The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1907-07-13
||ULD REMOVE
|1EE DOLLAR MARK
lard N. Shepard Of New York
ylssds Against Nominal Cor
porate capitalization.
gJEVES PRACTICE TO BE
PRODUCTIVE OF DECEIT
4 Of Dividends Should Be
Existing Conditions, Not
Oh capitalization.

H., July l2.-An ad.
4 by Edward N. Shepard of New
4 on "Corporate capitalization and
" Morals was the feature of
"a session of the annual meeting
q. Illinois State Bar association.
4, abolition of the purely nominal
NJ capitalization of business corpo-
.s as a cure for the evils of over
E,lization was set forth by Mr.,
ma in his address, The removal
h dollar mark from capital stock
ks believes, go far toward solving
|roblem.
4. Is the falsity of the present plan
eorporste capitalization which
|H condemn it." he said. "For
|,sry reason that it facilitates de-
IRE delusion Of investors and in
Ere dealing with public sentiment
|sublic officers, it should be ended,
sre be better plan. ] think there
II propose that the share of stock
A have no dollar mark; that its
4 essential feature shall be the
kful certifcation that 1T is one of
wen total number OF equal shares
shieh the enterprise IS divided.
What Creditor Considers.
( VIC lends corporation money
4 the nominal amount of its
Eulirstion7 The creditor who is
q eunsiders. not the nominal, but
tstual situationy his concern IS
q ths company's realizable property,
raigage or lien debts, its float
dsbf, its gross income. it's net
tzs Is not, however, the creditor
tfed 10 know that the capital of
kh be has been assured shall not,
b he is paid, be taken from the
ksny in dividends. but remain a
\ for his security Indeed, he is
Ned 10. that. Our system of nomi-
| rehabilitation does not give him
! assurance. The creditor might,
<vtr, require corporation, as a
|itipn of his extension OF credit,
|pgide him with a statement of
nt and actual conditions, just as
||oker requires statement of
|nty Of a partnership whose note
|hees on the market. For care
|su or dishonesty in making such
|asnts the common law provides
remedy. The essential thing, as
Ecsiye It, is that the basis of the
ND or of the credit shall be
: In some responsible statement of
ID actual facts, not in fictitious
alnal. or obsolete capitalization -
Ehould Not Restrict Profits.
b Shepard also spoke of the com
idea that the profits of railroads
l ulhsr public service corporations
d be restricted TO 6 per cent. This,
s opinion, is a. fallacy, and if so
ksed would prevent Industrial ad-
kimeut.
Private capital will not go into
and untried enterprises unless
q promise that, in case of sue
the profits shall exceed the rate
teyest which could be earned upon
I'd Investments, he said.
elsible capitalists will never take
nsk Of total or partial loss unless
FOR the risks III the magnitude Of
able or possible profit. IT is
Zid to suppose that constructive
ln and financial, and even moral
aga would have carried railroads
the Allegheny mountains, or the
mes or the Sierras. on the assump-
that if the enterprise failed
lnn should be borne by the pro
g, but that if the enterprise sue
"a, then their profit should be
ned % what they could have
Isd Without risk by lending their
Eltai On bond and mortgage.
HoTsver, the owners Of railroads
oIna like properties, in consider
part, have themselves to thank.
loI the beginning they had openly
'ed that their risks should be
stsated By large profits, just as
y be the risks Of a pioneer manu-
afsr or the merchant who loads a
for Cathay; if in this matter
1ad been neither concealment,
innnceIlty, nor juggling of figures,
would today be less Of the notion
hiifoad rates ought to be adjusted
iodace not more than or 5 or 6