And what shall we say in particular of economics, of “industry,” “business as usual,” and the “finance” of “normalcy”? There lies before me an established handbook of _Corporation Finance_, by Mr. E. S. Mead, Ph.D. (Appleton, N. Y.), whose purpose is not that of adverse criticism but is that of showing the generally accepted “sound” bases for prosperous business. I can hardly do better than to ask the reader to ponder a few extracts from that work, showing the established, and amazing theories, for then I have only to say that in the period of humanity’s manhood the moral blindness of such “principles,” their space-binding spirit of calculating selfishness and greed, will be regarded with utter loathing as slavery is regarded to-day. Behold the picture:
“Since the bondholder is solely interested in the security of his principal, and regular payment of his interest, and since both security and interest depend upon the permanence of income, other things being equal the companies with the most stable earnings or a market ... furnish the best security for bonds. Stability of earnings depends upon (1) the possession of a monopoly.... _Monopoly is exclusive or dominant control over a market. The more complete this control, the more valuable is the monopoly._ The advantage of monopoly lies in the fact that the prices of services or commodities are controlled by the producers (_meaning owners—Author_), rather than by the consumer.... Monopolies are of various origins. The most familiar are (1) franchises, the right to use _public property_ for _private purposes_, for example, the furnishing of light, water and transportation, (2) _control of sources of raw material_ ... , (3) patents, ... (4) high cost of duplicating plant.... In manufacturing industries, for example, those enterprises which _produce raw materials_ and the _necessities of life_ have a more stable demand.... Railroads furnish perhaps the best basis of bond issue because of the stability of the demand for the transportation service ... the high cost of duplicating the railroad plant, ... enables them to fix their rates on freight and passenger traffic.... The security of the creditors is here the profitableness of the business _which is carried on in the factory_. Furthermore, a business is not an aggregate of physical property but consists of physical property—buildings, boilers, machine tools—plus an industrial opportunity, plus the organization and ability to operate business.” (Italics indicated by the author.)