Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1913-05-03

made for the companys benefit
"The transaction was fully explained
to my directors and approved by them
with reference to the other miscel.
laneous notes:
These have all sbeen liquidated in full
with interest in cash or securities turned
over to the company, except 5000 which
was expended to pay the first instalment
of the capital stock of the Swanton &
Alburgh Railroad and which will later
be returned to the Boston & Maine Rail-
road.
1.-THE New Haven Co. has no contingent
fund and the sums represented by the
notes as temporary vouchers We're drawn
by me to purchase securities or property
for the company and were frequently re-
turned by me because not used though
I was charged for and paid interest dur
ing the time the moneys were in my pos
session.
"The aggregate of the notes very much
exceeds the moneys drawn by me, be-
cause this aggregate includes renewals of
notes and the same money appears in
this aggregate again in the case of each
renewal
Mr.. Choate then asked Mr. Mellen to
explain the transaction by which ]. L..
Billiard of Meriden. CT. appeared to have
made profit of s2,7OO,Ooo. Yur Mellen
said:
1.-The accountant has assumed that Mr..
Billiard received from the New Haven
Railroad profit of s2,7o0.000 on his trans
actions with the company In Boston &
Maine stock"
Replying to Commissioner Prouty, Mr.
Mellen said that none of the money dis
bursed by the road had been used in an
underhanded way. Vice President Buck
landao the New Haven volunteered the
information that $500 of the fund de-
scribed by Mr.. Mellen was turned over
to the Republican, state central commit
tee of Rhode Island on Sept. &c. 1901
Mr. Mellen further said that not all of
the sum mentioned was used for cam
paign purposes. part OF it having been
spent in the acquisition of pier leases.
President Mellen next explained u note
transaction in 1906. He said:
Transaction in March, 1906, by
which $1,000 shares of New Haven
stock were sold to me and l gave my
note
This stock was also treasury stock.
1t was sold to me, March 26, 1906. and
] gave my note and the stock was held
by the company as collateral.
"The stock was sold from time to
time end the entire proceeds and div
;dends paid directly into the treasury
of the company on account of my note.
On June 80, 1906 more than $4,000
shares remained unsold and the market
price of the stock had risen several
points.
I turned over $4,000 shares at less
than the market price, to the Consol-
idated Railway, the New England
Co., and the insurance
fund.
At the afternoon session Mr.. Mellen
defended the construction of the
Railroad as a wise invest
ment He said that the $4,000 paid the
Boston News Bureau by the New Hav-
en- was used by the bureau to buy adj
space for the railroad in va
rious New England newspapers.
Mr.. Prouty said that he did not feel
at liberty to question Mr.. Mellen re-
garding the Billiard transaction.
4 express my sorrow Also" said
President Mellen.
Mr.. Mellen appeared as a voluntary
witness and Commissioners Prouty
would not permit him to be sworn or
to be cross examined by Louis D.
Brandeis, lest the witness might later
claim immunity in federal proceedings
now under way.
/ The circuit courtroom was crowded al
most to suffocation when the railroad
ad nv Draci6apf .
auckland and his counsel, Charles +.
Choate. Jr., entered.
Mr.. Prouty explained the circumstances
under which Mr.. Mellen's statement was
to be received, emphasizing that he
would be unable to claim immunity as
the result of today's proceedings.
Commissioner Prouty added that the
department of justice had advised him
that he could not interrogate Mr.. Mellen,
but he suggested that Mr.. Brandeis and
Robert Romans, as counsel for the Bos-
ton Chamber of Commerce, be permitted
to question him if his explanations were
other than a personal nature.
Mr.. Mcllen. after reviewing his railroad
experience. took up the matter of the
slO2, 900 profit that he apparently made
from the sale OF l3WO SndreS or New
Haven stock in 1904 for which he gave
his personal notes.
After introducing formal statement
regarding this matter and another con-
corning the Billiard transaction, Mr.. Mel
len took up various points that had been
testified by Accountant Brown.
He explained the purchase Of the
Worcester, Nashua & Rochester stock.
forthc Boston &. Maine, saying that
1t was done at the request of Lucius
futile. president Of the Boston q
Maine, at the time. None of the New
Haven directors, who purchased the
Worcester, Nashua & Rochester stock
on money advanced them by the New
Haven on their notes, ever made
dollar profit.
He reviewed the acquisition of the
Rhode Island Company, a subsidiary
operating street railway lines in Rhode
Island. defending the transactions aud
declared that the Rhode Island CoEl-
pany earnings, this year, would pay
the New Haven three per cent. OF their
total cost to the railroad.
All of the New Haven's trolley prop
critics, he said. would in 1918 pay the
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