Looking back from the 1960s, the Washington lawyer Thurman Arnold could scarcely believe the faith Americans placed in businessmen during the 1920s. “The idea was that there was going up in the country a managerial elite. This was our business management, burning with a zeal for the public interest, wise in its economic views. It would inevitably keep our nation prosperous and free if only national government would withhold its heavy bureaucratic hand.” But the Great Depression was a debacle for corporate America, and the Wall Street bar came in for its share of the blame. Wall Streeters could shrug off the barbs of journalists and law professors, but a shaft from Harlan Fiske Stone drew blood.
Stone was a moderate Republican, born in New Hampshire and graduated from Amherst and the Columbia Law School. From 1898 through 1923 he combined, in varying degrees, teaching and deaning at Columbia with a legal practice, including a stint at Sullivan & Cromwell. In early 1924, Calvin Coolidge needed an unimpeachably upright lawyer to rehabilitate the Justice Department after the scandals of the Harding administration. His old friend from Amherst admirably served his purpose. The following year, when Coolidge needed to fill a vacant seat on the U.S. Supreme Court, Stone seemed the best choice once again.
So it was as a Supreme Court justice, but also a former denizen of the Wall Street bar, that Stone decried the waning “public influence of the bar” at the dedication of the University of Michigan’s new law quadrangle in June 1934. Stone invoked such “great figures of the law” as Edward Coke, James Otis, and John Marshall who “stir the imagination and inspire our reverence according as they have used their special training and gifts for the advancement of the public interest.” Yet during the Great Depression, when the nation needed the Bar's help in fashioning “remedies for our economic ills,” it had not “maintained its traditional position of public influence and leadership.” Instead, “the best skill and capacity of the profession” had been devoted to “exacting and highly specialized service of business and finance.” The successful lawyer of Stone’s day was “the proprietor or general manager of a new type of factory.” At his best he exhibited “a superb proficiency and technical skill”; at his worst he became “an obsequious servant of business, tainted . . . with the morals and manners of the marketplace in its most anti-social manifestations.”
Here was a challenge that demanded a response--eventually, once corporate America had regained its luster. Not until after Big Business had helped defeat the Axis did Wall Street attempt a sustained reply. The Cravath Firm (1948) was a massive history of Cravath, Swaine and Moore, authored by its senior partner, Robert T. Swaine (pictured at right). Its implicit argument was that the emergence of the corporate law firm was an inevitable and functional response to the implacable demands of a modernizing society, personified by the book’s great protagonist, Paul Drennan Cravath. Why else would Swaine note the “well-nigh unbearable” pressure under which senior partners broke down at the turn of the century, why else would he acknowledge that juniors endured “torrents of invective on their stupidity,” why else would he narrate, in the third person, his own capitulation to Cravath, “the dominating personality he had sought to escape,” if he did not consider the modern corporate practice, with all its unpleasantness, to be neither good nor bad but merely inevitable?
Swaine made the same point to the much larger readership of the ABA Journal in 1949. Three times he quoted the “alliterative phrases of the usually temperate Chief Justice Stone,” including once in the very first paragraph. Swaine grudgingly conceded that “the corporation lawyers of the previous generation might well have given greater thought to the economic and social consequences of many of the transactions in which they did the legal engineering.” But Stone’s “intemperate and exaggerated” indictment failed to acknowledge that the principal “function of those of us who serve industry, trade and finance” was “to do our part to keep them functioning smoothly, contributing to our national prosperity and our high standards of living and furnishing the individual opportunity which has meant America.”
Stone had died almost three years earlier; just weeks before his death he had again lamented “the regrettable decline in the public influence of the Bar.” It was left to the lawyers and legal historians of the 1960s and 1970s to challenge the false necessities of Swaine’s history of the corporate law firm.