The daily morning journal and courier., 1902-04-21
UNDER NEW JERSEY CHARTERS.
Stockholders Have No Rights Directors
 are Bound to Respect.

l Stockholders Have No Rights Directors are Bound to Respect For five years past the Press, in sea
 son and out of season. has been warn l ing it's readers that no investor i'll these
 numerous New Jersey owning corpora- | tions, popularly known as trusts" had any rights directors were bound to re- | spect.
 The New Jersey corporation law re- l quires no adequate reports. It is loose
 as to capital paid in. Directors are not tions consolidated, directors can be at both ends of the bargain and no one
 can hold them accountable save by the
 long, tedious process of an equity court No responsibility exists for representa-
 tions made in promotion prospectuses.
 All the bars are down. No stockholder
 and no bondholder has any legal protec-
 tion. He can invoke equity, and when
 he does this to escape the thief he gets
 the receiver a S a substitute.
 This has probably all occurred to va
 rious holders of asphalt stock and bonds
 in the last month. If it had occurred
 before investing it would have been
 wiser but that is now too late. The
 Press, at least, had it's say before and
 not after the collapse. Promoters adopt
 New Jersey corporations because New
 Jersey corporation law, in dividing the
 law and the profits, gives the promoter
 all the profits and leaves the law to the
 innocent investor.
 When the National Asphalt company
 swallowed the American Asphalt com
 pany two years ago and consolidated a number of imposing companies it au- thorized twenty-five million dollars of fifty dollar stock, six million dollars of collateral gold certificates, and collate- ral trust certificates of the asphalt company of North America thirty mill lion dollars. This lavish capitalization represented two sets of wholesome was the privilege of bribing councilmen and city officers, either directly by money or indirectly by political pull or corpora tion graft" and sundry asphalt prop critics in Trinidad, Venezuela, Alca- trez, etc. These properties varied. The Trinidad is good asphalt and good title. The Venezuela is poor title and good asphalt, and the Alcatrez is the other way. The local privilege of "control- ing" pavement contracts also varied but it was not, at best, a salable as- set. "Infooence," as our political friends call it, is not a transferable possession. The companies which en- joyed it were doubtless making money, oIac 5 Fro cfo a ilege, for obvious reasons.
 The directors in these companies when they made bargains with them selves in organizing the Asphalt com | pany of America and the National As | phalt company made good bargains for | themselves, as all men in all the trusts 1 have; but the properties they sold were | not factories, but the good will, which l gets city contracts. In new hands this | shrank in value, the scheme collapsed | and the asphalt companies went into the hands of receivers. There was all around partly sharp practice and partly | l mistake as to the transferable value | of the privilege of bribing or influen- ,ing city officers. Properties were sold at absurd figures, as in all trusts, by | directors buying as trust directors and | selling as owners of the properties bought Promises and predictions were made, partly false and partly optimis- .ic.
 The public including some banks, vas let in on what was thought to be he ground floor, but proves to be the enth story and no flooring. Hence a lrop. This is all wrong. Some one ought to suffer But the New Jersey act exists and is used be- ause it is so drawn that no one is le ,ally criminally or pecuniarily respon- ible. This is what it is there for. Ev- ny lawyer knows it. Every honest and veil edited newspaper has said it.
 When collapse comes4 and. the as- ,halt is but the first of many such-a title earlier in the procession-that is II, nothing is left but such assets as re mere good will and the privilege of The search for a scape- oat by committee" may be tempt ng but it is a futile pursuit. The only is a loss o' business and | ersonal reputation. All concerned suf- er that. Not man but will be re- lembered 8 not fit to be trusted.
 More than this penalty cannot be in icted. All that can be done is to reor- anize The National Asphalt has tan ible assets in it's asphalt properties in Trinidad and elsewhere. The best purse and the only course is to reor- anize on sounder basis with more onest directors and begin selling and tying asphalt ments.-Philadel- q q hia Press. e