The Barre daily times. (Barre, Vt.) 1897-1959, 1913-04-23
MELLEN'S
PROFITS
Brandeis Promises Revela-
tons About the New
Haven
A DEAL IN
STEAMBOATS,
How Two Vessels the Com
pany Bought Grew
in Value.

| ildNtlt iRbtH pib4AiioNN SNNNNA
day to unravel tangled system of high
finances used by the railroad. He prom
Used to disclose system whereby Presi-
dent Charles S. Mellen made hundreds
of thousands of dollars in transactions
in the New Haven stock.
| Brandeis declared that the system of
bookkeeping used by the road was so
involved that it was almost impossible
to unravel the records. He further
promised to show that the New Eng
land Navigation company was used by
MelIen and his board of directors to
carry out these transactions and that
the dividends were paid out OF the cap
ital stock and not out OF its earnings.
II intend to show" said Brandeis,
that within the past five years, begin
ming July |, 1907 the New Haven re-
ports OF its earnings and deficits have
been misleading and that the railroad
has failed to make a proper deprecia-
ton, not only in its operation of its
properties, but of its lines as well. I
charge that the railroad has made in
sufficient depreciation charges in the
operation of its rail and water lines.
II propose showing that the Proper
ties Security company was created with
the distinct purpose of eoncealing the
financial transactions of the New Ha
ven, and | also propose showing that
the New England Navigation company
was not holding company, but was
like shuttlecock, playing back and
forth to conceal financial transaction
carried on by the parties in question"
Vice President auckland of the New
Haven denied Brandeis' statements.
Commissioner Prouty declared that the
books, accounts and methods of the
railroad company had been so eriscrossed
that no one know what the real finan
eial condition OF the company was.
: Vice President auckland asked for a
delay of the hearing but the commits
sioner denied his request, Brown, an
expert auditor from Washington, who |
for nearly Tour months has been exam
lining the company's books, resumed the |
stand.
Under questioning by Brandeis, Brown
showed that the New Haven railroad |
had bought the two steamboats,, the /
Rhode Island and Connecticut from the |
Providence Stonington company, which |
valued them at 100000 each, The New
Haven paid S650,000 for them. They
were later returned to the New Eng
land Navigation company, another New
Haven subsidiary, and listed as worth |
1892 900. Three years later they were
sold as scrap for $4,000.
A part of the loss was sustained be-
cause of the unwillingness of officials
Of the company to have these steamers
fall into the hands of competitors, ac I
cording to evidence introduced by David
f. Brown. government accountant, at
the continuation of the hearing before
Interstate Commerce Commissioner
Prouty yesterday.
The acquisition of the Joy Steamship
by the New Haven system
was considered by Mr.. Brandeis.
Mr.. Brown, testifying always from
the voluminous mass of papers which
the work of himself and
from six to ten assistants for five
said that this line was taken
over by the New Haven system in De-
,ember, 1905, when payment of $775,-
300 in note was made by the navi-
cation company to the New Haven COM
pany. About Nov. 2s, 1905, the New
Haven company issued two checks, one
Tor s525.000 and the other for S250,000
TO Vice President Kochersperger for the
acquisition of Joy line stock. Altogeth
,r total of Sl,3l9,756 was paid for
he Joy line. ,
Mr.. Brown said that the records
showed that the Joy line had been
operated at deficit but $40 a share
vas paid by the navigation company
or its stock The appraisal of the Joy i.
inc was made by F. NJ. Dunmore. !
10y line official, and aggregated s775.-
100. To this was added S250,000 for (,
good will" !
In April, 1907, the navigation COM !
ANY sold the Boston line of the JOY !,
steamship company to c. W. Morse, I
Who then controlled the Metropolitan
steamship company operating between
Few York and Boston. for 100000. Mr..
Morse paid by check, which was de-
,osited with the Bank of North Amer
ca. New York
Vice President f. G. auckland of the
Iew Haven road argued that the in
uiry should be confined to the rates,
erviee and policies of the New Haven
nd its subsidiary companies. The com
Missioner ruled that the hearing should
IoCetu Win tht inquA. lhtO Htducld4
An alleged loss to the New York,
Jew Haven & Hartford railroad of more
han 100000 annually as a result of
Is recent contract with the Pullman
ompany by which the latter took the
arlor and sleeping car service of the
abroad company, was also described
Y Mr.. Brown.
The history of the merger OF the BOs-
on & Maine and New Haven systems
as related by Brown, with special at
sntion to the part taken by J. L. Bill
Ird of Meri1en, Conn. =
Mellen Indignantly Denies.
President Mellen OF the " Y. n. II. &
|. r. r., in a statement given out at :
be Offices of the company yesterday ]
fternoon. attacks the attitude of the :
OF the interstate commerce
,mmission. who, he SAYS. never made
he slightest inquiry Of him during their J
ve months examination Of the New
aven company's books. ~
He Indignantly repels. the statement
Tvs. insinuations that -he profted per-
,nally eight or nine years ago by trans !