Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1914-04-07
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HOLDERS Of STOCK
KENYON INTRODUCES gill MAX.
ING CONSERVATION OFFICERS
REsPoNstsLE.
EXCELLENT ENGLISH LAW
TAKEN As A MODEL

lntsriooI<ins oirsoteeatss Impossible
Fsaturss Of Bill Nay 10 Taksn Up
by Wilson Administration and
Adopted. ,ss.r7.47lss,
Washington-Senato Kenyon Of
Iowa, has introduced a bill to provide
a remedy for wronged and denauded
shareholders Of corporations engaged
in interstate commerce. which has at
tracted 30 much favorable comment
from democrats that there IL talk OF
making y part Of the a6anAn4strat1on's
program Of trust legislation.
The bin IL based upon the English
system Of protecting the interests Of
minority stockholders against the ma
chinationS of dishonest officers and di-
rectors Of corporations. It provides q
method whereby the shareholders cai
recover the money which the corpora
tions have been mulcted by mtsman-
agement Of te1t on the part OF the Of
ncers, and directors.
Those who have examined the meas
ure critically believe that the Kenyon
bill offers the solution Of the interlock-
ing directorate evil and the further
wrongs resulting from holding compan-
les, because the men who will be held
personally responsible for any financial
loss due to mismanagement Will not
be found serving upon the directorate
OF more corporations than they can
give close personal attention to.
Features Of Kenyon Bill.
The essential features of the Kenyon
bill are as follows:
The attorney general and the inter-
state commerce commission was en-
powered to make Investigation of the
financial and property affairs and OPP
erations Of every corporation engaged
in interstate or foreign commerce to
determine whether their affairs have
been conducted so as to preserve the
rights and interests Of individual
shareholders.
II improper methods are discovered
whereby Individual shareholders have
been despoiled OF property rights OF
interests, the attorney general shall
bring suit In the name Of the United
States AZ trustee for the stockholders
All persons. corporations, or partner
ships which have been engaged in the
fraudulent acts In any manner or de-
gree shall be Joined as defendants.
The proceedings shall be in equity
and no objection to the jurisdiction
shall be entertained.
The bill need be certified only by the
attorney general az true on investiga-
ftons ttss:.s.s5s 4 sS sia
Action Against Any Defendant.
The court may give judgment Jointly
and severally against all defendants
who have been Jointly engaged IN the
scheme to defraud the shareholders.
The attorney general shall proceed
at once to enforce the judgment.
Shareholders shall be allowed three
years after the final decree to show
their right to share in the proceedsEof
to judgment.
There may be two classes who may
share equally, those who owned their
shares at the time the fraudulent acts
were committed and can show they
suffered loss by reason of the acts, and
those who, having owned shares at
the time Of the fraudulent act, have
since sold them and can show that
they suffered loss by reason thereof
/ The funds collected by the attorney
GENERAL on the Judgment shall be de-
posted and paid to the shareholders
upon the courts order.
Any recovery OF property other: than
money shall be administered by the
court a Justice and equity demand.
Use Of Left Over Funds.
II any funds or property are left
over after claims have been satisfied.
they shall be applied to the legitimate
use ana beneht Of the parent corpora
TONS.
The gist Of Senator Kenyons propo-
sition is this: That any stakeholder
in 4 corporation who has reason to
believe that its officers are conducting
Its affairs in a manner to dissipate his
interest may go to the attorney gen.
eral or to the interstate commerce
commission, II 1t is common carrier
corporation, and state his case. It then
becomes the duty Of the attorney gem
eral or the commission to make an In
vestigation and If it Is discovered that
tho officers and directors have acted
wrongfully or II they have been guilty
OF gross mismanagement or have In
any manner turned to their own use
the funds which properly belonged to
the corporation, the attorney general
must bring s,1it against them to recov-
er the amount that has been lost to
the shareholders. ~
That money having been recovered
from one or more Of the officials Of the
corporation will be turned back to the
shareholders in proportion to their
holdings.
Effect Of English Law.
A similar law Is in operation in Eng
land and lawyers say 1t has had q good
effect. Tho English law has been in
voked for the purpose Of making pro-
moters liable for the full amount OF
money or property received from the
subscribers to the shareholders Of cor
porations which they have promoted
when Il has been shown that they had
x.s.s .,;:ss.a tenn nts in their prospect
uses. 81 y. ges;ss. .
II such q law were in operation today
Senator Kenyon and other members of
congress- say, It would be the duty Of
the attorney general to proceed against
the directors and officers Of the New
Haven railroad to recover the millions
OF dollars that they waster and dissi-
pated thru purchasing trolley lines.
branch lines, and other property at ex-
travasant prices, as shown by the In
vestigation by the interstate commerce
commission.
70 Cure . Cold In One Day
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