Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1913-04-29
Increase Of Capital Stock
Of New Haven Road
Ten Times as Great as Increase
OF Revenue Is Testimony.
President MelIen OF the New Haven
Road will Go Upon Stand.

Rcston, April 2S.-Tne examination
of David +, Brown, the government Is
accountant was continued by LOUIS y.
Brandcis at the hearing, today, of the
Interstate Commerce Commission On
the affairs of the New Haven Road.
The witness said that for the year
ending June So 1903, the first year in
eldcd in his examination of the New
! HaFen's books, the gross operating
/ revenues aggregated $47, 296,077. TIL
/ figures fer the year ending June 20
l9i2 were $65,559,2lS. showing an in
crease Of apprc Nimately II per cont in
nile years.
{. +. Ghoate, Jr., who like Mr. Bran
dets, Is appearing ut the hearings as
4 eitiZen of Massachusetts suggest
Cd that the figures quoted for 1903 IN
Ieiuded the revenues for the marine
lines of the company. Mr.. Brown
could not say positively that the fig
TRES did not include the steamship
earnings. but he understood that the
figures represented steam railroad op-
'erations. The gross operating rev.
nues for the year June 30, 1906 w,r,
So, 1881, 81. The increase from this date
TO June 20, 1912, was approximately :.
per cent. The. report of the New HAY
On Road to the stockholders for 1898
was introduced and showed that the
srl SIS revenues from rail and steamer
lines were nearly So, 900, 900 indicating
that the s47. 296,077 mentioned by tn
witness represented steam railway
revenue.
u he ngntt.tI Stnck funded
ness, bills payable and premiums re-
.oeived on capital stock of the New
Haven company was about S94. eG0. 00
n 1909 and $4700G0,0o0 in 1872 accord
ing To the witness, an increase in nine
years of SS7G000, 900 or about 400 per
cent.
Mr. Brandeis brought out that the
increase in capitalization was about
10 times as great as the increase in
revenue.
At his point Mr.. Choate protested
that such comparison and use of fig
ures were improper and misleading
because no account WAS taken of the
increase of assets and other elements
entering into the matter. Examiner
Ward Prouty ruled that the COMPARE
sons might be made.
Mr.. ghaate continued To take an ac-
tive part through the remainder of
the session, and it was learned that
previous to the opening of today's
hearing he had entered his appearance
as counsel for the New Haven Road
he had announced, Friday. that he APP
peared as a citizen OF Massachusetts"
Further examination of Mr.. Brown
resulted in the testimony that the fig
ures of aggregate capital Indebtedness
given by the New Haven did not in
clude such contingent liabilities as
guarantees on the debentures and 9TH
CT obligations assumed by the New
Haven on account of some of its sub
salaries.
Among the contingent liabilities
mentioned by the witness and not APP
pcaring on the New Haven's capital
were $1G0.040 a month on
account Of the New York, Westchester
e Boston, $500, 900 on account of the
Boston Railroad Holding Co. a $4,000
coo guarantee on certain outstanding
stock of the New England Investment
and Security Co, and $3,3S7 ,000 on ac-
count of the Springfield Railway Co.
The witness testified regarding Ger
tain entries on the New Ravens list of
assets which. in his opinion as an ac-
countant, were improper. He men
tened one instance where premiums
on the sale of stock to the extent %
$50, 601 900 had been credited to profit
md loss instead of to premium liabili-
ty If this had been credited tn pre-
nium liability, the witness said, il
would have had the effect Of convert
ing surplus of $12, 50o,0oo into a de-
felt of $500, 600
Again Mr.. Choate protested at the
line the examination was taking, say
inc that the deductions were mis-
leading and that the matter was one
Of bookkeeping.
Mr. Brown testified regarding other
included among the assets
which he thought, should have been
included among liabilities. Had these
items been charged. according to Mr.
Browns idea of proper accounting,
they would have shown $3,696,00 addi-
tional liabilities.
The hearing will be resumed, tomor-
row.
KEDr HhDEEItt WATCH