CONCERNING CORPORATION LAW. 323 



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 enter- 

 prises, 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 cor- 

 porations with extreme caution, if not reluctance, the many Legis- 

 latures 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 speedily out of date.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 uni- 

 formity 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 prob- 

 lem possible. 



The diversity of regulation has two effects — one commend- 

 able, the other not. The first is that when companies do busi- 

 ness 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 recom- 

 mendation. The Massachusetts law regulating insurance is an 



