Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1913-04-24
MAINE CENTRAL is
PRoBED BY COMMISSION,
lEontlnued from Page One.)

l.ton & Maipe. explained to the commits
i stoner that the Hampden railroad was
4 being constructed because 1t was the
4 belief that ii was Il matter of policy,
business necessity and that it would
he al Improvement TO Massachusetts.
There had not yet been any opportu-
nifty h demonstrate whether the direc-
| ters erred when they decide to con-
strnct the Hampden line
What directors ?" asked Commits
| sicnef Prouty.
| The Boston & Maine directors said
| Mr. Rich.
| Mr.. Hobbs replying to Commission
| er Prouty. said that the Hampden rail-
road, on June 10 last entered into an
agreement with the Boston & Albany
relative to the use of the Springfield
| terminal station. which is owned by
| the Albany Road.
! Mr.. kieh said that the construction
| of the HampdeH railroad was not TN
aertaaen for the purpose of competing
with The Boston & Albany but that
| the Boston & Maine was trying to as
| sure itself permanent protection be-
| cause its agreement on trackage rights
with the Albany Road was not per-
| :nancnt agreement.
The finances Of the Boston & Maine
we're next taken ZIP. In the course of a
| technical statement Mr. Hobbs said
| ti1at in 1911 the road had paid divi-
deDd of per cent, although the earn
| ings of the road were only one-half
| Of / per cent. and in 1912, a dividend of
| 4 per cent. was paid on earnings of
| 2.s per cent. The dividends We're made
up from a s2.oO0.oo0 surplus fund.
Mr. Rich explained that IL was no.
considered improper for public ser
vice corporation To pay dividends
greater than the earnings aud that the
surplus was maintained for that pur-
pose.
He said in order for railroad bonds
| to be legal Investments for Massachu-
sets savings banks it was necessary
| for the railroad to pay Il dividend of
at least per cent on its stock.
| An issue of 81. 600, 900 Boston &
Maine stock, which had been authoriz-
| el by the directors, had been held up,
| Mr.. Rich said, because the stock was
| selling below par and the law requires
| that the stock issue be at par.
Vice President Hobbs. resuming his
| testimony. said that beginning July /.
| 1911. the BUSINESS of the Boston &
| Maine was not so profitable as it had
heen in previous years. \ retreneh-
! ment policy was adopted and employees
in the operating departments We're
gradually laid eff. on April /, 1912. the
| payroll was si5.57l 600 compared with
fsi5,6le.000. the previous year. In Sep
| TENDER, 1912, business began to I'M
| prove and from that time until April
| :. 1875 there had been per cent. in
i
| same proportional increase III gross re-
Z! ceip,s for the same period.
At the afternoon session. Mr.
| Hobbs presented figures to show in de-
| tail the operating revenues Of the road
| In September 1912, the net corporate
| income was $4,000 compared with
| 100000 for September. 1911.
| The figures for the three months
| ending Sept 80. 1912, showed Il net cor
| porate income of $1,640,000. or nearly
| twice as much as the 1871 600 for the
| same period in 1911.
| His figures indicated an increased
number Of employees, and an increase
| IN the number of locomotive miles run
| IF your net revenue for this year
| should be the same as last year. would
| Jour operating expenses be larger than
/
| Preuty.
| YES considerably larger" said Mr..
]! Hobbs. who explained that the wages
| of engineers and telegrap piers had been
| increased. while wage scales of many
other employees were being considered
1 hefar.s. boards of arbitration,
\ Mr.. Hobbs was subjected TO a persis-
lent eross-examination by Mr.. Bran
| deis. He admitted that the Boston &,
Maine mad contracted to pay a yearly
rental of about 1000 per mile for the
Hampden Railroad, although the rent
~ on other leased lines was only about
$4,000 per mile The rental of the other
leased lines, he said, covered terminals
and equipment. The Hampden Rail-
road had no terminals and equipment
!, and entered the Springfield terminal
i station only over the tracks of the
Boston & Albany division OF the New
York Central.
1 1t was brought out during the cross
I examination that the Hampden Rail-
; read Corporation, of which Ralph D.
|. Gillett of Westfield is president, con-
> tracted with the Woronoeo Construe-
ton Co, of which Mr.. Gillett is also
!, president for the construction of the
road. Under the contract. Mr. Hobbs
1 said that the construction company
was to receive commission on the
cost CT the work.
"Then the more the road cost the
more MIR. Gillett received, did he not p
queried Mr. Brandeis Naturally" an
swered Mr.. Hobbs.
Mr.. Hobbs could not recall whether
! he had seen the contract between the
Hampden Railroad and the Woronocc
Construction Co. before the Boston &
Maine signed the contract leasing the
Hampden road. His advice as financial
vice president was not asked, he said