The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1897-04-01
VOORHEES, QUEER BILL
How the Corporation Stock
holders Protection Bill
Looks Here and at
Albany.
NEW JERSEYS BIG REVENUE.
Are Our Citizens Wronged BY the
New Observation-Disclosures
in a Panic.
NEW JERSEYS BIG REVENUE.

IN a Panlc.
There has been much discussion as to
merits of Senate bill No. 1858, which was
rushed through the Legislature on Mon
day night and signed by Governor Griggs
on Tuesday; but the prevailing opinion
seems to be that it was a timely coup
saving an important revenue to the State.
The passage of the bill will nal,ify the
effect. so far as New Jersey corporations
are concerned. of the anti-Foreign Cor
poration act which is now before the New
York Legislature. The bill was rushed
through because it would not have been
ehectual il passed after the enactment
OF the New York law. The race was
probably 9, close one. as the New York
bin was made q :saaeial order FOR this
mornlag. New Jersey, however, won by
a neck and by her victory, besides pro-
tectins New Jersey corporations, saves
many thousand dollars of revenue which
would otherwise have gone elsewhere
The ofsect1ef the bill is to protect the
revenue which we derive from corpora
ton taxes. and franchise fees.
Tie i~za1o-tanoe.of this revenue to the
State RAY be better understood by say
ing that N 1875, when the former cor
poration act was adopted. the revenues
to the State szsere about $4,000 a year
for corporation tax revenues from mis-
ceiianeeesutc Corporations. In 1886 the
ainoaRt Received by the State of New
Jersey from miscellaneous corporations
was $50. 5.25- aboSasem
A very large proportion of this amount
has been derived from corporations or
ganized under New Jersey laws, but
doing business in the State of New York.
and this is especially so since the codifi-
cation Of the. corporation laws in 1896.
A majority of the large trading corr
porations doing business in New York
are organized under New Jersey laws,
such as Park & Tilford, Tiffany & Com
pany. Westinghouse, Church, Kerr &
Company, the f. G.. G. Corset Company,
Frank H. La Pierre & Company and
many others.
In addition to these, very many large
moneye interests have been organized
in New Jersey, such as the American
Sugar Refining Company, which last
year paid to the State of New Jersey a
tax of over $1,000; the American Steel
Casting Company, which paid a tax of
about $4,000; the American Tobacco Com
pany, which paid a tax of over $500 ;
the Armour Packing Company, which
paid a tax of over $4,000, and other SINH
lar organizations.
New York has looked with a jealous eye
upon the gradual departure of its cor
porations into the State of New Jersey
and the consequent loss of revenue to the
State of New York. But its policy, in
stead of being conciliatory to corpora
tons. has been an endeavor to MAKE the
formation of both foreign and domestic
corporations as impracticable as possible,
by passing laws stringent in their nature
difficult of compliance, and which at every
turn subject the corporators and the
stockholders to personal liability.
The policy Of the State of New Jersey
has, however. been directly to the con-
trary, namely, that within safe limits
and within proper bounds it has prompt
ed corporations to do business without
undue publicity to their private affairs
and without unnecessary interference in
matters of internal government.
The New York Assembly bill, No. l,8S5,
which was directly aimed at New Jersey
O1o, was oil ltulQ 10 Illdh6
|eyery New Jersey stakeholder liable for
n infringement of the New York re-
auirements. It's object was. practically
to enable New York creditors to go into
New Jersey courts and sue New Jersey
stockholders upon a contract liability
arising out of the New York statute
The New Jersey Legislature, deeming it
q duty to protect corporations organized
under its own law. sought by the passage
of the act approved by the Governor on
to make it the law in New Jer-
sey. so far as the State Courts were con-
cerned, that corporations, SO long as they
obeyed the requirements of the New Jer-
sey statutes. should be held harmless in
New Jersey by reason of any failure to
obey the New York requirements.
The bill provides in substance that
any officer or stakeholder Of a
New Jersey, corporation for any sstatu-
tory liability, if that statute liability
arose out Of the laws of New York or
The second section of the statute pro- |
woes that any suit against any officer
or Of a company arising out
a foreign statute should be brought
IN a court Of equity and should be for the
benefit of all the creditors and not for the |
benefit of one.2ls aDeH
- <1441 Lie CSldD-
lished policy of the legislation of New
Jersey. that all distributions of corpor-
ate assets should be for the benefit of the |
as an entirety, and tina there
should be no difference and no collection
under n snap Judgment for the bene4
IT Of any Individual creditor to the
of all the creditors.
The reason for the unusual haste in
this act.was that If a contract |
liability, hould. be. fixed on New Jersey
s~tockhoiders by any law passed in New
York, then a question of the consfifI-
tfonality of the present act would have
been raised, and, perhaps, successfully. |
because under the Constitution of New
Jersey the Legislature may not pass
any law impairing the obligation of con-
tracts or depriying a party of any rem
coy Tor enforcing "a contract which ex-
isted when the contract was made
Governor Griggs said that he consider
cred the passage of Senate bill No. 263
as q most important protective measure !
tor New Jersey companies. He added |
fhat the proposed New York York law. |
had It passed first, would have affected |
III our companies. such as potteries and