The times., 1899-10-19

experience with tnat statute. James b.
DiH Of New York. who was chairman OF
the State commission which revised the
corporation laws Of New Jersey, was the
first witness TO be heard. He began by re-
citing the requirements Of the law.
He said the New Jersey corporation law
required all meetings OF the stockholders
Of corporations existing under it TO be
held IN the State. and that the books Of
corporations shall not be removed from
that State. nor shall the meetings OF the
directors be held outside Of the State.
Each corporation was required By law 10
file with the proper State authority an an
uual statement It's capital stock shall
not be in excess of its cash and its prop
erty al an equitable valuation, this queS-
ton 10 be determined by the courts on the
suit of any creditor or stockholder.
Though the statues Of New Jersey on
the subject of corporations were more Tlgii
than in any other State in the country ne
said that he believed taey were more
honored in the breach than the Obser-
vance" Out Of ten thousand corporations
he believed that not over two thousand
had filed the annual statement as required
by the Law. Il rested alone with the At
torney General of the State TO bring an
action against the Offending corporation
for the violation Of law Indicated.
When The witness had dwelt on the Sc
verify OF the New Jersey corporation laws,
Representative Livingston Of Georgia
asked him how he could account for the
fact that so many foreign companies had
themselves incorporated under the laws OF
New Jersey.
The witness replied that there were
various valid business reasons for this.
lie said that al a banquet recently held at
New York be had heard a prominent capl-
taiist say. Il send my companies 10 New
Jersey Tor Incorporation for The same rea-
son that ] deposit my money in the First
National Bank. The State Of New Jersey
has q sound and stable surplus in its treas
ury. and that State is not always LOOKING
about to devise ways 10 squeeze more
money out Of the corporations doing busl-
less in il. The legislators here ID New
York stay awake nights thinking now ihey
can get more money out Of the New York
corporations.
This is one Of the reasons. said Mr. Dill,
why companies have themselves incorpor-
ated in New Jersey. Another reason is that
the tax on corporations is fixed. II cannot
20 up and il cannot go down. II is one
tenth Of 1 per cent annually on capital
paid in This tax cannot be avoided There
is no wire-pUlling with boards Of assessors
as in other States.
another reason is that the laws OF New
Jersey On the subject Of corporations have
remained steady for twenty years. The
only changes in them have been consistent
ones. with a view Of throwing greater safe
guards around stockholders and the pub
lie
A great many companies came TO New
Jersey for Incorporation from other States,
like. for instance West Virginia, which
grants rowing charters, because II was
coming to be the belief OF business men
that the time is not far distant when the
Supreme Court Of the United States viii
hold that companies doing business under
charters which permit them 10 keep their
books anywhere. hold meetings anywhere,
and do almost anything they desire, are but
partnerships
The law Of New Jersey commanded every
corporation doing business in the State
10 omen It's books-that is its stock book,
transfer book. and account boOks-upon an
order from the chancellor, who sat infor-
lnaly and would issue an order OF this
nature 10 any stoekh0Ider who might apply
for il. II a man owned but one share Of
the stock ia the company the books OF
which he desired TO see he was entitled 10
the order. The only question TO be settled
vas whether the applicant was stock
holder. 4 failure 10 comply with the or
der. invited z penalty Of 5000 a day, and If
the order should not be complied with
within ten days such a failure worked
forfeiture Of the charter.
The law In New Jersey is that a list OF
the stockholders and their holdings shall
be filed with the proper State authorities
and shall be posted in their Office for the
benefit o. stockholders, and shall be other
wise accessible al all times during busi-
ness hours 10 any stockholder who may
wish to consult il.
In New York. should a stockholder desire
70 see the books Of the corporation in
which he held stock, and should the COM
pany refuse to open them he would have
TO employ an attorney and 90 into the
courts 10 compel compliance with his
wish This placed the small stockholder
az q great disadvantage by making him
pay counsel fees and court costs, besides
forcing him to submit 10 delay for an IN
certain period.
West Virginia granted what the witness
termed rowing charters The books
might be kept anywhere and the powers
OF the corporation were not clearly defined.
The witness thought that the lazity open
ed the door 10 fraud.
In the matter Of capitalization the
witness said he believed this practice was
harmful! Companies that were grossly
over capitalized were organized for the
purpose CT getting stock 10 the public and
this could only be done by misrepresenta-
ton or by the c0ncealment of some ma
terial fact These concerns must make
or must appear 10 make as good dividends
O. the stock as their IegiJimateIy capital
lied rivals. and 10 do this they must put
up the price Of material or put down the
cost Of labor lie knew of one company
the assets Of which, al q maximum esti-
mate could not be more than $500 GOO
and yet ID was capitalized a SIS 600 600
The New Jersey State law requires that
all corporations chartered aEGer it shall
maintain Offices ln the State for the trans
FER Of stock and the witnesses heard IN
the afternoon by the Commission were at
torneys engaged in the business Of main
taiuing such offices The first was How
ard X Wood. Of jersey City. assistant
secretary Of the Corporation and Trust
Company His company, be said. repre-
senred between COO and zoo corporations,
and for which a record was kept 81 all
transfers Of stock The operation 0f max
ing a record Of the transfer Of stock was
very simple, he said. and constituted
compliance on the part of the various cor
pOratious with the statute He was fol-
lowed by Frank Hansel. Of Orange, secre- /
tary OF the New Jersey Corporation Guar
sntee Trust Company, James Warwick, 4
who has charge Of the New York Office
Of the Corporation Trust Company. Of /
New Jersey s. J. GarVin, OF East Orange
OF the Registration and Trust Company,
and Dennis y. Ryan. Of Jersey City The 1
testimony of all these witnesses differed
only in detail, and the number of com
pauies they represented, the latter vary