of the capital stock of the Springfield Street Railway Company; which said trust shall issue at this time not exceeding $2,937,600 of preferred shares, which shall be entitled to cumulative dividends at the rate of 4 per cent. per annum, payable," etc., - "and in case of liquidation, payment of the principal of said preferred shares at the rate of $105 per share, to be guaranteed by the Consolidated Railway Company, and to be subject to call on any dividend date at the rate of $105 per share, as provided in the agreement of said Consolidated Railway Company with the Springfield Railway Companies," etc. There was a provision that Lee, Higginson and Company should underwrite at par so many of the preferred shares as should be necessary to acquire the whole, or at least a majority of the stock of the Springfield Street Railway Company at the price stated. There was then a provision for an underwriting commission to be given to Lee, Higginson and Company in full payment for their services. The expenses of forming the trust and of carrying out the terms of the agreement were to be paid by the Consolidated Railway Company. Under this arrangement the stock of the Springfield Street Railway Company was acquired and turned over to the association, which consisted of the trustees, with no financial interest, and the Consolidated Railway Company, which was then the beneficial owner of all the property. The common shares in the Springfield Railway Companies to the amount of $5,000,000, were to be delivered to the Consolidated Railway Company as soon as a majority of the stock of the Springfield Street Railway Company should be acquired. The proceeds of all the preferred shares were to be accounted for to the Consolidated Railway Company by Lee, Higginson and Company. The trust, including the accompanying contracts, was simply a machine, constructed for the management of the property and the business in the interest of the Consolidated Railway Company, which was the interest of the defendant corporation. As to sales made by Lee, Higginson and Company to third persons, and as to the underwriting of Lee, Higginson and Company if that be deemed a purchase by them of the preferred shares, the Consolidated Railway Company is still indirectly the owner of the shares, or at least of an interest in them. The Springfield Railway Companies is not a corporation, although the parties, by their contract, sought to obtain many of the advantages of a corporation without its liabilities. See Hussey v. Arnold, 185 Mass. 202. All who have any proprietary interest in it have rights of property as individual owners, subject to such restraints upon the management and use of it as are legally imposed by the contracts under which it is held. They are equitable tenants in common. By the terms of the agreement the association must be wound up and liquidated at the end of twenty years and eleven months. If there are profits from the enterprise, the Consolidated Railway Company will be entitled to the whole of them. It held all the common shares,

although it has since turned them over to the New England Investment and Security Company. The other holders of the preferred shares can receive only $105 per share as principal, with interest at 4 per cent. Any proceeds beyond that amount will go to the Consolidated Railway Company. If there is not enough in the property to pay that, the Consolidated Railway Company must make up the deficiency; for it guaranteed this amount to all of the preferred shares on liquidation. It can at any time wind up the association; for by its contract it has retained a right to call and redeem all the preferred shares on any dividend date at $105 per share. The case is like that of an association that issues mortgage bonds to be redeemed at $105 at maturity, with a right to call and redeem them at any earlier time at the same rate. In such a case the bondholders have merely made a loan. The real beneficial owners of the property are those who have agreed to pay the loan whereby the property will be redeemed. The transfer of certificates to purchasers of preferred shares is in the nature of a pledge. It seems plain that the Consolidated Railway Company is indirectly the holder and owner of everything belonging to the Springfield Railway Companies, subject to its relations to the New England Investment and Security Company to which we shall refer hereafter. As the defendant owns all the stock of the Consolidated Railway Company, it is indirectly the holder and owner of the 19,253 preferred shares of the Springfield Street Railway Company in the hands of the trustees of the Springfield Railway Companies, as well as of the right to redeem the preferred shares in the hands of purchasers.

The New England Investment and Security Company is a voluntary association similar to the Springfield Railway Companies, although in terms it is of broader scope as to the property that may be owned and the business that may be transacted. The declaration of trust by which it was created was signed by seven of the directors of the Consolidated Railway Company and of the defendant corporation, who were designated as the trustees, and by the Consolidated Railway Company, and by a member of the firm of Mackay and Company, bankers, who contracted to sell the preferred shares, and by an assistant of the president of the numerous corporations and the associations, who are designated together as subscribers. The trustees have no financial interest and are under no financial liability in regard to the property or business, but they hold the legal title and act as managers, under the name of the New England Investment and Security Company. They issued preferred shares and common shares which represent the ownership in the property and business of the association. The preferred shares are guaranteed by the Consolidated Railway Company, principal and interest, as the shares of the Springfield Railway Companies are, and are subject to call in the same way, and are to be redeemed at $105 per share when called, or when the

affairs of the association are liquidated. This guaranty was made at the request of the defendant corporation, which in turn guaranteed the Consolidated Railway Company against loss from its guaranty. The Consolidated Railway Company sold to the New England Investment and Security Company all the stocks and bonds which it held of the Worcester & Southbridge Street Railway Company, the Worcester & Blackstone Valley Street Railway Company, the Worcester Railway and Investment Company, the Springfield Street Railway Company and the Springfield Railway Companies, for the sum of $10,000,000, which was paid by the promissory note of the New England Investment and Security Company, and it guaranteed the preferred shares of this company to the amount of $10,000,000, at the request of the defendant corporation. The contract under which the shares were issued and the guaranty was made, was signed only by the New England Investment and Security Company, the Consolidated Railway Company and the New York, New Haven & Hartford Railroad Company. In the last analysis, in view of the ownership of one corporation by the other, the only party that had any interest in the matters covered by the contract was the defendant corporation. There was a contract with Mackay and Company for the sale of these shares, but they were all held by Mackay and Company for the benefit of the Consolidated Railway Company. At the time of the hearing there were 66,137 preferred shares held by Mackay and Company and owned by the Railway Company. So far as relates to the questions with which we are now concerned, there is no substantial difference between the two voluntary associations. In each the equitable ownership is in the Consolidated Railway Company which is entitled ultimately to the profits from the management, if there are profits, on liquidation, and which must make good the loss to the preferred shareholders if there is a deficiency.

So far as affects the relations of the Consolidated Railway Company with the New York, New Haven & Hartford Railroad Company, the only change in the situation dealt with by the court in its opinion above quoted appears to be that occasioned by the merger of the latter company into the former company, which has already been referred to.

Since, under the laws of Connecticut, the two corporations mentioned have been merged into a single consolidated corporation now known as the New York, New Haven & Hartford Railroad Company, that corporation, in order to bring into existence the conditions which will constitute "a performance of its duty to cease to hold or control either directly or indirectly

the stocks referred to in the information" (Attorney-General v. New York, New Haven & Hartford Railroad Co., 201 Mass. 370, 372), must divest itself of such holding or control, either by disposing of all interest in the two voluntary associations or by disposing of the stock of the street railway companies by a bona fide sale or transfer. I am advised that the New York, New Haven & Hartford Railroad Company has chosen the former method, and has taken action to divest itself of all interest in or control over the New England Investment and Security Company, which, since June 26, 1906, has owned all of the stock of the Springfield Railway Companies, which in turn held substantially all of the shares of stock of the Springfield Street Railway Company. This action is reported to me to be as follows: at the time of the decree most of the trustees and officers of the New England Investment and Security Company were also directors and officers of both the New York, New Haven & Hartford Railroad Company and of the Consolidated Railway Company of Connecticut. The present officers of the New England Investment and Security Company are not corporate officers or directors of the consolidated corporation known as the New York, New Haven & Hartford Railroad Company. In addition, the following action, as reported to me, has been taken by the New York, New Haven & Hartford Railroad Company to divest itself of the indirect ownership and control of the stock of the several street railway companies named in the decree:

1. The New Haven Company surrendered all the common shares of the New England Investment and Security Company issued to it except 1,000. It has surrendered, also, all the right originally reserved to it, when it surrendered such common shares, to again demand their issue to it. It has also surrendered all right to demand the issue to it of any additional common shares.

2. It has sold, without reservation or option of any kind, the 1,000 outstanding common shares. The purchasers thereof have paid for the same and hold the same with an absolute title.

3. It has assigned and transferred to the New England Investment and Security Company all its originally reserved right to call for redemption the preferred shares of the Springfield Railway Companies.

4. It has assigned to the trustees for the time being deemed to represent the common shareholders of the New England Investment and Security Company, all its originally reserved right to call for redemption the preferred shares of the New England Investment and Security Company, and that right is now held by the trustees, deemed to be appointed for the common shareholders, to be exercised by such trustees only for the benefit of the holders of such common shares.

5. It has accepted in lieu of its demand claim against the New England Investment and Security Company, fifteen-year notes, unsecured except by covenants of the Investment Company not to dispose of its existing assets without substituting other assets deemed by the trustees to be of equivalent value, and not to pledge or encumber its assets without equally securing by the instrument of pledge or mortgage the fifteen-year notes issued by the Investment Company.

6. Although advised that it was under no obligation so to do, the New York, New Haven & Hartford Railroad Company has contracted for the sale of all the fifteen-year notes so taken by it in payment of its demand claim against the New England Investment and Security Company.

7. It has sold to the New England Investment and Security Company all the bonds and promissory notes which it held of any of the street railway companies mentioned in the information excepting the Worcester & Webster and Webster & Dudley companies, the disposition of which is next hereinafter described.

8. The New York, New Haven & Hartford Railroad Company has sold and transferred to the New England Investment and Security Company all the stock, bonds, certificates of indebtedness and other obligations of every kind which it held of the Worcester & Webster and Webster & Dudley Street Railway companies, except only such as had, prior to the beginning of the suit by the Attorney-General against the New York, New Haven & Hartford Railroad, or by its predecessors in title, been pledged to the New York Security and Trust Company of New York, as trustee under the mortgage from the Worcester & Connecticut Eastern Railway Company, as collateral security for an issue of mortgage bonds by said last-named railway company, and as to the reversion or equity of redemption in all stock, bonds and other obligations of said Worcester & Webster and Webster & Dudley Street Railway companies so pledged, said New York, New Haven & Hartford Railroad Company has executed a transfer and assignment of all its right therein, subject only to the lien of the trustee under said mortgage.

The result of this action upon the part of the New York, New Haven & Hartford Railroad Company, as disclosed in the evidence submitted to me and contained in the official declaration