Cumshaw

Shipping men, John T. Flynn explains, have a special word for graft--"Cumshaw." When a captain, after being entertained lavishly by a chandler, gives an order to him, it is "Cumshaw."

But "Cumshaw" is not of course limited to the sea. Big graft and little graft run through the entire commercial structure. In Graft in Business, published last week by Vanguard Press ($3), Author Flynn goes into the matter. Part of the book deals with petty graft by corporation officials, tells of no practices one does not know or suspect to exist. Typical example : a Victor Talking Machine Co. superintendent who changed glue brands when offered a 5% commission.

The greater part of the book deals with what Mr. Flynn thinks are corporate practices. Such famed cases are cited as the Chicago, Milwaukee & St. Paul Railroad scandals of 1925, the St. Louis & San Francisco revelations of 1913, the Good year Tire & Rubber reorganization in 1921. Modern examples are the Bethlehem bonus system, the Loft, Inc. management troubles in 1930, the Bank of United States failure and the fall of Banker Rogers Caldwell. Cyrus Stephen Eaton's recently shaken corporate pyra mid is also discussed adversely.

While the story Mr. Flynn tells is true he offers no alluring remedies. He does, however, make a few improving suggestions. Among these: that corporations should adopt uniform accounting methods (a suggestion made last week by Gerard Swope--see p. 16); that lists of stockholders should be made public; that directors should be drafted from genuine investors in the company, not tycoons who may have other interests at heart or who pay no attention to the position. He would have no holding companies, would have no company own stock in another except in rare cases. As for general Cumshavian tendencies, Mr. Flynn thinks the best place for correction is in the schools.

Author Flynn is an oldtime newspaper man, was city editor of the New Haven, Conn. Register, managing editor of the New York Globe. He contributes to many magazines. He wrote Investment Trusts Gone Wrong! which was widely read in Wall Street. He now derives much satisfaction from the fact that important steps have been taken to mend erring investment trust ways.

This file is automatically generated by a robot program, so reader's discretion is required.