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

OF this railroad by Mr.. Morgan and
Mr.. Melen and the absolute subordi-
nation of other members OF the board
of directors to the will of these two.
The unwarranted increase OF tho
New Haven liabilities from $4,000
600 In 1903 TO S4i7,000. 900 in 1913.
The Increase in floating notes from
nothing In 1908 to approximately s40,-
100000 in 1913
'''rhe indefcnsible standard Of bust
ness ethics and the absence of fnan-
clal acumen displayed by eminent
flnanciers In directing tho destinies OF
this road in its efforts to establish a
monopoly OF transportation in New
England
"A combination OF all these has re-
suited in the present situation In which
the affairs OF this road are involved"
adds the commission.
OF the purchase of the Westchester line
by the New Haven the commission says
that the transaction cost the New Haven
something like sl4.000.00 before con-
struction was begun. the total cost being
f36,i3i,0OO for road only little over
eighteen miles long and which In being
operated at an annual loss OF approx
mately sl,25O.000.
What could have been the motive"
asked tho commission, "for unloading the
Westminster upon the New Haven at the
expense OF the stockholders OF the latter
must be left largely TO conjecture. The
one accomplished result, however. OF the
Westchestcr transaction was the sitting
of possible competition into New York
city from New England.
The blame for the Westchester rests
squarely upon the directors OF the New
Haven road. Some are guilty for acts
committed. others. the greater number,
for their failure 20 act. They are alike
culpable and responsible to the stock
holders
who Planned II.
Tho commission finds that the West
chester acquisition was planned and exc
"uted by II special committee consisting
of J. u. Morgan, William Rockefeller
and George VI. Miller with President Mel
len as chairman. The commission adds
that the vote Of the board Of directors
appointing this committee does not dis
close an intention to authorize the buy
ing Of charters and promotion securities In
tho bu.ldinL of new railroad much less
one at cost OF S36.000,0O0. The com
mission adds:
1T is ambiguous and was evidently
intended 10 conceal secret purpose.
The full board was not taken into the
confidence OF these directors who wanted
these securities purchased. and no re-
port was ever made by this committee
placing the situation az they found it
Before the board"
or the use OF New Haven stock to
bring about changes in the westchester
franchise by New York city officials the
commission says
''rhe testimony II somewhat occult, but
the character OF the transactions is no
less certain. This money was used for
corrupt purposes and the improper ex-
pendtures We're covered by tho transfer
to the New Haven OF these worthless
securities"
This is the transaction in which the
late Police Superintei dent Thomas Byrnes
was mentioned as intermediary. The com
mission adds
mo comment is necessary to make
clear TO the mind the corrupt and un-
lawful nature OF this transaction, and It
would seem that the amount illegally eX-
pended could he recovered from NJ. Mellen
and the directors who authorized IT,"
The commission says that $685. 05 paid
to Oaklcigh Thorne and Marsdsn Porry
In commssl ons In the Westchester deal
should be recovered either from them or
from the New Haven directors