Daily new dominion. [volume] (Morgantown, W. Va.) 1897-1906, 1899-11-01
CORPORATION LAWS.
West Virginia's Statues on that
Subject, Criticised

Before the Industrial Commission by
James b. Dill New York Lawyer
Danger That all Growing" Corpora
tiOns May be Declared Partnerships,
and Their Stockholders Held Liable
as Partners Wherein The West yir-
ginia Charters are More Vicious than
Those of New Jersey-Some Inter-
esting Comments.
WASHINGTON, d. G. Nov. West
Virginia corporation law has come in
for some interesting criticism on the
part of one or two witnesses before
the Industrial Commission, notab ly
in the testimony of James B. Dill, a
New York lawyer who appeared as a
5eeender of New Jersey corporation
statutes. In the course OF his testi-
mony, Mr.. Dill said:
"West Virginia grants a charter for
fixed sum for any amount with any
powers, the only restriction being to
limit the capital to $4,000, 900 and
grants what is commonly known as a
| rowing charter The stockholders
may meet anywhere on earth. They
may have their offices anywhere on
earth. They may transact any bnsi-
ness they choose outside of the State
and there is nothing that they are
obliged to do in the State. Now, the
point Of that and all the gentlemen of
| the commission who are members of
the bar and the profession will appre-
cate tnaU, is this: The State which
grants that kind of charter opens
the door fatty to fraud. Why, it is a
recognized principle of law that the
state of New Jersey has no power In
| its courts to compel New Jersey cor
poration, even at the instance of a
New York.stockholder, to bring its
books into New York for examination
on the part of that stakeholder
This has been uniformly held, so that
the State of Maryland has not any
power whatever, at the instance of
the Maryland citizen, who is a stock
holder of a New York company to al
low inspection of its books in Mary
| land. The moment the State of West
Virginia permits its corporations TO
hold their meetings and keep their
books anywhere, they at once grant
them rights to take their books out
of the State of West Virginia, and
keep them out of the State of West
| Virginia and put them in States
where no courts have power to COM
pei an inspection of them; that is
what I call rowing charter"
Mr., Dill also said that the law Of
West Virginia permits stock to be
issued for that terribly indefinite
quantity, that is, services" Later he
described meeting of New York
syndicate where the question was dis
cussed whether the new corporation
should go to Delaware, West Virginia
or New Jersey for charter. "As to
West Virginia." said Mr.. DILL s'that
matter was turned down without
much consideration, because they be-
lieve, as believe, that the Supreme
Court of the United States is eventu-
ally going to hold that corporations
organized in any Of these States with
a rowing charter, which do not, like
live tree, keep their roots in the soil
that created, them, are going to be
denounced as partnerships, and so
held"
Commenting on the New Jersey law
requiring publicity of transfers of
stocks, Mr.. Dill said the reason for
such legislation was ''that very many
large corporations desire to have the
public own the stock, but do not want
them to have any voice in the man
agement. Therefore if you and | own
only ten shares apiece in some COM
pany and we do not know who the
stockholders are and the officers do,
they can go and get votes enough and
proxies also to get themselves re-
elected; whereas if the others are
known and if we can go to the stock
holders Of the organization, we can
win or at least hold down an election.
That is the objection to it. That is
the way it is in the Delaware and
West Virginia laws, and men can
perpetute themselves in office. That
Is where you and | can do nothing
about it we are gone"
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