of real estate which it has been the consistent policy of the commonwealth to except from incorporation under the general law.  Any desired capitalization above a minimum of one thousand dollars may be fixed.  Capital stock may be paid for in cash or by property.  If it is paid for in cash, it may be paid for in full or by instalments, and a machinery has been created for protecting the corporation against the failure of the subscribers to stock to pay the balance of their subscriptions.  If stock is paid for by property, the incorporators and not the State are to pass upon its value.  Before any stock, however, can be issued for property, a description of the property sufficient for purposes of identification, to the satisfaction of the Commissioner of Corporations, must be filed in the office of the Secretary of the Commonwealth.  This document becomes a public record and may be consulted by any one interested in the corporation.  If the officers of a corporation make a return which is false and which is known to be false, they are liable to any one injured for actual damages.  If a full and honest description is made of property against which stock is issued, a stockholder cannot complain because of his failure to inform himself by personal examination or investigation of the value of the property in which he is, or contemplates becoming, an investor.

Second.—­Duties of the State in regulating the relations between the corporation and its officers and stockholders.

The second principle upon which the committee has acted in its specific recommendations is this:  that the State should permit the utmost freedom of self-regulation if it provides quick and effective machinery for the punishment of fraud, and gives to each stockholder the right to obtain the fullest information in regard to his own rights and privileges before and after he becomes the owner of stock.

Upon this theory the committee has recommended a law which permits the corporation to determine the classes of its stock and the rights and liabilities of its stockholders.  The recommended law provides for increasing or decreasing the amount of capital stock upon the affirmative vote of a majority of its stockholders.  For the protection of a minority interest of stockholders it requires a two-thirds vote to change the classes of capital stock or their voting power, to change the corporate name or the nature of the business of the corporation, or to authorize a sale, lease, or exchange of its property or assets.

Directors are made liable, jointly and severally, for actual damages caused by their fraudulent acts, but no director is made so liable unless he concurs in the act and has knowledge of the fraud.  The liability of stockholders is limited to the payment of stock for which they have subscribed, to debts to employees, and in cases of a reduction of capital when they concur in the vote authorizing a distribution of assets which results in the insolvency of the corporation.  An attempt has been made to give to the stockholder an opportunity of securing for himself the fullest information on all points touching his interest.