In the early
seventies the Pennsylvania system was organized and the
Vanderbilts acquired control of lines as far west as Chicago.
Soon the Baltimore and Ohio system extended its empire of trade
to the Mississippi. Half a dozen ambitious trans-Mississippi
systems, connecting with four new transcontinental projects, were
put into operation.
Prosperity is always the opportunity of the politician. What is
of greatest significance to the student of politics is that
prosperity at this time was organized on a new basis. Before the
war business had been conducted largely by individuals or
partnerships. The unit was small; the amount of capital needed
was limited. But now the unit was expanding so rapidly, the need
for capital was so lavish, the empire of trade so extensive, that
a new mechanism of ownership was necessary. This device, of
course, was the corporation. It had, indeed, existed as a trading
unit for many years. But the corporation before 1860 was
comparatively small and was generally based upon charters granted
by special act of the legislature.
No other event has had so practical a bearing on our politics and
our economic and social life as the advent of the corporate
device for owning and manipulating private business. For it links
the omnipotence of the State to the limitations of private
ownership; it thrusts the interests of private business into
every legislature that grants charters or passes regulating acts;
it diminishes, on the other hand, that stimulus to honesty and
correct dealing which a private individual discerns to be his
greatest asset in trade, for it replaces individual
responsibility with group responsibility and scatters ownership
among so large a number of persons that sinister manipulation is
possible.
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