Posted: Oct 02, 2012 9:55 pm
by Just A Theory
Oldskeptic wrote:
It was not legislated.

I knew that. I was just more commenting that there is a persistent narrative that it has been legislated.

It is a legal precedent set in the Dodge brothers vs. Henry Ford case settled by the Michigan supreme court in 1919. Ford wanted all his workers to make a descent living and had a plan for this that included putting profit back into expansion and he paid his employees at least five dollars a day.

My ambition is to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting the greatest share of our profits back in the business. - Henry Ford

The Dodge brothers owned a minority in the company and wanted more dividends payed out. The court decided that the duty of any corporation was to maximize short term profits for stock holders.

I didn't know this, thanks :)