Prof. Mechem On Corporations

I :st iny.hr Prof. Koyd R. Mr deiivered a tlmely ieetu:-e befoi Oí od Goven-nmeut Olub on the sub "Thè relations of the earparation te, the state." Tappan' Hall was elosely flllod. The speaker spokrj in sutoBtaáe aa foHows: The increase in the niünber oi' ecnporations, theflr extensión uto ww flolds, and a.ssimiplion ofteumues oC uuestiouable powers, lias bronglit the subject prominently before the public. Omitting the industrial and social sides of the question the legal aspect will be considfered. The corporation is in assoeiatiou of individuals endowed by lavv with eertain powers and re-ixinsibilities, as au arrifieial person. riiere are public and private corporartons. Only the lat ut will be discuss■cl. Purely private sueb ;i s mereantile ■ ;i porations havo a dlstinet eharacter jc-ai some public as railroads, etc. The great capital of corporatioas is iften eonsidered a public menace, but ■ i;cli capital mist be admiitted neces-ary eeïtain enterprises, as buildttg railroads aind liglxting pilants. Au objeetion is also made !.- corporations on the gronnd ih.u the etockholders are only liinited in liabiMty for the debts of the corpora t ion. Büt tlrts is necessary in ordesr to secure the desired capital. EJach party is in., lia ble only to the extent of eapitai i;ivested and his whole fortune caano be involV'Hl. The corporatiou is a creature of the state and musí be kepi so. It has onlj such powers as are expressly grantei it by legialature. Corporation.s may be crea led by a spocial legal soaetment for each individual case or under genera] iawa applicable to a class. 'liie fortnev is likely to bo ununifonn. and tlie laiter may be too elastic, but is on the whole pi-rferable. corpjration eau be held liable for ail aets of its offieers or paid servante as snel). I';irnRi]y tliere was no limit to the duration of ccrpomtions, but now iu Michigan iioiie may be iocotporated for a kmger term tl-an 30 years, except railroads. plankroadSj and canals. Two notable e.ceptions to this iaw may be stated, the Michigan Central and Michigan South eru Railroads. whieh are by thtiï charters exempt erom legislatiye con trol. "The r'elatíon is essetitially Lxat ai a creature to its ereator! The stati n;ay grant as uarrow or as vide powers as it eomsiders best." The stat may amend or repeal .-ha nors "oy general legisiation. The present abuses of eorporaöons are now reeeiving considerable atitntion. One reoiedy is publkHy of the corporrate affairs. Anmial or othei stated periodic reports are requireo to be su'bmitted to stated putolic qifieials, and penalties imposed tor fauure to reiwrt or for false reports. LawB are emacted auainst unlawliii combinations of carporations, and tile charters of eorporations entering luto sueh combinations may legally de prived of their ñ-aaichises. The state camnot easily regúlate íhe ra tes oí purely private qorporations, such as n.ercantue, manufacturing enterprises, etc. But ia return for the wiae powers .irranu',1 raJlways and the like. a considératele control may be èxercised by tlie state. Mie si a te can dem.imi fair and reasonable rates. imparüa) service, and proper equipmesnts, sueh as lig'hting. heating, and protective eunipment for the sa let v of gers and employees. The power of eminent domain cxti'iuls to corporations. The state insv take any or all the property or Jr.iiichises of a corporaüon for public use, on payment oí a fair and reasonablp value for the same. The railronds 'i-ay be taxed for public purposes, fiiher on their franchise, capital, sliares or property, any two of these or all at once. "The lejïisl.imre has no doubt ;icí soiie as far in its control of eoTporalions as it may legally do. Oertainly as to taxes. the ra te ís ïmu-h Icnv ilian on general properry." Oorporations are espeeially subjects to the pólice power of the state. Ta, state eau regúlate rate of spoed, hours f running and the like. Foréign corporarions can do busiuesf in a si.it o only on express.etl or i.-K-it permission of the state, and if more stringent regulatlons are imposed thar on corporations of the state, the Coi-eign coriiorations must submit. OorporatloHs not only useftjl, bul owessary servaiits, but must be bept in proper Hmits. Evite thcy have, but so have all things wlileh are good and mr-cssai.v. Bat if the ?orporations becoine a source of danger to üie pttblic, f musí be because rhe legislatura has t''11-"1' fafled to use, or has injiidJtíously used iis present, srufflcient and aai f.-le legal poters.