For the following reasons: I do not think the provisions of any existing laws in this State are open to a construction which gives the State the right to so amend laws for the organization of corporations as to change the rights of those who have associated under them as between themselves. Corporations so formed should of course be controlled by the authority from which they emanate as against any acts of wrong doing, but for no other. For instance, it seems to me it would be entirely competent for the Legislature to enact laws permitting stockholders at all times to attend meetings of directors, and compel directors to notify them of such meetings before they are to be held; also that all books of corporations should be open at all times for stockholders to examine. This could not be construed as taking away any rights; it might prevent any wrong being done, but it is not taking away a man's rights to prevent him from wrong doing.

Existing corporations have been formed by permission of the State, giving them rights to regulate their election of officers, and the conduct of their business generally, and the right being so given, of course the State is not a party interested any further, and I do not believe that it has the power to take rights so given away, nor to transfer from one man his rights to another who does not possess that right.

In the formation of corporations the State is a party to the agreement, and it cannot violate it, in my opinion, any more than the individuals forming the corporations. To attempt such an act would be an invasion upon vested rights, and a bad example for a great State to set before its citizens, and, in my judgment, would work a great injury to its credit as well.

Much has been said about the existence of minority representation laws in the States of Illinois, Pennsylvania, New York, West Virginia, Nebraska, and Missouri, and of their successful and satisfactory operation.

I have caused the laws on this subject in these States to be quite thoroughly examined, and have been unable to find a single instance where the law, when enacted, applied to corporations then in existence. In the State of Illinois laws of 1871-2, page 296, reads as follows: "Section 1. Be it enacted,” etc., "that corporations may be formed in the manner provided by this act," etc.

"Section 3. In all elections for directors or managers of corporations organized under this act," etc., showing conclusively that this law applied only to corporations organized after its enactment.

Pennsylvania laws of 1874, page 73, act No. 32, "Providing for the incorporation and regulation of certain corporations," reads:

"Section 1. Be it enacted, that corporations may be formed under the provisions of this act by the voluntary association of five or more

persons for the purposes and in the manner mentioned herein, and when so formed each of them by virtue of its existence as such shall have the following powers, unless otherwise especially provided."

"Sec. 10. In all elections of directors, managers, or trustees of any corporations created under the provisions of this statute or accepting its provisions, each member or stockholder may cast his vote," etc.

In the State of New York laws of 1875, chapter 611, I find an act to provide for the organization and regulation of certain business corporations.

"Section 1. Corporations may be organized under the provisions of this act for carrying on any lawful business," etc.

Section 26 provides for electing directors, and allows, by the words "shall be entitled to," stockholders to cumulate their votes. In all the States mentioned, so far as I have been able to learn, corporations or companies who elect directors by cumulative votes are those who were organized after the laws were created under which they were organized. So far as the justice or injustice of this principle is concerned, I cannot see that we have any right to consider it. The question is simply whether the State has or has not the legal right to take from a corporation privileges heretofore granted, unless the corporation violates some provision of its charter or of the law.

Could I make it consistent with my views in the matter I should most cheerfully approve of this act.

I believe thoroughly in the principle, and unless this shall become a law, notwithstanding these objections, I shall in my retiring message strongly urge that a law similar to this be enacted, but to affect only corporations organized under it, and then people who associate themselves together will have due notice of the existence of the law under which they are organized.

RUSSELL A. ALGER.

1887

January 6, 1887

From Journal of the House of Representatives, pp. 23-43

GENTLEMEN OF THE LEGISLATURE:

Section eight of the fifth article of the constitution of our State requires the Executive to "give to the Legislature, and at the close of his official term, to the next Legislature, information by message of the condition of the State, and recommend such measures to them as shall be deemed expedient."

By this command I do not understand it to be especially ordered that the Executive is to rehearse all that is contained in the reports of the different departments of the State or of the State institutions, as each chief, or the boards governing the same make his or their report fully, and to embrace them wholly or in part in this message would be only to consume your time and patience and cause unnecessary labor, as such reports are submitted herewith for your reference when needed. They are able and complete.

In a word, however, it can be said that our State is practically out of debt; consequently nothing need be said of its credit, because it does not use it, nor is it probable that it will ever have occasion to do so again.

The Treasurer's report shows that the State of Michigan owes $231,000, which will mature in 1890, and the Treasurer has in his possession United States Government 41⁄2 per cent. bonds to the amount of $231,000, which balances the account.

The crops for the past two years have in the main been excellent and abundant; business everywhere is prosperous and increasing, and a spirit of amity seems to exist between employes and employer throughout the State, where heretofore more or less disagreement in many locations divided them. It is to be sincerely hoped that such relations will continue, and that the clamor of agitators, who produce nothing and are unable to substitute employment or any means for obtaining an honorable livelihood to the men whom they so often counsel to "strike," will find no following among the honest laboring masses, and that the latter will become more and more convinced of the truth that their only true friends are the men who give them such employment as enables them to support their families and themselves, and frequently to engage in business on their own account.

STATE INSTITUTIONS.

Our State institutions are, in the main, in excellent condition. The State University, Agricultural College, and Normal School all require appropriations for repairs, improvements, and maintenance. The report of each is herewith submitted. I recommend them to your careful consideration. These great institutions stand at the head of our educational system, and stimulate the young men and the young women of the State to attain a high education. Their estimates will be laid before you, and I recommend that you deal very liberally with them.

REFORM SCHOOL.

The Reform School for Boys, at Lansing, under the able management of Superintendent Gower, is doing a great work. I, however, recommend that the name be changed so as to strike out the word "Reform,” for the reason that it indicates punishment for an offense. It does no good, and the rules of the institution can as well be enforced without the name as with it. I think the beneficial effect upon the morals of the boys who are brought up in it will be better without its taint, and especially so in after life. I also recommend that a capable man be employed at a fixed salary to find homes for the boys instead of keeping them in school so long, and whose duty it shall be to look to their welfare after they have been placed out; although, of course, many of them are bad and will have to be kept a long time, yet there are very many excellent ones among them. This will lessen the expense to the State very much, and accomplish the object desired, in my opinion, to a greater degree than is now being done, as the sooner they can be placed in homes and be made to feel that they occupy an honorable place in life the better it will be for them and for the State.

INDUSTRIAL HOME FOR GIRLS.

The Industrial Home for Girls at Adrian needs some careful attention and consideration. The same rule will, in a measure, apply to that school about placing girls in homes, that has just been recommended for the Reform School. A very great wrong connected with this institution should be righted at once. While there are very many bad girls in the school, there are quite a large number of small ones, and some larger ones too, who are sent there simply because they have no friends. They are charged with "vagrancy," and with being "wayward,”—anything to come under the letter of the law, to get rid of the care of them. Νο girl can go to that school without carrying away more or less of a taint

which affects her character, and will do so through life, as it is purely a reformatory, and the innocent class referred to should be taken away immediately. Several smaller girls have been sent home and recommitted to the Coldwater school within the past year, from which place they have been sent to comfortable homes. I recommend the enactment of a law absolutely prohibiting the sending of any girl to that institution that has not a bad character. Also that the law be so made that girls now there, or hereafter sent there, under any circumstances of that class, may be transferred to the Coldwater school direct, upon the consent of the joint boards of the two institutions. This, perhaps, may relieve the Adrian school so as not to require the building of an additional cottage. An administrative building is needed there very much, and it is hoped an appropriation may be made for it.

I deem it my duty to say concerning this school, with all deference to the good ladies who make up a majority of the Board, that I think it would be for the decided benefit of the institution, if its business affairs had more man management. I also believe it would be better for the girls, if none but mothers-and good ones, too-had the care of them. I think the institution ought to have for its head a man and wife. I wish, however, to distinctly say that I believe all people connected with it are acting to the best of their ability in conducting it. Its Superintendent, Miss Scott, is a noble woman, and is doing all that any woman could do under the circumstances.

A system of giving prizes to the girls for good behavior for the past year, has seemed to work beneficial results, and I believe a little more freedom, with a relaxation in a measure of the strict discipline now enforced, and placing them upon their honor to a greater degree, would have a marked effect for good upon them. I hope the Board, at least, will be changed so as to make a majority thereof men.

STATE PUBLIC SCHOOL.

Of the Coldwater School I cannot say too much in praise. In twelve years it has received nearly 2,200 children, and placed in homes over 1,900 of them. Its management, in my judgment, is as near perfection as possible, which is largely due to its able Superintendent, Mr. Foster. This institution has the great advantage of a special agent, which I have recommended for the Reform School and the Industrial Home for Girls, who spends the greater part of his time in finding homes for the children, and looking after them after they are placed in such homes. This person draws a salary, and if his labors can be duplicated for the other institutions, it will be a great blessing to the boys and girls in them, and a great saving to the State.