The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14

financial transactions II indicates q low
state of financial morality
while stock in the New Haven was
listed on the New York exchange a large
portion of its funds were invested in blue
sky corporations, the officers OF which
knew nothing of the purposes or assets
| OF the company OF which they were man
ayers or officers"
The report finds that tho New Haven
purchased cars almost exclusively from
diamond jim Brady without competi-
tion to the extent OF some $4,000, 900 I;
also locomotives were bought from n
company in which director OF the New
Raven was director The commission
says:
The corporate economy IL not prac-
ticable where gifts and obligations aris-
ing from friendship tend to obscure
official duty"
The commission agrees with Mr.. Mellen
that the New Haven road had 10 politics .
that Its aim always was TO get under the
best umbrella"
Attention is called to n campaign con-
tribution OF $4,000 through J. y. Morgan
Co In 1900 for which no proper and
complete voucher appears on the hooks OF
the New Haven. In 1904 there was an
other $4,000 contribution, which the com
mission says was not reported to the
directors or stockholders or In any man
ner made public.
Such use of corporate funds IL n gross
injustice to the stockholders and the
public, says the commission.
Estimate of Losses.
Tho commission estimates that the New
Haven stockholders have lost:
s23.223, 900 through tho New Ravens
purchase OF the Boston and Maine.
sli457.000 through the purchase OF
the Westminster trolleys.
si2535, 900 through the purchase of
the Connecticut trolleys.
sls.3s5.0 through the purchase OF
the Rhode Island trolleys.
s73,394 or the Hartford and
Worcester Street Railway.
s209,22l on the Springfield Rail-
way companies.
s3,b940 600 on the Merchants and
Miners Steamship Company
The commission estimates that these
actual losses all told from depreciation
and waste foot up to almost $40, 900 900
In addition deficits are reported in the
company's last annual report in the
operation OF other subsidiary companies
amounting to more than S72,6oo for the
year. These annual losses. In tho opinion
OF the commission. will TO a alrge extent
recur from year to year.
From all OF the foregoing and from
careful consideration OF the method
In which expenditures, not specified herein,
have been made IL IL submitted" says the
report. that a reasonable estimate of
the loss TO the New York. New Haven and
Hartford road by reason OF waste and
mismanagement will amount 10 between
$50. 100000 and 100000. 900"
II was at this point however that
the commission expressed the opinion
that honesty and efficiency OF manage
ment finally will restore the railroad
property to its former standing.
Representatives on the Board.
The commission points out In speaking
OF interlocking directors that the Penn
sylvania Railroad. which owned az. OO0
shares OF New Haven stock; the New
York Central which owned the same
number OF shares the insurance COM
panies, which also had $4,000 shares
the express company which had con
tract with the railroad the Standard oil
Company. the United States Steel Cor
poration and the Pullman Company all
had representatives in tho New Haven
board.
in fact" says the report. every other
interest seemed better represented on the
New Haven board than the average stock
holders interest
The commission says In speaking OF the
duty OF directors that there are too many
ornamental directors and too many who
have such childlke faith in the man AT