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

brought to full disclosure OF their affars but
the country has accomplished the result desired
in other lines. and it do so in this.
If protest that this is bringing into the open
their business affairs, the reply Is that they have
clothed themselves with corporate powers and thus
acquired great advantage over others who are
not incorporated powers not possessed except by
virtue of a State statute. When the State grants
them such powers. the State should exercise fits
power OF visitation and inspection for the common
An effort TO bring the Industrial corporations 10
book is no fight on real capital; It is only fighting
a lot OF watered and fictitious capital There
plenty Of large corporations that would make
sorry showing il compelled to disclose their real
condition; but that IS only q natural result from
water that is incorporated in them from their be-
Their IFaS should be strong light thrown upon the
been organized Let the light he Y rays so that
all the facts and atrocious methods may be seen
by the conhding and creduIous Stockholders Let
them sec how their good money that they paid into
me company, Suiposlns II was for the benefit Of
pPor2tions into the pockets Of the promoters and
ious manipulation of corporate laws and the
f faI1 an" ,a5ahsitF OF properly to the corpora
holder would be astounded the discovery that
ny la5lous lnlLigues his money has largely r.
has received for his money stock certificate that
Is little more in value than chrome
TTLLANY ~ "COHHON STOCK"
The practice of organizing corporations with an
issue OF bonds or preferred stock and common
stock is a yiilanous practice II is generally UNI
derstood that the bonds or preferred stock repre-
sent the real value Of the property involved or
more; the common stock IS generally understood
by the insiders to represent nothing but water
Here is fine opportunity to outrap the llnvary
into purchasing common stock to the rra1f rro6r
OF the promoters. II has become n preslrrlutlye
badge Of fraud to issue common stock with an is
sue Of bonds or preferred stock This practice
should be regulated prohibited by statute No
such loophoie for fraud should De left open In the
laws.
Explain it you may. II is an interesting fact
that the promoters and sponsors generally grow
very rich, while the stockholders grow poor II
such disclosure have suggested should
cause pain TO some promoters and sponsors. they
have only themelves blame for IT, II Is the right
OF the legislatures and the duty OF legislatures
when they cothe corporations with the extruordi-
nary powers. that they should also keep firm hand
upon them and upon their managers and see 10 Il
that they free from fraud and deception in
dealing with the public. Every charter is subject
to amendment by legislation. II Will put their
capital into corporations formed AMI clothed with
corporate power, they must expect the regulation
which the legislature properly give them. II
a corporation Of any kind is expressing the pub
lie or defraUding the public the creature Of the
State it can be brought To for it.
There are many Illustrations Of this exercise Of
1t is claimed that attack corporations that
profess 10 deal with the development OF the ma
eIaI resources OF the country Is TO attack the de
upon watered stock and fraudulent corporations.
me me chaTse rs hot true SuGh CORPORATIONS do not
pers in spite OF these waterod 6orn6ratjons and
such is the fact. These corporations are and have
been great hinderance 10 the real progress OF the
country corporation that Is capitalized for an
amount required for and actually used in any ma
way TO develop and promote the prosperity
Of the country except through the aid Of corporate
organizations. II large ones are necessary, let
them be large so long their capital stock rep
resents only tho requirements of the enterprise.
ural Development Of this age It is not easv 10 see
business
try can get along without them. Properly admins-
giving steady employment 10 laboring men and
cheapening the necossaries OF life for the great
Al the present time the balerul influence Of these
Of the country can hardly be estimated vast
amount OF capital that innocent and credulous
been diverted from that purpose n has sh9ke t5
confidence of people in corporate securities to such
an extent that the good and the bad are suffering
alike. The enormous amount OF money received by
these corporations or their promoters has crippled
the ability Of the investing public to come to the
rescue Of the market at the present time and take
up good securities that are selling vastly below
their real value.
STATES ROOT or THE TROUBLE
The roots of all this trouble about corporations
are found in the laws OF the several States of
this Union. and not in thu laws Of the general
government The State that has the loosest and
easiest laws under which to expand the so-called
capital. and in which matter can be best con-
cealed that ought. in common honesty to be known
TO stockholders. TO be the favorite State in
which organize these huge overca pitalized con-
Germs. New-Jersey seems at present TO be the
favorite breeding ground for these overstocked cor
porations Other States. Judging by Iegisia-
ton. are preparing to contest the doubtful honor
with her. What the times demand is that the
States with each other In stringent legislation
regulate present corporations. TO prevent in
the future the organization OF any more OF the
vicious character.
The idea that this matter is a subject for the
federal government TO deal with is faIlacious our
system Of government is such that this is one of
the questions to be dealt with by the States The
evil can only be touched incidentally in n few
deal with effectuay is In the States alone
This Is party question. Republicans and Demo-
have been equally guilty in the respective
legislation that has made the opportunity for these
financial mOnstrosties
There has been slowly developing within the last
year a disposition to blame the federal
government for all the evils of these huge and
sometimes fraudulent, corporations. when. In fact
1t IS responsible for them than Is the
municipal government of Buffalo The evil
originated in the States, and there ii must be as
sailed.
DEMOCRATS DESERT STATES RIGHTS.
For Democrats to advocate assault upon these
corporations and so-called trusts as a national
issue would be a most conspicuous assault upon
their pet doctrine OF State rights. Nothing could
be inconsistent them than to interject this
issue into the coming Presidential contest. It must
be admitted however. that consistency has not