CONCERNING CORPORATION LAW. 329 



of this sort in her Constitution, but the domestic corporations in 

 the State have not had a sufficient development to thoroughly test 

 its influence. It will probably do but little good to secure minori- 

 ty representation on the board of directors, unless the laws are so 

 drawn as to limit the tyranny of a majority of the directors. The 

 State of Maryland and the city of Baltimore have derived but 

 scant benefit from their privilege of appointing a minority of the 

 directors of the Baltimore and Ohio Railroad. But if minority 

 representation be backed by the proper legislation governing the 

 actions of the directors, there is no doubt that it is an efficient 

 way of checking the misdeeds of stock majorities. . 



In Germany there is a second body chosen, under special rules, 

 by the stockholders, known as the board of supervisors (Auf- 

 sichtsrath). This board has the fullest possible power of inves- 

 tigation and report, but very little power of any other kind. 

 Its usefulness must obviously depend on the rules governing 

 its selection, since, if so chosen as to have interests wholly in 

 common with the directors, it would be of no use as a check 

 upon them. 



Turning to the question of responsibility, we find that in this 

 country the principle of limited liability is almost invariably the 

 same for the director as for an ordinary stockholder, though the 

 director is personally liable for all illegal or unauthorized acts. 

 There has been a great deal of agitation of late for the introduc- 

 tion of the French plan of protecting ordinary stockholders by 

 the grant of limited liability, but leaving the directors liable for 

 the corporate debts to the full amount of their respective fortunes. 

 The experience of France with these societes en commandite has 

 proved that responsible men can be found to manage any legiti- 

 mate enterprise under this plan. A recent English act permits 

 the formation of such companies in England, but the companies 

 decline to adopt this principle under mere permissive legislation. 

 To make this form of organization mandatory upon certain select- 

 ed classes of our corporations is an experiment that ought to be 

 tried, and is much better than going back to the old plan of un- 

 limited liability for stockholders, as California has done. 



Under the head of the responsibility of the directors must also 

 be treated the question of the relation of the corporation to its 

 employe's. Albert Fink one day called together the presidents of 

 certain roads he was trying to organize for their mutual good, 

 and told the gentlemen who responded to his call that he wanted 

 them all to resign. He further explained that this was advisable 

 in order that their general freight agents might thereafter be 

 nominally, as then actually, in charge of the several properties. 

 The Interstate Commerce Association went down very largely be- 

 cause the " gentlemen " who were partners to the agreement could 



vol. xxxvii. — 25 



