Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1913-12-27
Aampden Railroad Co. Ex-
penditures Excessive.
Public Service Com. Authorizes
s1,9O0,OOO Capital Stock.
Project Severely Criticized by Mass.
7rd..History Of Deal.

Boston, Dec. 26.-The Public Service
Commission today authorized the
Hampden Railroad Corporation to is
sue s1,900,000 additional capital stock
The company had asked authorization
for bond issue of $2,500,000.
The commissioners say in its report
that according to the company Off
Gals $4,400,000 has been expended up
to the present time in the construc-
ton of the road. In the opinion of
the commission the reasonable anc
proper amount amounts to 100000.
AS the commission had previously au-
thorized a capitalization of s1,400, 000
the additional issue of $f,sO0,000 was
granted in order that the total cap
italization might equal the commits
sion's finding as to the proper cost.
If the officials of the Railroad Co.
shall within a reasonable time pre-
sent to the commission evidence that
the company is relieved of liabilities
with the exception of the outstanding
stocks in excess of $1,900000, an or
der may be entered. The commits
sion's findings criticizes severely the
conditions under which the road was
built. OF the railroad itself the report
says:
This railroad is a single track. road
1885 miles long, running for most of
the way nearly parallel to the Athol
branch of the Boston & Albany Rail
road from Bonesville, where it con-
meets with the Massachusetts Central
branch of the Boston & Maine Rail-
road to Athol Junction, where it con-
meets with the tracks of the Boston &
Albany Railroad, about two miles
from Springfield station. 1t has four
small stations, two of them combina-
ton freight and passenger stations.
The single fact that such a road
has no terminals and the rolling stock
is alleged to have cost about $4,000
per mile is enough to put the commits
sion in strict careful inquiry into the
history of the enterprise and the meth
DDS pursued in its construction"
The commissioners tell of the agree
ment between Charles S. Mellen, then
president of the New York, New Ha-
ven & Hartford and the Boston &
Maine Railroads, and Ralph n. Gillett
of Westfield, a railroad construction
contractor, who had been employed by
the New Haven, under which Mr.. Gil
lett should finance and construct the
Hampden, which the Boston & Maine
would lease and pay an annual rental
of per cent. of the construction cost.
The construction work was done by
the Woronoco Construction Co., of
which Mr.. Gillett was president, and
was financed by the Hampden Invest
ment Co., headed by Mr.. Gillett.
A little more than week ago, the
Boston & Maine directors gc:ed that
the lease of the Hampden to tie COS
ton & Maine was not warranted as the
execution of the lease by Mr.. Mellen
was premature.
The commission finds that the prop
er cost of the completed railroad, in
Guiding interest charges up to Dec. l,
1913, is $3,300,000.
This sum-" says the report, repre-
sents a reduction of more than ST.
100000 in the gross cost of the COM
pleted road upon the basis of figures
originally filed by the petitioners and
is also less than the actual amount
shown by the accountants of the COM
mission to have been expended by the
Hampden Railroad Corporation and
the Waronoco Construction Co., in the
construction of the road. In other
words, as the result of this finding, it
would appear that Mr.. Gillett and his
associates will not only be deprived of
any profit or compensation for pro-
noting and building the road. but may
be obliged to stand financial loss. In
sofar as this result follows in the ap-
plication of the principle we have
adopted, it seems to be unavoidable
Moreover, it may not be entirely re-
grettable in the public interest, the
general method of railroad promotion
and construction employed in this the
case should be found to be unprofit
able"
Commissioner George W. Anderson
in a dissenting report, said:
THE present petition should be dis
missed without prejudice to the right
of the corporation hereafter to apply
for any additional capitalization above
the $1,400,000 of stock already issued.
the amount to be determined on the
basis of the actual value of it's prop
erty for railroad purposes"