Omaha daily bee., 1892-01-17
LET'S ORGANIZE A COMPANY
How the Festive Dollar is CHASED by
spOrtive Corporations,
AMAZING CAPITALIZATION ON PAPER,
Legitimate and wildcat Comprehensive
Favored Section of the Confidence
Boomer-Rigid and Loose Laws
Corporate Curiositlcs.

INC UUSJ CulIntTiChl VI SOueultS arc dbtCuipt7
ed to DO floated with the largest amount of
supposed capital. When incorporators have
faith In the value of a scheme they name as
small a capital as they reasonably can TO
save capitalization fees and local taxes on
capital. When they project something not
quite substantial In description they put or
a bold face and name a big figure as the CAPT
tai stock. The first class of projectors
organize usually in their own states, no mat
ter how large tho fees and heavy the taxes,
because OF the fact that a corporation OBJ
tains credit whea 1t organizes in the Same
state in which it is to operate. Vice versa:
the chimerical organizations Incorporate In
states which require little actual capital tc
be paid in and charge light fees for articles
of Incorporation. OF course such companies
suffer in credit from this system Of organiz-
ing in one state and doing business in
another. l should not say that this course
implies fraud or even weakness: but invest
ors look upon it with suspicion, though sus-
picions in many cases are not justified. AT
the present time many corporations intend
ing to do business in New York state are
being incorporated in New Jersey and Illl-
nois. They are driven to this not so much by
the heavy fees and taxes imposed by the
LNCN u laws hdODIOo III lDV 10 W e"-
requirements as to annual reports. The form
OF annual report to the secretary of state now
in force in New York is simply inquisitorial
1t requires, If strictly complied with, an ex-
pose of a corporations entire business.
CORPORATE VARIATIONS.
Corporations vary in many curious ways,
| according to locality. The state laws &C.
count for this in some measure, but not en-
\ tireiy. In the New England states corpora
lions with limited capital, In view OF the
practical character OF the enterprises, are
there with a paid-up capital so small as to
| appear ridiculous. In the middle states,
especially New York, Pennsylvania and
Ohio, the same general principle prevails;
but u good many corporations with high
sounding names and big capitalization are
| recorded in New Jersey, Indiana and Illinois
used to be the states III which the doubtful
corporations with big capitalizatlons were
organized; but Indiana has lately added
largely to her fees for Incorporation, and 1lli-
nois and Colorado have a monopoly of the
corporations with suspicious titles and pur-
poses and heavy capital stock on paper.
Chicago and Denver are the places Of bust.
ness named by more chartered corporations
with apparently inexhaustible capital than
any two other cities in the country.
GtowTH OF CoRPoRATIoNS
The greatest number OF corporations or
ganized in the past year have been IN pecu-
iipA ttioJ AbSp aNsS SSSp - " ~
which Tho raw material consumed is supplied
by nature. Hundreds-it would hardly be
exaggeraJiou to say thousands of electric
light, heat, power and railway companies
have been organized in the states during 1891.
In almost every instance the capital stock
named has been insignificant. Companies to
furnish cities of 90, 900 inhabitants with light,
heat and power. have been started with from
$40. 900 to $50, 900 capital. The most ampi-
tious OF those of which / have any record was
of the New York Electric Railway company,
incorporated iu New Jersey, however, with a
capital of S25 ,0O0, of which one-teDth was
actually paid in. and which proposed to build
and operate surface, elevated and
underground electrical railways all
over the country! Trolley electric
street railway companies to build and
operate several miles Of road, start on a basis
of only s., 1000 or 5000 a mile. The plant is
all that such companies have to provide.
There is no raw material to buy and the
labor is chiefly mechanical. In most manu-
features the raw material and labor are the
chief items of cost; IN the electrical business
there is neither of these original costs to eat
up profits or to require large capital origin
ally. Many hundreds of irrigation companies
have similarly been started with absurdly
small capitali2ations The reason is that the
plant only is TO be D provided. These irrigation
companies dam q mountain stream, accumu-
late the water which nature provides in the
wet season and dole it out to the valley lands
in sluices during the dry season. Some of
LneSo '1rrlgaIiOn cOmDdnleS as .Ln0y are
called are
BONDED FOR vERY LARGE AMOUNTS,
especially in California, but as a rule private
corporations undertake the work of irriga-
tion AS a,business with very small capital. In
San Diego. Cal, over l42, 900 acres are irri-
gated by three districts which have been
bonded for over a million of dollars. But in
Washington, ana Oregon, and Idaho, where
a different system prevails, corporations are
formed with from S2o,090 to S25 1000 capital to
collect water and irrigate whole counties.
Somewhat akin to the electrical and irriga-
ton corporations are a large number OF fuel
manufacturing companies, which make an
artificial fuel. These companies not only do
not have to buy the raw material, but are
actually paid to cart 1t away from coal mines.
The raw material used is the coal dust which
~accunulates AZ tho mines in immense heaps,
and which must be removed from time To
time. Somebody has discovered a process
by which this refuse of the mines can be
compressed into IA brick, which burns
Without odor or lame in "A stove which does
not require a chimney to create a draft"
MINES M MINING.
There are two classes of corporations
which for some reason or other capitalize in
the largest gross amount of CAPITAL stock |
with the smallest possible value per share. !
Mining companies by the hundreds have
been Incorporated this year in the west, |
largely in Salt Lake and at Denver, Col, |
with capital STOCK ranging from 81, 900. 900 to |
oJ,oUb,OOO "lOso ShaicS hhNCu Ihlc talub OF 1
81 or 80 only. These are not merely ''pros- |
pecting" companies, but substantial aud act.
lively operating companies with mines open
and mills running. 1t Is not uncommon to
see a group of mines from which ore has been
taken for some time consolidated with big 4
capital divided into dollar shares. Building
and loan associations have sprung up in
every state of the union with capitalization
of from $1,000 TO 5000, 900 in 81 shares.
Chicago, which takes the cake as an incor-
porator, has one or two with $50, 900, 900 each !
These are simply mutual aid associations
the members of which are mechanics and
laboring men who combine their savings In
these loan associations to draw upon the
funds in building homes, with mortgages and
other like eXasperating decorations aud i'm
upon them. / should say that
there arc more of these building and loan
Incorporated In this country
than OF any other form of cooperative bust
ness.
TRANSPORTATION COMPANIES.
Another class of corporations which have
sprung up during the past year are engaging
in the tram portation business. They build
and lease to firms or individuals, freight cars
specially arranged to carry the particular
class of goods In which The lessor Is engaged.
IL is a new development OF tho Transportation
business we have become familiar with under
various titles as freight lines. Its peculiari-
ties are that /, rents its cars with the privi-
lege of any railroad line in tho country, and
for the TINA IF fhe laoSa the aurc ata . no tnay