Arizona republican., 1910-10-23
PHOENIX, ARIz, OCTOBER %. 1910
The EIIinwood Proposition.

regulation of corporations is attacked
10y the Arizona Gazette as "a bad
measure and calculated to drive all
capital out of the new state" The
charge is not specific. No reason is
given why capital should be driven
out For an explanation of the I'M
worthiness of the measure, the Ga
zette refers to the Douglas Dispatch
Other newspapers, democratic and
republican, have referred to the prop
osition as drastic" 1t is so in the
sense that the laws against murder,
forgery and fraud in all its forms are
drastic, for this proposition is plainly
less intended for the regulation of
legitimate enterprise than it is for the
prohibition within the new state of
Arizona of ilegitimate enterprise, fake
corporations.
AS a regulator of corporations the
proposition will probably not come up
to the radical views Of those who
have been clamoring for the regulation
and control of corporations. There
will be much more drastic" meas
ures than this as to legitimate cor
porations before the convention ad-
journs.
The Dispatch labors under two err
rors with respect to the proposition.
1T does not differentiate between the
legitimate corporation and the wild
cat concern" AS a regulation meas
ure there could be no such differen-
tiation, for who should say whether a
corporation at its inception is legiti-
mate or ''wildcat?" But the Film
company an impossibility in this terri
tory. 1t excludes also companies
which might or might not turn out to
be wildcat" 1t guarantees legitimacy
and in that respect it should receive
the approval of all right thinking
men.
Says the Dispatch: 1T makes the
stockholder liable for the corporate
debts and for the unpaid capital
stock"
1t does nothing of the sort, though
If it did stockholders would exercise
greater care According to section IL,
stockholders are liable for the debts
of the company to the extent of the
par value of their stock, subscribed
and unpaid. They are also liable in
dividually for all labor performed for
the corporation. No laboring man and
no other honest man will criticise the
proposition on account of this section.
AS to the driving out of capital, that
is the merest moonshine. The present
lax laws of the territory, a statutory
invitation to fraudulent corporations,
have never brought a dollar of capital
into the territory beyond the $4,000
annually which they pay for the privi-
lege of plundering the unsuspecting
investors throughout the world. This
is small sum in comparison with
the millions of which widows and or
phans have been mulcted, for these
wildcat companies prey chiefly upon
the poor.
The money received for the license
is tainted and should be dispensed
with. 1t is a small recompense for
the disgrace into which the name of
Arizona has been dragged.
Instead of inviting capital into the
territory, our loose corporation laws
have scared it away. The widely adj
vertised legalization of fraud has pre-
vented many an investment in Iegiti-
mate enterprise. to the disadvantage
OF the small mine owner.
II is safe to say that every worthy
company which has come to Arizona
for it's charter would have come If
the EIlinwood proposition had been
the law.