70 CORPORATION FIXANCE

7. To vote for directors. This is supposed to be one of the must import
rights possessed by a stockholder. Since he cannot voice his wishes <Hre<
in trying to guide the policies of the corporation but must act through
chosen representatives, it would appear that he should take particular c
in choosing directors to represent him. Actually, few stockholders
corporations whose shares are widely distributed over attempt to mi
direct use of this right. In some instances, they are discouraged from try
to exercise the right to vote. Voting arrangements some! hues prodi
marvelous results. Kreuger and Toll stock held by insiders carried one v
per share; that held by the outside public was entitled to one vote for ci
1,000 shares. The Industrial Rayon Corp. had outstanding 998,000 shu
of nonvoting common stock and 2,000 shares of Class B voting stock,

8. To vote on other questions that fundamentally affect the welfare
the corporation. As stated before, stockholders seldom attend mtrtm
If they did, few would know how to vote on important questions other th
to follow the recommendations of their lenders. There is a considcral
difference in the practices of different corporations in inviting the partici}:
tion of stockholders when significant questions are being decided.

Until 1932, the certificate of incorporation of the American Ty
Founders, Inc., included a provision that read as follows:

Directors or other officers of the corporation shall not give any
other lien in the nature of a mortgage on any ussels other than real estate w
by a %o vote of stockholders at a meeting called for the purpose, nt which mwti
at least %o of the full number of shares is represented.
In 1936, the stockholders of the Barber Company, Inc., ratified mnen
ments to its certificate of incorporation to give the board of directors pow
to issue and dispose of bonds, debentures, or other obligations, withu
consulting the stockholders.
English practice on this point, as defined in the English Companies A
of 1929, is of interest. Ordinary resolutions, such as those providing for tl
election of directors, may be passed by a majority of eligible vote's cast i
a regular meeting. Extraordinary resolutions, such as those providing f<
voluntary liquidation of the corporation, require at least three-fourtiw of tl
votes cast at a meeting, tho notice of which must recite its purpose. Sped
resolutions, such as those intended to amend the articles of association i
change the authorized capital, require a majority of at least three-fourtl
of the votes cast at a meeting whose purpose has been stated m a notice sei
at least 21 days in advance of the meeting.
9. To inspect corporate books and records. As the presumed owner <
the corporation, this right sounds important. The common law rccognia
the right of stockholders to examine corporate records at a reasonable tin
and place, provided that the purpose is a proper one. These limitation