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 STOCK WITH EXCLUSIVE VOTING POWER the methods adopted in these cases. In that of the railroad, the common stock holders are in form and in law, as well as in fact, the owners of the franchise, capital, and profits of the corporation, and the pre ferred stock, with its voting power, has a share in such ownership, relatively so small as to be in legal intent and effect a mere peg on which to hang the trust control. In that of the Equitable Life, the contri butions of the policyholders became the capital and they the owners or beneficial "members" of the corporation, though with out a voting power. The so-called voting stock, like the preferred stock in the other case, became a mere peg on which to hang the control. Its rights in distribution are, however, postponed to those of the policyholder, and it was in legal intent simply the security fund required by the statute, upon which the contributors are entitled to a seven per cent dividend out of the accumu lations. A distinction is of course necessary between contract insurance and mutual insurance. In the former, the policyholder exchanges his property for a contract. In the latter, he places this property in a joint venture, in which he acquires a share of the joint ownership, in exchange for the indi vidual ownership he surrenders. In the case of the Equitable, this joint ownership attaches not to any particular fund, but to the assets of the society as such, — in other words, to the society itself, as an association of the policyholders, vested by law with a corporate entity* It is this association that is controlled by the voting stock.

In the case of the real estate concern, the charter is that of a straight stock company with Sioo.ooo capital, and its officers have apparently assumed the power to issue "profit-sharing certificates," the holders of which are by their contract entitled to a fixed return and to a share in the profits proportioned to their investment. They also by these dubious contracts become the 1 Cooley's Briefs on Insurance, Vol. I, pp. 51-53.

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substantial owners of the corporation, but are not of course in any sense its corporate "members." A further supposititious, but perfectly possible illustration may complete our view. It is that of the simplest form, a corporation organized for the primary purpose of entrust ing to the control of A, the property say of B, for investment. B, having entire trust in A, a so-called preferred stock in a small amount is issued to him, for services, and a non-voting common stock is issued to B. A has agreed to manage the property for a share in the returns on the investments, represented by dividends on his voting stock. In the confidence of a moment, the property of B has been absolutely and irrevocably placed in the control of A, his representatives and assigns forever. Now it will not be contended that there is anything morally wrong with any one of these plans of corporate finance, resting as they do on the trust and confidence of the parties. We will also assume that they are permitted by statute at least in some of the states. It may indeed be opposed to public policy, that the legal title and con trol of A over the property of B and C should be irrevocable and be represented by stock divisible and transferable for cash. It is probable that the essentially trust relationship established and its attendant dangers have been largely ignored. Where they have been recognized, as in the case of eleemosynary institutions, the statute has given to the members or trustees a strictly trust position, generally without financial interest or possibility of "honest graft" in the management. An illustration of such an institution, having some bearing on our subject, is found in the early Pennsylvania case of Philadelphia Savings Institution, i Whart. 461, (1836). The legislature had specially incorporated certain men and their successors, as "members" of the Savings Institution, giving them, through their elected governing board, entire control of the institution, with power to elect their