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The article reports that the role and functions of business schools in universities has been raised from an unfamiliar quarter. Academicians have always quarreled about the scholarly values alleged to be present in, or absent from, a business school's training. If a collegiate school of business is to be more than a trade school with a university veneer, then it must not attempt to educate people for specialized types of jobs. Rather, it is necessary to find the requirements that are common to all, or most, kinds of jobs in business and to concentrate the educational efforts on these common elements, leaving the task of training people for particular jobs largely to the companies themselves. It is an error to think that a school of business administration can or ought to turn out people who are immediately qualified, without further experience and training, for specific jobs. The place for training for specific jobs is not found at the undergraduate level. Rather, such training should be offered to businessmen who are already on the job and who have a substantial background of experience. Thus, short courses and conferences for purchasing agents, advertising copywriters, investment bankers, can be extremely valuable.

The article focuses on the changes in corporate structure during 1940-1943 in the U.S. Corporate structure is a broad term; it includes the capital structure the assets--and the financial structure--the liabilities. Current assets, fixed assets and investments are the categories which are of considerable significance in an economy at war. Changes in these categories and in certain items within each category throw light upon such issues as reconversion, the rate of interest, and employment. The purpose of this analysis is therefore to investigate the probable cause and effect relationship between these changes and certain economic issues, as well as to point out the mere quantitative changes. Reserves for federal income and excess profits taxes, long-term liabilities, reserves for contingencies and reconversion, capital stock, and earned surplus have all been significantly affected by the war, and these changes in turn have considerable bearing upon the economic issues of security value, long-run rates of interest, and incomes of certain economic groups. The quantitative data cited in this article are derived from a study of 150 corporations, each with assets in excess of $1,000,000, each listed on one of the security exchanges, and each with at least one of its plants in Texas.

The article deals with financial legislation and the Securities and Exchange Commission of the U.S. The technical, legal, engineering, and accounting fees incident to preparing a listing application and printing a prospectus are not to be taken lightly and there is no denying that the legislation makes this aspect of capital raising more expensive. However, it must be remembered that much of the investigation, involving engineering, legal, and accounting work, has heretofore been done by the bankers before assuming responsibility for a public offering and is, therefore, not added or new cost. It is not improbable that the technical experts and professional men will become so well versed in just what is required to prepare a listing application that it will cost no more than the less effective investigations the bankers were accustomed to make before the legislation became effective. There is this one vast difference--the prospective security buyer now has access to all the information as well as the underwriter. Formerly, whatever was known was known to the underwriter only.

This article focuses on the tax on undistributed corporation surpluses in the U.S. When the U.S. Supreme Court, early in 1936, reduced revenue by a half-billion dollars by declaring the processing taxes invalid, and when the U.S. Congress a few days later increased expenditures over a half billion dollars by providing for the immediate payment of the soldiers' bonus, it was imperative that additional revenue be found. It was then that the Administration proposed a tax on the undistributed earnings of corporations, stating that it would raise approximately $600,000,000 in revenue, that it would remove a major injustice in our tax system, and would plug up a large loop-hole, widely used for tax avoidance. A wide avenue of tax avoidance had been available to corporations by retaining net income in the surplus account instead of distributing dividends to the stockholders. One of the main purposes in the tax on undistributed corporation surpluses was to make it less profitable to withhold dividends and add to surplus.

The article discusses on the case of Texas v. White case with reference to the doctrine of political questions. It is commonly believed that when an American court is confronted with a case involving a political question it will look to the political branches of the government to learn what the view is which those departments have expressed. When that view is ascertained, the courts will act in conformity with it. This is largely true, but Texas v. White offers one instance, if one examines both majority and minority opinions realistically, in which the general rule does not satisfactorily apply. In 1868, Texas, claiming the bonds in question as her property, sought an injunction in the Supreme Court to restrain the defendants from receiving dividends from the national government. Texas, besides, sought to compel the surrender of the bonds to the State. It will be remembered that at the end of the war the government of Texas was non-existent, that is, there was no government maintaining constitutional relations with the Union.

Presents several cases for review, published in the April 1911 issue of "Harvard Law Review." Discussion about adverse possession as to who may gain title of real property relative to the owner; Probable claims and the rights of creditor's security in times of bankruptcy; Misapplication of funds of corporation by officer endorsing the checks of the corporation.

The reorganization provisions of the Internal Revenue Code, though frequently thought to be advantageous only to taxpayers, also have an important function in policing the withdrawal of corporate earnings at capital gains rates. In this article the author discusses in detail the most recent example of the so-called ‘reincorporation’ problem, and then suggests a number of approaches to the problem under the changed statutory language of the 1954 Code. [ABSTRACT FROM AUTHOR]

The article highlights issues related to cross ownership in the U.S. In the first quarter of 1961, Fifth Avenue Coach Lines, Inc., absorbed an unprecedented 892,000-dollar loss. Organized opposition to management came forward and accused management of milking the company. Despite the huge loss and the vehement opposition, management was able to win reelection, one crucial factor being an "ace in the hole." When there are mutual shareholdings between two corporations - for example ownership of Fifth Avenue shares by Gray Line which was itself a subsidiary of Fifth--cross ownership is said to exist.

The article comments on the U.S. Internal Revenue Code of 1954. The purpose of section 306 of the Internal Revenue Code of 1954 is to prevent shareholders from realizing the earnings of a corporation at capital gains rates through the use of a stock bail-out.'0 The stock bail-out, a problem which had become acute under the 1939 Code, was typically initiated by the declaration of a tax-free preferred stock dividend to a corporation's common shareholders. The draftsmen apparently anticipated that, in tax-free reorganizations or separations, the receipt of preferred stock could offer much the same bail-out potential as a tax-free stock dividend.

Discusses the provisions of the Communications Satellite Act of 1962 in the United States. Roles of the president, the National Aeronautics and Space Administration and the Federal Communications Commission in the establishment and operation of the satellite system; Powers and relations of the regulators; Control of the structure of capitalization of the satellite corporation; Control of competition.

Contends that the U.S. Internal Revenue Code provisions taxing shareholders at capital gains rates upon the proceeds of a corporate liquidation have been interpreted to permit some income properly attributable to the corporation to escape the corprate ordinary income tax. Necessity of legislation allowing attribution of income to a dissolved corporation; Problem relating to the transmutation of ordinary income into capital gains; Distribution by a corporation in the process of liquidation of rights to the receipt of income not yet accruable by the corporation in the year of liquidation.

Although a closely held corporation typically cannot finance a stock redemption except by accumulating earnings either before or after the redemption, the status of such accumulations under the accumulated earnings tax is far from clear. Professor Herwitz reviews the present state of the law on this subject, as well as the evolution of the Code provisions dealing with redemption transactions. He narrows the area of difficulty by a careful examination of the several types of accumulations that may be employed in a stock redemption transaction. In the remaining area, his analysis suggests a more rational and practicable way of testing accumulations under the tax law. [ABSTRACT FROM AUTHOR]

Examines the accounting for treasury shares under the Model Business Corporation Act in the U.S. Provisions of the legislation; Flaws and problems of handling treasury shares; Suggestion of the author for solutions and remedies to such flaws and problems of the legislation.

The author undertakes an analytical exploration of the implications of the requirement that a transaction be "in pursuance of the plan of reorganization" in order to be governed by the reorganization provisions of the Internal Revenue Code. He suggests some criteria for determining which of the transactions that occur during a corporate readjustment should be governed by the reorganization provisions, and he then considers the requisites of "the plan." [ABSTRACT FROM AUTHOR]

The Treasury's responsibility for building up a consistent body of tax law in its regulations and revenue rulings is the basic theme of Mr. Young's article. In examining the treatment of one important rule governing corporate separations, he finds that the rulings often diverge from the regulations and are not completely consistent themselves. Thus the Treasury has failed to give adequate guidance for taxpayers, and to fulfill its responsibility. [ABSTRACT FROM AUTHOR]

This article presents information related to the practical uses of the taxfree-reorganization provisions of the Internal Revenue Code of 1954 in effecting corporate acquisitions of the stock or assets of existing corporations. There are a number of administrative and judicial doctrines applicable to reorganizations which have been superimposed on the statute. Registration is required for the issuance of stock to acquire stock of another corporation in a type of reorganization whenever a public offering is involved.

Attempts to define the role that the concept of earnings and profits plays in defining shareholder income. Enactment of the first income tax statute after the passage of the 16th Amendment; Role of the earnings and profits requirement of 1916, as the chief statutory basis for exempting return of contributed capital; Question on whether earnings and profits are decreased upon a distribution in kind to the extent of basis or to the extent of fair market value.

The article reports that the problem of distributing the administration of corporate reorganizations between Chapter X and Chapter XI of the Bankruptcy Act is again being considered by the Supreme Court in General Stores Corp. versus Shlensky. Derived from the equity receivership and former section 77B of the Bankruptcy Act, Chapter X provides a statutory framework for full-scale corporate reorganizations. The presiding district judge has broad supervisory powers over the proceeding and can call upon or permit the SEC to participate. Where the debtor's liabilities amount to $250,000 or more, appointment of a disinterested trustee is mandatory.

This article discusses the internal revenue code of 1954, in terms of corporate distributions, organizations, and reorganizations in the U.S. The principal problem relating to distributions in kind arises out of distributions of appreciated property when the corporation's earnings and profits are less than the value of the property distributed. The 1954 Code, like prior law, treats such distributions as dividends to the extent that they are "out of" earnings and profits, and the committee reports state that the comparison with earnings and profits is to be made by reference to the fair market value of the distributed property.

The article focuses on various legal issue in the U.S. The payments to the retiring shareholder by the corporation constitute dividends to the buyer. The buyer is purchasing the interest of the retiring shareholder in the corporation. The U.S. Supreme Court had ruled against an economic legislation holding that it gave legislative authority to private person. It is still invoked to test the validity of statutes and ordinances under state constitutions. Fair and impartial administration is the primary issue presents by delegations of a power of particular application.

The article reports that shareholders of defendant, a New York corporation owning and operating an office building, adopted by more than a two-thirds vote the following plan for reorganization: Defendant was to transfer all of its assets and liabilities to a Delaware corporation created with an identical capital structure, in exchange for all of the new corporation's stock. The Delaware stock was then to be deposited by defendant with three voting trustees, two of whom were officers and directors of the New York corporation.

This article details several legal and administrative guidelines and procedures related to industrial regulation and taxation. It first illustrates features and guidelines of the Section 107(a) regarding business partnership matters. Section 107 provides that where at least 95 percent of the compensation for services on a single job rendered individually or as a member of a partnership over a five-year period was received on completion of the services the tax could be computed by allocating the amount received ratably over the period of the services. Section 107(a) emphasizes on the allocation provision for shares and profit sharing. The article further discusses legal provisions and restrictions related to dividends from contributed capital and protection of preferred shareholders. Information regarding De Novo Judicial, based on review studies, of State Administrative findings are further illustrated here.

The article focuses on the determinants of dividend payments by the individual firms. Most dividend models implicitly assume that the current dividend payments of the firm are a distributed lag function of current and past profits. Table testing whether the data lend any support to the notion of a lagged response, seems to provide evidence for a distributed lag relationship between profits and dividend changes. Some sort of distributed lag dividend model is the evidence that the effects of given change in profits on the dividend stream decline over time. A particular model works well only because it happens by chance to conform to the random. Two steps were taken in the study to guard against this result. First, the data for half of the available firms were used in screening for the best models and data for the remaining firms were used to validate the initial results. Second, when the best models had been chosen, their predictive value was examined by applying them to a new year of data.

By measuring response errors in reports of savings account and debt balances under near-ideal (and very special) conditions, this article shows what is the maximum degree of accuracy we may expect to attain in sample surveys of a financial character. Under the conditions of this study none of the response errors observed were sufficiently serious to invalidate the data for any likely statistical use. The article investigates the influence on response errors of the following factors: record consultation, "rounding," size of balances, the number and nature of transactions in the account balance, the length of the recall period. [ABSTRACT FROM AUTHOR]

The article discusses about the attitude of industrial employers toward hiring of former state mental hospital patients. Recently various governmental and private agencies have made special efforts to acquaint the general public with various aspects of mental illness. It appears that these efforts are beginning to pay dividends, because there is noticeably less stigma attached to the fact that one received psychiatric or psychological help. However, the situation seems to be different with those who have been patients in a state mental hospital.

El artículo presenta resúmenes de varios artículos publicados que incluyen "Better Year Predicted for American Economy," por Paul A. Samuelson, "Recent Developments in Economic Statistics," por Sir Harry Campion, "State Finance Corporations in India," por C. K. Shah, y "International Stabilization and the Concept of Balanced Growth," por John Sheahan.

El artículo discute varias noticias sobre la economía norteamericana. Según el Departamento del Trabajo, el último trimestre de 1955 mostró altos niveles en el ingreso personal, la ocupación y los dividendos. Las predicciones para 1956 son más favorables que las fines de 1954. El sector de la agricultura ha experimentado la peor crisis desde los años treinta, con los precios de productos agrícolas bajando 2% más entre octubre y noviembre.

The article informs that the reorganization of the Waltham Watch Co. under Chapter X of the Bankruptcy Act presents excellent case material for a clinical study of the means available under that chapter to rehabilitate a corporate debtor. Chapter X, the successor of Section 77B, was enacted in 1938 as part of the Chandler Act, which substantially amended the procedures for corporate reorganization. It makes available to corporations which comply with its requirements a practical method of refinancing. The benefits inuring to the Waltham Watch Co. by virtue of the second reorganization are best summarized in the pro forma balance sheet annexed by the trustees to their petition for the approval of the agreement with the RFC.

This article reports that even though the number of actual proxy fights that have taken place under the rules has been small and the number of successful ones even smaller, the proxy rules play an important part in the development and maintenance of that investor confidence that is vital to the efficient functioning of our democratic capitalist system. Today the investor in listed securities knows that generally he will be kept fully informed about conditions in his company and that he will not be asked to give the management a "blank check" not knowing for what amount or what purpose.

Presents recent court decisions on cases related to corporations in the U.S. Ruling of a court to grant a certiorari in a case involving taxation on the sale of corporate assets Court Holding Co.; Claim of the court that the a corporation realized no gain from the distribution of a dividend in kind in the ground that the corporation had neither made a sale nor discharged a corporate obligation in a case of General Utilities & Operating Co.; Facts of the case.

Discusses the law to be applied when neither the statute of the state of incorporation nor that of any other state in which it does a substantial amount of business mentions the problem of dividends in its multistate aspect in the U.S. Role of the state of incorporation in determining dividends to be paid; Assessment of statutes of states on foreign corporations; Decision of the Supreme Court to sustain state regulatory and taxing measures on the issue.

This article focuses on Chapter X of the National Bankruptcy Act of U.S. with emphasis on reorganization of dissolved corporations in proceedings under this chapter. Chapter X offers a procedure by which the capital structure of a debtor business unit, insolvent in either the equity or the bankruptcy sense, may be adjusted to its estimated earning power. Occasionally, reorganization proceedings are not commenced until after loss or suspension of the corporate charter.

The article presents notes from lectures delivered in the law schools of the U.S. Most British reorganizations and recapitalizations in the past half-century have been accomplished under Section 206 of the Companies Act, 1948, and its forerunners. The corporation statutes of eleven American states contain sections which undoubtedly are derived from this provision of the Companies Act. The early suggestion that "arrangement" must be limited to agreements in the nature of a compromise--that is, agreements arising as the solution to a dispute over rights--has been displaced by an interpretation permitting that term to cover any agreement whatever its origin.

The article focuses on corporate financing through the sale and lease back of property. Sale-and-lease-back arrangement commonly involves a sale of land and buildings to an investor by a business concern, which simultaneously leases them back upon a long-term contract, frequently making some provision for renewal or repurchase. Its business, legal, and tax implications are so manifold that the problems it raises can only be introduced rather than resolved. Most cases involve only two parties, a company seeking capital and a single investor, a life insurance company, an educational institution, or a private corporation or citizen.

Focuses on the legal questions on the administration of the simplification provisions of the Section II of the Public Utility Holding Company Act by the U.S. Securities and Exchange Commission. Provisions of Section II; Liquidation preference and the absolute priority rule of the section; Formulation of a theory by the Commission regarding recapitalizations.

The article presents a report on fair and equitable recapitalizations of any business organization. There are two situations in which the management of a business corporation is likely to attempt to revamp the capital structure so as substantially to modify present and future rights of existing security holders: reorganizations of insolvent corporations, involving modification of the rights of creditors, including bondholders; recapitalizations of solvent corporations, involving modification of the relative rights of classes of shareholders. A business enterprise which is insolvent in the bankruptcy sense or one which, although solvent, is nevertheless, because its assets are frozen, unable to meet its matured obligations, is under an obvious necessity of coming to some arrangement with its bondholders and other creditors if it is to continue to function.

Examines the impact of the implementation of the U.S. Chandler Act on the reorganizations of business enterprises in the U.S. since 1938. Details of the legislation; Importance of the Act to eliminate possible negative consequences of corporate reorganizations; Comments on the effectuation of reorganization by an independent agency of a judicial court.

Discusses the regulation of corporate finance and management under the Public Utility Holding Company Act of 1935. Objective of the Act; Corporate structures, securities and their provisions; Imposition of new fiduciary concepts.

The article reports that until recent years, the federal equity court has been the reorganizing forum, and the creditors' objections to a proposed plan have been formulated under the aegis of the Boyd case. But since 1933, the federal bankruptcy court under Sections 77 and 77B of the Bankruptcy Act has, to a large extent, taken over the work of the equity receivership. Recent litigation there has brought to light a new line of defense to justify the preservation of stockholder participation beyond that newly paid for. Since Sections 77 and 77B stem from a heritage of bankruptcy legislation, the composition technique of Section 12 of the Bankruptcy Act has been recalled, and it has been argued that this background justifies the reorganizing court in interpreting the requirement of a "fair and equitable" plan as exacting something less rigorous than that required by the Boyd case.

Addresses issues about concept of earnings and profits. Establishment of a new statutory test of taxability of corporate distribution to stockholders; Details on the ascertainment of earnings and profits for the purpose of determining taxability of corporate distributions; Concepts in the field of income tax law.

Discusses the determination of priority of security interests in particular property between bondholders claiming under the "after-acquired property" clause of one mortgage. Effect of the clause on future financing of the corporation; Efforts made to solve the conflict in the application of settled rules of general mortgage law; Arguments of the court on the clause.

Focuses on the pledging of bonds by corporations in the U.S. Use of bonds as collateral for loans; Commercial financing.

Examines the concept of principal and income in corporate practices. Historic conceptions of rent and interest; Res conception of a corporation's capital in English corporation accounting; Court cases indicating the relation of a value or quantum theory to the Pennsylvania doctrine.

Focuses on the U.S. law extending control over public utility-affiliate financial transactions. Principal methods of holding company exploitation of operating companies; Remedies for the unnecessary and unreasonable managerial and supply contracts, irregular banking transactions and improper dividend declarations by the utility; Elimination of the practice of direct regulation of holding companies suggested as necessary to prevent abuses; Prevention of delays incident to the passage of novel legislation and the setting up of new administrative machinery; Necessity of legislation permitting control of banking transactions and dividend declarations.

This article discusses various issues related to responsibility and corporate management. Most students of corporation finance dream of a time when corporate administration will be held to a high degree of required responsibility--a responsibility conceived not merely in terms of stockholders' rights, but in terms of economic government satisfying the respective needs of investors, workers, customers, and the aggregated community. Unchecked by present legal balances, a social-economic absolutism of corporate administrators, even if benevolent, might be unsafe; and in any case it hardly affords the soundest base on which to construct the economic commonwealth which industrialism seems to require.