SOME CORPORATION INIQUITIES.
Is it any wonder that so many complaints are made against corporate bodies, when so much iniquity is perpetrated by them? Only a few years ago the president of a great railway corporation secured a large amount of its stock, which he bought “on margin.” Then he watered it 50 per cent, giving one share of stock for every two held. As he held millions of the old stock, he gave himself—or rather forced the company to give him—millions of the new, which he turned into the market and sold, putting the money into his own pocket, and with that money bought a railway which was a necessity to the corporation! Meantime the new stock is a debt of the corporation, who are obliged to pay interest on it the same as on the original stock. Take another case: “An ocean telegraph company's stock was quoted at 70. A New York trustee with some others quietly bought it up; in fact, the New York trustee offered to buy at 70, and prominently large stockholders ostentatiously reported that they thought best to sell. So the smaller stockholders followed suit and sold. And then one fine morning it was discovered that the large stockholders who had ostensibly sold their stock, with the trustee alluded to, were really a ring for securing the whole control; and it was also discovered that a large surplus had been allowed to accumulate for some years with the knowledge of a very few who were in the ring, and who as soon as they got the stock at 70, declared an enormous dividend, which enabled them to get their stock for a song. In the construction of the elevated railways of this city a Credit Mobilier was organized, the companies paying enormously for the construction of the road in order that a certain ring—and not the stockholders—might make fortunes. And the last step in the same direction has just been taken. A new company, styled the “Manhattan Company,” has taken possession of the New York and Metropolitan Elevated Railroads—the arrangement for such transfer having been confirmed by the stockholders of both companies on Saturday of last week. The Manhattan Company guarantees 10 per cent dividends on the old stock. Each holder of old stock receives in its stead one share in guaranteed stock in the old roads and one share in the Manhattan. The two roads will be run under one management. What does this mean? Why, just this, that the roads could pay greater dividends than 10 per cent, so a ring is formed for running the road on a guarantee dividend of 10 per cent to the stockholders, the excess between what the road really does earn above the per cent—and which must be a princely fortune—being devoted to enrich the members of this “Manhattan” Ring! How much higher in the scale of morality such proceedings are than the doings of the late lamented Tweed Ring, the reader can judge for himself. For ourselves, such proceedings are none the less dishonorable and dishonest that they are set on foot by those wearing the garment of eminent respectability, and even claiming the Christian name. In view of these and other like doings on the part of corporations, it is clear that wholesome legislation is needed to protect the rights of stockholders and prevent the aggrandizement of the favored and rapacious few. In England such proceedings as the watering of stock, the doings of construction mobiliers, and other abuses common to this country are not allowed; why should they be permitted here? We need wholesome legislation which shall make these abuses the crimes in our criminal code that they are in the code of morals. Then the bona-fide stockholder will be protected in his rights, he will not be robbed right and left under forms of law; and if these malpractices are not at once suppressed, those indulging in them will at least become amenable to law, and we may reasonably expect they will receive the just punishment which they so richly deserve.—Christian at Work.