The Bridgeport evening farmer., 1913-04-23
BRANDEIS CLAIMS N. E. N. co. IS ONLY FOR JUGGLING CASH Accountant Tells of $2,7OO,OOO Profit on One Deal of New
 Haven Road Mellen Issues Statement Denying Charges of Brandeis--Exam-
 iner and BuckIand Have Tilt

Boston, April 22-There were refer
 ences in detail here today of profits
 of 2,7OO,ooo made by John L. Billiard of Meriden, Conn.,, by the purchase 1 from the New England Navigation company of it's stock control of the Boston and Maine Railroad and it's
 transfer back to the navigation com
 pany and resale to the Boston Rail
 road Holding company, the bonds of which are guaranteed by the New York, New Haven and Hartford Railroad, at the hearing conducted by Interstate Commerce Commissioner Prouty David E. Brown, the commits sion's accountant said that in the whole transaction he could find no record which seemed to show that MT Billiard had paid much principal in
 money.
 It was shown in the testimony about steamship lines that some of the steamers were scrapped within three years after the New England Navfga- ton CO, one of the New Haven sub sfdiaries, had paid large prices for them.
 Louis D. Brandeis said the company was not a navigation company at all, not even a holding company, but a medium for juggling accounts with the New Haven. The plan was intended to conceal the facts from the public by shifting the accounts back and forth
 He said he wanted to bring out that dividends were paid out of capital and not actually earned and that the actual capital had shrunk out of all proportion to the dividends paid. The plan, said MT. Brandeis, was to pay from the New Haven to the navtga- tion company and then a few days
 
 the New Haven. The assets, he said, were not actual assets, or were greatly over-VaIued.
 Vtce-President Buckland of the New Haven said that Examiner Brown had not requested any information from the officials of the railroad, but Com missioner Prouty flatly repudiated this assertion. He said:
 My observation is that these sub rosa investigations do not amount to anything. We have been through your books and we bring the results here. We desire you to make any ex- plantations you wish, but whatever is done it seems to me should be done in public and the public should have the benefit of hearing whatever is said.
 ''I have regarded from the first our examination of your financial meth eds the most important part of our in vestigation. I believe this is the first
 
 transactions has been known. Prevf- ous examination has been rendered all most impossible by the complicated methods you have pursued in creating companies almost without number and passing transactions from company to company in a way that seems to be utterly unnecessary
 President Mellen of the New Haven isued 8 statement today denying that he had profited by transactions in the stocks of the New Haven or any of it's subsidiary companies. He said:
 Anybody who stops to think of the character of the men who constitute the New Haven board of directors will realize that the fact that these trans actions have been audited and approv- ed by the directors is sufficient proof Of the absurdity of the charge
 s"The entire attitude of the account ants shows animosity. unwil1ingness to be advised as to the facts and desire to draw hostile differences.
 During the five months the ac- countants have been at work on the New Haven books they have never slightest inquiry of me as to the mat ters they now bring forward In view of the previous examination of the New Ravens accounts this belated charge against me seems ridicuolus and absurd.''
 It was brought out that two steam srs, one built in 1882 (Rhode Island) and one in 1889 (Connecticut) were bought by the navigation company rom the United States Navigation Company and three years later were yold for ss, 500 and $e, GOO respectively, md S26, 800 for the boilers, total of IA GOO
 At one time in writing of the sale | ,f these steamers one of the officials s said to have written that he did aot want them to go ''to any one who would be foolish enough to put them n competition with our linest'
 The total cost of the Joy Line to the New Haven was given by Examiner Brown as s1, ,31e, ,756. No dividends were ,aid to the navigation company.
 Brown said that in April, 1907, the navigation company sold to Charles ervice for $500, 900, Morse paying by heck, which was deposited in the Sank of North America, and that MT. FeIlen wrote a letter saying that no raft would be made against this $300, % deposit without due notice to the rank.
 Brown said that on April 6, 1907, the directors of the Navigation Company were authorized to purchase Boston & 1aine stock, any and all, and to pay or it by delivery of one share of New Haven for one share of Boston & 1aine. In all the Navigation Company ac- ufred 110,752 shares of Boston & Iaine stock. This stock was carried n the books of the Navigation Com any at $116.15 a share, which was ad- { lsted to $125 in Noven'bes, 1907, and Tas sold to John L. Billiard on June ), 1908, at $125 a share. The trans ( ct1on was carried through as fol-