The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1914-07-16
PROSECUTIONS MAY
FOLLOW EXPOSURE
OF RAILWAY LOOT

Washington. July 14."One of the
most glazing instances of maladmlnls-
t%ration, revealed in all the history OF
American ~railroading," is the Interstate
Commerce commissions CHARACTERIZE
ton of it's findings in the investigation
of New Haven railroad anc al
fairs, reported today to the Senate.
In a report Of 10000 words, probably
the most drastic in terms of n ever
made by the commission. the New
Haven's directors We're pronounced
"criminally negligent"
Evidence pointing to violation of law
has been transmitted to district at
torneys in Massachusetts, Rhode Isl
and and New York, and the federal de-
partment of justice.
A reasonable estimate Of the loss to
the New Haven by reason of waste
n mismanagement," says the report,
will amount to between 100000, 600 and
| 500, 600, 900. Directors should be made
individually liable to evil and criminal
laws for the ann in which they dis
charge their trust"
All the commissions structures were
on the management of the New Haven
system under former President Mellen.
In justice to the present manage
ment, the commission says it is but fair
to say that Chairman Howard Elliott
and Walker D. Hines, special counsel,
have-co-operated with the commission
and rendered it substantial assistance
through it's investigation"
Story of Loot.
The report cites the Significant in
cidents:"
"Marked features and significant
incidents in the loose, extravaganza
and improvident administration of
the finances of the New Haven Jas
shown in this Investigation are the
Boston G. Maine despoiIment; the
despoilment; the iniquity of the
westminster acquisitions; the
double price paid for the Rhode
Island trolIeys, the recklessness in
the purchase of Connecticut and
Massachusetts troIleys at prices
exorbitantiy in excess of their mar
ket value; the unWarranted ex-
penditure of large amounts in
educating public opinion" the
disposition without knowledge of
ands of dollars for influencing pub
lie sentiment; the habitual pay
ment of unauthorized vouchers
without any clear specification of
details; the confusing inter-rela-
ton OF the principal company and
it's subsidiaries and consequent
practice of financial Ieaerdemain in
issuing large blocks of New Haven
stocks for notes of the New Enc
land Navigation and
manipulating these securities back
and forth; fictitious sales Of New
Haven stock to friendly parties
with the design Of boosting the
stock and unloading on the public
at the higher market price, this
unlawful diversion of corporate
funds to political organizations;
the scattering of retainers to at
torneys of five states, who render
ed no itennized bills for service and
who conducted no litigation to
extensive use of a paid lobby in the
matters as to which the directors
claim to have no information; the
attempt to control utterances of
the press by substituting reporters;
payment of money and the profit.
gate suanc Of free passes to
investment of $4,000 in securities
of a New England newspaper; the
regular employment Of political
bosses in Rhode Island and other
states not for them to perform any
service, but to prevent them as Mr..
Mellen expresses it from be-
the retention Of John 1. Billiard for
more than $2,7o0,ooo in a trans
action in which he represented the
New Haven and into which he in
vested not a collar; the inability of
oaklsigh Thorne to account for
$l,o32,O0O of the funds of the New
Haven %intrusted to him in CARRYING
put the Westchester proposition;
the story OF Mr.. Meilen as to the
distribution of .$1,2oo,0oo for cor
rupt purposes in brinaina about
amendments of the Westchester e.
Portehester franchises; the dom
nation of all the affairs Of this
railroad by Mr.. Morgan and Mr..
Meilen and the absolute subordina-
ton OF other members Of the board
OF directors to the will of those
two; the unwarranted increase Of
the New Haven liabilities from
$~9a,ooo,0oo in 1908 to $417,ooo,Ooo
in 1918; the increase in floatinu
notes from nothing in 1903 to an.
Proximateiy $4o,ooo,oo0 in 1918; The
l~ndePensibie standard of business
ethics and the abser-cs of financial
acumen Displayed by eminent
l. EtG GfzEENd= E5-~t