The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-11-29
RAILROAD NEWS.
Shippers Indirectly Pay Rail-
way officials Fines.
Stockholders Have Cause Of
Action Against Directors.
COMMISSIONERS IDEAS
Corporations Should Not Pay
Fines for officers Violations.
Gossip and Matters of Interest
in Railroad Circles.
COMMISSIONERS IDEAS

That the stockholders, directly. and
the people, indirectly, pay the fines i'm
posed upon railroad officials for viola
tons Of the interstate commerce law is
the inference drawn by Commissioner
Franklin K. Lane. He bases his con-
illusions on the evidence introduced
during a hearing in connection with
the punishment of First Vice President
Darius Miller and Claude G. Burnham
foreign freight agent of the Chicago,
Burlington e Quincy railroad, by
Judge Bethea in the United States dis
trict court.
The case in point involved a charge
that the officials of the Burlington had
granted rebates on shipments of tin by
the United States Steel Export COM
pany to Vancouver, which resulted in
Miller and Burnham being fined $10,-
600 each. in addition to the fine of
$4,000 imposed upon the railroad
company as a corporation. The testi-
mony of George B. Harris, president of
the railroad, and OF 9. l. Sturgis, gem
eral auditor, showed that the railroad
company had paid the fines of its Off
Gals and the penalty assessed against
the corporation by a check in favor of
Thomas c. Mcmillan, clerk of the
northern district of Illinois. This was
charged on the books of the company
against the account designated as cor
rected freight earnings
'tThis is the first time that 1t has
been actually demonstrated that a rail-
road company has paid the fines of its
officials out of funds belonging to the
stockholders said Commissioner
Lane at the close of the hearing. THE
railroad corporation was fined $4,000
and two officials directly connected
with the payment of rebates were as
sessed $4,000 each. The total amount
SEQ, o0o-was paid on single
voucher out of the treasury of the cor
poration and was charged to corrected
freight earnings on the company's
books. Therefore this must be regard
ed as a frank Endorsement by the COM
pany Of the acts of its officers. They
were not allowed to suffer for the acts
committed in the interests of the com
pany, even if these acts were Illegal
and under the law constituted a crime"
In answer to a query whether pro-
ceedings, criminal or civil, would be
instituted against the directors of the
Burlington for using the funds of the
stockh olders to pay these fines, Com
missioner Lane replied that the stock
holders must take the initiative
This is not matteriwith which the
commerce commission can
DEAL" he said. THE stockholders may
institute such Rroceeding's as they
road are held in trust BY the directors.
who generally. have very broad powers
in the matter OF disposition But
am not aware of any general power
vested in those officials which may per-
init them to use such moneys to pay
the fines of officials who have been
OF violations of the law
Burden Upon the Public.
There is a very obvious inference to
draw from the facts developed-that
he fning of a convicted railroad official
Is in reality Furnishing the stockh olders
and indirectly imposing a burden upon
the shippers. who in the end pay all
Of the obligations of the railroad.