|CONCERNING CORPORATION LAW.|
By AMOS G. WARNER,
PROFESSOR OF ECONOMIC AND POLITICAL SCIENCE IN THE UNIVERSITY OF NEBRASKA.
IF ten Americans desire to engage in ten distinct business enterprises, it is conceivable that they will incorporate ten joint-stock companies, and each, belong to all of them. While other countries have granted the privilege of existence to private corporations with extreme caution, if not reluctance, the many Legislatures of the United States have vied with one another in making it easy for them to be born. To adapt words heretofore applied to another matter: "The whole system of the free incorporation of private companies in the United States, with all its excellences and all its defects, is thoroughly characteristic of the American people. It grew up untrammeled by any theory as to how it ought to grow, and developed with mushroom rapidity."
We have no "system" of corporation law in this country; we have, instead, a tangled mass of statutes, which is yet further amended and ensnarled at the recurring sessions of our various Legislatures. We have a still larger mass of judicial decisions, which all the ingenuity and industry of the many writers on the subject can never quite systematize and reduce to order. Even when this feat may be approximately accomplished for a moment, the growth of judge-made law is so rapid that any treatise is speedily out of date. A redeeming feature of the situation is that the mimetic tendencies of our States lead the new ones to follow the examples set by the older, and thus a certain degree of uniformity is introduced into the different codes of law. The many sources of legislation also make it possible that a large amount of experimenting may be done without danger to the country as a whole. The immediate and disastrous consequences of the Granger railroad laws were thus limited to a few States in the Northwest, while their more general influence, as examples of what can but should not be done, has been of use to the whole country. One railroad president has gone so far as to say that in their results these laws have made a solution of the railroad problem possible.
The diversity of regulation has two effects — one commendable, the other not. The first is that when companies do business in all or many of the States at once, and in any line, like that of insurance, where ascertained corporate soundness is the best advertisement, a good code of laws in any one State makes the fact that a company does business there a helpful recommendation. The Massachusetts law regulating insurance is an