Slike strani
PDF
ePub

Eighth, the act sanctions the purchase and resale of its own stock by the following clause: "Every corporation shall have the power to purchase or otherwise acquire its own capital stock, but only out of its own surplus earnings, or in payment or satisfaction of any debt due the company to such extent and manner and upon such terms as the board of directors by two-thirds vote shall determine, and to reissue the said stock so acquired. Any such purchase or reissue of stock shall be noted in the annual report." It will be generally admitted that the privilege here granted may at times prove of large benefit to the corporation without consequent detriment to the stockholders or the public. Such a case occurs when a small clique of stockholders, by selling their stock back and forth, are able thus to manipulate the value of the shares. The board of directors, as the legitimate defenders of the interests of the company, might, it will be granted, protect the interests of the business had they been given the power of buying up these shares when they were offered. In the New York Act this power is carefully guarded: (1) by the provision that such purchase shall be made only out of the surplus and (2) by the right of the stockholders to call for the minutes of each directors' meeting at any annual meeting. Still such power is constantly liable to abuse for two purposes: (1) to virtually annul another clause of the act which provides that every increase or reduction of the stock must have the sanction of stockholders owning at least two-thirds of the stock, in a meeting called especially for the purpose; (2) to legalize inside manipulation of the price of the shares, a privilege most likely to be used to benefit a small group of directors and their friends at the expense of the investing public; an objection which certain recent developments in industrials strongly emphasizes. This objection is not answered by affirming that it is better, to allow the directors to do openly and publicly under the protection of the law what otherwise they would do secretly and irresponsibly. The cases are not parallel; in the one the director is speculating on the company's funds, in the other on his own. For the degree of publicity guaranteed by the act would prevent the practice, too common in the past, of directors speculating with the corporation's funds. On this point the Journal of Commerce well says: "An owner of stock who wishes to sell it should be free to go into the market without danger of encountering competition from his own agents using his own money for the purpose; any one wishing to buy the stock should be able to buy it at a price fixed entirely by the results of the legitimate exercise of its functions as a producer and distributor

of commodities, and not dependent in any degree upon its skill in fixing the price of its own shares by any stock brokerage device."

This summary of the characteristic features of the Business Companies' Act does not aim either to state all the important provisions or to discuss any one exhaustively. Any adequate discussion of its merits or its demerits would extend far beyond the scope of this It is to be hoped, however, that the provisions of the act will form the starting point of a discussion that will cease only when our lawmakers, either by a federal corporation law, or if that be found impracticable, by State laws essentially uniform in their terms, shall have constructed the indispensable groundwork of a permanent industrial prosperity and peace, viz., a system of American corporation law conceived in a spirit of justice to all classes and able to guarantee permanent protection to the honest corporation, to the honest investor and to the consuming public.

In conclusion it is worthy of notice in this connection that the New Jersey Corporation Law, by Act of March 23, 1900, was amended in certain particulars along lines directly in harmony with the provisions of the New York Business Companies' Act. The amendments referred to relate to the annual report and require additional information as follows: (1) The amount of authorized capital stock, if any, and the amount actually outstanding; (2) the date appointed for the next annual meeting of stockholders for the election of directors; (3) whether the corporation has complied with the statute requiring it to maintain a registered office in the State, with the stock and transfer book properly kept and open at all times to the inspection of stockholders. The penalty provided for violation or neglect of this amendment is, like those of the New York Act, of the automatic variety. In addition to a forfeit of $200 it is further provided that "if such report be not so made and filed, all the directors of any such domestic corporation who shall wilfully refuse to comply with the provisions hereof and who shall be in office during the default, shall at the time appointed for the next election, and for a period of one year thereafter, be thereby rendered ineligible for election or appointment to any office in the company as directors or otherwise."

Yale University.

MAURICE H. ROBINSON.

Insurance for the Unemployed in Basel. The democracies of Switzerland have proved themselves fertile in social experimentation. The latest addition to their collection of socio-political laws is an act passed by the great council of the canton of Basel, November 23, 1899, to provide insurance for the unemployed. The idea is, in itself, not new, nor is Basel the first canton to carry it into execution. What principally distinguishes the present law from others is that it has been framed with more deliberation, care, and precautions against abuse, so that it will serve as a better test of the effects and possibilities of this kind of compulsory insurance than any of those thus far enacted.

After the German series of compulsory insurance laws had given a great impulse to this kind of legislation throughout Europe, the question naturally arose: why not exorcise the evils of unemployment by the same means that have been applied to sickness, accident, old age and invalidity? And as in Germany, so in Switzerland, the spur which forced the step from theory to practice was applied by the socialists. In the annual gathering of the Social-Democratic party of Switzerland held in 1891, it was decided to take the initiative in proposing as an amendment to the federal constitution a series of clauses, providing, among other things, that "The right to a sufficiently remunerative labor is guaranteed to every Swiss citizen." In 1894 this amendment was rejected at the polls by a vote of 308,289 to 75,880.1 Yet the movement stimulated the establishment of public employment agencies, and of insurance, either voluntary or compulsory, against the evils of unemployment. It should be remarked here, by the way, that the question of nomenclature occupied the attention of the Basel commission. The original title was insurance "against" unemployment. This having been criticized on the ground that it was really intended "for" unemployment, the matter was referred to a German professor of philology, who suggested the term "insurance for the unemployed," and this was finally adopted. Whatever the name should be, the thing was first introduced by the city of Bern in 1893. This is not compulsory, nor can it be called insurance except by courtesy, since the insured themselves contribute in fact but one-seventh to one-sixth of the funds disbursed, the balance being made up by private generosity and by a subsidy from the public treasury. St. Gallen followed in 1895. A permissory law having been passed in 1894 by the canton, the city introduced compulsory insurance for the unemployed within its own.

1 Schanz, Zur Frage der Arbeitslosen-Versicherung, p. 55.

boundaries, providing that the system should go into effect July 1, 1895, and be tried experimentally for two years. But the law was faulty in itself and was, moreover, executed with laxity. It was hard to collect the dues, the better class of working men felt that they were being taxed to support the shiftless, and the town meeting voted November 8, 1896, to close the experiment on June 30, 1897.1

Undeterred by these experiences, Basel-Stadt has now undertaken to provide in a similar manner for its unemployed. But the present law is the outcome of a much more scientific study of conditions and of a longer deliberation. The movement of which it is the result was formally inaugurated by the executive council (Regierungsrat) of the canton in 1893, when it instructed the department of the interior to examine into the question. This department referred the matter to a commission of eleven citizens, who, in turn, secured from one of its members, Professor G. Adler, of the University of Basel, a memoir on which their first draft was based. This was presented July 15, 1894, to the executive council, who in turn discussed it and transmitted it to the great council November 8, of the same year. The latter gave it a favorable reception, but were not prepared to adopt it at once, and so referred it by vote of March 14, 1895, to a commission of nine. This commission took testimony, secured new evidence by means of a census of the unemployed, made in December, 1895, and reported the original draft with a few changes April 22, 1896. Still the great council was not satisfied, and May 6, 1897, referred the draft back to the same commission, who made their final report April 20, 1899. The subject came before the great council again in the past fall and after a short debate, the last draft of the commission was adopted with scarcely a change, November 23, 1899.

Although so many years have elapsed since the original essay of Professor Adler, the main outlines of his recommendations have been preserved, and the changes relate entirely to details. Even these have been so few that the number of sections is the same in the law as it was in the draft presented in 1894. It will, therefore, simplify the presentation, if we take up first those features which have remained unchanged in all of the bills and then trace the evolution of those which have been modified. From the first the insurance has been compulsory, not optional, for the classes of workers subject to it. These do not include all wage-workers, but only those in the trades

1 Schanz, Die Frage der Arbeitslosen-Versicherung, p. 68 and Neue Beiträge zur Frage der Arbeitslosen-Versicherung, p 43.

subject to the factory law of 1877, and those engaged in the building trades and in earth works, provided that they reside in Basel, are over fourteen years of age, and earn less than a certain amount. This was at first fixed at 2,000 francs a year, but was afterwards lowered to 1,800. According to Professor Schanz,1 less than one-half of those who are liable to be out of work will get anything from the insurance, since many occupations are not included at all, while those who live outside of the canton are not subject to it, and of those who are included a very considerable number live and work there for but a part of the year. These will have to pay contributions while they work, since no one can tell in advance how long they will be in the canton; but if they happen to leave before they have had time to pay dues for, half a year, they lose all claim to benefit, The funds are supplied from four sources: the dues of the insured, the dues of the employers, the subsidy of the state, and private benevolence. The state also bears the expenses of management, and in case of deficit is to advance the necessary sums, without being financially responsible for making them good. The dues of the insured are collected through the employer, who must deduct them from the wages. The relief consists in a weekly pension, whose amount varies with the size of the family and the wage class to which the insured belongs, and is limited to a certain number of days in the fiscal year. These features have been in all of the drafts.

The changes made in the course of the deliberations relate mainly to the arrangement of the insured in certain groups according to risk and certain classes according to wages; to the amount of the dues; to the contribution of the state; to the size of the pension; and to the conditions under which relief can be refused. The law divides the insured into four groups according to the risk of unemployment and into four classes according to the wages they receive. In both of these cases it was found necessary to make the successive drafts more complicated. In the first draft there were but two groups, the first including factory hands, the second those engaged in the building trades and in spade work. Then it was discovered that certain of the building trades involved almost entirely indoor work and were, therefore, not nearly so much affected by the seasons as others, such as brick-laying, which involve outdoor work. Hence in the draft of 1896 group II was subdivided. Then it was found that some of the factories were much more subject to stoppages,

1 See Schanz, Neue Beiträge, p. 51.

« PrejšnjaNaprej »