Page images

minority in such cases; the majority, as well as the directors, should be treated as trustees for the minority, and no freezing out er squeezing out should be permitted. The equity courts can be relied on to enforce legislation for this purpose if the law inaking power will provide it.

A minority of the stockholders should also have the right to compel the winding up of an insolvent or failing corporation, or a corporation which is manifestly unable, from any cause, to acconiplish the object of its creation.

But the outside public, all who come in contact with a corporation in business matters, are also entitled to protection, or rather to the means of protecting themselves; and these means should be provided by the Legislature. When an individual on the outside is about to enter upon dealings with an incorporated association, whose liability is limited to the corporate assets, the individual is entitled to know from a trustworthy and reliable source the amount of those assets and the shape in which they exist, and also what are the existing corporate liabilities. This information can be best supplied by reports made at stated intervals to the State Corporation Commission, or to some bureau under its supervision, and these reports should be published or recorded in such convenient place or places as will give the public free access to them. The reports could be framed in such way as to give all needed information as to assets and liabilities, without entering into such specifications as would give undue publicity to the business relations of the reporting company with other parties. Every national bank is required to make such reports, and so is every insurance company. Justice and fair dealing require that these reports should be made, and, moreover, should be verified by the affidavits of at least a majority of the directors, as well as of the president and treasurer. And false swearing in the verification of the reports, whether intentional or the result of gross neglect, should meet with substantial punishment. It is within the knowledge of every man of any business experience that a number of men acting together will indulge in practices and take risks that no one of them acting alone could be persuaded

[ocr errors]

to do. And this is true of conduct alike in its moral and in its legal aspects. A divided responsibility is at once a temptation and a danger. This idea is embodied in the injunction of the Mosaic law—."Thou shalt not follow a multitude to do evil"an injunction of equal force whether applied to the civil or religious life of a people.

Under the new Constitution, no foreign corporation can hereafter come into this State to do the business of a public service corporation, nor can any foreign corporation engage in private business or exercise any powers or privileges here that cannot be exercised by a domestic corporation of similar character; and every foreign corporation is to be subject to the rules and requirements applicable to domestic corporations when the same can be made applicable to the foreign corporation without discriminating against it. And the new Constitution further provides that the property of foreign corporations within this State shall be liable to attachment, the same as that of non-resident individuals; and there is a still further provision that nothing contained in that instrument shall be construed as restricting the power of the General Assembly to discriminate against foreign corporations whenever and in whatever respect it may deem wise or expedient.

These provisions are just as they should be. They are politic and wise.

The work of corporations in Virginia should, so far as practicable, be done by domestic corporations-by corporations formed under the constitution and laws of the State, and subject to them in all respects. It should be made convenient and easy for every one proposing to deal with a corporation to ascertain its condition; and business contracts with a corporation will be entered into with much less hesitation and with a more assured sense of security if its managing officials are residents of Virginia, or otherwise directly amenable to the laws of the State regulating the management of corporations and imposing penalties for their violation.

It should be the legislative policy of the State to encourage the formation of domestic corporations under general laws,


placing all the corporations of the same class upon a footing of exact equality. And the method of obtaining a charter or certificate of incorporation should be simple and inexpensive.

To impose a heavy tax on the charter or certificate of incorporation at the time it is obtained, is a mistake.

A judge of the Court of Appeals of the State of New York, in a thoughtful address on the Evolution of the Corporation, made not long since, refers to the legislative policy of his State on this subject, and says that some years ago a very high incorporation tax was required, the result of which was to drive citizens of that State into neighboring States to obtain charters, under which the corporate business was transacted in New York just as if the charter had been obtained there. Thus the State in which the corporate business was done deprived itself of a very valuable source of taxation, and had to increase the taxes on land and other subjects to obtain the requisite revenue. The speaker continuing, said: “Still more recent and more liberal legislation upon the subject has created an increase of revenue, which will render the absolute wiping out of a general State tax a possibility of the near future. In other words, a large tax has driven corporations from the State and reduced our revenue, while a small or liberal tax has kept our corporations at home, thus reducing the general tax burden."

The plan outlined in our new Constitution for the taxation of corporate privileges and franchises upon the taking out of the charter or certificate and afterwards, appears to be both reasonable and wise.

But time does not suffice for further suggestions.

Perhaps I have already abused the privilege incident to my position on this occasion in trespassing so largely on your patience, but if consolation be needed, it may be found in the fact that you will be exempt from a repetition of this infliction on my part in the future. I will not have you at this disadvantage again.

Now, it is open to any of you to say that this address, if such it may be called, might as well have been made to an association of business men as to an association of lawyers. Admitting the correctness of this observation, I might reply that in being made to this Association it has been made not only to lawyers, but to business men, or to men acquainted with business affairs and methods, as well. Every cultivated man is, or should be, more than his business; and such is usually found to be the case. Not only are lawyers, by the requirements of their profession, interested in the various departments of business in the communities in which they live, but they are also citizens of the State, and usually public spirited and patriotic citizens. What class in our beloved old State has striven more faithfully to meet all the requirements of citizenship, and to maintain and advance the public weal than the lawyers ? Virginia, although comparatively poor, wears a crown of glory-a crown without a single stain. Henry Clay (a native born son of the Old Dominion), in one of his memorable speeches exclaimed: "A nation's glory is the sum of its splendid deeds”; and, judged by this standard, Virginia's glory is great and has been well earned. Her annals from Colonial times to the present day are full of splendid deeds, illustrated by the services and achievements of her many noble sons, amongst them being not only one. but a number, as to each of whom it may be said that his is


One of the few, the immortal names,
That were not born to die.

And amongst these noble sons, what a great proportion were lawyers. I shall not undertake to call their names; many of them are household words.

In no emergency or crisis in politics or war in which our proud old Commonwealth has been called on to take action has she ever proved unequal to the occasion. And, as a class, the lawyers have been always conspicuous in upholding her hands and in maintaining her honor and renown.

And now—in the work of recasting her legislation so as to adjust it to the new Constitution, which we would fain hope is to inaugurate a new era of prosperity for our State, and especially in the work of providing more reliable and efficient agencies and instrumentalities for the development of the material interests of the State and for enabling her to make the most out of present industrial conditions and commercial methods—are the lawyers to be laggards ? On the contrary, judging the future by the past, may they not be relied on to lead the new departure, both in the halls of legislation and outside of them ? In order for us to lead the State into the highways of prosperity, modern industrial methods must be provided by law and must be put into active operation. Let our motto be: All for Virginia.

The Hebrew psalmist, in contemplating Jerusalem, the centre alike of the political and religious life of his people, gave utterance to the overflowing fullness of his heart when he cried out:

“If I forget thee, O Jerusalem, let my right hand forget her cunning. If I do not remember thee, let my tongue cleave to the roof of my

mouth; if I prefer not Jerusalem above my chief joy.”

I am sure there is no son of our dear old mother Virginia here present who cannot apply these words to her with all the loving admiration and patriotic fervor which animated the psalmist when he spoke them of Jerusalem.

« PreviousContinue »