The Washington times., 1912-11-10


able volume of legislation is concerned, !
Il seems probable today that the dues- |
ton of n new corporation law for the |,
District of Columbia will receive some {,
attention. The agitation for such a law
will at least be the basis for serious |
consideration when the new Congress
convenes.
The desirability Of model corporation |
law for the District as basis Tor SINH
lar legislation for the whole country
as suggested and advocated by j. Sci
win TAFT, president of the Washington
and Southern Bank. has already been
fully explained In this column. That
suggestion will likely be followed py
some action by the Investment BANK
ers' Association, which holds Its hrst
annual convention In New York next
week.
Here in Washington the movement is
scbeduled to receive some impetus
through the efforts Of the Board OF
Trade, The committee on law OF that
organization, OF which Louis A. Dent
is chairman, has submitted its annuai
report. which positively favors the
enactment of a new corporation law
for the District.
The committee realizes that the pres
ent law In the District is not wel
adapted to modern business conditions'
and that It is very inferior to laws on
the same subject in force In most OF the
States, as well as in foreign countries,
and considers the time ripe ana the
necessity apparent for the enactment Oh
u new law. a biil providing sucn law
has been framed by the committee IN
conjunction with officials OF the Bu.
reau of Corporations and has received
the approval OF that bureau ana the
Corporation Counsel for the District.
The committee, however. Is not likely
to submit u Draft OF a new corporation
law for the present. The reason given
for this is that It Is hoped That withlh
the next year, the Conference OF Com.
missioners on Uniform State Laws, Will
have submitted an acceptable form OF
law. This commission Is composed OF
three delegates, appointed by the execu
tive authority III each state ana leIir
tory of the United states, and for the
past three years has been engaged In
drafting "a corporation law intended 10
be a model for adoption In all OF the
States and Territories. the commis"
sioners from the District OF Columbia
to the Conference ON Uniform state
Laws are all members OF the boaTu ot
Trade, and two OF them are memoeIs oi
the committee on law.
The lack OF uniformity in the laws
OF the various States has led to con-
siderable oeBree oil reproach IN the or
gdniZdtiOn and management OF many Vi
our corporations, ana resulted IN great
difficulty in practically supervising the
| evils OF corporate management thlouSh
the fundamentally OF our courts. the
committee says. ~
considerable criticism OF Kansas lam
uus Blue SKY law: but most OF II goes
wide Of the mark by assuming that
! the Eastern States, In leslslatlnS
against fake stock swlndlers, must copy
| nI.l a SATURDAY
| Evening Post In its current issue. Va
! luralIy the Kansas law, though II works
admirably in that state, would need
modification for communities where
great and complex investment business
| exists.
| Nobody wants State functionary
10 sit in judgment upon investments
brought out by J. L. Morgan & Co. Or
the National City Bank. True, those
Institutions might iioat Issues That
would turn out unsatisfactorlly; but
Kansas never dreamed that infallibility
In business judgment could be pro-
cured by an act of legislature. The OBJ
jcct is TO bar so-Calied securities that
are offered with the plain intent TO
defraud or deceive. and that can be
secured in New York, with its thou
sands of millions OF investment busi-
ness. as well as In Kansas.
| The first question Is as TO the record
and reputation OF the men behind the
| fering its securities to the public. Ger
tainly the state that cannot frame a
| law and get commissioner who Will
draw the line between a reputable bond
house and the wildcat financial corpora
ton must be badly off for Legislative
and administrative talent.
| blue Sky laws are aimed at SWIM
dlers. and the mere fact that law is
| aimed at them will discourage nine stock
| swindlers out ot ten. The PUstoftice De-
partment has done much to keep fake
stock thieves from using the mails
without in any way hampering legiti-
mate Investment business. Blue Sky
| law must provide severe penalties and
vest considerable discretion in the Of
fcials charged with It's enforcement; hut
1t need not burden honest business. !,
! wouldn't hurt Morgan or the city Bank
to register and receive a State license
as dealers In securities, or to file a state
ment describing any new issue brought
out by them We are convinced that
| any State can have an effective Blue
Sky law without hurting legitimate in.
| vestment."
OF course a new Incorporation law
and Blue Sky law are separate and
distinct things, but the reason for urg-
ing the enactment Of both is in many
Instances a common one. A Blue Sky
law would not be needed at all II there
were uniform Incorporation laws, such
as govern corporations of Great Britain
and Germany, but the very TACT that
there Is agitation for such laws as Kan.
sas has enacted in it's Blue Sky Law
demonstrates forCibly the need for d
uniform incorporation act.
Whatever may be the basis for cx'
change OF security to he presented tC
the shareholders of the Washington
Railway and Electric Company by the
Washington Utilities Company whe:
the latter is ready to cover the form
into its Sl5O, 100000 of capital, those in'
terested in the Utilities Company are
not ready definitely to announce Il.
Asked whether the basis of exchange
would be s, 900 of collateral trust pei
cent bonds and two shares of the stock
of the Washington Utilities Company
for each ten shares OF preferred stocR
) In the Washington Railway and Electric
Company, w. B. Hibbs said yesterday
that that would not be determined al
/ the present time. There viii h" Il u
certain, more than one propositiot
made to the shareholders in the Wash
ington railway and Electric Company
according to Mr.. Hibbs Some basis o,
exchange of securities will be one propo
sition; another will be cash oner
probably around the present market
and the third will he the, privilege o.
neither exchanging or selling.
1t does not seem that the sugsesuof
of Mr. Hibbs that the directors OF the
Washington Utilities Company make
known their plans to the Attorne!
| of ha SfatpS has me-