Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-07-14

THE purchase Of the Rhode Island
trolleys was another instance of mil
lions wasted in acquiring properties
that bring an annual deficit instead of
d surplus, and constitute a liability
instead Of an asset in the New Haven
system.
"A committee of the board of direc-
tors of the New Haven had been APP
pointed for the purpose of looking into
the Providence trolley situation with
a view Of purchasing that property
and this committee, after considering
the proposition. reported adversely.
Not content to abide by this action of
the hoard, Mr.. Mellen, after some six
months. revived the matter. This was
done after a conference between Mr.
Melien and Former Snator Nelson w.
Aldrich who was largely interested in
tie United Traction and Electric Co,
tbs largest lessor company.
The United Gas Improvement Co.
of Philadelphia that controlled this
property under lease, had capitalized
the future hopes of the proposition
into holding company known as the
Rhode Island Securities Co. and had
issued $19,S99,000 of debentures, which
represented an investment of approx
imately only s6,000,000.
The millions that were made from
this transaction were brought into ex-
istence at the expense of the seock-
holders Of the New Haven and the
New Haven stock was diluted to the
extent of the water thus added This
gas company also owned some Con-
neeticut tralley lines and it was made
further condition of the Rhode Island
trolley acquisition that the New Hav-
en- take over these properties.
When the details bad been worked
out by MIR. Mellen for the assuming of
this additional burden, the board of
directors without question acquiesced.
Mr.. Mellen testified that these Connec-
tlcllt trolleys represented a payment
of about s100oo.0O0 more than their
value.
This transaction seems such an
extravagant purchase that it makes
1t matter of interest just who own
ed the securities of the Rhode Island
Securities Co. This information could
be furnished from the stock books of
that company but during the progress
that these books had also been
burned.
1.-The Rhode Island and Connecticut
trolley ventures are further evidences
of the prodigality in the expenditures
of the money of the New Haven
stockholders in carrying out an I'M
lawful policy of transportation mon
opoly."
AS to the steamship lines which were
acquired at an approximate cost of
$24, 000000 the report has this to say:
The testimony shows that the ply
steal valuation of the properties ac-I
quired as a result of these OUTLAWS,
approximate something like $10000,000.
These steamship lines were not ac-l
quired by the New Haven openly but
covertly and by devious methods.
Dummy companies and dumy officersl
and directors were used in financial
maneuvering that resulted in the
New Haven controlling these steam
ships.
I'm connection with these steamship
purchases it was necessary to have
piers.
THE record shows money payments
in connection with pier leases which
were Enthusiastically improper, and
these payments were covered up by
being charged on the books of other
companies to the New Haven under
such headings as repairs on steam
ers'
Payments to Mckay
There were payments to one John
Hall Mckay of many thousands of
dollars for which no temized vouch-
ers were given. Mr.. Mckay left for
Europe after this investigation was
commenced and his evidence could not
be secured. These pier leases in the
city of New York are controlled by
public officials, as the municipality
owns the piers and arrangements for
the leases had to be made through
these officials. But because Of the
methods employed to conceal these
expenditures by increases of capital
stock and otherwise, it has been i'm
possible to give any total amount OF
these payments"