The Anderson intelligencer. [volume] (Anderson Court House, S.C.) 1860-1914, 1874-04-16
Minority Representation in Corporations.

Minority Representation in Corporations.
Minority representation, which we have
often had occasion to advocate, has value
not only in legislatures but in stock compa-
MES. Corporations with large membership,
the majority of whose members are simply
joint owners of the property, who take no part
in the operations of the concern, and are not
brought into personal contact with those oper-
atoms, are apt to be controlled by some few
persons, or even by one, unknown and unseen
by the majority of the members, to the person
al profit of the real managers, without much
regard to the rights or interests of other share
holders A striking instance of this was the
Erie Railroad, where large part of the owners
were long excluded from the management,
kept in ignorance of the operations, and de-
frauded of immense sums. Another is the late
change of control in the Union Pacific, where
by one man has succeeded in buying an abso-
lutte majority of the stock. At the next elec-
ton for Directors of that great corporation,
this single individual can 60 to the ballot box,
his one vote overpowering those of all the
other owners; he can put in thirteen men to
represent himself, while his fellow-ow must
submit to have no representatives of their
choice, and must acquiesce in the selections he
may choose to dictate. Thus he can practical
ly convert to his own use the whole Of the
great property nominally controlled by a board
representing all the owners, can exercise all
the functions and enjoy all the advantages of
sonal responsibility. Masked behind this cor
poration, he can appropriate his neighbors'
property or otherwise pursue improper ends
without being reached by law, or perhaps even
by public opinion. Now, were the proposition
to succeed of enacting minority representation
in the Union Pacific Railroad Company, the
rights Of this one owner who holds majority
of the stock would in no way be invaded or
injured, while the rights and interests of his
feIlow-owners would be in measure protected.
Equtably the one owner holding 1000 out
of 100000 shares of Union Pacific stock is en-
titled to choose seven or at most eight out OF
thirteen Directors, while the other stockholders
are entitled to six or at least five. With q
board so composed it would be much less easy
to enact swindles or expressions that it now is
for the resolution of majority predetermined
on unfair dealing can often be materially
shaken or modified by the attacks of minori-
ty which understands the contemplated wrong,
and is anxious to prevent it. Even if the mi
nority of shareholders can elect but single
Director his mere presence in the board would
often operate as considerable check to mis-
doing, for it would effectually destroy the Sc
crecy which is often indispensable to the sue
cess of plots against the property or rights of
others.
The minority could often learn through him
of the transactions and operations of the cor
poration, ascertain its actual condition, and
act intelligently with reference to facts which,
without such representative, they are often
debarred from knowing. Under the present
system the wrong may be completed, the prop
erty misappropriated, or its value destroyed,
before the owners know anything about the
matter; but one minority Director can appeal
to the courts if necessary, and stop contem-
plated outrage in time. Again, if the majority
in the Board is but one vote, the minority
would at times have 81 opportunity, by con-
centrating their votes, to elect from among the
majority the man most acceptable to them as
President, thus securing themselves to con-
siderable extent.
The method which we have often had occa-
sion to commend for the choice of members OF
Congress and Legislatures-and which has
been embodied in bill now before the Com
mittee on Territories of the House of Repre-
sentatives, by Hon. John w. Hazelton, of New
jersey, in reference to the solution of the
vexed question between Gentiles and Mormons
in Utah-would answer the purpose. A gen.
eral law might be passed requiring that the char
ter of every corporation shall tx the number
of shares that shall be entitled to one Director.
For instance, the shares in the Union Pacific
being 100000, if ten Directors were to be
chosen, 10000 shares would be entitled to one
if thirteen, 23077; if fifteen, 22,500 shares
would be entitled to one; if twenty, $4,000
would elect; and so on. Thus any man re-
ceiying the needed quota of votes would be
elected; and the holders of a majority of stock
could always arrange to have majority of the
board, but could not exclude the minority from
representation therein.
But there is another method and better
one which is also perhaps easier of immediate
adoption. Let the system of voting by proxy
be transferred from the choice of Directors to
the proceeding of boards. That is, instead OF
holding an election for Directors, the result OF
which has been entirely cut and dried before
hand, let register be opened at the beginning
of each year. wherein every man who proposes
to act as Director for the year can register his
name; and let proxies, instead of emitting the
holder to vote at elections entitle him to vote
on behalf of the giver of the proxy at roll
calls. in the board. Thus the whole stock
would be voted on by authorized representa-
tives in all important questions. 1t might be
made necessary qualification for Director
that he should hold at least one proxy before
taking his seat, as we'll as hold stock himself
and if men entered boards simply to get COM
pensated as Directors, this point might be met
by making them look to proxy-givers for COM
pensation. Proxies should be revokable at
pleasure, and thus would nearly perfect repre-
sentation be secured.-New York Mercantile
Journal
REMARKABLE MEMoRY-There is a negro
girl in Brucetown, about years of age, whose
memory is truly marvellous. Her wonderful
powers were first brought to the notice of a
White man who keeps q grocery in that part