The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1913-04-26
Expert Brown Told of New
Haven's Transactions
in Stocks
STOCK SOLD BACK
AT S644,0O0 PROFIT
Dealings with Various Subsidiary
Railroads and Navigation Com
pany Figured in Testimony-Prou-
tvs Son Conducted Inquiry.

BOSTON, April 26.-Financial trans
actions between the New York, New
Haven & Hartford railroad company
and its subsidiaries. as indicated by
their books. were described Yesterday
at the Interstate commerce commits
sion 5 Investigation Of the Eew Haven
system by David +. Brown the com
mission 5 examining accountant Ward
Prouty sat as examiner in the absence
of his father, Commissioner Prouty,
and by direction Of the commissioner
the proceedings were limited to the
examination Of Mr.. Brown bv Louis
ID. Brandeis. The latter appeared as a
citizen of 3Iassa huse-ts having
withdrawn his appearance as counsel
taa .ha Boston frait ana produce OK
eLaI
SIR Brown testified that ell Ap-ll
1907. the EeN England uay 1arlpa
COMPANY New Haven .unslale-r. ass
uaireG 74gt shares Of Nsw Haven e-lez.
tlem tho Ne~ Eara. company at --na
hace l1 e-ci atl.H tsr aebsufGIes II
+ the Consolidated railway. au-tlsr Ne~-
+ Ea-an subsidiary having taae value
T of e1f>iT.9"H. AZ tlse time <-Fy Iae-
cr stock Nas selling in the market gF
i from l73 to l79.
This transaction. thr stiffness sail
/ created q ca-ita' liability h~ fhc Nea
+ Haven Of e t0G.1 SOC ana aa invest
rieut valnr Of Sl4SI2a63, giving tbe
i New Havon 2 premium showing Of
tGs. SOC This ann anoher
i transaction showed upon the laGks ~
the New Haven company ~ apparent
profit Of SS.50O0G0 while the navi-
cation company 5 records indicated
= that 10y selling the stock back 20 the
+ New Haven at an advance over the
original price, 2 profit of S644 600 was
obtained Other subsidiaries figuring
i'm the exchange of securities described
f by Brown included the Billiard com
many, the Rhode Island company, the
4 United States transportation company.
the Maine steamship company and the
Hartford and New York transportation
/ company.
On June 80. 1912. according TO the
witness, the navigation company held
l2l5.000 shares Of the New Haven
stock. valued on the navigation com
pany's books at S34 $50. 65T, OF about
Sl6O a share. Brown was unable TO
give the market value OF the stock at
that time. hut comparing the book
value of the stock on june go with
the present market value. he said the
stock was worth slO.000OO0 less than
the sum credited on the navigation
companv's books last June. Mr..
Brown gave long technical explana-
tion to show that the comparison be-
tween book value and market value
Fdid not indicate actual loss
The witness told of money remittel
at various times by the navigation
company for the purchase Of stock OF
the Worcester. Nashua and Rochester
railroad for President Melleu. J. T.
i Billiard. A. r. Robertson, Samuel Aims.
lev and j. = Hemmenway. al diree-
tors Of the New Haven road. These
rcmittances were secured by demand
notes al per cent given by the iiree.
tors named The stock Of the WOrccs
. ter. Nashua and Rochester was later
sold to the Boston & Maine railroad
another New Haven property. All Of
, these notes which aggregated on their
, face more than 100000, were suu>e
/. quently iguidated.
The fnancin. Of the New York
, Westchester and Boston consolidate
/. railway company and the construction
: of IFS line received considerable atten
2 tion and letters from President Meliel
20 Oakley Thorne and Na-sien J. Per
i ~. who were connected with tho con
struction of the road were read. As
ountant Brown said that the road va
built al 4 cost Of about sl.5o0.o0o
mile anil that the renorts Tor the frs
two quarters Of its operation shove,
that the operating eNpcuses Tere 4
excess Of the earnings