rectly or indirectly, any control, direction, supervision or influence whatsoever over the acts or doings of such domestic railroad company by virtue of such holding of stock therein." As a result of the passage of this statute, the situation remained unchanged, and no action was taken with reference to it by the Legislature of the year 1908. In view of the provisions of this statute and of earlier acts of like effect forbidding the acquisition of the stock of a domestic railroad or railway corporation, and in the absence of legislative action in the premises, I filed an information in equity under the provisions of St. 1906, c. 372, based upon the acquisition by the New York, New Haven & Hartford Railroad Company of the ownership or control of shares of stock in the Boston & Maine Railroad, which action is now pending in the Supreme Judicial Court.

The decision in the case of Attorney-General ex rel. v. New York, New Haven & Hartford Railroad Company (198 Mass. 413), above referred to, is undoubtedly authority for the proposition that a corporation chartered in Massachusetts is and must be subject to Massachusetts laws, either general or special, so long as it continues to enjoy a Massachusetts charter, unless and only to the extent that the Commonwealth may by legislation expressly or by necessary implication waive its jurisdiction in the premises; and it follows that the supervision and control of the Commonwealth over corporations like the New York, New Haven & Hartford Railroad Company is not limited to acts done by them within the Commonwealth, but extends to and includes action elsewhere upon matters which affect the corporation as a whole in its relation both to private persons and to public authority.

The New York, New Haven & Hartford Railroad Company, under authority of a special act passed by the Connecticut Legislature in 1907 (House Joint Resolution No. 357), amending the charter of the New York, New Haven & Hartford Railroad Company, providing that such railroad may at any time hereafter merge, consolidate and make common stock with any or all corporations engaged in transportation, wherever organized, whose property it shall hold

under lease, or a majority of whose capital stock it shall own," merged and consolidated with the Consolidated Railway Company of Connecticut; and by a subsequent act the merged or consolidated corporation so created received the name of "New York, New Haven & Hartford Railroad Company." The result of this consolidation was to vest in the corporation now known as the New York, New Haven & Hartford Railroad Company, so far as the authority of Connecticut was effectual to do so, powers, privileges and franchises so far in excess of those granted to the Massachusetts corporation of the New York, New Haven & Hartford Railroad Company by any legislative act of this Commonwealth as to convert the corporation into a holding company, and materially to affect the relations of the consolidated corporation either with private persons who might become its stockholders, or the holders of bonds, notes or other evidences of indebtedness issued by it, or with the public authority of the Commonwealth, since such consolidation is in violation not only of such public policy but also of express statutory provision. The result of this consolidation was to convert a corporation chartered by the Legislature of this Commonwealth as a railroad corporation into a company authorized by the State of Connecticut, so far as such authority is effectual, to own the stock and bonds of any other corporation, and to own and control any and all properties or instrumentalities directly or indirectly connected with the business of transportation, or, in short, into a holding company.

The general railroad and railway law, St. 1906, c. 463, contains in section 47 of part II., which was first enacted in St. 1874, c. 372, § 177, the following provision:

If a railroad corporation owning a railroad in this commonwealth and consolidated with a corporation owning a railroad in another state increases its capital stock, or the capital stock of such consolidated corporation, except as authorized by this act, without authority of the general court, or without such authority extends its line of railroad, or consolidates with any other corporation, or makes a stock dividend, the charter and franchise of such corporation shall be subject to forfeiture.

The action of the New York, New Haven & Hartford Railroad Company in obtaining legislation in Connecticut which merges such corporation with and in the Consolidated Railway Company of Connecticut, a corporation of that State, is, in my opinion, a clear violation both of the express provision of section 47 above quoted, and of the public policy as defined in that and in other sections of the statutes dealing with the supervision and control of railroads by the Commonwealth. This merger or consolidation was accomplished during the pendency of the proceedings brought by the Commonwealth which I have herein described, and without the consent of this Commonwealth. The corporation has also, without the authority of the Commonwealth and in direct violation of said section 47, between 1898 and 1907 increased its capital stock from $47,500,000 to $121,878,000. It seems clear, therefore, that both the policy of the New York, New Haven & Hartford Railroad Company and the results of that policy are contrary alike to the declared public policy of the Commonwealth and to the statutes thereof, and the charter and franchise of said corporation is therefore subject to forfeiture, and it only remains to determine what proceeding is most safe and most certain in the premises. Since the decision of the court in Attorney-General ex rel. v. New York, New Haven & Hartford Railroad Company (198 Mass. 413), I have given most careful consideration to the question whether or not it was my duty to seek, by appropriate proceedings in the Supreme Judicial Court, a forfeiture of the charter of said corporation. If the question were purely one of law, involving only the construction of the statute and the enforcement of its terms, its determination would present no great difficulty; but in the present instance it is impossible to separate law and policy, or to consider the enforcement of the law without equally considering the situation which that enforcement may, and indeed must, cause. In an opinion of this year, given to the Bank Commissioner, dated September 27, I discussed one phase of such situation, the status of the bonds, coupon notes or other evidences of indebtedness of the corporation with respect to the legality of investment therein by savings

banks when issued in excess of its capital stock, and upon the evidence presented was forced to conclude that there were several issues which were not present legal investments for our savings banks, because not issued in accordance with the laws of this Commonwealth (see St. 1906, c. 463, part II., § 66). The stock, bonds or other evidences of indebtedness of the New York, New Haven & Hartford Railroad Company are held not alone by savings banks, but by many investors throughout the Commonwealth and elsewhere; and it is needless to say that to such investors, whether savings banks, trustees or individuals, the forfeiture of the charter of such corporation would bring heavy financial loss and possible suffering, and would probably cause great inconvenience to the public generally. These and other like questions involving public policy and the convenience of the public, and the serious and important considerations which are material to them, are peculiarly within the field of legislative inquiry and action. The Legislature undoubtedly has the power, upon the one hand, either to pass such laws as may ratify and confirm the acts of the New York, New Haven & Hartford Railroad Company, if in view of all the circumstances such course is deemed best, or, upon the other hand, to repeal its charter. If the issue as to the forfeiture of the charter between the Commonwealth and the New York, New Haven & Hartford Railroad Company is to be determined by the courts, proceedings when brought for that purpose might be delayed for one, two or even three years; and the uncertainty with respect to the status of the evidences of indebtedness of the corporation which must necessarily be created by such proceedings might be indefinitely prolonged, with unfortunate results both to the corporation itself and to the innocent holders of its stock or bonds. Legislature, on the contrary, may act directly and speedily, considering both the requirements of the public and the needs of the corporation, and may apply such relief as may be appropriate for both. I am constrained to say, therefore, that in my opinion such ultimate relief as may be afforded by legal proceedings is inadequate, in view of all the circumstances, and that the proper tribunal to decide the im

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portant and difficult questions to which the situation now existing has given rise is the Legislature of the Commonwealth; and I call the subject to your attention for such action as you deem proper.

In this connection I desire also to call to the attention of the Legislature the provisions of St. 1906, c. 463, part II., §§ 47 and 57, neither of which sections contains any provision imposing a penalty for the violation of its terms and restrictions; and in any proceeding to enforce such terms, where the Commonwealth does not seek the last redress afforded by the forfeiture of the charter of an offending corporation, the only remedy is by injunction, which is sufficient to enforce a tardy compliance with the law, but imposes no punishment for its violation. It results, therefore, that a corporation may with impunity violate these provisions for its own benefit, and may by protracted litigation secure sufficient time to accomplish its purposes in the premises, notwithstanding that the ultimate decision may be adverse and a restraining injunction may issue. In view of this condition, I suggest for the consideration of the Legislature that it may be advisable to provide sufficient penalties for either or both of the sections of the statute above cited, to secure compliance with, and to render unprofitable violations of, the law.

LEGACY AND SUCCESSION TAXES.

It has been the policy of the Commonwealth to provide for speedy methods of collecting taxes due to it. The provisions for the collection of corporation taxes are, in general, adequate. The legacy and succession tax is becoming an important source of revenue, and it is equally desirable that there be a speedy method of collecting these taxes. I therefore recommend that the method of collecting taxes by information as well as in an action of contract, now applicable to corporation taxes, be made applicable also to the collection of legacy and succession taxes; and I recommend that in such proceedings for the collection of taxes assessed under the legacy and succession tax law of 1907, the certification of the amount of the tax by the Tax Commissioner be at least prima facie evidence as to liability and amount.