Corporate property

“ But, if the state comprehends all property in its scheme of taxation, then the good will of an organized and established industry must be recognized as a thing of value. The capital stock of a corporation and the shares in a joint-stock company represent not only the tangible property, but also the intangible, including therein all corporate franchises and all contracts, privileges, and good will of the concern. ”

“ Whether the actual dividend occurs at the moment when valuable rights are distributed or at the moment when their value is realized through sale or exercise, it is clear that when a corporation sells corporate property to stockholders or their assigness at less than its fair market value, thus diminishing the net worth of the corporation, it is engaging in a 'distribution of property' as that term is used in § 316. ”

“ The first and seventh sections of the charter evidently contemplate the ownership of property by the bank in its corporate capacity. The real estate and the profits of the capital stock, previous to a dividend, may be considered as belonging to the bank. But the capital stock itself is as much the property of a stranger as of the bank. There cannot well be two entire owners to the same property. The stockholders have the property, and the corporation the management of it. The corporation is not even the trustee: for it has not the legal estate, and no power to sell. ”

“ It is no limitation upon property rights or freedom of contract to require that when men receive from Government the privilege of doing business under corporate form, which frees them from individual responsibility, and enables them to call into their enterprises the capital of the public, they shall do so upon absolutely truthful representations as to the value of the property in which the capital is to be invested. ”

“ The typical business corporation of the last century, owned by a small group of individuals, managed by their owners, and limited in size by their personal wealth, is being supplanted by huge concerns in which the lives of tens or hundreds of thousands of employees and the property of tens or hundreds of thousands of investors are subjected, through the corporate mechanism, to the control of a few men. ”

“ It matters not in what this intangible property consists,-whether privileges, corporate franchises, contracts, or obligations. It is enough that it is property which, though intangible, exists, which has value, produces income, and passes current in the markets of the world. ”

“ The capital paid in and represented by the stock, is entrusted to the custody and husbandry of the corporation; but, that artificial and transferable commodity, brought into life by the charter, endued with all its faculties by the charter, and denominated bank stock, is just as much the separate property, and at the disposal of the respective owners, clear of all corporate control, as their several lands, chattels and choses in action. ”

“ Moreover, the shares represent a property interest, an aliquot proportion of the whole corporate assets. The shareholders, whether domestic or foreign, depend for the preservation and protection of this property upon the law of the State of the corporation's domicile. The property right so represented is of value, arises where the corporation has its home, and is therefore within the taxing jurisdiction of that state ”

“ When a business corporation, instituted for the purposes of gain or private interest, is dissolved, the modern doctrine is that its property, after payment of its debts, equitably belongs to its stockholders. ”

“ All existing charters or grants of corporate franchise under which organizations have not in good faith taken place at the adoption of this Constitution shall be subject to the provisions of this article,' etc.
'Sec. 181. The property of all private corporations for pecuniary gain shall be taxed in the same way and to the same extent as the property of individuals. ”

“ Presumptively all the property of the corporation or company is held and used for the purposes of its business, and the value of its capital stock and bonds is the value of only that property so held and used. ”

“ The author says:
"The physical property is that which enables the corporation to do business. Without physical property it could not produce the commodity which it sells. The amount of money actually invested in acquiring that physical property represents the measure of capital on which it is morally entitled to earn interest and profit; and, in the stage of promoting and financing the enterprise, all hope of earnings is based on the amount of money required to construct the property." ”

“ The manufacturers who had private property—that is, property and money apart from the capital employed in their business—were in a different position, and could either retire from business, and make the best of what they had left, or keep on manufacturing in the hope that they should retrieve their losses, and that times would mend. ”

“ Much of the property of the country is in the hands of incorporated or joint-stock companies; the business in which they are engaged being of a magnitude requiring an outlay of capital that can be met only by associated wealth. ”

“ Money earned by a corporation remains the property of the corporation, and does not become the property of the stockholders, unless and until it is distributed among them by the corporation. The corporation may treat it and deal with it either as profits of its business or as an addition to its capital. ”

“ In the first place, the original property is in most instances granted out upon long leases, or upon lives, for a mere nominal premium and nominal rent, to the tools and dependents of the Corporation. In truth, almost all the Corporation, all their dirty instruments, and the major part of the parsons and lawyers, are tenants. Large sums of money are lent by the Corporation, to the members of the Corporation, at mere nominal interest. ”

“ It certainly requires no argument to show that a railroad corporation cannot perform the functions for which it was created without owning rolling stock, and a limited quantity of real estate, and that these are embraced in the general term property. Property is a word of large import, and, in its application to this company, included all the real and personal estate required by it for the successful prosecution of its business. ”

“ The proportion between the property of corporations and individuals is greater there than in other States, but the property held by corporations in other States is large enough to awaken the most earnest attention. ”

“ Should a corporation have a right to demand an income return, separable from any return upon its tangible property, from its right to place gas mains in the public streets and maintain them for its private profit, a right which it did not buy from city or state or pay therefor any legal valuable consideration? The Court thinks not, because 'Return can be expected only from investment, and he that invests must part with something in the act of investing.' Does any company invest its franchise in its business? ”

“ Its creation (except where the corporation is sole) is the investing of two or more persons with the capacity to act as a single individual, with a common name, and the privilege of succession in its members without dissolution, and with a limited individual liability. The right and privilege, or the franchise, as it may be termed, of being a corporation, is of great value to its members, and is considered as property separate and distinct from the property which the corporation itself may acquire. ”

“ We think it is clear that corporations organized for the purpose of doing business, and actually engaged in such activities as leasing property, collecting rents, managing office buildings, making investments of profits, or leasing ore lands and collecting royalties, managing wharves, dividing profits, and in some cases investing the surplus, are engaged in business within the meaning of this statute, and in the capacity necessary to make such organizations subject to the law. ”

“ Sec. 112 (b) (5) provides: 'No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock or securities in such corporation, and immediately after the exchange such person or persons are in control of the corporation ”

“ Is it not possible that the recent depression in the business world has been due, in considerable measure, to the shrinkage in the values ascribed to franchise and other intangible value in public service corporation property? ”

“ That means that all which the workingman gains is net product; but that only that part of the manufacturer’s gains is net product, which remains after deducting his wages. But why is the right of profit confined to the manufacturer? Why is this right, which is at bottom the right of property itself, denied to the workingman? In the terms of economical science, the workingman is capital. Now, all capital, beyond the cost of its maintenance and repair, must bear interest. This the proprietor takes care to get, both for his capital and for himself. ”

“ The sublimation of business capital that has been going forward in recent times has grave consequences for the owners of property as well as for the conduct of industry. In so far as invested property is managed by the methods of modern corporation finance, it is evident that the management is separated from the ownership of the property, more and more widely as the scope of corporation finance widens. ”

“ There surely was no intention that all mercantile and manufacturing corporations, foreign and domestic, should in very truth be exempt from taxes upon property so fundamental in importance as capital and the fruits of capital. ”

“ Suppose you and a number of other men of your time, all having separate claims in a mining region, formed a corporation to carry on as one mine your consolidated properties, would you have any less private property than you had when you owned your claims separately? ”

“ We can discover no sound reason why a corporation existing in England may not as well hold real property in the United States, as ordinary trustees for charitable, or other purposes, or as natural persons for their own use. ”

“ So true is this, that the proprietor—neither wishing nor knowing how to produce, and perceiving that as fast as he uses his property he destroys it for ever—has taken the precaution to make some one produce in his place. That is what political economy, speaking in the name of eternal justice, calls PRODUCING BY HIS CAPITAL,—PRODUCING BY HIS TOOLS. And that is what ought to be called PRODUCING BY A SLAVE—PRODUCING AS A THIEF AND AS A TYRANT. He, the proprietor, produce!... ”

“ And again, if a company is formed “to acquire and work a property of a wasting nature, for example, a mine, a quarry, or a patent, the capital expended in acquiring the property may be regarded as sunk and gone, and if the company retains assets sufficient to pay its debts, it appears to me that there is nothing whatever in the Act to prevent any excess of money obtained by working the property over the cost of working it from being divided amongst the shareholders.” ”

“ I.13 If things were always owned in fee simple, i.e. if there were no division of ownership,—no partnership rights, no shares, and no stock companies,—there would be little practical need to distinguish property from wealth; and as a matter of fact, in the rough popular usage, any article of wealth, and especially real estate, is often inaccurately called a "piece of property." ”

“ The employment of one's wealth to construct or purchase facilities for one's business greater than others possess constitutes no monopoly that does not appertain to all property. Such facilities may give advantages, and, it may be, power; so does all property and in proportion to its extent. ”

“ The proprietor, having estimated from his own productive capacity the number of laborers which his property will accommodate, divides it into as many portions, and says: "Each one shall yield me revenue." To increase his income, he has only to divide his property. Instead of reckoning the interest due him on his labor, he reckons it on his capital ”

“ Acting in good faith, and for the best interests of all concerned, the corporation may distribute its earnings at once to the stockholders as income, or it may reserve part of the earnings of a prosperous year to make up for a possible lack of profits in future years, or it may retain portions of its earnings and allow them to accumulate, and then invest them in its own works and plant, so as to secure and increase the permanent value of its property. ”

“ III. The proprietor who, instead of consuming his income, uses it as capital, turns it against production, and thereby makes it impossible for him to exercise his right. For the more he increases the amount of interest to be paid upon it, the more he is compelled to diminish wages. ”

“ Deeds, mortgages, bank balances, money in hand, corporation stocks and the like, belong in no Economic category at all below the surface of customary titles to property. They are nothing but evidences of legal title to property of any kind—Natural Resources, Artificial Objects, Man himself when and where ownership of Man by Man is conventional. ”

“ If the corporation receiving such other property or money does not distribute it in pursuance of the plan of reorganization, the gain, if any, to the corporation shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property so received, which is not so distributed. ”

“ In order to apply Professor Adams' method justly, we must know whether the company is wisely managed, whether its income is a fair income, whether its physical property is all useful and needful, whether its service is what it ought to be as to efficiency and economy, etc. We must assume an ideal condition of commerce and industry, and of property value and management, and then appraise the company's property by comparing it, consciously or unconsciously, with this ideal. ”