Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1914-04-11
By ALBERT ". ATWOOD
LIN HarRer'> eeklNA -.

the stockholder, may secure prOteC-
tiOn through his own efforts. ana
those of others. it may be we'll to point
out his duties and obligations. moral
as we'll as legal This is neither the
oretical nor a QuiXotic subject, II is
one dictated by ordinary caution. For
who can tell when an aroused public
conscience will make the ethics OF to-
day the laws OF tomorrow.
Rights and privileges usually carry
with them duties and obligations.
These Of a legal nature which apper-
tain to stocks are fairly we'll known
end require only a brief summary.
Purchasers of stocks are liable to cred
itors of the company for unpaid in
stalments on shares which were only
part paid to begin with. They also
are liable to the creditors for diVi-
dends paid out of capital rather than
out Of earnings. If a corporation fails
and its creditors can prove that stock
was isued for property or services at
excessive or fictitious values. they can
sometimes hold the stockholders, pro
Vided the latter were the original sub
scribers to the stock.
In New York. Pennsylvania. Indiana,
Tennessee and North and South Da-
kota employees of a company can in
many cases hold stockholders directly
for their wages if the company refuses
to pay. Stockholders in national
banks and in nearly all state banks
are liable to creditors for double the
amount of the face value of their
stock. and in two states. California and
Minnesota. this same rule applies to
certain other classes Of corporations.
Are These Moral Responsibilities?
These are the only important liabil-
tiles, or accountableness, of a legal ma
ture, which accrue to stock owner
ship. Now how about the moral, or
shall we say the social. liability? Are
they ass fully understood.
It is a well-knoWn fact that a new
code Of business ethics is in the max
ing One only haS to follow the many
diSsolutions of trusts. supreme court
decisions on monopoly matters and
debates in Congress to realize this
fact. But as stated by Mr.. Arthur B.
Kuhn in his admirable comparative
study of the law of corporations with
particular reference to the protection
Of creditors and stockholders, the so
called antitrust" problem has alb
sorbed the attention of statesmen and
pubicists, and I might add, that of
business men, to the neglect of the or
ganic functfoning Of the corporation
itself.
Prof John w. Burgess has pointed
out that il the internal affairs of cor
porations are not properly attended to
the few may despoil the many, and
thus weaken the basis of popular gov
eminent if not of all forms of gov
eminent"
This is a strong statement, but it
goes to the very foundations of our
present-day. troubles. - The morals or,
social, obligations of the individual
employer are already admitted. If a
cloIhmg manufacturer does not main
tain sanitary conditions for his labor
ers or does not provide enough fire
exits, he Is fined. His case is plain.
The application of similar principles
to the stakeholder in large company,
that Is. to the more duplicated forms
of property, seems only matter of
time. It is in accordance with the
;ceuntry's growing regard for human
welfare. In the abstract the scnool-
teacher in Vermont who owns ~
shares of United States Steel prefer
red is Just as responsible for the
injury to an immigrant workman in
the Homestead mills as were the two
sweatshop proprietors whose girl en-
pioyes were killed in the Triangle fire.
The relation between the Vermont
school teacher and the SlaVish work
man may possibly be considered the
loosest of conceivable relations.
Stocks and bonds are an intangible
form of property Relatively they
were the invention only of yesterday.
Old obligations long associated with
more primitive forms of property have
not yet adhered to these disguised
Instruments The owner of dog that
bites pedestrians is held liable direct
ly enough. But how about the petty
investor whose mammoth machines
have cripped a workman? There is no
real difference in kind. 1t is only
one or degree.
6ut What Can ! &c?
The desire for profits is being tenn
pered by vague uneasiness and COM
Functions as to the social conditions
underlying these profits. People are
actually writing to such magazines as
the Survey to discover if there is
white list of stocks, to find out which
are the least unfair corporations. Peo-
PIE are asking if stocks which pay
coed dividends represent enterprise,
AID superior patents and processes,
or a minimum of these assets and
maximum of child labor law evasion,
killing speed underpay. and lack Of
accident protection No investment
bankers prusNCCtus pnlightenS one
with resao": to these subjects. ONLY
when corporate greed becomes pub
lie scandal does Wall Street awake
to the fIct, and rarely even then.
or course state lahCr boards in
,estigatc these conditions. hut that is
net tn" rCi2t An enlightCnpd social
CGnSCinDC.n demands that the owners