Gold Hill daily news. [volume] (Gold Hill, N.T. [Nev.]) 1863-1882, 1863-11-18
Corporation s.

Corporation
The provision of our Constitution which
relieves stockholders from individual la
bifty, and over which much discussion
was had in the Convention, meets, we
perceive, with the entire approval of the
Sacramento Union. As that paper evinces,
and has ever done, much solicitude for
the welfare of our infant Territory and
embryo State, we should feel rejoiced that
our Lawmakers have earned its approba-
ton. The great terror of the opponents
of the provision, and those who desired
to so frame the law as to hold each stock
holder personally responsible for all the
debts of the corporation, was that by the
limitation clause foreign capitalists would
be deferred from investing in our opera
tons, and the mineral wealth of the coun-
try consequently remain undeveloped.
The Union takes precisely the opposite
ground, maintaining that the personal LA
billy clause, even limited as it is by the
Constitution of California, has had the
effect of excluding foreign capital from the
country, and says:
"Since the State was organized it has been
almost impossible to obtain dollar subscrip-
ton to the stock of any company by men liv-
ing out of the State. They would not place
themselves in position where their respon-
sibility was not fixed. Under the provisions
of the Constitution and laws of California
they would not be certain as to how much
they might be called upon to pay, and as
they did not reside in the State would not in
vest their money. But had the law been so
framed that they could not only be called
upon to risk the sum subscribed for stock,
they would not have hesitated. Men of
means would have reasoned that the pros
poets for doing well were favorable; if the
enterprise failed they would only suffer to the
extent of the money advanced for stock, and
that they were able to lose without embarras-
ment."
The arguments of the Union knock in
the head most of those used by the de-
baters of the subject in the Convention.
The sticklcrs for the liability provision
based nearly their whole argument on the
ground that without it no foreign capital
could be obtained for the development of
our mines, while its successful opponents,
or some of them at least, based theirs upon
the same ground, and denounced the in
PRODUCTION of foreign capital as an evil
and drawback on the prosperity of
State. If the Cnion's argumentare sound,
the whole Convention "slopped over"
and those who prevailed have made an
egregious error, and the defeated have got
exactly what they wanted.
The S. F. Bulletin take entirely antago-
nistic ground to that of the Union. 1t
says:
individual liability for stockholders is a
most wholesome check upon the organization
of bogus corporations, to cheat unsuspecting
people. Where there is legitimate basis
for an enterprise the creditors can easily be
induced to trust the company having it in
hand, holding only the property to be Great
ed as security and releasing BY stipulation
the individual corporators. It is question
dote Ii any enterprise IIlaL uoeS nOC IurIllSn
adequate security for the money needed to
inaugurate it, ought to be taken hold of by
corporation. We contend that California had
not suffered any loss because corporations
here have been treated the same as individual
firms or partnerships, and that it is unsafe
for Nevada to follow her example on this
subject. But when the door is open for ire
ponsible corporations to flood the new State
with stock that no one can be held response
BILE for, it is impossible to predict the calami-
ties that may follow. California has had no
experience in this line, and hence there is no
telling how a loose system of corporations
may work in Nevada-the only State that
commences life under circumstances similar
to those that prevailed in the early history of
this State"
This is subject that is susceptible of
strong argument on both sides, and al
though since the definite action of our
Convention makes the further discussion
of it dead issue, it is still interesting to
note how, on the same subject, "great
minds will differ"