Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-07-13
Declared Most Glaring Instance Of
Maladministration" Ever Revealed
in Railway History.
PART OF LOSS RECOVERABLE
Commission Would Make Directors
Individually Liable to Civil and
Criminal Laws'' for Manner of
Discharging Trust.

'One OF the most glar1ng IN
stances of maladministration re
vealed in all the history o
American railroading," is the in
terstate commerce commission
characterization of its finding il
the investigation of New Haver
railroad financial affairs, reported
today to the Senate.
In report, probably the mos
drastic in terms OF any ever made
by the commission, the New
Haven's directors were pro
nounced "crirninally negligent
Alleges Loss by Mismanagement.
"A reasonable estimate of the loss
TO the New Haven by reason of waste
and mismanagement." says the report
will amount to between s60,0O0,00(
and $9O.O0O,00O. Directors should be
made individually liable to civil an6
criminal laws for the manner in which
they discharge their trusts
All the commissions structures were
upon the management of the New
Haven system under former Presiden,
Melled.
In justice to the present manage
ment. the commission says it is bu,
fair to say that Chairman Howard FL
lott and Walker D. Hines, special
counsel have co-operated with the
g1lh n
tfal assistance throughout this investi-
CATION"
Recovery of Funds Probable.
From the facts developed in this in
vestigation it would seem that there is
little question concerning the recovery
of a substantial amount of the stock
holders money that has been wasted
Several items of this nature will be brief
ly summarized:
"overpaid Perry & Thorne in com
missions. s3os.75O.
illegally spent in obtaining West
Chester franchise changes. 81 .524. .O72.T
"In the Billiard transaction. s.. 49,
200.
"In the investigations the commits
sion is required to make from time to
time it has. in accordance with its
usual custom, exercised due caution not
to REQUIRE the testimony of witnesses
where immunity might result. eXcep,
when 1t is necessary in order to get at
the truth The purpose OF the I'M
munity statute. as the commission
understands 1t. was to aid in the search
for facts by removing the obstacle OF
witnesses refusing to testify on the
ground Of self-incrimination. and under
the statute the commission has always
endeavored to exercise a sound dis
cretion in this regard.
Mellen Testimony Necessary.
with respect to Mr. Mellen. former
president of the New Haven system. il
was the belief of the commission thai
his testimony was necessary in this in.
vestigation. and the result. in our opin
lon, fully justifies this position.
Evidence of wrongdong. such as wa.
6iscIosed in this hearing, is difficult tt
pbtain Men do not conduct such trans
actions in the open, but rather in secre
and IN the dark. Only those involved a
n rule, have direct information. So som,
pf the evidence of necessity must come
Through participants.
This investigation has demonstrates
that the monopoly theory of those con
trolling the New Haven was unsounC
and mischievous in its effects. To achieve
such monopoly meant the reckless anc
scandalous expenditure of money; il
meant the attempt to control public opin
ion; corruption of government: the at
tempt to pervert the political and eco
nomic instincts Of the people in insolen
defiance of law. Through exposure Of
the methods of this monopoly the invis
ible government which has gone far il
its efforts to dominate New England ha:
been made visible. 1t has been clearl.
proven how public opinion was distorted
how officials who were needed and who
could be bought were bought: how news
papers that could be subsidized were sub
sidized: how a college professor and pub
licists secretly accepted money from thu
New Haven while masking as a repre-
tentative of a great American universit,
and as the guardians of the interests o
the people, how agencies of information
to the public were prostituted whereve
they could be prostituted in order L
carry out scheme of private transports
tion monopoly imperial in its scope.