Business Morality

June 2, 1961

Report Outline
Exposure of Unlawful Business Conduct
Business Interest in Ethical Practices
Efforts to Assure Business Morality

Exposure of Unlawful Business Conduct

Formation of a 26-member Business Ethics Advisory Council at a meeting of business and other leaders with Secretary of Commerce Luther H. Hodges, May 17, evidenced national concern over an apparent decline in business morality. Revelation of a far-reaching price-fixing conspiracy in the electrical equipment industry, evidence of conflict-of-interest situations involving executives of large corporations, and growth of other questionable practices had so shaken public confidence in business standards that government intervention of some kind seemed unavoidable.

It is probable that the new Advisory Council will undertake the task of drawing up a code of ethics for American business. Hodges wants the group to consider specific ethical problems, such as truthfulness and taste in advertising, expense account abuses, the propriety of making gifts to important customers, and pricing practices. Establishment of the council constitutes a single step in a widening examination of business conduct by the federal government and by the business community itself. What is accomplished, or not accomplished, by that examination may have effects beyond the immediate business scene. General and conspicuous failure of business concerns to follow fair practices, it has been observed, would “tend, like the cheap coin in Gresham's Law, to drive out adherence to proper ethical standards throughout the society.”

Collusive Price Fixing by Electrical Companies

The extent of antitrust violations in the heavy electrical equipment field was brought forcibly to public attention, Dec. 8, when 29 companies and certain of their top officers pleaded guilty or nolo contendere (no contest) in federal district court at Philadelphia to indictments charging price fixing and bid rigging in the sale of equipment. Although none of the indictments charged existence of a conspiracy going back more than 10 years, Robert A. Bicks, then Assistant Attorney General in charge of the Justice Department's antitrust division, said some of the agreements had been in effect since the mid-1930s.

ISSUE TRACKER for Related Reports
Morality and Values
Jun. 21, 1996  Teaching Values
Jun. 28, 1967  Moral Education
Jul. 14, 1965  Changes in Moral Customs and Laws
Jun. 02, 1961  Business Morality
BROWSE RELATED TOPICS:
Antitrust and Monopolies
Commercial Law