The Goldfield news. [volume] (Goldfield, Nev.) 1904-1911, 1905-09-22
A TIP TO INVESTORS.
New incorporation Laws to Protect
Investors in Mines.

stocks is the name of the state or terri
tory in which the organizers of a com
pany choose to incorporate, says the
Daily Mining Record. In certain states
the laws are of the kind sometimes
called liberal. Such laws permit, in
deed, they encourage manipulation.
Few legal restrictions are placed upon
the operations of the corporation, and
the directors and other officials are al
lowed to do pretty much as they please
with the enterprise placed in their
charge. The stockholders are left with
out adequate recourse in case of dis
honest or incompetent management,
and often they are kept in complete
Ignorance of the affairs of their com
pany subsequent to its organization.
Many of the inquirers who write to
the Record concerning companies in
which they hold stock are unable to
give the names of the officers of the
company, it's main Office or the place
where it is supposed to be conducting
operations. Their certificate will tell
them in what state the company is in
c~orporated, and by writing to the see,
rotary of that particular state it is
possible to obtain from him some infor-
nation. Very often, however, the rec
ords in the Office of the secretary of
state give only the names of the direct
ors at the time of organization. Ere
quently, even with the resources at the
command of the Record, it is impossi-
bic in such cases to locate the present
officers of the company. The Record
has a long list of companies that must
be classed as mavericks because they
cannot be corralled and branded.
To make this kind of disappearance
impossible is one object of the corpora
tion laws of New Mexico. Every com
pany incorporated under the laws of
New Mexico is required to file yearly
with the secretary of the territory the
names and addresses of the officers of
the corporation. These laws contain
several other excellent provisions. For
eign corporations are given no greater
privileges than are given to local cor
porations. There must be resident in
the territory a legal representative of
the company, and in Ease of failure to
appoint such a representative, service
on the company may be obtained
through the territorial secretary. Ten
per cent of the stockholders, if resi-
dents of the territory, may legally call
a meeting. Any violation of the law
is punishable by a fine of 5000 for
each %offense, and if the violation is
persistent the attorney general, upon
complaint, may take steps to put the
company out of business.
While the New Mexico laws do not,
in the opinion of the Record, go far
enough in the direction of publicity,
they are much better than the laws of
some other states and territories. The
stakeholder of a New Mexico corpora
tion can be certain of being able to
keep his eye on the men to whom his
money is entrusted.
Preference OF the part of investors
for the stock of companies incorporat-
ed in states where the laws are rigid
will be effective in bringing about cor
pOrate reform. Let investors make
themselves familiar enough with cor
poration law to know which states af-
ford them the most complete protec-
ton, and the promoters of new compan-
les will be quick to recognize the adj
vantage of incorporating in those
states. The fact that a company has
beer incorporated in New Mexico is
a standing advertisement that the pro
moters have honest intentions. New
Mexico is not alone. There are other
states hat are improving their corpor-
alton laws, and readers of the Record
will recall comment upon the commend
able measures enacted. By showing
preference for the corporations of the
morally progressive states, investors
will strengthen their own position and
they will encourage the advocates of
further reforms. BY Withholding their
money from corporations that have
taken advantage of the legal robbery
encouraged by New Jersey and other
states that have followed the lead of
New Jersey, investors can secure the
annulment of vicious legislation. When
iniquitious corporation laws drive
away instead of attracting business
they will not long remain on the stat
ute books.
Should one state take the advanced
step of compelling the publication by