The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1904-02-27
GROWTH OF REALTY
CORPORATIONS
TT HAS BEEN VERY RAPID HERE
AND ELSEWHERE.
They Facilitate the Transaction Of
Business and Serve as Means of
Avoiding Responsibility - r h e y
Have Become an Enormous Factor
In the Business World.

has been taken up by the New York
Mail and Express. The paper recent,
ly published a list Of a thousand or
more such corporations in New York
city. 1t notes that only recently has
the substitution, Of artificial for nat
ural persons been found a good plan
in real estate matters as in other de-
partments of financial activity.
Within year a score or more of
new real estate corporations have been
formed in Minneapolis. Some Of these
are only to enable estates to carry
property or to enable banks to sell
off real estate which they are not al
lowed by national banking laws to
case of New York are applicable here.
The Mail and Express says, in part:
THE. avoidance of personal respon-
sibility and the simplification Of bust
ness forms are the two leading fac
tors in the formation of corporations,
not only in real estate matters, but in
every field in which they have been
generally adopted. From the mo-
ment that two or three or a dozen
men go into a real estate operation
they begin to feel the convenience of
corporate ownership; yet it is fact
that several Of the most active and
successful firms and syndicates operat-
ing in New York real estate have
never found it necessary to become
incorporated. Yet a corporation can
take and give title, make leases, en-
gage help and transact all it's other
business more smoothly and more
promptly, than can two or four or
six joint tenants; for under the law
joint tenants Of real estate must all
act and act unanimously in all their
important moves.
Avoiding Responsibility.
GAS a method of avoiding response
bility, corporations are formed almost
the state will not be obliged in time
to limit this form CT corporate actiV-
ity. The owner Of real estate being
responsible for his torts, and this re-
sponsibility being occasionally very
burdensome, the state has practically
provided a means Of avoiding it by
permitting an individual to transfer
his holding to corporation with but
nominal capital, of which he owns
all the stock. Often he further pro-
cures, manufactures, nortgages up
to the full value Of the property. and
in this situation the building may fall
down and bury all it's tenants and no
redress is possible. Similarly, these
very lightly capitalized companies are
on the DCnQS Oh the mortgages, ana
thus practically act as dummies. 1t
is not unlikely that the state will
eventually find it necessary to pro-
hihit corporations from owning real
estate valued at more than certain
percentage Of their paid-in capital.
Pc An Enormous Factor.
But when all this has been said,
the fact remains that realty corpora
tons have become, very suddenly, an
enormous factor in it's business world
The fact also remains that there are
very many Of these companies that do
a strictly legitimate business, whether
as operators or as investors or as
both, and that these companies are
gradually extending their importance
and increasing the respect with which
| the public views them. It is not un-
reasonable to hope that certain Of
these companies, after q few more
fyears Of actually earning moderate
! dividends upon genuine capital, viii
| become standard form OF invest
ment for sums smaller than are nov
usually serviceable in real estate
i operations, and that thus there will
! be created a new means of investing
such funds safely, and with the prob
ability of returns a little higher ant
much less f1uctuating than can bt
obtained from either railway or in
dustrial stocks