The record-union., 1894-02-01
HAVE YOU ANY STOCK !?
New Departure in the Collection Of
Assessments.
People VIII Hereafter be Very Careful
About Subscribing for
Stock.

Quite large number of Sacramentans
are now being educated in the matter OF
the responsibility of stock kholders in min
ing and other corporations, in manner
which will make it very difficult to float
stock here for some time to come. Here
tofore men who purchased mining stocks
have felt that they could hold the stock
and pay assessments on it until they were
tired of it, and then, by refusing to pay
an assessment, could allow the stock to
be sold for the assessment and escape
further liability. But the lawyers have
found way 10 force a man 10 pay an as
sessment without letting him out of the
corporation by selling his stock. AS the
proceeding is an unusual one people
should study it up before investing III
stocks or corporations.
Some four years ago quite large
amount of the stock of the Carizel Del
Norte Mining Company was sold in TINS
city, and the purchasers soon discovered
that the stock was worthless, as the
parties issuing it had no legal title to the
mine. A number OF persons who had
purchased this stock, however, did get
possession of the mine, and they organ
lied a company called the sacramento
Mexican Mining Company" and SOLO
very large number OF shares OF the stock,
alter adding to the possessions OF the
company two or three other mines in the
same vicinity. The company was COM
posed OF good men, and the ockholderS
elected a Board of Directors who were
good men. The stockholders had the ut
most confidence i'll the management, and
no man could think of any way IN which
he could be ''done up"
The stock of this company was paid for
by monthly assessments, the money thus
collected being used to develop the mine,
which is located in. Mexico. Good re-
ports were continually received from the
mine, and many OF the stockholders
looked forward TO being mlllionaires
some day, while others were not so SAN
guine. Finally all hands became inn
patient to know just what the real condl-
tion of the mine was. and proposition
was brought before meeting OF stock
holders TO send mining expertto Mexico
and get report on the mine. Some
favored the plan and others did not care
to put I'D any more money. However,
the directors decided TO levy an assess
ment of two cents a share, and did so on
the 25th of April, 1898.
Those who still had faith in the mine
came up promptly and paid the assess
u.
did not pay, expecting, of course, that the
DELINQUENCY would be advertised and the
stock sold, as is usually done in such
cases. But the directors never attempted
to collect the assessment by selling the
stock and let the matter rest until after
the return of the expert, who reported
that the mine would not pay for the
working.
Now comes "the little joker" Within
the past few days such of the stockholders
as had not paid the assessment received
the following notice from firm OF at
tOrneyS:
"Sir: We have been instructed by the
directors of the Sacramento Mexican
Mining Company to demand payment of
the amount of the delinquent assessment
of two cents per share on the stock Of the
company held by you, which assessment
was levied by the directors April %, 1893;
ana TO inform you that unless the same
be paid to the Secretary OF the corpora
ton by February 1st next, we shall COM
mence proceedings against you to recover
the amount of such assessment together
with the costs and expenses already in
Cured"
This was naturally startling PROPOSE
ton on its face for no stock mad ever
been advertised for sale or sold, but it is
nothing compared to another feature
which does not appear on the face of the
notice
Every man who purchases stock in a
corporation is supposed to know that he
is individually liable for his proportion
of the debts of the corporation incurred
while he is q stock holder, but inquiry de-
Yelops the fact that the money to be
raised by the forced collection of this as
sessment is not 80 be used entirely to pay
the debts of the corporation, but to pay
back percentage to those who willingly
paid the assessment at the the time 1t was
levied, because they had confidence III
the mine. The debts only amount to a
very few hundred dollars. The directors
are now collecting only one and one-
quarter cents per share, which is to be
used in paying off the small Indebtedness
and paying back three-quarters OF cent
per share to those who paid in the full
two cents when the assessment was
levied. This is where the novelty of the
thing comes in.
One of the delinquent stockholders said
yesterday: This is an entirely new style
of transaction to me. | was one of those
who had no faith in the mine at the time
the assessment was levied, and l was
strongly opposed to it and made up my
mind 10 allow my stock to be sold as de-
linquent and thus get out OF the whole
business. I thought l knew something
about the mode OF procedure in such
cases, but IL seems ulu not. 1eOple VIII
have to educate themselves a little more
in these matters.
Mind you, l don't dispute the fact
that am liable for my share of the debts
of the corporation, but 1 can't under
stand how the law can compel me to pay
money back to another stockholder who
paid an assessment. 1t may be So and
probably Is, but it Is news TO me and will
be to many another man who holds stock
in corporations.
II think the minority in corporations
have rights as we'll as the majority, and
they ought to be protected by law. These
people who paid the two cents were in
favor of the assessment and paid it will
ingly. They were ready to bet that much
more on the mine. / was not and did not
bet They bet and lost, and now come
and make me pay portion of the money
they insisted on risking.
"Well, it's all right [ am going up
fr 7