ADDRESS

OF

R. G. H. KEAN,

President of the Association.

Gentlemen of the Virginia State Bar Association :

I proceed at once to discharge my present duty under the eleventh article of our Constitution.

The work of such an association was admirably outlined in the circular, issued two years ago, which led to the formation of this body, as follows:

1. In promoting the dignity and usefulness of the Bar by elevating the standard of legal requirement and legal ethics.

2. In maintaining the honor of the profession by purging it of unworthy members.

3. In guarding the avenues to the profession by requiring higher and better qualification before admission to practice.

4. In laboring to secure for the Bench the best professional talent in the State by providing better compensation, or otherwise.

5. In watching and influencing legislation, and preventing the enactment of ill-considered laws.

6. In combining the voice and influence of the Bar in favor of these objects, or any other looking to its advantage, and the good of the State.

To this summary may be added, the promotion, by personal intercourse, contact and association, of mutual regard and confidence, and of that liberality of mind which such intercourse tends to produce.

In all of these objects, except two, the aid or co-operation of the State Legislature was, and is, needful; to several of them essential. I have observed during the past winter with equal mortification and disappointment, that of the various matters brought to the attention of our Legislature, in pursuance of the resolutions of this body at its last

annual meeting, but one (the charter of the Association) received approval, and most of them failed to meet with even decently respectful consideration. The fate of several of the matters specially directed by the Association to be presented to the General Assembly will be presented in the reports of your standing committees.

Why the Legislature of the State should be unwilling even to consider subjects of public concern merely because they are submitted by a body of citizens of good character, excellent intelligence, and fair knowledge of affairs, who, being lawyers, may be presumed to be moderately well versed in the subjects which concern the administration of the law and its bearings on society, is a question worth considering. It is a painful fact that the Legislature seems not only not in sympathy with us, but almost hostile; and that some of the most scornful flings come from members of the Bar. This experience, I learn, is not pecuculiar to us in Virginia. An eminent gentleman of the profession in an adjoining State, a member of their Court of Appeals,* (who, alas, while this address was only partly written, received the summons, which none can gainsay or resist, to come up higher), who was warmly interested in their State Bar Association, informed me a year ago that the result of six or seven years of experience had demonstrated that the Bar Association of his State, contrary to expectations previously entertained, has had no perceptible influence on the course of legislation; that the members of the Legislature, so far from lending a ready ear to the recommendations of that body, have shown a distinct indisposition to entertain them favorably.

This, I repeat, is discouraging. The causes are obscure. Yet the history of society shows that abuses are always conservative; that reformers have rarely had the ear of the public, or of the law-making body, at first; that all reforms, in short, have been the fruit of constant, persistent, and laborious pertinacity, amounting to propagandism.

It may be that we may prove less immediately useful to the general public than we hoped to be. Not the less, however, let us continue to lift up our voices in pointing out abuses, in demanding reforms, in declaring sound principles. Every member who goes from one of our meetings with his interest and attention aroused and stimulated, and his mind convinced, will be a new centre of enlightenment in society. And after a time, though it be many days hence, some fruit will grow from the seed we plant.

*Hon. William C. Folkes, of the Supreme Court of Tennessee.

In this faith I have chosen for the special topic on which to submit some reflections,

THE TENDENCY TO ABUSE OF CORPORATE FRANCHISES.

The employment of corporations in recent years has developed into vast importance. In the social struggle of the present, the most marked feature is the tendency to combination, as contrasted with individualism. This fendency finds expression in multiform ways, of which Trade Unions, Labor Unions, Trusts, Common Schools, the Single-Tax Movement, Consolidations, Corporations, and Mr. Bellamy's hobby, Nationalization, are all examples. Year by year, almost day by day, in the rush of events, the bustle and struggle of the world, the individual man counts for less and less-combinations in some form or other, for more and more.

What the ultimate effect of this may be on human society is no mean problem. It is one which belongs less to our profession than to the professors of the science of sociology. It seems probable that one effect is, or will be, to dwarf, more or less, the man; to depress his spontaneity and independence; gradually to mould the units of society into a shape taken from a common pattern. The work of the world is falling into machine work. This remark is especially true of the common school system. I am not an enemy of public free schools, in the abstract, or in the concrete, if it be possible to have a system which can be worked upon philosophical principles of pedagogy. So far as my observation of them goes, as they exist here in Virginia, and I believe elsewhere, their work is nearly all on the machine pattern, the outcome of which is, at least in tendency, to produce a nation of mediocrities of a low grade.

Corporations form a conspicuous expression of this tendency to combination. Ancient as the text-writers show us that they are, it is only as a part of the recent movement of the human mind that their numbers, their scope, their magnitude, and their diversity, and the amazing ingenuity and ability with which they are misused, have grown into proportions so vast as to render them a social factor of immense importance, and no little danger. This, in part, was clearly and strongly pointed out by Mr. Justice Miller, of the Supreme Court of the United States, twenty years ago, in delivering the opinion of the Court in the case of the Liverpool and London Life and Fire Insurance Company v. The State of Massachusetts (a foreign corporation against a State), 10 Wallace, 566. He says:

"The subjects of the powers, duties, rights, and liabilities of corporations, their essential nature and character, and their relation to the business transactions of the community, have undergone a change in this country within the last half century, the importance of which can hardly be over-estimated.

"They have entered so extensively into the business of the country, the most important part of which is carried on by them, as banking companies, railroad companies, express companies, telegraph companies, insurance companies, &c., and the demand for the use of corporate powers, in combining the capital and energy required to conduct these large operations is so imperative, that both by statute and by the tendency of the courts to meet the requirements of these public necessities, the law of corporations has been so modified, liberalized, and enlarged as to constitute a branch of jurisprudence, with a code of its own, due mainly to very recent times."

The learned Justice had in his mind's eye only the legitimate uses of corporate powers, as theoretically subject to the visitation of the courts.. He failed to express, if indeed he realized, how far the intellectual forces at the command of the corporations had outstripped those of the law-makers and the judges.

By the constitution of the State Bar Association of Alabama, it is made the duty of the President in his annual address to call attention to the noteworthy changes made in the law during the next preceding year by the Legislatures of the several States and by Congress. In performing this duty for the year 1887, the President, under the head of " Virginia," remarks that the acts and resolutions fill a volume of 538 pages: "Leaving out a few acts for the protection of oysters, terrapins and crabs, nineteen-twentieths of the remainder are local and private.” Most of them are private charters. The only act of a general nature found worthy of mention was one having reference to corporations, viz., allowing receivers of a corporation to be sued without leave of the appointing court. (Chapter 176).

The Acts for 1887-'88 contain 582 pages and 500 chapters. Of these 500 chapters, 194 are either charters of private corporations, or amendments of such charters previously granted, or were passed with other direct reference to such subjects. The Acts of the last session, in a volume larger than the code, contain 889 chapters, of which 645 are private and local, many of them charters. The legislation of this State for many years has been of the same average character.

When it is remembered how freely the powers given under Section 1145 of the present code, to the Circuit and Corporation Courts, to grant charters for any purpose of business, except to conduct a bank

of circulation, or to construct a turnpike, canal or railroad beyond the limits of one county, have been used of recent years, the enormous extent to which private corporations are absorbing the business of society is apparent.

The practical utility of corporations, properly used and adequately guarded, no intelligent person can doubt. Small sums of capital, combined into the capital of a bank, become available for all the purposes of a well managed institution of that class, when in the hands of the subscribers they would remain practically unavailable for commercial purposes. In like manner the minute savings of many are aggregated in the stock of industrial enterprises, which would be far beyond the ability of any one or several of the subscribers, and thus the productive wealth of society is increased, employment provided for labor, and weekly pay rolls, by numerous little rills, irrigate the regions of the smaller traders.

Many enterprises of high, but as yet of untried promise, are set on foot by reason of the willingness of men to risk a comparatively small sum in the venture, when no one, or no few, of the subscribers would be, or ought in prudence to be, willing to risk their estates. Thus the limited liability of the stockholders acts as a prodigious stimulus to enterprise. They also afford opportunity to avail of intelligence, business sagacity, skill, inventive powers, which, but for the field thus afforded, would remain permanently separated from the financial facilities which alone can give them scope for employment.

But this fair picture is not without a reverse.

1. The facility with which charters are obtained has produced, or at least encouraged, a spirit of gambling speculation in stocks and "wildcat" enterprises, set on foot for the purpose mainly of providing the material for such operations. For purposes of this sort the manufacture of what, in the slang of the day are called "booms," is systematically followed. In these remarks it will of course be understood that I have no reference to cases in which real industrial enterprises of a permanent character are actually set on foot; those being cases of the legitimate use of corporate franchises for the purpose of real and permanent development, founded upon actual industries called into being or judiciously and powerfully promoted.

2. The enormous accumulation of wealth, patronage and power in the hands of some of the great corporations leads to formidable abuses, some of which have become full-blown, while others are as yet