Reading the report of the price spreads commission one gets the impression that the members of that commission became convinced of the fact that appraisal companies were materially assisting in-I do not think this is too strong a word- fleecing the public, by not having regard to the ordinary ethics of business in making their appraisals. So it does seem to me that if this difficulty has crept into our business practice these appraisal companies should be bonded or very severe penalties should be provided for false appraisals or false reports on appraisals made by the company. [DOT]
Companies Act-Mr. Bothwell
I should like to say just a few more words particularly in connection with sections 5, 15, 16 and 20. In section 5 I find these words:
In no case shall any shares, whether common or preferred, or whether with or without nominal or par value, be issued and allotted as fully or partly paid up for less than what may justly be deemed in all the circumstances of the case adequate consideration-
I hardly know what you can take out of those words, "what may justly be deemed in all the circumstances of the case adequate consideration," or how wide be their scope. It seems to me that a simpler expression could be used in dealing with the consideration for shares that- are being allotted. Surely the time has come in the history of this country when if men are able to form corporations and go out and sell their stock to the public, the public have a right to expect that either dollars or dollars' worth are going into the company, and not simply "what may justly be deemed in all the circumstances of the case adequate consideration." We know of cases of incorporations-they will be found in any book of company law-where assets properly purchased for a few hundred or a few thousand dollars were then sold to the company at greatly enhanced prices and yet they were called "adequate considerations."