then existing until it shall have received in money or property the amount of such increase of its stated capital. The directors of the corporation assenting to the creation. of any debt in violation of this section shall be liable jointly and severally for such debt."

Now the stated capital which must be paid in before the corporation may begin business or incur debts is the same thing as "the amount of capital with which the corporation will carry on business," which amount must, pursuant to Section 19 of the Stock Corporation Law, be stated in the certificate of incorporation, and must be not less than the amount of stock having a preference as to principal plus $5 for each share without par value.

Thus, if you state in your certificate of incorporation that the corporation may issue 10,000 shares, of which 5,000, of the par value of $100 each, are preferred as to principal, and 5,000 are without nominal or par value, you must also state, as the amount of capital with which the corporation will carry on business, a sum of $525,000.00 or more, and, having done that, you cannot lawfully begin business or incur debts until that whole $525,000 is paid in money or property taken at its actual value. Aside from the question as to whether it is necessary to require the payment of any fixed sum into the corporate treasury on account of shares without par value, it is certainly unnecessary to require full payment of the entire stated capital before the corporation can even begin business or incur any debts. This feature of our statute has driven some large corporations away from New York and into other states whose laws do not impose this condition, which in many instances is prohibitive.

A bill has already been prepared for introduction in the current session of the Legislature which, if enacted, will permit corporations of this kind to begin business before all of their shares are sold, and will provide that directors shall be person

ally liable for such debts only as are in excess of the amount of capital paid in at the time they are contracted.

If the law were so amended, a corporation capitalized as in the example I have just used could, upon selling say $50,000 worth of stock, begin business and obtain credit up to that amount, and, from time to time, as opportunity offered, issue additional stock and expand its credit proportionately. I bespeak your support for this measure.

The third and last subject I will touch upon is that of corporate names.

Section 6 of the General Corporation Law provides that

"No certificate of incorporation of a proposed corporation having the same name as a corporation authorized to do business under the laws of this state, or a name so nearly resembling it as to be calculated to deceive, shall be filed or recorded in any office for the purpose of effecting its incorporation or of authorizing it to do business in this State."

There are upwards of 200,000 names on the index of corporations in the office of the Secretary of State, and there is a growing difficulty in finding an appropriate name for a new company which is not the same as, or closely similar to, one which has already been used. Fully 50 per cent. of the names proposed from day to day for new corporations are found to conflict with names on the index. Without doubt a great many, possibly 50,000 or more, of the corporations whose names are carried on the index are inoperative and practically defunct. Yet they are, so far as the record shows, authorized to do business, and must be so regarded. Several efforts have been made to obtain the enactment of a law which would provide a practical and expeditious method of clearing the names of these dead corporations from the official records, but all such attempts have failed.

The lack of success has been due to a number of factors,

among them being conflict of opinion as to just what method should be followed in declaring the corporations dissolved, reluctance to appropriate funds to meet the expense of whatever course of procedure is adopted, and lack of realization by the individual legislators that there is urgent need for such action. Something must be done very soon or else the incorporators of new companies will have to give them numbers in lieu of

names.

Some of the states have laws permitting the Governor to proclaim the forfeiture of charters for non-payment of annual franchise taxes. Such a law in New York would probably give a measure of relief, but it would not reach the majority of inactive companies, because most of them are so dead that they are not carried on the records of the Tax Department.

Any procedure, to be practical and effective, will have to be of a summary nature. In most cases it will be impossible to serve actual notice upon the corporations to be dissolved, for they maintain no office and their incorporators, directors and officers have died or removed.

The Secretary of State has from time to time recommended amendments to the corporation law, and many of the present statutes have been drafted in his. office. Among such laws which have been enacted during the present administration are the following:

A law which directs the filing in the office of the Secretary of State of a certified copy of every order of the courts dissolving a corporation or annulling its charter. Formerly corporations might be dissolved by certain kinds of judicial proceedings without such dissolution or annullment becoming a matter of record in any department of the State Government.

A law permitting a change of name of a business or a membership corporation by vote of its stockholders or members without a court order. This change of procedure brought the

New York law into uniformity, in that respect, with those of all other states of the Union, save two.

A law authorizing corporations having charters which do not permit the issuance of shares without par value, to reorganize, and thereby obtain the advantage of the law of 1912, which provides for the issuance of such shares.

The accelerated birth rate of corporations during the year last past was doubtless due to a variety of causes, chief among which is probably the removal of the artificial restraints which were imposed upon many kinds of industry during the war. Projects had been conceived but had to await the cessation of hostilities before they could be financed and put into operation. Now that the need for war supplies has ended, these projects, relieved from restraint, are being launched, and most of them are floated by corporations newly formed for that purpose.

Of course, real estate companies always head the list in point of members, due to obvious reasons, such as the ability to contract loans at whatever rate may be agreed upon without interference by the usury laws; freedom from encumbering dower rights, etc.

There is a marked increase in the number of corporations formed to manufacture candy,- due, it has been suggested, to the demand for a substitute for alcoholic drinks.

The moving picture and motor industries occupy a place near the head of the list, along with foreign trading corporations.

A comparatively new accession to the corporation family is the so-called "Finance Company," which is a sort of intermediate agency between merchant and banker. It seems to find its chief employment in taking over installment notes given by the purchasers of automobiles to the sales companies, and discounting such notes at the banks. Whether such operations come properly within the scope of the Business Corporations Law, or whether they constitute a species of banking, seems to be an open question. It will doubtless be determined

ere long either by judicial pronouncement or by statute, for the finance companies are becoming numerous and their services appear to be in demand.

The President:

I am sure we are all indebted to the Secretary of State for his very clear elucidation of the subject.

Abraham Benedict, of New York:

I move that the suggestion offered by Mr. Hugo be referred to the Committee on Law Reform.

The President:

They will take that order without any special motion to that effect.

The next order of business is the report of the Committee to Confer with the Court of Appeals, of which Judge Clearwater is Chairman.

A. T. Clearwater, of Kingston, then presented the following report:

REPORT OF THE COMMITTEE TO CONFER WITH THE COURT OF APPEALS AND RECOMMEND MEASURES FOR THE RELIEF OF THE CON

GESTED CALENDAR OF THAT COURT

To the New York State Bar Association:

It is assumed that the members of the Association recall that at its annual meeting in January, 1917, at the close of the address of Chief Judge Hiscock of the Court of Appeals, a resolution was unanimously adopted providing for the appointment of a committee to confer with that Court, and to report to the Association at its next annual or a sooner called special meeting, such measures for the relief of the existing congested condition of the calendar of that Court as their judgment might suggest. The result of the appointment of the Committee was