Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1907-04-13
Corporations Let One Drastic
Measure Slip Thru Legisla-
ture Without a Fight
PETERSON BILL IS SWEEPING
Law Provides That Lands, Patents,
Machinery and Devices Put in Com
pany as Stock Must Have Its Ac-
tuaI Value Passed Upon by State
Executive council-Ericson Bill.
to Times Republican.

Special to Times Republican.
Des Moines, April 13.-While the at
tention of the corporations was az.
tracted by the Ericsson bill which re-
uuired that they make annual reports
to the secretary of state and pay
small tax, the legislature passed the
Peterson bill, senate file 109, which IS
far more drastic and requires that
every stock transaction of corpora
ton that is not strictly on cash ba-
sis and fully paid up, must be laid be-
fore the executive council i'll ali its de-
tails. Evidently the corporations
while fighting the Ericsson bill over
looked this one.
State officials believe the law one OF
the most drastic that has ever been
placed on the statute books. 1t will no
longer be possible for the man owning
patent right to place a value on that
patent and then induce number OF
friends to go in with him and put in
facture the article. The matter must
be laid before the executive council
and the executive council must put q
value on the patent right 1t man
owns Il lot of real estate in some arid
country or anywhere else and hasn't
the funds to hold it and put it on the
market, instead of valuing it himself
and inducing his friends to form a
stock company with him and they put
in cash and he his land at his own
valuation the executive council will
put the valuation on the land. Then
when the public buys the stock in the
proposed corporation 1t will have an
impartial valuation on the commodity
it is to put its money against.
The primary intention of the law
is to prevent new corporations from
Watering their stock. OF course since
every stock transaction that is not for
cash in full must have the approval
of the executive council it will hardly
be possible for an Iowa corporation to
make presents of blocks of stock to
public officials and influential men for
the purpose of gaining their interest
and influence in the proposed under
taking The executive council might
not consider the influence and in
terest of prominent citizen or Off
cial to be exactly in the interest Of the
public.
While some of the members of tho
legislature interposed some objections
to the bill when it was under consid-
eratiom the corporations themselves
did not fight the measure. All their
time and attention was taken up in
fighting the Ericsson bill which was
SPOKEN of as the Corporation tax" bill.
The real purpose of the Ericsson bill
was to get reports from the corpora
tions to the secretary of state. There
is a. law now that requires them to
report, but there is NO way of enforc-
ing it and the purpose of the Ericsson
bill was to provide for a small tax in
addition to the annual report. The
funds from the tax would add some to
the revenue of the state besides guar
'anteeing fund with which to enforce
the provisions of the bill, requiring
the annual report
The Ericsson bill was offered at the
request of the secretary of states Of
flee. There are hundreds of corpora
-tions in Iowa that have incorporated
under the laws of the state of Iowa
that are dead and many others that
have been given the privileges of the
corporation laws that are doing an IL
legal business. There are others do
ing business in the state that were in
corporated in other states that have no
legal right to do business here till after
they have filed certified copies of their
articles of incorporation. Yet the sec
retary of state has no means what
ever of keeping track of these corpora
tions or of ascertaining what they are
doing. 1t is quite generally conceded
that there should be some report to
the secretary of state regularly and 1t
is probable that one of the first bills
offered to the Thirty-third general as
sembly will be the Ericsson bill or
modification of it.