A state law provided for public operation of the Boston Elevated Railway Company, with a board of trustees appointed by the governor with the advice and consent of the council. The salaries of the trustees were received from the company. The trustees were to manage and operate the company, having "possession of said properties in behalf of the Commonwealth." They were to fix rates of fare that would insure sufficient income to meet the cost of service including, in addition to operating expenses, specified rates of return on the investment. If the rates were insufficient for this purpose the deficit was to be paid by the Commonwealth and then assessed upon the cities and towns in which the company operated. Held, that the compensation of the board of trustees is not exempt from the federal income tax. Helvering v. Powers, 293 U.S. 214, 55 Sup. Ct. 171 (1934).

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