A Brief History of the Founding of the Society
by C. F. Hale, August 1937, and the
Committee on Organization, July 1940
The Society was organized for a twofold purpose, to simplify the administration of the business and social affairs of the community and to afford the cottage owners as a body more complete control of these matters.
Prior to the founding of the society the responsibility for the welfare of the community was divided between three organizations: the Heron Island Company, a group composed of present cottage owners and sometimes known as the Cottagers' Association, and a membership organization of the women of the community known as the Casino Association. The Heron Island Company was a stock company, incorporated under the laws of the State of Maine. It owned a considerable number of vacant lots and held title to all the property used in common by the people of the community. This property included the landing facilities, a wharf and float, two public wells and a building which housed a carpenter shop (originally a bowling alley), the post office and a small grocery store conducted by Frank W. Jordan, the unofficial caretaker for the Island. The Company also held title to the Casino property as trustee. The Cottagers' Association and the Casino Association were unincorporated.
The funds for the maintenance of the company property were obtained from a system of fees for the use of the landing facilities and the wells, from the sale of land, and by voluntary contributions from the cottage owners. Additional income was derived from a rebate by the Town of South Bristol of a percentage of the taxes collected on Heron Island property, both that property owned by the Company and that owned by cottagers. This income, however, was supposed to used in the maintenance of the public paths, such as the Center Path and the East Marginal Way which were recognized as public highways of the town.
The property of the Casino Association included the casino building and the tennis court. The building was maintained by dues from members, by the proceeds from social affairs such as amateur plays, food sales and the like. The funds for the maintenance of the tennis court were obtained in part from fees charged for use and in part by voluntary contributions. The Association sponsored the social affairs of the colony and for many years it arranged for religious services on Sunday.
The Cottagers' Association assumed the responsibility for the services of Mr. Jordan during the summer season. The arrangement guaranteed Mr. Jordan a certain sum for the vacation period when extensive work around cottages was suspended. The funds were obtained by prorating the cost among those cottagers who were willing to contribute. In practice nearly every cottage owner accepted his or her share of the burden. The Association also assumed responsibility for the milk supply by making suitable arrangements with a dairy and providing for the transportation of the milk from the mainland.
So far as the writer is aware there was at all times a spirit of complete cooperation between the three organizations in the pursuit of the welfare of the community. The officers and directors of the Company were all active members of the cottage colony and many of the cottage owners held blocks of shares of varying size.
From the above recital it should be evident that the administration of the simple business and social affairs of the colony was unnecessarily involved and cumbersome. Each season there were three separate meetings to transact business and plan social affairs. The system of fees for use of the various facilities provided funds for ordinary maintenance but frequently failed to meet the need for emergency repairs and replacements. This happened in the case of the tennis court, for example, and also in the case of the wharf. In such cases recourse was had to an appeal for voluntary contributions. While the cottage owners, both those who were stockholders in the Company and those who had no interest in the Company as such, always had shown great generosity toward these appeals it came to be the general feeling that a system of voluntary contributions was not the best way of meeting our problems. There was, for example the anomaly of asking contributions from non-stockholders for the support of property owned by the Company and controlled by it.
In the case of the wells, the situation was precarious for quite another reason. The fact that the Company collected fees for the use of the wells made it, technically at least, a public utility according to the laws of the State of Maine and therefore subject to various regulations. Since it was the custom periodically to send samples of water from the wells to the state laboratory for testing, there was always the possibility that the attention of state inspectors might be attracted. There were also, of course, other ways in which our water supply system might come to the attention of state authorities. While the committee charged with the maintenance of the wells was constantly on the alert to improve the condition of the wells, it had never seemed necessary to meet the state requirements in all details. An inspection by the state authorities might, therefore, lead to a demand for extensive changes, a burden that the Company could not assume, financially.
In 1936 it became necessary to replace the wharf for a second time within a few years. The funds of the Company were at a low ebb and wholly inadequate for the purpose, and yet, being the only organization that could function under the circumstances, it assumed the burden. There seemed little chance that so large a fund could be raised by the sale of land because the demand for lots had been pretty much exhausted by sales for the purpose of raising funds for the repair of the old wharf a few years previous. Funds were therefore solicited from all cottage owners. While it is true that the major part of the fund was contributed by persons who were stockholders of the Company, their gifts were made as cottagers rather than as stockholders since the stock of the Company is non-assessable. A considerable amount of the fund was contributed by cottagers who were not stockholders or who held only a small number of shares.
The situation was then anomalous indeed. Presumably the Company would hold title to the new wharf and its Directors would control the use of the property but in reality the wharf was owned by the community. The situation was in truth worse than this superficial statement would indicate because a heavy burden was placed on one member of the colony, Mrs. Alice G. Gunn (Mrs. L.J.Gunn). This came about because Mrs. Gunn owned a majority of the shares in the Company. She had a full appreciation of the situation and felt keenly the responsibility that it placed upon the Company. Fortunately Mrs. Gunn's interest in the welfare of the community was second to none. Her generosity and wise counsel were prime factors in the success of the colony. Being the majority stockholder under any circumstances would be burdensome but under the conditions then existing the burden was heavy indeed, even when the Directors conscientiously tried to relieve her of the details of administration. The situation was difficult also because of certain undercurrents that were unpleasant - in fact hostile.
At various times and made by various people there had been suggestions to the effect that we ought to find a less cumbersome and more democratic arrangement for the administration of the business affairs of the community. The general idea was to organize some type of corporation which could be a successor to the three existing organizations, an organization through which all matters pertaining to the welfare of the community would be controlled by the whole colony in a completely democratic manner. Some persons felt that the organization should also be empowered to levy assessments based on the town tax list or some other equitable base. It was understood that the Squirrel Island colony in the Town of Southport was organized along these general lines. However, no definite steps were taken toward a new organization at Heron Island until early in the season of 1937. At that time, under the encouragement of Mrs. Gunn, a committee of the Directors of the Company was charged with the duty of investigating possible incorporations. This committee was composed of Messrs. Hale and L. A. Howland, respectively the president and the treasurer of the company. The committee consulted with Mr. Edward W. Atwood of Cook, Hutchinson, Pierce and Connel, a well-known firm of corporation lawyers in Portland.
Two forms of village incorporation were investigated. In one form a Village Corporation is organized. The Corporation is empowered to maintain all village services including fire department, roads, streets and sidewalks, sanitary works, wharves, water supply, etc. Funds are obtained by a rebate of taxes and by assessments on the taxable polls and estates in the village. Such a corporation must, however, be chartered by a special act of the Legislature. This is the form of corporation obtained by the Squirrel Island community. The prospect of getting a special act of the Legislature seemed remote, partly because of the reluctance to the granting of such charters and also because of the probability of vigorous opposition by the Town of South Bristol. On the advice of Mr. Atwood the committee chose another form of incorporation, one that could be chartered by the Secretary of State for Maine, although the authorized powers of the corporation are much more limited. The committee reported to the stockholders of the Company in a letter, which also outlined the manner in which the Company proposed to cooperate with the new organization. This letter is included here to complete the record.
Heron Island, Maine
August, 1937To the Stockholders of the Heron Island Company:
Enclosed is a copy of a letter that has been sent to the present cottage owners on Heron Island by a committee of the Cottagers' Association. This committee is composed of directors and stockholders of the company and cottage owners who are not stockholders. The letter seems to need no explanation but your officers and directors will be glad to answer questions that occur to you. The plan proposed, in the mind of your directors, meets a real need and is for the best interest of the colony.
The proposed sale of the Heron Island Company's assets to the Improvement Society, when and if it is organized, is an essential part of the plan. It is favored by a majority of the officers, directors and stockholders of the company, but it is desirable that the vote for the sale be as nearly unanimous as possible. The purpose of this communication is to acquaint the stockholders with the proposition in advance of the call for a special meeting at which a formal vote will be taken. Due notice, accompanied by a proxy for stockholders who are unable to attend the meeting, will be mailed about August 15.
The assets, apart from a cash fund, consist of the store, landing facilities, two wells, and a few unsold lots. The unsold lots have an assessed value of less than $1000, the total number of shares outstanding being about 18,000.
The cash on hand is largely an accumulation of annual and special contributions of cottage owners to the company for upkeep of the facilities of the island, together with tax refunds from the town of So. Bristol. The tax refunds are available for the upkeep of roads and paths and to some extent for the upkeep of landing facilities. Practically all of this money is needed at once for improvements and should be so used by the company.
The wharf has been replaced twice in recent years, due to destruction by unusually severe storms. The money for rebuilding in both cases came largely from contributions by cottage owners.
The store and wells are of value only as they serve the needs of the community and have not yielded more revenue than was needed for maintenance, nor could they fairly be expected to do so.
The fact of the matter is that for many years the Heron Island company has functioned practically as an improvement society for the island. Under the circumstances, it could hardly have done otherwise. Its income, being derived largely from the fees and contributions of the cottagers, has justly, it seems to your officers and directors, been spent for the benefit of the community, or has been allowed to accumulate as a sinking fund for replacements.
May I, personally and on behalf of the directors, appeal to you to take the trouble to sign the proxy that you receive and so greatly enhance the welfare of the present and future of the Heron Island community.
Very truly yours,
Committee of the Directors
An outline of the plan for the new organization was presented to the Cottagers' Association at a meeting held on July 19, 1937. At that meeting a committee of seven cottage owners was authorized. The committee, when appointed, included the two members of the committee of company directors and two persons who were not stockholders in the Company, and therefore be considered a joint committee of the two organizations. The joint committee was charged with the duty of studying the details of the proposed organization and was ordered to deliver a copy of its report to each cottage owner. A copy of this report follows.
Heron Island, Maine
August, 1937To the Cottage Owners of Heron Island:
For a number of years some members of the cottage colony and several of the stockholders of the Heron Island Company have felt that our arrangements for the promotion of the welfare of the community and for conducting its business are unnecessarily cumbersome and undemocratic, if not actually unfair to a good many people. The company, tho under no obligation to do so, has taken the initiative in such matters as the replacement of wharves and the improvement of the wells. The funds for these projects have come from the cottagers in one way or another and yet the title to both belongs to the company. Moreover, as a group, these cottagers have had no voice in either the choice of construction of or the location of the structures. The vital importance to our existence as a colony, of the landing facilities, the water supply and the store, is self evident and it is felt that they ought to be controlled by the community. Probably the same principle should apply to our social center, the casino.
As a result of this feeling about the affairs of the colony, a committee of the directors of the Heron Island Company has been investigating possible forms of community organization which might replace the present system. This committee has had the cooperation and advice of a very fine firm of corporation lawyers in Portland, Messrs. Cook, Hutchinson, Pierce, and Connell, and it is believed that the organization suggested below is the only one feasible. It is recognized that the plan fails to accomplish one desirable feature of a community business organization. For many reasons we should like to substitute, for the system of voluntary contributions, a scheme of assessments based on the town tax list. The power of assessment can however be had only thru an act of the legislature and there seems little prospect of obtaining such an act. The committee, therefore, feels that the Improvement Society plan herein suggested most nearly meets our needs.
The plan was proposed at a meeting of the cottagers' association held on July 11 and was there discussed at some length. This communication has a two-fold purpose: to make a written statement of the proposal, and to acquaint those cottagers who were not present at the meeting with the movement. It has been proposed by a committee which was appointed at the meeting for the purpose of further study of the proposal. This committee is expected to report to the association at a meeting to be held during August,
The general nature of the plan can be apprehended from the following excerpts of the statute covering the organization of improvement societies:
Revised Statutes of Maine, 1930
Chapter 70"Sec. 1. Organization. R.S. c.62, p.1.1919, c.48, 1921, c. 101.1923, c.3.1925, c.74.1929, c.164. When seven or more persons desire to be incorporated ... as a village improvement society ... they may apply in writing to any justice of the peace in the county, who may issue his warrant, directed to one or said applicants, requiring him to call a meeting thereof at such time and place as the justice may appoint. 90 Me.410; 91 Me.255; 94 Me.400; 98 Me.176; 104 Me.329; 114 Me.158
Sec. 2. Notice of meetings R.S. c.62, p.2. Such applicant may call it, by reading the warrant in the presence and hearing of each, or by leaving an attested copy thereof at his last and usual place of abode, at least fourteen days before the day of meeting, or by publishing an attested copy thereof in some newspaper printed in said county, for two weeks successively, the first publication to be at least fourteen days before the day of meeting. 94 Me.400.
Sec 3. Organization and powers. R.S. c.62, p.3. When assembled pursuant to the warrant , they may organize themselves into a corporation, adopt a corporate name, and they, their associates and successors may have continual succession; have a common seal; elect all necessary officers; adopt by-laws, not inconsistent with law, and enforce the same by suitable penalties; have the same rights and be under the same liabilities, as other corporations, in prosecuting and defending suits at law; and enjoy all other rights, privileges, and immunities of a legal corporation. 94 Me.400.
Sec. 49 Certificate recorded in registry of deeds and secretary of state's offices R.S. c.62, p.4, 1917, c.85. Before commencing business, the president, treasurer, and a majority of the directors or trustees of every corporation organized under the foregoing sections shall prepare a certificate setting forth the name and purpose of the corporation, the town where located, the number and names of the officers, and shall sign and make oath to it; and after it has been examined by the attorney-general, and been by him certified to be properly drawn and signed and to be conformable to the constitution and laws, it shall be recorded in the registry of deeds in the county where said corporation is located, in a book kept for that purpose, and within-sixty days after the day of the meeting at which such corporation is organized, a copy thereof certified by such register shall be filed in the secretary of state's office, who shall enter the date of filing thereon, and on the original certificate to be kept by the corporation, and shall record said copy in a book kept for that purposes No fee shall be required hereunder by the attorney-general or secretary of state, but registers of deeds shall receive for recording such certificate the fee of one dollar.
Sec. 5. Power to hold property. R.S. c.62. p.5. Such corporation may take and hold by purchase, gift, devise, or bequest, personal or real estate, in all not exceeding in value one hundred thousand dollars, owned at any one time, and may-use and dispose thereof only for the purposes for which the corporation was organized. 90 Me.410.
Sec. 6. Charitable corporations, suits or against. R.S. c.62, p.6. No corporations organized for charitable or benevolent purposes, shall sue any of its members for dues or contributions of any kind, or be sued by any member for any benefit or sum due him, but all such rights and benefits, dues and liabilities shall be regulated and enforced only in accordance with its by-laws. 95 Me.497."
It is believed that if a large majority of the cottagers are interested in the formation of such a corporation and will give their support to it, the Heron Island Company will cooperate by selling to it, for nominal compensation, at least the store, the wharf and other landing facilities, and the wells. It is the hope also that, for like consideration the few remaining unsold lots may pass to the new corporation, to the end that the latter corporation may be in fact a true successor to the company.
If similar action is taken by the Casino Association, the casino and tennis court will become the property of the new corporation, thus bringing all property essential to the welfare of the community under the control of one organization which is in turn controlled by the cottagers.
This organization can, by proper enactment of by-laws be made as democratic as desired and can serve to express the will of the community in all matters.
On the financial side the following obligations would be assumed by the new corporation if it becomes in fact and law the successor to the Heron Island Company. Taxes on the store, landing facilities and wells - at present rates about $10. Taxes on unsold lots at present rates about $15. Taxes on the casino at present rates about $25. Upkeep of the same property listed above, and the tennis court. Defending the warranty of deeds as successor to the Heron Island Company. Defending suits for damages incurred by users of the property, Caretakers services or the Frank Jordan guarantee.
The improvement society, as successor to the company, the Cottagers' Association and the Casino Association would have the following sources of income: Dues as determined by the by-laws, They should probably cover the landing fee, the Jordan Guarantee and provide for the accumulation, during the early years of the organization, of a fund for general purposes, It is presumed that the dues would be but little larger than the present amounts collected, perhaps $25 to $30.
Well fees. There is perhaps good reason for discontinuing the system of regular fees for use of the wells, substituting therefore a pro rata contribution from users for expenditures for upkeep. This matter is complicated by the fact that some cottagers maintain their own wells, thus making it inequitable to use the general funds of the society for upkeep of the public wells. Fees from cottagers who are not members of the society. Refund of taxes by the town of So. Bristol. This money is to be used for the upkeep of walks etc. Sale of land. The proceeds of such sales must by law become a part of the general fund of the society.
It is now expected that the second meeting of the Cottagers' Association referred to above will be called on the 21st or the 28th of August But the work of the committee will be greatly facilitated if your support or rejection of the plan can be made known to them at once.
(Signed:) C.F.Hale, Karl S.Van Dyke, Franklin S.Browning, Louisa Stevenson, Sarah C.Elley, Alice G.Gunn, L.A.Howland
The reaction to the plan outlined in this report appeared to be very favorable and the committee hoped that the incorporation of the proposed village improvement society could be completed before the end of the season of 1937. In that case, if the action of the stockholders of the Company were favorable, the details of the transfer of assets to the new organization could be carried out during the winter and the improvement society could begin to function in the season of 1938. The committee decided to take advantage of the fact that seven persons could incorporate a village improvement society. Mr. Atwood was therefore commissioned to prepare the necessary forms. on arrival of the forms, the application, warrant and organization meeting were carried through as shown in the records. Mr. E. C. Schneider was added to the committee to replace Mr. Van Dyke who had left the Island soon after the report of the committee to the Cottagers' Association was made. The certificate of organization was approved by the attorney general, recorded in the Registry of Deeds in Wiscasset and then filed with the Secretary of State. The date of filing with the Secretary of State, Sept. 7, 1937, is the effective organization date of the corporation, known as the Heron Island Village Improvement Society.
It should be recorded here that Mrs. Gunn voluntarily assumed the expenses of the committee, chiefly the fee paid to the lawyers. Thus was avoided a possible criticism of the use of company funds for that purpose.
In the meantime a meeting of the stockholders of the Heron Island Company had been held but, because of the objection of a minority stockholder, had postponed action on the proposed transfer of its assets to the village improvement society. During the whole of 1938 and part of 1939 the directors of the Company endeavored to appease the objecting stockholder without success. During this period, further action by H. I. V. I, S. was in abeyance. When it appeared that the cooperation of the objector could not be obtained in a reasonable time, if ever, the committee, now H.I.V.I.S. officially, decided that part, at least east, of the advantage that would accrue from the original plan could be had by leasing from the Company that part of its property which is essential to the life of the community. Such a lease was executed late in 1939 and in 1940 the fact was reported in the final report of the committee to the Cottagers' Association on July 20, 1940. A copy of that report follows.
Heron Island, Maine,
July 20, 1940.To the Cottage Owners of Heron Island:
Final Report of the Committee on Organization.
Since the report of August 1937, your committee acting as incorporators, has formed the Heron Island Village Improvement Society, which has been duly chartered by the Secretary of the State of Maine.
To secure the charter it was necessary to present a skeleton constitution and by-laws covering certain essentials. These were drawn up for us by Mr. Atwood of the law firm of Cook, Hutchinson, Pierce and Connell of Portland, Maine. A copy of the document is enclosed herewith for your information.
The final step in the completion of the organization has been delayed by the fact that the Heron Island Company has been unable to cooperate as hoped at the time of the August 1937 report. To carry out the plan suggested on p. 3 of that report it was necessary to obtain, practically, a unanimous vote of the stockholders, in order to avoid the possibility of legal action by a minority of the stock. Such a unanimous vote has not been obtainable.
As there seemed to be little prospect of any change in the status of the Heron Island Company, the directors of the Improvement Society felt that they should secure control of the property necessary to the life of the community by means of a lease. Accordingly a lease, on suitable terms, of the store, the landing facilities and the wells has been arranged. While this procedure must be regarded as less satisfactory than the original proposition, your committee feels that it is a good basis on which to complete the organization of the Improvement Society. At the annual meeting of the society, held on July 20, in accordance with the by-laws, it was voted to submit this letter as the final report of the committee.
To be successful, the new organization must have the full cooperation and support of the cottage owners. The first step in such cooperation is, of course, membership in the Improvement Society and it is hoped that all cottage owners will promptly become Class A members. (See Art. V and Art. VII) To this end a blank covering application for membership is enclosed herewith. (See Section 2 of Art. V)
In order that the new organization may begin to function during the current season, the annual meeting of the Improvement Society was adjourned until August 10, without electing officers for the ensuing year. It was felt that the choice of the officers and directors should lie with the full membership because of the large scope of the powers vested in the directors.
Apart from the election of directors and officers there are a number of very important matters that should come before the meeting on August 10, viz:
- Desirable amendments to the by-laws. A copy of proposed amendments should, however, be in the hands of the Secretary not later than August 1st, in order that notice of them may be given in accord with Art. XI.
- Determination of the dues to be charged for each of the two classes of members. While the directors are empowered to fix the dues, is felt that the policy of the organization should be decided by the full membership. It seems imperative for instance, that the dues for Class A members should be fixed at an amount approximately equal to the total of the various fees and contributions which are now paid by those who have been in the habit of cooperating fully. Other policies may, however, be preferred. It is, of course, hoped that a good many persons will wish to join the organization as B members. The dues for this class should be fixed at an amount that will attract members.
- What fees shall be charged persons, not members, who use the property that is controlled by the society? Should these charges be higher than for members and how much higher?
- Shall the Improvement Society accept, in trust, the Casino Property, now held in trust by the Heron Island Company? If the trust is accepted shall the care and use of the Casino be referred to the Committee on Social Activities or shall another committee be added?
- Shall the Society vote to make unpaid milk bills a charge against its general funds? At present such bills must be paid by the Milk Committee which is responsible to the dealer.
It is felt that in all these matters, which are of interest to the whole colony, every cottage owner should have a voice in the decision. Your committee, therefore, urges that the applications for membership be submitted promptly.
Edward C. Schneider
Franklin S. Browning
Alice G. Gunn
Sarah C. Elley
Leroy A. Howland
Louisa S. Stevenson
Clarence F. Hale
Committee on Organization
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