6. That, if a department of commerce and industry shall be established, one of its functions should be to call attention from time to time to such economic changes in the world's progress as may suggest tariff modifications, and also to such commercial opportunities as may suggest reciprocal legislation or arrangements, and furthermore to any evils incident to combinations which changes in the tariff will correct.

7. That in view of the extent and perfection of our manufactures, of our growing export trade and the sharp competition it encounters in foreign markets, of the practice by some exporters of making lower prices abroad than at home, and of the desirability of protecting the consumer as well as the producer, without awaiting other legislation, the Congress provide for a commission to investigate and study the subject, and to report as soon as possible what concessions in duties may be made without endangering wages or employment at home, what advantages abroad may be obtained therefor, and also to suggest measures best suited to gain the ends desired.

If experience shall prove that these remedies are not sufficient to properly control the great corporations and combinations, it may be wise for the Congress to enact a Federal incorporation law. Should such a law be enacted, it would then be possible to increase the franchise tax upon State corporations engaged in interstate commerce so as to compel them to reorganize under the Federal law. When organized under a Federal law, it would be possible, as has been pointed out, to apply to corporations any degree of publicity or restriction that might be authorized. In the meantime the separate states should amend their corporation laws so as to require greater publicity, as outlined in our preliminary report.

The evils of discriminations in freight rates and their influence in aiding and promoting monopolies have been

clearly shown. The recommendations of the Commission relative thereto will be found under "Transportation."

APPENDIX C

PROPOSED NEW YORK BUSINESS COMPANIES'

ACT*

Powers and Purposes

Under the title, Powers and Purposes, the usual provisions regarding legal standing and acts are made, and special ones are added giving powers = . to the same extent and in the same manner that a natural person might do.†

*This bill, which was framed to carry out the suggestions in Governor Roosevelt's annual message sent to the Legislature, January, 1900, was in form a complete Business Corporation Law. It was intended not to repeal the present law, but to provide an alternative law under which corporations that wished to do so might organize and act; others might act under the present law.

As will be seen, the proposed act gives much greater privileges to corporations in many particulars than does the present law. In other respects, especially as regards publicity of accounts and of business methods, the responsibility of directors, etc., it is much more rigid. Corporations of the highest type as regards financial stability and management, having nothing to conceal for which the bill calls, might well wish to organize under it to give them standing as well as to secure its privileges. Speculative corporations could not well do so. The line would thus be drawn between the two classes, to the manifest advantages of investors and of the public.

The provisions giving privileges to sound corporations under proper restrictions were largely suggested by the late James B. Dill, Esq., of the New York Bar, author of "Dill on New Jersey Corporations," and they are to a considerable extent modelled after the New Jersey laws with additional safeguards for the public interests. The provisions regarding Promotion, Auditing, and the Annual Report are taken largely from the Corporation Laws of Victoria, modelled after those of England. All the provisions of the bill were submitted to many persons qualified to criticise them-corporation lawyers, professors of corporation law, lawyers with no interest in corporations, prominent business men, chartered accountants, and others and valuable suggestions were received from all, the effort being made to make the act as rigid regarding publicity as it could be made without endangering the interests of sound business. It is believed that the enforcement of such a law would gradually do away with a large part of the evils of the Trusts.

†As one of the authors of this book, Mr. Jenks, took the final responsibility of the acceptance or rejection of all suggestions made in its preparation, he has felt at liberty to make changes in the parts here reprinted and to add some brief explanatory notes. The only parts of the bill printed are those that are not found in the Corporation Laws of New York, or those that are needed to show the spirit of the act. The most important provisions are printed in full.

It may exercise the same powers outside the State of its origin as within it, subject always to the laws of the State in which it is doing business, but no corporation shall possess or exercise the above mentioned or any other corporate powers, except such incidental powers as shall be necessary to the exercise of its powers above mentioned, unless they are contained in the certificate of incorporation.

Registered Office and Agents*

Every corporation organized under this act shall have and keep continuously a registered office in this State, and an agent in charge thereof, which agent must sign the certificate of incorporation.

Every registered agent shall, during the month of April of each year, file a statement† as of the first of April, under oath, with the Secretary of State of New York, which shall specify:

1. The names of the corporations for which he is the registered agent.

2. Whether such corporations have or have not made their annual report.

3. Whether the names of these corporations have been at all times displayed before their registered office.

4. Whether the provisions regarding the keeping and inspection of stock and transfer books have been fully complied with.

*

It will be observed that large powers are conferred; but these powers must be fully declared in the certificate of incorporation, and very rigid provisions to prevent abuses are made.

*This provision is entirely new, and is intended to aid in securing proper annual

reports.

†The provisions regarding a registration office and agent will enable any person who has a right to know, to secure regularly and easily any information needed, and will enable the State much more readily to enforce its restrictive regulations. This provision is from the New Jersey law, with additional regulations.

Certificate of Incorporation*

The certificate of incorporation shall be signed in person by all the subscribers to the capital stock named therein and by the registered agent.

The certificate of incorporation shall contain the usual provisions in detail and, may contain any provision not inconsistent with this act, which the incorporators may choose to insert for the regulation of the business and for the conduct of the affairs of the corporation, and must contain all the provisions creating, defining, limiting, and regulating the powers of the company, the directors, and stockholders, and of any class or classes of stockholders, or any right or rights of specific stockholders. No provision creating, defining, differentiating, limiting and regulating the powers of the corporation, the directors, the stockholders, or any class or classes of stockholders, shall be valid unless inserted in the certificate of incorporation or in an amendment thereof.

The certificate of incorporation shall be proved or acknowledged as required for deeds of real estate, and filed in the office of the Secretary of State. Said certificate or a copy thereof duly certified by the Secretary of State shall be evidence in all courts and places. A copy of the certificate must also be kept in the registered office of the company, and a copy must be furnished by the registered agent to any person demanding the same, on payment of a charge of not more than one dollar.

*It was thought wise to encourage the formation of corporations wishing to do a sound conservative business, and through publicity to discourage the purely speculative ones. The full statements required in the certificate of incorporation, which is accessible to any person, would in very many cases make clear to investors and the public the nature of the business and the protection afforded shareholders, and would warn careful people against risks.