Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1905-01-19
DR.. Frank Horack Says Iowa
Laws Reduce Idea Of a Cor
poration to an Absurdity
MAY CONSIST OF ONE PERSON
Single Individual May Enjoy All the
Privileges Intended to be Conveyed
to Number of Persons for Business
Purposes-shown to be Different in
Other States.
Special to Times-Republ,can.

Iowa City. Jan. 10. "The laws of
Iowa have reduced the idea of cor
poration to an absurdity," declares Dr.
Frank u. Horack, of the department of
political science of the state university
of Iowa. "The artificial person crea-
ted by the law or under the authority
of the law. is everywhere in the United
States, except in Iowa, recognized as
an organization of at least two or more
persons united under a common name.
The first code of Iowa, adopted in
1851, declared in its chapter on corpor-
ations that q single individual was en-
titled to all of the advantages of an
act authorizing general interpretations
This principle has been retained in the
laws Of Iowa ever since and in the code
of 1897 appears in the clause a single
person may incorporate under the pro-
visions of this chapter, thereby EMIT
ling himself to all of the privileges and
immunities provided herein
"While the provision of the Iowa
code is unique in being the only one
of It's kind in any state code In the
United states, nevertheless have new
err found a provision in any of the 9TH
er state codes which would prevent
any one man from becoming the sole
owner and proprietor of any corpora
ton, If he could buy up the stock, no
matter how many persons were orig
inally required to organize 1t. This
condition, of course, nullifies the pro-
vision requiring more than one man to
organize.
1--WE are frequently told that remed
ial legislation is as necessary to cor
rect the abuses of corporate privileges
among the small corporations as a
mong the large ones; that about nine
tenths of the smaller corporations have
in reality become one man. partner
ship or family corporations by the
method just described. In many Of the
states it is easier for man with a
losing business to form corporation
than to face bankruptcy, he prefers his
friends or relatives and after the af
fairs are wound up is really in better
shape than he was before.
II understand that there is pro-
vision in the English Companies Act,
which makes 1t impossible for one
company to become the sole owner Of
q corporation, that is if the number of
associates in a corporation falls below
seven for a period of six months, the
others are considered in law as part
ners. jointly and severally liable for
the debts. Some such provision in the
laws of our states would undoubtedly
have a healthful effect upon many Of
our smaller corporations"
When asked what he thought of the
Garfield report" DIR. Horack said: "In
my opinion the essence of that report
must become a law before we can hope
for any adequate solution Of the trust
question. In effect there would be lit
tie difference between national incor-
porations and a federal license for cor
porations engaged in interstate COM
merce as far as the so-called trusts
are concerned. Any scheme for the
federal control Of corporations engaged
in interstate commerce, to be effective,
must sooner or later prescribe the re-
quirements as to organization. These
requirements may be set forth in a
federal statute, but the national gov
eminent may refuse to permit corpor-
ations organized in states whose laws
do not meet a given standard for or
ganization, to engage in interstate
commerce. When this is done, New
Jersey, Delaware, West Virginia, and
other states will no longer vie with
each other In trying to make their corr
poration laws attractive to foreign