porations pay the general property tax locally for both State and local purposes. The raw material of such concerns is assessed at the average taxable value of such stock on hand during the preceding year. Machinery is regarded as real estate and taxed as such.230 The method of taxing the class of corporations here considered is not clear-cut. The various portions of the law should be collected and the law redrawn as a unit.

RECAPITULATION

An examination of the corporation laws of Iowa reveals the fact that Iowa has been conservative in its corporation legislation. The law as it appears to-day is based largely on the act of 1847. Special laws are provided for incorporating banks, building and loan associations, fidelity companies, insurance, railroad, telegraph, telephone, water, and water power companies.

The common law powers of a corporation as enumerated in the law may be summarized as follows: (1) to have perpetual succession; (2) to sue and be sued by its corporate name; (3) to have a common seal which it may alter at pleasure; (4) to render the interests of the stockholders transferable; (5) to exempt the private property of its members from liability for corporate debts, except as otherwise declared; (6) to make contracts, acquire and transfer property, possessing the same power in such respects as individuals; and (7) to establish by-laws and make all rules and regulations necessary for the management of its affairs.

Notice of incorporation must be published and the content of such notice is prescribed, but the law does not specifically prescribe the content of the articles of incorporation. Any number of persons may incorporate under the Iowa law. There are no residential requirements for incorporators or for directors. Any number of persons may act as directors, who are penally liable for the unlawful diversion of the corporate funds.

Articles of incorporation must be recorded in the county where the principal place of business is located and in the office of the Secretary of State. Corporate indebtedness is limited to two-thirds of the amount of the capital stock, except when bonded and secured by mortgages.

An organization tax of twenty-five dollars is charged and an additional fee of one dollar per thousand dollars of capital stock in excess of ten thousand dollars. These fees are smaller for coöperative enterprises. Small fees are required for filing and recording the articles of incorporation. For extending the corporate existence the regular organization fees are charged. Moreover, an annual license fee of one dollar is required with the annual report to the Secretary of State.

Corporations may not transact any business until the articles of incorporation are filed with the Secretary of State and approved by him. Every corporation transacting business within the State is required to maintain an office in the State. Every stockholder is entitled to have a certificate for the shares held by him. The issue of preferred stock is not expressly authorized. Stock may be issued for either money or property, but the issue of stock for property is under the supervision of the Secretary of State. Transfer books are required to be kept at the principal office within the State; and such books are open to the inspection of the public.

Every corporation transacting business within the State is required to report annually to the Secretary of State. Charters may be forfeited for intentional fraud on the part of the corporation or for failure to comply substantially with the articles of incorporation and with the laws of the State. Corporate existence may be extended for an additional period of twenty years if desired. Articles may be amended by complying with the provisions of the law. Corporations may also be dissolved before the period fixed in

the articles of incorporation under certain conditions; and courts of equity have power to dissolve corporations or close up their business.

Every foreign corporation must file with the Secretary of State a certified copy of its articles of corporation. The articles must be accompanied by a resolution of the board of directors or stockholders authorizing the filing of the articles. The resolution must also appoint an agent upon whom service of process may be had within the State. Foreign corporations are required to pay the same fees and to make the same reports as are required of corporations organized within the State.

Elaborate laws have been placed upon the statute books for the purpose of protecting investors in corporation securities and for the prevention of pools, trusts, and conspiracies.

In the matter of the taxation of corporations no special system has been developed. The corporations dealt with in this chapter are taxed under the general property tax, modified in such a manner as to be applicable.

The corporation law of Iowa is neither extreme nor hostile, and contains no features not found in the laws of neighboring States. The law has been amended many times and at present contains most of the essentials of a complete and satisfactory law; but it needs to be rewritten. All the parts should be brought together and constructed into a comprehensive statute on corporations.

VII

INSURANCE LEGISLATION

THE EARLY PERIOD

Although insurance on a large scale is of recent development, by the time the Iowa country was first settled the business had made a substantial growth in the United States.231 Indeed, before Iowa had become a separate Territory one mutual fire insurance company had been chartered by a special act of the Legislative Assembly of the original Territory of Wisconsin. This company was called the Iowa Mutual Fire Insurance Company and was chartered in January, 1838. The incorporating act simply enumerated the corporators and declared that the new company should have the same powers as those of the Milwaukee and Racine mutual fire insurance companies, which had been chartered less than one month earlier. These companies, it appears, were simple mutual fire insurance companies with ordinary corporate powers. The manner of the administration of their business was set forth in detail in the charter statute.2 232

After the Iowa country had become a separate Territory insurance companies were chartered by special acts of the legislature in the same manner that other businesses were incorporated. By special act the First Legislative Assembly of the Territory of Iowa incorporated one insurance company, the object of which was "to afford the members thereof the means of mutually insuring each other against loss by fire". The company was given the usual corporate powers. The organization of the company was defined in detail, and every person insured in the company was de

clared to be a member of the company and entitled to vote for its officers. Every insured person was required to deposit his promissory note with the treasurer of the company for such a sum of money as the directors might specify, and five per cent of the amount of the note had to be paid in money. At the expiration of the term for which the insurance was to run the note, less all losses and expenses incurred during the term, was returned. Every member was bound to pay his proportional share of all losses to the amount of his premium note on deposit with the treasurer. The note, moreover, gave the company a lien on the insured property. Methods of settlement were outlined in the statute. Double insurance was prohibited; and no insurance could be issued until thirty thousand dollars had been subscribed. The last section of the act reserved to the Territory or State the right to alter or repeal the law. 233

In 1840 the Bloomington Insurance Company was incorporated by a special act. This was a stock company with an authorized capital of fifty thousand dollars, divided into shares of twenty-five dollars each. The affairs of the company were to be managed by a board of nine directors elected by the shareholders. Section eight of the act declared:

That the corporation hereby created shall have power and lawful authority to insure all kinds of property against loss or damage by fire or other casualty, to make all kinds of insurances against loss on goods and merchandise in the course of transportation, whether on land or water, to make all kinds of insurance on life or lives, to cause themselves to be insured against any loss or risk which they may incur in the course of their business, and generally to do and perform all other matters and things connected with and proper to promote those objects.

The stock was transferable and the charter was to endure for twenty years. The right to alter or repeal the act was