Morning journal and courier., 1880-01-23

JOHN Be CARh1NGTONs
 EDWARD T. oAHRINeroS. JOHN B. oAnR1saToN, Jn.
 Friday Morning, Jan. 23, 1880.
 THE JOINT STOCK LAWS.
 The joint stock laws of this State have served altogether too long as an aid to swind- lers. By means of them it has been easy to organize and continue in existence companies whose purpose it was to deceive people in other parts of the country under cover of the good name of Connecticut, and to such an ex- tent has this been done that the reputation of the State has suffered considerably thereby. The matter has been discussed for several years and Governor Hubbard took hold of it in earnest and made number of valuable recommendations concerning what ought to be done. Some of these recommendations are embodied in the bills just submitted by the Commission-consistin of John s. Beach, William 0. Crump, Samuel Fessenden, Henry s. Barbour and Frederick Webster-appoint- ed to consider the subject of our joint stock laws.
 This Commission finds that since June 24, 1869. there have nominally been organized in the State ?, 13O companies. Of this number ], 1898 have now no legal existence, and as the first step toward reform it is recommended that they be formally wiped out by act of the Legislature. Then, to prevent the recurrence of such abuses as have been complained of, the Commission has prepared 8 bill complete Iy revising the joint stock laws. This bill comprises twenty six sections. The following is summary of its main features
 In the first section it stipulates that any three more persons majority Of whom are residents of the State, who shall express their agreement to be incorporated, may be and ending with Company" or 'tCorpora- tion.'' Section 2 provides that two of the persons associated may call the first meeting, at such time and place as they may appoint by notice in any newspaper published in the county, at least fifteen days before the time meeting bylaws for the regulation of the affairs of the corporation may be adopted and an organization shall be effected. In the fourth section it says that no associa- tion under this act shall have corporate pow CTS or commence business until all the stock shall have been taken by bona ide subscrib CTS and paid for in full. Section says the directors shall cause the articles of agreement to be published in & newspaper in the county, and majority of the directors shall swear to a certificate setting forth true copy. Sec ton is to the effect that any corporation having voted to change it's name may apply to the Superior Court to have such change made, first giving notice of such in tended application by advertisement for two weeks in newspaper published in Hartford or New Haven, and in a newspa- per published in the town. In the 7th sec tion it is stipulated that the affairs of every corporation shall be managed by three or IL 1I-z L ,,,11Ir by the stockholders. Section Il provides that any corporation may increase or reduce it's capital stock, and the number on par value of its shares, at any meeting of the stock holders warned for that purpose, by a vote of stockholders holding at least two-thirds of the stock, provided such increase shall all be paid for and certificates thereof shall be filed with in thirty days after such payment. In the following section it says the president and treasurer shall on or before the 18th day of February of August, lodge with the town clerk certificate signed and sworn to by them, showing the condition of it's affairs as nearly as the same can be ascertained on the first day of December or January, or on the first day of June or July preceding the time of making such certificate. Section 23 states that when any corporation shall have failed for two successive years to make the annual statement, the Superior Court shall be ap- piled to for dissolution thereof, which court, after due notice to all parties interested, may proceed to hear the matter, and for reasonable cause decree dissolution.
 It certainly is not too much to ask that those who take advantage of the privileges offered by the State for the formation of joint stock companies shall give satisfactory proof that they have actually put in the capital they pre- tend to have put in, and that they shall make at stated periods showing of their financial condition. These two requirements, properly enforced, will do great deal to relieve Con- necticut of the reputation of helping rogues by her joint stock laws.
 While the bill, as it now stands, provides for great improvement upon the old order of things, it does not embody some of the recommendations of Governor Hubbard which he strenuously urged, and which many would have been glad to see incorporated in it. For instance, the recommendation that stockholders of corporations should be per sonally liable jointly and severally for all labor claims against such corporations. The Hart ford Post, in commenting on this branch of the subject, says: "No reason is offered for rejecting this important change; which Is to be regretted, for the recommendation as put
 
 cepted as wise and timely. Why the partners in these corporations should not be severally liable for labor performed for their benefit, can, perhaps, be shown in way to command aoquiescence. It may be said that it would establish bad principle by giving the laborer higher claims than other creditors; but it can be answered that there are good reasons for doing so. The worker is generally too con fding to discover danger and too poor to pro tect himself in case of failure; while the bus mess man is sharp enough to take care of himself. Besides, the principle of discrimi- hating in favor of labor has already been es- tablshed in builders liens and other enact ments" The Post also calls attention to an- other point concerning which nothing was done by the Commission, namely, the rights of minorities in corporations. As the law is, the holders of one share less than half are absolutely at the mercy of the holders of one share more than half, and it has happened that the minority have been swindl ed by the majority because under the law they were un- able to protect themselves.
 The Commission presents another bill pro- viding for the appointment of a Commission | CT of Corporations, whose duty it shall be to see that corporations comply with the laws, 1 and thus much needed reform is at last in a | fair way of being accomplished.
 EDITORIAL NOTES.