Watertown leader. [volume] (Watertown, Jefferson County, Wis.) 1909-1911, 1910-01-14
incorporation
BILL DEVELOPING
MUCH OPPOSITION
TREMENDOUS ADMINISTRATION IN
FLUENCE WILL BE NEEDED TO
ENACT IT INTO LAW.
COMPULSORY MEASURE URGED.
Many Congressional Lawyers Advocate
This Plan to Bring About Ell
( fective Control.
BEFORE CONGRESS NEXT WEEK.

WASHINGTON, d. c.. Jan. 10
Now that the main features of the bill
TO be recommended by the President pro-
viding Tor a federal incorporation act
have become known, there is a DISPOSE
ton on the part of many members OF
Congress to insist not only upon a full
discussion of the measure, but upon
amendments which will, in their judg-
ment. be necessary to make it effective
in dealing with great corpora tons. In
deed, it is believed that nothing short of
tremendous administration influence will
enact it into law.
The need of forfeiture clause by
which :; corporation persistently violat-
ing the law can have its charter revoked.
is declared to be absolutely necessary il
corporations are to be effectively con-
trOlied
Many congressional lawyers advocate
compulsory instead Of voluntary federal
incorporation. They cite as sound the
genera principle that if Congress has
constitutional power to grant charters
to corporations doing ali interstate bust
ness, it has power to require corpora
tons doing such business 10 take fed
eral incorporation just as it has power
To require them to comply with Its laws
regulating Interstate commerce.
The Rights CT States
Among the questions that will come
up TOR consideration and likely win pro-
woke considerable discussion is that re-
lating to the effect Of federal incOrpOra-
ton upon the right Of states to control,
and to tax the property of such enter
prises. This is Il phase of the proposed
law. it is said, that has received com
paratively little attention.
In tWenfV-One sections Attorney len
eral Wickersham has embodied the ideas
Of President Taft and his cabinet regard
ing a system of federal incorporation of
business enterprises. The bill is expect
ed to be laid before Congress next week
The principal feature wifi be the ere
alton of a form of holding company
which under the national charter may
control business and subordinate com
panieS organized under state laws. Prop
er limitations will be provided against
the embarkation of any such corpora
tions in the bus ness of discounting bills,
receiving depos and issuing notes.
There will be - compulsory provision
III the bill. it Is said. The corporations
will not be required to take out Il ma
tional charter if they see fit to do bust
ness under the state laws instead. All
charters will be subject to the approval
Of the commissioner Of Coz pOrations. The
minimum amount of capitai stock will
$4,000 of which shall be available to
commence business. In case Il national
corporation shall desire to acquire prop
erty of state corporations, it will be re-
CURED that it shall hold not less than
a majority of the capital stock of SUCH
corporations.
Any corporation that has more than
one kind of stock will be authorized to
confer the right to choose the directors
of any class to the exclusion of others.
Creating Two Kinds of Stock.
Corporations will be authorized to Gre
ate two or more kinds of stock, the pref
crences and designations of which are
to be clearly stated in the articles Of
association, but at no time shall the pre-
ferred stock exceed two-thirds of the
capital stock paid for in cash or proper
ty. No preferred stock by the terms can
be issued except as specified in the orig
inal articles of association save with the
consent of the holders of two-thirds of
each class of outstanding stocks. Stock
books are to be open to inspection of all
stockholders, judgment creditors and law
officers.
An important provision will be one re
Quiring every subscriber to pay to the
treasurer of corporation 10 per cent.
Of the amount OF his subscription in cash
and directors Will be authorized TO assess
stock not exceeding the whole par value
thereof: or if the stock is not Of par
value. then to the amount agreed to be
paid for it. Failure to pay these as
sessments will subject the stock to sale
ar public auction.
\ corporation will be permitted to pur-
chase property necessary for the cor
poration's business and issue stock for
the same with the approval of the bureau
Of corporations. Ample provision viii be
made for exhaustive reports to the gov
eminent by every national corporation:
special reports may be called for at any
time, and finally severe penalty provi-
sions will be included TO insure the prop
er working of the act, but these are in
the nature Of fines to be imposed upon
The officials. There will be provision for
the forfeiture OF the charter. it is said.