Daily Kennebec journal., 1913-05-02

you would have. escaped all THIS both-
er.
Iii answer To questions by Mr. Choaee
the witness read from the records hs-
ures to indicate that the subsidiaries
naying dividends had earned them
Wnen adjournment was taken. Mr..
t,heate was questioning Mr.. Brown re-
eardins his experience as an account
am. the methods he employed in MAX
ing the investigation of the New Hav-
erss books and the persons with whom
he conferred, during his inquiry.
Boston. May 1.--When the Inter-
tate Commerce Commission hearing
was resumed, today, it was learned
that President Mellen had decided 20
appear as a witness later, with the
purpose of defending his management
of the New York, New Haven 4 Hart
ford Railroad and subsidiary lines.
Mr.. Meilen heretofore has refused
to appear a.; voluntary witness and
waived immunity and the commission
has declined To subpoena him. As late
as yesterday. it was said that the ran-
road man remained steadfast IN his
original decision, but it Is understood
that he has since decided that II Is
his duty to the stockholders 10 per
sonally defend tie New Haven sys,
TEN before the commission.
II is said TO be probable that Mr..
Mellen will not be called before, neA'
week, a.; Charles f. Cheate, Jr., MS
counsel, will not have completed lhe
examination of the government ae-
co,intant, David L. Brown before, To-
morrow night.
It was announced that arguments
would he made in Washington, next
Wednesday.
The bookkeeping system of the New
Haven was criticized by Commissioner
Prouty in connection with the nrst
stlbpect taken up. today. This was
the transfer of the steamers Rhode
Island and Connecticut from the Provi-
dence and Stonington Steamboat Co..
to the New England Navigation Co..
subsidiaries of the New Haven, in Au-
gust. 1901, at an appraised value of
$3.50, 600 In December, 1905, the ves-
sells were transferred to the United
states Transportation Co.. for the
price In 1908, the Navigation Co.
bought back the steamers from the
Transportation Co., for $932, 900.
Mr.. Choate asked Accountant Brown
to assume that the Transportation Co.
had spent s2s2,000 and then say what
was the amount represented by tn
steamers. The witness answered $780,
600.
In July 1910, Mr.. Brown said, ad-
justments were made which placed {
book value of s225, 900 on the Connecti-
cut and $25O,O00 on the Rhode Island
When the Connecticut was broken u
in 1911, $4,000 was received from sal
wage; $4,000 on her boilers that were
installed in q freight steamer and the
balance, s191, 500 was charged against
income.
Have you any criticism of our
method of charging off in adjusting
the value of these steamers" Mr.
Choate asked.
Il am not making criticisms of any
kind" the witness replied.
Il think&I have" said Commission.
or Prouty. Your methods of book
keeping are open to serious criticism
My criticism of your bookkeeping i.
that it does not represent real values
Your books ought to be kept in such {
manner as to show actual value ol
property. You ought not to charge
yor property 100000 up or $500. 900 dowr
as you wish, for that does not repre-
sent real value.
DO you think that these boats wert
worth $4,000 when they were turned
back to the Navigation CO..
; Il do not know anything about that,
replied the attorney
WELL" commented the commission
/ er, Il think you can make a prett,
: shrewd guess. These boats were uset
for several years and were then turn
: ed back without any charg being mad'
, for depreciation"
J, A discussion between Mr.. Clroate an,
. the commissioner followed, regarding
the manner in which various entrle
We're made on the hooks of the NaNi
cation Co.. ard the Transportation CO
!, The railroad attorney held that
InaGe "a difference whatever whetha
the adjustment charges on the tw.
steamers were written off by the Nay
igation CO.. or the Ira nsportation Co
since the latter company was ovne
by the Navigation Co.
Notes given by Mr.. Mellen 70 t
New Haven we're then considered. III
Witnoss said that enc note for $l,6S2
|. 45) was given, May /, 1904, for SSI
: shares of New Haven stock and q
March 16, another note was given fl
$2,oSs,soo for 1885 shares. Paymen
made by MIR. Mcllen aggregate sS,9i5
80. on as was agreed by the witnes
e nearly $4,000 more than he had r
eeiv.d excluding dividends on stof
i which also were paid back to the con
psny. And this" said the lawyer, :
d the transaction on which you testih
ID Mr.. Mellen made $1,000 profit"
I'd From the books 1t would appear st
II the witness replied
n After interest charges had been +
/ rrrd the New Haven Co. appeared
IL haze a difference Of nearly Sia,oO in
.as as n rsuit of the transaction
IL At this point Mr.. cho2te read a
nd introduced ~ an exhibit resolut
II ef the direetsrs adopting the report
IS sun-commttee on finance approvl
On tifo rrpne" ction.
cr. Commissioners Prouty observed that
sf- books indicated that Mr.. Meilen had
1ls ceived a profit of sl02.000 and asked I
,r- the transaction be explained. Mr.. Che
IRE described the bookkeeping entries
M said that every cent had been tur
m back into the New Haven's treas