The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1905-01-16
GARFIELD RIDDLES
CORPORATION LAW
Of THE DISTRICT
Declares Issue of Char
ters Amounts to a
Scandal.
A NEW STATUTE NEEDED
Commissioner May Be Ask
ed to Frame Bill Sup
plying Defects.
A NEW STATUTE NEEDED

- - - - 80
James r. Garfield, Commissioner of
Corporations. went before the House
Committee on the District OF Columbia
today and pointed out in forceful terms
the deficiencies of the laws governing
the incorporate of concerns In the Dis
trict of Columbia
That a new corporation law be franz
ed for the District of Columbia to serve
as a standard for all corporation laws;
that the present law be suspended while
the new one is being prepared; that the
issuance of articles of incorporation In
the District be made a source OF real
revenue, and that the quickest steps
possible be taken TO check what, under
the present corporation laws. is fast be-
coming a scandal" were the reforms
suggested during the hearing
The shortcomings of the present law
We're brought out in addresses before the
committee by Mr.. Garfield Recorder of
Deeds Dancy, f. L. Siddons and Z. w.
Mccormick
Garfield to Frame Law.
The probable result viii be a request
to Commissioner Garfield by the COM
mittee to frame the desired new law so
that it may be apssed by Congress next
year It is also possibility that the
present corporation law may be sus-
pended by this Congress.
Commissioner Garfield, in his adj
dress, said.
The principal thing that has at
tracted me in connection with corpora
ton laws in the District of Columbia
is that they have forgotten the protec-
ton and publicity the people need IL
sealing. with cerporatsens...s-z.s
The people, he claimed, ought to
have more definite information con-
cerning companies purposes and or
ganization methods. Then District law
ought to make companies explain the
essential facts of how, where, and with
what means they intend to operate.
District of Columbia law
Secondly, he said, provision ought to
be made for the annual returns Of the
corporations. The terms of such pro-
visions ought to be regulated according
to the nature of the concerns incorpor-
porated
1.-The District law" he asserted en-
phatically, fought not TO be mere con-
Germ for turning out corporations.
Suspend Present Law.
Would it not be we'll" asked Mr..
Babcock. for us TO frame as nearly a
perfect law for this purpose as possible.
and i.ave il as a standard 10 be referred
to as Z model for all Incorporating laws,
and, in the meanwhile, suspend, by d
resolution, the operation of the present
Iaw2"
Mr.. Garfield saiG IT would be eminent
ly wise" TO make such a law and such
an arrangement IN general.
lie thought the taxation feature the
smallest in Importance among the other
considerations.
= tax on gross receipts is, he said, the
most feasible and the fairest way of
deriving revenue from corporations
Mr.. Cowherd at this point suggested
the advisability of the committee re-
queSting Commissioner Garfield 10
frame : new District corporation law
III tl:ne TO have it pass Congress this
Mr.. Garfield said he would hardly have
time 10 frame a satisfactory law in so
Snort q time.
Mr.. siddons raised the point that an
immedlate repeal OF the present law
would leave the District of Columbia
without any corporation law at all. He
thought this unwise.
Some of the Facts.
Eas. Siddons. the first speaker. said
. ,211 companies with a capitalization Of
over s.. .000. sos. 600. had been Incorporated
in the District during the two years
ended December 81. 1904, owing to the
broad character of the corporation laws
in the District of Columbia. Only "a
few OF these. he said, had been formed
for doing business in the District of CO.
lumbia.
Under present law. ne said, there is
no way OF reaching by the local courts
of companies organized here
ana doing business in another part of
the country. He thought the law should
be amended 10 remedy this defect.
An amendment, he suggested, should
be adopted making the com panies keep
their books here. He urged on the com
mittee the importance of making the
District incorporation law a really local
incerpoI alton law, and check. the trend
OF petambulating corporations.
TIE present state of affairs" he said
is giving rise to something approach
ing Il scandal | do not think the pres
ent pending laws go far enough. We
went our Federal corporation law re-
Vlsed, ana thoroughly gone into
Also, we want a larger revenue from
companies. The Recorder
of Deeds says the revenue hardly aver
ages 81 from each of the concerns in
corporated The main point. low ~ er. l.,
tc iocaliZe our corporation law
We must make the District of CO.
lunlbia the habitat of concerns incor-
poraIed in the District Of Columbia.
Here Is the place for their books and
for their Offices.
At tkis point. Chairman BabcocI1 said.
This law has been differently con-
strued from what vas meant by the
committee who drew II :"
Mr. Mccormick said he quite agreed
with Mr. Siddons in many particuIs rs
but that he differed with him on the
points that corporation revenues do moi
support the Incorporating Office. and
that there is no way of reaching by law
the concerns Incorporated here but do
ing business elsewhere
He said he had incorporated compa-
XCoutinued ON Fifth PaueA