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Edited by
Jonathan Callund · Gonzalo Jiménez-Seminario ·
Neil Pyper

Corporate Governing in
Latin America
The Importance
of Scandals to
Institute Change
Corporate Governing in Latin America
 Jonathan Callund ·
Gonzalo Jiménez-Seminario · Neil Pyper
Editors

Corporate Governing
in Latin America
The Importance of Scandals to Institute Change
Editors
Jonathan Callund Gonzalo Jiménez-Seminario
Callund y Compañía Ltda. Pontificia Universidad Católica de
Santiago, Chile Chile
Santiago, Chile
Neil Pyper
International Business, School
of Business, Economics
and Informatics
University of London
Birkbeck, UK

ISBN 978-3-030-85779-0 ISBN 978-3-030-85780-6 (eBook)

https://doi.org/10.1007/978-3-030-85780-6

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
Nature Switzerland AG, part of Springer Nature 2023
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights
of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and
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The use of general descriptive names, registered names, trademarks, service marks, etc.
in this publication does not imply, even in the absence of a specific statement, that such
names are exempt from the relevant protective laws and regulations and therefore free for
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 Acknowledgments

Prof. Carlos Francisco Cáceres Contreras

Juan Andrés Camus Camus
Axel Christensen
Martin Costábal Llona
Mauro da Cunha Rodrigues
Prof. Stephen Davis
Prof. Alfredo Enrione Cáceres
The anonymous, local, academic and professional corporate governance
specialists who we called on to review the respective country chapter.

v
 Praise for Corporate Governing in
Latin America

“This book is clearly the new reference on corporate governance research

in Latin America. It has many layers to it. While it describes the main
theoretical approaches, it also stimulates the reader by showing how
different corporate scandals in Latin America have shaped these country’s
corporate governance practices. Then it turns to a systematic discussion of
six countries’ corporate governance systems based on its legal system and
existing governance practices and it also has a sharp analytical perspective
in forecasting what’s in the future. Thus, this book is targeted to academic
as well as practitioners who want to understand better the past, present
and future of corporate governance in Latin America.”
—Ruth Aguilera, Brodsky Professor of Global Governance, Northeastern
University, USA

“Corporate Governing in Latin America offers a welcome perspective

on how corporate governance policy reforms and practices are shaped
in economies outside of the more advanced financial markets of North
America and Western Europe, which tend to influence corporate gover-
nance policies and regulations globally. The variation of approaches taken
in the six markets reviewed highlights the importance for credible market
reforms to be tailored to the context of the local market and informed,
where appropriate, by so-called internationally accepted best practices. As
demonstrated, the process should be much more nuanced.

vii
viii PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA

Kudos to the authors who provide an insightful assessment for policy

makers, regulatory authorities, boards and directors, scholars and prac-
titioners in evaluating approaches to good corporate governance which
are both relevant and practical and not taken from a standard stereotype
but shaped to the prevailing macroeconomic and institutional conditions.
Many useful lessons are offered for emerging markets elsewhere in the
world.”
—Philip Armstrong, Independent governance advisor and former Head,
Global Corporate Governance Forum, South Africa

“Corporate Governing in Latin America is a must read to better under-

stand the evolution of corporate governance and its specificities in the
context of Latin America. This book is of enormous benefit to company
owners, managers, practitioners, and policy makers alike, in addressing
the challenges of developing sustainable firms and consolidating their
business governance structures. Written in plain English, the collection
of papers explains the challenges and benefits of corporate governance
through clear examples that illustrate the main ideas and conclusions, and
the authors are able to lead us on an amazing journey and help navigate
the complexity of corporate governance.”
—Rodrigo Basco, Professor, American University of Sharjah, Dubai,
UAE

“An understanding of the complex issues associated with improving

Corporate Governance is becoming increasing important. For too long
in the English language, there has been a Latin America sized gap in the
corporate governance bookshelf until now with the arrival of Corporate
Governing in Latin America. In its pages the authors make a thoughtful
and original contribution in their examination of corporate governance in
Latin America but also by identifying how it is often different from other
geographies (notably North America, Europe and the UK). Corporate
Governing in Latin America also covers how individual countries differ
in their approach to the law, regulatory codes of practice and conduct
as well as how the rules-based environment is changing. The authors
have provided a readable and much-needed contribution to the subject
of corporate governance.”
—Gerry Brown, Chairman of NovaQuest Capital Management L.L.C.
and co-author (with Professor Randall S Peterson) of Disaster in the
Boardroom
 PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA ix

“Harmony in any society is found in the subordination of its political

and economic structures to moral reference points. Competition in a free
market is essential to ensuring the efficient and correct allocation of scarce
resources. Key to this, however, is also the prestige of the players – the
corporations and agents – who effect these allocations and in just the
pursuit of efficiency gains. Sustainable free market economies rely on their
adherence to ethical behaviors such that society as a whole can achieve the
common good.
The book Corporate Governing in Latin America - The Importance
of Scandals to Institute Change, makes an important contribution in
presenting multiple case studies flagging the behaviors of key actors in
performing their corporate activities who give scant consideration to
essential ethical parameters when carrying out their respective activi-
ties. The thumbnail cases draw on public accounts of malfeasances in
Argentina, Brazil, Chile, Colombia, Mexico and Peru, while, providing
testimonies of reprehensible conduct, open a space for analysis of both the
lessons and concrete steps that can be taken to avoid their reoccurrence,
specifically relating to management and board oversight of corporations,
in both the private and public sectors.
This works is of great value! By reinforcing the essential nature of good
conduct of those who participate in corporate life, confirming the subor-
dination of efficiency criteria to moral principles that must dictate and
illuminate all human action. There is no doubt that business activity has
proven legitimate in terms of efficiency. However, ethical legitimacy can
only be cultivated – day-by-day – through the behavior of its actors.”
—Carlos Francisco Cáceres Contreras, Professor, Director, former
President of Chilean Central Bank, former Minister of Finance and
Minister of Interior, Chile

“A solid corporate governance practice is an essential factor for any

company to be successful in the long term. In particular, it is even
more important for family businesses, as they need to differentiate busi-
ness issues from their family matters. This book provides extraordinary
theoretical reflections on the principles that frame corporate governance
practices in companies of six countries in Latin America. Moreover, its
thumbnail studies of the authors’ “top six” scandals in each of the leading
countries in the region help derive practical lessons and the essential flags
to doing business in Latin America. This superb study will inspire both
academics and practitioners, business owners and legislators looking to
x PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA

innovate on old practices and produce institutional change. Founded on

clear and insightful theoretical and empirical bases, the authors – and
there are 21 – evolve a “theory of practice” for those looking to draw
lessons in the development of better corporate governance in their own
companies or countries.”
—Jesús Casado Navarro-Rubio, Secretary General, European Family
Businesses, Belgium

“Jonathan Callund, Gonzalo Jiménez and Neil Pyper the editors, have
assembled an excellent collection of articles from 18 authors which cover
critical theoretical aspects around Corporate Governing in Latin America.
This is a major contribution to the field, a must read for academics,
students, practitioners and those interested in corporate governance.
A unique and innovative part of the book is to show how thirty-six
corporate scandal cases from six main countries in the region have forced
a change in regulations and hence, have had a positive impact in changing
public attitudes, board behaviors and relevant corporate practices.
This book is a must read for those interested in corporate governance
and in Latin America.”
—Lourdes Casanova, Senior Lecturer and Gail and Rob Cañizares
Director Emerging Markets Institute, Cornell S.C. Johnson College of
Business, Cornell University, USA

“A key challenge in learning about the intricacies and complexities of

corporate governance is where to go to gain a deep theorical and prac-
tical understanding of this social and legalistic space. This book provides
a unique grounding of the underlying theoretical premises of corporate
governance, based on extensive and detailed first-hand experiences. Hith-
erto, as a supervisor of the financial markets, my job – and those of the
rest of the market players – would have been that much easier had such a
book existed in our day.
When reviewing the diverse and multiple cases of missteps, both here
and across the region, I am heartened to see significant progress being
made on all governing fronts, not least as a result of government, private
and institutional reactions to these human failings.
 PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA xi

This is a mammoth contribution and will help directors – new and old
alike – in understanding the importance of what they do and how to do
it better.”
—Álvaro Clarke, Founder & President, ICR Chile Credit Ratings,
former Securities & Insurance Supervisor, Chile

“First of all, I want to celebrate the initiative of the publishers in making

Corporate Governing in Latin America - The Importance of Scandals to
Institute Change a reality, which in my opinion had been long pending. I
have read it with great interest and considerable nostalgia. In my different
roles – as investment manager of the country’s #1 pension fund, as a
company director, and, most recently, as President of the merged bank,
insurance and financial services regulator – I have first-hand knowledge of
the people and circumstances narrated by Matías Zegers and Carla Rojas
in their Chile chapter and, in particular, the six scandals they selected. In
matters of corporate governance the role assumed by the pension funds
was key, given the local market’s low liquidity, hindering investors who
were dissatisfied with a company’s performance or governance to sell their
positions without incurring large losses.
At the core of this book are the descriptions and lessons drawn from
corporate scandals. This, however, should not be construed as yet another
attribute of “Latin American magical realism”, as scandals also abound in
many developed economies. Maybe more striking is the dark side seen
through the involvement of state-owned foreign multinationals. What is
important are not the corporate scandals themselves, but more how these
have been used – with widespread public support - as levers to close the
differing legal and regulatory gaps in this regard. This is well documented
in the book. In this context, Gonzalo Jiménez-Seminario also goes some
way to closing the gap between the academic vision and the practice of
corporate governing that are comprehensively addressed in his sections.”
—Joaquín Cortez Huerta, Director, former President Comisión para el
Mercado Financiero, Chile

“A comprehensive and unique description of the history of corporate

governance and the multiple crises in key Latin America countries, delving
into the evolution of each market’s regulation, with pithy assessments and
commentary. In flagging the current regulatory gaps, this book provides
valuable policy and programmatic ideas at both a national and regional
level on how to improve normative frameworks. Corporate Governing in
xii PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA

Latin America - The Importance of Scandals to Institute Change is an ideal

primer for board members, executives, academics and regulators alike.”
—Martin Costabal Llona, Director and former Finance Minister, Chile

“Corporate Governing in Latin America, The Importance of Scandals to

Institute Change should become a definitive resource for analyzing CG
in Latin America. It provides inciteful analyses on the past, present and
future of CG developments in the six specific countries it examines as well
as a regional view. This book will be useful for academics, practitioners,
regulators as well as investors in emerging markets in Latin America.
Regarding the latter, I find it a great resource particularly in determining
contextual CG risk for the largest economies discussed in the book.”
—Charles Travis Canfield, Principal Corporate Governance Officer, IFC,
USA

“Like plane crashes, corporate scandals will only happen after a combi-
nation of factors. The recurring nature of such events in Latin America
might lead to the depressing conclusion that they are an inherent fixture
of the region. They need not be. This book offers hope and opportunity.
Hope for those that believe in the construction of healthy capital markets
as a tool for a better, more democratic, and more equal society. It will
surely become a reference for academics and practitioners alike, given its
rich interplay between theory, policy making and real life. But it also offers
opportunity.
Corporate Governing in Latin America - The Importance of Scandals
to Institute Change shows that corporate governance does not evolve
linearly, but is rather a cyclical process of euphoria, hubris, reform and
backlash. It allows us to see that not all investment cases are the same.
Increasing regulation offers plenty of opportunities for box ticking, but
problems keep popping up. Investors that go the extra mile and do the
homework of understanding the true nature of corporate governance
rather than its appearance in a checklist can be handsomely rewarded. Not
least by avoiding the next scandal, but also by filling the gaps left open
by other gatekeepers and taking advantage of the high cost of capital that
such an environment creates. This book is an excellent companion for
such a journey.”
—Mauro Rodrigues da Cunha, CFA, Independent Director, former
President Brazilian Corporate Governance Institute (IBGC), Brazil
 PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA xiii

“Most of the world’s thriving businesses are owned by families or a state.

But you wouldn’t know that from the overwhelming focus of global
corporate governance scholarship, which has for years been trained on the
escapades of publicly traded enterprises in big developed markets. Finally,
the aperture is widening, thanks in no small part to Corporate Governing
in Latin America - The Importance of Scandals to Institute Change, edited
by Callund, Jiménez-Seminario, Pyper.
The authors keep academics happy with solid theory about what distin-
guishes one market from another. For practitioners—that is, investors,
companies, or executives—this book is a gold mine of real-world insights
on how corporate governance works, or doesn’t, across six Latin Amer-
ican markets. One key finding: Scandal, sometimes at monstrous scale,
plays an outsized role in driving change in each country. But this makes
the region a crucible of global significance: eruptions are what happens
when entrenched power faces the shock troops of global capitalism in the
form of foreign financial agents, international standards, probing media.
The outcomes of such clashes are what now shape Latin America’s corpo-
rate future. Callund, Jiménez-Seminario, Pyper, and their many chapter
authors are the indispensable guides we need to understand and navigate
it.”
—Professor Stephen Davis, Senior Fellow and Associate Director,
Harvard Law School, Program on Corporate Governance, USA

“Fascinating read on the catalytic effect of governance scandals and their

power to mobilize for change. Corporate Governing in Latin America -
The Importance of Scandals to Institute Change offers so many valuable
insights!”
—Patrick Eamonn Dunne, Chairman, Boardelta, Author of the award
winning “Boards” and member of the Higgs Review, UK

“Corporate Governing in Latin America - The Importance of Scandals

to Institute Change is long overdue for academics and practitioners in
the region. While the current literature would seem to suggest that
the world is rife with dispersed ownership, efficient financial markets
and strong institutional investors, we know that in most parts they are
rather the exception. This book not only shows us the particularities of
Latin America as a whole, but also the relevant differences between the
six leading countries in the region. The collection of emblematic cases
is a treasure trove for understanding the particular challenges and the
xiv PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA

adaptive solutions of regulators and other actors in each market. My

congratulations and thanks to the authors!”
—Prof. Alfredo Enrione, Director of the Corporate Governance Centre,
ESE Business School, Universidad de los Andes, Chile

“This is a comprehensive review of governance in Latin America and the

influences and events that have shaped it. The analysis is developed with
academic rigor and references, but will be of interest to academics and
practitioners alike and explores overall themes and country by country
analysis.
Corporate Governing in Latin America - The Importance of Scandals
to Institute Change is essential reading for those who are involved with
or, want to understand the Latin American landscape and compare and
contrast it with Governance developments in the rest of the world.”
—David Fairs, Executive Director for Regulatory Policy, Analysis and
Advice at The UK Pensions Regulator, UK

“I have read Corporate Governing in Latin America - The Importance of

Scandals to Institute Change with particular interest the aims, background
and focus of this book, as well as those details relating to Chile, and I am
taken by the exhaustive nature of its content and authors’ prolific research.
Although I am unable to comment on each chapter or the impacts on
regulatory development deriving from corporate scandals in each of the
six countries, I do recognize that they have indeed played a positive role
in encouraging better corporate governance practices.
Moreover, the impact these scandals have had, and the feeble institu-
tional reactions they have elicited serve to show the lack of appreciation
of capitalism and the market economy in our society, as reflected in a
substantial and continuous weakening of confidence in private enterprise.
That said, I would also point out that the risks and consequences of bad
corporate governance is not solely with private companies, but also with
public corporations and institutions, as well as non-profit institutions,
whose governing failures have understandably and drastically brought
on the deep skepticism of our society and its confidence in them to
solve problems, such as, in the cases of the pension fund industry, the
management of private resources for old age.”
—José Antonio Guzmán Matta, Director, Past President, Enersis,
ENDESA, AFP Habitat, Chile
 PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA xv

“Corporate Governing in Latin America - The Importance of Scandals to

Institute Change is a balanced and comprehensive book about the state of
the art and the challenges for corporate governance in Latin America. As
the title suggests, it is an invitation to understand and assess the current
situation learning from the past with an eye on the future. After intro-
ducing the reader with the theoretical framework - New Institutional
Economics, Resource Dependency Theory, and Institutional Theory -
an original chapter on corporate scandals in Argentina, Brazil, Chile,
Colombia, Mexico and Peru follows. But the next chapters place the
context for each country. In sum, theory illuminates reality, but practice
also informs theory.”
—Leonidas Montes, Former Dean & Professor, Escuela de Gobierno,
Universidad Adolfo Ibáñez. Director, Centro de Estudios Públicos (CEP),
Chile

“Latin America is a special case in corporate governance - arguably several

special cases - and Corporate Governing in Latin America - The Impor-
tance of Scandals to Institute Change provides a way to see the problems
from several different vantage points. The region has overlapping institu-
tional arrangements - formal and informal - and political systems that are
conscious of each other, while consciously different. The companies across
the region copy each other - not always for the best - but also respond
to local imperatives. Investment and share ownership involve both large,
global players but also regional and local ones.
Corporate Governing in Latin America - The Importance of Scandals
to Institute Change serves a valuable service in discussing the complexity
but also the commonality across those four dimensions. It provides not
just a critical overview but also abundant cases of scandals and malpractice
that illustrate what we have learned about corporate governance in Latin
America and where we need to learn more.”
—Donald Nordberg, Associate Professor of Corporate Governance,
Bournemouth University, author of “The Cadbury Code and Recurrent
Crisis - A Model for Corporate Governance?”, UK

“A systematic and detailed examination of the stories that have defined

our understanding of the lacunae in corporate governance in Latin
America, Corporate Governing in Latin America - The Importance of
Scandals to Institute Change provides useful insights per country. Many
of these learnings are translatable to the wider emerging markets scenario
xvi PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA

where governance, or the lack thereof, has created significant issues that
individuals, businesses and governments have to contend with. To para-
phrase a famous quote, the authors use their collective knowledge and
experience to demonstrate how to ‘never waste a good scandal’.”
—Dr. Vinika D. Rao, Executive Director, INSEAD Emerging Markets
Institute, Gender Initiative & Africa Initiative, Singapore

“I read Corporate Governing in Latin America - The Importance of Scan-

dals to Institute Change with curiosity and interest. The book seeks to
address the paradox of corporate governance scandals in juxtaposition
with a historical aspiration to move beyond them to better practices. With
summarized reviews of several academic literatures on corporate gover-
nance, the book is written for the thoughtful practitioner. Yet, it ends up
inspiring the mindful policymaker through the depth of its concerns for
building a better future for all corporations in Latin America.
The book is timely, engaging and full of insights explained through
examples. An interesting side-effect of the book is that it provides a
glimpse into the business histories of several countries in Latin America
for those outside the continent.”
—Saras Sarasvarthy, Paul M. Hammaker, Professor of Business
Administration, University of Virginia, Darden School, USA

“A very interesting work providing a case-by-case review of corporate

governance regulation in Latin America, following corporate scandals.
Corporate Governing in Latin America - The Importance of Scandals to
Institute Change invites an in-depth debate on corporate governance on
two levels: (i) the concrete prospective improvements that are needed
in a country’s respective regulations given the risks of greenwashing
and a general lack of transparency on corporate practices; and (ii) the
innovations needed to improve “the process of creating regulations” to
ensure better corporate governance, particularly in concentrated markets,
dominated by business groups.
One lesson is that the business community and policy makers must not
allow the future development of regulations to be dependent on the flow
of new scandals –going from shock to shock. Rather, the book throws
down the gauntlet, flagging the importance of the role and process of
regulations in shaping future discussions and the evolution of markets.
The history of capitalism shows that the regulations - so essential in
the quest for better governance - normally arrive late, so engendering
 PRAISE FOR CORPORATE GOVERNING IN LATIN AMERICA xvii

avoidable tensions in the economy and across the fabric of society. In

addressing the problems inherent in the “process of regulation”, the regu-
lations themselves will necessarily improve, but so will the level of trust in
capitalism. This is a strategic challenge especially now, when transforma-
tion of capitalism is needed to reward value creation, not value extraction.
To design and implement the right governance structures for sustainable
capitalism, based on competitve and more dinamic markets, is key for the
future in this planet.”
—Jeannette Von Wolfersdorff, Director, Former President of the
Corporate Governance & Sustainability Committee, at Santiago Stock
Exchange, Author of “Capitalismo”, Chile
 Contents

1 Introduction - Innovations & Drawbacks in Evolving

Governing Practices 1
Gonzalo Jiménez-Seminario and Jonathan Callund
1 Setting the Theoretical Scene 1
2 The Dilemmas 3
3 Attributes 4
4 Aims 6
5 What to Expect 7
References 8
2 Theoretical Framework 11
Gonzalo Jiménez-Seminario
1 Literature Review 11
1.1 New Institutional Economics (NIE) 14
1.2 Resource Dependence Theory (RDT) 16
1.3 Institutional Theory (IT) 17
2 Corporate Governing Evolution in Emerging Markets 19
3 Main Findings: The Institutional Construction
of Corporate Governing 22
References 34

xix
xx CONTENTS

Part I Regional Chapters

3 Corporate Scandals in Latin America and Their
Impact on the Corporate Governing Environment 41
Jonathan Callund and Gonzalo Jiménez-Seminario
1 Argentina 45
1.1 Desarrollo de Acuerdos Comerciales S.A.
(DACSA) 46
1.2 YPF S.A. 48
1.3 Benito Roggio E Hijos S.A. 51
1.4 Skanska 53
1.5 Vicentin SAIC 55
1.6 TGLT 58
1.7 Lessons from Argentina and Open Questions
for Further Study 60
2 Brazil 61
2.1 Petrobras 61
2.2 Odebrecht 63
2.3 JBS 67
2.4 Grupo EBX 69
2.5 Brasil Resseguros (IRB) 71
2.6 AmBev 73
2.7 Lessons from Brazil and Open Questions
for Further Research 76
3 Chile 79
3.1 ENDESA Chile (Chispas) 80
3.2 FASA 82
3.3 Pehuenche 84
3.4 Enersis 86
3.5 La Polar 88
3.6 SQM (Cascadas) 92
3.7 Lessons from Chile and Open Questions
for Further Study 94
4 Colombia 96
4.1 InterBolsa 97
4.2 Estraval 101
4.3 Reficar 104
4.4 El Cartel de los Pañales 108
4.5 The Cement Cartel 112
 CONTENTS xxi

4.6 SaludCoop 115

4.7 Lessons from Colombia and Open Questions
for Further Study 119
5 Mexico 120
5.1 Homex 121
5.2 Banorte 123
5.3 AeroMéxico/Mexichem 126
5.4 OmniLife 127
5.5 OHL México 130
5.6 Exportadora De Sal (ESSA) 132
5.7 Lessons from Mexico and Open Questions
for Further Study 134
6 Peru 134
6.1 Credicorp 135
6.2 Graña y Montero 138
6.3 Alicorp 140
6.4 Arca Continental | Lindley 143
6.5 Milpo 145
6.6 BAYER/Aventis 148
6.7 Lessons from Peru and Open Questions
for Further Study 151
7 Conclusions on the Impact of Scandals on Corporate
Governing Development in Latin America 153
7.1 First Cut Review of the “Top 6” Scandals in Each
Country 153
7.2 As an Emerging Market, Why Latin America
Might Offer Different Lessons 159
8 Conclusions 164
References 166
4 The Latin American Corporate Governing
Landscape—Its Past, Present, and Future 169
Andrés Bernal, Catalina Rojas, and Michelle Mora
1 A Brief Reference to Regulation, Self-Regulation
Initiatives, and Investor Perspectives 170
1.1 The Compulsory Corporate Governance
Regulation 171
1.2 The Voluntary Standards: The “Comply
or Explain” Model 173
xxii CONTENTS

1.3 The New Corporate Governing “Influencers”:

Institutional Investors 182
2 Three Milestones of Corporate Governing Evolution
in Latin America 187
2.1 Where Does the Regional Corporate Governance
Conversation Converge? 187
2.2 The Brazilian Experience: Novo Mercado 190
2.3 Governing Challenges for Latin American
State-owned Enterprises 192
3 What’s Next? Some Guessing and Predictions 196
References 200
5 The Institutional Construction of Corporate
Governing in Latin America 203
Magdalena Díaz Le-Fort, Gonzalo Jiménez-Seminario,
and Jonathan Callund
1 Latin American History 203
2 Chile as a Corporate Governing Trendsetter 210
3 Latin American Corporate Governing Evolution 213
3.1 Economic Institutional Logic (1989—onwards) 217
3.2 Social Institutional Logic (2011—onwards,
Peaking in 2019) 218
4 Conclusions and Perspective of Latin American
Corporate Governing Evolution 219
References 221

Part II Country Chapters

6 Argentina 225
Hugo Gaggiotti, María de los Ángeles Lucero Bringas,
and Ismail Adelopo
1 Introduction 225
2 Organizational Roots of Corporate Management 228
3 The Legal Framework for Corporate Governance 230
4 A Chronological Account of Corporate Governance 231
5 Argentina as an Emerging Country for Emerging
Corporate Governance 236
5.1 Corporate Governance and the Private Sector 238
5.2 Corporate Governing and the Public Sector 239
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and Iowa have since come into the Union, and they solemnly
repudiated and excluded slavery from those States forever.”
 Charles Sumner on the Fallibility of Judicial
Tribunals.

Let me here say that I hold judges, and especially the Supreme
Court of the country, in much respect; but I am too familiar with the
history of Judicial proceedings to regard them with any superstitious
reverence. Judges are but men and in all ages have shown a full share
of frailty. Alas! alas! the worst crimes of history have been
perpetrated under their sanction. The blood of martyrs and of
patriots, crying from the ground, summons them to judgment.
It was a judicial tribunal which condemned Socrates to drink the
fatal hemlock, and which pushed the Saviour barefoot over the
pavements of Jerusalem, bending beneath his cross. It was a judicial
tribunal which, against the testimony and entreaties of her father,
surrendered the fair Virginia as a slave; which arrested the teachings
of the great apostle to the Gentiles, and sent him in bonds from
Judea to Rome; which, in the name of the old religion, adjured the
saints and fathers of the Christian Church to death, in all its most
dreadful forms; and which afterwards in the name of the new
religion, enforced the tortures of the Inquisition, amidst the shrieks
and agonies of its victims, while it compelled Galileo to declare, in
solemn denial of the great truth he had disclosed, that the earth did
not move round the sun.
It was a judicial tribunal which, in France, during the long reign of
her monarchs, lent itself to be the instrument of every tyranny, as
during the brief reign of terror it did not hesitate to stand forth the
unpitying accessory of the unpitying guillotine. Ay, sir, it was a
judicial tribunal in England, surrounded by all the forms of law,
which sanctioned every despotic caprice of Henry the eighth, from
the unjust divorce of his queen to the beheading of Sir Thomas
Moore; which lighted the fires of persecution, that glowed at Oxford
and Smithfield, over the cinders of Latimer, Ridley, and John
Rodgers; which, after elaborate argument, upheld the fatal tyranny
of ship money against the patriotic resistance of Hampden; which, in
defiance of justice and humanity, sent Sydney and Russell to the
block; which persistently enforced the laws of conformity that our
Puritan Fathers persistently refused to obey; and which afterwards,
with Jeffries on the bench, crimsoned the pages of English history
with massacre and murder, even with the blood of innocent women.
Ay, sir, and it was a judicial tribunal in our country, surrounded by
all the forms of law, which hung witches at Salem, which affirmed
the constitutionality of the Stamp Act, while it admonished “jurors
and the people” to obey; and which now, in our day, has lent its
sanction to the unutterable atrocity of the Fugitive Slave Law.
 Galusha A. Grow’s Speech on the Homestead
Bill.

In the House of Representatives, March 30, 1852. “Man’s Right to

the Soil.”

But even if the Government could derive any revenue from the
actual sale of public lands, it is neither just nor sound policy to hold
them for that purpose. Aware, however, that it is a poor place, under
a one hour rule, to attempt to discuss any of the natural rights of
men, for, surrounded by the authority of ages, it becomes necessary,
without the time to do it, first to brush away the dust that has
gathered upon their errors. Yet it is well sometimes to go back of the
authority of books and treatises, composed by authors reared and
educated under monarchical institutions, and whose opinions and
habits of thought consequently were more or less shaped and
moulded by such influences, and examine, by the light of reason and
nature, the true foundation of government and the inherent rights of
men.
The fundamental rights of man may be summed up in two words—
Life and Happiness. The first is the gift of the Creator, and may be
bestowed at his pleasure; but it is not consistent with his character
for benevolence, that it should be bestowed for any other purpose
than to be enjoyed, and that we call happiness. Therefore, whatever
nature has provided for preserving the one, or promoting the other,
belongs alike to the whole race. And as the means for sustaining life
are derived almost entirely from the soil, every person has a right to
so much of the earth’s surface as is necessary for his support. To
whatever unoccupied portion of it, therefore, he shall apply his labor
for that purpose, from that time forth it becomes appropriated to his
own exclusive use; and whatever improvements he may make by his
industry become his property, and subject to his disposal.
 The only true foundation of any right to property is man’s labor.
That is property, and that alone which the labor of man has made
such. What right, then, can the Government have in the soil of a wild
and uncultivated wilderness as a source of revenue, to which not a
day nor hour’s labor has been applied, to make it more productive,
and answer the end for which it was created, the support and
happiness of the race?
It is said by the great expounder of the common law in his
commentaries, that “there is no foundation in nature or natural law,
why a set of words upon parchment should convey the dominion of
land.” The use and occupancy alone gives to man, in the language of
the commentaries, “an exclusive right to retain, in a permanent
manner, that specific land which before belonged generally to
everybody, but particularly to nobody.” * * *
It may be said, true, such would be man’s right to the soil in a state
of nature; but when he entered into society, he gave up part of his
natural rights, in order to enjoy the advantages of an organized
community. This is a doctrine, I am aware, of the books and treatises
on society and government; but it is a doctrine of despotism, and
belongs not to enlightened statesmen in a liberal age. It is the excuse
of the despot in encroaching upon the rights of the subject. He
admits the encroachment, but claims that the citizen gave up part of
his natural rights when he entered into society; and who is to judge
what ones he relinquished but the ruling power? It was not necessary
that any of man’s natural rights should be yielded to the state in the
formation of society. He yielded no right, but the right to do wrong,
and that he never had by nature. All that he yielded in entering into
organized society, was a portion of his unrestrained liberty, which
was, that he would submit his conduct, that before was subject to the
control of no living being, to the tribunals to be established by the
state, and with a tacit consent that society, or the Government, might
regulate the mode and manner of the exercise of his rights. Why
should he consent to be deprived of them? It is upon this ground that
we justify resistance to tyrants. Whenever the ruling power so far
encroaches upon the natural rights of men that an appeal to arms
becomes preferable to submission, they appeal from human to divine
laws, and plead the natural rights of man in their justification. That
government, and that alone, is just, which enforces and defends all of
man’s natural rights, and protects him against the wrongs of his
fellow-men. But it may be said, although such might be the natural
rights of men, yet the Government has a right to these lands, and
may use them as a source of revenue, under the doctrine of eminent
domain. * * *
What is there in the constitution of things giving to one individual
the sole and exclusive right to any of the bounties provided by nature
for the benefit and support of the whole race, because, perchance, he
was the first to look upon a mere fragment of creation? By the same
process of reasoning, he who should first discover the source or
mouth of a river, would be entitled to a monopoly of the waters that
flow in the channel, or he who should first look upon one of the rills
or fountains of the earth might prevent fainting man from quenching
there his thirst, unless his right was first secured by parchment.
Why has the claim to monopolize any of the gifts of God to man
been confined, by legal codes, to the soil alone? Is there any other
reason than that it is a right which, having its origin in feudal times—
under a system that regarded man but as an appendage of the soil
that he tilled, and whose life, liberty and happiness, were but means
of increasing the pleasures, pampering the passions and appetites of
his liege lord—and, having once found a place in the books, it has
been retained by the reverence which man is wont to pay to the past,
and to time-honored precedents? The human mind is so constituted
that it is prone to regard as right what has come down to us approved
by long usage, and hallowed by gray age. It is a claim that had its
origin with the kindred idea that royal blood flows only in the veins
of an exclusive few, whose souls are more ethereal, because born
amid the glitter of courts, and cradled amid the pomp of lords and
courtiers, and, therefore, they are to be installed as rulers and law-
givers of the race. Most of the evils that afflict society have had their
origin in violence and wrong enacted into law by the experience of
the past, and retained by the prejudices of the present.
Is it not time to sweep from the statute book its still lingering relics
of feudalism; and to blot out the principles engrafted upon it by the
narrow-minded policy of other times, and adapt the legislation of the
country to the spirit of the age, and to the true ideas of man’s rights
and relations to his Government? If a man has a right on earth, he
has a right to land enough to rear a habitation on. If he has a right to
live, he has a right to the free use of whatever nature has provided for
his sustenance—air to breathe, water to drink, and land enough to
cultivate for his subsistence; for these are the necessary and
indispensable means for the enjoyment of his inalienable rights of
“life, liberty and the pursuit of happiness.” And is it for a
Government that claims to dispense equal and exact justice to all
classes of men, and that has laid down correct principles in its great
chart of human rights, to violate those principles and its solemn
declarations in its legislative enactments?
The struggle between capital and labor is an unequal one at best. It
is a struggle between the bones and sinews of men, and dollars and
cents. And in that struggle, is it for the government to stretch forth
its arm to aid the strong against the weak? Shall it continue, by its
legislation, to elevate and enrich idleness on the wail and woe of
industry?
If the rule be correct as applied to governments as well as
individuals, that whatever a person permits another to do, having the
right and means to prevent it, he does himself, then indeed is the
government responsible for all the evils that may result from
speculation and land monopoly in the public domain. For it is not
denied that Congress has the power to make any regulations for the
disposal of these lands, not injurious to the general welfare. Now,
when a new tract is surveyed, and you open the land office and
expose it to sale, the man with the most money is the largest
purchaser. The most desirable and available locations are seized
upon by the capitalists of the country, who seek that kind of
investment. The settler who chances not to have a pre-emption right,
or to be there at the time of sale, when he comes to seek a home for
himself and his family, must pay the speculator three or four
hundred per cent. on his investment, or encounter the trials and
hardships of a still more remote border life. And thus, under the
operation of laws that are called equal and just, you take from the
settler three or four dollars per acre, and put it in the pocket of the
speculator—thus, by the operation of law, abstracting so much of his
hard earnings for the benefit of capital; for not an hour’s labor has
been applied to the land since it was sold by the government, nor is it
more valuable to the settler. Has not the laborer a right to complain
of legislation that compels him to endure greater toils and hardships,
or contribute a portion of his earnings for the benefit of the
capitalist? But not upon the capitalist or the speculator is it proper
that the blame should fall. Man must seek a livelihood and do
business under the laws of the country; and whatever rights he may
acquire under the laws, though they may be wrong, yet the well-
being of society requires that they be respected and faithfully
observed. If a person engage in a business legalized and regulated by
the law, and uses no fraud or deception in its pursuit, and evils result
to the community, let them apply the remedy to the proper source—
that is to the law-making power. The laws and the law-makers are
responsible for whatever evils necessarily grow out of their
enactments.
While the public lands are exposed to indiscriminate sale, as they
have been since the organization of the government, it opens the
door to the wildest system of land monopoly. It requires no lengthy
dissertation to portray its evils. In the Old World its history is written
in sighs and tears. Under its influence, you behold in England, the
proudest and most splendid aristocracy, side by side with the most
abject and destitute people; vast manors hemmed in by hedges as a
sporting-ground for her nobility, while men are dying beside the
enclosure for the want of land to till. Thirty thousand proprietors
hold the title deeds to the soil of Great Britain, while in Ireland alone
there are two and a half millions of tenants who own no part of the
land they cultivate, nor can they ever acquire a title to a foot of it, yet
they pay annually from their hard earnings twenty millions of dollars
to absentee landlords for the privilege of dying on their soil. Under
its blighting influence you behold industry in rags and patience in
despair. Such are some of the fruits of land monopoly in the Old
World; and, shall we plant its seeds in the virgin soil of the
New? * * *
If you would raise fallen man from his degradation, elevate the
servile from their grovelling pursuits to the rights and dignity of
men, you must first place within their reach the means for satisfying
their pressing physical wants, so that religion can exert its influence
on the soul, and soothe the weary pilgrim in his pathway to the tomb.
It is in vain you talk of the goodness and benevolence of an
Omniscient Ruler to him, whose life from the cradle to the grave is
one continued scene of pain, misery and want. Talk not of free
agency to him whose only freedom is to choose his own method to
die. In such cases, there might, perhaps, be some feeble conceptions
of religion and its duties—of the infinite, everlasting, and pure; but
unless there be a more than common intellect, they would be like the
dim shadows that float in the twilight. * * *
Riches, it is true, are not necessary to man’s real enjoyment; but
the means to prevent starvation are. Nor is a splendid palace
necessary to his real happiness; but a shelter against the storm and
winter’s blast is.
If you would lead the erring back from the paths of vice and crime
to virtue and honor, give him a home—give him a hearth-stone, and
he will surround it with household gods. If you would make men
wiser and better, relieve the almshouse, close the doors of the
penitentiary, and break in pieces the gallows, purify the influences of
the domestic fireside. For that is the school in which human
character is formed, and there its destiny is shaped. There the soul
receives its first impress, and man his first lesson, and they go with
him for weal or woe through life. For purifying the sentiments,
elevating the thoughts, and developing the noblest impulses of man’s
nature, the influences of a moral fireside and agricultural life are the
noblest and the best. * * *
It was said by Lord Chatham, in his appeal to the House of
Commons, in 1775, to withdraw the British troops from Boston, that
“trade, indeed, increases the glory and wealth of a country; but its
true strength and stamina are to be looked for in the cultivators of
the land. In the simplicity of their lives is found the simpleness of
virtue, the integrity and courage of freedom. These true, genuine
sons of the soil are invincible.”
The history of American prowess has recorded these words as
prophetic: man, in defence of his hearth-stone and fireside, is
invincible against a world of mercenaries. In battling for his home
and all that is dear to him on earth, he is never conquered save with
his life. In such a struggle every pass becomes a Thermopylæ, every
plain a Marathon. With an independent yeomanry scattered over our
vast domain, the “young eagle” may bid defiance to the world in
arms. Even though a foe should devastate our seaboard, lay in ashes
its cities, they have made not one single advance towards conquering
the country; for from the interior comes its hardy yeomanry, with
their hearts of oak and nerves of steel, to expel the invader. Their
hearts are the citadel of a nation’s power—their arms the bulwarks of
liberty.

Every consideration of policy, then, both as to revenue for the

general government, and increased taxation for the new States, as
well as a means for removing the causes of pauperism and crime in
the old, demands that the public lands be granted in limited
quantities to the actual settler. Every consideration of justice and
humanity calls upon us to restore man to his natural rights in the
soil. * * *
In a new country the first and most important labor, as it is the
most difficult to be performed, is to subdue the forest, and to convert
the lair of the wild beast into a home for civilized man. This is the
labor of the pioneer settler. His achievements, if not equally brilliant
with those of the plumed warrior, are equally, if not more, lasting;
his life, if not at times exposed to so great a hazard, is still one of
equal danger and death. It is a life of toil and adventure, spent upon
one continued battle-field, unlike that, however, on which martial
hosts contend, for there the struggle is short and expected, and the
victim strikes not alone, while the highest meed of ambition crowns
the victor. Not so with the hardy pioneer. He is oft called upon to
meet death in a struggle with fearful odds, while no herald will tell to
the world of the unequal combat. Startled at the midnight hour by
the war-whoop, he wakes from his dreams to behold his cottage in
flames; the sharer of his joys and sorrows, with perhaps a tender
infant, hurled, with rude hands, to the distant council-fire. Still he
presses on into the wilderness, snatching new areas from the wild
beast, and bequeathing them a legacy to civilized man. And all he
asks of his country and his Government is, to protect him against the
cupidity of soulless capital and the iron grasp of the speculator. Upon
his wild battle-field these are the only foes that his own stern heart
and right arm cannot vanquish.
 Lincoln and Douglas.

The Last Joint Debate, at Alton, October 15, 1858.[85]

SENATOR DOUGLAS’S SPEECH.

Ladies and Gentlemen: It is now nearly four months since the

canvass between Mr. Lincoln and myself commenced. On the 16th of
June the Republican Convention assembled at Springfield and
nominated Mr. Lincoln as their candidate for the United States
Senate, and he, on that occasion, delivered a speech in which he laid
down what he understood to be the Republican creed and the
platform on which he proposed to stand during the contest. The
principal points in that speech of Mr. Lincoln’s were: First, that this
Government could not endure permanently divided into free and
slave States, as our fathers made it; that they must all become free or
all become slave; all become one thing or all become the other,
otherwise this Union could not continue to exist. I give you his
opinions almost in the identical language he used. His second
proposition was a crusade against the Supreme Court of the United
States because of the Dred Scot decision; urging as an especial
reason for his opposition to that decision that it deprived the negroes
of the rights and benefits of that clause in the Constitution of the
United States which guaranties to the citizens of each State all the
rights, privileges, and immunities of the citizens of the several States.
On the 10th of July I returned home, and delivered a speech to the
people of Chicago, in which I announced it to be my purpose to
appeal to the people of Illinois to sustain the course I had pursued in
Congress. In that speech I joined issue with Mr. Lincoln on the
points which he had presented. Thus there was an issue clear and
distinct made up between us on these two propositions laid down in
the speech of Mr. Lincoln at Springfield, and controverted by me in
my reply to him at Chicago. On the next day, the 11th of July, Mr.
Lincoln replied to me at Chicago, explaining at some length, and
reaffirming the positions which he had taken in his Springfield
speech. In that Chicago speech he even went further than he had
before, and uttered sentiments in regard to the negro being on an
equality with the white man. He adopted in support of this position
the argument which Lovejoy and Codding, and other Abolition
lecturers had made familiar in the northern and central portions of
the State, to wit: that the Declaration of Independence having
declared all men free and equal, by Divine law, also that negro
equality was an inalienable right, of which they could not be
deprived. He insisted, in that speech, that the Declaration of
Independence included the negro in the clause, asserting that all
men were created equal, and went so far as to say that if one man
was allowed to take the position, that it did not include the negro,
others might take the position that it did not include other men. He
said that all these distinctions between this man and that man, this
race and the other race, must be discarded, and we must all stand by
the Declaration of Independence, declaring that all men were created
equal.
The issue thus being made up between Mr. Lincoln and myself on
three points, we went before the people of the State. During the
following seven weeks, between the Chicago speeches and our first
meeting at Ottawa, he and I addressed large assemblages of the
people in many of the central counties. In my speeches I confined
myself closely to those three positions which he had taken,
controverting his proposition that this Union could not exist as our
fathers made it, divided into free and Slave States, controverting his
proposition of a crusade against the Supreme Court because of the
Dred Scott decision, and controverting his proposition that the
Declaration of Independence included and meant the negroes as well
as the white men when it declared all men to be created equal. I
supposed at that time that these propositions constituted a distinct
issue between us, and that the opposite positions we had taken upon
them we would be willing to be held to in every part of the State. I
never intended to waver one hair’s breadth from that issue either in
the north or the south, or wherever I should address the people of
Illinois. I hold that when the time arrives that I cannot proclaim my
political creed in the same terms not only in the northern but the
southern part of Illinois, not only in the Northern but the Southern
States, and wherever the American flag waves over American soil,
that then there must be something wrong in that creed. So long as we
live under a common Constitution, so long as we live in a
confederacy of sovereign and equal States, joined together as one for
certain purposes, that any political creed is radically wrong which
cannot be proclaimed in every State, and every section of that Union,
alike. I took up Mr. Lincoln’s three propositions in my several
speeches, analyzed them, and pointed out what I believed to be the
radical errors contained in them. First, in regard to his doctrine that
this Government was in violation of the law of God, which says that a
house divided against itself cannot stand, I repudiated it as a slander
upon the immortal framers of our Constitution. I then said, I have
often repeated, and now again assert, that in my opinion our
Government can endure forever, divided into free and slave States as
our fathers made it,—each State having the right to prohibit, abolish
or sustain slavery, just as it pleases. This Government was made
upon the great basis of the sovereignty of the States, the right of each
State to regulate its own domestic institutions to suit itself, and that
right was conferred with the understanding and expectation that
inasmuch as each locality had separate interests, each locality must
have different and distinct local and domestic institutions,
corresponding to its wants and interests. Our fathers knew when
they made the Government, that the laws and institutions which
were well adapted to the green mountains of Vermont, were unsuited
to the rice plantations of South Carolina. They knew then, as well as
we know now, that the laws and institutions which would be well
adapted to the beautiful prairies of Illinois would not be suited to the
mining regions of California. They knew that in a Republic as broad
as this, having such a variety of soil, climate and interest, there must
necessarily be a corresponding variety of local laws—the policy and
institutions of each State adapted to its condition and wants. For this
reason this Union was established on the right of each State to do as
it pleased on the question of slavery, and every other question; and
the various States were not allowed to complain of, much less
interfere with the policy, of their neighbors.
Suppose the doctrine advocated by Mr. Lincoln and the
Abolitionists of this day had prevailed when the Constitution was
made, what would have been the result? Imagine for a moment that
Mr. Lincoln had been a member of the Convention that framed the
Constitution of the United States, and that when its members were
about to sign that wonderful document, he had arisen in that
Convention as he did at Springfield this summer, and addressing
himself to the President, had said, “A house divided against itself
cannot stand; this Government, divided into free and slave States,
cannot endure, they must all be free or all be slave, they must all be
one thing or all be the other, otherwise, it is a violation of the law of
God, and cannot continue to exist;”—suppose Mr. Lincoln had
convinced that body of sages that that doctrine was sound, what
would have been the result? Remember that the Union was then
composed of thirteen States, twelve of which were slaveholding and
one free. Do you think that the one free State would have outvoted
the twelve slaveholding States, and thus have secured the abolition of
slavery? On the other hand, would not the twelve slaveholding States
have outvoted the one free State, and thus have fastened slavery, by a
Constitutional provision, on every foot of the American Republic
forever? You see that if this Abolition doctrine of Mr. Lincoln had
prevailed when the Government was made, it would have established
slavery as a permanent institution, in all the States, whether they
wanted it or not, and the question for us to determine in Illinois now
as one of the free States is, whether or not we are willing, having
become the majority section, to enforce a doctrine on the minority,
which we would have resisted with our hearts’ blood had it been
attempted on us when we were in a minority. How has the South lost
her power as the majority section in this Union, and how have the
free States gained it, except under the operation of that principle
which declares the right of the people of each State and each
Territory to form and regulate their domestic institutions in their
own way. It was under that principle that slavery was abolished in
New Hampshire, Rhode Island, Connecticut, New York, New Jersey,
and Pennsylvania; it was under that principle that one-half of the
slaveholding States became free; it was under that principle that the
number of free States increased until from being one out of twelve
States, we have grown to be the majority of States of the whole
Union, with the power to control the House of Representatives and
Senate, and the power, consequently, to elect a President by
Northern votes without the aid of a Southern State. Having obtained
this power under the operation of that great principle, are you now
prepared to abandon the principle and declare that merely because
we have the power you will wage a war against the Southern States
and their institutions until you force them to abolish slavery
everywhere.
After having pressed these arguments home on Mr. Lincoln for
seven weeks, publishing a number of my speeches, we met at Ottawa
in joint discussion, and he then began to crawfish a little, and let
himself down. I there propounded certain questions to him. Amongst
others, I asked him whether he would vote for the admission of any
more slave States in the event the people wanted them. He would not
answer. I then told him that if he did not answer the question there I
would renew it at Freeport, and would then trot him down into Egypt
and again put it to him. Well, at Freeport, knowing that the next joint
discussion took place in Egypt, and being in dread of it, he did
answer my question in regard to no more slave States in a mode
which he hoped would be satisfactory to me, and accomplish the
object he had in view. I will show you what his answer was. After
saying that he was not pledged to the Republican doctrine of “no
more slave States,” he declared:
“I state to you freely, frankly, that I should be exceedingly sorry to ever be put in
the position of having to pass upon that question. I should be exceedingly glad to
know that there never would be another slave State admitted into this Union.”
Here permit me to remark, that I do not think the people will ever
force him into a position against his will. He went on to say:
“But I must add in regard to this, that if slavery shall be kept out of the Territory
during the territorial existence of any one given Territory, and then the people
should, having a fair chance and a clear field when they come to adopt a
Constitution, if they should do the extraordinary thing of adopting a slave
Constitution, uninfluenced by the actual presence of the institution among them, I
see no alternative, if we own the country, but we must admit it into the Union.”
That answer Mr. Lincoln supposed would satisfy the old line
Whigs, composed of Kentuckians and Virginians down in the
southern part of the State. Now what does it amount to? I desired to
know whether he would vote to allow Kansas to come into the Union
with slavery or not, as her people desired. He would not answer; but
in a roundabout way said that if slavery should be kept out of a
Territory during the whole of its territorial existence, and then the
people, when they adopted a State Constitution, asked admission as
a slave State, he supposed he would have to let the State come in. The
case I put to him was an entirely different one. I desired to know
whether he would vote to admit a State if Congress had not
prohibited slavery in it during its territorial existence, as Congress
never pretended to do under Clay’s Compromise measures of 1850.
He would not answer, and I have not yet been able to get an answer
from him. I have asked him whether he would vote to admit
Nebraska if her people asked to come in as a State with a
Constitution recognizing slavery, and he refused to answer. I have
put the question to him with reference to New Mexico, and he has
not uttered a word in answer. I have enumerated the Territories, one
after another, putting the same question to him with reference to
each, and he has not said, and will not say, whether, if elected to
Congress, he will vote to admit any Territory now in existence with
such a Constitution as her people may adopt. He invents a case
which does not exist, and cannot exist under this Government, and
answers it; but he will not answer the question I put to him in
connection with any of the Territories now in existence. The contract
we entered into with Texas when she entered the Union obliges us to
allow four States to be formed out of the old State, and admitted with
or without slavery as the respective inhabitants of each may
determine. I have asked Mr. Lincoln three times in our joint
discussions whether he would vote to redeem that pledge, and he has
never yet answered. He is as silent as the grave on the subject. He
would rather answer as to a state of the case which will never arise
than commit himself by telling what he would do in a case which
would come up for his action soon after his election to Congress.
Why can he not say whether he is willing to allow the people of each
State to have slavery or not as they please, and to come into the
Union when they have the requisite population as a slave or a free
State as they decide? I have no trouble in answering the questions. I
have said every where, and now repeat it to you, that if the people of
Kansas want a slave State they have a right, under the Constitution of
the United States, to form such a State, and I will let them come into
the Union with slavery or without, as they determine. If the people of
any other Territory desire slavery, let them have it. If they do not
want it, let them prohibit it. It is their business, not mine. It is none
of our business in Illinois whether Kansas is a free State or a slave
State. It is none of your business in Missouri whether Kansas shall
adopt slavery or reject it. It is the business of her people and none of
yours. The people of Kansas have as much right to decide that
question for themselves as you have in Missouri to decide it for
yourselves, or we in Illinois to decide it for ourselves.
And here I may repeat what I have said in every speech I have
made in Illinois, that I fought the Lecompton Constitution to its
death, not because of the slavery clause in it, but because it was not
the act and deed of the people of Kansas. I said then in Congress, and
I say now, that if the people of Kansas want a slave State, they have a
right to have it. If they wanted the Lecompton Constitution, they had
a right to have it. I was opposed to that Constitution because I did
not believe that it was the act and deed of the people, but on the
contrary, the act of a small, pitiful minority acting in the name of the
majority. When at last it was determined to send that Constitution
back to the people, and accordingly, in August last, the question of
admission under it was submitted to a popular vote, the citizens
rejected it by nearly ten to one, thus showing conclusively, that I was
right when I said that the Lecompton Constitution was not the act
and the deed of the people of Kansas, and did not embody their will.
I hold that there is no power on earth, under our system of
Government, which has the right to force a Constitution upon an
unwilling people. Suppose that there had been a majority of ten to
one in favor of slavery in Kansas, and suppose there had been an
Abolition President, and an Abolition Administration, and by some
means the Abolitionists succeeded in forcing an Abolition
Constitution on those slaveholding people, would the people of the
South have submitted to that act for one instant? Well, if you of the
South would not have submitted to it a day, how can you, as fair,
honorable and honest men, insist on putting a slave Constitution on
a people who desire a free State? Your safety and ours depend upon
both of us acting in good faith, and living up to that great principle
which asserts the right of every people to form and regulate their
domestic institutions to suit themselves, subject only to the
Constitution of the United States.
Most of the men who denounced my course on the Lecompton
question, objected to it not because I was not right, but because they
thought it expedient at that time, for the sake of keeping the party
together, to do wrong. I never knew the Democratic party to violate
any one of its principles out of policy or expediency, that it did not
pay the debt with sorrow. There is no safety or success for our party
unless we always do right, and trust the consequences to God and the
people. I chose not to depart from principle for the sake of
expediency in the Lecompton question, and I never intend to do it on
that or any other question.
But I am told that I would have been all right if I had only voted for
the English bill after Lecompton was killed. You know a general
pardon was granted to all political offenders on the Lecompton
question, provided they would only vote for the English bill. I did not
accept the benefits of that pardon, for the reason that I had been
right in the course I had pursued, and hence did not require any
forgiveness. Let us see how the result has been worked out. English
brought in his bill referring the Lecompton Constitution back to the
people, with the provision that if it was rejected Kansas should be
kept out of the Union until she had the full ratio of population
required for a member of Congress, thus in effect declaring that if the
people of Kansas would only consent to come into the Union under
the Lecompton Constitution, and have a slave State when they did
not want it, they should be admitted with a population of 35,000, but
that if they were so obstinate as to insist upon having just such a
Constitution as they thought best, and to desire admission as a free
State, then they should be kept out until they had 93,420
inhabitants. I then said, and I now repeat to you, that whenever
Kansas has people enough for a slave State she has people enough for
a free State. I was and am willing to adopt the rule that no State shall
ever come into the Union until she has the full ratio of population for
a member of Congress, provided that rule is made uniform. I made
that proposition in the Senate last winter, but a majority of the
Senators would not agree to it; and I then said to them if you will not
adopt the general rule I will not consent to make an exception of
Kansas.
I hold that it is a violation of the fundamental principles of this
Government to throw the weight of federal power into the scale,
either in favor of the free or the slave States. Equality among all the
States of this Union is a fundamental principle in our political
system. We have no more right to throw the weight of the Federal
Government into the scale in favor of the slaveholding than the free
States, and last of all should our friends in the South consent for a
moment that Congress should withhold its powers either way when
they know that there is a majority against them in both Houses of
Congress.
Fellow-citizens, how have the supporters of the English bill stood
up to their pledges not to admit Kansas until she obtained a
population of 93,420 in the event she rejected the Lecompton
Constitution? How? The newspapers inform us that English himself,
whilst conducting his canvass for re-election, and in order to secure
it, pledged himself to his constituents that if returned he would
disregard his own bill and vote to admit Kansas into the Union with
such population as she might have when she made application. We
are informed that every Democratic candidate for Congress in all the
States where elections have recently been held, was pledged against
the English bill, with perhaps one or two exceptions. Now, if I had
only done as these anti-Lecompton men who voted for the English
bill in Congress, pledging themselves to refuse to admit Kansas if she
refused to become a slave State until she had a population of 93,420,
and then return to their people, forfeited their pledge, and made a
new pledge to admit Kansas at any time she applied, without regard
to population, I would have had no trouble. You saw the whole power
and patronage of the Federal Government wielded in Indiana, Ohio
and Pennsylvania to re-elect anti-Lecompton men to Congress who
voted against Lecompton, then voted for the English bill, and then
denounced the English bill, and pledged themselves to their people
to disregard it. My sin consists in not having given a pledge, and then
in not having afterward forfeited it. For that reason, in this State,
every postmaster, every route agent, every collector of the ports, and
every federal office-holder, forfeits his head the moment he
expresses a preference for the Democratic candidates against Lincoln
and his Abolition associates. A Democratic Administration which we
helped to bring into power, deems it consistent with its fidelity to
principle and its regard to duty, to wield its power in this State in
behalf of the Republican Abolition candidates in every county and
every Congressional District against the Democratic party. All I have
to say in reference to the matter is, that if that Administration have
not regard enough for principle, if they are not sufficiently attached
to the creed of the Democratic party to bury forever their personal
hostilities in order to succeed in carrying out our glorious principles,
I have. I have no personal difficulty with Mr. Buchanan or his
cabinet. He chose to make certain recommendations to Congress, as
he had a right to do, on the Lecompton question. I could not vote in
favor of them. I had as much right to judge for myself how I should
vote as he had how he should recommend. He undertook to say to
me, if you do not vote as I tell you, I will take off the heads of your
friends. I replied to him, You did not elect me, I represent Illinois
and I am accountable to Illinois, as my constituency, and to God, but
not to the President or to any other power on earth.
And now this warfare is made on me because I would not
surrender my convictions of duty, because I would not abandon my
constituency, and receive the orders of the executive authorities how
I should vote in the Senate of the United States. I hold that an
attempt to control the Senate on the part of the Executive is
subversive of the principles of our Constitution. The Executive
department is independent of the Senate, and the Senate is
independent of the President. In matters of legislation the President
has a veto on the action of the Senate, and in appointments and
treaties the Senate has a veto on the President. He has no more right
to tell me how I shall vote on his appointments than I have to tell
him whether he shall veto or approve a bill that the Senate has
passed. Whenever you recognize the right of the Executive to say to a
Senator, “Do this, or I will take off the heads of your friends,” you
convert this Government from a republic into a despotism.
Whenever you recognize the right of a President to say to a member
of Congress, “Vote as I tell you, or I will bring a power to bear against
you at home which will crush you,” you destroy the independence of
the representative, and convert him into a tool of Executive power. I
resisted this invasion of the constitutional rights of a Senator, and I
intend to resist it as long as I have a voice to speak, or a vote to give.
Yet, Mr. Buchanan cannot provoke me to abandon one iota of
Democratic principles out of revenge or hostility to his course. I
stand by the platform of the Democratic party, and by its
organization, and support its nominees. If there are any who choose
to bolt, the fact only shows that they are not as good Democrats as I
am.
My friends, there never was a time when it was as important for
the Democratic party, for all national men, to rally and stand
together as it is to-day. We find all sectional men giving up past