The Yale expositor., 1897-01-15

be the peoples representatives, whose
names are upon the rolls of your houses
infest the halls Of legislation for evil pur-
poses.
state Control of Corporate Stock
and bond Issues.
We should be extremely jealous of the
reputation OF our business interests. All
investments should be given such guar
antee of safety by law as to inspire con-
fidence i'm those who deal with us.
Capital should be encouraged to invest
in the development of our varied re-
sources Investments made within the
state should be governed and protected
by wise laws and not be dis
turbed by frequent changes in
the laws that govern them. The
burden of taxation should be equally
distributed, all property bearing its just
share. The issuing of stocks and bonds
should be so regulated that when the in
weston seeks for proper security. he will
find that the state has guarded him in his
investment against the purchase of arti-
fetal values by way Of watered stocks
and bonds. II is in your power to materi-
ally aid owners of corporate property IN
Michigan in disposing of their securities
II you will pass such laws as will pro-
tect the investor therein, by making the
sale of the securities easier and at
lower rate of interest
Under the laws that now exist manu-
featuring and other corporations are per-
mitted TO do business after having paid
in 10 per cent of the authorized capital
without the residue being subscribed for,
and upon this payment of 10 per cent, and
upon the strength of the authorized cap
ital, and the fair standing of the men
connected with the corporation, and
possibly TO some extent the fair pros
poets Of the business, large credit has
been obtained by the corporation, in some
cases many times larger than the actuat
capital paid in. The practical workings
OF this law are unsatisfactory 20 creli-
tors because In many instances the
creditor after the corporation has failed
to be successful has been found 10 be the
largest investor in the venture. In order
to protect the creditors OF corporations
of this character, l recommend that you
increase the responsibility Of the share
holder by making him individually liable
for such debts as are incurred beyond the
amount of capital actually paid in. az
least up to the amount of the authorized
capital of the corporation. In other
words when n corporation obtains
authority to do business with certain
amount of capital. that capital should
exist I'm good faith for the security OF the
creditor
In the case of banking corporations.
much greater liability of the stock;
holders exists under the law with very
satisfactory results to the creditors of the
banks and to the people generally. In
this connection it would Ice well 70 con-
slider such supervision of corporations by
a corporation commissioner. whose duty
1t shall be to ascertain what the exact
available assets of corporation are he
fore IL Is permitted to enjoy corporate
privileges and enter upon the business for
which IL is created.
Great care should be used in preventing
corporate bodies from coming into eX-
istence on values that are artificial. In
short, l deem 1t as important that all
corporations dealing with the public
should be under the supervision of
competent state official as that railways
and banks should be under the super
vision of the proper officials.
Liability of Stockholders.
am not unmindful that there are some
legitimate advantages in organizing part
nerships and other enterprises into cor
porations. The death or withdrawal Of
partner sometimes compels the winding
up of the affairs OF a partnership. This
and several other inconvenience are OBJ
Waited by converting the partnership into
n stock corporation. While partnerships
are often converted into corporations for
legitimate purposes and with honest in
tentions. It is equally true that this OPP
portunity afforded by the law is seized by
the dishonest for the purpose OF avoiding
Individual liabilities for debts contracted
in the conduct of their business, and thus
cheat their creditors out of their honest
dues.
Many worthless corporations are organ
lied. electing for its president a person
OF well-known financial strength, thus
giving TO this institution a fictitious cred
come involved and creditors seek to get
their money II is found that the afore-
said president has only few dollars
stock In the concern. and therefore IS
only liable to the creditors for n small
amount. The creditors are thus swindled
by the use of the rich mans name There
should make a distinction between pub
lie and Ouasi-public corporations and
those which are strictly private: the lat
ter should. I'm my Judgment. for conven-
fence and distinction. be designated az
Joint stock companies and all holders Of
stock In such companies should he liable
for the debts OF the concern precisely the
same as though they were partners.
Some Pointers on Taxes.
Mr.. Pingree points TO the report OF the
Michigan railway commissioner for 1895
to show the inequality of the present dis
tribution OF taxes, and, he says. like
inequality applies to the telephone. telc-
graph and express companies. and to
large amounts of other property in the
state. The governor gives the following
items from the report:
state OF Michigan in the year 1895 according
to the report OF the railway commissioner mot
yet in print was S3l6.333. o27 90. The railway
companies paid during the year In specific
taxes S741, 40S II, fraction more than two
and one-third mills on the dollar.
in the state in the year 1895, as cauaiized
by the boards OF supervisors was SsiS OS6.-
for state. local, and all other PURPOSES las
shown below. amounted to $50. 633. 5T1 OF. or a
fraction less than two and one-half cents on
the dollar
Mr.. Pingree then suggests that the leg
islature create department of taxes and
assessments, composed of board to be
appointed by the governor, and which
board should be composed in part of such
officials as have the supervision OF the
corporations against whom taxes are TO
be assessed This board to determine the
exact value OF all corporate property in
the state not now taxed locally under the
present law and TO levy taxes thereon i'm
the same proportion that private prop
erty is taxed
The Present Tax LAW.
am of the opinion that some radical
changes should be made in the present
tax law. The taxation of mortgages
upon land must he considered double
taxation. The owner of the real estate
must in ali cases pay the tax, not only
upon the real estate. but upon the mort
gage which he holds, he will recuperate
from the owner of the proDartv eithar
by requiring him to pay additional in
terest sufficient to cover the amount OF
execute a mortgage which contains a
clause requiring him to pay the tax upon
the mortgage direct. The effect OF the
present law is to prevent residents of the
state from loaning money directly. and -