Daily Kennebec journal., 1914-03-09
Chairman Elliott Issues
Supplementary Statement


plementing that of ]. P. Morgan &
Co. on New York, New Haven &
Hartford financing was issued by
Chairman Elliott of that road at his
home here tonight. Mr.. Elliotts state
ment said:
some time ago I began investiga-
tions of one kind and another into va
rious phases of the New Haven situa-
tion so that / could be in position
to answer questions that were asked
me- and so as to introduce as rapidly
as practicable any improved methods
of management, accounting ana OPP
erations that seemed necessary anu
desirable. For example, an expert IN
dependent accountant has been at
work on the books of the company Tor
several months. An expert investisa-
tor has been checking up all mechan-
cal methods and standards. An expert
in the purchase and handling Of sup
plies has made thorough examina-
ton and report of that part of the
company's operations. A very care1ui
examination by Technical experts was
made of the important electric trolley
companies, not only of the properties
themselves, but of the organization ana
details of management and operation.
Ia the course of these invesuga-
tions the question of the financing OF
the New Haven road in the past came
up and l asked the firm of j. P. Nor
gan & Co. if they would be willing to
help me in obtaining certain facts.
They asked me to put my request IN
writing. which resulted in my letter
to them and their reply.
1.-The New Haven Co. has said TO
Interstate Commerce Commission Nc
Chord, who has charge of the inves-
tigation ordered by the Senate reso-
luton. that it is glad to have him in
vestigate the financial and other con-
ditions in the New Haven and that it
will help to expedite the work in eV-
cry reasonable manner. Already 1t
has accumulated on its own account
large Quantity of detailed Information
about various transactions which IL Is
placing in the hands Of the investiga-
tors so as to hurry the work. The
sooner the commission can make the
investigation and report its findings
the better il will be for all"
Funds from Other Sources.
Regarding the obtaining of funds
from others than ]. P. Morgan & Co.,
Mr.. Elliott said:
Inquiry was made of Kuhn, Loeb &
Co. about the placing by that house,
for the New Haven Co., of the So
called French loan in 1907. Kuhn. Loeb
& Co. make the following statement:
"In February, 1907. the company
entered. with Kuhn. Loeb & Co. into
A
cent. bonds in France at about 81 per
cent, less is per cent. commission.
Kuhn, Loeb & Co. contracted for the
firm purchase of these S2S,000, 900 bonds
and the commission paid to them was
really part of the purchase price. This
was not simple commission transac-
tion, with the bankers simply acting as
Intermediates, but Kuhn, Loeb & Co.
had to undertake a very heavy obli
CATION, as a matter of fact. they had
to carry a large part of these bonds
during the critical period of the panic.
1t took more than year and half
to bring the transaction to a success
full end, and a part of the commission
had to be re-allowed by Kuhn, Loeb
& Co, to their associates in Europe
perfecting the negotiation
In addition to the negotiations with
Morgan & Co., and Kuhn, Loeb & Co.,
Mr.. Elliott continued, there appear
to have been occasional and tempo
rary borrowings from deposit banks
and others along the line of the road
and long term securities issued by the
company or held in it's treasury were
sold to various banking houses and
banks, principally in New England
from 1898 to date, aggregating about
$4,000, 200; the total commissions paid
on securities of this class were $97.-
700"
You will understand that these
transactions took place prior to my
becoming associated with the manage
ment of the New Haven Road. except
the short-time loans of December 1,
1918, and since. and that my inform
alton in regard to the earlier transac-
tions is derived from the companys
books and from the bankers named"