Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1875-08-20
The Vermont Central Railroad Accounting.
ST. ALRANs. August ID, 1875.

road accountant. Inc WITNESSES HANc JUL
sisted entirely Of the receivers and their en-
ployers, past and present, but the counsel
Tor the security holders express their belief
that this testimony, with the evidence found
in the books and the vouchers, makes out
strong case, emitting them to recover very
large sum from the receivers. brief re-
sumo on the leading features OF the testi-
mony may be of interest at this time.
First. it shows that the Sullivan Railroad
was leased by the receivers in their private
capacity and operated in connection with
the trust roads. 1t was so operated that the
net earnings were as high as 80 per cent OF
the gross. During the last eight years they
averaged over 30 per cent, and one year ex-
ceeded Il per cent. The whole profit to the
receivers aggregates $780, 900, exclusive OF
interest, but the receivers claim that their
holding the lease has been of even greater
benefit to the trust than to themselves, be-
cause it has given the Vermont Central a
southern outlet. The security holders claim
that the whole benefit should have gone TO
the trust. and that the profits should now
be accounted for.
Second, the Montreal and Vermont June
ton road, extending from Vermont line to
near St. Johns in Canada, was mainly built
and is mostly owned by two Of the receivers
1t has been operated by the receivers in con
nection with the trust roads for eight years,
under an arrangement made tn themselves
by which they received 50 T cent OF the
gross earnings, and the trus furnished the
entire equipment, kept the lad IN repair
and paid all the expenses. The road Is about
- miles long. and the income derived by the
receivers has amounted to about S5O0 600.
The security holders claim that this should
be accounted for. Gov Smith says he has
always regarded the arrangement as but
temporary, and has supposed the court
would say what sum they ought to receive,
or what, IT any, they ought 70 now account
for
Third, during the period covered by this
accounting, from 1851 to 1873, the ST. Al
bans Foundry Company has furnished the
trust mos. Of its wheels and castings. W.
c. Smith, one of the receivers, has derived
percentage, called royalty, Of One-hah
cent a pound on the castings, and from g
to - on each wheel the whole amounting
TO about $3.50 coo. Mr. Smith claims that
this was in consideration Of certain accom-
modati0ns which he, a. Joint owner with his
brother in the foundry real estate, had ex-
tended to his cousin and nephew, who con-
stitute the Foundry Company. Although
the price paid them for wheels and castings
was above the market. il Is claimed that the
convenience to the road. the saving IN
ireights. etc. were enough 10 Offset the ex-
cess The security holders claim that 1t
should all be accounted for.
Fourth, fund of about $4,000 was Sc
oucstered fJr sccre; services. GOV. Smith
-av- that il was all used for the benefit Of
the trust. and portion Of it appears by the
books TO have been 50 expended but d Tor
the major part, be SAYS he prefers to stand
charged with IL. rather than disclose 10
whom il was paid
Fifth. funds OF the trust were used by the
receivers for pur .ha-ing the >tanstead, shei-
ford AID CAamb.v road. in Canada. amount
ing 10 more than $500 900, and for con-
,tIucting the Waterloo tramway, amount
ING to 50 600. The receivers claim that
il was imp1rtau. II the trust % have these
roads a. q feeder, and % prevent their fall
ing into the hands Of q rival road. Ihs
security holders claim that, inasmuch as
such purchase and construction were unau-
thorizad and the roads have proved unproht-
able. the expenditure should be accounted
for. and the roads treated Is tile private
property 0. the receivers.
sixth. the receivers have allowed money
earned hy TIE trust for carrying Canadian
mails. amounting to upward Of SO 900, to
Pc drawn AMI appropriated By Colonel A e..
Foster. v ho was interested with them IN the
construction of the Montpelier and Vermont
junction road. and who has also been al
lowed 10 run in debt 10 the trust over
SIS 600. and 10 the Stanstead. Shef0rd and
thamblv -oai, operated by the trust, about
$40 900. il- which il is claimed the re
ceiyer- are responsible but if Col. Foster
has ~ Offset. the claims are good against
him.
seventh. the National Car Company and
Vermont Iron and Car Company were or
gained upon the roads. and most Of the
stock Wa owned ~ the receivers and their
lrien5~ Lansing Mills. for q long time the
Boston agent for the Vermont Central. and
now general Superintendent of II traffic.
was president of one company, and i preSi-
dent now of the consolidated companies
They nave done large business and re-
turned handsome profit. The testimo-
ny in regard o. them is conflicting. There
is some ~ show they have been q leech upon
the road. and their ca-s have been given
preference over the Vermont Central c4rs.
This has been denied by the receivers. who
claim that the Trust was in need OF cars
had rut money O. build them, and has been
greatly rrofted hy the business Of this line
.-f.rs.. ls bod i-a-ao-nf aanlrrruU.
datian- The security holders claim that
the receivers should account Tor the losses to
tie trust in consequence of these c1mpa-
MES. but the amount has not vet been A.
ccrtainei.
Eighth. 10 is CLAIMED that the receivers
should restore 10 the trust what was lost in
constructing the Nissisquoi Railroad and in
guaranteeing is bonds. the amount being
about So 900 also that they should ac-
count for al losses from the Rutland lease,
winch are conceded 20 have amounted, up
to July ]. 1873. to SS3l.7s61+; ditto
from the O.lonshurg lease amounting 10
Si0S .6tl .gj and also for all money invest
ed in boats. and lost IN the running thereof.
on the great lakes. amounting, As J. claimed.
to S2j0otO.
Ninth, the receivers purchased with
trust money $4,000 of stock in the North
ern Transportation Company 5000 Of
stock in the Mount Washington Railroad a,
IS 500 Of stock in the Weldon Hotel, in
St. Adams = zoe in the Mount Mans
field Hotel in Stowe and : 50 in the Water
bury Hotel None of these investments have
realized dividends. and the security holders
claim that an should be accounted for, a
well a. 10000 loaned TO the Woodstock
Railroad COMPANY
Tenth. the receivers have retained large
number of attorneys AL over Vermont, and
some outside the State. cnly a few Of
whom have been called on 10 do any busi-
nc~s also they have granted free passes
with grca; libcrality furthermore that
when the Ogdeusbnrg road was leased,
retainer oC So 900 was paid ". c. Brown.
who had been attorney for that road, but 70
per cent Of which. 1t Is claimed by the re-
ceiver~. was paid by other roads in the
through line, and finally that expenses were
incurred in procuring charters Of the East
ern Vermont and W estern New Hampshire
roads. claimed by the bondholders to have
been for the benefit OF the Sullivan leases,
but by the receivers to have been for the
benefit Of the trust In each of these cases
the security holders claim accounting.
Eleventh. it appears that expenses were
incurred for lobbying ut Montpelier. Con
cord, Albany and Washington. Among
them are annual payments to 10 d. Hatch,
who attended through each session at Mont
pelier and disbursed considerable sums. For
most Of his payments vouchers were given,
but he stands charged with portion of the
secret service fund and has entirely forgot
ten what he did with II. Ii appears by
voucher No 792, that Hon u. 4. Smalley,
then and now niied States District Judge,
receipted for s. eco from the trust on ac-
count of service and for money paid out in
the legislature" The receivers claim that
all these and similar disbursements were
necessary, and they defend generally against
the claim that they should be accounted
for, on the ground that the accounts have
all been examined and approved by the com
mittee Of the boudholders-
A SINGuLAR AcCIpENT The St. Adams
lT,ssc,,oo, toll the folloWinp story of a re-