Chapter III: Corporations

In modern times the tyranny of the group is more oppressive than the tyranny of the individual and becomes more and more irresponsible. We all suffer from the arbitrary powers of the Trade Union as consolidated by the Trades Disputes Act, 1906, and of the limited company as built up by successive statutes since 1862. The Trade Union interferes with freedom of labour and contract, and the limited company system has fostered, and at the same time, protectively concealed the activities of the Trust. The ordinary member of a Trade Union has little power of controlling its policy and the ordinary shareholder would be surprised to learn that he was entitled to regard the director of a company as a trustee for the shareholders.

That a Trade Union should not be responsible for its torts or that a shareholder should have but a strictly limited liability for the enterprise in which he invests, may appear common sense to the ordinary mind. Nevertheless a stable society reposes on the general responsibility of individual citizens for their acts. The industrial conflict of to-day shows some recognition of all this. There are tendencies towards giving even the unskilled workers in joint stock enterprise some share both of profits and management, and this may even extend so far as to relegate the capitalist to the position of a debenture holder. Obviously, however, such a result would weaken the hold of the Trade Unions in so far as it promoted peaceful co-operation between capital and labour, and it would support the old-fashioned alliance between English law and individual liberty. Strikes do not occur in the legal profession because its position is established. The Trade Union of the future may very possibly be no more obviously militant than the Bar Council of the Law Society.

The successful working of smaller enterprises may often be more efficiently conducted by the machinery of limited partnership as provided by the Limited Partnership Act, 1907. The machinery of the Act has been neglected by solicitors who are too indolent to study it and by laymen who enjoy the pompous verbosity of a memorandum and articles of association; but in time to come it should be extensively adopted.

The State will have to exert eternal vigilance against the power of private corporations such as the above; but it must also control public corporations and its own departments and again quasi-public corporations like the Bank of England. I fancy that the Banks and big financial trusts will acquire more and more control of public policy as well as of private business and that this trouble will have to get worse before it gets better.