Joint-stock company

“ When a company of merchants undertake, at their own risk and expense, to establish a new trade with some remote and barbarous nation, it may not be unreasonable to incorporate them into a joint-stock company, and to grant them, in case of their success, a monopoly of the trade for a certain number of years. ”

“ The aggregation known as the joint-stock company, everybody is willing now to admit, was absolutely necessary in order to secure the machinery, that is to say, the tools, the raw stock, the buildings, and to provide for the permanence of the venture. ”

“ To go a step further, how ridiculous would it seem should a joint-stock company, with ample capital, an able direction, and active and intelligent agents, decline the undertaking they had proposed to themselves, upon discovering that they must expect an unprecedented demand for the objects of their operations. ”

“ The development of the joint-stock company system has introduced a new factor into the problem of the supply of capital, which is of immense though but dimly perceived importance. The directors of a company are technically no more than the servants of the shareholders. It is the profit of the shareholders that it is the directors' duty to promote with a single mind, and the whole capital of the concern, including its reserves both open and concealed, is the shareholders' exclusive property. ”

“ So far as the trading principle is involved, the joint stock company is no better than the private speculator. However disinterested may have been the motives which have induced some to become shareholders in these companies, and I have been assured upon authority which I respect, that many have done so without any expectation or hope of profit upon their shares, yet the primary and effective character of these associations is undeniably that of trading associations, and they cannot be rescued from that character by even numerous individual exceptions. ”

“ One essential feature of an incorporated joint-stock company is the right of each stockholder, without restraint, to sell or transfer his shares at pleasure. Thomp. Liab. Stockh. § 210, and cases there cited. So well established is this right that a by-law of a bank putting restrictions upon the transferability of stock in the hands of its members has been held void as being in restraint of trade. ”

“ The centralization of labour in cities has assisted the birth of the trade union and the co-operative society, which are among the best agencies for [Pg 460] diffusing wealth; and the growth of joint-stock companies is a strange proof of a tendency to greater concentration of wealth, for the joint-stock company is really an instrument of the small capital, enabling it by combination to compete successfully with the larger; and as to agriculture, the real tendency, in this country at any rate, seems to be to lesser holdings. ”

“ But the loss occasioned by the negligence, profusion, and malversation of the servants of the company, had probably been a tax much heavier than all those duties. That a joint-stock company should be able to carry on successfully any branch of foreign trade, when private adventurers can come into any sort of open and fair competition with them, seems contrary to all experience. ”

“ When those companies do not trade upon a joint stock, but are obliged to admit any person, properly qualified, upon paying a certain fine, and agreeing to submit to the regulations of the company, each member trading upon his own stock, and at his own risk, they are called regulated companies. When they trade upon a joint stock, each member sharing in the common profit or loss, in proportion to his share in this stock, they are called joint-stock companies. ”

“ The industrial factory was soon followed by the industrial corporation, which is really an industrial union of dollars. It was necessary that the small craft owner, displaced by the industrial factory, be taken into the industrial union, so the joint stock company was created. This was a most important development in the evolution of modern, capitalism. In the early stages when capital was scarce it made it possible for people with small means to become share-holders in big corporations. ”

“ When once the idea that the joint-stock system was the most advantageous method for working the mines gained a hold upon the community, the excitement became intense, company after company was formed, and the shares in every case were eagerly taken up by the public. When the formation of a new undertaking was announced, the applications universally doubled and trebled the number of shares proposed to be allotted, and in fact a premium was invariably offered to a successful applicant for the chance he had secured of obtaining a share in any new venture. ”

“ Out of that fact sprang traditions that have moulded the destiny and that conserve the character of one of the most gigantic, most powerful, most prosperous, and most public-spirited corporations in the world. It is sometimes said that a joint stock company has no soul to be saved and no hindquarters to be kicked. ”

“ A joint-stock company is an association of a number of people for the purpose of carrying on a trade or some useful enterprise capable of yielding a profit. Now, if ever you take shares in one, whether it be a bank, or an insurance office, or a mine or anything else, make sure that it is established under the “Limited Liability Act.” If the company be not a Limited Liability concern, should it happen to fail, you and every other shareholder are liable to lose every penny you possess. In a Limited Liability Company, however, you can only lose the amount of the shares which you hold. ”

“ The mine-adventurers company has been long ago bankrupt. A share in the stock of the British Linen company of Edinburgh sells, at present, very much below par, though less so than it did some years ago. The joint-stock companies, which are established for the public-spirited purpose of promoting some particular manufacture, over and above managing their own affairs ill, to the diminution of the general stock of the society, can, in other respects, scarce ever fail to do more harm than good. ”

“ An endeavour was made to convince the Duke that at the price named there could be no risk of loss, because the fur-trade could be separated from the land and rights, and after the purchase a new joint-stock company could be organized to take over the trading-posts, the fleet of ships, the stock of goods, and the other assets, rights and privileges affecting trade. ”

“ The whole nation caught the fever; the steadiest merchants turned gamblers. Hardly a day passed without a new swindling concern being started as a joint stock company.
Meanwhile several of the Hudson's Bay Merchants-Adventurers looked on with envious eyes. The desire was great to embark in so tempting a scheme, and the opportunity to cast inflated shares on the market almost too great to withstand. ”

“ The term partnership as used in these sections obviously refers only to ordinary partnerships. Unincorporated joint-stock associations, although technically partnerships under the law of many states, are not in common parlance referred to as such. They have usually a fixed capital stock divided into shares represented by certificates transferable only upon the books of the company, manage their affairs by a board of directors and executive officers and conduct their business in the general form and mode of procedure of a corporation. ”

“ Of course, anything like this will meet with strong opposition on the part of those who have no faith in enterprises, but let a joint stock company be formed with sufficient capital to purchase the tools and gum seed, and we will be responsible for the result. ”

“ But the constitution of joint-stock companies renders them in general, more tenacious of established rules than any private copartnery. Such companies, therefore, seem extremely well fitted for this trade. The principal banking companies in Europe, accordingly, are joint-stock companies, many of which manage their trade very successfully without any exclusive privilege. The bank of England has no other exclusive privilege, except that no other banking company in England shall consist of more than six persons. ”

“ Dangers of the new system of business; promotion of unprofitable enterprises.—The appeal of joint stock companies to the public through the medium of the stock exchange proved to be so effective in gathering capital that a great many worthless undertakings were floated. When times were good, that is, when enterprises had proved successful, when people had saved money for investment and looked with confidence to the future, almost anything in the shape of a158 company could get subscribers to its stock. ”

“ There is no such thing as "the Queen's English." The property has gone
into the hands of a joint stock company and we own the bulk of the
shares! ”

“ The test, they say, is whether the enterprise to be acquired is engaged in commerce-not whether a corporation formed as the instrumentality for the acquisition is itself engaged in commerce at the moment of its formation. We believe that this logic fails in the light of the wording of the section and its legislative background. The test of the section is the effect of the acquisition. Certainly the formation of a joint venture and purchase by the organizers of its stock would substantially lessen competition-indeed foreclose it-as between them, both being engaged in commerce. ”

“ A joint-stock trading company would even be more benefited than the individual trader, by adopting some course, if it were practicable, which would give the labourers a pecuniary interest in their work, for in this manner the energy and skill of the workmen might with greater certainty be secured. ”