poor as they individually are at any given moment. During the late war with Mexico, our National Government, by means of a great effort, transported to California a regiment of soldiers, with their arms, food, and clothing. Contrast this with what a comparatively few of our citizens have since accomplished personally in the same remote region, and you will realize the smallness of governmental efficiency, in contrast with the personal efficiency of its subjects. Wise, therefore, is the policy which, by means of private incorporations, enables individuals to combine their resources, and thus to extend the sphere of personal efficiency-the great reservoir of all efficiency. We carry the policy so much further than other countries, that it may be termed an American principle. The creation in other countries of corporations is doled out as governmental favors, while we make it dependent on personal volition.

PART II.

THE DISADVANTAGES OF PRIVATE CORPORATIONS.

THE ANTAGONISM BETWEEN A CORPORATION AND ITS

MANAGERS.

When a manufactory or bank is managed by its owner, self-interest, which is the most conservative instinct of human nature, is a guarantee that the management will promote the institution's pecuniary productiveness and permanent prosperity; but a corporation being an artificial person, can act only through agents, whose self-interest is almost a guarantee that the corporation will be subordinated to their private interests. This natural antagonism between the interest of a corporation and the interest of

"

its managers, constitutes the most inveterate danger that attends corporations. They are like cheese entrusted to the care of rats and mice-well instructed in honesty and honor, we may admit, and well reputed, but still rats and mice, with a law in their members that is at war with the law of their minds." The managers, who are practicing deeply such an antagonism, own usually as little as they decently can of the corporate shares; to the surprise often of the public, after the victimized institution is found to be insolvent, and its secrets become revealed.

THE EFFECT OF THE ANTAGONISM ON OUR MANUFACTURING

ESTABLISHMENTS.

The above antagonism is disadvantageous to manufacturing in our country, in contrast with manufacturing in England, where the managers are the owners. The difficulty is almost too radical to be surmounted by any amount of protective tariff, the gains accruing from a high tariff being almost always nullified by increased salaries of managers, and prodigal absorptions in other shapes; hence, during our lowest protective tariffs, manufacturing corporations become insolvent not more frequently than under our highest tariffs-the low tariffs being remedied by diminished salaries and increased general economy, as the high tariffs are neutralized by opposite consequences.

THE ANTAGONISM PROMOTES THE CREATION OF CORPORATIONS.

Still, to the foregoing source of evil we are indebted for most of the corporations, railroads and others, whose benefits we are enjoying; for, if the regular earnings of a corporation constituted all the benefit that was expected from it, and the earnings were to be divided among the stockholders ratably to each stockholder's ownership of the capital, a

person would rarely assume the labor of originating a corporation, and of stimulating other persons to become corporators. Usually the originators take as little of the stock as is compatible with the procurement of other stockholders, and with the procurement by the originators of such a position in the management of the corporation as they desire to possess. Nor are such expectant beneficiaries of every newly projected corporation few in number -bankers are enticed to become stockholders by the promise of deposits; lawyers, by the promise of fees; merchants want commissions and contracts; men out of employ want salaries, and land-owners want to sell, at a good price, a location for the contemplated new establishment. Some stock is also taken irrespective of any pecuniary gain to be derived directly from the corporation, but to promote incidentally the business prosperity of a neighborhood, village, or city. A large portion of the stock of every new corporation is thus billeted on persons of all the foregoing descriptions, and is readily taken by them; just as commissioned officers are always readily obtained for any contemplated new regiment of soldiers. But to obtain the rank and file, who are to receive nothing but single rations, small pay, and plenty of danger, requires in the army and in corporations the drum and fife of wary and active recruiting serjeants.

THE CONTROL OVER THE MANAGERS BY THE CORPORATOR.

Usually a corporation consists of too many corporators to be managed by them personally, except by their voting annually in the choice of directors; but the efficiency of this control by the stockholder is more theoretical than practical. In some cases a single stockholder owns a majority of all the votes in a corporation, and thereby pos

sesses a legal right to perpetuate his control over it, with all the pecuniary incidents resulting therefrom. The early corporations of our State attempted to guard against the dangers of so alarming a power, by according to large stockholders a smaller ratio of elective efficiency than was accorded to smaller stockholders; but the guard is abandoned in modern corporations, from indifference to the consequences on the part of legislatures, or from an opinion that every guard can be easily evaded, and that stockholders had better be presented with a known evil, than deluded with a fallacious remedy.

ANNUAL ELECTIONS ARE USUALLY BUT AN EMPTY CEREMONY.

But when a corporation is exempt from the influence of unwholesomely preponderant stockholders, the corporators are strangers to each other, and live far apart. Some, also, are women, some infants, and not a few are superannuated rich men, who desire relief from the management of their property. Much of the stock is held also in sums too small to excite in the owners great solicitude about its management; and should solicitude become excited, the stockholder will sell his stock to a more confiding person, and at a low price if necessary, as the best practical mode in which he can escape apprehended danger; especially after the first election, when the reigning directors are become banded together to perpetuate their own control, and some leader among them (the imperium in imperio), who is virtually the corporation (as Napoleon said he was France), has carefully gathered up proxies, under the facility of knowing the residence of every stockholder, and being officially in correspondence with him. So impotent, then, become outside stockholders, that an annual election for directors is but an empty ceremony, except occasion

ally, when a reigning board happens to split into rival fragments; and then a private stockholder finds himself unexpectedly of some consequence, and is solicited to exercise, what is often only the barren option of deciding between. two factions, who are, more or less, warring for his spoliation.

THE INEFFICACY OF ALL EXISTING LEGISLATIVE REMEDIES.

The board's entire practical independence of the stockholders our Legislature has attempted to remedy, by enacting that every corporation shall, when required, exhibit to any stockholder the names of his corporate associates, and the number of shares owned by each. Three persons who are not directors or officers, must also be inspectors of every election; and every voter may be compelled to deny on oath some practices which have ocasionally been employed to unduly control elections. But, alas! law makers are not more cunning than law breakers; hence the wit of man can devise no safeguard which the wit of man cannot circumvent; and the above, with other existing legal provisions of the same purport, are as effective in securing directors from displacement, as in aiding the elective control of the stockholders. Directors have, accordingly, been as secure in their seats since the above enactments as they were previously, and quite too secure to enable any stockholder to be elected a director, except by the agency of the existing board.

A NEW REMEDY PROPOSED.

In our political elections, the poll is brought almost to the door of every voter, yet hundreds of voters are too listless to step across the threshold and deposit a vote. How little, then, need we expect that corporators will vote where only one poll is opened, and that may be several