abuse, without providing reasonable protection against, and adequate remedy for, such abuse. The writer believes that the corporation is the most efficient business machine yet invented; and its very efficiency makes it, in the hands of the honorable, most beneficent; but in the hands of those otherwise disposed, most oppressive. The vast majority of business men are honorable, and need but little, if any, restraint beyond their own consciences; there are, however, many others who are bent upon securing and exercising undue advantage over their fellows; the former, not needing restraint, will not, or should not, feel hampered by such restraints as are made necessary by the latter; while the law cannot make men better, it may make it more difficult for them to injure their neighbor,-and this is the standpoint from which many provisions herein should be judged. Many of the provisions are designed to meet the evils that the investigations of the Industrial Commission, the Interstate Commerce Commission, and the Commissioner of Labor have found to exist,-over-capitalization, unjust discriminations, predatory competition, oppressive combinations, unjust, unsafe, and unsanitary conditions of labor, and insufficient publicity either for safe investment or proper legislation. Nearly every section has been prepared only after a careful and long-continued consideration of the provisions of the English Companies' Acts, the national banking law, the new Massachusetts law, the law proposed (but not adopted) for New York in 1900, the New Jersey law, and the new Virginia law of last year. These have been worked over in order to make a consistent whole and such additions and modifications made as seemed necessary to meet the conditions believed to exist. Inasmuch as there is no common law of the United States,1 it seems necessary that a national corporation law should be in the nature of a code of corporation law, and calls for many provisions which would not otherwise be required.

So far as the writer is aware, with the exceptions of the single section proposed by Mr. Stimson to the Industrial Commission,2

1 W. U. Tel, Co. v. Call Pub. Co., 181 U. S. 92; Peters v. U. S., 94 Fed. R. 127; Murray v. C. & N. W. R. Co., 62 Fed. R. 24.

* "Any state corporation engaged in interstate commerce, or any number of citizens of the United States desirous of forming a corporation for the purpose of engaging in interstate commerce either by the transportation of persons or property, or by other traffic or commerce among the states, may be organized as a Federal Corporation under this act, and as such may sue or be impleaded in the Federal courts, and such Corporation shall not be subject to taxation under the laws of any state except as to property actually situated within such state."-19 Indus. Com. Report, p. 695.

the five points proposed by Mr. W. S. Logan,1 and the eight requirements insisted on by Mr. James B. Dill,2 only one other draft of a national incorporation law has been published,-that of Hon. H. W. Palmer, of Pennsylvania, introduced by him in the House of Representatives, November 9, 1903, (58th Congress H. R. 66). Most of the following provisions had been worked out before a copy of that bill was seen by the writer. It has (with some proposed amendments) been approved by the National Board of Trade, and referred to the Judiciary Committee. It is commend

able for its brevity; it follows Mr. Stimson's advice not to undertake to define interstate commerce, nor to compel incorporation under it; it leaves most of the legal problems to be worked out by the courts of a government having no common law; it makes excellent provisions for securing the payment of stock, but does not otherwise seem to be designed to meet any of the other difficulties pointed out by the public commissions that have so long considered these matters; it is as liberal in permitting the promoters to mould, and the directors to manage, the corporate body to suit themselves, without any liability or report, as the most liberal corporation law of any state; it contains the objectionable (but popular with corporation promoters) feature of the New Jersey law allowing the incorporators to create and confer upon themselves any corporate power they choose "not contrary to this Act, and the Constitution

1 Mr. Logan's propositions suggested: (1) That a bureau of incorporations be established under the control of the Attorney-General; (2) That corporations be allowed to form under articles of incorporation stating the things usually required; (3) "That no corporation shall engage in commerce between any one state and any other state unless it shall be incorporated under this act or shall have accepted the provisions of it." (4) Corporations tending to create monopolies should not be allowed to engage in interstate commerce; and (5) The U. S. Circuit Courts have jurisdiction to enjoin violations or entertain suits for damages.-37 Am. Law Review,-March-Apr. 1903, p. 237, 247.

2 Mr. Dill's propositions may be summarized as follows: (1) Optional to organize under such act; (2) The name "National" should be forbidden to any corporation not organized under such law; (3) Protection from state attachment laws, etc; (4) Assurance of privileges and immunities guaranteed to natural persons by the constitution, and discrimination by state laws forbidden; (5) Freedom from state supervision, subject to state taxation only on property in the state, as an individual. (6) National supervision, examination, and private publicity; (7) Annual report to Federal authorities showing taxing situs, collated by Federal authority and furnished to state officers to insure just taxation; (8) Taxation on property locally where situated. Stock in hands of stockholders exempt from taxation,-Address, Harvard Univ., March 10, 1902, p. 27-8.

arm.

of the United States," a provision broad enough if the words are given their usual meaning to enable such a corporation wholly to ignore any state laws, and with the power conferred to acquire and vote the stock of any other corporation whatever, (Sec. 26), to form any combination that the Anti-trust act was designed to prevent; no reference is made to the Interstate Commerce law, the Department of Commerce and Labor law, nor the Anti-trust act, indicating whether they would apply or not. In short the purpose of the act is apparently to induce incorporation under it, by making it nearly as liberal as the New Jersey law, and yet supported by the national The writer does not believe in the national government bidding this high to encourage and perpetuate, clothed with national power, the precise kind and quality of institution that already afflicts us. Many of the provisions of the following proposed act perhaps will not meet with general approval: as the prohibition on certain corporations not formed under this act to engage in national commerce;1 the deliberation required in forming a corporation,association, organization meeting, articles of organization,* certificate of incorporation,5 certificate to commence business; the prospectus;7 issue and payment of stock; increasing incorporation and franchise 10 fees as the capital stock and franchise increase; power to engage in manufacturing, etc.;11 forbidding the acquisition of shares in other corporations, 12 or allowing its shares to be so acquired;18 consolidation; 14 application of the interstate Commerce, 15 Department of Commerce, 16 and the Anti-trust 17 laws; rebates;18 predatory competition;19 employers' liability; 20 compulsory arbitration, under certain conditions;21 safety of laborers; 22 purchase by the government; 23 annual reports, etc.24 It is not designed to make an argument in favor of any of these; but as to the first, (prohibiting

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1 The provision reads: "Sec. 4. That certificate of incorporation may also contain any provisions which the incorporators may choose to insert for the regulation of the business and for the conduct of the corporation, and any provisions creating, defining, limiting, and regulating the powers of the corporation, the directors and the stockholder, or any classes of the stockholders: Provided, That such provisions are not contrary to this Act or to the Constitution of the United States."

certain companies) the writer believes that so long as honorable men can and do conduct an honorable business in an honorable way under the New Jersey law, or a similar one; and the dishonorable can do, and do, otherwise, and as these make up all, there is very little likelihood that either will organize under a national law less liberal than the New Jersey law, unless some pressure is brought to bear; such was the experience with the national banking act; since this proposed law is not designed to outbid the "liberal" states for corporate patronage, but to remedy existing abuses, it undertakes to make provision for the necessary pressure to be applied, as was done in the national banking law, to accomplish the purpose. The writer, however, believes there is no provision that need or will obstruct or unduly hamper honorable and legitimate enterprise, but would rather strengthen, build up, restore confidence in, and induce investment in the same by the people generally, when the fungous growths are amputated or prevented. No one realizes more fully than the writer, the difficulty of putting in words suitable provisions adequately to meet existing conditions and tendencies, without overlooking much, or overdoing much. From the nature of the topic, and the extent of the interests involved, if for no other reason, almost any proposed law should receive full, fair, and just consideration, criticism and discussion. And in the multitude of counselors wisdom will be found.

An Act to Regulate National Commerce, to Prohibit Certain Companies from Engaging therein, and to Provide for the Formation and Regulation of Corporations to Engage therein.

§ 1. Be it Enacted by the Senate and House of Representatives of the United States of America in Congress assembled, as follows:This Act shall consist of thirteen parts as follows:

I. Preliminary. II. Certain Companies forbidden to engage in National Commerce. III. Constitution of Corporations to engage in National Commerce. IV. Formation of such Corporations. V. Powers of such Corporations. VI. Management of such Corporations. VII. Duties and liabilities of such Corporations. VIII. Control and supervision of such Corporations. IX. Rights and liabilities of members. X. Rights and liabilities of officers. XI. Rights of creditors. XII. Penalties. XIII. Dissolution and winding up.

I. PRELIMINARY.

§ 2. Short Title. This Act may be cited as the National Corporation Law.

§ 3. Commencement. This Act shall come into operation on the first day of January, 1907.

§ 4. Definitions. (1.) "National Commerce," shall consist of commerce with foreign nations and among the several states, and without excluding other things, shall include the transit or transportation of persons or things from any place in one state to any place within another state, by any method now or hereafter used or devised; the transmission of intelligence from any place or person, within any state to a place or person within any other state, by any method now or hereafter used or devised, except through the United States mails; the buying of any personal property or commodity of any kind whatever by any person in any state, from any person in the same or in any other state, or the selling of the same by the latter to the former, or the exchange of such property if the property or commodity bought, sold or exchanged, is to be delivered in, or transported or taken into, any state other than the one in which it is located, owned, or used at the time of purchase, sale, or exchange.

(2.) "State" shall include the United States, or any state of the United States, or any of the territories, colonies, or possessions thereof, or any foreign country state, territory, colony, or possession, unless the context otherwise indicates.

(3.) "United States," unless the context otherwise indicates, shall include all the territory now or hereafter belonging to, or held by, or subject to the jurisdiction of the United States.

(4.) "Company" shall include any form of partnership, association, partnership association, joint-stock company, limited partnership, corporation, trust, combination, or any other form of association whatever, now or hereafter known, used, or devised, composed of seven or more persons, or having a capital stock of one million dollars or over, with transferable shares, or having or controlling that amount of property, engaged in, carrying on, or controlling national commerce or any part thereof, whether such company is a transportation company, a transmission company, or a trading company, except a state or public corporation.

(5.) “Transportation company" shall include any such company, or any trustee, receiver, or representative thereof, owning,