Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-06-02
8
Railroad Gets Into Iowa Wig
out Paying Fee For Prt = 4
lege of incorporate 5
GREAT NEED OF REW s FELT
Attorney General Was Helpless When
Contract of Consolidation Under the
Iowa Merger Statute Was Presented
Error Discovered in New Code
Supplement Causing Annoyance.
Republican,.

! Des Moines, June 2.-Renewed eVl-
dence has been furnished Of the truth
of the oft-repeated assertion that in
no one thing is there greater need OF
reform and revision than in relation to
the incorporation laws of the state. The
Minneapolis and st. Louis Railway
company has just demonstrated how
railroad company can get into Iowa and
do business on a basis of $20,000,000
capital and yet not do as the ROCK
Island and other companies have done,
nav handsome fees to the state for the
privilege of incorporation. In fact the
Minneapolis company has been teach
| ing the officials of Iowa something
about the merger law which is and long
has been incorporated in the code OF
the state Under this law the MINES
ota corporation with $20,000,O0O cap
ital becomes merged with the Iowa cor
poration with 100000 capital, and one
new Iowa Minnesota corporation is
formed which has the same capital as
the larger of the two, and this trans
formation is effected without the pay
ment Of a filing fee as required by the
Iowa statutes. This was not done With
out a thorough examination by state
officials and proper delay. The sec
retary Of state submitted the PROPOSE
ton to the attorney general for an offt-
cial declaration. 1t appears that there
were originally two companies engaged
in the making of the Minneapolis road
and after their consolidation there was
failure and sale by a receiver. Then
the purchasers organized in Minnesota,
afterwards organizing an Iowa COM
pany called the Minneapolis & St.
Louis Telegraph and Railway COM
pany. with 100000 capital, to which
company the Iowa portion Of the sys-
teri was decided. Then in 1895 con-
Isoltaatlon was agreed to. When articles
cf incorporation We're filed with the
secretary of state for the new company
to take the place Of the two old ones
a fee was demanded. The articles We're
withdrawn and contract of consoli-
dation under the merger statutes OF
Iowa was presented. After full investi-
cation the attorney general reached
the conclusion that the contract might
be filed without payment of any fee
other than the recording fee. Thus for
all practical purposes incorporation is
effected in Iowa by a process which
evades the payment of the filing fee.
For the Minneapolis & st. Louis to be-
come an Iowa company in the regular
and ordinary way at this time a fee
of $4,000 would have to be forthcom-
ing.
This merger statute of Iowa has not
been very greatly exploited. 1t is the
most complete merger statute ever en-
acted and provides specifically for con-
solidation of lines touching at the
borders of the state. But it appears
that some Of the railroad corporations
doing business in Iowa are making use
of the law, for they are not incorpor-
ated in the state. One of the biggest
companies doing business In the state
has never incorporated at all. Deputy
Secretary of State Hites last summer
wrote to the general attorney asking
why his company was not incorporated
in Iowa or to state how 1t was doing
business here while in fact there is not
a particle of evidence at the state house
of the existence Of the company. NO
reply was ever received. 1t Is pre-
sumed that the main company has
contract of consolidation with some one
of it's minor companies organized in
Iowa and thus has legal standing
in the state.
ATTORNEY General Mullan has hereto
fore been quoted as stating that he is
in favor of a general revision or the
laws of the state. and
the creation of some board OF deslgna-
ton of some competent body to have
full control of the matter and to pass
on all articles of incorporation before
q charter is issued. and to have the
power 10 refuse charter to compan-
les that are not organized rightly. The
of the state with this merger
statute may form the basis Of strong
movement for such revision.
An error has been discovered in the
new code supplement that is causing
ATTORNEYS in some parts OF the state
considerable annoyance. In that par,
OF the new law relating to negotiable
where reference is mace
to instruments that are unconditional
occurs sentence Bot GA oiNsSi "
promise to pay out of particular
fund is not unconditional" This is the
wording of the bill as it was passed
and it appears this way in the session
laws. but in the code supplement the
word mot" is omitted The secretary
of state has had a great many inquir-
les from lawyers as to this error 1t is
a material one and may cause some
Secretary Wesley Greene, of the state
society is of the opinion
that the extreme wet weather in iowa |
has not done great damage to the fruit
crop. The plums and cherries were
all destroyed by the frost of
Nav. but the other fruits are coming
along very well. He is now receiving
the June reports from the correspon-
dents of the society and they are favor
able. The strawberries VIII not be
very good unless there is more sun
shine soon.
Dr.. ]. F. Kennedy. secretary Of the