Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-07-14

They were used to cover up transactions
that would not bear scrutiny and to
keep from the eyes of the public officials
matters that were sought to be kept Sc
cret. The commission should have the
power to examine, not only the books,
records, papers and correspondence of in
terstate carriers, but of subsidiary com
panes as well.
The revelations in this record make it
essential for the welfare of the nation
that the reckless and prohigate fnan-
eiering which has bhghted this great
railroad system be ended, and until this
is fully done there will be no assurance
that the story of the New Haven will
not be told again with the stockholders
/ of some other railroad system as the
/ victims.
| Obstacles to Inquiry
I'm the search for truth the commits
sion had to overcome many obstacles,
such as the burning of books. letters and
documents and the obstinacy of wit
nesses, who declined to testify until
criminal proceedings were begun for
their refusal to answer questions" says
the report.
In the course of the investigation,
many instances were uncovered of viola
/ ton of the laws of different states. AS
these were not directly understood TO be
pertinent to our inquiry under the SEN
ate resolution we did not follow them in
our details In pointing to violations Of
state laws we have turned over the evil
dence concerning local occurrences in
| New York City TO the district attorney
/ for the proper district and the testimony
! relating to Irregularities in Massachu-
sets and Rhode Island have been laid
before the proper authorities of those
states. The commission has also furnish
ed the department of justice with a COM
plete record of the testimony.
Not Governments Work
1.-The difficulties under which this rail-
internal and wholly due to its own mis-
management. Its troubles have not aris-
en- because of regulation by government
al authority. Its great losses and most
costly plumbers were made in attempting
to circumvent governmental regulation
and to extend its domination beyond the
limits fixed by law"
| It is pointed out that the capitalization
of the New Haven system was increased
$93, 900, 900 to SAT- 900 since June 3, 1903
This was inclusive of stock premiums
making an increase of 1924 600, 000
"Of this increase, says the commits
sion, Approximately s120O00,000 WAS de-
voted to its railroad property and was
expended for betterments and equipment
This leaves the sum of s20i 900 900 which
was expended for operations outside of
its railroad sphere Through the expend-
| iture of this sum the railroad system has
practically monopolized the freight and
passenger business in five of the states
of the union. 1t has acquired a monop-
oily of competing steamship lines and
trolley systems in the section which it
serves. The financial operations neces-
i, sary for these acquisitions and the losses
which they have entailed have been skill
fully concealed by the Juggling of money
and securities from one subsidiary cor
poration to another"
The report then goes on to deal with
various financial transactions which
were under investigation.
"A Profiigate Waste"
OF the New York, Westchester &
| Boston Railway, the report says:
| The Westminster is story of the
profiigate waste of corporate funds.
| The road was not necessary as a part
of the New Haven system. The enor-
nous sum of 6,f34, 1925 was ex-
pended for a road only 1903 miles in
extent. which is being operated at an
annual loss of approximately $.250000
and which will have to increase its
earnings Az fold before it can pay its
| operating expenses and fixed charges.
1t is inconceivable that hits enter
prise could have been entered into by
i the New Haven as a result of the
mandates OF good judgment and prop
| err railroadng.
1.-THE Westchester acquisition was
| planned and executed by a special
| committee of the board, consisting of
| Directors Morgan Rockefeller and
| Miller, with President Mellen as chair
man"
Concerning the Rhode Island trolleys,
the report says.