Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1910-06-22
BANK IS IDEAL
ORPORATION
George T. Buckingham of Chi
cago Sees in It Key to Cur
ing Corporate Ills.
TALKS AT BANQUET BOARD
Address Feature of Closing Session
of Meeting Here-Says Federal
Government Must Regulate.


the ideal corporation and regulated
in the ideal manner. Hon. George T.
Buckingham of Chicago, speaking
last night at the banquet which clos
ed the annual session of group one
of the Illinois Bankers association,
predicted that within the next few
years other classes of corporations
will have undergone the same evo-
luton that national banks have been
subjected to and will become equally
worthy of public confidence.
Mr.. Buckingham was the princi
pal speaker of the evening and HIS
address followed a feast in the ban
quet hall of the New Harper at which
$50 gentlemen and ladies were seat
ed. A. ]. Jackson of Morrison, presi-
dent of the group, presided as toast
master.
Mr.. Buckingham was assigned the
subject of Corporations" He began
with a history of this form of organ
lied capital. showing that it started
in the church and that more than
800 years ago England passed laws
to regulate the accumulation of land
under this form of ownership.
One of the first lay corporations
to come into prominent notice was
the Great Western Exploration COM
pany organized in France more than
| 200 years ago by John Law, Scots
man, which obtained grant from
the French crown of the land on
which Rock Island now stands, the
tract extending from the Alleghen-
les to the Rockies and from the far
-
ands Of shares were sold and when
the mississippi bubble" finally
burst Law was chased out of France.
KneII of mathematician.
| Up to so years ago corporations
were comparatively few and individ-
ualism in business still held sway.
With the coming into general use of
the steam engine, however. greater
aggregations of capital than the in
dividual controlled became necessary
to carry on growing enterprises and
so the corporation came into general
use. Now there are over 100000 of
them.
/ The state, in granting power to in
corporate, vests certain rights in a
given body of individuals. Originally
this was done by special charter, but
later general incorporation laws
were passed, thus doing away with
special act of the legislature when
ever company is formed.
Reserved by states.
The right to grant the power to
incorporate was one of those reserved
to the individual states under the
constitution and now there are IS
states in the union that have this
authority. The result is there have
been and are many abuses. Corpor-
atoms are formed in one state under
such liberal terms that they are
authorized to do almost anything
they may wish in other states. and
several of the commemorative make |
practice of advertising the advan- |
tages of their charters and the ease !
with which they may be obtained |
merely to secure the fee for the
state Golfers.
Under such circumstances it is not |
to be marveled at that abuses have |
been and are many. The chief abuse |
has been in connection with the kit
ing of values, or the watering of |
stock. The speaker illustrated the
=
that stranger should come to Rock |
Island and buy 10 millinery stores |
at $1,000 each, form company witt
100000 capital, sell the shares to |
the public at par and install a man
ager to manage the combined bust
ness. The manager, in order to make |
the usual profits, would be forced to |
sell millinery at 10 times its former
cost, the public would be forced to /
pay the bills and the promoter would
be $4,000 ahead as a result Of his
enterprise.
Railroads Worst Offenders.
The great transportation compan-
les, the speaker said, have furnished
the most startling examples of stock
watering. Within three years a group
of New York financiers have come to
Illinois and purchased a perfectly
good, well managed and dividend
paying road, the capital of which was
S29, 100000 and without adding one
dollar to it's assets, increased the cap
ital to $104,000,00O. This is only a
single instance. The Rock Island
road and many others have in the last
few years passed through a similar
operation, and hence arises the de-
mand for the right to increase freight
rates which has agitated the country
for several months and which has
resulted in the passage by congress
within the week of what the speaker
declared was the most valuable piece
of legislation enacted in a half CEN
fury, the railroad rate bill. limo
cent purchasers of the inflated stock
think they are entitled to dividends
on their investment and they are try
ing to collect from the public. 4
People VIII stop 1t.
In the end, the speaker predicted,
this sort of thing will cease. The
people, who originally granted these
their rights, still hold
the power to regulate and will event.
nally exercise it A start has been
made in the case of transportation
companies and the industrial corpor-