Norwich bulletin., 1913-04-26
Dealings With
 Subsidiaries
FINANCIAL TRANSACTIONS or
 NEW HAVEN ROAD.
THEIR BOOK RECORDS
Produced at Interstate Commerce Commissions Investigation-West-
 chester Line Cost s1,5oo,ooo Mile.

Boston, April Financial transac- tions between the New York, New Haven and Hartford Railroad com pany and it's subsidiaries, as indicated by their books, were described today at the Interstate Commerce Commis- sions investigation of the New Ha- ven system by David E. Brown, the commissions examining accountant Ward Prouty sat as examiner in the absence of his father, Commissioner Prouty, and by direction of the com missioner the proceedings were limit ed to the examination of MT. Brown by Louis D. Brandeis. The latter ap- peared as Ia citizen of Massacllu- setts'' having withdrawn his appear ance as counsel for the Boston Fruit and Produce Exchange. Navigation Go. Paid s2oo a Share. Mr Brown testified that on April S. 1907, the New England Navigation company, a New Haven subsidiary acquired 7,465 shares of the New HR,- ven stock from the New Haven com pany at $200 share in exchange for debentures of the Consolidated rail way, another New Haven subsidiary, having a face value of S14,815,0o0.
 At the time New Haven stock was selling in the market at from 173 to 179.
 Books of Both Companies Show Profit This transaction. the witness said, created capital liability by the New Haven of ST, ,4O6, 800 and an investment value of $14,813,00O giving the New Haven a premium showing of $7,40e,- i 900. This and another similar tran saction showed upon the books of the New Haven company an apparent profit of $S,500,000, while the naviEa- ton company's records indicated that by selling the stock back to the New Haven at an advance over the original price a profit of s644,o0O was obtained
 Other subsidiaries figuring in the l exchange of securities described by Brown included the Billiard company, the Rhode Island company, the United States Transportation company, the Maine Steamship company and the Hartford and New York Transports tton company.
 Worth s1o,ooo,oo Less Than Book
 Value. l On June 30, 1912, according to the witness the navigation company held ] 215, ,0OC shsEes o1 New Haven stock l valued c. the na 1igation company's books at $34,659, 657 or about $1e0 share. Brown was unable to give the market value of the stock at that time 1 but. comparing the book value of the stock on June 30 with the present market value he said the stock was worth $10, ,0o0,0 less than the sum credited on the navigation eonpany's books last June
 
 | explanation to show that the oonpari- sen between book value and market value did not indicate actual loss. Roundabout Trip of Certificate of
 Deposit. What was regarded by MT. Bran deis as queer banking transaction uas brought out in his examination of the witness, Mir. Brown, with rel Ation to the liquidation of notes of the New York, Westchester 6 Boston railroad, amounting to $1,601, 762. Liquidation involved a series of notes and was brought about by a certificate of de- posit, the New Haven drawing a check on the National ShawTnut bank Of Boston, which reissued it to tho Second National bank of New Haven, which in turn transferred 1t to the First National bank of Boston, the check being finally deposited in the National ShawI1ut bank to the credit pany.
 Railroad Cost S1,5oo,ooo Per Mile.
 MT. Brandeis asked the witness what he knew about the cause for such a transaction. and the reply Was that in response tc an inquiry, Cashier Bowman of the New Haven had said that 1t WAS done 50 that the name of MT. MelIen should not appear In the transaction
 How is 1t that the railroad cost e million and a half a mile7" asked MT. Brendeis
 T do not know" was the reply, and witness added that the earnings the first two quarters were less than the operating expenses.
 That there wero intangible asBets of $J,000.000 of the New York, West chester 6 Boston road was brought out tn the testimony.
 NAVAL COMMITTEE