their capital stock to such amount as may be fixed by the stockholders 

 at a meeting called for the purpose. (Revised Laws, Chapter no, Sec- 

 tions 4-13, and Section 31.) 



Note now the kinds of business which are barred from the privileges 

 of the corporation law. A corporation can be organized for the purpose 

 of erecting and maintaining a hotel, but not for the business of an inn- 

 keeper. Sometimes innkeepers fail to take sufficiently good care of their 

 guests, but they always seem to be abundantly able to take care of them- 

 selves, so that it is not necessary to consume your time in considering their 

 disabilities. What will interest you is the consideration of the reasons why 

 the business of buying and selling real estate is classified in the same proscrip- 

 tion with the business of distilling and manufacturing intoxicating liquors. 



Now, gentlemen, you know something about buying and selling real 

 estate. It is your business to encourage trade in real estate. Is there 

 something wrong about it? Real estate brokers always make a good 

 appearance, always talk smoothly and entertainingly, and they are always 

 very anxious to promote the interests of their customers. Is it not true 

 that as a class you stand pre-eminent in the community in these respects? 

 What is the reason that the Legislature looks with suspicion upon this 

 business which you are promoting ? 



A commission on the revision of laws relating to the formation, 

 conduct and taxation of corporations has this year made a report to the 

 Legislature in which it is stated incidentally that it has been the consistent 

 policy of this Commonwealth not to permit the organization under general 

 laws of corporations for the buying and selling of real estate. Is this 

 policy founded on reason or on prejudice ? 



There are in existence in this State at the present time some forty or 

 fifty companies which may be classified as real estate corporations organ- 

 ized under special charters. As a rule these charters have fixed the limit, 

 either in quantity or by location, of the land which the corporations may 

 hold ; the amount of capital stock has been limited, and also the life of 

 the corporation, — such life in most of the charters granted in late years 

 being limited to a period of twenty-five or thirty years. Most of these 

 corporations now in existence will die within the next twenty years, unless 

 reanimated by legislative act. To this general statement thei-e are some 

 exceptions, notable among which is that of the corporation known as the 

 Fifty Associates. The act under which this corporation was organized was 

 entitled "An act to incorporate the proprietors of Museum Hall in the 

 Town of Boston," being Chapter 138 of the Acts of the year 1S19. This 

 act authorized Benjamin Rich, John Hurd, Jr., Shadrach Shattuck and 

 Alpheus Carey to organize a corporation with authority to hold in fee 

 simple or leasehold a lot of land in Boston between Elm Street and 

 Cooper's Alley, having a frontage of 180 feet and a depth of 260 feet. 

 The corporation was given power to buy, sell, lease, manage, improve, 

 pull down, rebuild, etc. The capital stock was divided into shares not 

 exceeding 600 in number, which were "in all respects and at all times 

 to be held as personal estate." The total assessment per share was limited 



2 



to $200. It was provided that each proprietor should be entitled to one 

 vote for each share held by him, but not to more votes than would "be 

 equal to one-third in value of the corporation property." Voting by 

 proxy was permitted. 



By Chapter 15 of the Acts of the year 1S23 the name of this corpo- 

 ration was changed to "The Fifty Associates." Authority was given to 

 increase the number of shares to 1,000, and the limitation as to the quantity 

 and location of real estate which the corporation could hold was removed. 

 The limit of capital of this corporation is, therefore, 1,000 shares, of the 

 par value of $200, or in all $200,000. 



The real estate of this corporation, in the year 1900, was taxed for 

 $3,753,900. This great increase has been the result of judicious investment 

 and re-investment, of the natural increase in value of real estate with 

 the city's growth, and also of the accumulation of undivided earnings. 

 A share of this stock to-day sells for about $5,000. 



Of the charters which have been granted of late years, that of the 

 State Street Exchange (Statutes 1888, Chapter 82) is probably the most 

 liberal. The land which this company can hold is limited to the area 

 bounded by Congress, State and Kilby Streets and Exchange Place ; the 

 life of the corporation is not limited, and it is allowed a capital stock 

 of $3,500,000. It appears that the land and buildings have cost about 

 $6,000,000. 



The objections to the organization of real estate corporations were 

 probably never better nor more forcibly stated than by Governor Butler, 

 in 1883, in the veto of a bill which extended the time allowed by an act 

 of a previous legislature for the organization of the Somerville Wharf and 

 Improvement Company. One of his principal objections was that the 

 corporation would have the right to hold in perpetuity, and that such 

 land-holding, in the language of the books, would be a holding in mort- 

 main, or by the dead hand. We can better understand the force of this 

 objection if we inquire into the origin of the term mortmain. 



Under the feudal system in England the rendering of service and duty 

 to a superior lord and to the king was a necessary incident of land 

 ownership by an individual ; but when land was conveyed to a religious 

 corporation it was thereby discharged from such feudal service. For this 

 reason, and, also, because such lands were unalienable, that is, they could 

 not be conveyed away by the corporation after they had been received by 

 it, it came to be considered that such lands were held by the hand of the 

 dead, or by mortmain. As years rolled on, the amount of land given to 

 religious societies, and which was thus tied up and exempted from 

 service, became so great that Parliament interfered by limiting or prohib- 

 iting such gifts. The term mortmain was therefore originally used in 

 connection with gifts to religious corporations, but in England the term is 

 now used as applicable to an alienation or conveyance not only to eccle- 

 siastical bodies, but to any corporation, sole or aggregate, ecclesiastical or 

 temporary. 



In Shelford on Mortmain it is stated that the laws now in force in 

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