Financial History 142 Summer 2022 - Page 33

employed the standard playbook : indirectly discourage investors from attending the annual meeting , get through it as fast as possible and limit any rogue comments .
Despite struggling during the Depression , U . S . Steel did rather well during and immediately after the war . Irving S . Olds , a product of Yale University and Harvard Law School , had taken the helm of U . S . Steel in 1940 , and shepherded Steel through the challenge of the war economy . By the late 1940s , U . S . Steel ’ s annual sales exceeded $ 2 billion and in 1948 it achieved a record profit of almost $ 130 million . The rebound obviously pleased shareholders , but U . S . Steel was far from perfect , suffering from labor issues and other problems .
Brandishing his delightfully Dickensian name , Chairman Olds called the sparsely attended meeting to order . Despite her gregarious nature , Soss sat and listened to Olds and other top managers briefly overview the year just past . A few bold shareowners occasionally dared to interrupt with tough questions about the company ’ s labor relations . Soss inwardly stewed at how rudely and sarcastically Olds treated her fellow shareholders . “ I saw a lot of things I didn ’ t like ,” she later recalled , including the time a labor representative received the “ brush-off .” As she saw it , management somehow abrogated the authority of the company ’ s rightful owners and controlled them , instead of the other way around .
Soss left the meeting rather disillusioned , having just witnessed in person a problem that law professor Adolph Berle and economist Gardiner Means had described in their 1932 book , The Modern Corporation and Private Property . Stockholders , they showed , did not wield much power despite technically owning the corporate enterprise .
Berle and Means noted that ownership became separated from control in part because stockholders were so dispersed and scattered that they lacked the unity to impact the direction of the enterprise .
“ The property owner who invests in a modern corporation so far surrenders his wealth to those in control of the corporation ,” the duo explained , “ that he has exchanged the position of independent owner for one in which he may become merely recipient of the wages of capital . [ Such owners ] have surrendered the right that the corporation should be operated in their sole interest .” Berle and Means found
Photograph of Soss at the height of her PR consulting career : confident , radiant and fearless .
this a problem in need of remedy and suggested various reforms that Soss later would embrace , such as improved voting rights for shareholders and increased corporate transparency .
She didn ’ t have much time to dwell on the problem of passive investors and arrogant managers . Management ’ s behavior at the U . S . Steel meeting in 1946 clearly irked her , but she had a public relations consultancy to run , and it continued to demand considerable attention . It would not , however , be her last shareholder meeting ith the board of U . S . Steel and the incomparable Chairman Olds .
Janice Traflet , a professor in Bucknell ’ s Freeman College of Management , explores Wall Street history in her research and writing . In addition to her first book , A Nation of Small Shareholders , her work has appeared in numerous journals , such as Journal of Business Ethics , Business History , Journal of Cultural Economy and Essays in Economic and Business History . Robert E . Wright is a Senior Research Fellow at the American Institute for Economic Research . He is the ( co ) author or ( co ) editor of over two dozen major books , book series and edited collections .
Jan and Bob are active members of the Financial History editorial board and co-authors of Fearless : Wilma Soss and America ’ s Forgotten Investor Movement ( All Seasons Press , 2022 ), from which this article has been adapted .
University of Wyoming , American Heritage Center , Wilma Soss Papers , Accession # 10249 , Box 8
Sources
Churchill , Winston . “ The Sinews of Peace ” (“ Iron Curtain ”) Speech . Westminster College . Fulton , Missouri . March 5 , 1946 .
Emerson , Frank D . and Franklin C . Latcham . Shareholder Democracy : A Broader Outlook for Corporations . Cleveland : Press of Western Reserve University . 1954 .
Gonzalez , Arturo and Janeann . “ Where No Woman Reaches the Summit : Thousands of Females Work in Wall Street But Few Attain Executive Status and None Has Scaled the Peak .” The New York Times . August 17 , 1959 .
Graham , Benjamin and David Dodd . Security Analysis . New York : McGraw Hill . 1934 . Kimmel , Lewis . Share Ownership in the United
States . Washington DC . 1952 .
Lipsitz , George . Class and Culture in Cold War America : ‘ A Rainbow at Midnight .’ South Hadley : J . F . Bergin Publishers . 1982 .
Marens , Richard . “ Inventing Corporate Governance : The Mid-Century Emergence of Shareholder Activism .” Journal of Business and Management 8 , 4 : 368 . 2002 .
Martindell , Jackson . The Scientific Appraisal of Management : A Study of the Business Practices of Well-Managed Companies . New York : Harper & Brothers . 1950 .
“ More Girls on Job at Stock Exchange : 150- Year Tradition Now Thoroughly Smashed , but ‘ Business as Usual ’ Wins ….” New York Times . July 13 , 1943 .
“ Pressure Group .” The New Yorker . June 25 , 1949 .
Soss , Wilma . “ Business Women are Here to Stay .” Forbes . December 15 , 1945 .
Soss , Wilma . “ The Solid Gold Chevrolet .” Commercial and Financial Chronicle . April 21 , 1955 .
Talner , Lauren . The Origins of Shareholder Activism . New York : Investor Responsibility Research Center . 1983 .
Traflet , Janice M . A Nation of Small Shareholders : Marketing Wall Street After World War II . Baltimore : Johns Hopkins University Press . 2013 .
Warren , Kenneth . Big Steel : The First Century of the United States Steel Corporation , 1901 – 2001 . Pittsburgh : University of Pittsburgh Press . 2001 .
Wilma Soss Papers . American Heritage Center , Laramie , Wyoming . Various boxes , especially Boxes 8 and 9 , including transcripts of Soss ’ s NBC radio show , “ Pocketbook News .”
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