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number not yet subjected to judicial scrutiny, that are, in the opinion of Constitutional lawyers, open to the criticism of being very near to, if not actually over the line into the field of special or class legislation. Certain it is, that there are quite a number tainted with the virus of paternalism. Inside and outside our State, public opinion has been so aroused by disclosures made in the investigation of public and private corporation officials, that wholesale prosecutions have been and are now being waged against those alleged to be guilty.
United States Senators have been prosecuted and convicted for criminal violations of the trusts reposed in them. Prominent railroads and railroad officials, and officers of other large corporations have been prosecuted and heavily fined in various courts of the country for persistent and flagrant violations of criminal statutes. Everywhere, as investigation has proceeded, public and private corporation officials have, in the public mind, been “Condemned to have an itching
So strong became the feeling in the public mind against the open and persistent disregard of the laws of the land and the people's rights, that the President of the United States, seeming to forget the lines between the three co-ordinate branches of government, seized his “Big Stick" and marched into the halls of Congress to urge the adoption of laws to meet the public demand. Current report has it, that the "Big Stick" used by the President in this instance was not made of wood from any tree known in the study of forestry, but was a conglomerate, made of Public opinion, party necessity, political patronage and executive displeasure; and so vigorously did he wield it, that Congress before its adjournment, placed before him for his signature bills regulating railroad rates, beef inspection, and pure food. These bills have been so recently before the public, by full discussion in Congress and the newspapers, that nothing can be added of interest until we have had actual experience under them. I
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presume it can be said that no legislation has been enacted in years, that has created such wide discussion, or has been of such great and general importance to the whole people.
Our own legislature in 1905 passed several acts relating to corporations: three of them are important.
One is an amendment to Sections 2 and 4 of the General Incorporation Act of 1872, another is the revision of the act relating to Foreign Corporations seeking to do business in this State, and a third exempts the capital stock of certain corporations from taxation.
Section 2 as amended in the General Incorporation Act empowers the Secretary of State to inquire into the true purpose of the proposed corporation, and also provides a means of breaking up the practices of these concerns that have carried on the business of issuing diplomas and certificates of qualifications, based not on mental equipment or ability, but for a financial consideration only. The main feature of the amendment to Section 4 is that any property taken in payment of stock shall be appraised by the Commissioners, and that one-half of the capital stock shall be actually paid in.
Just how beneficial either of these amendments will prove to be, is uncertain, but they are steps in the right direction, and if their provisions are enforced according to their true intent and purpose, the public will be protected against many frauds, and corporations themselves will have better standing and credit.
The revision of the act relating to the admission of foreign corporations to do business in this State, is of very considerable importance just at this time, when there are so many questions before the public touching the status, rights and reg. ulation of corporations engaged in interstate trade.
The statute is loosely drawn and bears evidences of
patch work, due possibly to compromise necessarily made to effect its passage.
The important features of the statute are; that it requires foreign corporations, not excluded from the operation of the act, to comply with its provisions before they can do business in the state at all: that it gives the Secretary of State broad powers to inquire into the object and purposes of the intended corporation in this State; that it compels compliance with the act by heavy penalties and by closing the Courts of the State to those corporations that fail to comply with the provisions of the act.
The amendments to the general act, and also the provisions of the Foreign corporation act, tend to correct that which has always been a glaring fault and weakness in the corporation laws of this State, namely: authority to issue a charter to a corporation with an expressed capital stock of certain magnitude, without requiring anything to be actually paid into its treasury.
The granting of charters giving the maximum of privileges with a minimum of risk to the incorporators, no good purpose, but opens the way for reckless speculators, and men seeking corporate existence as a cloak for hazardous and fraudulent undertakings, to exploit illegitimate schemes, that must ultimately bring corporations generally into disrepute and public disfavor.
EXEMPTION OF CAPITAL STOCKS.
Section one of the Revenue Law is so amended by the laws of 1905, as to exempt from taxation the capital stock of companies and associations organized for purely manufacturing and mercantile purposes or for either of such purposes for the mining and sale of coal, or for printing and publishing newspapers or for improving or breeding of stock.
And Sections 3, 32 & 108 are so amended as to make consistent, the exclusion from assessment of the capital stock
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of such companies and associations, throughout the Revenue Act.
These amendments have been made the subject of attack on constitutional grounds in an action in the Circuit Court of Peoria County against the assessor and the treasurer to compel the assessment of the capital stock of such exempted corporations. A hearing has not yet been had on the demurrer to the petition.
EMPLOYEES PENSION FUND.
The last legislature passed two acts providing for employees pension funds, applicable at the present time to the City of Chicago only.
The first relates to a pension fund for those employees of the Water Works department who earn over $65.00 per month. The establishment of the fund is made compulsory on the Board of Aldermen and contribution to the fund, as I read it, is also compulsory. The administration of the fund is to be placed in the hands of a Board of Trustees, which board has the power, subject to certain limitations, to fix the amount each employe shall contrbute to the fund. I do not know whether there are employees in the service of the Water Works department who receive less than $65.00 per month, but if there are such, it would seem that they, being necessarily less able to put themselves beyond the possibility of want in later life, might very properly have been included in the terms of the act, no matter whether we look upon the act as co
conferring a privilege or a burden upon those made subject to it.
There is another act providing for a pension fund for certain Public Library employees. This fund likewise to be administered by a Board of Trustees, under conditions, most of which are identical with those prescribed under the Water Works Pension Fund act. But the provisions of this act are in some respects radically different from the Water Works employees act. For instance, it applies to all employees who
receive a stipulated yearly salary. But it is not compulsory as to those who shall go into it, nor are any required to remain contributors longer than they desire.
I confess my inability to see very clearly the virtue in an employees' pension fund where the employees must establish and support the fund themselves; but if there is a demand for such legislation why not make a general act applicable to all municipal employees alike except in cases where a fund is furnished from outside sources (as in the Firemen's Fund Act), and not encumber an already too voluminous statute book with a separate act for each branch of the service.
INVESTMENTS OF TRUSTEES AND GUARDIANS FUNDS.
On the first page of the volume containing the laws of 1905, is an act concerning investments of funds in the hands of trustees, where the method of investment is not specified in the instrument of their appointment. A second act relates to investments of moneys by guardians. Under the first act, investments may be made in U. S. or State bonds. First mortgages on real estate in any State, county, city and municipal bonds in any State. First mortgage bonds of any corporation of any State upon
which no default has been made in the payment of interest for five years. After opening this very liberal line of investments to trustees, the act with a show of caution adds, “But no trustee shall be authorized by this act to invest trust funds in any bonds in which cautious and intelligent persons do not invest their own money." Under the guardians act, investments may be made in securities approved by the Court, or on approval of the Court, in U. S. bonds, or in bonds of any county or city not issued in aid of railroads, and where the laws do not permit the counties and cities to become indebted in excess of five per cent. of the assessed valuation for taxation, and where the total indebtedness of such county or city does not exceed five per cent. of the assessed valuation for taxation at time of such investment. Trustees and guardians hold the