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The annual address by the Honorable George Turner of Spokane whose subject was "The Acquisition of the Pacific Northwest" gave evidence of great research and was a revelation to many; the address was both eloquent and instructive and should be read by all who are interested in the history of our country. It is printed in full in the report of the proceedings of the Association and will be found at page 420 of the report.
The address delivered by Hon. Cornelius H. Hanford, of Seattle, whose subject was "National Progress and the Increasing Responsibility of our National Judiciary" was a notable contribution, upon the relation of the Courts to modern, commercial and industrial life.
This address will be found at page 439 of the published report. Other addresses relating to specific branches of Jurisprudence were delivered by others but we do not deem it necessary to refer to them further in this report.
The "Canon of Ethics" adopted by the Association is worthy of more than passing notice. It was received by the press of the country with universal commendation, and should be read and thoroughly digested by every lawyer. A strict observance of the standards which this code enjoins upon the members of the Bar cannot fail to inspire confidence in, and reflect credit upon, the Profession.
The next meeting of the Association will be held at Detroit, Mich., August 24th to 27th, inclusive, of the present year.
A. W. O'HARRA,
THE PRESIDENT: The Association, I know, is pleased with the report and it is thank fully received.
The next matter is the report of the special committee to prepare and present to the legislature a bill for a new incorporation law, by Millard R. Powers. I may parenthetically state that never did a committee work harder, never with more seeming certainty of success than did that committee under the leadership of Millard R. Powers, and the result he will tell you. To the President Illinois State Bar Association:
The Special Committee appointed by you to draft a bill for a new incorporation law and to endeavor to secure its passage by the General Assembly, pursuant to a resolution adopted at the last annual meeting of the Association, makes the following report:
The draft was prepared, submitted to the General Assembly and
passed by both branches by practically unanimous votes. report.
Such is our
The Executive Committee having requested a "full report" as to how this was accomplished, we add the following information with reference to the preparation and passage of the bill. After a careful examination of the corporation statutes of this state and the court decisions construing their provisions, as well as reviewing similar laws of a considerable number of the other states, the Chairman of your Committee prepared a preliminary draft of the proposed law and distributed copies to the other members. Meetings of the Committee were held at which each section was carefully considered, altered or re-written, as the Committee determined. This conference work occupied considerable time.
After the final draft was completed, it was placed in charge of Senator Charles L. Billings for introduction in the Senate, where it was referred to the "Committee on Corporations and Public Utilities," and there it reposed for some time. After the bill was printed, Senator Billings sent a number of copies to the Chairman of your Special Committee with the statement that active work "by some one" must be done or the bill would not be acted on. The copies were circulated among the officers of the Illinois Manufacturers' Association and others, and conferences held with them with a view to securing their support for the bill. The attorneys of that association suggested amendments, which were accepted; Senator Billings succeeded in arranging meetings of the Senate Committee which your Chairman attended, and the bill finally was reported out of Committee with a recommendation of passage. Thereafter Senator Billings secured the speedy passage of the bill in the Senate with but one dissenting vote.
The House Committee on Corporations were inquisitive as to the necessity for such a law and the possible interests supporting its passage. Much time was necessarily spent in attendance upon the meetings of that Committee and in conferences with members for the purpose of satisfying them that the bill was meritorious, was not intended to specially benefit any one, but had been prepared by a Committee appointed by you of disinterested and experienced lawyers who were thereby donating to the state their labors with the only motive of a public benefit.
Unfortunately, the time thus consumed brought the final passage of the bill to the closing hours of May 29th, when success was only attained through the energetic and intelligent work of Senator Billings, Secretary of State James A. Rose and other influential friends of the bill.
The financial expense was but ninety-seven dollars and thirty-five cents; the time and labor devoted were considerable; the result achieved will be of great benefit to the business interests of the state by way
of a clear and comprehensive law, while the public will have the benefit of the information conveyed by the publicity features, and the revenues of the state will be increased by more than one million dollars annually.
SYNOPSIS OF BILL.
The Act applies to all business corporations, organized elsewhere, as well as in Illinois.
It defines the rights, powers and privileges of all corporations in this state.
Permits three or more persons to incorporate for any amount above $2,000 by filing an agreement in which shall be stated the name of the proposed corporation; object of its formation; location of its principal office in this state, and elsewhere, if to do business outside of this state, total capital stock and par value of shares, and if classes of stock are to be created a description of each and the relative interests thereof, and the restrictions imposed upon their transfer. The names, places of residence and number of shares subscribed for by each person, the amount each is to pay in cash and when and how the remainder is payable. If any portion of the capital is to be paid in property, a full description and actual value must be stated; if in patents, the date and patent office number of each must be given and the amount of stock to be issued therefor, stated. The number of directors to be elected, and the name and post office address of each, and any other provisions for creating, defining, limiting and regulating the powers of the corporation, and of the directors, officers and stockholders of the corporation.
The agreement must be signed and acknowledged by each subscriber to the stock of the proposed corporation, and filed with the Secretary of State, who is given power to require amendments or additional information before approved.
Upon the Secretary issuing a certificate of organization, of which a copy of the agreement filed in his office shall be a part, and it being recorded in the county where the principal office of such corporation is located, the corporation shall be deemed fully organized.
General power to enact by-laws is conferred. The corporate powers are to be exercised by the Board of Directors, which may hold meetings at any time or place by consent of all directors.
The stock certificates must show facts as to whether paid for or not, and officials are liable for any loss to the holder because of untrue statements.
Annual meetings of stockholders are required, and access to the books and accounts of the corporation and to the stock ledger and transfer books are given to each stockholder, and a penalty provided in case any officer or director prevents such inspection.
Makes all directors liable if indebtedness exceeds the amount of the capital stock, for such excess to creditors; and directors and officers liable who vote for unearned dividends, to the amount distributed.
Provides for changing name, place of business, objects of corporation, creating classes of stock, increase or decrease of the number of directors, extend the period of corporate existence (not exceeding ninety-nine years) increase or decrease the capital stock, consolidate with another corporation, etc.
Directs the manner in which corporations may be dissolved, stock liability enforced and assets distributed.
Requires annual reports from all corporations having a place and doing business in this state, of assets and liabilities, and the payment of an annual fee based upon the outstanding stock.
Protects the rights of minority stockholders where a consolidation has been perfected and objection in writing has been made at the stockholders' meeting called to vote upon the resolution of consolidation.
Provides that foreign corporations may do business in this state upon filing a copy of charter and making annual reports and paying same fee as domestic corporations; and authorizes the Attorney General to institute all legal procedure against corporations to enforce provisions of the law.
MILLARD R. POWERS,
ROBERT E. PENDARVIS,
EDGAR A. BANCROFT,
THE CORPORATION ACT WAS A PROPER AND CONSTITUTIONAL ENACTMENT.
BY MILLARD R. POWERS.
The Governor having vetoed the Act of the General Assembly known as the "Business Corporation Law" which was enacted at the instance of this Association, it is proper to consider two things, viz.: Were the provisions of the Act inimical to the business interests of the citizens of this State, and what proper action shall the Association take?
The Governor sent the Act (Senate Bill #286) to the Attorney General for an opinion "as to its form and constitutionality." Under date of June 9, 1909, the Attorney General replied that: "Within the limited time this department has in which to examine the provisions of this bill, and more than two hundred others, many of which are quite lengthy and of great importance, it is manifestly impossible to
anticipate, thoroughly investigate and prepare opinions upon every possible constitutional question that may arise upon it."
The Attorney General then answers the first question propounded by saying: "So far as the form of the bill is concerned, I have no criticism to make."
As to the second question, he stated: "While the Act contains some provisions of doubtful constitutionality, as hereinafter pointed out, I am inclined to think that it is in the main a constitutional enactment."
He then says: "In view of the fact that in some of its provisions it is such a radical departure from the present law relating to corporations for pecuniary profit, as construed and settled by judicial decisions, as well as a complete reversal of the public policy of the state, I deem it my duty to direct special attention to some of such provisions, and to express my views as to the legal effect thereof."
Before proceeding further, I will state that as Chairman of the Committee charged with the duty to prepare the bill and secure its enactment, I wrote the Attorney General of the preparation of the bill by the Committee, of its progress in the General Assembly, and stated that I would feel greatly obliged if he would obtain a copy and examine it, and grant me an interview on May 12th. Upon calling on that date, the Attorney General told me that he had not examined the bill and would not do so in advance of its passage, because it might be amended substantially. I had therefore, no opportunity to explain the provisions of the bill or present for his consideration the enactments of the legislatures of this and other states, or the decisions with relation thereto.
I was not informed that he had rendered an adverse opinion until after the departure of all trains by which I could have reached Springfield in advance of probable action by the Governor. I was, therefore, without opportunity to influence the Attorney General's mind in advance of the preparation of his opinion, or to meet his objections while they were being considered by the Governor.
The Attorney General presented to the Governor a number of objections; the first was directed to Section 31, which section reads as follows:
"SECTION 31. Every corporation included within the scope of this Act may invest in, purchase, own, exercise all the rights, powers and privileges incident to such ownership, sell and otherwise dispose of, the shares of stock of any other corporation or corporations engaged in the manufacture, use or sale of property or in the construction or operation of works, necessary or incidental to the business or investment of such owning company; or organized for the purpose of extending the business of such owning or holding company; provided, however, that no