The Way it was: 1990.


'We Had No Idea...'

Leaders of American corporations entered the 1980s with a great sense of confidence. Deregulation was the watch word of the day -- a free market environment, with less rigorous antitrust enforcement. We simply did not know the route this would take. We simply could not appreciate that the creation of a new vehicle, the junk bond, would replace equity and, in the hands of ripoff artists, circumvent margin requirements in the hostile takeover of companies. We had no idea the ripoff artists, with only their own interests at stake, would be able to use these junk bonds to attack major corporations and, most surprisingly, would receive the support of the SEC and of much of the business press.

Over the past decade one industry group after another has been targeted by those interested in quick profits, beginning with the conglomerates in the early '80s and the airline industry as the '80s came to a close. A lot of companies aren't around that were here in the early '80s. Just consider a few that have disappeared from the exchanges as public corporations: Pillsbury, Northwest Airlines, Beatrice, Grand Union, Federated Department Stores, Allied Stores, RJR Nabisco, General Foods, Koppers, Celanese, Revlon, Norton Simon, Revco, Shaklee, Western Union, Singer, Dart Drug, Sterling Drug, Farmers Insurance, Kraft Foods, Safeway Stores, Crown Zellerbach, Firestone, Goodrich, Irving Bank, RCA, Conoco, Gulf, Getty.... Something is going to happen. I don't know exactly what it will be. Once I thought it might be the Boesky conviction. Then the Oct. 19, 1987, market crash. Then the RJR Nabisco struggle. Something has to stop us from continuing on what most know is the wrong course.

Rand Araskog. chairman and CEO of ITT Corp., in "A Camelot of Debt and M&A Madness" [Fall 1990].

Elitist Attitude Challenged

Some corporate managers and directors seem to view their companies' shareholders as silent partners. They believe that shareholders should express dissatisfaction by simply selling their stock. We and other concerned investors challenge this elitist attitude toward corporate governance. We believe that shareholders are proportional owners of the company and they and their representatives have a right, in fact an obligation, to play a role in important decisions impacting the value of their investments. Gabelli Asset Management Co. has always stated that we are neither for nor against corporate managements. We are for shareholders. That is our fiduciary responsibility.

Mario Gabelli, chairman of fund company Gabelli Group Inc., in "A Magna Carta of Shareholder Rights" [Winter 1990].

In the Cold Light of History

In the late 1980s, I read The Last Lion Alone, William Manchester's account of Winston Churchill's life during the 1930s. I was astounded to learn the true cause for the severe disagreement between Churchill and his fellow...

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