To the House Rules. 1910 April 22. Firemen who are injured while taking part in a drill, or while exercising the horses of the department by order of the superior officers, may undoubtedly be considered as having been injured in the performance of their duties as firemen; but the statute, as it stands, makes provision for the relief of those only who are injured in the performance of certain specified duties, namely, duties performed at a fire or in going to or returning from the same. A bill which establishes a special and distinct method for the taxation of the Boston Railroad Holding Company, incorporated under the provisions of St. 1909, c. 519, for the sole purpose of acquiring and holding the capital stock, bonds and other evidences of indebtedness of the Boston & Maine Railroad, and of voting upon the stock and collecting and receiving dividends and interest upon the stock, bonds and other evidences so acquired and held, by imposing an excise tax upon such corporation and exempting its bonds from local taxation, is objectionable upon constitutional grounds; first, because the franchise to acquire and hold stock, bonds and other securities, exercised by such corporation, is not to be distinguished from the franchises of other corporations which have been or may be organized for similar purposes, and the imposition of such excise upon a single corporation, therefore, would not be reasonable, within the meaning of article IV., section I., chapter I., part the second of the Constitution of Massachusetts, which authorizes the Legislature to impose and levy reasonable duties and excises; and second, because there is no valid distinction between the bonds of such corporation and the bonds of any other business corporation which may hold securities of like character, and the exemption from taxation of such bonds would have an effect to render the general tax on property throughout the Commonwealth unequal and disproportionate, and so be obnoxious to the Constitution; and the creation of such exemption, therefore, would exceed the constitutional authority of the Legislature "to impose and levy proportional and reasonable assessments, rates, and taxes, upon all the inhabitants of, and persons resident, and estates lying, within the said Commonwealth," as defined in the Constitution of Massachusetts, part the second, chapter I., section I., article IV. I am in receipt of your communication of April 4, which is as follows: The committee on rules on the part of the House has decided to submit to you the enclosed bills. They wish your opinion upon their constitutionality. If these particular bills are not constitutional, can you suggest such modification, carrying out the purpose of the bills, as will render them constitutional, either by making the bills general, or in any other way? The bills to which you refer are alternative drafts of an act relating to the taxation of the Boston Railroad Holding Company. This company was incorporated under the provisions of St. 1909, c. 519, "for the sole purpose of acquiring and holding the whole or any part of the capital stock, bonds and other evidences of indebtedness of the Boston and Maine Railroad, and of voting upon all certificates of stock so acquired and held, and of receiving and collecting dividends and interest upon said stock, bonds and other evidences of indebtedness." (Section 1.) The corporation so organized was expressly made subject to substantially all the provisions of St. 1903, c. 437, known as the Business Corporation Law, and acts in amendment thereof, so far as applicable to domestic corporations, including the provisions therein which relate to taxation, which now appear in St. 1909, c. 490, part III. The act of incorporation above cited imposes certain limitations upon the powers of the Boston Railroad Holding Company which do not apply generally to business corporations. Such are the provisions that a majority of the officers and directors of the Boston Railroad Holding Company shall be citizens of Massachusetts, that the principal office and place of business of such corporation shall be in the city of Boston, and that all meetings of the directors shall be held in this Commonwealth (section 2); that the stock of the Boston & Maine Railroad which may be acquired by the Boston Railroad Holding Company shall not be sold by it without express authority from the Legislature, and that the bonds, notes or other evidences of indebtedness of such railroad acquired by such company shall not be disposed of without the approval of the Board of Railroad Commissioners (section 3); and that the shares of stock of such company shall not be sold or transferred until they have been guaranteed by a railroad corporation incorporated under the laws of the Commonwealth (section 4). The Boston Railroad Holding Company is therefore a corporation organized under special law for a specific and limited purpose, subject to substantially all the provisions of the Business Corporation Law and to certain further express restrictions; and the single purpose for which it was organized is doubtless one for which, apart from the prohibition in St. 1907, c. 585, § 1, which in my opinion, does not affect the question herein under consideration, a corporation might have been organized under the Business Corporation Law. The bills submitted to me make special provision for the taxation of the Boston Railroad Holding Company by name, and cannot apply to any other corporation now existing or which may hereafter be created. I quote them in full. One draft is as follows: SECTION 1. The Boston Railroad Holding Company shall annually between the first and tenth days of April make a return to the tax commissioner, under oath of its treasurer, setting forth as of the first day of April of the year in which the return is made: First, the total authorized amount of the capital stock of said Boston Railroad Holding Company; the amount issued and outstanding and the amount then paid thereon; the classes, if any, into which it is divided; the par value and number of its shares; the market value of the shares of its stock and of each class of its stock, if there are two or more classes; Second, the total amount outstanding of the bonds, notes and other evidences of indebtedness of said Boston Railroad Holding Company; Third, the market value of all the shares of stock in other corporations held by said Boston Railroad Holding Company which, if owned by a natural person resident in this commonwealth, would not be liable to taxation. SECTION 2. The tax commissioner shall estimate from the returns or otherwise the fair cash value of all of the shares constituting the capital stock of said Boston Railroad Holding Company. To such value there shall be added the total amount outstanding of the bonds, notes and other evidences of indebtedness of said Boston Railroad Holding Company, and from the sum thereof there shall be deducted the market value of securities owned by it which if owned by a natural person resident in this commonwealth would not be liable to taxation. The remainder shall be taken for the purposes of this act as the true value of the corporate franchise of the said Boston Railroad Holding Company. SECTION 3. The said Boston Railroad Holding Company shall annually pay an excise upon the value of its corporate franchise as determined above at the rate determined in the manner provided in section fortythree of part III. of chapter four hundred and ninety of the acts of the year nineteen hundred and nine; provided, however, that the total amount of tax to be paid by the said Boston Railroad Holding Company in any year shall amount to not less than one-tenth of one per cent of the fair cash value of its capital stock at the time of said assessment as found by the tax commissioner. SECTION 4. No taxes shall be assessed in a city or town upon the shares in the capital stock, bonds or other evidences of indebtedness of the said Boston Railroad Holding Company for state, county, city, town or other purposes, for any year for which the said Boston Railroad Holding Company shall pay to the treasurer and receiver general the excise upon its corporate franchise as herein provided. SECTION 5. This act shall take effect upon its passage. The other draft, which contains a more detailed method of valuation, is as follows: SECTION 1. The Boston Railroad Holding Company shall annually between the first and tenth days of April make a return to the tax commissioner under oath of its treasurer setting forth as of the first day of April of the year in which the return is made: First, The total authorized amount of the capital stock of the corporation; the amount issued and outstanding and the amount then paid thereon; the classes, if any, into which it is divided; the par value and number of its shares; the market value of the shares of its stock or of each class of its stock if there are two or more classes. Second, The total amount of the bonds, notes and other evidences of indebtedness of said Boston Railroad Holding Company and a statement of the market value of such bonds, notes or other evidences of indebtedness upon the said first day of April. Third, A statement in such detail as the tax commissioner may require of the market value as of said first day of April of all the shares of stock of other corporations owned by said Boston Railroad Holding Company which shares if owned by a natural person resident in this commonwealth would not be liable to taxation. SECTION 2. The tax commissioner shall ascertain from the returns or otherwise the true market value of the shares of said Boston Railroad Holding Company and shall estimate therefrom the fair cash value of all of said shares constituting its capital stock on the preceding first day of April. The tax commissioner shall also ascertain from the returns or otherwise the true market value of all the bonds, notes and other evidences of indebtedness of said Boston Railroad Holding Company and shall estimate therefrom the fair cash value of all of such bonds, notes and other evidences of indebtedness as of the preceding first day of April. The sum of such fair cash value of the shares of stock and such fair cash value of the bonds, notes and other evidences of indebtedness of the Boston Railroad Holding Company shall for the purposes of this act be taken as the true value of its corporate franchise. From the value of the corporate franchise determined as above there shall be deducted the value as found by the tax commissioner of the securities owned by the Boston Railroad Holding Company which securities if owned by a natural person resident in this Commonwealth would not be liable to taxation. The value remaining after making the deduction herein provided shall be taken for the purposes of this act as the true value of the corporate excess of the Boston Railroad Holding Company. SECTION 3. Said Boston Railroad Holding Company shall annually pay to the treasurer and receiver-general an excise upon the value of its corporate excess as determined above at the rate provided for in section forty-three of part III. of chapter four hundred and ninety of the acts of the year nineteen hundred and nine; provided, however, that the total amount of the tax to be paid by said Boston Railroad Holding Company in any year shall amount to not less than one-tenth of one per cent of the value of the corporate franchise determined as is herein provided. SECTION 4. No taxes shall be assessed in a city or town for State, county or town purposes upon the shares in the capital stock or upon the bonds, notes and other evidences of indebtedness of said Boston Railroad Holding Company in any year in which said company shall pay to the treasurer and receiver-general the tax provided for by this act. SECTION 5. This act shall take effect upon its passage. The material difference between the two bills is that the minimum limit of taxation under the second is one-tenth of one per cent. of the value of the corporate franchise, which is the sum of the fair cash value of the shares of stock and the fair cash value of the bonds, notes and other evidences of indebtedness of the corporation. The minimum limit in the first bill is onetenth of one per cent. of the fair cash value of the capital stock alone. It would result from this difference that if the Boston Railroad Holding Company should issue large amounts of bonds, the minimum limit of taxation under the second bill would be much higher than under the bill first quoted; and this difference is important, for the reason that it is unlikely, under either bill, that the tax will be in excess of the minimum therein established. It is to be observed that neither bill provides a method for the collection of the tax imposed; but I assume that this defect will be remedied, and that the question may be considered as if |