The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-05-21
COST ROAD MILLIONS SAYS N1ELLEN

/ Q. How did Mr. Morgan acquire III
A. Bought It,
q. Whom did he buy Il from? A. He
bought II from the Mutual Life Insurance
Company OF New York.
Q. Did he consult with you? A. No.
Q. When did you first learn that he
bought It? A. ! think he called me to the
telephone and told me he had bought 1t
and told me the price.
O. What did he want you to do with IT.
n. He knew the Boston and Maine Rail-
road wanted to reduce its fixed charges
q How much did he pay for the stock
A. think II was $i65 a share.
O. Mr.. Morgan without you ever hav-
ing any prior knowledge OF the purchase
called you over the telephone and told
you that he had bought the stock? A. I
would not want to be positive, but that Is
the best information I had
u What was the conversation? A. He
told me he had purchased the stock and
wanted me 10 take 1t up with Mr. futile,
the president OF the Boston and Maine
lie bought the stock for the Boston and
Maine. was only a director then OF the
Boston and Maine. but the only question
would raise now is as to whether II was
not pretty stiff price.
Purchase a Surprise.
q. This road was un'oaded on the Bos-
Won and Maine Railrosd without tho
knowledge of the directors. was II not?
a. Well. at the time OF the purchase OF
the stock by Mr.. Morgan 1 had no previ-
Gus knowledge OF II.
Il do not think the purchase was rati-
hed until some time after by the board
OF directors" added Mr.. Mellen. 'I car
| RED the transaction for Mr.. Morgan
through the New England Navigation
company with per cent. interest as a
| carrying charge"
@. At the time OF this transaction you
were director? A. Yes. sir.
g. member of the executive commit
tee? A. Yes. sir
Q President of the New Haven Rail-
| road, which. In the manner described,
owned the Boston and Maine? A. Yes,
| sir.
o. Did this transaction come be-
fore the board OF directors of
That Is, the navigation company dlrec-
tors knew OF 1t. ! think that some of
| the confusion which you have discov-
| cred In connection with New Haven af-
fairs is due to the fact that a meeting
OF the New Haven directors would be
called and held and :hen a meeting OF the
| New England Navigation Company would
be called and held without us leaving our
seats, the directors being the same
| q. Why did YOU adopt this method
| n, Because In that way We could do
things which the New Haven Railroad
could not do under It's charter.
q According TO n report OF the New
| Hampshire Railroad Commission the lea sc
OF the Boston and Maine on the
| Worcester. Nashua and Rochester was at
the rate OF $3.50. 900 year, A. think
| those figures are correct
| q. SO to get rid of fixed expenditure
OF $4,000 a year the Boston and Maine
took on obligations of $685. 900 a year
4. II those are the figures they must be
| correct.
@. Would you call that good financing ?
\. Under some circumstances would. IL
| II could have been converted into capral
stock or better think the Boston and
Maine always suffered by reason OF fixed
charges and lcascholds
All told there were 1884 shares Of
| Worcester, Nashua and Rochester stock
bought by Mr.. Morgan from the Mutual
| Life Insurance Company
when MIR. Mellen later was confronted
with a letter written by him he revised
| his testimony TO the extent OF saying
that Mr. Morgan had probably talked
with him in advance about the purcha Sc
| OF this road, but never had said any
thing of the price until he called him
| tMellen) over the telephone and asked
| him to notify President futile OF the
| Boston and Maine that he had acquired
| the property.
Mr., Mellen acknowledged that while
/ Mr.. Morgan paid sl65 share for the
big block constituting control. other pur-
chases We're made by the New Haven at
the same time for $3.50 or less Mr.. Mel
len explained this by saying that n biz
powerful company like the Mutual Life
always could obtain more for block Of
stock carrying control than could be OBJ
tanned for smaller lots.
Why didn't you object to the stock
being purchased without your knowl-
edge" asked Mr.. Folk
~ thought ii "A good thing but did no,