The office of recently-appointed company president, Colonel Robert C. Clowry announced a general price increase for all private messages sent by the Western Union Telegraph Company. The stated purpose of this rate increase was to insure PROFITS! This news was received by a shocked, communication-savvy public with horror.
The "New York Times" newspaper picked up on it immediately, and a column was placed prominently, above the fold, on the first page. It began like this:
WIDOWS AND ORPHANS OWN WESTERN UNION
And the Company Says It Put Its Rates Up to Pay Its Dividends
"...explaining more in detail the reasons for the increase in private message rates which went into effect on Monday.
The company lays especial interest on the statement that the increase of private message rates was made in the interest of its 14,000 stockholders, many of whom, the statement says, are
widows and estates,
and in order that the company might continue to maintain and continue to pay its five percent dividend...
Our company has been paying a regular annual dividend. On account of this regularity the stock has been very largely acquired by widows and estates. In fact, the company is known on the street as 'The Widows And Orphans Company...' ...So a failure of the management to secure a sufficient profit from its business to pay those dividends would be a great hardship on those 14,000 stockholders.
Further, in defense of the company's actions, Mr. Clowry went on to make this frightful statement:
... another point that has been made was the statement that the telegraph companies must have profited largely from the large increase in communication necessitated by the unprecedented prosperity. The fact is, the telephone companies have largely absorbed the growth, to the exclusion of the telegraph."
This statement was published in the New York Times 3 April 1907.
The article goes on to explain other reasons for the rate increase, which include infrastructure replacement and installation, service to new areas, and "general improvement of the company's facilities."
You should know, the increase was two percent. That's all, two percent.
Who owns big corporations? Yes, most common stock is held by pensioners. Who are these shareholders, even today? Widows and orphans! Estates! Pensioners! People who are depending on these companies for their future existence! They are taking a BIG RISK!
And what provides these shareholders their livelihoods? DIVIDENDS. From what are dividends created and announced? Profits. PROFITS!!
The horror. THE ABSOLUTE HORROR! Say it ain't so! Did you say PROFITS!!??
Mr. Clowry above was accused of wanting to acquire too much profit! His reason, the Board's reason, for increasing rates was because he fully understood the integral, public-service nature of profits, as they relate to the owners of the corporation.
Corporations are legal entities. They exist on paper. Corporations don't pay taxes. Corporations have no social obligations. Corporations don't care if they are being naughty or nice. Corporations have no feelings, politics, emotions or cares. But they are composed of people, and these people are interested in the furtherance of their entity! And have responsibility to report to those who own the corporation.
What is the business of their business? It is BUSINESS.
And every now and then some politician, always a recognized "liberal," but not really a LIBERAL * like I am, makes some stupid, and I mean STUPID statement about windfall profits. Certainly that "glittering jewel of colossal ignorance" has NO idea what a windfall profit is!
What is a "WINDFALL PROFIT?" One that is earned without having any involvement in what it took to derive that profit! No thought, no risk, no participation, no decision making - nothing. The windfall profiteer merely earns profits, using the word EARN very, very loosely!
AND WHAT IS THE ONLY ENTITY THAT EVER, EVER EARNS WINDFALL PROFITS?
And that profit comes to the gubment in the form of what? Taxes. Corporate taxes (which are paid by whom?). Dividend taxes (which are paid by whom?). Capital gains taxes (which are paid by whom?). Estate taxes (which are paid by whom?). And "fees," another way of saying taxes (which are paid by whom?).
So the next time you hear of corporations derided for profits, and please don't try to make the also STUPID case with me that some make "too much" profit (a LOT of profit merely indicates that the corporation, or small business, is providing goods and services that the market it serves really, really wants) just remember -- you are taking food, clothing, education, medicine and shelter away from widows and orphans! You are a mean, mean person!
You should be flogged. And the flogging should continue until your attitude improves... There, someone had to say it!
The same goes if you deride any business for not paying "enough" taxes.
Oh, the asterisk -- heah 'tis:
* I have said for years that I am a liberal. Of course I am, in the CLASSICAL sense, the ORIGINAL sense, the REAL sense. I am a liberal in the mold of Adam Smith, John Locke, David Ricardo, Milton Friedman, von Mises and Hayek, Ronald Reagan - THE FOUNDING FATHERS and the great document they left us. Modern "liberals" have hijacked the word and are using it incorrectly because they are NOTHING of the sort. They are statists, yes, big gubmenteers, yes, socialists, yes, Marxists, yes - but not liberals, or progressives, or any other innocuous-sounding moniker they use depending on the political climate.
Today's "liberals" get away with it because most people don't think for themselves enough to read and study history and understand what WAS as opposed to what IS.