My Father's Business: A Practical Study of Business Ethics [Reprint 2016 ed.] 9781512807387

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THE GEORGE DANA BOARDMAN

LECTURES 1935

MY FATHER'S BUSINESS

THE GEORGE DANA BOARDMAN LECTURESHIP IN CHRISTIAN ETHICS HISTORY THE

AND TERMS OF FOUNDATION

On June 6, i8qQ, the Trustees of the University of Pennsylvania accepted from the Reverend George Dana Boardman, D.D., LL.D., and his wife a Deed of Gift, providing for a foundation to be known as "The Boardman Lectureship in Christian Ethics," the income of the fund to be expended solely for the purpose of the Trust. Dr. Boardman served the University for twenty-three years as Trustee, for a time as Chaplain, and often as Ethical Lecturer. He died on April 28, IQ03, and his wife, Ella Covell Boardman, on September 12, 1915. After provision for refunding out of the income of the Foundation any depreciation which may occur in the capital sum, the remainder is to be expended in procuring the delivery, at the University of Pennsylvania, of lectures on Christian Ethics from the standpoint of the life, example, and teachings of the Lord Jesus Christ, and in the publication thereof. On the following page are listed the Lectures which have been delivered and published under the terms of the Foundation. In June, IQ32, the Reverend Walter Brooke Stabler was appointed Chaplain of the University of Pennsylvania and Boardman Lecturer on Christian Ethics.

ili

Lectures

delivered

under

THE GEORGE DANA BOARDMAN LECTURSHIP IN CHRISTIAN ETHICS I. T H E G O L D E N

RULE.

George Dana Boardman. 1900 II. M O D E R N S T U D Y O F

CONSCIENCE.

Oliver Huckel. 1906 III. T H E E T H I C A L T E A C H I N G S O F

JESUS.

Lyman Abbott. 1909 IV. E T H I C S O F T H E L A R G E R

NEIGHBORHOOD.

Hamilton Wright Mabie. 1914 V. W O R L D PEACE A N D T H E C O L L E G E

MAN.

David Starr Jordan. 1915 VI. JESUS O N LOVE T O G O D .

T O MAN.

JESUS O N

LOVE

James Moffatt.

1922

VII. T H E SOCIAL T E A C H I N G O F JESUS C H R I S T . T H E SOCIAL PRINCIPLES OF THE TEACHING OF JESUS. T H E SOCIAL CONSEQUENCES OF THE TEACHING OF

JESUS. VIII. T H E

Francis Greenwood Peabody. 1924

FUNDAMENTALS

OF

CHRISTIANITY.

Charles Foster Kent. 1925 C H R I S T I A N E T H I C S , 1927. I X . CHRISTIAN ETHICS IN EVERYDAY LIFE.

Frederick R. Griffin X. ETHICS IN EDUCATION. X I . THE CHRISTIAN HOME.

Edwin C. Broome William P. McNally

X I I . T H E ORIGINALITY OF CHRISTIAN ETHICS.

George C. Foley X I I I . T H E TWO ROADS.

Boyd

XIV. T H E RELIGIOUS M O T I V E IN

THROPY.

Edwards

PHILAN-

Henry Bradford Washburn. 1931

XV. CREATIVE CHRISTIAN

LIVING.

Walter Brooke Stabler. 1933 XVI. W I T H O U T

COMPROMISE.

Walter Brooke Stabler. 1934 iv

MY FATHER'S BUSINESS A PRACTICAL

STUDY

BUSINESS

OF

ETHICS by

WALTER BROOKE STABLER

Chaplain of the University of Pennsylvania and Boardman Lecturer on Christian Ethics

PHILADELPHIA UNIVERSITY O F PENNSYLVANIA PRESS London: Humphrey Milford: Oxford University Press 1935

Copyright

1935

UNIVERSITY OF PENNSYLVANIA PRESS London: Humphrey Milford Oxford University Press

vi

To

BROOKS STEVENS, JR. a young buñness man in whose character and conduct the principles of this book are exemplified.

vii

CONTENTS PAGE

PREFACE

1

I . T H E FIRST M I L E IN BUSINESS ETHICS

7

I I . T H E SECOND M I L E IN BUSINESS ETHICS

51

I I I . T H E FIRST PERSON SINGULAR IN BUSINESS ETHICS

95

I V . T H E FIRST PERSON PLURAL IN NESS ETHICS

BUSI139

NOTES

179

BIBLIOGRAPHY

181

ix

PREFACE

SOME TIME ago, I read a little verse which gave me serious pause. Long haired preachers come out every night, Try to tell us what's wrong and what's right. But when asked about something to eat, They answer in voices so sweet: You'll eat by and by In that glorious land above the sky Way up high. Work and pray, live on hay, You'll get pie in the sky when you die. (That's a lie.)

If there is one thing a spokesman of religion cannot do, it is to dwell altogether "in that glorious land above the sky," a land far beyond the span of mortal man's existence. He must live and work and teach in this workaday world. Though his head and his heart should be in the clouds "way up high," his feet must be on the ground and his hands on the affairs of men. In this book, I am endeavoring to bring some of the basic Christian truths "down to earth" where they may touch that area of human activity in which so much of life is lived and so much of

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human energy expended. I refer to the field of business, commerce, and finance. For the statements and opinions which are advanced here, I make no apology. I believe implicitly in their truth and in their practicality. I do apologize, however, for the things which have of necessity remained unsaid. For one thing, I am no expert economist. Consequently, I have left untouched the more technical economic aspects of the problems of business ethics. These must be committed to those who are trained in economics and actively engaged in business enterprise, as, indeed, must be the actual application of the principles set down on the following pages. M y primary hope is that this book, coming from one outside the feverish business struggle where it is difficult to see the woods for the trees, may lend some inspiration and illumination to those upon whom the major burden rests. Especially must many things pertaining to the imperative reconstruction of our social and economic system be left unsaid. This is unfortunate because the problems of ethical business conduct are not to be worked out in a vacuum. Their solution is inextricably linked up with the solution of the larger questions confronting our social and economic order. It is obviously impossible,

Preface

3

however, to encompass this vast question of social reconstruction and reform in the space at our disposal. Moreover, this larger subject of social rehabilitation has been most adequately treated during recent years by writers much more capable than I. I do not mean that this vitally important matter will be entirely neglected. I mean rather that it can be given only passing mention as we concentrate upon the problems of business ethics proper. As to the content of this book, it would be presumptuous to claim that it contains an answer to all the problems of business ethics. Though some answers are given, my main purpose is to question the answers now given to such problems and to stimulate a questioning attitude towards the subject generally. In Chapter One we shall see the progress which has been made towards higher ethical standards in business as viewed over a period of generations. W e shall also see that there is still much room for improvement. Chapter Two will be devoted to a discussion of the crying need in the business world for deeper motives, surer foundations, and a more generous spirit among business men. Above all will the Christian philosophy of business be presented. I f we are to hold much hope for a nobler business ethic, it

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is imperative that business thus be set against a Christian background. In Chapter Three we shall study some of the problems which a business man must face as an individual, while Chapter Four will draw us into some of the problems which a business man must confront as a member of a business organization. In both of these chapters, practical suggestions will be offered for the correct solution of such problems. I feel this book to be timely and pertinent to burning issues of the day. From an ethical point of view, periods of depression have two characteristics. For one thing, when the volume of business shrinks and competition thus becomes unusually keen, the ethics of business are likely to suffer. On the other hand, such periods stimulate men to thought and should afford a unique opportunity to clean house ethically. For these two reasons, the time is opportune for pushing forward the frontiers of a higher business ethic. Throughout the land there sounds the clarion call for business men to enlist in this service. May the response be great! And as laborers in "Our Father's Business," may the fruit of our labors be abundant 1 W . B. S. Annisquam, Mass. 1935

THE FIRST MILE IN BUSINESS ETHICS

I

T H E FIRST M I L E IN ETHICS

BUSINESS

INTRODUCTION

A LITTLE boy, on the occasion of his first visit to the Zoo, stood dumbfounded before the cage of a giraffe. After the most careful scrutiny, he pronounced an epic opinion: "There ain't no such animal !" A similar retort greeted me when I announced, in an unguarded moment of weakness perhaps, that I anticipated writing a book on the subject of Business Ethics. This reception was not surprising, for a widespread feeling still persists that there are no ethics in business. But to dismiss this question so blithely is both unfair and unfortunate. It is unfair because of all that contradicts such an opinion. It is unfortunate because this fiction will tend to become fact if young men enter the field of business with such preconceived ideas. The truth of the matter is this: There are standards of ethics in business, but they are not yet sufficiently high and do not yet have behind them the force of unanimous approval and enthusiasm. T h e late President Coolidge once defined business as follows: "True business represents the [7]

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mutual organized effort of society to minister to the economic requirements of civilization. It rests squarely on the law of service. It has for its main reliance truth and faith and justice. In its larger sense it is one of the great contributing forces to the moral and spiritual advancement of the race." T h o u g h this is as yet a far-from-realized ideal, nevertheless it is my contention that definite and steady progress has been and is being made towards its attainment. A clearer and truer note is ringing ever more loudly in the consciousness of industry, finance, and commerce. By a process of slow yet constant evolution—a process so subtle as often to remain unnoticed—higher and higher standards of business conduct are being achieved. T h e business man, like all others, seems motivated by the "invisible hand" of A d a m Smith's famous dictum. This great economist, the first of the modern school, expressed his penetrating observation thus : " I n a well organized industrial society, every man is led, as by an invisible hand, to promote the general welfare while working for his own." H e was aware, as many others have been and are aware, of the tendency of business to grow steadily upwards like a mighty oak, even though that growth is not visible to the naked eye. T o be sure, there are rotten branches which need prun-

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ing and decayed spots which call for drastic surgery. But this is part of the inescapable risk of growth and is not to be wondered at. Nor is it surprising to find that parasites have attached themselves like mistletoe to the trunk of this tree —a parasite being "a plant or animal living in, on, or with, some other living organism at whose expense it obtains its food, shelter, or the like." Moreover, we must expect to find some gnarled deformities produced by severe and adverse winds. On the other hand, this tree of business, commerce, and finance is not rotten to the core. I t continues to grow, reaching ever upwards and becoming more stately and majestic. Dr. Everett W. Lord, Dean of the College of Business Administration of Boston University, was also aware of this gradual process which is making for ever heightening standards of business practice when he wrote a little verse entitled "Business Is Business." Writing with legitimate poetic license, he pictures the old and the new conceptions of business. And since the case of business ethics will stand or fall according to the views of individuals engaged in the field, a young man on the threshold of the business world will do well to allow the latter picture to make an indelible impression upon his mind.

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"Business is Business," the Old Man said, "It's warfare where everything goes, Where every act that pays is fair And all whom you meet are foes, It's a battle of wits, a heartless rush— It's a tearing, wearing fight; It's a trick of the strong to win from the weak, With never a thought of the right." And he struggled and schemed and pushed men aside And he fought to gain his way He bartered his soul for the glitter of gold— And the scorn of the world was his pay. "Business is Business," the Young Man said, "A game in which all may play; Where every move must accord with the rules And no one his fellow betray. It's wholesome and clean, and full of good-will It's an urging, surging game, It's a mission to serve in your day and age, And a guerdon to honor your name." And he sought and he bought, and he brought from afar, And he served with conscience clear; And the wealth that he won was more than gold— It was honor and love and good cheer.1

In this first chapter, it is my purpose to consider in some detail the stages in this evolutionary process. I propose to examine various unethical practices which have characterized the development of business; the reasons why these practices

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have been in evidence; and some of the steps which have been taken to eliminate them and thus to raise the standards of business ethics. Such a study will serve two introductory purposes. First, it will lend us encouragement by virtue of the fact that the current picture will be seen to be less black than it is sometimes painted. And second, it will lend enlightenment, enabling us to hope for a future brighter than the past. If we first understand thoroughly that which has gone before, we shall be able to avoid the pitfalls of former days into which business men fell, sometimes consciously but often unwittingly. Let us proceed, therefore, to this detailed study in order that we may learn whence we have come, where we are, and whither we should go. SURVEY OF UNETHICAL PRACTICES AND ATTITUDES

The history of business ethics has had a long and memorable career. Ancient Greece, for example—remembered primarily for its lasting contributions to art and literature, to philosophy and science—was a busy, bustling, boosting center of trade. Here the noisome fumes of unsavory business practices polluted the air as really as did the fumes from its innumerable smelters. The busi-

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My Father's Business

ness rogues and rascals of Athens were as clever as any to be found in this particular year of grace. Swindlers and cheats who practised frauds by means of bottomry contracts and by other means were actually organized into associations. Rustic visitors to the big cities bought the Parthenon time and time again, just as "innocents abroad" have been known to purchase the Flatiron Building in N e w York. On numerous occasions, a scoundrel named Athenogenes and a beautiful woman accomplice, Antigone, induced wealthy country gentlemen to assume "the trifling bits of indebtedness" of slaves, which bits of indebtedness later assumed the proportions of a good-sized fortune. Shyster lawyers were to be seen forging or falsifying legal instruments, furnishing witnesses to whom sworn oaths meant nothing, and engaging in multifarious practices ranging from petty bits of chicanery to flagrant blackmail and wholesale bribery. Banks were subject to the predatory interests of embezzlers and wreckers. Individuals and companies made colossal profits by manipulating mining concessions or appropriating mineral lands belonging to the state. Others made "a killing" by cornering the wheat market. "Deadbeats" plied their questionable trade, a fact which shows the antiquity

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of a type which our retail credit associations of today have not yet been able to eradicate completely. Trade in general and the professional merchant in particular were looked upon with distrust and contempt, the pressing of shrewd bargains being the rule rather than the exception. Commercialized war, and all that goes with it, was the favorite mode of increasing one's possessions. Piracy and cattle lifting abounded. On top of all this, the state not infrequently refused to take legal action on many of these accusations "for fear of discouraging legitimate enterprise." Moreover, success in business—and, as can be seen, the means employed were not considered—came to be the prerequisite for social advancement, citizenship, and political preferment 3 I have spoken in some detail about ancient Greece—and the same familiar-sounding story might be told with equal truth of many other periods in history—because I wish to point out again that ours is not an age peculiarly devoid of business ethics, a fact from which we derive much encouragement. The attitudes and evils attending the operation and manipulation of business today are by no means original. They are as old as the proverbial hills. At this point some may come forward to say in a defeatist tone, "Since the same

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types of business corruption have persisted for so many hundreds of years, is this not conclusive proof that they will always exist? By bringing to light the business practices of this ancient civilization, have you not injured your cause and contradicted your fundamental premise?" I would reply in the negative to both of these queries. This evolutionary process in business ethics has gone in cycles—not round and round in circles, but ever upwards in spiral fashion. Each age has had its own business battle to fight, patiently and persistently; and each has made some permanent contribution to all succeeding ages. The story of Greece is again illustrative. Not all ancient Greeks were content with or indifferent to this procession of business which went by, day after day, black with corruption. Greece had its champions of business righteousness. As George M. Calhoun writes: "We may not agree with Xenophon in believing it expedient that the state should enter into competition with private enterprise in trade [again, how familiar that sounds], but we readily see that his proposals for public ownership were intended to improve the standard of living for the poorer citizens. Plato's schemes for the stringent regulation of trade and finance may not impress us as wholly wise, yet

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obviously they have this same intent. Again, there is Aristotle's distinction between the false and the true arts of acquisition, of which the one makes money an end in itself and aims at unlimited riches, while the other has as its goal the promotion of well-being by the production and proper use of wealth. . . . Whichever way we may look, we shall find abundant evidence that Greek economic theory was founded upon the humanitarian principles." 3 Others attacked the specific problems of business ethics with unstinting vehemence. These men were unable to perform fully their avowed task. Nevertheless, they did bring it to pass that this ancient civilization played a prominent part in the evolution of high standards in business, the chief being that they developed and applied, for the first time in history, the principles of economic freedom. Our age, therefore, need not start from scratch. I say this despite the fact that the Industrial Revolution and the rapid rise of big business in America seem to have ushered in a new stage in this evolutionary process in which age-old problems are presented in unusually acute and aggravated forms. Even though certain questions which attend our highly industrialized, twentieth-century life demand specialized treatment and a new

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technique of ethical handling, the past experience of the human race can tell us much. This is just as true of ethics in business as of ethics in the realm of personal virtue and morality. Superficially, ethical interpretations do change, and should. But certain fundamental principles and convictions, founded as they are upon centuries of experience with what is good and bad for the race, constitute the crystallized wisdom of the ages. N o civilization has long made light of them and survived. And, let me add parenthetically, we should be all the more unwilling, because of what we have learned of ancient Greece, to allow our civilization to fly in the face of them now. But enough of generalities and ancient history. Let us now familiarize ourselves with some of the reasons why certain attitudes towards business developed in this country during the special period introduced by the Industrial Revolution. This is our immediate concern, for the attitudes thus developed have been responsible for most of the unethical practises which have checkered the history of the rapid rise of American business even up until now. James Truslow Adams admirably summarizes the several notes which, when combined, form the great motif of early American business. He

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writes: "Taking a chance had got into the blood of the American until by the mid-century we find, as Kipling wrote of him nearly a century later, He greets th' embarrassed Gods, nor fears T o shake the iron hand of Fate Or match with Destiny for beers.

The influence of this taking a chance, of matching with Destiny for beers, had been cumulative, generation after generation. . . . There were two factors which chiefly influenced the new type of civilization. One was the colossal size and richness of the new American empire, which made the prizes to be won so great as to turn the heads of even the most conservative of old Eastern families; and the other was the absence of any impassable social barriers, which made success a free-for-all race, and so intensified the fierceness of competition to the 'nth' degree. . , . Making money became a great and exciting game in which everyone participated. Of course the element of luck was great, but those of skill and ability were also present; and thus, apart from the excitement of the game, and the power and pleasures to be derived from wealth, a fortune, if made by one's self, became also a badge of personal merit in the eyes of the public, our only

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substitute for a peerage to mark the man of outstanding ability. . . . In 1834, a by no means unsympathetic traveler noted that scenery meant nothing, that to the American a waterfall 'is a motive power for his machinery, a mill privilege; an old building is a quarry of bricks and stones, which he works without the least remorse. . . . At the bottom of all that an American does is money; beneath every word, money.' Although he gave much more liberally than the European to useful and public objects, 'it is neither enthusiasm nor passion that unties his purse strings, but motives of policy or considerations of propriety, views of utility and regard for the public good, in which he feels his own private interests to be involved.' . . . In old countries there would have been a distinct limit to the expansion of a business or the building of cities. In the Land of Promise there seemed to be none. T h e more men who devoted themselves to the material development of the country, the more quickly it developed, and the greater chance of everyone to get something out of it for himself. Thus, superimposed on the old Puritan and pioneer raising of work to the rank of a virtue, was the new conception of business as somehow a social and patriotic duty. . . . This, com-

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bined with the ordinary temptation to make money and the lack of social pleasures and the resources of cultivated society, made the pressure to think in terms of business almost irresistible. . . . Money-making having become a virtue, it was no longer controlled by the virtues, but ranked with them, and could be weighed against them when any conflict occurred. The quick development of an industry or a tract of land, the making of a million dollars to be added to the capital resources of the nation, could be weighed as exhibitions of moral and patriotic virtue against breaches of other exhibitions of virtue, such as justice or honesty. . . . Had it not been for this raising of money-making to the moral plane as a virtue in itself, its delinquencies could never have been measured with crimes against other parts of the moral code. As it was, unhappily, they could be, and were. . . . This, and the fast tempo of the new American life, made it all too easy for the individual to get himself involved in all sorts of moral casuistries. It might of course be wrong, so he could argue to himself, to make false statements, even to perjure himself in a report or application to the government, to bribe a legislature, to hoodwink a competitor, to take an unfair advantage; but, on the other hand, if by so

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doing he could put through his deal, if he could make a million in a year instead of in ten; was that not a patriotic service that might well outweigh the personal peccadillo involved in the means of its attainment? . . . I f , in the course of so doing, a policeman or a land-office official in Washington or a few legislators in the State Capitol seemed to be in the way, it could hardly be immoral to get rid of their obstruction by the simplest and quickest method possible. . . . Unfortunately, however, just as the pioneer period on the frontiers left scars on the American mind, aldng with some excellent legacies, so did the Eastern period. Chief among these was the moral confusion caused by the expansion of the old conception of work as a moral virtue into the further conception of money-making as both a personal virtue and a patriotic duty, with the resultant confusion as to its relation to the rest of the virtues and the whole scale of social and moral values. Emanating directly from the too rapid expansion of the country, I think we must consider it one of the most potent influences for evil in American life." 4 I have quoted at some length from The Epic of America because I feel this to be a point upon which an historian should speak. Moreover, I

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believe the general analysis here given is accurate. Of course, there have been many exceptions to these blanket condemnations. The fact remains, however, that the stately goddess Finance—which, I am afraid, resembled all too closely a certain golden calf of former days—with her two jewels Commerce and Industry, was enthroned and reigned supreme over the destinies of men. All too frequently, business came to be regarded as a game of wits, where the shrewdest and sharpest win and where the gain of one inevitably results in the loss of another. Because the whole constructive work of life was thrown so absolutely upon the man fighting his life-battle alone, excessive individualistic habits and self-interested, materialistic attitudes were formed. American business life tended to become one mad scramble in which everyone felt constrained to look out for himself. None felt the necessity of this more than the buyer. Even the law recognized the buyer's responsibility in the principle caveat emptor, the accepted basis of commercial transactions for generations. In addition to all this, it must be said that these attitudes conspired to produce a very noticeable disregard for law. This American trait was not (and is not) hid from the eyes of those across the waters. As John Graham Brooks, one-time President of the

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National Consumers' League, said even some years ago: "I have had occasion to examine with care the comments upon American life and institutions made by foreign critics during the period that extends from the latter part of the eighteenth century up to the present. If one puts aside the frivolous and ill-tempered studies and considers only the fairer and more competent observers, the least pleasant of all the criticisms is that we are essentially a lawless people." 8 In short, early American business provided a congenial environment for the counterparts of Lowell's popular candidate who said with feeling, "Ez to my princerples, I glory in hevin' nothin' o' the sort." To an appreciable degree, the reverberations of this motif of American business are still to be heard today. Such a sweeping assertion is always dangerous and subject to severe criticism. Of this I am fully aware. None can deny, however, that this general temper of the American mind is still "one of the most potent influences for evil in American life." To be sure, much has been accomplished for the development of the country and for the enrichment and betterment of human life. This we have seen most impressively displayed at "The Century of Progress" in Chicago. But those exposition halls did not show the means—many of

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them downright unethical—by which this remarkable progress was achieved. Many skeletons still hang in the closets of business—and they are none too pleasant to look upon : personal and corporation graft; commercial bribery; unethical advertizing; catch-as-catch-can competition; exploitation of human personality; the questionable development of monopolies; the violations of trusteeships ; and a multitude of others. This is the dark and negative side of the picture. Realism and honesty compel us to confess these evils frankly. Fortunately, however, there is another and brighter side. I have already expressed my conviction that definite and steady progress has been made towards the attaining of higher ethical standards; and it is to a consideration of this that I would now have us turn our attention. THE ENCOURAGING PRESENT

In general, it might be said that big business in America is now in the turbulent stage of late adolescence. It has only recently donned long trousers. T h e practices of former years, together with the attitudes responsible for them, which we have just surveyed, have been but typical of the conduct of the impetuous, thoughtless, selfcentered, not-too-ethical boy. They have been,

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perhaps, what we should expect of the gawky, awkward youngster w h o has grown too fast for his own good—and there is no denying the fact that American business has "shot up like a weed." T h i s period has been long and tedious; yet, again, this is not to be wondered at. A s Thornton W i l d e r says in The Woman of Andros, " O f all the forms of growth, goodness has the longest awkward stage." But now, American business seems to be emerging from this period of ethical awkwardness. N o w that it is growing into manhood, it is very definitely beginning to put away childish things. Upon this earnest attempt to emerge into ethical maturity it will be well to concentrate, rather than upon the aforementioned evil practices and attitudes which still remain with us. Neither Rome nor nobility of character nor business integrity is to be built in a day. Consequently, we should not bemoan the fact that progress is slow. T h e important thing is that w e are progressing, that we are moving in the right direction. A n d in this connection, I am convinced that the average young man anticipating business w i l l be surprised to learn how far we have moved, how much has been accomplished towards the heightening of ethical business principles, certainly as compared with several generations ago.

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One definite step forward lies in what might be called the field of interest Many who have been speaking for years to business men's clubs and similar associations have commented on the distinct change in the trend of subjects desired. As one writer expresses it: "Fifteen years ago such clubs asked for talks on sales psychology, on business organization, on scientific management. The interest was obviously centered in money making, and he who could most surely suggest ways of increasing profit was sure of the warmest welcome. Then came a wave of interest in employment and personnel management with various types of plans for employee participation in management and for profit sharing. Today the demand is entirely different: The clubs ask their luncheon speakers to discuss codes of ethics, principles of business conduct, plans for arbitration and maintenance of industrial peace."6 This fact is most encouraging, a potential asset of tremendous proportions. In every sphere of human experience, nothing creative can be accomplished until personal interest is aroused. Apathy and indifference are the ball and chain which retard the progress of any enterprise. Another and most important and hopeful stride forward lies in the field of organization. Various

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types of associations and bureaus have been slowly evolving to the point where their beneficial impact upon business practices is being increasingly felt. These organizations developed naturally and of necessity because American business soon came to see that commercial anarchy could not be allowed to continue indefinitely. Unregulated competition and unethical conduct were seen by many to be business suicide. Consequently, various organized remedies were devised. One of these was the pool, a method which never worked very well, however, primarily because it ignored the basic law of supply and demand. Another method was the trust, the amalgamation of competing firms which amounted to a closely organized monopoly. The threatening growth of trusts, however, caused great alarm and led ultimately to the passage of the Sherman Act of 1890, it being felt that such combinations militated against public interest. It remained for the modern trade association to evolve a third method of escape from this chaos, namely, that of cooperative competition. The trade association has had as checkered a career as the history of business ethics itself. The early trade association which began in the Civil W a r period followed the plan of the pool, as a result of which it was the subject of much per-

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secution and distrust. Despite this bad beginning, however, trade associations continued to multiply, often with governmental stimulus ; and these thousands of associations, again despite imperfections and failures, have profoundly affected the business man's thinking and conduct. At present, the efficient trade association is generally and primarily a fact-collecting and an information-disseminating agency. Because production, very largely, is based upon complete data available to all, both large and small, many beneficial results of ethical import accrue from its operation. Markets are more closely interrelated and unwholesome speculation is decreased. Scientific cost accounting is made possible. Prices tend to become stabilized. Waste and risk are reduced and progress is made towards standardized production. At the same time, competition is still free to "bring down the peaks and fill the valleys," the real competition in normal times having come to be competition in quality and service. Edgar L. Heermance pays just tribute to the trade association in commenting on the books of Walter Rauschenbusch. Of them he says: "They are as fresh and stimulating as ever. Much of his indictment against our present social order is still unanswered. But I have been impressed by the progress in certain directions

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during the past dozen years. Christianizing the Social Order was published in 1912. If Rauschenbusch were alive today and made himself familiar with the trade association movement, his chapter on T h e Law of Tooth and N a i l would be completely revised. T h e type of competition which he criticizes so severely has disappeared, in large sections of American industry. Business is more and more realizing the ideal which he holds out as the chapter closes: 'Men who are in the same line of work must be so organized that they can emulate while they cooperate. Commercial competition has developed in our commercial communities the lower instincts of selfishness, covetousness, and craft. A Christian social order must be such that it will develop and educate mutual interest and good-will, and equip workmates with that sense of comradeship and solidarity to which they are entitled.' " 7 There is another type of organization which has made a great contribution to business ethics despite its many boosting activities, its frequent desire to maintain the status quo, and its willingness on occasion to grind its private axe. I refer to the local, state, and national Chamber of Commerce. As far as the contribution of the local group is concerned, this varies, of course, in differ-

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ent localities. Some have accomplished little. Others, however, have accomplished much. The same applies to state organizations. I cite only one instance, the opinion of one intimately familiar with the facts of the business world. "One of the greatest accomplishments of the Chamber of Commerce of the State of New York, in its long history of commercial and civic usefulness, has been the revelation to America of the fine ethical and friendly spirit which must be at the very foundation of commerce and business."8 In like manner, the Chamber of Commerce of the United States has given infinite thought and effort along this line. Its adopted principles of business conduct are illustrative. While these principles are far from actual realization, certain inroads for them into the public and business conscience of America have been made by this national body. I list them here as worthy of detailed study. 1. The foundation of business is confidence, which springs from integrity, fair dealing, efficient service, and mutual benefit. 2. The reward of business for service rendered is a fair profit plus a safe reserve, commensurate with risks involved and foresight exercised.

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3. Equitable consideration is due in business alike to capital, management, employes, and the public. 4. Knowledge—thorough and specific—and unceasing study of the facts and forces affecting a business enterprise are essential to a lasting individual success and to efficient service to the public. 5. Permanency and continuity of service are basic aims of business, that knowledge gained may be fully utilized, confidence established and efficiency increased. 6. Obligations to itself and society prompt business unceasingly to strive toward continuity of operation, bettering conditions of employment, and increasing the efficiency and opportunities of individual employes. 7. Contracts and undertakings, written or oral, are to be performed in letter and in spirit. Changed conditions do not justify their cancellation without mutual consent. 8. Representation of goods and services should be truthfully made and scrupulously fulfilled. 9. Waste in any form—of capital, labor, services, materials, or natural resources—is intoler-

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able, and constant effort will be made toward its elimination. 10. Excesses of every nature—inflation of credit, over-expansion, over-buying, over-stimulation of sales—which create artificial conditions and produce crises and depressions are condemned. 11. Unfair competition, embracing all acts characterized by bad faith, deception, fraud, or oppression, including commercial bribery, is wasteful, despicable, and a public wrong. Business will rely for its success on the excellence of its own service. 12. Controversies will, where possible, be adjusted by voluntary agreement or impartial arbitration. 13. Corporate forms do not absolve from or alter the moral obligations of individuals. Responsibilities will be as courageously and conscientiously discharged by those acting in representative capacities as when acting for themselves. 14. Lawful cooperation among business men and in useful business organizations in support of these principles of business conduct is commended.

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15. Business should render restrictive legislation unnecessary through so conducting itself as to deserve and inspire public confidence. In addition to the Chamber of Commerce, cities also have their various Service Clubs—the Rotary Club, the Kiwanis Club, the Lions Club, and others. Here again we find great variations of accomplishment. Some, unfortunately, have deteriorated into "mutual admiration societies" which operate on the slogan "You buy from me and I'll buy from you." Others, however, have been real forces in the ranks of civic reform and business ethics, likewise adopting principles and codes of ethics by which they agree (verbally at least) to be governed. And even though some have become clubs in which the members say, "You scratch my back and I'll scratch yours," as a prominent business man described one such club, they are yet an asset inasmuch as no one is so likely to knife a back which he has formerly scratched. A certain British statesman expressed this principle negatively when he explained his refusal to meet a political opponent by saying, "If I get to know him, I cannot hate him. And if I do not hate him, how can I denounce him?" Yes, much has been and can still be performed through the medium of organizations which make it possible for com-

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petitors to meet together on a friendly basis and to come to know and understand one another better. There are still other types of organizations which have struggled to lift the standards of American business. I think, for example, of the Better Business Bureau (an outgrowth of the Truth Movement in Advertising), the Associated Advertising Clubs, and the Consumers' Research. These bodies have sought especially to bring to pass more ethical practices in merchandising publicity; and, in many respects, they have wrought miracles by shedding light on unscrupulous forms of deception and dishonesty. In earlier days, many a merchant deserved the epitaph of the California miner: "Here lies Bill Jones. There were some times he wasn't as bad as he was at others." Though many still deserve such a succinct description, these agencies have greatly reduced the number. They have made progress in their avowed task of engraving the word "Truth" on the map of the United States. They have been of much help in protecting people from fraudulent selling schemes, the annual loss of which has been estimated up in the billions of dollars. Through the medium of all sorts of publications, they have supplied information designed to enable people to

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buy and invest safely and intelligently. "Before you invest—investigate," "Keep out of this financial graveyard," these and other arresting captions have captured the eye of many throughout the country, as a result of which many a financial disaster has been averted. Thousands are receiving regularly the bulletins of Consumers' Research; while Your Money's Worth and IOO,000,000 Guinea Pigs, even though they are extreme and give an exaggerated picture, have proven to be best sellers. As I say all this, I am fully cognizant of the fact that many of the most unethical business practices of today are to be found in the field of advertising. Consequently, I do not mean to imply that the unsuspecting public may now believe all it reads in the papers or on billboards. Flagrant misrepresentations are still perpetrated, while a beautiful face (the application of sex psychology to advertising) may hide a multitude of business sins. More will be said later on this general subject. I do mean, however, that we may find encouragement in the activities and achievements of these agencies. I do mean that it is now harder for men of the faker type to make a dishonest living. I do mean that there is much truth in the words of the head of a large N e w York department store : "Anyone who wants

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to be forty years behind the times can keep right on practising all the old tricks of misrepresentation, baiting and inaccuracy, deliberate or otherwise, that modern establishments have cast aside." Yet another step forward in the direction of a nobler business ethic is to be found in the many codes of business ethics which have grown out of the activities of these several organizations. T h e number of these business creeds or confessions of faith increased tremendously during the early twenties; and this large and constantly augmenting stream of written rules, to which there are few historic parallels, suggests the extent of the ethical movement in American trade. These codes are of two general types, the practical and the ideal. Those in the first category reveal an attempt to provide for practically every contingency by a fixed rule. Those in the latter place the emphasis, probably with greater wisdom, upon the spirit rather than the letter. They are united, however, in giving expression to the same general ethical principles. T h e general principles thus incorporated are as follows—and anyone must admit their fundamental truth and validity: 1. The effort of every man to advance his own welfare with due regard to the welfare of others

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is right and ethical; and every man is entitled to full opportunity for such advancement. 2. Business is based on fair exchange: money, goods, or services for equivalent money, goods, or services. Something for nothing, or for an inadequate return, is unethical, uneconomic, and in the end immoral. 3. T o seek or accept value for which a fair equivalent is not given is unethical and results in dishonesty. 4. Taking advantage of an abnormal demand to secure an abnormal profit is unethical. 5. T h e outstanding characteristic of business must be service—the successful effort to maintain a constant supply, to consistently improve quality, and to reduce cost. 6. T o serve the community a business must first provide for its own people. It is ethical for a business to earn money from which to pay wages sufficient to allow workers to live in comfort ; and in addition, sufficient to pay a fair return on invested capital. 7. Ethics promote cooperation, mutual respect, and faith in one's fellows, all of which are essential to the spirit of service.

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8. Waste of time, energy, material, or money —anything which adds to cost without adding to value—is uneconomical and unethical. 9. The fulfillment of every obligation, express or implied, in letter and spirit, is a fundamental of ethical conduct. 10. The Golden Rule, "Do unto others as ye would that they should do unto you," rightly interpreted, is the most complete of ethical standards.® At this point, pertinent questions naturally arise in the minds of many. Are these codes actually followed? Do they not merely induce a smug selfsatisfaction on the part of business men? Are they not a snare and a delusion, a trick of the trade to fool a gullible public? I shall postpone consideration of these questions until a more appropriate time. Suffice it to say now that these written ideals of conduct, despite their shortcomings and frequent hypocrisies, have had and are having great influence upon business practices. As Dr. Clyde L. King says, "Codes of ethics are the means by which groups keep their members socially victorious over self-aggrandizement." To be sure, there have been many failures, but there have also been many such victories. Codes have fired the imagi-

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nations of business men the world over. In substance, they supply abundant grist for the mill of business ethics. W h a t we need now is a power sufficient to drive this mill, that is, a dynamic force which will enable men to bring these principles of ethical business conduct to full fruition— but again, more of this later. A final step forward from which we may derive encouragement centers in the successes which are to be seen in the field of legislation and arbitration. A t the present time, legislative measures seem to be producing nothing save endless debate. In the light of the stormy career of the National Recovery A c t and subsequent legislation, some might well maintain that the legislative picture is anything but encouraging. In all fairness, it must be admitted that some of the measures recently adopted defeated their own ends even before they were declared unconstitutional. Arbitrary pricefixing, for instance, opened the gateway to pricecutting and all sorts of subtle forms of dishonesty and unfair competition. It must be admitted, too, that sufficient allowance has not been made for the ever-present lag between public sentiment and its embodiment in legislation. Statutes are doomed to failure if enacted prematurely or too voluminously. T h e r e must first be "a w i l l to abide." On

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the other hand, the legislative activity of recent years has not gone for nought. Many efficient bills now in operation are furthering the purposes of ethical business practice, the majority of such bills having been enacted since the turn of the century. Moreover, the public conscience has been awakened to a degree unprecedented in history. Investigations and inquiries have brought to light multifarious malpractices which have shocked the general populace. This is evidenced by the fact that many, while criticizing the technique and detailed measures of the present administration, are nevertheless in admitted sympathy with the aims and ideals of the New Deal. A l l this, in itself, constitutes progress and cause for great rejoicing. It means that in the fulness of time wise and sound legislative steps will be taken to better the conditions, and consequently the ethics, of business. Laws, of course, cannot perform the entire task. Many practices, for example, which are now lawful can hardly be considered ethical. I realize, too, that people cannot be legislated into goodness and that they resent and balk at too many attempts of this kind. There is, however, a legitimate area within which it is proper and essential that society assert its rights through laws. And

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because of the spade work of recent years, the future holds infinite promise. As to arbitration, very definitely can it be said that the will to arbitrate as opposed to the will to litigate is growing. This general inclination however, as important as it is, does not represent the only or primary advance in this sector. Even more important is the fact that common law and statutory forms of arbitration are giving away more and more to industrial and especially to commercial forms of arbitration. T h e former have proved very ineffective because of the many legal intricacies and loop-holes, because either party may withdraw before the award, because the award is not binding, because the case in question is frequently not heard before experts, and because such cases deal only with existing disputes. T h e latter, however, commercial and industrial arbitration, hold increasing promise. Expert tribunals hear the cases, and the procedure is simplified. T h e way is opened to effective collective bargaining, even though this way has not yet been completely paved, as illustrated by the heated discussions centering about the once-famous Section 7A. And perhaps most important of all, these types of arbitration look especially to the future. Like the gyroscope, which does not perform any of the

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functions of the engines or the propeller which furnish the power, nor of the hull in which the cargo is carried, they are intended to steady the craft and make it more comfortable and safe when conditions are bad. When the going is smooth the gyroscope may be cut off for long periods, but it is always ready for use in case of need. Indeed, the gyroscopic and ethical functions of these two types of arbitration are more important, perhaps, than their actual use in settling disputes. Various arbitration tribunals have done much to make it almost impossible for disputes, and especially for unethical disputes, to occur. Furthermore, they render it likely that such disputes, which are usually in the form of simple mistakes and errors arising naturally in the whirl of business, will be amicably settled between the parties, be these parties two competing firms, an employer and employee, or what not. All these advances which I have mentioned, all these ways and means of heightening business ethics, have borne fruit—not a full crop, I know, but a very commendable crop. I think of the field of merchandising. In former days, the twopriced store was the accepted form. The merchant seemed to abide by two laws, one for the people he knew and another for the stranger. The

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same socks were sold for 25 cents a pair or, if the customer demurred, two pair for 25 cents. Like the Egyptian merchant w h o asks forty piastres for a string of beads and ends by selling them for five, the old-fashioned merchant bargained and haggled with his customer—and lied and cheated ignobly in the process. H e was a scalper who worked behind the legal maxim of "Caveat emptor—let the buyer beware!" T h e customer, in turn, haggled back and generally took special pains to pick out his pet clerk from w h o m he could get the best price. A new day has now dawned. T h r i l l i n g is the story of A . T . Stewart and John Wanamaker and others w h o contributed so materially in bringing about this revolution. T h e principle of caveat emptor has practically disappeared. A one-price policy is becoming ever more firmly established among individual firms, even though unwarranted discounts and rebates sometimes tend to prolong the life of the two-price evil. T o be sure, this ethical advance has in some respects been a by-product. T h e development of the large store, wider publicity of prices, and the change from a seller's market to a buyer's market did much to defeat the two-price store. On the other hand, a higher business ethic has likewise played its part in bringing this defeat to pass.

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Clarence F. Birdseye summarizes the situation thus: "More and more the guiding mottoes and characteristics of big business and organized business are service and business honor. . . . Never before has the average customer gotten more for his money, all things considered. Our present volume of business transactions could not have been reached unless these new and better notions of service and business honor had first grown correspondingly. The customer-be-pleased theory extends every day. . . . The day of Yankee wooden nutmegs has passed."10 The organized efforts of which I speak have also combined to displace, to an appreciable degree at least, the extreme individualism which we inherited from pioneer days. Joint action has now come into vogue in many areas where it was hitherto unknown. Cooperation is more and more tempering competition. Rivals are no longer hated above all evils. Fellow purchasing agents not infrequently assist one another in the performance of their duties. The opportunity to inspect a competitor's plant is now an accepted courtesy which would have been undreamed of several generations ago. The frank sharing of business information has very largely supplanted the former expensive spy system. There has also been a

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marked change of attitude relative to new firms entering an industry as competitors. As the photoengravers say: "When a new photo-engraving establishment enters the competitive field, it should be the duty and pleasure of those already in the field to establish, as early as possible, the most cordial and friendly relation with the management. Show clearly a desire to be of friendly service in avoiding possible pitfalls, and in other ways evidence a sincere friendship." 11 In short, the trend towards joint action pushes steadily onward. Just what it has meant and may continue to mean is admirably symbolized and illustrated by an incident which occurred several years ago in the automobile industry. T h e head of a great automobile factory in Detroit called up the manager of a rival plant. H e told his "colleague" that the superintendent of one of his departments was incapacitated by sickness and that his loss was crippling their business. H e asked if the competing plant could lend them a man. T h e rival factory sent over one of its best officials, who took charge of the department for several weeks until the regular superintendent could resume his work. This story is a parable of the way in which business should and can be con-

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ducted—and the ethical repercussions of such joint action are tremendous. CONCLUSION

I would summarize all that has been said by quoting the words which Judge Gary wrote several years ago. "We need but look around us to see evidences on all sides of the new day in business. Operations are conducted under a stricter rule of ethics than ever before. Undoubtedly the world is growing better. It may be asserted with the fullest confidence that in the period of which I write business has undergone a moral overhauling without precedent. T o my personal knowledge many men of big affairs have completely changed their opinions and methods concerning ethical questions in business. A host of others unknown to me, men of great interests and small, conducting their affairs in many parts of the country, have adopted this example, consciously or unconsciously. Men who once believed that the subject of ethics in business had little bearing upon their conduct, now assert that a proper code is the controlling element." 12 I believe this statement to be absolutely true. There has been improvement. There has been a change in sentiment. There has been a change in

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practice. T o say this is not to deal in pious platitudes or wishful thinking. It is to be realistic. Realism also demands, however, that we refuse to rest on the laurels of these advances. Corruption and unethical conduct still exist in superabundance. T h e devices contrived to eliminate these are not yet fool-proof or sufficient. The moral standards of any age are measured by the things which it tolerates. Consequently, just as the old merchant and manufacturer, feeling that they had fairly exhausted the resources of apologetics when they explained that they were not in business for their health, tolerated many practices which would be universally frowned upon today; so the business man of tomorrow must refuse to tolerate many of the practices which are accepted or which exist today. In short, the cause of business ethics must continue to go forward, impelled by education and inspiration and consecration. For this there is especial need at the present time because there has been a tendency to let down the bars of business ethics, an inclination to wink more frequently at certain malpractices, since the depression descended upon us. Moreover, our greatest need today is to discover a dynamic power which will enable men to bring the principles of ethical business conduct already evolved to full

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fruition. We must find deeper and finer motives. We must lay even surer foundations. We must develop a new spirit and philosophy of the purpose of business and the meaning of life. Then, and only then, may we dare to hope for a future brighter than the past. In short, the spade work has been completed. We have traveled "The First Mile in Business Ethics." To "The Second Mile in Business Ethics" we shall next turn our attention. If we go this second mile, the wealth that we shall win will be more than gold. It will be "honor and love and good cheer."

THE SECOND MILE IN BUSINESS ETHICS

I I

T H E SECOND MILE I N BUSINESS ETHICS INTRODUCTION

As I PROCEED to speak of "The Second Mile in Business Ethics," I am fully aware that I am treading upon dangerous ground. It is by no means easy for those of the ministerial profession to avoid one of two popular extremes in commenting upon ethical conditions in the business world. On the one hand, presumptuous clergymen all too frequently make themselves ridiculous by going to the world of banks and factories and merchandise with murmurs of pious impracticalities. By doing so, they render themselves liable to the most severe criticism. On the other hand, over-zealous apologists appear ludicrous in the eyes of the business man by reason of their shallow laudatory eulogies to the effect that business is more honest than it has ever been in its history—a superficial truism which does not get us very far and which many regard as damning with faint praise. For this they become subject to many a sarcastic retort, especially when their eulogies reflect a desire to cater to the favor of [51]

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those who pay their bills. John T. Flynn, in his illuminating book Graft In Business/ has much to say at the expense of those in this category. H e speaks of a dean of a prominent Divinity School who exclaims, in an almost ecstatic prostration before the throne of Mammon: "Business! Maker of morals!" and who then, eager to set up a monopoly for his particular god, cries out: "What else than business could make morality?" H e tells of a well-known clergyman who once lifted his soul to an exalted level in an incantation of such poetic and religious fervor that he rose almost to a chant about a certain large company, catching from it a glimpse of Paradise and calling his little apocalyptic saga "Heaven and Kingdom Come." H e writes also of a university president who glorifies the American salesman, stating that salesmanship is the essence of almost every human effort, including the great drama of the Atonement, which was in reality, so this president says, just a big plan to merchandise salvation to the human race by the Greatest of all Salesmen. "Most of the silly adulation of modern business," Mr. Flynn writes, "has come from writers and preachers and professors. T h e intelligent leaders of big business are aware of the profound difficulties which gather in the path of any business man who

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attempts to interfere with the established grafts peculiar to different industries."2 Despite this danger—and if Mr. Flynn's last statement be true, because of it—it is imperative that I cover this treacherous ground, endeavoring, of course, to steer between this Scylla and Charybdis. I feel strongly that it would be a poor, anemic religion which remained aloof from the pressing problems of business ethics. Since the standards of ethics in business need yet to be raised much higher, a practical consideration of religious values and principles is unescapable because these values and principles, I am convinced, can do much to elevate these standards. After all, though in a sense we are citizens of two worlds, there should be no strict line of demarcation between our secular and our religious lives. They are both lived in the same world; and the economic activities of men are not alternatives to the life of religion so that people must make their choice between them, nor need they be hindrances to the cause of religion. Rather may they be essential ways of doing God's will and cooperating in his creative purpose. Religion sets business in what might be called a cosmic setting. Without such a setting, the case of business ethics will inevitably fall far short of

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its highest goal. A sufficient raison d'être for their existence will be lacking. A n adequate philosophy and motive and driving p o w e r will be conspicuous by their absence. A n d the standards of ethics themselves will be subject to eternal variations to a m u c h greater extent than need necessarily be the case. I n short, ethics alone do not suffice. Secretary H e n r y A. W a l l a c e expresses this most adequately in speaking of the part that government can play in this enterprise—and the same m i g h t well be said of the parts that business groups can p l a y : " I t is the job of government, as I see it, to devise and develop the social machinery which will work out the implications of the social message of the old prophets and the Sermon on the M o u n t ; but it remains the opportunity of the Church to fill men's hearts and minds with the spirit and the meaning of those great visions." 3 This is but another way of saying that the mere formulation of codes of ethics, and the establishment of the machinery through which they may be expressed or enforced, will remain forever impotent if prompted only by some f o r m of "Lippmannesque" humanism which can do nothing more than make the best of a bad job. T h e elevation of business standards—that for w h i c h every sane and thinking person longs—can

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come only with a change in the attitudes and hearts of men. Without further ado, let us now consider some of the theories of ethical economy which, though they have great merit and can accomplish much in behalf of a nobler business ethic, are yet insufficient unto the task. INSUFFICIENT THEORIES OF ETHICAL ECONOMY

The first of these insufficient theories is the Utilitarian Theory—and I use this term in a very general sense, with no definite philosophical or economic school in mind. The name of those in the field of business who hold to this theory is legion; and their general attitude has been admirably summarized by one of their elected spokesmen. His words, referring to the apparent need of additional codes and the necessity of a community of interest and purpose, reveal the fact that many of the organizations which I have already praised for their work have their weaknesses and are to be found wanting. " T h e sociologist might herald this change of outlook as a sign on the part of business of an awakening social conscience. The moralist might regard it as an important step towards the setting up of ethical business standards. But to graft social and ethical buds on an

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economic stem is a somewhat dubious undertaking. . . . T h e moral effect might be praiseworthy, but if the change is good at all, it is good because it is 'good business.' . . . I t is merely the application of the ancient rule that helping others is often the surest way of helping one's self." 4 In other words, ethical advances do not necessarily reflect a heightened ethical sense. They are instituted not so much because they "are best" but because they "pay best." Let us scrutinize this broad assertion more closely. What is the explanation behind many of the ethical reforms in business? T h e r e are many—and the roots of a goodly number reach down into this utilitarian theory of ethical economy. Some credit must be given that type of publicist whom we tend to detest, the muck-raker. T h e muck-raker was one of the first to stir the public conscience. T o be sure, he went too far, failing to understand that the whole business world was running along in something of an ethical rut in which everyone had come to travel. Consequently, it was hardly fair for him to paint this or that individual as a villain of the vilest description, or to close his eyes to those business leaders who gave their voices on the side of decency and their energies to correct abuses. Nevertheless, he did make it known that business

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organizations as a whole were all too prone to be apathetic about existing malpractices and that some sections of it were even content with their wallow. Because of this dénouement, certain ethical reforms came into being. But note, they were not born out of a genuine desire to improve the ethics of business. They were forced on business. They were adopted by business groups, reluctantly or willingly, simply to save their own skins. Other illustrations of the operation of the utilitarian theory of ethical economy are to be found in the reception accorded various measures of federal and state governments, a story in which big business can hardly be said to carry off honors for its keen sense of ethical values. T o be sure, many governmental measures designed to bring about reform in the field of business ethics have been admittedly unwise and should have been stillborn. Others, however, have been altogether sane and aimed to produce the greatest good for the greatest number. Far too many of these have been blocked by organized business, or by the lobbies appointed thereby, simply because such measures would tap the head-springs of their income, break their monopolies, or deplete their pocketbooks already filled by questionable means. The history

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of the Interstate Commerce Commission, the Federal Trade Commission, the Pure Food and Drug Act, and many other governmental moves is replete with examples of such concentrated action on the part of big business. Other attempts of a similar nature on the part of Congress or legislatures have met with little or no opposition because, after "taking the sun" of public opinion, business leaders have felt it expedient to sanction or even to take the initiative in the enactment of such reform bills lest they lose out completely. This, again, is the utilitarian point of view which says once more, "Save you own skin—or as much of it as possible." Still another utilitarian explanation behind many of the ethical advances in business is to be found in the ranks of business itself. I f the business man learns through experience that unethical practices injure his total sales and profits over the "long pull," he is eager to take steps to eliminate such practices. I f greater returns accrue through the employment of more mature workers, children are no longer desired in the factories. I f weak and unbusinesslike and unethical firms tend to drag stronger competing firms down with them, the reputable firms must act. T h e same is true when less reputable companies, through devious

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means, get all the business. Legitimate bankers, for example, have fought valiantly on repeated occasions for more ethical banking practices simply because swindlers were cutting too deeply into their share of the consumer's dollar. Even the business man's realization that he is a purchaser as well as a producer has accounted for much reform, the business man in question fearing that he will be outcheated in his dealings with other industries. And some of the progress along this line is traceable to nothing more than the fact that business has become enlightened. A lot of business corruption has been due primarily to ignorance, and this has disappeared in the natural course of events. In all such instances, malpractices have been done away, not so much because it was felt that they were unethical, but rather because they were seen to be unprofitable. I do not wish to appear to be casting aspersions on those who have labored sincerely and with the highest motives for the elevation of business ethics. By no means all business men are victims of this utilitarian theory. My simple purpose is to point out that many who work for and adopt high ethical standards do so because businesses operated on these principles pay the largest returns, because personal stakes may be best protected in

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this way. In one degree or another, many are like a certain business man who wrote with pride in his autobiography of his part against dishonest newspaper publishers who lied about their circulation. One wonders, in reading this noble saga, if his efforts in this regard had anything to do with the fact that he was one of the pioneers who accumulated a sizeable fortune in patent medicine advertising. Imagine his chagrin when he learned that he had been lying to only 50,000 when he thought he had been lying to 100,000! N o r do I wish in any way to belittle the achievements which have resulted from the efforts of business men prompted by this utilitarian motive. They have been many. Again, I wish simply to stress the fact that they have been fundamentally selfish. This theory does not carry us far enough. It is not a sufficiently worthy or stable foundation upon which to erect the structure of a noble business ethic. All that its adherents maintain is true. T h e Principle of Cooperation, or as Dr. Heermance prefers to call it, the Principle of Common Interest, does work. It does "bring home the bacon." But our existence is to be interpreted less in terms of our claims upon life which we may expect to collect in the currency of pleasures and profits, than of life's claims upon us to be paid

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in terms of service which genuinely gives only secondary consideration to the rewards which accrue therefrom. Anyone desiring to act aright, to maintain ethical conduct under all conditions, must go deeper. He must be sure that his motive is worthy and its manifestation in harmony with the dictates of conscience, well-ordered reason, and the spiritual principles which lie at the very heart of the universe. The second insufficient theory is the Ethical Theory. In the introduction to this chapter, I have already expressed the opinion that ethics alone do not suffice. Because so many live and conduct their businesses on this basis, however, it will be well to examine this theory of ethical economy more carefully. Ethics, which is the science of personal and corporate conduct, is a tremendously important subject for study. This is obvious. But mere rules, mere ethical principles, do not possess transforming power. N o one wishes to be like a rule. Rules and principles, indeed, are often like disembodied spirits which can do nothing more, perhaps, than walk the earth and haunt the consciences of men. They are helpful, of course; but they are to be found wanting when it comes to achieving altogether satisfying results.

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For one thing, vast areas are left untouched. A prominent business man in the early years of the present century publicly announced that he based all his business transactions on " T h e Ten Commandments and the Penal Code." In so doing, he rendered himself safe from prosecution; but he merited little praise, really, for the Ten Commandments, vital as they are, do not cover one's whole duty, and the Penal Code does little more than attempt to interpret a few of the many relations between man and man. Moreover, such a basis for life and business is decidedly negative, a seemingly inherent weakness which the advocates of this theory find it most difficult to avoid. On this point more will be said in a later chapter. Again, the ethical theory alone leaves too many loop-holes through which an individual may escape obligations or by which he may excuse himself. Consider, for example, the famous German philosopher Kant's Categorical Imperative: "Act as if the law of thy action were to become, by thy will, a universal law." In theory this principle possesses great merit, but in practice it is far from fool-proof. As Kant points out, when we do wrong we do not will that others should do the same. On the contrary, we want others to keep on doing right so that we may continue to profit

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by our wrong actions. In other words, a man may endorse such a general principle and yet find a ready exit for himself. Wrongdoing consists in making an exception for oneself, and it is through this loop-hole that many drive the proverbial twohorse team with themselves seated on the driver's box. The same applies to the Golden Rule as the sole basis of a business ethic. The Golden Rule, rightly interpreted, is a true and splendid principle. If an individual believes to the contrary, he has not progressed far beyond the hyena. But the Golden Rule, together with the rest of the Sermon on the Mount, is easily suject to a wrong interpretation. It may be an easy prey to the ravages of rationalization. In short, it is applicable and practicable only if one's heart and mind are in the right place and truly permeated with the doctrine and spirit and mind of its originator, Jesus Christ. Then, and only then, are there no loop-holes left. Once again, ethical principles alone, while inspiring to look upon, are apt to be like a new car stalled in the midst of business traffic without gasoline. This is their main deficiency. Seeing no way to lay them down on everyday situations, we tend to think of them in ways that satisfy our emotions without committing us to act upon them. W e

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view them as "too lofty to work" in an imperfect world, and think we shall do enough if in after years we remind ourselves—by mottoes on office walls and by pronouncements amid after-dinner smoke rings—that we really have them at heart. This is to turn our ethical ideals into self-compensatory maxims or into pipe dreams. As an illustration of what I mean, I would mention "The Monument of Success" which Dr. Lord publishes in his book The Fundamentals of Business Ethics.6 This monument is constructed as follows: The foundation stone—making a living; the second stone—acquiring a surplus; the third stone—gaining a reputation; the fourth stone—establishing character; the capstone—service. Theoretically, there is no fault to be found with this monument. The trouble is, however, that it takes us so long, in the hectic and competitive world of business, to lay the first three stones that we allow the fourth and fifth stones, character and service, to stand to the side interminably. W e know that they must be put into place sometime, but that time is indefinitely postponed. This is but another way of saying that if we are the possessors of nothing more than a fine ethical theory, we are doomed ultimately to complete or at least comparative failure.

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The history of business codes lends abundant weight to this general opinion, namely, the insufficiency of the ethical theory. As I have said, the voluntary regulation of business by the imposition of rigid ethical standards and codes is one of the striking features of this era. Moreover, they have wrought wonders in lending guidance to business men and have been a means of bringing social pressure to bear upon their signers. Nevertheless, something is lacking. They are—and forever must be—bogged down for want of a dynamic power adequate to bring about their fulfilment. I know I have said this repeatedly, but it is a statement of fact which well bears repetition because it is so little appreciated. Codes of business ethics are not lived up to satisfactorily for this very reason. I know, of course, that group ethics are often crude and still in the making. I know that we must make full allowance for the fact that practice always lags far behind the set standard. On the other hand, we can never expect codes, in and of themselves, to become the great panacea and cure-all for business ills. Codes do not create ethics. They merely express or attempt to express them. General endorsement, therefore, even by a body of high-minded business men acting in the best of faith, is not enough. Just as music is not

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simply a matter of keys or strings or instruments, so true business ethics are not solely a matter of forms or methods. The important thing is the attitude of heart and mind, the enfolding power, which bends and sways everyone within its field of action. If this attitude and power are lacking, Mark Twain's sarcastic epigram becomes applicable to the business world: "Heaven for atmosphere but Hell for company." Again I wish to make it clear that in no way am I belittling the accomplishments of those who operate on this basis. They have made heroic contributions in the field of business ethics, even as have those who hold to the utilitarian theory. But once again this theory does not lead us far enough towards the goal which I have conceived. I agree with the observation that " A man may be a good business man and not be consciously religious; but he cannot be a good business man if he fails to practise the basic principles of ethics." 8 He cannot, however, be the best business man without being consciously religious—and I use the term "best" in its highest and most socially useful sense. A third and final insufficient theory of ethical economy is one which is closely akin to the two theories already mentioned but which is covered over with spiritual icing. It has a religious flavor,

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but it should not be confused with genuine religion. It is really quite different. I have chosen to call it the Cake Theory. The Cake Theory has as its philosophy a paraphrase of a familiar verse: "Cast thy bread upon the waters and it will return unto thee—cake." Its sponsors—and, again there are many, especially during such times as these—advocate the adoption of religion simply because greater material possessions will accrue therefrom. The following quotations, gathered from various sources, are illustrative. "The best religion is the religion of those people who will win out in competition with other peoples having other religions." "Ninetyfive per cent of the people who do not get along well materially owe their misfortune to lack of religious qualities." " I t makes one tingle to think of the comforts within our reach if we would only become actuated by the spirit of religion." "If children do not see why they should go to Sunday School, tell them frankly that religion 'pays best.' " "The capitalist must give charitably if he would win back his influence with the masses." In other words, religion is made a means to an end rather than an end in itself. One says, for example, that we should point with pride to the fact that most of the church people are prosperous

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and that most of the poor people are outside of the church. Fortunately, this is not true; but if it were, it would be a terrible condemnation of the church and of religion. Another quotes the words of Jesus, "Thou shalt love thy neighbor as thyself," as one of the two great principles of prosperity. It so happens that this is true, in its deepest sense; but it was first voiced as something vastly more than a mere recipe for material prosperity. Jesus was not simply putting forward here a truth which Kipling stated two thousand years later: For the strength of the pack is the wolf, And the strength of the wolf is the pack.

Still another advances the opinion that Jesus always closed his appeals with the promise that if we would be saturated with the Service Idea, we would automatically become prosperous; that the most truly religious men would gradually but surely acquire the wealth of the earth; that the reason why people are out of a job or not getting on better is because they lack religion. This is followed by the proposal that religion be adopted as a means of enabling all of us to have much more than we have at present. Even good health is listed as one of the automatic benedictions thus bestowed !

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What of this cake theory? It must be admitted once again that the sponsors of this theory contribute much to social well-being. They have given real impetus to the cause of higher ethics in business. This is because it is true that Jesus' Law of Equal Reaction, so-called, governs human relations as it does all physical, mental, economic, and spiritual forces. But something is lacking, something of vital importance. There are two things wrong with this picture. In the first place, though many of its tenets are true, the real religious spirit and motive are nowhere to be seen. The man who gives of his wealth for the purpose of securing favorable publicity, or who rents a pew to enhance his reputation, or who carves his name on the church or the library or the school so that people will patronize his business—this man is not actuated by love of his fellows, but rather by the supremest egoism ^nd self-interestedness. In like manner, he who applies the Christian principles of ethical business conduct simply because they pay the highest dividends is guilty of a perversion of Christ's life and teachings. In the second place, it must be pointed out that some of the tenets of this theory are not true. Religion does by no means insure health, wealth, or length of days. Christ himself could give no thought to

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his physical well-being. He had no material possessions, not even a place where he could lay his head. As for length of days, he was crucified at the young age of thirty-three. In sum, the cake theory of ethical economy is in direct contradiction to the spirit of the Christian message. Its title verse, "Cast thy bread upon the waters and it will return unto thee—cake," misses the point completely. I f these three theories of ethical economy—the utilitarian theory, the ethical theory, and the cake theory—while they do contain much to which we should listen and by which we should be guided, are found to be wanting, whither are we to turn? I have already given what I believe to be the answer—the Religious Theory. Let me now indicate more fully what I conceive this theory to be. Such an exposition is imperative because the term "religion" is so frequently misunderstood. T h e very mention of its name causes many people to shy away. T h e sight of it on the printed page is a signal to turn out the lights and go to bed. Consequently, I would make it clear at the outset that I am fully aware of the feelings and opinions which many harbor in this connection. A t the same time, however, I would ask such persons to remember that there is a great gulf fixed

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between essential and genuine religion, and religion as it is sometimes organized. THE RELIGIOUS THEORY OF ETHICAL ECONOMY

Religion is not merely a system of ethics, though ethics constitute an indispensable and inseparable part of its entire make-up. Religion is a source of strength and wisdom which makes it possible for one to live out the highest system of ethics of which Man is capable. There are many spokesmen for this so-called "day and generation" who stoutly maintain that this is all folderol. In no uncertain terms I suggest that these spokesmen are wrong. And many others, business men included, are of the same opinion. A statistician expresses it thus: "Business men desire spiritual help from religion. It is spiritual power for which they really hunger. The great opportunity before the church is in the development of such spiritual power. The greatest of undeveloped resources is faith; the greatest of unused power is prayer; the business men of the nation are waiting for the church to open to them these resources and powers."7 This is the expressed opinion of but one man, but there are many parallels. And certainly it is the unexpressed opinion of countless thousands.

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Let us analyze these words. In addition to the positive conviction here expressed, there is also to be found the hidden and negative suggestion that at present the church is not performing its tasks particularly well. This is often a just criticism. In pre-revolutionary Russia, for example, the general status and condition of the church were such as to give some justification at least for the attitudes which have since developed. In the communist set-up, religion—all religion and not only Christianity—is absolutely taboo. The leaders of the Russian proletariat are not indifferent to it. They hate it with a royal hatred. They are fond of saying that religion began when the first rogue met the first imbecile. They identify it with superstition and with man-made, money-making institutions. Lenin, e s p e c i a l l y , regarded God with positive, furious animosity. God, in his eyes, was the contemptible creation of the abject bourgeois, the last pitiful device of the sordid capitalist for keeping the unhappy proletarian in slavish subjection through fear. Russia offers an extreme picture, but mention of conditions there serves to show that we must discriminate between different types and qualities of religion. The truth is that there are both good and bad expressions and emphases of religion.

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There is high and creative religion and there is low and stifling religion. There is positive and enlightened religion and there is negative and antiquated religion. There is well-rounded religion and there is lopsided religion. There is seven-day-a-week religion and there is one-day-aweek religion which talks of service on Sundays and only of profits on the other six days of the week. Because the history of the church has been a constant fluctuation between persecution and prosperity, there is religion which is charged with spiritual power and there is religion which is weak because it has fallen too readily into line with material prosperity and has catered to the moneyed classes. There is religion which emphasizes fundamentals and agreements and there is religion which spends its time in petty factional and denominational scraps. There is religion which inspires its worshippers to go out unselfishly to serve mankind and there is religion which is content if its supporters gather together on occasion to bring joy and salvation to their individual souls. There is sincere religion and there is hypocritical religion, religion which is vital and religion which is nothing more than the formal observance of outward ritualistic forms. Much religion is lukewarm and sicklied o'er with the

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pale cast of wishy-washy goody-goodiness. It is no wonder, therefore, that many churches, in the eyes of many business men, appear to be infantile, unbusinesslike, and irrelevant to modern life. It is unfair, however, for anyone, the business man included, to condemn religion on the basis of its failures, its shortcomings, or its perversions. T o do so is inconsistent with our conduct in other spheres of human experience. One who comes into unfortunate contact with a quack doctor or a shyster lawyer, for example, does not cease patronizing medicine or law when he has need of its services. Instead, he turns elsewhere, seeking the best. In like manner, religion and the church should be judged in terms of the best that is to be seen, in the light of their finest exponents and highest achievements. In this connection, listen to the verdict pronounced by one of the world's foremost scientists, Robert Andrews Millikan: " . . . a very large fraction of the altruistic, humanitarian, and forward-looking work of the world, in all its forms, has today its mainsprings in the Christian churches. M y own judgment is that about ninety-five per cent of it has come and is coming, directly or indirectly, from the influence of organized religion in the United States. If the influence of American churches in the fur-

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therance of socially wholesome and forward-looking movements, in the spread of conscientious and unselfish living of all sorts, were to be eliminated, it is my belief that our democracy would in a few years become so corrupt that it could not endure." 8 Chronic critics would do well to emulate this scientist's passionate and fearless searching after truth. And even more important than this, they should appraise the Christian religion according to the life and teaching of its Founder, and not according to the way in which mortal men in their weakness have endeavored to interpret, in word and deed and institution, this life and these teachings. In substance, Christianity is not a topic for debate but a call to unselfish service. It is not good advice but good news. It is not a program but a secret. That secret holds the key to the solution of the many and varied problems which the world of business confronts. It offers, as I have said, wisdom and strength. It offers a philosophy of business first; and second, it supplies a power for the attainment of the same. Since the philosophy of business which is held by a people will very largely determine their ethics of business, let us look briefly at the teaching of Christianity on this point. W e must limit ourselves to comment on three general aspects of

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this subject, between which there is, of course, much inter-relation. These aspects a r e : first, wealth; second, service; and third, the development of human personality. These do not tell the entire story but they do give us enough to keep us busy for years. Furthermore, I am convinced that it is along this line, namely, instilling men with a Christian philosophy of business, that we find the greatest promise of a heightened business ethic. First, the pioneer frontiersman's economic philosophy of money was all too often, " W h i l e you're gittin', git a plenty." T h e Christian philosophy, on the other hand, says in very definite tones that the unrestricted profit motive brings on an anarchy terrible to behold both in the economic order and in the lives of men. I do not believe it advocates the absolute elimination of the profit motive; but it does insist very definitely that material possessions and rewards are, if not exactly beside the point, at least purely secondary. Just as the possession of lots of paint does not necessarily and of itself make a good artist, so the possession of tremendous wealth does not necessarily spell success or denote real achievement. Indeed, mere wealth and material possessions leave men profoundly unsatisfied in the majority of instances. Life is designed to offer something

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more; and business, which in the nature of things must occupy a large proportion of mortal man's existence, should offer something more. Ella Wheeler Wilcox has well expressed this thought in her words : I gave a beggar from my little store of wealth some gold ; He spent the shining ore, and came again and yet again, Still cold and hungry, as before. I gave a thought, and through that thought of mine He found himself, the man supreme, divine, Fed, clothed, and crowned with blessing manifold, And now he begs no more.

In short, we are doomed to be eternal beggars knocking at the door of the world if wealth be the primary reason for the sweat of one's brow. The majority do not share this view. Why, after all, do men seek gold above all else? Certainly not because they crave to sit in their cellars —or in private alcoves just to the right of the safe deposit vault—and let their store of coins jingle through their miserly fingers. No, the almost universal concentration on wealth-production is to win, not money, but that for which the average man most craves, namely, social power. Money is simply a fluid form of power—power to own or to do things. It is for this reason that the Count of Monte Cristo, when he had accumulated a vast

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fortune, felt that he could cry, " T h e world is mine!" Professor Overstreet was right when he said that the desire for money is really a desire to secure control of the tools of life. " I f big pay goes with a job well done, then the pay is simply tools added to tools well used." I repeat, the Christian philosophy of wealth does not advocate a society in which everyone is penniless nor one in w h i c h everything is distributed equally. It does not frown upon riches per se. It says, rather, that a man should not put money before all else. It says that a man should not belong to his belongings. " T h e love of money is the root of all evil"—these words are just as true today as they were three thousand years ago. But it is the love of money w h i c h is the root of all evil. Such love is despicable, cramping, crippling, confining, and is at once a crime, a folly, and a moral wrong. Such love the Christian philosophy of business cannot abide or tolerate— and this because it has a higher view of the purpose of life and of business, because it has a vision of a nobler and stronger power, namely, the power of a sense of stewardship and service. This brings us to the second aspect of the Christian philosophy of business, the meaning of service. Dr. Heermance gives us a splendid introduc-

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tion to this phase of the question. He writes: "Let us begin with the question of motive, or incentive. In popular discussions, this takes the form of a demand that the profit motive in business be replaced by the service motive, in order to save society from its ills. The defender of the present system retorts that, without the drive of prospective profit, no one would do any work, save any money, or make any effort to increase the efficiency of production and distribution. There is no need of getting so heated about the matter. Both parties are right, and wrong. . . . Life cannot be reduced to such simple terms as the antithesis between a profit motive and a service motive."9 With this statement I am in hearty accord. The entire question goes much deeper. The displacement of the profit motive must be relative, not absolute, that is, it must be definitely subservient to the service motive. When Edna Ferber wrote in her splendid novel Cimarron, "A few people make the world. The rest just come along and live in it," she hit upon the profound truth. The "few people" are those who have solved this problem. They are the ones for whom the service motive is predominant. They are those who comprise the everlasting "Christian minority." The Christian philosophy of service, in

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short, insists that we resolutely align ourselves with these few, contributing unstintingly to the creation of the world. Like Horace Mann, we should be ashamed to die until we have achieved some victory for humanity. To live out this philosophy in our workaday lives is difficult of attainment. Consequently, I can, in a sense, easily understand the reasoning of those who say that the profit motive must be completely obliterated. It is a dangerous policy to advocate its combination with the service motive. In the nature of things, it is all too easy, despite the nobility of our theory, to permit the desire for riches to become the prime ruler in our lives and actions. Jesus recognized this danger. Even though he did not condemn money as an evil in itself, he did feel it necessary to warn men that the chances are more than even that it will become their god if much thought is given to it. Moreover, this policy often opens the gateway to hypocrisy. Numerous are those hypocrites who boast of the service they are rendering when in fact they are scamping their services in every possible way. Like the scribes and pharisees so severely censured by Christ, for a pretense they "make long prayers" while in secret they "devour widows' houses." All this notwithstanding, such a policy is not

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impossible of fulfilment. Each of us has known men in business and in the professions who have worked out the proper relationship between these two motives. They realize, of course, that they must keep body and soul together, that they must provide for their dependents. Nevertheless, they labor valiantly in the service of others with no conscious thought of reward. One further word. Service in the business world is not the superficial thing it is sometimes thought to be. It is not an addition intended to sweeten a transaction, such as putting a man on the sidewalk to open the door or maintaining an extra telephone. Indeed, while such additions may add to the service rendered, they may be nothing more than unnecessary frills which add to the cost of doing business and for which the consumer pays. In such instances, most of us would prefer to get extra value in the quality of our purchases or lower prices and be allowed to open doors for ourselves. According to the Christian philosophy, service is a very deep and vital thing. It is the great and fundamental purpose of business. In a very real sense, profits are of secondary import—though, of course, they must be forthcoming if business is going to continue. A payment, however large or however small, is not

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m o r a l l y the closing of the account for w h a t has been done. W h a t is given to the servant of the p u b l i c — a n d every business man is in this category — i s not a reward for past service, but an opportunity for better and more abundant service in the future. But w h y elaborate w i t h endless words. T h e r e is no better description of genuine service than that found in Christ's own words. " L o v e thy n e i g h b o r " — s h o w forth sincere esteem, consideration, good will. " G r e a t e r love hath no man than this, that a man lay down his l i f e for his friends" — t o spend ourselves unreservedly, perhaps recklessly, this is Christian service with a capital S. In sum, Christian service operating in the business w o r l d must place the w e l f a r e of others on the highest conceivable pedestal. T h u s we arrive at the third aspect of the Christian philosophy of business, the development of human personality. T h e w o r l d does not owe us a l i v i n g ; we owe the w o r l d a life. If w e accept this view, the purpose of business is entirely revamped before our eyes. Business is no longer a means of m a k i n g a living, but rather a means of m a k i n g a life and an instrument to be used in the m a k i n g of the lives of others. R o g e r W . Babson arrived at one of his greatest deductions when he said: " W e must realize that life is given to us not for

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the purpose of building factories or houses, nor for constructing railroads or steamships; nor is the purpose of life to develop any of the other material things which now appear to us of such great importance. Industry should be encouraged first to develop the soul of man, and all these material things are of use only as they succeed toward that end." 10 And whether we believe it or not, it is none the less true that the greatest of undeveloped resources are the souls of men! Russia, again, with its Marxist theory of economic materialism and its thoroughgoing and unadulterated atheism, definitely sacrifices the individual. T o be sure, Karl Marx sought to uplift the worker; but in so doing he emulated Blatchford's famous defense of the bottom-dog. H e freed the bottom-dog from any moral censure by depriving him of his honour and dignity as a human being. Individual personality becomes non-existent in an equalitarian society in which everyone takes the same step at the same time. Man is lacking in Hegel's doctrine of anti-personalism which Marx appropriated, as a result of which his system attempts the impossible, namely, to make a "class-ape" evolve into a human being. Trotsky expresses the situation thus: "As for us, we were never concerned with the Kantian

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priestly and vegetarian Quaker prattle about the 'sacredness of human life.' " All this is foreign to the Christian philosophy of human personality. Christ had too lofty a sense of the personal worth of the individual. Consequently, the Christian business man must recognize with Nicolai Berdyaev that "the pitiless selfishness of competition, the turning of man into a thing and of his work into a commercial commodity, are intolerable to the Christian conscience. . . . Every man is made in the image of God, however indistinct that image may become, and every man is called to eternal life." T o be aware of the human factor in industry, to respect human personality always, and to labor unceasingly for the social good—these emphases of the Christian philosophy constitute a tremendous challenge to American business. It is not within the purview of this book to go into the broad questions of definitely social import, all of which are related to the problems of business ethics: conditions of employment, social legislation, social machinery, social structure, and the like. W e can and must, however, ask this question: W h a t does business, and the ways in which business is conducted, do to people who do business? T h e war gave us a partial answer. Out of the two million

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men tested in the draft, over one-half showed a mentality of fourteen, while one-third were actually rated as morons. Modern conditions of business played no small part in bringing about this lamentable situation. And certainly the multifarious malpractices of the business world dwarf and twist the moral development and the moral standards of far too many men who engage in it. I t is against such influences that the Christian philosophy, which stresses the development of human personality, wages unending warfare. I seriously question whether anyone will do much to raise business standards unless he first becomes possessed of a great passion to aid in the development of human personality in all its range and depth and length and height. He may work along to this end year after year; but unless he knows why he is working for such improvement, his labor will be largely in vain and discouragement will in time overtake him. He will be like the faithful negro who, after twenty years of tapping the car wheels on every train that had stopped at his station, one day straightened himself up and inquired seriously, "Say, boss, jus' what is dis here tappin' for?" If, however, he sees the problem in its cosmic setting; if he is aware that the purpose of the universe is the develop-

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ment of human personality; then, and only then, will he be inspired by a sufficiently worthy and creative motive. This realization is one of the great contributions of the Christian philosophy of business. T h e second great contribution of Christianity is a power for the attainment of the same. T h e r e can be little hope for a permanent ennoblement of business ethics unless men find some power great enough to change their hearts. T h e r e is extraordinary agreement on this point between public men, politicians of various parties, business men, publicists of many kinds, moralists and clergy. But verbal agreement is not enough. Something must be done about these symptoms of what might be called "heart trouble." T h e Christian religion gives the prescription. I quote again from Henry A . W a l l a c e : "Religion to my mind is the most practical thing in the world. . . . B y religion I mean the force which governs the attitude of men in their inmost hearts toward God and toward their fellowmen." 1 1 Spiritual power is the only power sufficient unto the task. Humanistic power may accomplish much—this has already been admitted gladly. Moreover, those who labor in the field of business and the physical sciences, while not consciously religious, may even

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have appropriated many of the attributes of true spiritual religion. What a magnificent edifice of social service business and the physical sciences have reared in this our modern world! What triumphs of the intellect have been made within their walls! What instruments for the betterment of life have been forged in their workshops ! What substances for the healing and helping of men have been born of their laboratories I Yes, and what thousands of self-denying lives of men lie buried in their mere foundations! What patience and perseverance; what putting aside of preference and passionate striving after truth; what toil unknown and unnoticed; what achievement without record; what sorrow of hope deferred and sacrifice of personal ambition are gone into their building! In theory, many children of business and science may serve an Unknown God. In practice, they follow Christ. Unconsciously they have found a power which has enabled them to labor in this manner, even though they have not given it a name. Spiritual power, however, becomes a much more vital factor in human life and its strength becomes greatly enhanced if men seek after it consciously. Such power is a reality. It is available. W e must not think that it does not exist because it

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is being so little used. Electricity has been operative in the world for thousands of years before men, only recently, harnessed it and put it to use. T h e same is abundantly true of spiritual power, with this exception: it is not yet in wide use. I t is high time that it be employed on a wide scale— and we can justifiably do so because we know just as much about it as we know about electricity. I t is invisible, formless, incapable of definition, yes; but it is none the less powerful. As one business man says, " M a n is the motor that can use this great invisible power. Prayer is the wire or the pipe that connects man with the great source of supply." W e are inane if we do not explore this great field of untapped resource. America spends millions in developing water powers, steam-generating plants, and electrical stations; but the power that we are getting in these ways is not to be compared with the great spiritual forces which could be ours for the asking. It is impossible here to enter upon a detailed description of the nature or the technique of prayer. Suffice it to say that if we push forward into this comparatively unexplored realm of human experience, we shall make many startling discoveries. W e shall come to know that God is actively engaged in the making of the world, the

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Power behind all phenomena. We shall be led to accept Christ's interpretation of the universe, to recognize the divine character of the world in which we are already living, to learn its necessary laws and conditions of life and conduct, and to adjust our human relations accordingly. We shall see that when Christ gave his ethical teaching to mankind, he was not legislating but rather interpreting life as it is designed to be. Jesus' ethics are a sort of by-product, principles which need to be transfigured by a man's attitudes and emotions ànd conscious personal relationship with God. In short, we shall come to possess more and more the spirit and the mind of Christ, thus being enabled to interpret his teachings aright and to apply them to concrete business situations as they arise. In the final analysis, we are not made moral beings by law or by public opinion or by organizations. We become moral beings only when our hearts are changed from within so that we do the right spontaneously. And there is no way of bringing this thoroughly to pass save by living in the presence of Jesus Christ. There is no power which can bring about this result save the power of God. The strength of such an all-possessing loyalty cannot be measured.

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CONCLUSION Just as Christ used Peter's commercial boat as a pedestal for his instruction, so may business today be employed as a vehicle for the promotion of the kind of world that Jesus conceived. It is perfectly possible to be " F e r v e n t in business, serving the Lord." If business men come to see that, first and foremost, they must serve the community through their business and not regard their business as a means of making money with w h i c h they may later serve the community (an all too popular v i e w ) , then may business become the greatest of adventures, an enterprise requiring the finest devotion. It may sound foolish, crazy, impracticable, to apply an unadulterated Christianity to business. I t may even be dangerous. Nevertheless, so to conduct one's business is the greatest wisdom of human and economic conduct. I repeat, this is the challenge w h i c h confronts the business world and especially w h i c h confronts individuals in the business world. T o accept this challenge is to go " T h e Second M i l e in Business Ethics." T h e creation of influence and power comes from going this second mile. F a m i l i a r is Stevenson's story of the four marines left over from the lifeboat of the sinking British ship

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Wager. The lifeboat took all that it could, and pulled away, compelled to leave four men unsaved. What did these four men do? Did they sulk? No. They gave three cheers when the boat pulled away and left them to die. This is the parable of the second mile enacted in real life before our eyes. This is the spirit which true religion creates. This can and should be the spirit of American business. This will become the spirit of American business, however, only when men realize that to enter business is to set forth upon a divine commission, saying what one said long ago: "Wist ye not that I should be about my Father's business."

THE FIRST PERSON SINGULAR IN BUSINESS ETHICS

III T H E F I R S T PERSON SINGULAR I N BUSINESS E T H I C S INTRODUCTION

THE foregoing chapters have been devoted to an examination of the general principles of business ethics. As we now turn from idealistic theory to the specific application of the principles evolved, Mark Twain's sarcastic epigram which I have already mentioned, "Heaven for atmosphere, but Hell for company," becomes peculiarly appropriate. There is scarcely anyone who will not vote "Aye" in favor of the highest conceivable ideals in business. But when it comes to the concrete application of these ideals, one notes a marked discrepancy. Far too many follow the line of least resistance which, in the world of business, means turning their backs on the ideals to which they have given such ready sanction. In one way or another, they become like the man who was famed in his community for his love of children until one day some of them left their footprints and initials upon every block of his new and unhardened pavement. His fury knew no bounds. He chastised the children severely and lodged [95]

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strenuous protests with their parents. None could understand such an unsympathetic attitude towards this childish prank save one neighbor who remarked, "Well, I suppose George likes children in the abstract but not in the concrete!" Many do endorse ethical business practices in the abstract but not in the concrete. Many and varied are the extenuating circumstances which account for this discrepancy. Consequently, those who seek to eliminate it must be moved by the spirit of understanding rather than by the spirit of condemnation. Personally, I have tremendous sympathy with the man in business. Because of the way in which business is organized, because of its underlying attitudes, and because of the extreme severity of competition, his ethical battle is not a trivial one. "The very term 'business man' signifies that he is a busy man. H e is full of cares, perplexities, and doubts. Everyone is trying to get the better of him. When he is buying his raw material, merchandise, or labor, he is forced to seek the cheapest market or go bankrupt. When he is selling his raw material, merchandise, or labor he is forced to seek the highest market or else go bahkrupt. Literally, the whole world is against the modern business man."1 For this and other reasons, the business

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man should not be criticized or condemned too readily or too speedily. Anyone seeking after the elevation of business ethics must first understand his point of view and approach the matter sympathetically. This does not mean, however, that we should adopt a defeatist attitude nor become so tolerant as to lose our sense of conviction. There are ways and means of overcoming these seemingly insurmountable hurdles. In these last two chapters, we shall endeavor to ascertain some, at least, of these ways and means. For the sake of expediency, and for its sake only, we shall make an artificial distinction between the ethics of the individual in business and the ethics of the business group. Naturally, there will be much overlapping between the two, a fact which the reader must keep constantly in mind. But enough of introductory remarks. Let us proceed to a consideration of the individual implications of a lofty business ethic in a practical business world. Let us endeavor to determine what is the ethical course of business conduct and how this course may be followed in actual practice. Let us examine some of the specific problems which an individual in business faces as an individual.

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A BASIC ASSUMPTION

Progress can be made in solving these many specific problems only if we first admit a basic assumption, namely, that human nature is capable of moral change. Many of the classical economists, most orthodox scientists, and the majority of practical business men stoutly maintain that human nature cannot be changed. On the contrary, I maintain with equal stoutness that it can be changed, that is, if we do not quibble over the terms we use. Some time ago, a brief article was put into my hands which is most pertinent at this point. It reads : " 'You can't change human nature.' How often do we hear that solemn pronouncement! It is made to serve as an excuse for opposition to every form of social change. I t is offered as an explanation for personal wrongdoing. T h e assumption is frequently made that the evils practised by organized society and by individuals are somehow reflections of imperative natural demands. " I n all such assumptions there is a little truth and a great deal of error. When one lies or steals or kills or boasts and shows off, or when he is rude to a friend, he may be acting in obedience to impulses common to man. But his acts do not consti-

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tute the only means by which these impulses may be gratified. An infant may be curious. As a matter of fact, all of them are. We are all bom with something which may be termed an 'instinct' of curiosity (though psychologists are not agreed in the use they make of that term). Now as the infant grows into childhood and later into manhood, he will, from time to time, gratify that instinct or impulse. But he may do this in different ways. He may be a snoop, a gossip, a busybody. He may meddle in other people's affairs. That is one way to gratify the constantly recurring sense of curiosity. When he acts that way he is acting in accordance with human nature. If he is chided for his conduct he might reply, 'You can't change human nature.' "But suppose that instead of being a snoop, interested in the private affairs of his associates, he becomes interested in science and spends his time unraveling a few of the many mysteries of the physical world. That would be another way of giving vent to his natural curiosity. He would be acting in accordance with human nature. What determines, then, which form of 'natural' behavior he shall follow? The answer is 'habit.' One may acquire the habit of realizing his natural impulses and urges in socially desirable or in antisocial

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ways. His habits depend in part upon his environment, his associates, the examples placed before him, his education, and in part his own will. "There is no human impulse which finds satisfaction only in one kind of act, one kind of behavior. There are infinite possibilities of diverse personality development, all of them in harmony with primary human demands. If, then, you are antisocial, if your behavior is questionable, you cannot blame your nature. If you have got into bad habits, build new ones, with the full knowledge that the new and better ones will satisfy the unchanging demands of your nature as well as andl probably far better than the others. And when you hear people defending war and other social wrongs on the ground that human nature requires them, you should be on your guard. W e can't change human nature, but we can choose the channels, individual and social, through which the requirements of human nature may be met."2 The application of these words of wisdom to business conduct is apparent. Strictly speaking, fundamental human nature cannot be changed. But I have suggested that we do not quibble over terms. If we can change, can choose, the channels, both individual and social, through which the

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demands of human nature may be met, what is this, really, if it is not a changed human being? T o all intents and purposes, therefore, human nature can be changed. It has been changed many times in the past. And it can, must, and will be changed many times in the future. This basic truth is as applicable to the realm of business conduct as to any other sphere of human experience; and if it is firmly fixed in our minds at the outset, we shall then be in a position to make definite progress towards lessening the breach between theory and practice. "TAKING THE S U N " OF MORAL BEHAVIOR

As in mechanical action there is "one best way" and only one to reach desired results, so in our relations with those about us there is but one right relation. General Grant used to say that he knew only two tunes. One was "Yankee Doodle" and the other wasn't. In like manner, there are in business some practices which are ethical and some which are not. Many of these are easily recognizable, and we find little difficulty, generally speaking, in acting accordingly, all other things being equal. In many instances, however, there is genuine ignorance of what is the right thing to do in specific situations. T h e r e is a vast area in which it

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is most difficult to know how to interpret or apply general principles of ethical conduct. In many specific circumstances, the right may be much more difficult to learn than to follow. It is upon this area that the spotlight must be played so that business men may see more clearly which way to turn. This, of course, cannot be done with a flip of the hand. As I have said, codes are helpful in that they serve the individual and the corporate group as the chart serves the navigator. But the inadequacy of codes has already been discussed. T o use them aright, one must again know how to "take the sun" and compute one's ethical latitude and longitude with scientific exactness. I repeat, there is one fixed and unchanging standard illuminating our entire way. W e are not set adrift in a world of moral relativity from start to finish. T h e r e are inviolable and unchanging principles by which we must be guided. Relations are infinitely variable, but the moral foundation of the universe is eternally established. It is for the individual or the group to find this true standard, and then to deduce his own or its own interpretations of these principles. This can be done if one is willing to work hard and to think straight. It can be done if one is humble enough to appraise honestly the experience of the past, especially as it

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is exemplified in the most noble exponents of business ethics. And especially can it be done if one immerses oneself in the spirit and personality of the Master of Life. Much light is thrown upon the puzzling problems of business if they are thus carried into this environment of nobility. The maxim noblesse oblige is a working principle which automatically solves many of our problems, enabling us to know and to do the right instinctively and spontaneously. N o basis for moral interpretations can accomplish this satisfactorily save the religious basis, for religion alone lifts morality to the highest possible plane. Instinctive morality, that level of human conduct which is based primarily upon instinct, fails utterly. Customary morality provides no more stability than the shifting sands. Customary morality borrows extensively from the commonplaces of community ethics, as a result of which it is superficial and hopelessly relative. All tribal customs, class or trade rules, family traditions, superstitions, national prejudices, party control, generally accepted fashions and fads—all these are examples of customary morality, and all may change tomorrow. Such a level of morality, which thus reduces moral conduct to the mores of the particular locality in which a person happens

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to be living, is most inadequate, especially if one lives in a place like those reputed to exist "east of Suez." Even reflective morality, the third commonly accepted type of action, is found wanting. It is higher than the other types of action just mentioned in that it is based upon mature reflection and judgment and implies strength of character and a willingness upon occasion to break away from harmful tradition. But, even though it should be cultivated more and more, it must not be depended upon entirely. T h e chances are more than even that it will lead along the road of individualism straight to the stronghold of humanism. I repeat, religious morality is our main hope. One of the functions of religion has always been to throw higher sanctions around the standards which the social group or the individual has developed out of experience. It puts a spiritual interpretation upon the basic ethical principles which compose the warp and woof of the universe, principles which are, as I have said, invariable and inviolable. To see questions of morality in this light makes a tremendous difference. "There is a great difference between the man who takes the long-term view from expediency, and the man who believes in a moral Universe and feels loyalty to a Divine Leader; the latter does not have to be

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watched." 8 And the reason he does not have to be watched is because he is sensitively attuned to the basic principles of life. To my mind, there is nothing to be compared with the man who has thus been "cleansed, steadied and ennobled by religious communion." Of course, the quality of his religion must be of the highest. There are many so-called religious men, both within and without business, who are really smug pharisees and consequently the greatest obstacle to moral progress known to man. On the other hand, the quality of religion which I have previously described does something to people so that they become sensitive to the moral obligations which all the specific situations of life present. In short, it makes them "morally thoughtful," an attribute without which we can never hope to attain a high business ethic. This art of moral thoughtfulness—and it is an art—is the way of good business health. The elevation of business ethics is more than a question of following certain ethical principles. It is a matter of being "on the ball" morally. Stevenson was right when he said : "We are damned not for doing wrong but for not doing right." He was saying that moral thoughtlessness and insensitivity are at the root of most unethical practices. There

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are a number of classic illustrations of this truth which can profitably be paraphrased into modern business terms. So far as we can tell from the story, the rich man Dives was not condemned to Hell because he had won his riches through sharp business practices nor because he was tight-fisted. He was condemned because he had not made it his business to find out that there was a poor beggar Lazarus at his gate. He was, in other words, morally thoughtless. Those in the parable of Jesus who "with one consent began to make excuse" were not left behind because they were positively bad. They were left simply because they were preoccupied and because they allowed their legitimate enterprises to become too much of a drain upon their interests and energies. Again, those in the picture of "The Last Judgment" were not cast into outer darkness because they were guilty of any conscious wrong, as they themselves recognized. They were cast out because chaos and damnation inevitably follow close upon the heels of moral thoughtlessness. The crying need in the world of business is that men develop this art of moral thoughtfulness. It is being cultivated more and more, I feel, in what might be called the business man's "extra-curricular activities," but this is not enough. Something

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is lacking in the stock story of many a respected business man which frequently dwells on the fact that he is a regular communicant of the church· and on what he does for the community by sitting on the school board, or on a civic committee, or by giving to its philanthropies. This is solely an account of his activities outside of business. To be sure, these are important but the main question is: What does he do in business? He must be morally thoughtful there as well. He can permit no divorce between these two spheres of life. And since genuine religion is the inspirer par excellence of moral thoughtfulness, we may wager that a man is morally thoughtless if he says that religion and business do not mix. The chances are ten to one that somewhere he is evading a moral obligation—and frequently he knows it! One final word. In this connection, I would make it clear that I do not believe that the church can establish an economic system that will be valid everywhere, for everybody, and for all time. The church does not profess political and economic truths. But the moral relations between man and man are subject to her judgment and need her active criticism. And above all must she perform her cardinal function despite mountainous opposition, namely, developing the

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consciences, the ideals, and the aspirations of mankind. CHARACTER DEVELOPMENT

W e come now to a most important and practicable consideration if the gap between ideals of business conduct and actual business practices is to be filled in by the individual. I f a young man upon the threshold of business is to fulfil the obligations of " T h e First Person Singular in Business Ethics," he must begin at the beginning and with the little things. By this I mean that he must at an early age give genuine thought to the strengthening of the strands which go to make up his moral fiber. In Boswell's Life of Johnson we read: " I f he does really think that there is no distinction between virtue and vice, why, sir, when he leaves our houses let us count our spoons." In like manner, if a young man anticipating business has not built certain virtues into his character, why, sir, when he enters business let us count everything pertaining to that business ! It is patently impossible to compose here an authoritative list of the virtues, especially as they apply to the field of business. Such a list depends, in part at least, upon the person making it. Plato

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included in his tabulation of the Cardinal Virtues, from which all specific good might be deduced, Wisdom, Temperance (or Moderation), Courage, and Justice. Benjamin Franklin, on the other hand, gave thirteen: Temperance, Silence, Order, Resolution, Frugality, Industry, Sincerity, Justice, Moderation, Cleanliness, Tranquillity, Chastity, and Humility. For our immediate purpose, however, I would say just a word about a few basic and indispensable traits of character which must be cultivated if a man, be he young or old, is to stand with integrity in the business world. First, courage. Some writers on business ethics list courage as a virtue of business because of the fact that a considerable part of business involves risk-taking. Every deal, they say, is an adventure which can be enjoyed only by a man of courage. Moreover, the exhibition or lack of courage will have much to do with a man's advancement. But there is another and higher reason for the need of courage in business, namely, because of the many temptations in business to cut corners, to compromise convictions, and to chisel questionable compensations. These temptations give this trait of character real moral significance. James Russell Lowell expresses exactly what I mean:

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They arc slaves who fear to speak For the fallen and the weak; They are slaves who will not choose, Hatred, scoffing, and abuse, Rather than in silence shrink From the truth they needs must think ; They are slaves who dare not be In the right with two or three. 4

Anyone can see the appropriate implication of this verse for the business world. I t will require courage of the highest quality to stand firm against and to refuse to be guided by many of the malpractices which a man will confront sometime during the first weeks of his business career. As I have already quoted, " T h e intelligent leaders of big business are aware of the profound difficulties which gather in the path of any business man who attempts to interfere with the established grafts peculiar to different industries." 5 But if in all the other relationships of life, this man courageously refuses to yield to the questionable mores of his environment, his chances of standing firm in business are greatly enhanced. Courage and backbone are very definitely attributes of character which can and must be cultivated and so strengthened as to remain strong under all conditions. Second, persistence. a "Treasure Island."

T h e business world is not Gone are the days when

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hidden treasures were stumbled upon in the fields, secreted there decades ago by some Captain Kidd. Business moves along and fortunes, large or small, are accumulated only by unremitting and persistent effort. This fact seems indisputable, yet many do not seem to appreciate it. Evidence of this is the vast number of those who are constantly seeking to get something for nothing. Corner-cutting and get-rich-quick schemes glut the market. Indeed, lack of appreciation of this basic fact can be held primarily responsible for the majority of the unethical practices to be found in business. There is in the world a type of person who has never learned the lesson of persistence. W e call him the "Good-for-nothing" and he is a liability for society. The life-story of such persons is told by one of their own number: There are a number of us who creep Into this world to eat and sleep ; And know no reason why we're born, But only to consume the corn, Devour the cattle, the fowl and fish, And leave behind an empty dish. Then if their tombstone, when they die, Ben't taught to flatter and to lie, There's nothing better will be said, Than that they've 'et up all their bread, Drunk up their drink, (Licked out their plate), And gone to bed.

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But there is also another type closely akin to the "Good-for-nothing" and he, too, is a liability. W e might call him the "Rich-for-nothing"—those who employ some other method than that of unremitting and persistent effort. Consequently, if high ethical standards are to be worked out in the first person singular, the individual must likewise develop this second virtue of persistence—and note, I do not say absorption, which is a vice. Such a trait in one's character, if developed early, will help to insure the application of ethical business practices in the concrete. Third, loyalty. With the general attributes and expressions of loyalty almost everyone is familiar. Consequently, little need be said about this virtue, the development of which is so indispensable to the practical working out of a noble business ethic. The fact should be stressed, however, that loyalty is no superficial or sentimental emotion. Many a university student, for example, sings constantly of his loyalty to his Alma Mater, but little does he realize that he is being disloyal when his personal conduct, both on the campus and during vacation, is such as to heap discredit upon her head. The issues are much the same in business. An employee or employer, if his spirit of loyalty be real and deeply rooted, cannot allow his per-

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sonai conduct or his business practices to bring discredit or dishonor upon his house. Moreover, it should be pointed out that the sphere in which loyalty is supposed to operate cannot be narrowly circumscribed. Again, the analogy drawn from university life is enlightening. No student is truly loyal if his loyalty is limited to a particular group within his university or, indeed, solely to his own university. H e is being disloyal, for instance, if in any way he casts aspersions or reflections upon other groups (perhaps a competing fraternity) or upon other universities (as students tend to do when an athletic feud is in progress). So in the business world, no one is really loyal who considers the feelings or welfare of only a small group within his firm. And certainly no one appreciates the genuine significance of loyalty who thinks only of his own particular company. H e must also be loyal to the trade or industry with which he is connected, permitting no act of his to lower its standing. Especially must he recognize his responsibility to be loyal to the right, whatever be the consequences. H e cannot propose this paraphrase of a familiar toast: " M y company! In her intercourse with others may she always be in the right; but my company, right or wrong." In short, true loyalty embraces the entire

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length and breadth of a man's associations and connections. The welfare of the corporate group in which he moves becomes the loyal man's concern, even though it be to his own detriment. "The change from the individual life of the animal to the group life of civilized man, which becomes a life of ever expanding complexity as our scientific civilization advances, would obviously be impossible unless the individual learned in ever increasing measure to subordinate his impulses and interests to the futherance of the group life"0-—this is the plea which Robert Andrews Millikan makes for an all-inclusive and noble-spirited loyalty. The inculcation of this quality of loyalty has definite moral bearing upon questions of business ethics. It is a virtue which can do much, in and of itself, to root out many of the malpractices and evils of business. Fourth, personal morality. I use this term in a somewhat narrow sense as pertaining to one's private moral habits, realizing, of course, that personal morality embraces far more than the socalled "sins of the flesh." Here again, some writers on business ethics stress this point because of the repercussion of clean living upon the success of the business with which one is connected. One such writer, for example, tells of a bank president

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who was removed by the directors because of flagrant public scandal resulting from the president's immorality. The president claimed arrogantly that his private life in no way affected his efficiency in business; but the directors knew better. They knew that the public would have little confidence in a man of known immorality. All of this is true. All forms of personal indulgence do have a reactionary effect upon the business in which one is engaged. But there is a deeper and more vital reason why clean living is demanded of the business man. It is because a let-down in other spheres of ethical behavior almost inevitably follows a lowering of the bars in this more personal sphere of human conduct. Drinking, sexual morality, and other expressions of personal indulgence weaken one's moral inhibitions all along the line; and if one's moral fibre is thus debilitated, one is all the more prone to succumb to all sorts of unethical business practices. Illustrations of the way in which the ethics of one's private and public life are interrelated are legion; and they reveal that far more is involved than the mere question of what the resulting public opinion and public confidence will be. In short, if a man does not shoot and live straight when the office is closed, the chances are more than even that he will not

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shoot and live straight from nine in the morning until five at night. It is imperative, therefore, if one is to work out satisfactorily the implications of the first person singular in business ethics, that he form habits of clean and well-controlled living. And fifth, honesty. Inasmuch as business is "an ultra-social occupation; its pursuit involves continual and intimate relations with others," this is perhaps the fundamental virtue of business. Indeed, it is so fundamental to modern business that further elaboration on its implications should be unnecessary. T o mention it is to present a truism which has been recognized for centuries. Iago spoke about it in classic words long ago in Othello: Good name in man and woman, dear my lord, Is the immediate jewel of their souls : Who steals my purse steals trash ; 'tis something, nothing ; 'Twas mine, 'tis his, and has been slave to thousands; But he that filches from me my good name Robs me of that which not enriches him And makes me poor indeed.

T h e business man's reputation for honesty is his choicest possession. As the Declaration of Principles of the Associated Advertising Clubs expresses it: " W e believe in truth, the cornerstone of all honorable and successful business, and we

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pledge ourselves each to one and one to all to make this the foundation of our dealings." Unfortunately, however, this unanimous agreement as to honesty being the fundamental virtue of business is an agreement in theory only. Here more than anywhere else in the world of business is there a divorce between theory and practice. This divorce made Iago the chief of villains. It made possible Your Money's Worth and IOOjOOOfiOO Guinea Pigs. It accounts for many a business man succumbing to all sorts of petty or flagrant dishonesties. I advocate that a man utilize every relationship of life to build unadulterated honesty into his character not simply because it pays. Honesty does pay, of course, as is indicated by the story of a man who missed a $35,000 a year position because a friend once saw him move a golf ball from a hole in the rough out on to the edge of the fairway (a story which also illustrates the interplay between personal morality and business success). In the long run, it is the best policy, even though it does seem that shady practices often get by and bring in large dividends. Rather do I advocate absolute honesty because I believe it to be the underlying principle of a useful, rich, and happy life. It is not really a policy. It is a

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foundation. It is the rock on which all permanent human dealings are built. It is at the very heart of the universe, an axiom of life itself. Just as defiance of the laws of health brings its inevitable penalty in the form of illness or death, so any individual or generation or nation that violates the law of honesty does so to his own or its own destruction. Proof of this is to be seen on every hand. Individuals and groups have been flaunting this basic law for society's health tirelessly, persistently, undiscourageably, almost jubilantly; and the social consequences have been profound and tragic. In sum, honesty is an indispensable part of that vast, mysterious, impenetrable silent energy which furnishes the dim background of all that we are and all that we shall do and be, of each man's own life and of mankind's drama. It has reflex value only because we live in a social world, and a social world of a particular character, a social world which takes its character from God. This is just plain truth. It is the unquestionable teaching of the Master of Life, and it is high time that we acknowledge the fact that "Jesus is to social ethics what Newton is to mechanics, or Faraday is to the study of electricity."

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In the light of this, the way in which the business man must go is clear indeed. "Business ethics demand untarnished personal honor; an honesty sounder and surer than any moralist has ever preached. T h e strong business man must be one who 'Couldn't lie if you paid him A n d who'd starve before he stole.'

and he must not be one to quibble about technicalities of lying and stealing. There can be for him no twilight zone between honesty and dishonesty. H e will not repudiate his word even to save himself from bankruptcy." 7 These basic virtues or traits of character must be woven into the moral fiber of the individual business man from the very beginning if there is ever to be much hope for the cause of business ethics. There are others, of course—thrift, courtesy, cleanliness, tact, definiteness, carefulness, and many more—but these, as important as they are, seem to be more like utilitarian recipes for success than basic virtues. T h e five which I have mentioned are fundamental, and especially must they be exercised in every area of life, particularly during the formative years. If they are sufficiently rooted in human character during

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this period, they will not be easily torn up even by the gale of business competition. As Dr. Joseph H. Willits, Dean of the Wharton School of the University of Pennsylvania, has truly observed, "It is just a question of time before the attitudes and practices in operation in a school which is training youth for business will find outlet and expression in business itself." This is a shrewd observation which works for weal or for woe, and it means that much of the battle to make business free from unethical evils must be fought before one enters business and later in the area of extra-business relationships. CASES AND PROBLEMS8

W e turn next to a consideration of specific cases and problems to be confronted in the first person singular of business. We cannot, of course, run the whole gamut of such cases and problems which must be faced and solved by the individual. All that we can do is to select a few typical illustrations in the hope that some light will be thrown upon those questions which most frequently make their appearance, and that such light may, by inference, help to solve other questions which arise under similar circumstances. Some of the problems which are to be mentioned are naturally more

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serious than others, as a result of which it should be remembered that all are not equally guilty at the bar of business ethics. Moreover, it should be made clear that the different categories devised are mutually overlapping, these categories having been evolved solely for the sake of clarity and brevity. And along this same line, I would also repeat that the distinction between the problems of the individual and of the group is purely an arbitrary distinction adopted for the purposes of expediency only. There is no strict line of demarcation between the two. Something of import for the group is learned as the problems of the individual are outlined, but the individual is also enabled to ascertain more definitely what is and what is not ethical for him as he studies the problems of organized business. In short, breaches of business ethics on the part of the business group are generally more impersonal ; but there is always an individual or a number of individuals in the background somewhere, sometimes hiding behind the skirts of the organization or using the weaknesses of the corporate group to cover up and excuse their own individual weaknesses. One further word in the interest of time. Since many of the unethical practices which are to be considered may be grouped under the general

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heading "Graft," it will be well to say a brief word about this oldest and most prominent form of business dishonesty. Graft is not necessarily illegal. More frequently than not it is within the confines of the law. It is my firm conviction, nevertheless, that graft is not ethical or honest. In its essence it is a profit drawn off from some perfectly legitimate business enterprise for some unnecessary purpose, perhaps for some service forced upon it. It is a leech, a device by which men tap the ordinary processes of production and distribution to drain away for themselves some portion of the product without giving anything in return. It permeates every level of business, being by no means limited to politics. It is "a festering sore in the commercial body of the nation." It is practised in crude and vulgar forms as well as by means of refined, delicate, and sometimes respectable technique. Almost always is it conducted behind a smoke screen, being a sub rosa enterprise conducted in semi-secrecy at least and a practice in which no one can engage with entire self-respect. Its elimination is not going to be easy, especially because it is pretty generally tolerated by the business world and also because it is frequently most difficult, due to the complexity of modern business organization, to determine what is and what is not

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graft. Those concerned about the cause of business ethics, however, must do all in their power to eliminate it. It imposes a frightful toll upon business enterprise, its appalling cost being enough to pay several times over for much-needed reforms such as old-age pensions, unemployment insurance, and the like. Upon its eradication, also, depends the future of business, both economically and morally. "If allowed to proceed unchecked and uncontrolled, it destroys legitimate competition, and cancels the reward of merit; it frustrates the rightful development of true progress. . . . So long as this practice continues, the hope of honest conditions of trade remains a chimerical dream."9 But enough of generalities. One of the most prominent problems to be faced by the man in business is that of bribery. Bribery has been defined as follows: "The giving by the seller to the employee or agent of the real buyer and without the buyer's consent, of a commission or gratuity for the purpose of influencing the sale of goods. The commission may be paid outright or concealed in a variety of manners. The gratuities may range from gifts to entertainment or other favors."10 While illuminating, this definition is only a partial one and not wholly adequate. Per-

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haps a better and more inclusive one is this : "The act of any person or corporation who gives or offers the employee of another or to a member of his family, directly or indirectly, any valuable thing as an inducement for doing or omitting to do any act in relation to the affairs of his employer." 11 Many examples of bribery might be given, but I select only a few at random. The chauffeur who gets a cut-in for swinging the purchase of a new car to some particular company or who gets a secret cash rebate from the purchase of his uniform or from garage work, the rebate being charged to his employer. The man who gets a compensation for smoothing the way for some business deal, perhaps because he has access to those higher up. The merchant who finds it worth his while to push some particular brand of merchandise to the exclusion of some other brand. T h e retailer whose rent is paid by the wholesaler or who receives some other incentive to establish himself in business in return for the promise to give the "fairy godmother" wholesaler his entire trade. The life insurance agent who gives a rebate to the insuree, perhaps by paying secretly a part of his premium for a stated period—a practice which is definitely illegal but which is not altogether unknown. The hospital employee who

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splits with an undertaker, at the undertaker's suggestion or perhaps upon his own initiative, for notifying him of all deaths and hence of prospective funerals. The man who, for a certain consideration, passes to a rival concern the trade secrets or the names of the customers of his own company. The mechanic who allows the test of a new machine to fail because the manufacturer of the old machine slyly holds out a roll of bills. The purchasing agent of a corporation who uses his position to exact or at least collect gratuities from those who sell goods to his corporation. And so we might continue ad infinitum—and perhaps ad nauseam/ These and other forms of bribery extend throughout the length and breadth of business. Such rebates, refunds, discounts, bribes, call them what you will, are definitely unethical in the highest sense of that term. And both the giver and the receiver are to blame. As a matter of fact, though business generally bears the brunt of condemnation (if there is any, which frequently there is not), the consuming public is often the guilty party. I have known many consumers to lambaste corrupt practices in business, only to turn around and instigate such practices themselves if opportunity presents itself. The elimination of this evil,

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I repeat, is not easy of attainment. As business is now conducted and as public opinion is now attuned, many a firm, it seems, would have to go out of business if such forms of bribery were not indulged in. They simply would not get the orders unless they could meet the demands of shrewd and bargain-pushing purchasers or buyers. An unusually blatant illustration of this was reported some time ago by the New York Times. The case centered about a diamond ring belonging to a prominent importer of lace. A buyer admired the ring; asked to be permitted to try it on; and then appeared offended when requested to return it after he had given an order. H e did return the ring, but suggested that he would like to have one like it. The importer ignored his hint. Later all the goods ordered