Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1888-01-08
RAILROAD OFFICES.
TIE RESOLUTION BEFORE The STATE
SENATE TOUCHING THK MATTER.
The Subject Discussed at Length-A Paper
Of Great Interest TO the
Public.
10 The Editor Of the Dispnt(h :

II is no doubt convenient, If not ne
cessary. for the different large railroad
companies chartered 10y the State each to
have a financial Office in New York or
other great financial centre outside OF the
State. and also local business Offices IN
the different States through which the
lines run; but the principal Office OF
business. financial and otherwise, must
be somewhere, and the natural and pro.
per place for it is in the State and
city OF the creation and legal domi-
Gle or habitat OF the company.
For only in sush State has the company
any legal existence, though by comfy 1t
may extend It's business into other
States Bank of Augusta rs. Earle, Is
Pet. 393), there only is the legal sit,is
of all of its movable property and chooses
in action, wherever in fact being, and
there only are all debts and obligations
of every character contracted by 1t or
contracted TO it due and payable, IN
GLIDING the unpaid subscriptions, II
anv. to its capital stock. Rorer on Inter
state Law, section 2O3; Story's Con-
fict Of Laws. sections 3o2, 3o3
Wharton's Conflict of Laws, section
1853 IA Penobscott Railroad Company
rs. Barthel, II Gray, 266. Surely
within some fixed locality in that State
land there can be no filter place than its
legal domicile) should the principal
Office OF its business and the records
ST its business transactions be kept,
not only for the convenience OF
citizens OF the State having dealings
with the company and the safety and
protection of the company's creditors,
but for the certainty and facility OF that
full examination of the transactions OF
the company, expressed upon its books,
and the power Of supervision and com
pulsion to duty which the State Is entl-
tied TO require and use, and may at any
time find necessary and proper to exer-
else and command by legislative com
mittees, quo warrantO, mandamus, bill
in equity, or other legal proceedings.
And III this view it matters not where the
principal Office Of business may be II the
books showing the transactions OF the
company and its assets and liabilities are
out of the State, and thus beyond the
reacI of the Legislature and the luris-
diction of the courts OF the Common
wealth. And it is obvious that
all this applies with full force to all
of the companies chartered by the State,
for Whatever business, as well as to rail-
road companies. The name Of these IS
legion, and charters are granted for
every conceivable business enterprise re-
curing large associated capital. There
is not a session of the Legislature at
which enough charters arc not granted
10 manufacturing. mining, insurance,
and other companies to fill one third OF
the more than go usual pages OF the
sessions acts. while all OF the circuit
courts. aud now all Of the corporation
courts. in the state have full jurisdiction
10 grant such charters and exercise 1t with
a liberal hand, as the records OF the
Secretary of State show where copies OF
all such charters are required to be filed
and q memorandum kept Of the same.
But for all practical purposes, so
far as the State and It's citizens
and other creditors OF such com
companies are concerned, the law might
as well require the copies to be filed III
the moon and record kept thereof by
the fabulous parsonage OF that doubtful
region. for all such companies are formed
upon what is called the jolnt-stock prin-
ciple. with the bulk of the prescribed
capital retained in the hands OF the sub
scribefs 10 the stock, to he paid up under
chapter 81, section 3, of the Code, "as
called for 10y the president and direc-
tors" OF these persons some one or
more are usually citizens of the state and
OF the city or town wherein Is normally
situated the principal Office Of business,
who through courtesy or for gam lend
their names to the enterprise for the pur-
pose of obtaining the charter, often pay
ing nothing and not expected to
nav ANYTHING towards the capital stock,
and the shares standing in whose
names are secretly transferred to the
real owners. The real capitalists III
there is any capitaD are citizens of other
States, generally of the northern States.
Such companies, properly organized and
conducted upon business principles, are
most useful lnstrumentaiitles for the en-
plovment of consolidated capital in all OF
the business enterprises OF modern life.
But when best organized and best con-
dncted the business often fails, and
failure is sure in the absence OF these re-
quirements. The capital stock Is rarely
called for by the president and directors
themselves stockholders beyond 20 pei
cent, and if disaster seems probable
much of that is unpaid. OF consequence
the company comes to grief, and Its
creditors with it, whose debts have been
contracted upon the faith of the sub
scribed capital. And what is their rene
dv? Ten to one the books Of the com
panv never saw light in the State OF Nir-
+ ginia, having been written and kept II
| some distant state where was the real OF
some branch Office OF the business, con-
yenient to the president and majority
| of the directors and to the body OF the
stockholders. But without the books
and papers of the company, showing
who and where are the stockholders
and proofs of their membership, and
| the amounts of the shares Of each and
| the transfers, the Virginia and other
creditors OF the company are pOwerless
to enforce their rights. In order to en-
force those rights resort must be
had to the courts of the States IN whlct
tine stockholders reside, and jurisdic
ton must first he acquired over the com
pany III such State, for the stakeholder
can be reached only directly or indl
rectly through the company.-PatersoT
Us. Lynde, 100 U. S., SO. And as ju
risdiction cannot be acquired except II
the cases OF special legislation over the
company in such foreign State defeat o
the creditors is certain and eifectual
Such WAS the case forty or more year
ago of the creditors of the Rappahan
mock Mining Company, which was char
tered by the State of Virginia, witt
capital stock divided into shares, payable
upon call of the president and directors
and all of whose officers and stockhold
ers were citizens of Pennsylvania an'
residents of Philadelphia. 1t failed, be
jngindebted to the Bank of Virginia upol
a protested note for $1,000. AS tn
law then stood no jurisdiction could b.
acquired over the company in Virginia
because there was no way in which pro