The Richmond Virginian. (Richmond, Va.) 1910-1920, 1916-08-27

tain within their own borders the L.
gal domicile of the companies to
which they We're lcgitimately entitled
| Even the great State of New York
finding itself unable longer to with
stand the cut-throat competition or It's
enterprising neighbor States. was n
nally forced to throw conservatism to
the winds and went its sister States
one better" 1t placed It's merchan-
disc on the bargain counter by offering
to issue unlimited shares of stock
without par value and free from oil
personal liability. without regard to
the actual values behind the shares,
as the result of which 1t has occurred
very large customers whose patron
age" was supposed to be firmly held
by Its New Jersey neighbor. What
New Jersey will now do in the way
of charter offering or in the line of
favorable judicial decisions or in re-
ducing or renting Its Incorporation
or annual franchine dues remains to
be seen. That 1t will do something
to retain or increase its threatened
trade" Is q foregone conclusion.
Whilst this auctioning OF the dig
nifty of the States Is thus merrily pro-
ceeding 1t Is likely that the courts of
the States which have thus barte FED
away their birthright and in which
the revenues from this source have be-
come valuable will incur the hostility
of the corporations whose patronage
they secured at such sacrifice, by de-
cisions that will unduly protect credi-
tors and stockholders? Or Will they.
wherever possible, so construe the laws
as to attract to themselves corpora
tons whose legitimate ZONES are
elsewhere. by Illicit methods of which
the average honest business man
would scorn TO avail himself?
And so We find ourselves IN the In
tolerable. humiliatins situation in
which our States, whic1 should have
uniform law. are bidding against
one another in laxity of administration
on subJec: where public protection
is essential and mono is 20 be had I'M
der existing conditions. The States
that are Fronting ty this trafiic will
not surrender it, so that uniform laws
by concerted action Is out OF the ques-
ton. We are deliberately playing in
TO the hands OF dishonest exploiters
by adhering TO the prese l. system
Tho remedy is obvious.
SHOULD ENACT \ NtTiOTAL
CORPORATION LAW
I. Enact national corporation
law. President Taft recommended
such a law under the advice OF his
encouragement. have been con-
tending for such law for the past
ten years and have never doubted its
constitutionality. Most OF the import
ant corporations. except banks and
local utilities could be reached by It..
as being engaged in foreign or inter
state commerce as now understood
To those who are still so welded to
the academic idea of States rights
that they are content that the country
shall continue to suffer from this In
tolerable condition that strikes at the
very foundation OF business integrity
we might If necessary offer by way OF
compromise a system by which the
state may continue to issue charters
subject to the restriction that cor
porations engaged in interstate COM
merce be required to secure a license
from the Federal government to con-
duct interstate business. In this way
Congress might prescribe such uni
form conditions as to the form of
charter and the protection OF security
holders as would secure civilized cor
porate administration. Whether the
result be accomplished by direct ma
tonal Incorporation or through the
indirect method OF Federal license
and control Is immaterial as compar-
va "ANA IAAS iHCSttlIld plS AuFAHL6EeS o..
either method over the prevailing
lawless situation which constitutes a
reproach to our institutions Sub
stantial progress might also be made
through the agency Of the stock ex-
changes by placing them under the
supervision OF the Federal govern
ment as is now the law in every Euro
pean country.
The New York Stock Exchange is
the great security market OF the
world. Its far-reaching power over
the business and finances OF the ooun
try is not understood 1t is essential
~ public agency international in Its
scope. It's quotations OF the prices
at which securities are supposed to
be bought and sold day by day nre
scattered broadcast all over the world.
These quotations are accepted by
courts of justice in all matters of It'll
cation, by the Federal and State bank.
ing ofhcfals in determining the SOL
Vency and standing OF banks, trust
companies, insurance companies and
other corporate bodies, by our nation
al and state authorities for the many
purposes OF taxation. by trustees OF
estates and in short IN all the COM
pick affairs affecting the values Of
properties whose securities are listed
va si4S "a. mango ret, strange TO say.
such Is the power OF the exc, ange
over legislation. that II has managed
10 circumvent all efforts at supervt
sion and TO remain an unincorporated,
irresponsible self-governing body
which has maintained the status be-
fore the law of private club with
which the public Is supposed to have
no concern. Its members NAV With
impunity manipulate securitie. on It's
list, depress and initiate values ty f,c-
titlous transactions and use It's vast
and powerful machinery to detraud