corporation to the amount thus obtained, but only within four years after the event. It may be doubted whether this law really creates any new remedy against abuses, while the limit of time set will probably serve to lessen the effectiveness of the previously existing remedies.

The provisions of the four new general corporation laws with regard to the liability of officers and stockholders in case of the payment of unearned dividends differ materially from one another. The Massachusetts law is less stringent than the others; it merely declares that the directors shall be personally liable for the debts and contracts of the corporation, if they assent to the payment of a dividend by which the corporation is rendered insolvent, to the extent of such dividend. In Nevada on the other hand, following the New Jersey statute, dividends may be paid only out of net profits, and directors assenting to a dividend by which the capital is impaired, whether bankruptcy ensues or not, are liable not only to the creditors but to the corporation itself to the amount of such dividend. A provision of this sort should serve to check the practice of paying dividends temporarily out of capital in order to bolster up the value of stocks to the ultimate injury of investors. In Virginia both directors and stockholders are liable to creditors in case dividends are paid which impair capital, and in Michigan a somewhat similar provision is found. In Connecticut the former law prohibiting corporations from paying dividends in excess of 10% till a reserve fund of at least 20% is set aside has been repealed ['03 ch.194 §5, 91].

Miscellaneous provisions. Among numerous other provisions of less interest which are found in the new laws of 1903 a few only may be briefly mentioned.

The general law in Massachusetts requires a vote of two thirds of the stockholders of a corporation to authorize the sale of its entire property and franchises, or the change of the nature of its business, and dissatisfied shareholders may demand payment of the market value or appraised value of their shares. A new act in California ['03 ch.271] also declares that a two thirds vote of a corporation's stockholders is necessary to sell or lease its entire

scribed or paid in before the commencement of business, but in Michigan 50% of the authorized capital must be subscribed and 10% of the subscriptions must be paid in.

Massachusetts in accordance with the recommendations of her special commission of 1902 has abandoned the attempt to restrict the issue of securities to the cash paid in or the actual value of property or services received. It relies for the protection of the investor on the requirement that the amount of stock issued for cash and for each item of property or services shall be reported to the state, together with the amount paid in on each share and a precise description of such property or services. The requirements in Virginia are similar, but here it is at least implied that the amount of stock issued for property or services shall not exceed their value, the statute declaring that in the absence of fraud the judgment of the directors with reference to such value shall be conclusive. The Michigan law permits the issue of stock for cash or property only and demands an itemized report to the state regarding the property. In this state also, in accordance with the usual custom, the judgment of the directors as to the value of property is conclusive in the absence of fraud. The Nevada law is similar to that of Michigan except that the description of the property or services taken for stock must merely be entered in detail on the records of the corporation, and not reported to the state. In this state there is a further provision that no stock shall be sold at less than par without the consent of three fourths of all the outstanding stock.

Several other states during 1903 adopted legislation affecting the method of paying for stock. In Connecticut the provisions of the general act of 1901, requiring that at least 50% of the authorized capital should be subscribed and at least 20% of the subscriptions paid in before beginning business, were repealed in 1903, leaving the regulation of these matters wholly to the corporation. In this state, however, the certificates of ownership of shares are not issued till the shares are fully paid, a temporary certificate setting forth the fact of partial payment being given instead. The clause in the law of 1901 which demanded a report to the state of the amount and character of property taken in exchange for stock is also omitted from the new statute, but the directors must sign on the record books of the corporation a statement describing such property and declaring that it has a value equal to the amount of stock issued for it. The increased leniency shown in this revised law is not manifested toward mining and oil companies. By a new act ['03 ch.196], before any such corporation, wherever organized, may sell or offer for sale its shares in Connecticut, it must file a statement with the secretary of state showing its financial condition, the location of its properties, the amount of cash spent for improvements and the condition of the plant. It is believed that no statute of this character has been enacted elsewhere in the United States.

In Delaware a constitutional amendment has been proposed ['03 ch.254] which if adopted will wipe out the requirement that "neither labor nor property shall be received in payment for stock at a greater price than the actual value at the time," thus permitting this state to follow in the footsteps of Massachusetts. In Oregon ['03 p.212], where formerly the corporation laws were silent on this point, an act of 1903 permits the acceptance of property for stock. The judgment of the directors, unless fraudulent, is conclusive, but in all statements of the corporation stock issued for property must be reported "in this respect according to the fact."

Reports. The new corporation laws show perhaps a slight tendency toward requiring greater publicity of corporate affairs, but it can not be said that any very marked advance has been made. The Massachusetts law does not demand any other report to stockholders than that which must be made to the state authorities, nor are they granted access to the corporation's books and accounts. The report to the state is slightly more detailed than that required under the former law; its most important feature is a balance sheet of moderate fulness. If the corporation has a capital of more than $100,000 this report must be accompanied by a certificate of correctness from an independent auditor selected by a committee of three stockholders who are not directors; this provision follows that of the English laws. The reports to the state required by the Virginia law are of an almost purely formal character, nor are reports to the stockholders required. In Nevada the new law contains nothing whatever regarding reports. In Michigan the annual reports to the state must show among other items the amount of stock issued for property, the amount invested in real and personal property respeсtively and its present estimated value, the amount of debts and credits, the estimated actual value of the credits and the names of the stockholders with their holdings. Moreover corporate officers are required to make annual reports to the stockholders showing the condition of the business, and all the records and books of the corporation must be open to the stockholders. The degree of publicity thus provided for is greater than in any other important state.

Liabilities of stockholders and directors. One of the most significant events of the year in corporate legislation was the adoption. in Ohio of the constitutional amendment doing away with the double liability of stockholders ['02 p.961]. In Kansas, which is one of the two or three states still retaining double liability, some of the statutory provisions regarding the method of enforcing it have been repealed ['03 ch.152].

The general corporation laws of Massachusetts, Michigan, Virginia and Nevada all impose penalties of one sort or another on officers or directors of corporations who assent to any false or fraudulent statement regarding its affairs. The Nevada statute is particularly detailed in this respect. It adds to the usual provisions penalties for false bookkeeping of any sort. A new law in Washington ['03 ch.93] is also strenuous in regard to deceptive practices by officers and promoters of corporations; penalties are imposed for giving out any statement or prospectus tending to give a fictitious value to a company's securities. A New Jersey act ['03 ch.182] declares that any officer or promoter who has made a profit or received a bonus in connection with any transaction with the corporation without disclosing the fact and obtaining the approval of the corporation shall be liable to the

corporation to the amount thus obtained, but only within four years after the event. It may be doubted whether this law really creates any new remedy against abuses, while the limit of time set will probably serve to lessen the effectiveness of the previously existing remedies.

The provisions of the four new general corporation laws with regard to the liability of officers and stockholders in case of the payment of unearned dividends differ materially from one another. The Massachusetts law is less stringent than the others; it merely declares that the directors shall be personally liable for the debts and contracts of the corporation, if they assent to the payment of a dividend by which the corporation is rendered insolvent, to the extent of such dividend. In Nevada on the other hand, following the New Jersey statute, dividends may be paid only out of net profits, and directors assenting to a dividend by which the capital is impaired, whether bankruptcy ensues or not, are liable not only to the creditors but to the corporation itself to the amount of such dividend. A provision of this sort should serve to check the practice of paying dividends temporarily out of capital in order to bolster up the value of stocks to the ultimate injury of investors. In Virginia both directors and stockholders are liable to creditors in case dividends are paid which impair capital, and in Michigan a somewhat similar provision is found. In Connecticut the former law prohibiting corporations from paying dividends in excess of 10% till a reserve fund of at least 20% is set aside has been repealed ['03 ch.194 §5, 91].

Miscellaneous provisions. Among numerous other provisions of less interest which are found in the new laws of 1903 a few only may be briefly mentioned.

The general law in Massachusetts requires a vote of two thirds of the stockholders of a corporation to authorize the sale of its entire property and franchises, or the change of the nature of its business, and dissatisfied shareholders may demand payment of the market value or appraised value of their shares. A new act in California ['03 ch.271] also declares that a two thirds vote of a corporation's stockholders is necessary to sell or lease its entire