The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-12-31

SCr1ctlonS as legislatures nave 1elC c
as we'll as corporations.
Indiana had no meeting Of Its
General Assembly in 1884. Eleven
other states had regular sessions OF
the legislature. Twenty-six states
have held special sessions, some with
two or three, Illinois and Texas be-
ing in the lead with four. Undoubt-
eddy in these states there has been
legislation specially directed at cor
porations as such. The record is
not yet available.
The chief subject Of legislation in
most of these sessions has been tax
alton. The urgent necessities of
poor relief, the failure in collection
of general property taxes, and the
increasing tendency to broaden the
tax base has brought into view an
infinite variety Of tax experiments
New tax ideas Of all kinds have been
enacted into law. Older forms of
taxes have been extended to apply
to new subjects, and higher rates
have been imposed.
Some Laws Cited
Among the new laws of 1884 are
those creating or modifying taxes
on net income, gross receipts, retail
sales, occupations, liquor sales, brew
ing and diStilling, gasoline, motor
vehicles, moving pictures, tobacco,
chain stores, intangibles and license
excise and privilege taxes of more
kinds than have ever before been
heard of in America. AS corpora
tons, like individuals, engage in al
most every type of business, it fol-
lows that almost any legislative act
touches corporations and natural
persons in much the same way.
Corporations therefore have been
affected at least as much as individ-
uals by the various types of tax leg
islation adopted by the several
states in 1884.
There are two new laws, however,
enacted by Congress which we're in
tended to apply specifically to cor
POA db4OAlOg do OACAAs Dull VI GIlCOC
are of a remedial or beneficial ma
ture, and we're passed with the de-
liberate purpose of aiding in the
rehabilitation of business corpora
tionS. These consist of the 1884
amendment Of the Securities Act
passed in 1888, and the law author
izing reorganization of corporations
that are in financial difficulties.
Amendment of the Securities Act
was for the purpose of removing
some Of the liabilities which the
very severe original provisions i'm
posed on officers and directors of
corporations desiring to sell to the
public new issues OF bonds or other
securities. There was much COM
plant Of the original act. It was
said that no substantial business
Improvement could be expected
until corporations engaged in the
manufacture of So-called durable
goods, or in other industries requir-
ing large amounts of new capital,
could obtain necessary funds by
sale of their securities, and that
directors of such corporations were
deferred by the drastic provisions
Of the act.
Made More Workable
The 1884 amendment removed or
ameliorated a number of the re-
strictions so complained of. The
changes were not as liberal as de-
sired by many, but have made the
act more workable and largely
stilled criticism.
The other Federal statute referred
to is of far reaching Importance
It undoubtedly confers outstanding
benefits on many corporations
which, through no fault of Their
own, have been affected so seri-
ously by the depression that unless
they can obtain some sort of finan-
cial reorganization, they have no
choice but to cease business.
On July 7, 1884, the President
affixed his signature to new law
now commonly known as Section
77B of the bankruptcy law. 1t is
a supplemental section added to
the Federal Bankruptcy ,ct origi-
nally passed in 1898. It's recurSor
was Section n, enacted March 8,
1893, relating to reorganization Of
railroads engaged III interstate
commerce. The 1888 amendment
applied only to railroad corpora
t.Jns. The 1884 amendment, Section
77B, opens the field Of reorganiza-
ton, under the Bankruptcy Act, to
all business corporations.
Section 77B is much too long and
intricate for detailed analysis here
It provides in general that a cor
poration in financial distress, in
stead of going through receivershir
or bankruptcy and being wound up
NAV fie It's petition in a Federal