The sun. [volume] (New York [N.Y.]) 1833-1916, 1890-06-29
CAPITAL DRIVEN AWAY.
NEWToRK CORPORATIONS ORGANIZING
IN NEW JRRSET.

VAST aggregate OF Capital Into Othcr
JurIsdIctIonS-Aiauy BIe Private Fart.
nershipH ReorERnIzed on n stock Com.
pnny HnSls-Oho Law Firm Takes Ont
Charters Representing $3.50, 600, 900 In
Other StRtes-Not the Right Thing.
A single firm OF New York lawyers has
within tho past year organized public and
private corporntions having an aggregate
capital OF S25O.0O0OO0 These corporRtions
number moro than 100. md most OF them arc
New DIRK concerns, but ncnrly oil OF them
have been organized under the laws OF other
States. and they pay to New York taxes on no
property except the real estate they hold in
this State.
Within n fow months II has become tho fash
ion for great private firms in various lines Of
business to reorganiae their affairs on stock
company basis. In most cases tho ownership,
or firm membership, has not been changed.
Tho reorganization has been made for tho
business and legal advantages which it Yields
in the majority of instances, and not for the
purpose of putting stock upon tho market.
There Is no doubt that tho now method OF con-
Quoting important private enterprises will bo-
come more and more popular. The advantages
are important. 1t limits tho personal liability
OF stockholders to tho actual amount OF their
Investment IN tho concern. In case Of tho death
concern ls not interrupted. as in tho casa of IL
private firm. 1t permits tho admission OF ono
or moro individuals to an interest in tho BUSH
ness without giving thom tho full rights OF
partners. as would be tho case in private
firm. In word tho private property interests
OF membcrs Of the concern are protected.
But If New York laws governed tho formation
OF all corporations which do business in Now
York very few would DO orInniGed. Nine
tenths OF the new CORPORATIONS being formed
by New York mon for distinctly New York pur-
poses nre being organized under New jersey
charters. For example, tho North American
Company. organized few DAYS ago under New
have boen New York corporation but Tor tho
onerous hurtl ems our laws impose. Tho foo
charter TO this comnnny was sI6.6OO.
New York would have, reIuired,a preliminary
ranY annually only on such proncrtv aS 1T hc-
tuAllY owns in the State Now Ork would have
imposed an annual tax OFF, per cent. on tho
value Of the entire capital 1mmCdntely alter
tho New York Legislature recently revised the
corporation laws to tho above effect, Now Je'-
corporations to a minimum. She is harvesting
rich returns NJ Now York 8 expense, Tor It IS
portion chartered in New > York since tho law
was changed amounts to only about SinUupunJ.
In New Jersey tho capital !Zation OF really Now
l Ork cOrpOratIOnS recently amounts to some
samuel !ntorlnvor. who has placed many
millions OF English capital in America, and
IL reorEani2ing many industrial and man.
ufacnring enterprises in this country upon
tho variations in, state laws bearing on the
subject: lie condemns tho Now York statutes
New York and Massachn-cits" Ic said in
discussing tho subject, have tho sevcrcst laws
rmon The III s snncs a IN .h
anything, worse q ian those Of New York Ne
pIrGH9%;d tne "ther gay tho Sew England
u. We took out II New Jersey charter
at a foe OF 5000. TO have orcnnized that
company in Vow York would have cost go
MS u preliminary tee TO the Sta;e. No were
forbidden 10 organize in Ainssachusrtts on any
terms. becausc tho law OF that state does not
manufacture OF ,splrtuouss or malt liquors.
iM G Of G btnE of he n6s y tbs nso y or
we can do business In MASSACHUSETTS, under mn
outside charter on precisely the same terms
and with tho same privileges rs corporations
organized under Massachusetts laws. Tho
Constitution Of .he United States guarantees
recognize lawful corporations as well no pri-
va!es.i firms and individuals Of ohor, n!ntc-
poration Avs Of New York Is enormous. us" our T
own own c9rnortations arc taxed two per cent: on
cEn cotnoratons are taxed Of course. only OH
their visible properly in the Stnto. New
York corporatl9n which had most Of Us cnri-
was hold outside the State. would thu, beco'no
subject 70 double taxation, II must bay tho
tal, and then pay another tax +" tho Stale
where tho pEropGGrty which that canitnl stock
eyitabe effect of such law is to pro-
Won't the organization Of now corporations
be sUrprSng LII many yS cxisnc coTU"ranEs
should abandon their Now York charters and
reorGanizc in other Statos; England taxes cor
plan. The tax in that cOuutry il six
renee on Gael. mound eGlnod,, only % rer cent.
cent. on the value Of the entire capital.
l., There are four States which offer LIBERAL In
SsS sFsey 10 wes $rEpn Thy
South OAK otaa;;, West Virginia j. no most lib
only So and thsr saSo HS ens
Discussing thef endency to pnt all manner Of
enterprises on y corporation basis, Mr.. Cnter-
:, Such successful Issues as that OF the Clanin
Company have on2oIraGed tho movement.
subscribed three times over, and the common
stock is now ~ BID. There Is no reason why
should not be as popuInr in this
country as II has been the past three, or four
years Sn N Gnigland IN, The common stock Of AL
chased and capitalized for british nvestment
nsomo SO 900 9ooTris pnying II per cent. dly
they pay 2 per cent. But tho English appetite
n this direction IL prettywcIl supulied now,
unities the now field OF publ, investment
;;iiers. The past few months we have
ling purely American CORPORATIONS tim t
n placing English capital. Some enter
JTlseS are DclnB DlucOu IN bOtn countries. ono
million In bonds Of the New England brewing
company. :, New Jersey corporation was
'laGed IN EngIHnd and tho stock was all SUBJ
erlbed hero. The Chicago Brewing and Malt
M Company. which was organizod a month
Igo with a capital Of $950O0pO was floated
wo-thirds In Chicago and tho balance in Lon
lon. Tho Chicago portion was taken in less
han two weeks.
but It is in organizing prvate corporations.
which arc merely substitutes for ordinary
partnerships. that most IL. now, being done.
We hays SpsaniIedd ino ore thnn 100 Of these
bout $250,Q0O,Ou0; Here is ono Just oom-
eted. Frederick Beck & Co., tho wall paper
eorranized as corporation. with a capital OF
! ,OOOOgO. Tho state OF Now York Is losing
undreds OF thousands OF dollars annually By
irving these corporations into other States
Were the laws are moro reasonable"