Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1914-07-17
DIRECTORS OF NEW
HAVEN ARE SCORED
INTERSTATE COMMERCE. COM.
MISSION ARRAIGNS MAN.
AGEMENT OF ROAD

WASHINGTON, July 1.-THE
story of the RECKLESS and profigate"
operations of the New Haven railroad
one of the most remarkable chapters
in the history of American railroad
and American finance, was revealed
in part this week by the interstate
commerce commission in a report to
the senate of its investigation of that
road.
1t told of millions used like stage
money, of corporations as pawns,
10 years from the height of prosper
ity to the point where dividend has
been passed, where a dissolution suit
is threatening and where criminal in
dictments of many of the directors
who figured in its deals are at least
possibility.
Followed Covered Trail.
Hampered by unwilling witnesses,
by burned books and by all the mazes
which lawyers invented to cover the
trail, the commission estimated that
in the progress toward monopoliza-
ton of New England transportation
the New Haven stockholders have
lost between $65,OOO,OOO and $780,
100000, but little of which they may
recover.
In return, the report said, they
have on their hands properties which
pay no dividends, which eat into the
earnings Of the parent road AID
which will be a burden on its capac-
ity for many years to come.
The report deals with the manage
ment of the New Haven under for
mer President Charles s. Mellen. OF
the present directing head, Chairman
Howard Elliott, and Walter d. Hines.
special counsel, 1t says: They have
co-operated with the commission
and rendered it substantial assist
ance throughout this investigation"
Says Law Clearly Violated.
The combinations reared by the
hands of Mr. Mellen and approved
by the late j. Pierpont Morgan and
William Rockefeller, the commission
finds to be clearly in violation of the
Sherman antitrust act and mon
opoly in practical control of trans
portation of five states.
The commissions report is unus-
ual in the manner in which the d.
rectors Of the New Haven are scored
for their deeds. 1t speaks of crimi-
nal mal-administration and negli-
gence, asserts with positiveness that
the directors knew they were per-
fecting an illegal combination, and
says that the dream of transporta-
tion monopoly was unsound and mis-
chievous.
Methods Are Denounced.
The New Haven, the commission
says, employed dummy directors,
manipulated accounts, used question
able methods in increasing it's own
stock, paid the dividends of subsi-
diaries to make showing, and used
many other devices to deceive the
stockholders and the public.
1t dipped into politics, was fac
tor in invisible government" made
large campaign contributions to the
two dominant political parties,
bought officials and tried to distort
public opinion All this it did, the
commission says, to carry out a
scheme of private transportation
monopoly imperial in it's scope.
Faithless to Stewardship.
"If these directors who were faith
less to their stewardship, were held
responsible in the courts and at the
bar of public opinion for their failure
to do those things they should have
done, the lessons to directors who do
not direct would be very salutary,"
the report says.
Most of the directors of the New
Haven accepted their responsibilities
lightly. They failed to realize that
their names gave confidence to the
public and that their connection with
the corporation led the public to in
vest. When these directors were
negligent and serious losses resulted
therefrom they were guilty of grave
dereliction of duty and breach OF
trust that was wrong and criminal
in its fruits.
Says Directors Should BE Liable.
Directors should be made indi
vidually liable to civil and crimina
laws for the manner in which they