FEDERAL ACTS LIMIT DIRECTORS

Mr. Edward G. Buckland, former professor of the Yale Law School and at present vice-president of the New York, New Haven, and Hartford Railroad, spoke in Emerson A last evening on "The Obligations of Corporation Directors." After defining the three kinds of corporations, private, quasi-public, and public, Mr. Buckland went on to explain the principal duties and obligations of the directors of a private and quasi-public corporation.

The first duty of a director is to see that the operation of the corporation is carried on with as much economy and efficiency as possible. They should strive to lay up a comfortable surplus and should declare no dividends without such a surplus. In case of doubt no dividends should be declared. The director of a corporation stands in the same relation to that corporation as a trustee does to the property he has in trust. A director, therefore, should make no contracts with any other directors and the corporation except such as will bear the closest scrutiny, and then only after competitive bidding. The rigidness of the Federal Corporation Act makes it a paramount necessity for a director to carefully consider every step he takes and first of all assure himself that he is in no way guilty of exceeding the charter power or of transgressing the laws of the Federal authorities.

In the course of his talk Mr. Buckland discussed the Federal Corporation Act and pointed out its significance in regard to corporation directors. One of the provisions virtually declares that "the labor of a human being is not a commodity of commerce." "Combinations of laborers to raise wages are lawful; combinations of organizations to lower wages are unlawful. Why should labor organizations be excluded from the jurisdiction of interstate law and directors of corporations included?" Many other provisions seem palpably unfair, but time will tell whether the acts of the Federal Trade Commission will in the end be beneficial to the country at large.