Gold Hill daily news. [volume] (Gold Hill, N.T. [Nev.]) 1863-1882, 1864-03-29
Mining Corporations.

very prevalent belief that these complaints
are not without foundation, suggest the in
ouiry: Is there no remedy for or preventive
Of the wrongs complained Off These COM
plants come chiefly from the holders Of
mining stocks, and to the consideration OF
their grievances / shall conlne myself,
though the principle involved apply alike
to all corporations and their stockholders.
II, as some maintain, the statute places the
entire control Of corporations in the hands
Of the Trustees, know of no remedy for
past wrongs, nor of any preventive for the
future, but in all amendment of the law,
Some suggest that stockholders might pro-
tect themselves BY restricting the power OF
the Trustees through the bylaws. But here
again we are met by the claim set up by
some, that even the framing OF the bylaws.
is prerogative pertaining to the ! rustees.
Absurd as this proposition appears, 1t has Its
advocates, and it is said that certain mining
companies in the city have referred the ques-
ton to gentlemen learned in the law. and
that even they differ in opinion. II this be
so, then surely the law should be 50 amend
ed as to set this question at rest. But II
this power were vested in the stockholders,
it is doubtful whether that would have the
desired effect Bylaws might be so framed
as to prevent the Trustees from doing
wrong to the company, or to its members
indi Tidually. But the wrongs complained OF
are not committed exclusively, nor, perhaps,
chiefly, by the Trustees, and but rarely by
them in their official capacity. The sorest
complaints lie against stockholders, whether
Trustees or not, in their individual capaci-
ties. True, an act Of the Board may assist
the conspirators in swindling their associates,
but the Swindling may also be accomplished
without such aid.
At the time of organizing 4 mining conf
panv, in most cases, the stock is held by
few persons, all of whom are appointed
Trustees. Suppose they determine to make
fortune out of the entcrprise-out Of the
mine, if they find the precious metal there
out of the stock, if they fail TO find the
metal. They sell stock enough at a low rate
to commence the work Of developing tie
mine. In selecting a Superintendent they
seek for one who is willing to carry out their
plans for share Of the profits. They in
struct him to send true report OF the pro-
press of the work and the quality Of the
rock to one of their members for private use,
and a different report to the Secretary, to be
placed OH file for the inspection Of the COM
panv (such instructions have been given).
With such an advantage over their associates,
the Trustees can levy assessments, suspend
work on the mine, bull or bear the stock ut
Measure, until they have alarmed the pru-
dent and compelled the poor stockholders to
sell their stock for trife, all which, through
the secret agency of others, has passed into
the possession of the conspirators; or, II the
stock be worthless, until the consplrators,
unknown to their associates, have sold their
own at high price. But it is not necessary,
the conspirators should be Trustees. few
unscrupulouS stockholders having majority
of the stock, by tampering with the Superin-
tendeut, making him an accomplice, might
accomplish the same object. 1t is possible
they might succeed even without the conni-
vance Of the Superintendent. BY having
one of their number near the mine, obtain
ing specimens and making assays from time
to time, circulating false reports, and bulling
and bearing the stock, they might attain
their object rs completely, though not, per-
haps, as cheaply, as if they were Trustees,
and had the control Of the Superintendent
and the power of lcvying assessments.
But this buying and selling must not be
done in the name OF the owners Of the stock.
That might excite suspicion, as the Trustees
and large holders of stocks are presumed to
know more about the real value Of the mine
than others. Hence an agent must be found,
man Of straw, to do the work cllndestine-
". Pretended sales are made, the certificate
passes into other hands, but is neither sur
rendered nor transferred on the books. Hence
no one can tell by examining the books how
much stock is actually owned by any MEM
Der of the company. Such are some oi the
means by which unscrupuiouS stockholders
manage to swindle their associates. And for
all this, we are told there is no remedy-that
the wisdom Of man cannot devise a law that
rogues will not find means to evadc-or If 1t
can, the Legislature has no power to pro-
hibit the acts complained Of. The constitu-
tional power Of the Legislature shall not at
present attempt to discuss, as it would ex-
tend this article to an undue length. shall
assume what | think no lawyer will deny,
that corporation being an artificial person
ia creature of the State-has neither right
nor privilege but such as are bestowed by
the State, and in accepting these it is bound
70 take them with all the restrictions and
limitations the Legislature deems necessary
to impose. If in this | am correct, 1t would
seem that when we hear Of wrong being
done and the manner particularly specified,
there can be no great difficulty in defining
Il remedy. Willing TO contribute my mite
to the effort, would suggest the following;
|. Require the Secretary to Keep on hie
for the use Of the Company and open to the
inspection of any stockholder during ofhce
hours, all reports and communications touch
inv the progress of the work and the value OF
the mine, Whether received from the Super
intendent or from any s,ockholder. Also
record. separate from the record Of transfers,
Of all certificates of stock assigned, but not
surrendered, and transferred on the books;
and to furnish, at the request Of any stock
holder, statement showing the number Of
shares held by any other stockholder in his
own name, and the number owned by him
and held in the name Of other persons.
.. The Superintendent to report, at least
montbly TO the Secretary, the progress Of
work ON the mine, the number Of hands em-
ployed, the expense of working, every assay
made, the amount of rock worked, and the
value of its product and to send specimens
and report progress at such other times
as he NAV think conducive to the interest
cf the company, or as the Trustees may re-
ouire.