New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-05-11

THE WRECK LOOKING
therelpon eprang up that wonderfully useful class
OF corporations known manufacturing corpora
tons. All the States have extended the system of
corporate existence to great variety OF pursuits
Industrial nature until to-day there is
ly industry that cannot be clothed with the
powers Of corporation.
This has worked very well up to a comparatively
recent period. and has developed the country with
gigantic strides. These corporations. however, in
their respective lines Of business became rivals and
sharp competitors. until in time of them were
rendered bankrupt and driven out of business Quite
recently. for the wise purpose Of economy Of adj
minstratiou and strengthening the power of cor
porations to conduct their business, there have
sprung up the so-caled trusts. which are in fact
copartnershps OF corporations two or more uniting
for common purpose.
Within proper limits and under proper restrc-
tons this also is a good movement. but unfortu-
nately the power 10 organize corporations has been
so generously given and loosely restricted by the
legislatures of various States that all sorts or
schemes and devices have been concoT{fa nGo' ,y
shield and panoply or corporat IONS. ms - l.o
experience in this country. All men VINO nave az
under ts s}rfe of banking corporations, there were
all sorts of fraudulent and irregular banking oiA1Il-
Panies the same ,rs ere All oreanized without
insurance coinpaIleS -, ,-jtL the r.sult
Of great loss the community and great eNl, 10
the body polite fact. banking corporations be
came so rotten and hollow that many of them were
oonuIarlV termed wildcat banks.
these latter classes Of corporations within whole
some limits. so that At the present ume our DaihS,
fire insurance companies: our me lISui1IlCe
companies, trust companies and our savings
banks are sound. This has been accomplishing 10y
a succession of amendments to the corporate avs
in most Of the States under which these various
some rules of restraint compellins them to report
under oath and in detail all the affairs Of their
business operations.
''WTLDCAT' CORPORATIONS.
Unfortunately, Industrial corporations are sub
stantially without restraint contro, We suf-
rertng from flood Of wildcat industrisls. just
the same as we formerly suffered from wildcat
banks There some pretty large Wildcats In
Wall Street at the present time. There IS no mita-
ton upon the frauds that can be practised under
the laws authorizing the organization of indus
trials.
The right to be a corporation IS not natural
right: It is a right granted by the State Property
incorporated IS impressed with new powers not
possessed by unincorporated property. 1t ceases
to be absolutely under the control of its owners,
is unincorporated property. The price paid for
corporate powers is a surrender TO the State Of
a partial control such property by its owners.
This consideration seems to be largely overlooked
by those who incorporate their property The same
State which grants the right TO incorporate
and should impose the most rigid restrictions upon
such corporations No corporation should be al
lowed to be organized without a fairly appraised
valuation upon the property it is proposed to put
ment should be subject to a review by the head Of
a department. Tha appraisal should DO sworn to
and open to public inspection Not a share Of cap
ital should be issued purportng to represent money
where the actual par value IS not shown under oath
TO be the actual value OF the corporations assets
1t is with such kindred restrictive measures that
we have curbed and brought within control the
banking interests, the life insurance interests the
hre insurance interests. savings banks and other
corporations. AS ii Is to-day in Industrial enter
prses. a few gather around a table in their
office. having In their possession limited amount
OF property, none and proceed of their own
Volition to organize themselves into a corporation
With a fictitious capital. vastly III excess of the
property which they represent Men with perhaps
1905 OF property will incorporate for $1,000 o6O
sE5.OO0cO0 of capital; If they have SOOOOO1 ii will
be made $4,000 600; $l5OJ0000 Will be mace SO 90 G6
and so on. to the top Of the giddy Imitation XII
this is done by a few men behind closed doors in
are organized on substantially nothing we do not
hiding under the shield Of corporate Isvs do tbs
mat they would despise themselves for ioinr. in
falrs But If these men were bold enouph
70 90 these things in the open transactions Of con-
Inere shoud be some wholesome supervision over
fraud f6o schHmes' SO well calculated to de-
porate Jaw such transactions may be legally
the least. dshonorable What we yyaI1t are. 10
honest corporations. Just much as We need hon
"heh these promoters and sponsors OF these in
oustrial corporations have perfected their orgaptza
Ioii' lhey proceed to issue their certificates ~
STOCK and to trade them. and by cunning adj
Verusements induce people to purchase these certn
Gates and call them investments. These invest
ments have been called "undigested securities "
ms is a misdescription They are watered &C.
curites that are indgestible. In furtherance Of
THESE schemes these organizers and promoters will
perhaps Tor year or two, pay very respectabIe
even nattering, interest their so-caled capital
oy way of what they call dividends and then he
gins the fall OF the dividends. until within two or
three years dividends are not more than n quarter
OF what they were in the beginning These stoke
have been falsely and cunningly represented 70 IN,
Vestors from the Atlantic to the Pacific Tbe, ha,,
been sold and paid for. and there are distress
ana sorrow in hundreds of thousands of ho1cahoIjs
py reason or this imposition perpetrated on i've
people in the name OF the law. ~
An excessive oVeriSSue of corporate stool,
Iatal 70 general prosperity issue of ire
oeefnabe currency. Bankruptcy and distress aro
the sure sequence of either mad experiment The
laws OF SOUND nnance cannot be resisted nv any,
schemes II is at the expense of confdng public
STATE SUPERVISION or INDUSTRIES
What we need in every State is a department for
Industrial corporations akin the department thar
we have for banking, insurance, etc. and every cor
poraton should be brought to book and cop,nelIed
under oath TO state annually It's condition with fuu
power OF visitation upon the part of the head oF
tho department to the offices and books Of the cor
porations. There will be great deal of squrn,ipo
among the managers OF these corporations If tba1,