Jay's Tuesday Free Enterprise Quote - 1 November 11

By
Home Inspector with Jay Markanich Real Estate Inspections, LLC 3380-000723

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?

GUBMENT!  GUUUUUBMEEEEENT!!

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.

 

 

Posted by

Jay Markanich Real Estate Inspections, LLC  

Based in Bristow, serving all of Northern Virginia.

Office (703) 330-6388   Cell (703) 585-7560

www.jaymarinspect.com


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Rainmaker
694,609
Clint Mckie
Desert Sun Home, commercial Inspections - Carlsbad, NM
Desert Sun Home, Comm. Inspection 1-575-706-5586

Hi Jay,

I'm an independent.

I simply vote for the best person for the job.

Right now though, I really have a problem with all of the politicians running for office.

No one person can fix everything. I wish they could.

Best, Clint McKie

Nov 01, 2011 12:22 AM #1
Rainmaker
1,810,560
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Vote smart Clint!  Always vote smart.

And take care of the widows and orphans.  That, after all, is "pure religion..."  (James 1: 27)

Nov 01, 2011 12:39 AM #2
Rainmaker
786,304
Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate

Good one, Jay.

Corporations should be aggressive in publicizing the institutional ownership of shares by pension funds.  People often do not recognize that they have huge stakes in publicly-traded corporations.

Nov 01, 2011 12:39 AM #3
Rainmaker
1,810,560
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

And those people who have taken the risks to invest in them, Mike, are taking HUGE risks.  They should be rewarded, not taxed.

Nov 01, 2011 12:51 AM #4
Rainer
147,442
Michael S. Bolton
Michael S. Bolton,Inc. - Zimmerman, MN
MN Appraiser

Jay, I really appreciate your Tuesday posts! It makes me think, and appreciate others points of view. Thanks!

Nov 01, 2011 03:14 AM #5
Rainmaker
1,810,560
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

And I'm glad you like them Michael.  I don't know how many this makes to date, but over 80 I think.

Nov 01, 2011 03:20 AM #6
Rainer
407,122
Randy Ostrander
Lake and Lodge Realty LLC - Big Rapids, MI
Real Estate Broker, Serving Big Rapids and West Central MI

Good morning Jay. I think I have read most of the 80. I always like your insight and the way you articulate your thoughts. Keep up the good work.

Nov 01, 2011 04:34 AM #7
Rainmaker
1,810,560
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Thanks very much Randy.  I am a tweaker and very good at it!

Nov 01, 2011 05:10 AM #8
Rainer
284,418
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Jay -- Thank you again for an insightful and thought provoking Tuesday presentation.  Now, if only we could get ALL the politicians to read, understand and apply what you have to say...

Nov 01, 2011 07:24 AM #9
Rainmaker
1,810,560
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Thanks Steven.  Just doing my missonary work, but I am certain no politicians will be reading this!

Nov 01, 2011 12:18 PM #10
Rainmaker
1,219,910
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

I'm going to BOOKMARK this and use it when I do my rental increases next year!  

If landlords can't operate their rental property to make it financially viable, they get OUT of the business and the inventory of available rental homes decreases!

Nov 02, 2011 12:11 AM #11
Rainmaker
1,810,560
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

That's an idea Wallace!  Yes, they should get out of the business.

Nov 02, 2011 12:26 AM #12
Rainmaker
592,740
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

Well, first of all, you are using logic and common sense (which isn't very common anymore). Plus, the "New York Times" wasn't the complete anti-capitalism rag that it is today.

Nov 02, 2011 02:13 AM #13
Rainmaker
1,810,560
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Of course Than!  But the complaint was still there and the CEO felt the need to defend his company (and stock holders!) !!

Nov 02, 2011 04:59 AM #14
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Rainmaker
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Jay Markanich

Home Inspector - servicing all Northern Virginia
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