39 Harv. L. Rev. 673 (1925-1926)
Non-Voting Stock and Bankers Control ; Berle, A. A. Jr.

handle is hein.journals/hlr39 and id is 719 raw text is: HARVARD

VOL. XXXIX              APRIL, 1926                    No. 6
VOLUTION of modem business structure has brought for-
ward a new problem, that of corporations much of whose
capital stock is disfranchised, and management of which is vested
in a small class of voting shares. These shares are ordinarily
called  bankers' shares, but may be better termed manage-
ment stock.
It is submitted that under the law as it stands, the holders of
CC management stock  must exercise their power of control for
the entire body of stockholders. This means, of course, that
their control is by no means so complete or untrammelled as is
ordinarily assumed. It is believed that, among other results of
this rule, holders of such stock are required (i) so to arrange
the capital structure that no class of stock appropriates to its
benefit any of the capital contribution made by any other class;
(2) to act disinterestedly, and to refrain from acting in any sit-
uation in which they have an interest apart from that of the
corporation; and (3) to bear liability jointly with the corporate
directors for mismanagement of the corporate affairs unless they
show dissent from the wrongful acts complained of.
Control of American corporations by holders of a minority of
the capital stock is no novelty to business men or lawyers.
Means have been constantly sought to maintain such control.
* I am indebted to Irving Mischkind of the New York Bar for many sug-

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