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TESTIMONY
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Ex-Mayor Stoddard and General Passenger Agent Flanders
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IN 8UPPORT OP
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THE "HAZEN BILL"
BEFORE THE
RAILROAD COMMITTEE
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OF THE
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NEW HAMPSHIRE HOUSE OF REPRESENTATIVES.
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JUNE SESSION, 1887.
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CONCORD:
PRINTED BY THE REPUBLICAN PRESS ASSOCIATION.
1887.
\yifl*cU«UA>xi fie** Ciera*
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TESTIMONY
OP
Ex-Mayor Stoddard and General Passenger Agent Flanders
IN SUPPORT OP
THE "HAZEN BILL"
BEFORE THE
RAILROAD COMMITTEE
OF THE
NEW HAMPSHIRE HOUSE OF REPRESENTATIVES.
JUNE SESSION, 1887.
CONCORD:
PRINTED BY TIIE REPUBLICAN PRESS ASSOCIATION.
188 7.
TESTIMONY
Testimony of ELIJAH B. STODDARD, Wednesday even¬
ing, July 27, 1887.
Q. (By Mr. Burns). Where do you reside?
A. Worcester.
Q. What is your business ?
A. I started in my business as a lawyer in 1819.
Q. Have you resided in Worcester ever since ?
A. I have, sir ; forty years.
Q. Are you one of the directors of the Worcester & Nashua
Railroad ?
A. I am, sir.
Q. How long have you been a director ?
A. Since, I think, September, 1885. Previous to that I was
a director, originally, in the Rochester & Nashua when it was
first started : I went over the route to lay out that road.
Q. How long were you a director in the Nashua & Rochester
road ?
A. Until it was consolidated ; and afterwards I was elected a
director in the Worcester & Nashua, I think in 1879, and was
director until December, 1884, when the new arrangement was
made.
Q. Are you a director, Mr. Stoddard, in any other railroad ?
A. In the Providence & Worcester. I have been a director
there for two terms, the last term, I think, since 1865 or 1867.
I am the oldest director there but one—they have all died since :
over twenty years—twenty-five years.
Q. That is a railroad extending from Worcester to Provi¬
dence ?
A. Yes, connects with the Worcester & Nashua and the other
roads that run north.
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0. Have von held any office in the city of Worcester, Mr.
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Stoddard ?
A. Well, I have held a variety of offices in the city of Wor¬
cester 5 X have been through the list. The last office I held was
mayor in 1882, and I was alderman for several years, and have
been in the legislature, etc.
Q. Were you a director of this road at the time it was leased
to the Boston & Maine Railroad ?
A. I was, sir.
Q. Will you state the circumstances under which that lease
was made, briefly?
A. After Mr. Turner, who was the president of the road, re¬
signed—I thiuk it was in September, 1885—I was put into his
place ; it was either in September or October, and I think in
September. I took his place, and have been a director ever
since. Soon after coming into the board—Mr. Sinclair was then
president—there was some talk about the road and its manage¬
ment. Mr. Charles Howard was then the superintendent; for¬
merly Mr. Turner was superintendent and Mr. Hurlbert. Soon
after that I had two or three interviews with Mr. Sinclair, and
attended, I think, two or three meetings along in October, or
the last of September and October. One day Mr. Sinclair sent
for me—he had come to Worcester—and said that the road had
been doing very well under Mr. Howard's management, and had
been making a good showing, but he said he was not exactly
satisfied with the condition of the road, and that he either want¬
ed to buy a controlling interest in the stock or sell out. At that
time I think the stock was selling at about 80 or 85. I said
that the principal stock in Worcester could probably be bought,
because it had gone up from 60 to 85.
Q. Well—make it brief, Mr. Stoddard—did he purchase the
stock there ?
A. 1 es, sir, an arrangement was made by which he purchased
the stock of Mr. Turner, Mr. Edwin Smith, Mr. Stephen Salis¬
bury ; and the stock represented by them, I think, in one block,
taking it all together, was about 3,200 shares.
Q. And at what price was it bought ?
Mr. Chase. Was Mr. Stoddard present?
Mr. Burns. I understand he had something to do with ne¬
gotiating the sale of some of that stock.
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Q. Do you know at what price be purchased the stock?
Mr. Chase. That is, as legal evidence, J\lr. Stoddard ; you,
being a lawyer, know.
A. I know it as well as I know anything I could know.
He paid $100 a share, sir.
Q. To everybody there ?
A. That was in the arrangement. Mr. Sinclair said he would
either give Mr. Turner and these parties $100 a share, or he
would sell out for $99.
Q. They were officers in the road?
A. They were officers in the road. I said I did not wish to
have anything to do with it, in regard to the purchase of the
stock or advising about it, unless he would take the stock of
everybody, the small stockholders as well as the large. He said
he was willing to offer that, and that I might go to the broker
and offer it.
Q. Now, something has been said here, or some votes have
been put in here, in relation to rescinding the vote in reference
to the lease to the Boston & Maine Railroad. There was a lease
made to that road October 19, 1885, was there not?
A. Yes, sir.
Q. Now, it appears bv the copy of the record that has been
put in here that the vote by which you agreed to lease to the
Boston & Maine was rescinded November 2, 1885 ; why was
that vote rescinded?
A. One day at a meeting—
Q. State it very briefly, Mr. Stoddard.
A. I think it was October 19, Mr. Sinclair announced that he
had made an arrangement with the Boston & Maine for a lease
for a certain sum, $250,000, a lease for fifty years ; and he read
the terms of the lease. I questioned one or two items with re¬
gard to it. I said it was not complete ; that I did not think it
covered what he intended to have covered in the lease. It was
a question with regard to taxes. Mr. Sinclair thought it was
all right, but taking my opinion with regard to it we hesitated
for a few moments, and finally the vote was passed authorizing
the lease. Then Mr. Sinclair said he would see the Boston &
Maine, and at the next meeting announce the result—see if he
could have it arranged. That vote stood from October 19, I
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think, to Nov. 2, without it being rescinded ; and after the lease
was fullv arranged and the taxes covered, the first vote was re¬
scinded, and afterwards the lease was confirmed, subject to vote
of the stockholders.
Q. Then it was rescinded because the lease was not right?
A. Yes, sir; but it was not rescinded that day when it was
first passed; and nothing was said about it until it was made to
be right; because, very likely, if the Boston & Maine had not
consented to the alteration it might have stood or might not
have stood : it was to be subject to a vote of the stockholders.
Q. Now, something has been said about a distribution of the
surplus stock,—the treasury stock of this road ;—do you know
about that?\
A. Yes, sir, I suppose I do.
Q. You were a member of the board at the time the distribu¬
tion was made?
A. Yes. At the time of the building of the Nashua & Roch¬
ester Railroad, the Worcester & Nashua Railroad subscribed
for 2,000 shares of the stock, putting it in ; I think the city of
Nashua did the same. It was supposed that the road would
cost $1,300,000 ; it cost, I think, about $2,000,000. After the
road was begun, the Worcester & Nashua road had to take the
burden of building it, and they had to take more stock ; and,
finally, when the road was completed, the Worcester & Nashua
had a large block of the stock, which was treasury stock which
they had paid for dollar for dollar. When the state of Massa¬
chusetts and the state of New Hampshire, by their legislatures,
authorized the consolidation, there was then remaining in the
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treasury 4,805 shares of treasury stock. That was in the treas¬
ury, except a small part of it, which was pledged, at the time I
became a director the last time, before the lease was formed.
That stock was, by vote of the directors—the question came up,
and certain votes were passed as to the distribution of the stock.
Some of the directors thought it ought to be distributed before
the lease was confirmed. Mr. Sinclair, at that time, was op¬
posed to it; but the matter had been talked about, and he had
taken the advice of Mr. Richard Olney, of Boston, with regard
to whether the directors had a right to distribute that stock, and
Mr. Olney gave it as his opinion—
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Q. (By Mr. Chase.) I suppose all you know about that is
what Mr. Sinclair told you, is it not?
A. I know what Mr. Olney's opinion was, and my opinion
was also asked with regard to it.
Mr. Chase. I suppose Mr. Sinclair can tell us what Mr.
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Olney told him ; I object to your stating it.
Q. (By Mr. Burns.) Did you see the opinion of Mr. Olney
and Judge Bingham ?
A. Judge Bingham had not given his opinion at that time.
Mr. Chase. Mr. Stoddard is a lawyer, and I trust he will give
us only legal testimony.
Mr. Stoddard. I will try to.
Mr. Burns. Mr. Stoddard being a director of this road, and
having seen the opinion of Mr. Olney, it is perfectly legal evi¬
dence for him to state it.
Mr. Stoddard. I gave my opinion at that time.
Mr. Chase. We will rely on Mr. Stoddard's honor in the mat¬
ter.
Mr. Stoddard. I gave my opinion at that time, well knowing
that the Worcester & Nashua Railroad had paid dollar for dol¬
lar for the stock, and I did not see any reason why they did not
own the stock, and why they did not have a right to distribute
it among their stockholders, or sell it, 01* do what they chose
with it.
Q. Your opinion was in that direction, was it ?
A. Yes, sir.
Q. You say Mr. Sinclair objected to the distribution of the
stock, or thought it was not wise ?
A. Yes, sir. The question was argued in the board that if
the stock was not distributed and was held in the treasury, it
was thought that the earnings of the road would pay at least 7
per cent., unless the stock was distributed ; if it was distributed
the road would only pay 6 per cent, by the lease. But it made
no difference really whether it was distributed or not.
Q. Why ?
A. Because the stockholders would get 7 per cent, if it was
not distributed, or they would get 6 per cent, if it was distrib¬
uted ; and if the stock was paying a 7 per cent, dividend—we
compared it with the Old Colony Railroad, which at that time
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paid 7 per cent., and the stock was selling at 170, and stock
which paid 6 per cent, was selling at about 140 or 150.
Q. Was your rental a round sutn?
A. It was $250,000, and taking out the fixed charges, I
think, of about $80,000, left the balance to be divided for divi¬
dends.
Q. That is all that could be divided in dividends, whether you
divided your stock or not?
A. It did not make any difference. And then there were
bonds on the road which were maturing, and which were bearing
five per cent, interest, and which we could float for four per cent,
and a premium, which were afterwards floated at four per cent,
and sold at seven per cent, premium—some of them—$15,000—
and that went into the treasury.
Q. Something has been said about $125,000 of bonds,—five
per cent, bonds, they have been called ;—what is the fact about
those bonds ?
A. Those bonds were held by the New England Mutual Life
Insurance Company, of Boston. Those were Nashua & Roches¬
ter Railroad bonds, which were secured by mortgage placed on
the road. At the time the bonds were issued they were six per
cent, bonds. In 1879 or 1880 the bonds were scaled, that is,
the bonds of the Nashua & Rochester Railroad were exchanged
for mortgage bonds of the Worcester & Nashua;—no, the
Nashua & Rochester bonds were not exchanged, but parties
agreed,—yes, I think some of the bonds were really exchanged
for new bonds of the Nashua & Rochester, at five per cent,
instead of six. But the bonds held by the New England Mutual
Life Insurance Company were not exchanged. I made the ar¬
rangement with the late Dwight Foster, and he agreed by letter
that while they held those bonds they would take five per cent.
And there was another company which held $10,000—the Mas¬
sachusetts Mutual Insurance Company held $10,000—and they
made the same agreement. And those were the onlv bonds
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which were not actually reduced upon their face.
Q. Now, if those bonds went into the hands of third parties,
you had no agreement that the rate should be five per cent. ?
A. It would have been six ; we could not have controlled
them.
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Q. Was that the reason you bought up the bonds?
A. That was my chief reason in advising the buying of the
bonds,—one of the reasons, yes, sir.
Q. Now it appears by the record that they have put in here,
that November 2d your corporation voted to distribute this
stock, and that November 9th they voted to rescind that vote ;—
why was that?
A. November 2d Mr. Hammond showed me a copy of the
records which he sent up to present to this committee, and I
would like to see the original copy which he sent.
Mr. Chase. I have n't it here.
Mr. Stoddard. A newspaper copy was handed to me
Mr. Chase. The elate, if that is what you refer to, should be
the 13th day of November instead of the 13th day of December.
Mr. Stoddard. That is the point; I could not understand
the newspaper report for that reason.
Mr. Chase. It may have been a mistake in Mr. Hammond's
copy, but I understand it, Mr. Stoddard, just as you do.
Mr. Stoddard. The first vote which was passed, of which this
is supposed to be a copy, was as follows :
At a meeting of the board of directors, held on the 2d day of
November, 1885, the following preamble and vote was adopted:
Whereas, This company is the owner of its capital stock to
the amount of forty-eight hundred and five shares,—
Voted, That the said shares be distributed to and among the
stockholders of record on the loth day of December next, pro
rata ; and proportionally to the respective stockholders of record
on said 15th day of December next, entitled to fractional parts
of shares, may sell and assign their right to the same.
That specified holders of stock on the 15th day of December ;
I call your attention to that. It was a long time from Novem¬
ber 2d to the 15th of December,—that is, it was considerable
time.
At a meeting, held on the 9th day of November, 1885, it was
voted to rescind the vote passed November 2d, in relation to the
distribution of stock.
The following preamble and vote were adopted :
Whereas, This company is the owner of four thousand eight
hundred and five shares of its capital stock,—
1 roted, That said stock, to the amount of forty-eight hundred
and five shares, be distributed to and among the stockholders of
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record 011 the 20th day of November, instant, pro rata ; and that
any stockholder may Lave a right to sell and assign, etc.
That changed the date from the 15th of December, as it was
in the first vote, to the 20th of November, because there was no
necessity for waiting. Most of the stock had been disposed of
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and bought that would be bought, and there was no necessity
for holding it. That was changed at that time.
Then at a meeting of the directors, held on the 13th day of
December this says, but I think it should be November,—
At a meeting of the directors, held on the 13th day of Decem¬
ber, 1885, the president being absent, the meeting was called
to order bv the clerk, and James P. Cook was elected chairman.
•j *
On motion, it was
Voted, That the vote passed by the board of directors of this
company, at a meeting held on the ninth day of November, 1885,
in relation to the distribution of forty-eight hundred and five
shares of stock owned by this company, is rescinded.
Voted, That the treasurer be authorized to distribute from
stock owned by the company to stockholders of the Worcester,
Nashua & Rochester Railroad Company, at the close of busi¬
ness on the 13th day of November, 1885, seventeen shares of
stock for every one hundred shares held by them respectively,
and to issue assignable certificates for fractional rights convert¬
ible into stock at the rate of one share for everv five and fifteen
seventeenths rights, if presented at the treasurer's office in
Worcester on or before the 13th day of December, A. D. 1885,
in lots of five and fifteen seventeenths rights, or multiples
thereof.
Now you notice that that is a more specific vote, which I
thought was necessary, and that was one reason for rescinding
the vote which was passed at the meeting on the 9th of Novem¬
ber, which was not particularly specific. If you will look at the
report of the case in the Boston & Albany matter, you will find
that that was even a fuller and more specific vote than this is.
Q. The first vote, then, was not specific enough, in your judg¬
ment ?
A. I did not think it was, and I do not think the second was.
That vote which I have just read was passed on the 13th of
November, as I understand it. Just about as it was passed, or
about to be carried into execution, if I recollect right, there was
an injunction served upon the company for some purpose by the
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New England Mutual Life Insurance Company, which stopped
the issuing of that stock, at one of the dates,—I don't know
whether that was served on the 13th, but I think it was served
on the 13th of November—it may have been served a day or two
before ; at any rate, when the injunction was served, it stopped
it. Then the bonds held by the New England Mutual Life In¬
surance Company were bought. I advised the buying of them
by Mr. Cook, because they were six per cent, bonds if they sold
them into the hands of other parties ; and if they were bought,
that would settle the injunction, so far as they were concerned.
And those bonds were bought. The price paid for them was, I
think, 120.
Q. Was that another reason why you purchased the bonds,—
in order to get rid of litigation ?
A. In order to get rid of litigation, yes, sir. But they were
worth that; they were worth 120,—that is, at six per cent. The
five per cent, bonds had sold for 108 or 109, I think. I con¬
sider they were worth that. Those were bought by Mr. Cook
and taken out of the way, and the injunction was dissolved.
But at that time there had grown up more or less difficulty in
the Eastern Railroad, or the Boston & Lowell Railroad, and
there were some threats against the lease. Somebody did n't
want to have the road leased—I can't tell just who it was—but
there was some objection to it, as there most usually is in such
cases.
Q. By the way, I don't know what the fact is, but did you
buy any stock at that time?
A. No. I owned some stock which I originally put into the
Nashua & Rochester Railroad, and held it for a long time. I
had some stock, but I did n't go into this syndicate, or any of
the deal, or anything about it.
Q. You had no interest in it?
A. Not at all, in any way. As soon as the injunction was
dissolved, then the stock was distributed ; and it was distributed
immediately, for fear that somebody else might get up some
more difficulty and make more trouble.
Qj Now, was there any other reason for rescinding these
votes—either one of them—than the reasons you have given ?
A. I have stated to you the reasons that occur to me and
which are in my mind, and which I believe to be correct.
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Q. Now, Mr. Stoddard, what effect has the lease of the Wor¬
cester road to the Maine had upon the business of Worcester?
what effect has it had upon the cost to your people of doing
business ?
A. I had always been interested in the Worcester & Nashua ;
my family had been very much interested ; my father-in-law had
been a large owner and director ever since it was built, and had
put a good deal of money into this and the Nashua & Rochester
Railroad — Mr. Isaac Davis, of Worcester; he is now dead.
And I was interested as one of the directors of the Providence
& Worcester Railroad, because I was on a committee to go from
Nashua to Rochester to see if the committee would recommend
the Providence & Worcester road to take 2,000 shares,—that is,
$200,000,—in the stock of the Nashua & Rochester Railroad.
Another committee was appointed from the Norwich & Worces¬
ter Railroad, and we went over the Nashua & Rochester road,
and made our report to our directors. And we declined—the
company declined—to euter into it, being a Rhode Island cor¬
poration ; and the Norwich & Worcester would not go into it.
But we were still friendly to the line of railroad from Worcester
to connect with the Providence & Worcester, because we be¬
lieved it was of great advantage to Providence and to the Provi¬
dence & Worcester Railroad to get a through connection to
Portland ; that was the great object—to get a connection East,
and also to connect with the North. After the road went into
the hands of the new management, the rates were not reduced at
all, that I know of,—the rates of fares or of freights,—but im¬
mediately upon the lease being made and accepted by the Boston
A Maine, the business began to increase, and the freights have
since been reduced, and the fares have been reduced. I think
originally the fare from Worcester to Nashua was $1.50, and
now, by a 1,000-mile ticket, you get your fare for two cents a
mile ; and Nashua being forty-five miles, you can go from Wor¬
cester to Nashua for ninety cents. The business has increased,
and we consider it of the utmost consequence to the Providence
& Worcester Railroad, in connection with the steamer which
runs to New York, that we should have this line for doing our
' ©
business. For instance : A steamer leaves New lrork at five
o'clock tliis afternoon, and to-morrow morning at six it is in
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Providence ; we run a train leaving there at half-past six, arriv¬
ing: at Worcester at ten minutes before eight, and a train leaves
Worcester at eight o'clock and is at the Fabyan House at three
o'clock in the afternoon. That is going on in the summer-time,
and the connection and the service have been entirely satisfac¬
tory to the city of Worcester, much more so than they ever were
before. I do not know as I can say any more ; we are entirely
satisfied.
CROSS-EXAMINATION.
Q. (By Mr. Chase.) I have a few questions to ask you,
Mr. Stoddard. You speak of the fare from Worcester to
Nashua. What is the regular fare?
A. The regular fare is $1.40 I think, now; it used to be
$1.50.
Q. How long ago was it $1.50?
A. I could n't tell you, but I suppose it has been reduced
since the Boston & Maine had it.
Q. Do you know whether it was reduced since they took it, or
before ?
A. Well, whether Mr. Howard reduced it or not, I don't,
know.
Q. I mean from $1.50 to $1.40?
A. I could n't tell just the tariff. I know on the line of the
road it varied from, I think—
Q. I am speaking, Mr. Stoddard, of the fare from Worcester
to Nashua. You spoke of its being reduced from $1.50 to $1.40,
and I ask you whether that was before or since the chanoe in
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the management.
A. Whether that was before or not I cannot absolutely tell
you ; I am speaking more with reference to the two cents a mile
fare than anything else.
Q. How long have you had the two cents a mile fare?
A. I saw it published in the papers, I guess, since the first
of July ; I suppose that is the time it went into operation.
Q. Now, Mr. Stoddard, had the Worcester, Nashua & Roch¬
ester Railroad any surplus in 1885?
A. Over and above what they owed?
Q. Yes.
14
A. I don't know of their having anv.
Q. What was the standing of the corporation at that time?
A. When they consolidated?
Q. Yes, after the consolidation; I mean particularly in No¬
vember, 1885, when they made this stock dividend. What was
the standing of the corporation then ?
A. Well, they owed some money and some bonds. For in¬
stance, I think one sum they owed was 8115,000. I do n't think
they had any surplus.
Q. You think they had no surplus whatever?
A. I do not believe they did, no, sir.
Q. And were in debt besides?
A. They owed their bonds, etc.; just as to the details of it I
cannot tell you without looking at the reports.
Q. You say the Worcester & Nashua purchased stock in the
Nashua & Rochester?
A. Thev originally subscribed for 2,000 shares.
Q. And subsequently purchased more shares?
A. They put in their money and took stock for it.
Q. Where did they get their money to purchase this stock?
A. Well, I suppose they took it out of the earnings of the
Worcester & Nashua and borrowed it.
Q. They borrowed it principally, did n't they?
A. Just the details of how much they borrowed I could not
tell you ; I have no doubt but what they borrowed it, the most
of it.
Q. You have n't any idea that any considerable portion of it
was paid from the earnings of the road?
A. Just how they mixed it up I don't know. They took the
money and put it in as the bills came along to be paid.
Q. Was not the road at that time embarrassed in consequence
of what it did for the Nashua & Rochester road?
A. It was.
Q. So you have n't any doubt but what the money that was
put into that stock was money borrowed from outside parties ?
A. I should sav generallv it was ; that is what I think about
it.
Q. Now at the time of this stock dividend, was any of this
stock pledged?
15
A. I think there was some. No, it was taken up.
Q. Well, sir, before this, prior to the time when this dividend
was made, was it pledged?
A. I think there was some of the stock pledged; just where
I can't tell you.
Q. How much?
A. I would n't say, but I have a recollection that there was
towards $100,000 ; that is what I think about it.
Q. Was n't it $125,000 ?
A. I do not think it was. It mav have been, I would not
my '
say.
Q. Somewhere in that vicinit}7 ?
A. I should think between $100,000 and $115,000.
Q. The Worcester, Nashua & Rochester Railroad were owing
parties about $100,000, and had pledged this stock to those
parties to secure that loan ?
A. Substantially ; that is what I suppose, yes, sir.
Q. Now, in order to make the dividend, you had to hire
money to get that stock released, did n't you?
A. In order to make the dividend?
Q. Yes, in order to make the stock dividend.
A. Oh! the distribution?
Q. Yes.
A. Oh, yes, we did.
Q. You had to hire the mone}7?
A. We did.
Q. How did you hire that money?
A. Hired it on the notes of the corporation.
Q. On the notes of the corporation?
A. Yes.
Q. You placed the loan elsewhere?
A. Yes.
Q. And in that way released the stock which was pledged for
the former loan ?
A. Yes.
Q. And then took the stock and made a division of it?
A. Yes, I suppose so. I would not say for every dollar, be¬
cause we were earning money, and I could not tell you just the
details, but substantially that.
* »
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Q. Substantially, it may have been a dollar or two in some
other way?
A. It may have been several hundreds or thousands, I do n't
know.
Q. Now, Mr. Stoddard, at the time of the stock dividend,
there was substantially a dollar of stock and a dollar of bonds
outstanding, was there not, for every dollar which had been put
into the Nashua & Rochester road?
A. There were bonds outstanding.
Q. And stock?
A. Yes.
Q. So that there was substantially a dollar of stock and a
dollar of bonds outstanding for each dollar that had been put
originally into the Nashua & Rochester road?
A. There may have been to some amount; I can't state as to
the amount.
Q. That is the way you understand it?
A. There were bonds outstanding, and there was some of the
stock which had been pledged in some way.
Q. But you understand it substantially as I say, that there
was a dollar of bonds and a dollar of stock outstanding for each
dollar that was put into the Nashua & Rochester road ; sub¬
stantially that you understand to be so?
A. Pretty much so ; I could n't tell you just the amount.
Q. So that there was two dollars of indebtedness of this cor¬
poration for every dollar of actual receipts, was n't there ?
A. No. You see the Worcester & Nashua had been losing
on the Nashua & Rochester Railroad about $70,000 a year on
account of the lease.
Q. Laying your losses out of the question, wasn't there?
A. There was a good deal of a loss.
Q. The losses you would not charge in this account, perhaps.
Laying them out of the case, there was two dollars of indebted¬
ness of the Worcester, Nashua & Rochester corporation for
every dollar that had gone into it?
A. I do n't so understand it.
Q. Well, substantially every dollar?
A. I do n't so understand it; not two dollars outstanding for
every dollar that came in.
IT
Q. Why not, sir?
A. Well, I can't tell you. The Worcester & Nashua paid
into the Nashua & Rochester Railroad dollar for dollar for all
the stock that they took.
««
Q. The Worcester & Nashua paid in what?
A. They paid to the Nashua & Rochester treasury $100 for
every share they took.
Q. But subsequently the two corporations came together and
formed one?
A. Yes, but they had a right under the consolidation act to
the stock.
Q. Laying that out of the case for the moment, they united
and became one corporation ?
A. Yes, sir.
Q. Then, sir, when they became one corporation, there was
two dollars of indebtedness of the new corporation outstanding
for every dollar, or substantially every dollar, that had been
put into the construction?
A. I never construed it exactly in that way. Perhaps you
can figure it out that way, and I am perfectly willing to have
you, but I have not looked at it in that light.
Q. Won't you reflect on it and see if you are not able to look
at it in that light?
A. I have reflected on it a good deal.
Q. You don't question but what I am right, do you?
A. I do, sir.
Q. Won't you tell me wherein T am wrong?
A. I can't tell vou : I would like to if I could.
Q. You can't tell me?
A. I won't pretend to answer that question.
Mr. Chase : If you can't answer it I won't ask you.
Mr. Stoddard : A good many persons have put their own con¬
struction on it, the same as you do.
Q. If you can give any reason why I am not right I would
like to have you, but if you cannot I will leave it. Now, then,
Mr. Stoddard, I will ask you another question. You say that a
vote was passed on the 2d day of November to make a division
of this stock, the division was to be made on the 15th day of
November by that vote, and that vote was rescinded?
2
18
A. It was to be made to stockholders owning stock on the
15th day of December.
Q. You are right: that is what I meant. On the 9th day of
November that vote was rescinded ?
A. Yes.
Q. And another vote passed making a distribution to the
owners of stock on the 20th day of November?
A. Yes.
Q. Now, I did not quite understand what the reason was for
the rescision on the 9th day of November of the vote passed on
the 2d day of November.
A. Because, as I recollect it, it was not considered to be a
sufficiently full vote, that is, to carry the thing, not dividing it
up, and also it put the thing off longer than there was any ne¬
cessity for, to the 15th of December.
Q. The 15th of November, was it not, sir?
A. To the 15th of December I think vou will find. That is
so, is it not?
Mr. Chase. Yes, you are right.
Q. Were there any other reasons?
A. Any other reasons than what ?
Q. Excepting the two you have now mentioned ?
A. I don't know of any other reasons. The stock had all been
bought that I know of, previous to this time; that is, Mr. Sin¬
clair had bought all the stock, and it was not done to purchase
stock, or to depreciate the stock, or for anything of that kind.
Q. So they had got the thing all fixed up at that time, so they
were prepared to make a division, so far as purchasing the stock
was concerned ?
A. There was no " thing" about it ; it was simply a business
transaction.
Q. You understand the stock had all been purchased at that
time ?
A. Nobody had any stock for sale.
Q. Why was the vote rescinded again on the 13th day of
November; why was that second vote rescinded?
A. You will see, if vou look at the third vote, that it is more
specific, divides up into five seventeenths; and at this same point
the injunction came in, and after the injunction was dissolved
19
they voted to distribute the stock so they would not have any
more legal trouble.
Q. How long, sir, after the vote was rescinded, was the stock
distributed ?
A. Oh! right off, distributed within a week, and I don't know
but within two or three days: I have forgotten.
Q. Had it been sent out to the stockholders ?
A. Previous to that time ?
Q. Has it at any time ? Has this stock ever been given to the
stockholders ?
A. Oh, yes.
Q. Had there been any communication with the stockholders
in regard to the matter?
A. About the distribution ?
Q. Yes.
A. Well, they took their stock very readily, all of them ; I took
mine.
Q. Has there been any communication by your corporation
with its stockholders in regard to this stock which was divided to
them ?
A. Well, the annual meeting was held right off, in December,
and it was talked about pretty thoroughly there.
Q. Did the railroad commissioners have any communication
with your board with regard to this matter?
A. Oh ! not till a long time afterwards.
Q. At any time, sir ?
A. Some time after I had a petition to the Massachusetts leg¬
islature for the ratification of the lease.
Q. Then, sir, you did have a communication from them?
A. There was a communication received, I think, about the
15th of February.
Q. Was n't it the 26th of January?
A. Well, I can't tell you as to two or three days, sir.
Q. Well, sir, they directed you to direct your stockholders not
to transfer that stock, did they not?
A. That was not brought up in the board at all, it was sent to
the president.
Q. Do n't you know that fact ?
A. I have seen a letter published in the papers.
20
Q. Do you know, sir, what was done in consequence of that
letter ?
A. Well, the hearing was then going on.
Q. Do you know what was done in consequence of that letter?
A. I do n't know that there was anything done.
Q. Do n't you know that a communication was made by the
treasurer to the stockholders, directing them not to transfer their
stock ?
A. I didn't get any.
Q. Did you get any dividend of stock?
A. I got a distribution; yes, sir.
Q. How many shares, sir?
A. I think I have thirty-five or forty shares.
Q. Originally?
A. Yes.
Q. And got a distribution on that of two shares ?
A. Yes, I think it was.
Q. Did n't your board take any action in consequence of the
communication }mu received from the railroad commissioners on
this subject?
A. I have forgotten about it, if they did.
Q. Have n't you any memory about it ?
A. I do n't know what action, but it seems to me there was
something done; just what, I can't tell you, I do n't know.
Q. See if this will refresh your recollection :
The consequence of transferring for value certificates of which
the issue is declared by law to be void, may be serious. It will
therefore be not only an act of good faith toward the public, but
a favor to stockholders, that such a warning should be given.
That is a warning sent out from your board to the stockhold¬
ers not to distribute their stock, but to hold it.
Mr. Stoddard. Is that part of the communication?
Mr. Chase. I will read you the whole of it, sir, so you will
understand it.
Boston, Feb. 15, 1886.
To the President and Directors of the Worcester. Nashua & Roch¬
ester Railroad Company :—Gentlemen,: The board have received
a communication signed by your treasurer, stating that you desired
to comply with the suggestion that transfer of stock issued by vote
21
of Nov. 13,1886, should be prevented, but that it is difficult to find
a way of doing so. The difficulty had occurred to the hoard, hut
we would now suggest that stockholders who appear of record to
be holders of stock, should be at once notified of the facts
(including the law) of the case by your treasurer. The conse¬
quence of transferring for value certificates of which the issue is
declared by law to be void, may be serious. It will therefore be
not only an act of good faith toward the public, but a favor to
stockholders that such a warning should be given, and it is hardly
necessary to suggest that a private communication from your
•office would be the most desirable mode of reaching the result.
There has been unavoidable delay in the action of the Commis¬
sioners, and they now hope for prompt action and an early reply
•on your part. Very respectfully,
William A. Crafts, Clerk.
(By the Board.)
Q. Now, sir, what I ask you is, whether a communication was
sent from your hoard or from your treasurer, to the stockholders,
in compliance with this letter?
A. Well, I have no recollection of its being sent, hut I was not
alwaj^s at home, and I did not attend all of the meetings of the
hoard, I presume. I do not recall that. I was engaged in some¬
thing else about the lease at Boston.
Q. So that all you can say about it is that either you did not
do it, or else you do not remember?
A. I do not remember it at present.
Q. Was there a provision in those bonds you spoke of, that is,
the bonds that the Hew England Insurance Company held, that
the holder of the bonds could have a share of stock for every
$100 of the bonds at his option ?
A. Yes. In the issuing of the original bonds of the Nashua
-& Rochester, and I do nT know but the new bonds, if they were
issued, there was a provision that the holder of a bond, or demand
on the treasurer, of something of that kind, of the Nashua &
Rochester Railroad, might have one share of stock for a $100
bond.
Q. That was a provision in the bond itself?
A. That was a provision in the bond itself.
Q. Now, did the New England Insurance Company claim that
they were entitled to a share of stock for each 8100 of the bonds
they held ?
A. They did not make a claim on me, hut I presume they con¬
sidered it worth what a share of stock would be at that time.
Q. Did you ever see the bill in equity served on the corpo¬
ration ?
A. I never read it.
Q. So you had nothing to do with that ?
A. I did not appear in that case, sir; I knew of it.
Q. You realty had very little to do with the management of
the road, did you, Mr. Stoddard ?
A.Weil, I knew considerable about it; so far as the manage¬
ment was concerned I was consulted about it, etc., and I talked
with Mr. Olney, and I knew about the case. But just in what
form the bill in equity was brought I can't tell you to-day.
Q. When was it that you first heard of the lease to the Boston
& Maine?
A. Well, I should think somewhere about the 19th day of Octo¬
ber.
Q. From whom did you hear it ?
A. Mr. Sinclair.
Q. He first told you of it ?
A. He first told us at the Board.
Q. Did you not know of the fact that Mr. Lord and Mr. Fur-
ber had been over the road prior to the time when Mr. Turner
resigned ?
A. No, sir; I never knew it until we brought it out in evi¬
dence in the hearing before the committee of the Massachusetts-
legislature.
Q. You have since learned that fact?
A. Oh ! yes, I think it is stated in the evidence which was giv¬
en there, that they went over the road in August previous.
Q. So that the commencement of this matter of the lease was
in August, 1885 ?
A. I did n't know it at the time.
Q. But such is the fact, as you now understand it?
A. They went over the road and it had been talked about, the
road being leased to the Boston & Lowell and to the Fitchburg
Kailroad at five per cent.; that had been talked about for a long
time.
Q. Now, Mr. Stoddard, can you state how early beforthe 19th
23
day of October it was—how many daj^s before that it was, that
you learned from M. Sinclair about this lease ?
A. I learned it at the meeting.
Q At that meeting?
A. That is the first time I knew about it.
Q. He brought it up at that meeting at that time ?
A. Just about that time; yes, sir.
Q. You say that those bonds that the Hew England Insurance
Company held were the original six per cent, bonds ?
A. Yes, sir.
Q. And that the President of the company wrote you, at the
time the scaling process took place, that while they held the bonds
they would accept five per cent. ?
A. I did not say the president; IsaidDwight Foster, the attor¬
ney. I saw him—I went to the office and saw him, and he after¬
wards wrote to the treasurer.
Q. So that a fair agreement was made that they would accept
five per cent, upon the bonds ?
A. While they held the bonds ; that was the understanding.
Q. And you say that five per cent, bonds at that time were
worth how much in the market ?
A. YYu mean about November ?
Q. Yes.
A. Well, from eight to ten per cent.
Q. About 108 or 110?
A. Yes ; I bought some pretty soon after that and gave 110
for them.
Q. And these bonds you purchased and paid 120 for?
A. YYs, they paid 120 to save one per cent, interest.
Q. How, you say one reason for doing so was because of the
uncertainty that the Hew England Insurance Company would
continue to hold these bonds ; that you say was one reason. How,
what was the other?
A. The other reason was, they had brought this suit, and
we wanted to get it out of the way.
Q. Yrou wranted to get rid of this suit?
A. Yes.
Q. Why?
A. So the Boston & Maine Railroad might take their lease in
January as they agreed to.
24
Q. Did this suit interfere with the Boston & Maine Bailroad
taking this lease?
A. I think it would have interfered with it.
Q. How?
A. They would not want to come into possession, and I do not
think our road would want them to come into possession, until they
had got the suit settled, that is all.
Q. Why, what was the objection to it ?
A. Well, I can't tell you, only it is a better way to get out of
the law ; you and I know it is better to get out than to keep in.
Q. Is that the only reason you can give ?
A. It is a good reason.
Q. Is that the only reason ?
A. I told the legislature so ; I wanted to get rid of the law¬
yers.
Q. Is that the only reason you can give ?
A. The onty reason why we wanted to get out of the law ?
Q. No, sir ; I asked you why it was, what the reason was, what
the other reason was, why you purchased these bonds at 120—
what the other reason was aside from this, that if they passed
out of the hands of the Insurance Company they would bear six
per cent, interest, and, also, that you wanted to get out of the
law ?
A. Well, we wanted to close up; I do n't know—do you want
I should state it was because they wanted to distribute the stock?
Q. Can you state any reason, Mr. Stoddard, -why the Boston &
Maine should not have taken possession of your road under this
lease notwithstanding this suit was pending?
A. Well, we had got to have a meeting of the stockholders in
order to have it ratified, and it was to be called in December,
about the 15th or the 20th of December, the annual meeting.
The lease was not of any effect until the stockholders ratified it,
and we wanted to come before the stockholders, not with any
law-suits on our hands, but clear; and they voted unanimously to
ratify the lease.
Q. You wanted to sweeten them up a little with a stock divi¬
dend ?
A. No, there was no sweetening.
Q. The stock dividend was a little sweetening, was it not ?
25
A. Oh, it alwa}7s is, yes, sir. They were entitled to it; they
went without their dividends for a good while, owing to the fact
that they had put their money into the Worcester & Rochester
Railroad. They had lost a good deal of money. The stock of
the Worcester & Nashua was worth 120 when they went into it,
and it went down to 20.
Testimony of D. J. FLANDERS, Wednesday evening, July
27th, 1887:
Q. (By Mr. Aldrich.) Where do you reside?
A. I reside in Maiden, Mass.
Q. Are you connected with the Boston & Maine Railroad?
and if so, in what capacity?
A. Yes, sir; I am the general passenger and ticket agent.
Q. How long have you been connected with that road in that
capacity ?
A. I have been with them twelve years in that capacity.
Q. Now, sir, since the lease of the Eastern Railroad to the
Boston & Maine, has there been an increase, or a reduction, in
passenger tariffs?
A. There has been a reduction.
Q. To what extent—what per cent. ?
A. The decrease varies in different cases ; it runs from per¬
haps 2 or 3 or 5 per cent, up as high as 50 in certain cases.
Q. Well, approximately, what would be the average per
cent. ?
A. The average, according to the reports to the railroad com¬
missioners, is about 10 per cent.
Q. How much would that amount to in all?
A. Our passenger earnings are something over $4,000,000 ;—
10 per cent, of $4,000,000 would be $400,000.
Q. That the road has lost by reason of the reduction in the
tariffs ?
A. Yes, sir.
Q. Now, how about the tariff being uniform before this union
of the roads?
26
A. The tariffs in 1882, before the lease, in many cases varied
from three cents per mile for passengers to perhaps five and six
cents a mile in a great manv cases.
dv «/
Q. Then thev were not uniform?
A. Not uniform at all.
Q. How is it now ?
A. A uniform maximum rate of three cents per mile is charg¬
ed,—nothing more than that.
Q. Is three cents per mile for passenger tariff the highest tar¬
iff on the Boston & Maine and its branches?
A. Yes, that is the highest rate we get.
7 o o
Q. What was the highest before the lease, or before these
reductions?
A. I cannot tell you exactly, but it was as high as six cents
per mile in many cases.
Q. What is the lowest passenger tariff on the Boston &
Maine at the present time?
A. The lowest local tariff is in the neighborhood of two cents.
Q. Where is that?
A. There are manv cases over the whole line where that rate
*/
is made. The local tariff—that is, for suburban points outside
of Boston—is made on the basis of two cents per mile.
Q. How far out does that extend ?
A. It extends on the Eastern division to Salem, and on the
Western division as far as Reading.
Q. You say that, as a whole, the tariffs have been reduced on
this system since the union. Now, have they in any instance
been increased?
A. Never, to my knowledge, sir.
Q. How did the local tariffs run on the Worcester & Nashua
before the lease to the Boston & Maine ?
A. Thev varied considerablv more than thev did on the old
*/ «/
Boston & Maine and Eastern roads; they varied from say
three cents per mile up to perhaps seven and seven and a half
in one or two instances, and as high as ten cents per mile in
one instance.
Q. Since you have taken the management of that road, what
has been the result by way of a reduction ?
A. We have reduced all of the passenger rates to three cents
per mile.
Q. That applies to the Worcester & Nashua?
A. Yes, sir.
Q. At whose suggestion was the reduction made on the Wor¬
cester & Nashua?
A. That was made at Mr. Furber's suggestion.
o o
Q. And after what examination?
A. I cannot tell you just what the examination was that call¬
ed for the order. We took possession of the road in May,-1
think it was, 1886, and during the summer season Mr. Furber
had made some examination,—had been up to Worcester and
over that division,—aud on his return to Boston he told me that
our rates were too high up there, that we must reduce them ;
and I immediately commenced on a passenger tariff, which was
put into effect on the 1st of January, 1887.
Q. Now, I will ask you generally, whether these reductions
from five and six cents a mile on the Boston & Maine, and run¬
ning up as high as ten cents on the Worcester & Nashua, have
been made voluntarily in every instance?
A. They have been entirely voluntary, sir.
Q. I see, by reference to the commissioners' report for the
year 1885, it is stated by the commissioners that "The maxi¬
mum passenger rates established by this board, in compliance
with chapter 101, section 4, of the laws of the state of New
Hampshire, passed at the June session, 1883, are as follows:"
—I will omit all but the Worcester, Nashua & Rochester Rail¬
road—and it is stated that upon the Worcester, Nashua & Roch¬
ester Railroad the rate is fixed at four cents per mile. Now,
when the board had given you the opportunity to place your rates
at four cents per mile, why did you make them three?
A. We made them three because we considered three a better
rate, and to bring them in unison with the rest of our system.
Q. Was this entirely voluntary?
A. It was, entirelv.
' %j
Q. Now, sir, I want to call your attention to the mileage
tickets issued to bearer; where are they issued at present ?
A. They are issued from the general ticket office.
Q. And on what application ?
A. Upon personal application, or upon the application of
agents. We send them out to stations upon application of
patrons at those stations.
28
Q. And are Boston & Maine mileage tickets proper issued
from the Boston and Lowell offices ? and if not, why not?
A. We have no authority to issue our tickets at the Boston &
Lowell offices ; we can only issue them from our own offices and
by our own agents.
Q. Whether or not, by order from the general manager of the
Boston & Maine, the Boston & Lowell tickets are made good on
the entire Boston & Maine system?
A. They are, sir.
Q. And whether or not, by order of the superintendent of the
Boston A Lowell, the Boston & Maine mileage tickets issued to
bearer are made good on the Boston & Lowell ?
A. Yes, I understand that is the case.
Mr. Aldrich. I desire to put in the following order, issued
from the Boston & Maine office:
Boston, July 2d, 1887.
J %/ '
To Conductors:
Commencing Monday, July 4th, 1887, you will honor Boston
A Lowell mileage tickets for passage on all divisions of this
road. You will also notify any passengers who may inquire,
that Boston & Maine Mileage tickets will be accepted for pas¬
sage on the Boston & Lowell Railroad aud its leased lines.
JAMES T. FURBER,
General Manager B. & M. R. R.
Q. Was that order distributed?
A. Yes, sir, it was sent to all conductors.
Mr. Aldrich. I desire to give in this connection the average
rate of fare per mile from from all passengers on nine roads in
New Hampshire. It is found on page 127 of the New Hamp¬
shire Railroad Commissioners' Report for the year 1887. Atlan¬
tic & St. Lawrence, 2.93 cents ; Boston & Lowell, 2.06 ; Boston
& Maine, 1.80 (it will be observed that this is the average rate
of fare per mile from all passengers) ; Cheshire, 3.10 ; Concord,
2.38 against 1.80 on the Boston & Maine; Manchester A Law¬
rence, which is a part of the Concord, 2.77; Fitehburg, 1.75;
Portland & Rochester, 2.50 ; Sullivan, 2.32 ; Whitefield & Jef¬
ferson, 5. From this it appears that the average on the Boston
A Maine is the lowest, except on the Fitehburg, which is .05 of
one per cent. less.
29
Q. How much line has the Fitchburg in New Hampshire, as
you understand it?
A. My knowledge of it is that tliev only have four or five
V-} fc/ <L.'
miles.
Cross-Exam i nation.
Q. (By Mr. Mitchell.) When did the reduction of fares take
place ?
A. They have taken place in three different instances,—in
1882, 1885, and 1887.
Q. What was the reduction in 1882?
A. The reduction in 1882 was the scaling of the various rates
that were then charged, down to three cents a mile.
Q. And in 1885 ?
A. In 1885 they were reduced from three cents to two and a
half for suburban business, and that, of course necessitated a
reduction on nearly all of the stations to Boston. In 1887,
May 1st, another reduction was made in suburban rates, which
also necessitated another reduction from all stations to Boston.
a What do you mean by suburban rates?
A. Suburban rates are rates from Boston to points within the
limit of suburban trains. The terminus of our suburban trains
on the Western division is at Reading, twelve miles from Bos¬
ton ; and on the Eastern division at Salem, seventeen miles.
Q. This reduction in 1887 was limited to a reduction in subur¬
ban rates ?
A. You cannot limit a reduction of that sort to suburban
points. You make a reduction from Boston to stations outside,
and you will carry it nearly the whole length of the road. And
in this case, when it was reduced from three cents to two and a
half, it extended to Lawrence, making the rate from Boston to
Lawrence seventy cents instead of eighty, and to Haverhill,
ninety cents instead of a dollar, and so on down the road about
this difference.
Q. When did you make the increase in the distance from
Boston to Portland, and intermediate points on the line of the
Eastern ?
A. We have not made any increase in distance that I know of.
Q. As applied to mileage tickets?
30
A. We have not made any.
Q. On either division ?
A. The distance between Boston and Portland is 115 miles in
all our passenger operations, and it is 115 miles to-day.
Q. By which route is it 115 miles?
A. The Western division.
Q. Is it 115 miles by actual measurement over the Eastern
road ?
A. I cannot say as to that, sir.
Q. How far is it bv the Eastern from Boston to Portland, bv
actual measurement ?
A. Well sir, I don't know b\- actual measurement what it is ;
I have not measured it.
Q. Will you look at that table and see what the distance is
fixed upon that?
A. This is a time-folder of the Eastern division, and it gives
the distance from Boston to Portland as 108.2 miles.
Q. When was that adopted ?
A. This is the time-folder which has been issued bv the Boston
«/
& Maine ever since the consolidation or lease of the Eastern.
Q. Now, take this (another folder handed to witness) and say
when that was issued, and whether or not it has reference to the
same route ?
A. Comparing the Eastern division here (referring to one
folder) with the Eastern division there (referring to the other
folder), it is 115 miles.
Q. A difference of seven miles?
A. Yes, sir.
Q. When did you begin to issue mileage tickets?
A. The first of June.
Q. And this increase of the distance from Boston to Portland
was made contemporaneously with the issuance of mileage tick¬
ets ?
A. Yes, or about that time.
Q. And you charge full miles for each fraction of a mile, do
vou not ?
*/
A. We do not in the case of the Western division to Port¬
land.
Q. I am speaking now of the Eastern division ; for instance,
five and one tenth miles you charge six miles for?
31
A. Yes, sir.
Q. And you charge according to this arbitrary table, without
reference to the actual distance?
A. We do on the Eastern division, ves.
Q. So that in fact you charge two cents a mile for more miles
than are actually travelled by the passenger?
A. We make the fare by that $2.30 between Boston and Port¬
land, and that is lower than any fare we have ever had between
those two places before.
Q. That is more than two cents a mile, is it not?
A. No, sir, not by the Western division.
Q. Is not $2.30 for 108 miles more than two cents a mile?
A. It is not by the Western division.
Q. If a man goes by the Eastern division, isn't it?
A. While it actually amounts to two cents a mile for more
miles than are represented on the Eastern division, still it makes
the fare $2.30 between Boston & Portland, which is the mileage
by the Western division. The ticket is good on either division.
Q. The person who travels upon the Eastern is compelled to
pay two cents a mile for more miles than he actually travels ?
A. He is compelled to pay $2.30 ; that is what he is com¬
pelled to pay.
Q. When he travels to intermediate points, how is it?
A. Well, there may be some instances where he pays a num¬
ber of coupons which will amount to more than two cents a mile,
but very little.
Q. A complaint has been made to the railroad commissioners
of Massachusetts recently, has there not?
%/ '
A. Not in reference to Boston & Portland.
Q. In reference to this charge of arbitrary rates without ref¬
erence to the actual distance ?
A. Yes, there has been complaint made as to arbitrary mile¬
age.
Q. And the judgment of the commissioners was adverse to
the practice of the Boston & Maine Railroad?
A. No, sir, it was not.
Q. What was it?
A. My recollection of the commissioners' report—it was a
verbal recommendation—is, that iu cases where railroads pub-
lish or use arbitrary tables of mileage, they should use their ut¬
most endeavor to notify passengers as to what that mileage is.
Q. Mr. Flanders, the passenger who took his mileage ticket
under this arbitrary was entitled, according to the judgment of
the commissioners, to have punched out only one coupon for
each mile he actually travelled?
A. Yes, sir, the passenger who took his mileage under that
was entitled to that, and the Boston & Maine Railroad have al¬
ways been willing to give it, and so stated to the railroad com¬
missioners at the hearing.
Q. Why was complaint made, then?
A. I could not tell you why it was made, but no complaint
was made to the officers of the Boston & Maine road. Nothing
was done until a suit was brought in the police court at New-
buryport, and at the same time, or within a day or two, a com¬
plaint was made to the commissioners ; but no complaint was
brought to the attention of the officers of the road until that was
done.
Q. This practice has been discontinued, has it not?
A. No, sir, it has not.
Q. You still continue it?
A. We still continue it.
Q. Notwithstanding the recommendation of the commission¬
ers ?
A. I want von to understand that, so far as the old tickets
were issued and sold in connection with that mileage, the rail¬
road is ready, as it told the commissioners through its counsel,
to make any correction that was necessary to carry out any un¬
derstanding which the purchaser of the mileage ticket might
have had in regard to the mileage ; but the contract of the mile¬
age ticket provides, since the first issue of the tickets, that the
mileage shall be subject to a mileage table which was issued aud
dated at that time. That is why the time-tables have been
changed,—with the idea of informing the public, and advertis¬
ing, as the commissioners recommend, that an arbitrary mileage
was adopted. It was to inform the passengers that the mileage
had been changed from the original 108.2 miles.
o o
Q. This has been adopted since the action of the commission¬
ers ?
oq
oo
A. Not since the action of the commissioners, no, sir.
Q. Before?
A. Yes. I would state that mileage tickets had never been
adopted—had never been sold, on the Boston & Maine road—
until the first of June of this year, and of course many things
have come up since the first of June to teach us how to sell
mileage tickets and how to issue them ; and the difficulties we
o '
have met with have been obviated, so far as has been possible,
in about two months. Many of these things have come up, and
we have corrected them as fast as we could.
Q. The commissioners recommend the adoption of a mileage
that will set forth actually the contract which you desire to
make with the passenger?
A. The recommendation of the commissioners is, that the
passengers shall be informed in regard to an arbitrary mileage
which has been or may be adopted.
Q. You say there has been a decrease in freights and fares on
the Worcester & Nashua?
A. Yes, sir.
Q. When did that take place?
A. That took place—the tariff for single tickets was reduced
—January 1, 1887, and the sale of mileage tickets, a reduction
of two and a half to two cents a mile, was begun simultaneously
with the sale of mileage tickets on the Western and Eastern
and Northern divisions,—the whole Boston & Maine.
Q. Has the complaint of the people of Groton, on the line of
the Nashua & Worcester, been called to your attention?
A. Yes.
Q. A complaint made by ex-Gov. George S. Boutwell?
A. No, sir, you are mistaken about the complaint.
Q. Have you noticed this article in the Traveller of yesterday
(readiug) :
On Monday next, at 2 o'clock p. m., Hon. George S. Bout-
well will argue a case before the railroad commissioners, involv¬
ing the price of season tickets on the Worcester division of the
Boston & Maine Railroad. He will represent petitions from
his own town of Groton, and he heads the petition.
Groton people, in coming to Boston, come to Ayer Junction,
and there they take the Fitchburg road for this city. The dis-
3
84
tance from Groton to Aver is 3.52 miles ; and the season ticket
rates, when the Worcester & Nashua corporation operated its
own line, were $9 per quarter, 815 for six months, or $25 per
year. Since the Boston & Maine leased the line, the yearly and
half-yearly tickets have been discontinued, and the quarterly
rate has been raised to $11. This subjects business men com¬
ing to Boston daily to a cost of about two cents per mile for the
distance actually travelled, which the petitioners hold to be un¬
reasonable and injurious to the interests of the town.
The officials of the road have been appealed to, but declined
to do anything about the matter, so the petitioners propose to
get the opinion of the commissioners.
Has your attention been directed to that, Mr. Flanders?
A. Yes, sir, I read that in the Traveller last evening, and I
am probably the party to whom the complaint was made by the
son of Mr. Bout well, of Groton.
Q. Has the rate, as here stated, been increased from $9 per
quarter to $11 ?
A. Yes, sir.
Q. And the half yearly ?
A. What do vou mean?
Q. Has the quarterly rate been increased from $9 to $11?
A. When you get through with it I will answer the whole
question full}7.
Q. Just answer my question ; has the quarterly season ticket
been increased from $9 to $11?
A. When we made reduction in single fares—
Q. Answer directly, and then you may explain. It is a ques¬
tion susceptible of a direct answer, Yes or No, and I ask you to
give me a direct answer, and then you can explain.
A. I did give you a direct answer. I said " Yes, sir."
Q. Now you may explain, if you please.
A. When the reduction in single fares was made we found
that the rates for season tickets were very much higher on the
Worcester division than thev were on our own road. Now, with-
V /
out making a season ticket tariff between every station, we have
a schedule of miles. For instance, from one mile to three miles
it is, perhaps, $3 a quarter; from three miles to four miles is $7
or $58 or $50, or whatever it is. We make a rate upon any part
of the road for a season ticket, a three months ticket, for those
35
distances. Now, in apptying that to the Worcester & Nashua
Railroad it made a very large reduction in the season ticket rates
which were then charged. But in one or two instances, and this
between Groton and A}rer Juncton was one, the rate inadver¬
tently was increased by us from 89 to $11. There were two
instances, I think, and it was apparent that some special rate had
been made to accommodate some patrons living at Groton who
wanted to come to Ayer Junction, and an exceptional^ low rate
had been made. Now, when I was called upon by the gentleman
whom I suppose to be the representative of ex-Gov. Boutwell, his
son, I think, he desired to know why the rate was increased. And
I went over it and explained that we had applied the mileage basis
for season tickets to the Worcester Division, which in ninety-
nine cases in a hundred had made a very large reduction, but in
that one case, which was under a special rate made for some pur¬
pose or other which I did not know, the rate had been increased.
And I said to him, "Now, do you wish me to make a special rate
in your case? Do you wish me to make a special rate for you
that I do not make for your neighbor who has to travel four
miles on some other part of the road?" He said, " Well, I do n't
know as I can ask you to do that. " And after some further con¬
versation he said, " Then you positively decline to make any
change ?" I said, " Really, it does not seem to me consistent
for us to make any lower rate for a season ticket for you than we
do for other people living on the line of the road, and while we
have made a large reduction generally, I do not think it is con¬
sistent for you to ask it." Then he said, "Well, then, I shall
go further," and he turned and left the office ; and the next
thing I hear is the complaint to the commissioners.
Q. Well, the fact is, Mr. Flanders, that the rate has been in¬
creased ?
A. The fact is, the rate was increased from $9 to $11 a quar¬
ter.
Q. And the further fact is, that the half-yearly rate was discon¬
tinued ?
A. Yes. There were on the Worcester Division thirty-five or
forty, and there might have been forty-five or fifty, but I do not
think there were over fifty, yearly tickets issued between various
points on the line of the Worcester road. The question was
36
brought up at that time whether we should continue issuing
yearly tickets, or tickets for a period longer than three months,
and it was referred to the President; and he said that as it was not
consistent with our rules and regulations on other parts of the
road, and there were so few of them, I need not issue the yearly
tickets on that division. They were discontinued at that time to
bring the system of issuing tickets into unison with the rest of
our system.
Q. Now, then, Mr. Flanders, it is a fact that the citizens of
Groton have to pay now $44 a year for that which cost them $25
before ?
A. No, I think you are mistaken about that.
Q. Four times 11 makes 44, does it not?
A. Yes ; but I think that $25 was not the yearly rate.
Q. So the complaint states.
A. I do not think the rate was $25 per year.
Q. " The season ticket rates when the Worcester & Nashua
corporation operated its own line, were $9 per quarter, $15 for
six months, or $25 per year."
A. I won't undertake to say that is not correct, but I can¬
not say that it is correct. Four times $9 is $36 for four quarters
of the year.
Q. If that is correct, the passenger from Groton now has to
pay $44 for that which he formerly got for $25?
A. He pays now $44 for what cost him $36.
Q. If he bought an annual ticket for $25 ?
A. You cannot compare an annual ticket with four quarterly
tickets ; }rou should compare the quarterly rates now with the
quarterly rates existing previously.
Q. He is now prevented from buying a yearly ticket ?
A. No, sir; we do not sell a yearly ticket at all. And let me
say here, I do not think there are any roads in this vicinity which
do sell yearly tickets. It is contrary to the custom of all roads,
so far as my knowledge goes.
Q. What is the local tariff from Boston to Portland ?
A. It is $3.
Q. That would be how much a mile?
A. The distance is 115 miles, and at $3 it is a little less than
three cents a mile, about two and a half cents.
37
Q. What is the rate from Dover to Boston?
A. From Dover to Boston the rate is $1.85.
Q. And what is the distance ?
A. The distance is 68 miles.
Q. So that the rate from Boston to Dover is higher ?
A. It is a little higher rate per mile, yes, sir. It was formerly
$2, and we have reduced it to $1.85.
Q. When was that change made?
A. There were two changes made, I think; one in 1885, and
the other in 1887.
Q. What was the change in each case ?
A. I cannot tell, hut the fifteen cents was divided between
those two changes.
Q. Do you know what the distance is from Dover to Bollins-
ford?
A. It is about three miles.
Q. How many coupons are cut off on your mileage ticket ?
A. On a mileage ticket it would take three coupons.
Q. And what is the distance from Bollinsford to Great Falls?
A. The distance from Bollinsford to Great Falls is two miles,
I think the mileage table gives it.
Q. How many coupons are cut out?
A. Three coupons.
Q. For two miles?
A. Yes, sir; three coupons is the minimum number they take
from a mileage ticket for any distance.
Q. Why is it you make two charges in going from Dover to
Great Falls, and take out so many coupons ?
A. We do not make two charges, unless the passenger goes
with two conductors, between Dover and Great Falls.
Q. How does it happen ?
A. It does not happen; it is done by rules, by an order to the
conductors, that a conductor shall collect coupons only covering
his run, or covering the distance which the passenger travels
with him on his train.
Q. So that it comes by reason of a change of cars?
A. In certain cases; they do not change on all trains.
Q. (By Mr. Aldrich.) When you made your reduction and
issued your mileage tickets, you say you sold them for the entire
distance by way of the Boston & Maine ?
38
A. Yes, sir.
Q. And they are good by way of either line ?
A. Yes, sir.
Q. Now, suppose all the men who buy these tickets were to
travel all the time over the Eastern, how much gain would result ?
How large a colt is this we are spending so much time about ?
A. I cannot tell you.
Q. Approximately?
A. I cannot tell you approximately; I can only estimate it.
We have sold a large number of mileage tickets, and they are
used on all sections of the road, but how many are used directly
between Boston and Portland by either division I could not say.
Q. What proportion would it probably be ?
A. The tickets that are used wholly between Boston and
Portland might be ten or fifteen per cent, of the whole. It is a
guess ; I cannot say.
TABLE, showing local freight rates per ton, per mile, upon the Concord Railroad, the Boston & Maine
Railroad and other roads, in comparison with each other, for distances substantially alike, and the aver¬
age of all.
CO
Pd
3
Rate in cents, per ton, per mile.
1st
Class.
2d
Class.
3d
Class.
4th
Class.
5th
Class.
6th
Class.
Concord Railroad.
Boston & Maine Railroad.
Eastern Railroad.
Fitchburg Railroad.
Old Colony Railroad.
Boston & Albanv Railroad.
Boston & Providence Railroad.
Boston & Lowell Railroad.
Boston & Lowell Railroad.
N. Y. & N. E. Railroad.
Northern Railroad.
B. C. & M. Railroad.
Nashua to Manchester.
Boston to Wilmington June.
Boston to Salem, New Wharf.
Boston to Lincoln.
Boston to No. Stoughton.
Boston to Natick.
Boston to Sharon.
Lowell to Winchester.
Lowell to Nashua.'
Boston to Tiltons.
Concord to Franklin.
Concord to Tilton.
17
18
l7
17
r7
18
17
18
H
18
*9
18
T QJLH
7xt
7TV
9tt
r "> ^ 0
17
8-L<v
18
i i 44
1 1 17
816
18
ii-6-
1 1 14
io
i an
t1 9
i ci°
1o 1 8
8-4-
17
611
18
r!5
j 17
9 IT
714
/ 18
tf)10
laX7
8ii
18
io
hlA
/ 18
I2xt
bfrs
r.l5
j17
611
18
5if
7tt
8-4-
17
6f|
9i7t
714.
/ 18
8-8-
14
612.
18
i oil
19
i r 2
11,8_
,12
417
flo
j 18
all
117
5xf
7-ik
5xt
7 xt
7xx
5xf
7x9
7x4
_/jf_
4x27
5xt
,12
rl7
-X
017
r!5
J 17
C'il
0 18
r 1 5
5xx
clo
0 18
710
0 14
rio
0 1 8
6-6-
u19
611
18
■7_9_
017
-10
0 18
all
117
ail
t17
rJL
0 17
5ft
4xt
5ft
fio
0 14
clo
0 18
6-6-
19
6H
18
Average per ton, per mile, each class.
Concord R. R., per mile, each class.
i oil6
1<jt8 7
io110
1 > .. ■
Q 3 4
91 8 7
8 44
01 8 7
8-1-7-
18 7
r-16 5
018 7.
6-68-
18 7
A132
f 1 8 7_
rl 19
0 18 7
,22
8 7.
r 85
0 1 3 7
n 99
O 18 7.
A large proportion of the freight, 70 per cent., or more, including raw material for manufacturing, and
heavy goods, come under the four lowest classes.
I hereby certify that the above is made up from the printed tariffs of each of the several roads named
above, and in use at the present time.
S. BARRETT,
Gen'l Frt. Agent C. R. R.
Concord, July 28th, 1887.
SECTION 18.
"Railroad Corporations created by the
laws of other states, operating* roads
within ill is State, shall have the same
right for the purposes of operating, leasing
or uniting with other roads as if created
by the laws of this State.'1
HAZEIT BILL.
SECTION 11.
" Railroad Corporations created by the
laws of other states shall have all the rights
and privileges as regards connecting roads
under the preceding sections of corpora¬
tions created by the State.11
ELAZE^r BILL
SEC. 1G.
This Act shall always be under the control of the Legisla¬
ture, to alter, amend or repeal, as the public good may require.
" RETROSPECTIVE
laws are highly injurious, oppressive and unjust. No such laws,
therefore, should be made, either for the decision of civil causes
or the punishment of offences." Bill ot Rights, Art. 23.
DEFINITION.
" Every statute which takes away or impairs vested rights,
acquired under existing laws, or imposes a new obligation, or
duty, or liability, in respect to transactions already -passed,
must be deemed retrospective." Morrison's Digest, p. 160, s. 7,
citing cases.
VESTED RIGHTS TO BE UNAFFECTED
BY REPEAL.
The repeal of any act shall IN NO CASE affect ANT
ACT DONE, or any right accruing, accrued, acquired, or
established, 01* any suit or proceeding had or commenced in any
civil case, before the time when the repeal shall take effect.
General Laws of 1878, c. 1, s. 33.
The repeal of any act shall in no case affect any act done, or
any right accruing, accrued, acquired, or established, or any
suit or proceeding had or commenced in any civil case before
the time when said repeal shall take effect. General Statutes
of 1867, c. 1, s. 34.
The repeal of any act shall in no case affect any act done,
or any right accruing, accrued, acquired, or established, or any
suit or proceeding had or commenced in any civil case before
the time when said repeal shall take effect. • Compiled Statutes
of 1852, c. i, s. 26.
The repeal of any act shall in no case affect any act done, or
any right accruing, accrued, acquired or established, or any
suit or proceeding had or commenced in any civil case before
the time when said repeal shall take effect. Revised Statutes
of 1842, c. 1, s. 26.