The representative. [volume] (St. Paul, Minn.) 1893-1901, 1893-08-23

railroad which should go by GER
tain route. and they now purposed
to build it on another route; but
that was immeterial, since the
agent, in telling him where the road
was to be built, was expressing a
matter of mere opinion, belief, or
motive. He was promised that he
should not be called upon to pay his
subscription until the road had been
built to certain place, and the road
was never built to that place and
never would be; but he must never
theless pay, for parol evidence is not
admissible to vary the terms of
written contracts! In fact, he dis
covered, through a decision of the
supreme court of his state, that he,
and not the railroad company's
agent. was the party that had COM
mitted the fraud; just as the honest
man, assaulted by the highwayman,
is frequently led off to jail by the
courageous policeman, while the
highwayman is permitted to escape.
His experience was but duplica-
tiOn of that which he had had with
some insurance company, except
that in this case the supreme court
was the adjuster.
Such was the kind of justice fire.
Quently melted out to those who en-
deavored to escape from corporate
clutches into which they had been
drawn by fraud and deceit. For
those who remainded in the corpor-
ate ring there was far different
measure of justice. The legislature
had provided that the shares should
be paid for in money; but the COM
PLEASANT courts held that this was
merely directory; that the legisla-
ture could not have been guilty of
SO foolish thing as to require the
subscriber to the corporate shares
to pay his subscription in money,
which money the corporation might
use in purchasing of him certain
| NY dOOO LII 1UO
business; but that he might make
a subscription payable in such pro-
perty. The extension of this doc
trine has led to consequences the
most injurious to the public. 1t has
led to the "stocking" of property at
fictitious values; and the courts have
sustained such manipulating under
the specious reasoning that valu-
alton placed by the associates on the
property transferred to the corpora
tion is conclusive in the absence of
fraud. The result has been that
worthless mining property and pa
tent rights have been stocked" at
enormous values; that the corpora
tiOn has thus been able to publish
that it has certain great capital
''fully paid up" and to obtain a
false credit until the bubble bursts,
leaving it's creditors in the lurch.
The progress of this debauching doc
trine has been such that the highest
American notwithstanding the
express language of the governing
state statues, and refusing to fol-
low the decisions of the courts Of
those states Interpreting their own
statues, has sloughed off into the
low conception that, as against it's
creditors, a corporation can sell it's
unissued shares at less than par, and
even give them away provided they
are worthless at the time; an act the
very doing of which will make and
keep them worthless.
Nor did the complaicency of the
court stop here. Corporations we're
not only endowed with rights super
ior to those of sovereign states and
the people, but many of the courts
clothed them with the wonderful
faculty Of being at the same time
both debtor and creditor. Shares
of the stock of corporation are
debts of the corporation, and in
every bank statement it's capital
stock is classed among it's debts.
The obvious reason is that the mon
ey paid in by it's shareholders must,
on the final winding up, be re-distri-
buted to them, after it's creditors
are satisfied. But when the courts
endowed them with the faculty of
becoming the holders of their own
shares, of owning their own debts,
of selling such debts and of traffick-
ing in them generally, they merely
endowed them with faculties which
the legislature had forgotten to ex-
tend to them, and which did not be-
long to ordinary mortals. Of course,
l do not impute this complaicent
folly to all the courts: the weight
of authority is no doubt the other
way.
Editor Representative
We have mud-slinging paper here