Norwich bulletin., 1915-11-24

profit of between $SoO,O0o and s40o, ,0Dos to the banking firm of Kidder, Pea lbody & company of Boston, gaineds from transactions with Charles S Mellen in connection with the sale to- him of stock of the Boston and Maine. l-raf1road, figured in the testimony to- directors of the New York. New Haven and Hartford railroad under the Sher- man antitrust law.
 Charged More Than Market Price. The testimony was brought out in, an effort by government counsel to show that the seeming profit was al- lowed in connection with the fact that MeIIen and Robert Winsor, head of the banking firm, were cooperating ill legislative affairs in Massachusetts. Winsor, according to. Mellens' testi- mony, charged from 10 to 20 points more than the market price of Boston and Maine stock which he purchased from him. Mellen admitted that he and Winsor were cooperating in legis- lative affairs at the time. but he would not admit that the high price paid | for the stock had any reference to their activities before the legislature.
 Phase of Billiard History. The transaction was phase of the history of the New Hayen's relations with the John L. Billiard company, the concern alleged to have been used by | the New Haven to hold it's acquisition of Boston and Maine majority stock until the Massachusetts legislature had passed an act permitting the road to 1 hold the stock itself. It was brought out that Billiard, a Meriden; Conn, coal merchant, had in June, 1908, bought the New Haven's 109,080 shares of Boston and Maine stock at $125 a share without putting up a cent of money of his own, having been financed in the transaction by the New Haven. and that nine months later the New Haven, in response to an inquiry from the Massachusetts legislature, re- ported that it did not control the stock directly or indirectly. A year later, | June, 1909, the legislature passed the i Boston Railroad Holding company act which permitted the New Haven to | hold the Boston and Maine through l that company.
 Netted Billiard $2,75o, 900. The New Haven then bought the stock back from Billiard at $50, which | netted him a profit of $2,750, 900 in the deal. Meantime, although the New of its Boston and Maine shares, l Charles s. Mellen, according to his l testimony, authorized Kidder, Peabody & company. to acquire 25,000 shares l dou4l1OIdl 1O1 A1cllGAS $ dCCOQ1l. I16 1 admitted that he used the resources of the New England Navigation com l pany, a New Haven concern, by au- l thority of the directors, and that Kid 1 der, Peabody & company got for him | 5,793 shares of Boston and Maine pre- 1 ferred at 160 and 14,1S2 shares of com mon at 140. The common stock at that time was selling, MT. Mel1en said, at l between 120 and 130, the whole cost figuring at about. s3,oOo,ooo, or between 1 $300, 900 and $400,000 in excess of the l market value of the securities. Stock Difficult to Get l "Mr. Winsor told me-" said the wit ness. that the stock was very difficult | to get and that he'd have to charge me more than. the usual commission. He named the price and they were ae- cepted." i., ra4
 how much this was costing you?' asked R. L. Batts of government coun- ] sell The witness said that he discussed it with the executive committee and that "kick developed'' and the ] comment was severe"
 Did you make any statement to the committee as to legislative matters you had in hand with Winsor?"
 T never did,
 Had you and Winsor co-operated /. in legislative matters at that time ?''
 
 Mellen said he was advised by the : executive committee to take up the matter of his disposition of the stock with the committee appointed by the New Haven to deal with Boston and Maine matters and that the committee advised him Ito see if Billiard would buy it."
 Billiard bought it at the same prices. the witness testified. without any dis cussion as to whether the prices were excessive. This, it was brought out, was hardly a month after he had 7 bought the 109.000 shares at $125.
 No Discussion of Market Price.
 There was no discussion of the
 market price" said MT. Mellen. "BiI- lard was told that he could keep 1t or leave 1t as he chose" And that was the substance of the E conversa tion?' was asked.
 '<Yes, except that he said he was very glad to buy it. Billiard was a : very benevolent looking old gentle nan but as sharp as a razor and he knew what the market price was" Was that part of his benevo- ience%
 Sharp as a Razor.
 T said he was as sharp as razor f'' Tetorted the witness.
 The. New Haven. however, it was 2itcited from the witness, financed the purchase. The New England Navi- cation company deposited in two New York banks In which Henry K, Me- iIarg and William Skinner, New Ha- yen directc%s, were interested, S2,3o0,- o01, from which Billiard borrowed and rave his time note for the rest of the purchase price.