be on the "ground floor"; and when an individual was tendered admission to this floor, it usually proved to be a temptation he could not resist.

The applications or certificates required by the law as foundations upon which the orders of incorporation were based, as well as the orders themselves, were usually drawn by lawyers, and the differences between these papers, save in those instances in which the papers in one case were copied from another, were many and various. And where it came to the matter of organization preparatory to business, the mode of procedure was hardly alike in any two cases. The fact is that, with a few exceptions, the members of the profession were without experience in such work, and our statutes being so obscure and imperfect in their provisions, it was difficult to determine just how the organization in any particular case should be managed. Indeed, the statutes prescribe no forms for organization, and do not state the steps to be taken to this end.

The sale of lots at first was very active, and prices soared beyond even the most sanguine expectations. Speculation ran wild. After a while prices began to sag, and before a great while sales were difficult at any price. Meanwhile, calls on stock subscriptions continued with unfailing with unfailing regularity, although work on the industrial plants had ceased, and share holders were receiving no profits on their investments in the form of dividends or otherwise. Dissatisfaction followed, the mutterings of a storm brewing in the distance became audible; and then it occurred to the more thoughtful that even the "ground floor," in the event of a collapse, might not be a place of absolute security. Promoters' profits, and the statements contained in the prospectus, and its omissions as well, began to attract attention, as did also the law applicable to these matters. A class of English cases, conspicuous amongst which is Erlanger v. New Sombrero Company, which found its way through all the courts to the House of Lords, was invested with an interest which to the legal profession in Virginia it had never had before. The development of the law of corporations, especially in respect to the subjects mentioned and cognate

matters, was in England quite a number of years in advance of what it was in this country, notwithstanding the singular fact that the incorporated joint stock company, with a limited liability, was introduced into Great Britain in 1856 from the United States, where it had, in the more densely populated and prosperous States, been in successful use for a considerable time. However, the courts in this country had begun to follow the English cases of which Erlanger v. New Sombrero Co. is perhaps the leading one; and for a while there was not a little confusion, coupled with a considerable degree of apprehension.

But it was not long before there was a general collapse of all these enterprises, and the corporations, as such, passed out of existence, save in so far as they were formal parties in winding up proceedings. The general result, as to most of those interested in them, was the loss of much money and the acquirement of some sad, but perhaps profitable experience. And the most of the legal profession knew something more about corporation law in general, and particularly of our statutes relating to this branch of the law, than they did before the advent of the booms.

One chief cause of the utter failure of these enterprises was that there was no sufficient reason for their existence. There was nothing in the condition of the State or of its people which called for their formation. Moreover, from the first they were speculative schemes, and there is no field in this State for schemes of a merely speculative character.

Notwithstanding the general revulsion against corporations consequent upon the failure of these land and improvement companies, business corporations of a non-speculative and otherwise legitimate character are beginning again to attract the attention of the business classes in our State, and interest in the subject, it is submitted, should be encouraged by the lawmaking power within reasonable limits and under proper safeguards and restrictions. Indeed, under present industrial conditions and methods of business, if Virginia would grow in

material wealth, she must quicken her step and endeavor to lessen the distance between herself and some of her more prosperous sister States; to this end imitating their example to a greater or less extent. As soon as corporations for carrying on legitimate business are made worthy of public confidence, they will receive it.

Massachusetts, with a territorial area only one-fifth that of Virginia, but with a population one and a half times as large as that of Virginia, had within her limits at the end of the last calendar year considerably over four thousand business corporations of all kinds, the aggregate capital stock of which, exclusive of savings and co-operative banks, which have no capital stock, was assessed for taxation at a valuation not far from seven hundred millions of dollars.

Both Massachusetts and Virginia were among the original Thirteen, and at the outset each had the same chance for working out its industrial destiny.

The climate of Virginia was decidedly better than that of Massachusetts; its soil, acre for acre, was richer; its harbors and facilities for commerce and manufactures were at least equal to those of her Northern sister; and, indeed, there was scarcely a single gift of nature in respect to which the Old Dominion was at a disadvantage.

True it is, that the descendants of those who landed on Plymouth Rock, like their ancestors, were and are a sturdy, industrious, persevering people—a people who have made and still make the most of their natural resources, and who from the first have made it a rule of life to save at least a portion of their earnings, however small they might be. Still, after due allowance is made for these sterling qualities and habits, and also for the tremendous losses sustained by our own State during the late Civil War, and in consequence of it, we must look to other causes to account for the great increase in the population of Massachusetts and of its wealth. And in the last half or three-fourths of a century it is believed that chief

amongst these causes has been the habit of combining capital and labor by means of joint stock companies, incorporated, and with limited liability, in the conduct of private business enterprises on a larger scale than could otherwise have been done; and in the establishment of savings and co-operative banks as depositaries not only for the preservation of the surplus earnings of the people, but for their accumulations in the shape of interest as well.

On the 31st day of October, 1901, there was on deposit in the savings banks of Massachusetts $560,705,752.64, and the average throughout the year was not much below this amount.

These savings banks, as has already been said, have no capital stock, and their management is inexpensive, only the treasurer and his clerks receiving salaries, and yet the investment of the funds, made by a special committee, chosen for the purpose, are so guarded and restricted by law, that there has been less than one-twenty-fifth of one per cent. lost in any way during the life of these institutions. It has frequently occurred to me that a business corporation whose stock, or a part of it, is divided into small shares, might be a good substitute for a savings bank, in so far as its stock afforded people of small means a safe investment for their surplus earnings. Co-operative banks are really not banks at all, but building and loan associations, and the law governing them is said to be the best law of its kind to be found on the statute books of any State. These associations have been very successful.

For this and other valuable information, I am indebted to Hon. W. D. T. Trefry, commissioner of corporations for the State of Massachusetts.

It may be here stated that, in addition to the commissioner mentioned, there are in Massachusetts a board of railroad commissioners, commissioners of savings banks, trust companies and co-operative banks, gas and electric light commissioners, and an insurance commissioner.

This brief comparison between Virginia and Massachusetts, in considering the subject of private business corporations, has been made because the laws of the latter State providing for

the creation and government of domestic corporations, and for the control and regulation of foreign corporations as to so much of their business as may be carried on within that State, are usually regarded as more stringent than the laws of most of the other States of the Union. And, if I were allowed to express an opinion, it would be that the so-called stringency of these laws is the secret of their successful operation in the way of enabling the corporations to realize satisfactory profits for themselves, and at the same time to promote the public welfare.

The so-called anti-stock watering laws of this State are more or less famous, but an examination of them would seem to show that they are just.

Our recent Constitutional Convention addressed itself, with earnestness, to the consideration of corporations, both public and private, and after exhaustive discussion and the most careful consideration, adopted an article concerning them quite as full and elaborate as can be found in the Constitution of any of the States. This article was framed with great care, and its language is perspicuous and apt. If upon a few points its provisions are not as definite as could be desired, they are perhaps as definite as it seemed practicable for them to be made.

So far as it relates to public service corporations, and especially to transportation and transmission companies, its provisions, whilst under consideration in the convention, developed a decided difference of opinion as to their policy and wisdom, and this difference probably still exists to a greater or less extent. But along the lines upon which the committee in charge of the matter thought these provisions should be drawn, and the sequel seemed to show that a large majority of the convention concurred with the committee as to the correctness of these lines, the work could not perhaps have been better done.

In a synopsis of this article on corporations, given to the newspaper press for the benefit of the public by the chairman of the committee by which it was framed, he, after referring to the State Corporation Commission, which he thinks will probably be one of the most important departments of the entire State government, speaks of it in relation to private corporations as