The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-07
NEW HAVEN BOOKS FALSIFIED IN
MELLEN'S TIME, EXPERT TESTIFIES
Big Transactions Never Recorded or Beclouded
With Maze of Financing New Prosecutions
Are Likely Through Latest Reeve atons

WAsni>oN, June 6.-The public
hclrings In the Investigation which the
interstate Commerce Commission is con-
Quoting into the financial AFFAIRS of the
New Haven railroad have probably come
TO an end and report will be made TO
tn, Senate, which directed the investiga-
ton This afternoon when adjournmen;
was taken. Commissioner McChord, who
PRESIDED, announced:
III the commission should deem Il
n, cess ry to hold further public hearings
the parties who are desired as witnesses
Will be- notified. and Il it suould be deeme q
nee, ssary to take deposi.io the parties
will Ue notified The commission will now
adjourn"
To.day's session brought to an end one
of the most dramatic Investigations the
commission has ever undcrt ken and the
character OF the report II will make to
the Senate will be awaited with the
greatest interest
There have been all kinds Of rumors of
probable prosecutions growing out OF the
testimony adduced during The investiga-
ton These rumors have been based
CHIEFLY on the action OF the commission
IN permitting two of the directors OF the
New Haven to testify only after they
had waived immunity. The directors
who were moi sworn were Lewis Cass
L,dyard and T. Dewitt Cuyler.
FnIsiHcation of Reports.
Solicitor Folk put in the witness chair
to-day Examiner David T.. Brown OF the
commission. an expert accountant Mr..
Brown made statement as to three
transactions of the New Haven. which on
its face puts the question of falslieation
OF records squarely up to Charles =.
Meicn and the olrd Of directors of the
New Haven railroad.
These transactions related to the ac-
QUESTION by the Boston and Maine Rail.
road Of stock of the Worcester, Nashua
and Rochester Railroad. the purchase OF
stock of the Rutland Ralro d. and third,
the Billiard transaction. There is a like
lhood that these alleged fa'sifcations
may form the ground for criminal pro
ceediugs.
Solicitor Folk. after calling Mr.. Brown
% the stand, said
estate wnat YOU found on the books OF
the New Haven or rather the books Of
the New England Navigation Company
concerning the purchase OF the stock OF
.he Worcester. Nashua and Rochester
Pailroad"
In respect to the records of the New
ynrand Navigation Company" said Mr..
,;rown. There Is not an io.a OF evidence
at the company ever purchased or sold
stock of the Worcester Nashua and
Rochester Railroad. The records OF ]. +.
riorgau & Co. however. give me the in
formation that on FcbruaI va. 1910. the
New England Navigation Company sold
mat firm 10000 shares Of New Haven
stock at "A price OF $3.50 less one-half
per cent. commission. The total receipts
were $5,74s.OoO.
DenIing- Of Morgan Company.
- T. Morgan & Co on or about Feb
ruary IT, 1910, purchased from the Mu-
tual Lii" Insurance Company 1914
shares of the Worcester, Nashua and
Rochester Railroad stock at $3.50, or a
total OF s2.6s6.796. This stock was
charged IN the records of J. p. Morgan &
Co. To the New England Navigation Com
plny and check amounting to $5.l62.-
203.02 was drawn on the National Bank
OF Commerce In favor OF the New Eng
land Navigation Company In settlement
OF a balance Of this transaction.
This check was lndorsed by the New
England Navigation Company to the Or
der of the New York, New Haven and
Hartford Railroad Company. VINO in turn
Endorsed 1t To the order of ]. +. Morgan
4 Co., and 1t was deposited In the Ma
tional Bank of Commerce. on which 1t was
drawn. with the result that not one dollar
came in or went out.
''rhe transaction regarding the Worces-
ter. Nashua and Rochester Railroad on
the books " the navigator company was
not reflected in any way to indicate that
the stock was ever in the possession OF the
company. The transactions, according to
the record Of the navigation company, are
that for this 10000 shares Of stock they
February Il for S2,bs6.796.9s, which is
the actual amount of the cost of the
Worcester, Nashua and Rochester stock.
I'm addition TO that. in indorsing this
check over to the New Haven the New
Haven liquidated note OF the naviga-
ton company which they held OF $l.S00,-
600 dated December 90, 1909, and gave
them a credit on their note for 1885,
s,3,2s9 dated October 81. 1901. for the
balance OF that check. but there Is moth
Ing in the record OF the navigation COM
pany which shows that this stock was
ever In the possession OF that company
and was sold by them to the Boston and
Aslno Railroad"
Deal Not ON Books.
$50 II the navigation company pur-
Chased this stock the books are false
10 the extent that they do not reflect this
ElnSlcton?" asked Mr.. Folk.
III the records of ]. =. Morgan &
G.. are correct and this stock was pur-
chased for the navigation company, whose
records do not reflect the receipt and
disposition of that stock, the records
mus, oe false" said Mr.. Brown,
What did you find In your examna-
t'n Of the books concerning the Rutland
railroad stock?" asked Solicitor Folk
The records OF the navigation conf
p'ny show that on February 16, 1911.