New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-09-22

Taxing ThemMore Liberal Provisions
FIR Stockholders-To Control Monopolies.
BY AssEMBLYMAN GHERARD1 DAVIS.

| certainly have not increased the existing taxes
| on any class of property by extending the indi
| rect State tax to property not heretofore SUBJ
| ject to 1t. We have added a large amount Of
! property, formerly exempt to the list Of prom
erty subject to indirect taxation and II is tn bs
| hoped that by the amendments to the CORPORA
/ ton laws have held out fair inducements tn
j men of money to form corporations in this State
/ discussion of the laws relating to the taxa
| ton OF corporations leads naturally TO anOtba-
| subject which occupied much of the time Of the
legislature, namely. the amendments to the cor
/ poration law.
! While endeavoring to make the corporation,
| tax more equitable. We. again, on Governor
| Odell's suggestion. endeavored within propsr
| bounds to make the laws governing the forra
/ tion and management of corporations more raa
/ sonable and in respects the legislature
/ went very far in relaxing the somewhat unnec
essarily strict provisions governing our corpora-
lions. These amendments resulted among other
/ things. in considerably reducing the liabilities
! of both directors and stockholders simplifying
/ the form Of the annual reports extending the
| power TO borrow money. allowing stock To he
issued for property. and the stock 30 issued IN
! be regarded as fully paid. simplifying the issue
| OF preferred stock. authorizing the creating NJ
| voting trusts; that is TO say generally, IN q
| large extent. making our statute similar to or
| at least as liberal as that Of the State Of New
Jersey. whose corporation laws have met with
] such general approval in the business world We
! did not take away any of the States mower o,,ar
corporations. the amendments which were nassAd
| relating only to the internal management OF cor
porations and their dealings with stockholders
and creditors
Now, corporation is creation OF the State
IL derives its powers from legislative Anac+r1ant
and its axis
id'oF. since the decision in the famous Dart
mouth College case IN 1919. the constitutions ~
| tne states have been generally so amended as
| ~ give the states the right to amend a cornora
.ion charter at any time Thus under section
OF article VIII Of our Constitution. all general
laws and special acts relating to corporations
may De altered from time to time or renea1A5
Iri,b purgy artificial creatures are endowed
mtu-t sLnsuIar powers. Of which probably the
most important is, that they continue in ax
astence Tor the period for which they were Or
sahlzed, regardless Of the death of the original
corporators. To business men who know; +ba
QifncuIties which arise in a partnership upon The
death OF a partner. this advantage Of a corpora
uon over a partnership must be very apparent
ana II has led to a very extensive use Of cor.
poratons in place OF partnerships.
another great privilege given TO certain cor
poratlons is the power 10 take private prOnarty
against the wish Of the owner for the use 81 tha
orporation-known at law as the right Of emil
nent domain. Still another advantage is ger
orally speaking, the absence Of liability 81 a
stockholder for the debts Of the company. if he
mas paid for his stock in fuI-quite different
from the liabilities of partner
The first two privileges alone would i71s+ify,
me states demanding in return from the cor
porations reasonable amount of taxes and tha
justification for the imposition OF taxes on CO..
tain corporate property heretofore untaxed az
any is necessary can be properly based on +ha
nrse OF these privileges. The State however
has to consider the question OF taxation under
the following alternative: II 1t imposes too
heaVy taxes on corporations il will discourage
people from organizing under our laws II again
IL is TOO easy going. the corporations will he
favored at the expense Of the Individual As
far as our tax laws are concerned the !egisIar-
ure has unquestiona bly, acted wisely IN rnaLrino-
the amendments passed at the last two sessions
and few If any complaints have been made OF
these laws
A corporation is not an ogre prepared to de-
YOUR infant children and defenceIess women as
certain politicians Casually opposed to the Re-
publcans) are fond Of describing them. Neither
are they the paragons Of unselfshness and viz
tue their friends would have people think They
Were long since described BY Coke as souless
and they undoubtedly are very often more sell
nsh than individuals. because. among other
Things. or the absence of individual feeling in
the dealings with their employees and the publtc
They have however. in one sense done no more
IN seeking to escape taxation than individuals
40 AS matter OF fact, they are not more
severely taxed than individuals and in All the
TAX laws applicable 10 corporations organized
for business purposes there is none as severe in
its general effect as the tax on inheri1ances ia
when applied to individuals
II should not he forgotten IN discussing the
that the corporations affected are organized to
make money, and are Just as energetic in their
efforts to do so as individuals are. and perhaps
more So They are unquestionabIy a benefit 70
the State-every large business enterprise is such
benefit. whether private or corporate. But
corporations are not better than individuals and
certainly not entitled 10 greater privileges
than individuals unless they make a fair return
TO the State for these privileges; in other words,
they must submit 10 more rigorous control by
the State than individuals are Obliged 10 do. It
should Furthermore be borne in mind in all dis
cussions on corporations that corporations or
ganized outside of this State cannot do business
here unless we allow them to do so. and the laws
this subject can make as strict and Sc
we're as We choose. OF course we would injurs
our own corporations II were too severe. for
the other States and other countries would re-
taliate- Section IS OF our own Insurance law
contains just such retaliatory provision. which
has occasionally been applied by this State to
foreign corporations.
With all the amendments made to the cor
poration law. the provisions Of our statutes for
the purpose of preventing wrongful use of cor
porate power were not changed. The State or
New-York is far from defenceless against un-
lawful combinations trusts Gas they are COM
monty Called To begin with. the Attorney Cen
eral has most sweeping powers under the DON
which Governor Roosevelt signed. 10 inquire INTO
the mana cement OF a so-called trust-the statute
uses the far better expressions "mOnopolies ana
restraints OF trade''-whether the offender DC
individual a domestic corporation, or
foreign corporation. doing business IN New
York
be quoted at length. and will show TO what eN-
tent the laws OF this State already cover tne
much discussed question of controlling trusts
Every contract. agreement. arrangement or
combination whereby monopoly in the manu-
facture. production sale in this state OF any
article commodity OF common use Is or fhaS
he created established or maintained. or Whsie
by competition in this State in the supply %
price of any such article commodity IS OF
may be restrained or prevented. whereby Ior
the purpose OF creating establishing or nam
,r.>Iy~ in hTG