Evening star., 1902-08-08
HOME OF THE TRUSTS
Why They Flock to New
Jersey.
CALLED CORPORATIONS
GREAT RFMBER OF NEW CHAR
TIERS LAST YEAR.
Same Secrecy for Company as an In
dividual-The Modus Operandi
Show Big Figures.
Special From a Staff Correspondent.

Special From STAFF Correspondent.
TRENTON, N. j., August S.-New Jer-
sey, the spawning ground of the octopus,
home of the trust. In this region the gen.
eric name Is softer in sound less offensive
the one word Corporation" is descriptive.
In the calendar year 1901 new corpora
tions to the number Of 2,347 were formed
IN New Jersey. The number included
trusts" Of all grades and character Since
January 1 of 1902 the additional number
OF 1894 have been formed and applications
are coming in daily. These, Of course, are
IN addition to the large number created
within the past ten years, since trusts
have become the vogue in this country.
The creation Of these new corporations in
the year 1901 brought the state of New
Jersey $6S7, ,43S.S7 in initial fees. The as
sessment of taxes on trusts for that year
amounted to s2,315, 592 in addition. The
business of granting charters to corpora
tions is exceedingly profitable to New Jer-
sey. 1t pays the expenses Of the state and
more. In 1901 the receipts from new char
ters granted; the tax on those and prior
charters, the tax on railroad corporations
added together paid the ordinary expenses
of the state, put 81 600 600 to the credit of
the school fund.- gave $1,O0O,00O to various
municipal funds and put something by way
the hearth. No wonder New Jersey thinks
the trust Is a good thing.
Why Jersey is Popular.
I asked an official Of the state government
here why New Jersey was so popular with
the trusts-beg pardon. corporations; why
they came to Jersey for charters.
There are three principal reasons" he
replied. First, on account of the stability
of our corporation laws and the character
of the courts decisions upon our statutes;
second, on account of the high standing
Of our judiciary and their permanency in
office, rendering unlikely overturning of
decisions; third, the moderate rates of tax
alton and the proximity to the great COM
mercial center, New York.
Would you not add 1 suggested, "as
another reason, the laxity of your laws
concerning corporations?
No" he replied, ''laxity Is not the word.
I would say liberality of principle.
The laws are enforced strictly. Wildcat
corporations do not come here In no state
in the Union Is the law concerning the
regulation of corporations more strictly en-
forced than in New Jersey. But the law it
self is liberal.
THE principle of the law since 1916, when
the manufacturers act was passed. mas
been to grant to the corporation the same
secrecy that the individual enjoys, while
holding the corporation to account as an in
dividual'
An, there is tne WnOle secret lie COl po-
ration is wrapped in secrecy as to Its acts
In no other state is it so immune from in
QUESTION by the state authorities as in New
Jersey, for in that state it is absolutely and
wholly immune
President Roosevelt has declared that the
primary essential in dealing with trusts is
publicity" New Jersey assures woud-be
incorporators that the essence of its policy
is secrecy for the corporation as well as for
the individual.
Modus Operandi.
I made inquiry into the modus operandi
OF Incorporating a trust in New Jersey.
The word should be singular; there is only
one requirement-possess of the price.
You make no promises, you fulfill no pledges
save and except to pay your taxes yearly.
You designate an agent upon whom process
can be served in suing, or IN case you fail
to walk up to the captains desk and settle
on the appointed day. Beyond that nothing
is required
Here is the blank you fill out If you want
to charter a trust in New Jersey (and II
you have the price,:
This is to certify that we - do hereby
associate ourselves into a corporation, un-
der and by virtue Of the provisions Of an
act Of the legislature Of the state Of New
Jersey, entitled An act concerning corpora
tions,' and the several supplements thereto
and acts amendatory thereof and do sever
ally agree to take the number of shares of
capital stock set opposite our respective
names
First, the name of the corporation is -
- =; second, the location Of the prin-
cipal office in this state is -; the name of
the agent in charge thereof, upon whom
process against this corporation may be
served, Is - -; third, the objects for
which this corporation is formed are -
1.-THE corporation shall also have power to
conduct it's business in all it's branches.
have one or more offices, and unIimitedly to
hold, purchase, mortgage and convey real
and personal property in any state territory
or colony Of the United States and in any
foreign country or place Fourth, the total
authorized capital stock of this corporation
IS -; fifth, the names and post office ad-
dress OF the incorporators are -; sixth,
the period of this corporation Is unlimited
That Is very easy to fill out. Then the
gentleman behind the desk opens the cash
drawer and you dig down into your leans
You pay an initial fee of 20 cents for each
lied The certificate is signed, stamped
with the great seal Of the state and you
have full-fedged trust
Sixteen months later the tax collector
calls on your agent, foresightedly located
within the state. and demands taxes as fol-
lows: one-tenth of l per cent on the issued
capital up to $S,OO0.OO one-twentieth of
per per &c cent IT. on the next next $4,000 ,oOo nominal
An idea may be gained of the extent of
the capitalization of the corporations here
tofore chartered when it is realized that on
this basis of one-tenth and one-twentieth
sof per cent the state collected in cash, in
1901, 5! !,6SS,O74.19. besides the $S95,O13 of
railroad tax.
No Report to the State.
The corporation makes no report to the
state. in the sense Of an accounting. 1t
only Is required to file annually the names
OF Its agents and the location of its office
Nothing as to capital stock paid or as diyi-
dends nor Of its operations That is where
the underlying principle gets in its work.
invest the corporations business with the
same secrecy that the individual enjoys.
Hence the popularity of the Jersey statute.
/ was struck by paragraph in the pref
ace of a copyrighted compilation of the
general corporation act Of New Jersey, as
follows:
'sThe legislature of 1901. in accordance
with the established policy of the state
made no radical changes In the general laws
affecting corporations.
mo attack was made on corporations or
corporate property and no requirements in
the way of additional taxes or inoufsfto-
rial reports were imposed" There we are