Kroeger, Harry W.

English

Washington University St. Louis: Open Scholarship

Washington University Law Review Volume 15 Issue 1 January 1929 Review of “Studies in the Law of Corporation Finance,” By Adolph Berle, Jr. Harry W. Kroeger Washington University School of Law Follow this and additional works at: https://openscholarship.wustl.edu/law_lawreview  Part of the Banking and Finance Law Commons, and the Business Organizations Law Commons Recommended Citation Harry W. Kroeger, Review of “Studies in the Law of Corporation Finance,” By Adolph Berle, Jr., 15 ST. LOUIS L. REV. 108 (1929). Available at: https://openscholarship.wustl.edu/law_lawreview/vol15/iss1/21 This Book Review is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact digital@wumail.wustl.edu. ST. LOUIS LAW REVIEWSTUDIES IN THE LAW or CoPpmAToN FINANCE, by Adolph A. Berle, Jr.Chicago: Callaghan & Company, 1928.The law still has its frontiers, and, as the social organism progressivelyexpands, so must the law, if it perform its function, marshal the advance.Mr. Berle's book must be understood as a pioneer enterprise, an attempt todiscern the principles of law which are being developed in keeping withthe new phenomena of corporation finance. To approach the book withthe idea of finding a handbook of practice or a treatise on some crystallizedbranch of the law, would be to misconceive the primary purpose. We feelindebted for numerous suggestions as to the handling of corporate organi-zation, but those suggestions are incidental to a deeper study.Mr. Berle's field of inquiry is the protection to be accorded to stock-holders under modern business conditions and in the face of new forms ofcorporate organization which have rendered old doctrines of the law ofcorporations obsolete. With the divorce of corporate management fromactual ownership of the corporation, with the growth of non-voting stock,accompanied by so-called "bankers' control," with the right given to themanagement under new legislation to sell no par stock at a price fixed bythe Board of Directors, with the opportunity afforded manipulation throughthe device of controlled subsidiaries, old doctrines have become inadequateto protect inactive and minority stockholders and a need for new doctrineshas arisen. Mr. Berle sees a gradual development of the control of courtsof equity over the acts of corporate managements in the interest of thereal proprietors of the enterprise. The authorities are scant and the rulesonly loosely formulated, but the treatment is seen as a reaffirmation ofvitality in our courts of equity.Mr. Berle's chapters on cumulative preferred stock, participating pre-ferred stock, stock purchase warrants and convertible bonds, as well as histreatment of the doctrine of "freezing of capital" upon reorganization withno par shares, have to do largely with the growth of charter interpreta-tion, but they have coherence with the general theme of equitable controlof the corporate management in that the newly evolved rules of interpre-tation constitute limitations on the unbridled discretion of the manage-ments. To us it seems that the high point of the book is reached in thatclearly defined discussion of non-cumulative preferred stock, where Mr.Berle depicts the growth of the doctrine that earnings must, so far asthe rights of the various classes of stockholders.are concerned, be "chris-tened at birth," so that, though the discretion of a Board of Directors todeclare or not to declare a dividend remains unimpaired, yet the earnings,which might rightfully be declared in favor of a given class of stockhold-ers, constitute an equitable fund in their favor.The book has the merit of lucid style and is mechanically satisfying.We regret that there should have been included in it the first chapter,which deals with the origin and history of the conception of a corpora-tion at the common law. Whether the corporation be deemed to be createdby act of the sovereign or by the contract of the parties, would seem toWashington University Open ScholarshipBOOK REVIEWSconstitute a discussion having no relation to the general topic, which re-lates to the internal affairs of the corporation.HARRY W. KROEGER.St. Louis, Missouri.LAW AND SOCIAL WORK, by John S. Bradway. Chicago: The University ofChicago Press, 1929. Pp. xx, 189.The purpose of this book is to relate the law and its administration tothe problems of social workers, or, to put it somewhat differently, to orientthe social worker, both factually and psychologically, in the law as it re-lates to his objectives. The purpose is avowedly and wisely not to makethe social worker a legal adviser of society's wards, but to reveal why, andhow, and to what extent social agencies require legal aid.Anyone, with even a small knowledge of social work, knows that theproblems of the poor frequently have in part a legal phase. It is desirablethat social case workers should have at least a speaking acquaintance withthe legal questions which are of fairly frequent recurrence, so that the casehistory may reveal such questions and furnish a factual basis for a sounddetermination thereof.It is believed that the author has performed his task with eminent suc-cess. The effort to write law or about law for laymen is always difficult.Not the least of the difficulties is to preserve a proper balance between toomuch detail and too great generalization. Mr. Bradway has done wellin this respect. He has written with a keen appreciation of the problemsof social workers born of a long interest in and contact with social agen-cies and especially with the charitable activities of the Bar in the form oflegal aid and law school legal clinics. It is fair to say that no one is bet-ter prepared than the author to render this service-a service not only tothe social workers but to the administration of justice in some of its finerand much needed aspects.The broader titles in the table of contents reveal not only the scope ofthe book but the author's appreciation of the needs of the field: I, ThePhilosophy of the Field of Legal-Social Relations; II, Rules of Law inGeneral; III, The Machinery for Administering the Law; IV, ParticularRules of Law. Under the latter title are included a treatment of suchtopics as wage claims, small loans, assignments and garnishments, install-ment contracts, workmen's compensation, crimes, estates, especially ofminors, feeble-minded or insane persons and habitual drunkards, domesticrelations, including of course the problems of desertion, abandonment, andnon-support, parent and child, persons under abnormal physical, economic,social and political conditions. Finally there is a bibliography of interestand value.Apart from a few details of minor importance the only criticism wewould offer is that more space could well be given to the functioning of theJuvenile Courts and the legal problems which head up in such courts andhttps://openscholarship.wustl.edu/law_lawreview/vol15/iss1/21

Review of “Studies in the Law of Corporation Finance,” By Adolph Berle, Jr.

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Review of “Studies in the Law of Corporation Finance,” By Adolph Berle, Jr.

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