level of demonstration. 



First of all, then, the type of investment 

 institution that will meet modern condi- 

 tions of existence must be scientific, in that 

 it must follow the path of demonstrated 

 safety as marked out by scientific research. 

 Secondly, the management of such an insti- 

 tution must be a respoisi'ble one, in the 

 sense of being morally and technically 

 aware of its rights, duties and possibilities. 

 Thirdly, under existing scarcity of capital 

 the world over, and with the prevailing 

 degree of dependence upon the compara- 

 tively small investor, the type of invest- 

 ment organization which prevails will have 

 to be popidar. It will have to appeal to 

 the confidence of the people effectively 

 enough to draw from them necessary cap- 

 ital, not only for initial investment, but for 

 subsequent doses for extension and de- 

 velopment. Fourthly and finally, it goes 

 without saying, that any investment agency 



