Litchfield enquirer., 1878-04-11

Schuyler, which were surrendered and cancelled, and also 13, ,269 shares sold by the company in 1865 and 1866 to its stockholders, pro rata, at $75 per share, the aVails of which were used in paying judgments obtained against the company, upon claims growing out of said Schuyler frauds, and that said stock was for the first time reported as pad in, in the re- port of the year 1867.
 Your committee find that the second allega- ton made against the said railroad company is true.
 In reference to the third charge against said railroad company, your committee find that the records sustain all except the allegation that the amount of the loss by the Schuyler fraud" was included as part of the cost of the road, without informing the stockholders of the fact 7j Ia .SsGs D..
 During the year ending March 31, 1869, there was added.to the cost of the road, the sum of $1, 782, ,868 the loss sustained by the said rail- road company, by the Schuyler fraud. As this loss wasn part of the legitimate cost of the road, and represented a total loss to the com pany, the propriety of including it in the as- sets of the company is submitted, by your con- mittee, to the consideration of the House with out comment but we are of the opinion that the fact that it was so added to the cost of the road. appears from the report made to the stockholders after the said addition had been made.
 And as to the 4th and 5th allegations, the con- mittee find that said company did report that 1t had surplus, as alleged and that in com putting that surplus, the company considered said sum of $1, 772, 868, the loss so sustained by said company in consequence of said Schuy- Ter frauds, an asset and if said sum was inn properly considered an asset or improperly chaFUnH If a then the report of said company would show that, instead of said surplus, the capital of said company was impaired to the amount al- legged but whether the capital of said com pany was in fact impaired, or. whether said company declared dividends in violation of said law, your committee are not informed.
 And as to the 9th allegation, your commit tee find that it has substantially, the same foundation as the first allegation.
 NEW YORK, NEW HAVEN 6 HARTFORD RAILROAD
 COMPANY.
 AS to the several allegations against this company, the committee find That said com pany has reported to the Railroad Commis- sioners as alleged, but in relation thereto, they find; That this corporation was created by a consolidation of the Hartford & New Haven Railroad Company, with the New York and New Haven Railroad company under an act of the legislature of this state passed in 1871, and authorized by said act to makeits capital stock equal to the aggregate of the capital stock of the companies out of which it was formed.
 The capital stock of the Hartford & New Haven Railroad Company actually paid in by the stockholders, together with that issued as dividends as hereinbefore found in relation to said company, amounted to $6 500, 900 :: and the capital stock of the New York 6 New Haven Railroad Company actually paid in by the stock holders, together with that issued for the adjustment of the claims growing out of the Schuyler fraud, amounted to $9, 900, 900, making the total amount of the two compa- nies $15, 300, 900. The amount of capital stock created by the consolidated company was $15,- 300, 900, which was exchanged, share for share with the holders of the stock of the separate companies, and was within the limits author ized by the consolidation act. At the time that said exchange was made, the consolidated company paid to the several holders of the stock of the Hartford & New Haven Railroad Company, the sum of $10.33 on each share held by them, in order to fairly adjust the diff ference in value of the stocks of the said two companies, which payment amounted in the wEole to the sum of $671, 450, and was equiv alent to a dividend of that amount tothe stock holders of the Hartford dC New Haven Rail- road Company, which was not reported to the
 
 was given by the said Commissioners in the body of their report for the year 1872
 DANBURY < NoRwALK RAILROAD COMPANY.
 In regard to the charges made against the Danbury & Norwalk Railroad Company, .yonr committee find them to be true
 SHORE LINE, NAUGATUCK, X NEW HAVEN &
 NORTHAMPTON RAILROAD COMPANIES.
 No one appeared before your committee in behalf of the Shore Line, Naugatuck, and New Haven & Northampton Railroad Companies After as thorough and complete an examina- tion as it was possible to make under the cir cumstances attending the investigation, and from an examination of the report of the said companies, and from ths testimony of Mr. Goodwin, your committee are of the opinion that the charges against said railroad compan- ies are we'll grounded and substantially true
 RAILROAD COMMISSIONERS,
 In support of the first charge against the Railroad Commissioners, your committee were referred to the published reports of the com missioners for the years named A large num- Der of questions were found unanswered in those reports as alleged. Such omissions, in the opininion of your committee, deprive those reports of much of their value as sources of exact and complete information in regard to the railroad companies of this state. No ex- planation of said omissions was made to your committee.
 In support of the second charge was present ed copy of communication, dated June 1, 1874, from Andrew Northrop, then chairman of the Board of, Railroad Commissioners, ad- dressed to the General Assembly, In said communication MT. Northrop states that no information of any violation of law by the railroad companies in making their reports had been furnished to the commissioners but admits that an unsigned communication had been left with them, alleging that there was an incorrect statement in certainreports.
 In regard to the third charge, we find true that the commissioners declined to require the companies named to change their returns in the particulars requested by the complainant. but do not consider that it was a violation of law, because we think that under the law re- ferred to it was matter within the discretion ot the commissioners.
 As to the fourth charge, your committee find that construction of the law has been accepted by the Commissioners, and which they claim was given by the Legislature of 1875, which construction is: ''that the amount of capital stock actually paid in, means the amount of stock for which ull-paid certificates have been issued, without reference to the amount of cash paid for such certificates by the stockholders, but upon which no further payment of capital can be called for" Act ing in accordance with thls construction of the law, the commissioners issued to the railroad companies the instructions mentioned in the fourth charge. Such construction of the law appears to your committee to be perversion of language. It renders the returns, as to the capital stock, and the manner in which it is made up, if not corrected in some other way, not only worthless, but mischievous in their tendency to mislead. This the commission CTS have recognized; forswhile seeming to fa- vor this construction of the law (having adopt ed it from the Railroad Commissioners of Massachusetts, before the so-called construc- tion by the legislature in 1875,) they interpo- laed into the schedule then in use certain questions, in addition to those required by law, in the returns of railroad companies un- der the head of Capital Stock; " which were designed to obviate the evils resulting from such construction of the law.
 As to the fifth charge 1t is true that the com missioners in the text of their report, for 1875, speak simply of the paid-in capital, using the expression as equivalent to ''the amount of f,,ll maid YoitaI ctOok icsuo1