This section is from the book "Business Finance", by William Henry Lough. Also available from Amazon: Business Finance, A Practical Study of Financial Management in Private Business Concerns.
In a corporation which is conducted by able business men who are single-mindedly devoted to the upbuilding of the corporation, it is probable that nearly all subordinate officers will be of the same type. In the business world, as everywhere else, like attracts like. Men who are themselves honorable prefer to work under chiefs of the same type. If they suspect that their company is being exploited by its officers, they naturally seek an opportunity to leave and their places are taken by men who are perhaps less able or less scrupulous. There are, of course, innumerable exceptions on both sides, but the general rule holds good. Consequently, when we find a company in which the chief officers have been primarily engaged in exploitation, it is only too likely that petty graft will not be unknown among the subordinates.
Under the old regime of the New Haven Railroad Company, according to the report of the Interstate Commerce Commission, the company purchased its rolling stock almost exclusively and without competition from one man. This man sold the company approximately $37,000,000 of equipment. He made no secret of his generosity in making valuable presents to the officials with whom he did business, but claimed that these officials were old friends of his.
The purchasing officers of large corporations are naturally subject to special temptations, inasmuch as they frequently control contracts of great importance. It is, however, a very rare occurrence to find even a tinge of suspicion resting on these men, almost all of whom command the complete confidence of their associates and of those with whom they do business.