Daily Kennebec journal., 1913-07-10
CON DEMNATioN.
Continued from Page One.)

| unimportant. Moreover, any suppress
sion Of competition involves larger is
cues, which must be discussed by those
who are charged with the duty Of leg
:sla ton
Inc proposed continuation of the in
curry INTO the matter of increase in
rates ought not To be held in atIyance
CT the posting of such rates for the in
formation of the shippers who must
pay them. The report strongly suv-
gests that increased net income for the
l'usten & Maine should be secured by
re4trm in expenditures rather than
by an increase of rates"
On transactions in New Haven stock
bought with such notes. the report
says. there were profits of $io2. 900 but
the New Haven's books do moi show
TO what use the money had been put
Inquiry Begun Year Ago.
The inquiry resulting in today's re-
rort was begun about year ago by
the Commission upon it's own initiative,
in consequence of numerous and per-
sistent complaints of the railroad rates,
regulations and service in New Eng
land. The carriers particularly in
vestigated were the New York New
Haven K Hartford; the Boston &
Maine: and the Maine Central Months
We're devoted to examination of books
and accounts and 81 days were de-
voted to public hearings, in the course
| of which more than 5000 pages of tes-
timony were taken.
The report is divided under four
general heads, Service, Rates
Finances" and "rhe Remedy.t. Com
| missioner Prouty, who has devoted
much of his Me during the last wear
to the inquiry, discusses exiaustive1y
| each phase. The report aggregates
nearly 10000 words, or approximately
| 20 columns in the average newspaper
/ In an exhaustive discussion of the
| financial affairs of the New Haven
and the Boston & Maine. Commission
| er Prouty indicates clearly that the in
vestigation was mot into the solvency
or Insolvency of the New Haven Co.
| but rather into the chara acter of it's
financial operations.
1t is shown by the report that in
1909. the total capitalization of the
| New Haven WAS se3000o00, and it's
| operated mileage, 2040 miles. In 1912,
its capitalization was s417 600 900, an
/ increase of 1924 GEO, ,e0D: While its OPP
| Grated mileage was increased only so
miles. In this period of nine years.
/ the New Haven Co, acquired actual
ownership of about 500 miles of road
which it previously had operated ex-
| pending approximately $4,000, 900 in
obtaining the additional mileage. 1t
expended during the nine years $685.
| 600 900 for betterments and equipment.
making a total of s136000, 900 devoted
to its railroad property.
| This would leave" the report points
ont, the sum of s204, 100000 which in
| nine years had been expended in ep-
Grafton outside its railroad sphere"
| To the methods of investing that sum,
| the. report devotes elaborate atten-
ton. Various transactions are taken
up, one by one and analysed
Trolley Line "Hiah Finance"
In its acquisition of the Rhode Is
land trolley lines. the methods pur-
| sued, Commissioner Prouty suggests,
afford an instructive object lesson in
/ the rea I'm of what is some times term
/ ed high finance" After passing
/ through the hands of two or three cor
porations. the trolley lines We're ae-
quired by the New Haven at "in-
Uatea prices
/ Representatives of the New Haven
CO. the report says, insisted that
this company had not watered the
stock of the Rhode sland Co, and this.
strictly speaking. is true. The I'm
proyement Co, turned in the water
and the New Haven Co, converted
that water into wine. In whatever
aspect the transaction is viewed. the
New Haven gave sl3,5o0,o9o fer moth
ing 1t was shown that the trolieyS
cost the New Haven to date about
/ s24, ,00o, 900 and have been valued al
something more than one-quartcr oil
J tfat amount,
We are not concerned" says the
report, with the amount lost. but
4 rather with the character of the
| transaction The inevitable query Is
| What was the motive behind this
transaction and who made the proilt :
4 That question. in the very nature OF
such transactions. never can be sat
| isfaetorily answered
The New York. Westchestcr g. Bos-
ton Hallway, the evidence disclosed.
| fouE-track electric road extending
| from White Plains, y. Y, 10 ternl-
nus at Harlem River, a distance of 20
miles. was built and is owned by the
| New Haven. When it Was opened
for business in 1912 it had cost tho
| New Haven about $4,000, 900, ST.
| 100000 in excess of the value of the
4 property en- the New Havens own
showing.
| What Has Become of $f2,c00,c00?
| Again the question arises, sug-
gested Commissioner Prouty, What
has become of this $12,00o,000'? So
| far as the records go this money has
vanished into thin air.
The property is expected in time to
earn its fixed charges and perhaps ne
profitable The report points out that
| "all this in no respect alters the
quality of the transactions. In any
aspect of the matter, the patrons OF
these lines are required to pay upon
an investment which never has been
made. and thereby subjected to per-
petual unjust eXaetion.'
The acquisition by the New Haven
of trolley lines in Massachusetts is re-
yipuoI at Iencfh Particular refer