Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1902-11-15
David Lawrence e. Co. Ltd
CIGAR MERCHANTS y =. Young Building

Of a corporation by giving them the
right to amend the bylaws without
the consent of the stockholders. Since
1t is in the bylaws that all rights and
duties are defined, the directors can,
by DISTINGUISHING the stockholders and
increasing their own powers, render
themselves practically omnipotent.
But such undue authority is frequent
ly withheld from the directors and
preferred holders by the articles OF
Incorporation.
A State that seeks the business Of
granting corporation charters may
defeat its own ends by being over.
jealous in patterning its laws to suit
the designs of promoters. States
have regulations to maintain In this
respect. and, when they have once
become disreputable. people refuse to
invest In projects that they have
chartered. BY series of accidents
or by an unexampled wisdom. the
! Legislature of New Jersey has in this
respect followed midway path.
Popularity Of the Law.
The reasons usually assigned for
the popularity of the New Jersey law
are. first. the greater scope of the
( charters that are granted, for there
/ Is no limit to the kinds OF business
In which a corporation may engage,
except that ordinary commercial com.
| panies are forbidden to operate rail.
! roads in the State or to conduct a
! banking business. though they may
own either railroad or bank stock.
The president of one great industrial
company who would naturally have
taken a charter in Illinois came to
New Jersey because the Illinois law
| forbids one home corporation from
owning stock In another and II was
necessary that this company should
be interested in both railroad and
steamship lines. Again, the laws Of
Pennsylvania prohibit extra.State cor.
porations from owning more than one
! hundred acres of land in the State,
though they may hold stock in home
corporations that own any amount.
Had this company been incorporated
In Illinois 1t would thus have been
impossible for II to hold, either direct
| ~ or through the stock of another cor
poratiOn, any quantity of Pennsylva'
MIA land. All the so.called trusts are
| excluded from West Virginia by law
| limiting the capitalization of any cor
poration to 100000. Michigan lin
| its the capitalization according to the
nature of the business conducted, and
so with other States; but New Jersey
! fixes no maximum either to Capitaliza'
ton or to bonded Indebtedness.
Charters for Eternity.
It was formerly customary for
charters to be limited to a specified
period, say twenty-five or fifty years,
but now New Jersey extends them to
eternity-''perpetua charters" they
are called-a manifest necessity to
the recent gigantic ''industrlals'
whose contracts and bonds mature In
thirty or forty years.
Low taxation is a reason frequently
assigned for Incorporating In New Jer
sey. As a prominent New York bank
err expressed II, Il. as a New York
man, send my corporations to New
Jersey for the reason that the State
has financial surplus in its treas
ury and therefore will not be driven
TO squeeze any corporations to make
up deficiency. The State Of New
York sometimes has n deficit in some
, of its departments of government anC
its officials sometimes sit up at might
, to see how they can squeeze money
out of my corporations.
No Tramp Corporations.
Yet the tramp corporations tina
I, wander from the States of their crea
ton promiscuously over the Wild
, world going hlther or thither as bus
= mess or necessity attracts or drive
. them. are not permitted by the New
Jersey statutes as they are by SoutI
!. Dakota's for instance. The New Jei
sey laws expressly provide that eN
cry corporation shall maintain II
principal office" within the State
y where the stock and transfer book
J. shall be kept open to the inspectio
Z of any stakeholder at all times durin
. the usual hours of business and wher
" legal process may be served on tn
y representative Of the corporation.
1t goes even further and commands tina
. the OfliCe address, street and numbe
T. be registered with the Secretary c
y State and that a sign announcing tina
;. It Is the principal office of the sal
u corporation shall be conspicuously dii
+ played at the entrance.
1t corpor alton Agencies.
&c With $500 corporations created b
u the State since 1896, and with III
B. prospect OF increasing thousands yea
ly, one would expect that under sue
a. law office space and clerks won
le be at a premium In the State. b,
d. the law has given growth to one of Il
10 queerest freaks in all the busine
lie world. They are known as "Corpor
'e ton Agencies" or Trust Companies
De and probably have no counterpa
~ elsewhere. One of these agenci
IT. alone will maintain the principal {
'h flee" of hundreds of corporations
Us once and comply with every requil
Ut ment of the law. They are in effe
, enormous bookkeeping concerns co
III Quoted on the cooperative plan by
IT. host of corporations. Massive llbT
w. ries, as II were of stock books may