The Wilmington daily Republican. (Wilmington, Del.) 1890-1902, 1899-06-22

sey, West Virginia and Delaware. serious
will result to ths country at large. !
Mover before has there been such compe- |
ii on betw con these three States In the
unique business Of manufacturing corpor-
ntions for revenue only. At present Do'a-
ware offers the hest terms, and IN her
anxiety to get tho lions share OF the bust,
ness that State has virtually removed
every restriction that has heretofore Deeh
considered necessary to the safeguarding
Of public Interests.
ITS EASY IN DELAWARE.
It wns thought that New Jersey had let
down the bars as low rs any S'ate would,
but Delaware, besides Offering nll the ! u
duocments given by New Jersey. hiss cut
rates and mudo other concessions, which
must prove worry tractive to persons
wishing to form u corporation at little cost
aud trouble.
. no original fee to be paid for incorpor-
ntion is small, about three-fourlhs OF that
in New Jersey, for instance The annual
Tux Ia very small, one.half OF that III Now
Jersey. 81
Stockholders and directors may hold
their meetings wherever they please, ana
need never meet in the, Stote OF Delaware.
New Jersey stockholders must meet ia
that State.
Original stock and transfer books (Which
in New Jersey corporations must be KEPT
in the State) may DO kept in or ont OF Dell
aware, in tho discretion OF the company.
Examination of the books by "lntermed.
d ,ers" is much more difficult under the
Delaware law than undor the laws OF any
other State.
The liability of :he stockholler is abso.
lutely limited when tho stock has once
bean issued Tor cash, property or services.
Stock may be issued in compensation for
services rendered AMI in tho absence Of
fraud In the transaction the Judgment OF
the directors rs to the value OF such SER
vices in conclu'ivc Tin New Jersey author
ity is given 10 issue stock for properly. bui
not for services
In certain important classes of corpora
tions, as, for In lance, railroad, railway,
telegraph telephone, caele. electric lights,
stoam, heat, power, gas, oil, pipo line or
sleeping car companies, the advantage Is
still more marked
The annual report of a Delaware cor
,,ora,ion is required to give no secret or
confidential information.
The oertitlca' need not show, nor need
public record be in any way made OF the
amount OF stock subscribed TO by any in
corporator
HOW ABOUT INVESTORS?
No prctext is made that tho interests Of
investors are considered ut all. The only
thing which seems to have engaged The Mt
tentiOn Of the legi Ilators was wlint Induce
ment could be offered persons in all parts
of the world to buy corporation charters
from Delaware. .sgst
1t was not even conscm plated that these
corporations would ever do business In the
State which created them. sr'
Several enterprising gentlemen. rea'iz-
tn, h,t with Snnh induoamputa Delaware
would do great business as Il cor orati0n
incubator, have recently organized II COM
pany 10 perform the duties OF II nurs, for
the corporations as soon ns they are hatch
cd out.
THE CORPORATION MAKER.
The organization is called the Corpora
ton Tiust Company OF Delaware.
Among its riIcors are former Cnlc
81 ntos Senator George Gray. W L. WI t.
son, formerly Governor of Delaware ana
other men equally prominent.
lh s company has sent out attractive
pamphleIs, calling attention to the acVan-
tages Of incorporation in general, ana es-
peCially TO tho advantages of incorpora'
ing in Delaware.
Nrhis company" reads the prospec US.
as authorized TO act rs the agent and
trustee of corporations orgtnlzel under
the Delaware law. IL will maintain the
principal office OF the company in l)eiti-
ware, and keep an agent In charge within
the State. 1t Is formed for The purpose of
facilitating the incorporation OF conpan-
les in delaware. and of aiding them lt
comply, at II minimum expense, with nc
requirements Of the Delaware law. W.
are re ,dy to aid and give full Information
to interpretations corporations OF thell
counsel.
With this great mill ready for turning
out corporations to do business all ovel
the country, to issue countless millions o
| stock, and to make only such statements
es they may choose to make. tits obviou
that gold bricks may be sold in legal Torn
| on IL scale never approached before.
| DANGERS OF THE SYSTEM.
What will DO the ultimate result? Thi
/ Is tho quest. on that thoughtful men ar
| asking all ever the country. There SEEM
| to be but one answer-diRaster
! 'rhere is no doubt that this wholesnl
| manufacture OF corporations without sui
| jecting hem to necessary restrictions vii
result IN losses in every section OF the coul
try, said George Wharton PEPPER yes
, day.
''The ideal form OF business association
Tor the safety OF the public was ho o {
common law par nerthip, where these wa
unlimited ab.lity OF the partners. A
corporations came into ex's ence, 1t w,
| obviously nee tISnry to pii &c restriction
upon them to compensate tor the limite
liability feature. Tut it Is getting to tn
point now IN New Jersey, West Virgin
and above ui!, in Delaware. where persoL
may form stock company rs easily Il
they once could form Il partnership, an
still bs Liable to tie public and tho crcd
tor cn4s to av ~ limited amount
"What do you think viii BE- the ontcom
of this SORT OF corporation building?' M
Pepper was asked.
Eventually the courts will refuse
recognize corporations formed in certain
States, and Legislatures will pass law
for the protection of the citizens OF tho
own States. For it should be remembers
that foreign corporations are permitted t
do business in a State solely as q mat er
comfy, The thing can be carried go f.
that the comfy Will be Withdrawn
WHAT MAY HAPPEN.
Mr.. PepIer then called attention to Il
fnCt that soon ntI er tho war PennsyIyan
even went further than Delaware has r
Gently gone in granting charters to irr
spoasible corporations. Indeed, Ponnsy
| ynnin gran cd charters to such rotten co..
Germs that the charters distinctly prohil
| tod them from doing business i'll Il
Stae,
One of tho companies was tho New q
and Colorado Vineyard Company In pa:
ing upon tie merits Of this concern Il
Supreme Court of Kansas used lnngual
similar to what will probably be enployt
very soon by other courts in dealing wi
some OF the mushroom creations OF Del
ware:
mo rule of comfy" said the kans
Court will allow ono State to spawn &C
porations and send them forth into 9th
States to be nurt ured and TO dc blsinc
there, when said aforementioned STA
will not allow them to do business wit
in its own b)underies.'
So it will be seen that there is onr at
lowor than that already reached by Del
waro-uhe making of corporations so re
, ten that they will DO prohibited from d
lug business in that State. But 1t
thought that composition in clrporati,
' manufacturing will soon drive one of {
, three rival S Htss to that step In my ca
tho courts and Legislatures will! soon tn
=, II hand. 1t is thoughJ shat before the G
, has been repressed there will be losses
many millions through investments
tho securities Of worthless mushroc
: companies
: Launched Yacht.
r The stool yacht Willada built for C
onol william Hester proprietor OF
nroOklyn Daily Eagle WAS launched FRI