davidaulloa/AmericanStories huggingface dataset:
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14
BILLIARD MERELY AGENT
FOR NEW HAV VEN COMPAN I

tors Of the Billiard Company confessed
that they were dummies and knew
nothing of its operations. why men
Of respcctability and standing. as these
appear 70 be. should lend their names
as dummies passes comprehension.
Thus. throughout the entire story
of deccption. the New Haven manage
mcnt vainly endeavored to hide the
true facts behind these dummy lndl-
viduals and dummy corporations.
"No condemnation can be too severe
70 apply to the frequent use OF these
companies by the New Haven.
while stock in the New Haven road
was listed on the New York Stock EN-
charge. large portion of It's funds
were invested in blue sky corpora
tions. the officers Of which knew moth
ing of the purposes or assets OF the
companies of which they were man
agers or officers.
"A system of interlockng directo-
rates has grown up and ftourshed IN
tho last few wears which has brought
about combinations and intercorporate
relationships not conducive TO the pub
lie welfare. On the New Haven board
of directors there was a representative
of the Pennsylvania Railroad. which
railroad owned 50 900 shares of New
Haven stock: there was representa-
tive Of the New York Central, wh-c1
owned $4,000 shares; there was rep
rescntative Of insurance interests mat
owned 1000 shares. and a representa-
tive Of an express company that hal n
contract with the railroad there we're
directors who were also directors OF
.ihe Standard Oil Company. the United
States Steel Corporation, the Pullman
company, in fact, every other interest
seemed better represented on the New
Haven board than the average stock
holders interest.
"Thc practice Of one man serving on
many boards of directors cannot be 800
strongly condemned.
Through the control of voting
strength resulting from stock owner
shin by other corporations a few per
sons whose individual. holdings were
small in comparison with the volume OF
stock Of the company were enabled TO
perpetuate their full control of the
New Haven company In similar
manner the control of other great cor
porations is maintained by means Of
interlocking directories.
THE handling Of bank deposits ard
security sales of these corporations are
massed in a few hands, carrying With
them "A power and domination over
large amounts Of banking capital as
we'll as the control of great railroad
systems. These and other evils as the
result Of interlocking directories are
now well recognized and known, and
they have been emphasized by the dis
closures OF this estigation."
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14
BOSTON & MAINE CONTROL
DISASTROUS AND ILLEGAL

Before the New Haven secured con-
troll OF the Boston a. Maine Railroad
says the report. the stockholders OF
the latter had realized substantial div
idends for period Of more than fifty
years. Its credit was high and its
stock was i'm the year 1900 officially
valued by hte Railroad Commission OF
Massachusetts, at $3.50 "A share. There
is reason for the belief that this rail
road. in the hands Of its former man
agement, would have continued 10 pay
dividends and serve its constituency Of
passengers and shippers with reason
able rates and adequate facilities.
AT this stage Of the fortunes Of the
Boston & Maine, Gardner Lane. of the
banking house Of Lee. flagginson Il
Co.. of Boston. approached Lewis Cass
Ledyard. who represented in the di-
rcctorate of the Boston & Maine %
COO shares of stock held and owned by
the American Express Company. Mr.
Lane made application to Mr.. Ledyard
that the express company should eX-
change its Boston & Maine shares for
New Haven shares. As the result OF
these negotiations the American EX-
press Company sold its stock 20 the
New England Navigation Company, 4
subsidiary of the New Haven.
This was the beginning OF evil days
or bott the Boston & Maine and the
New Haven. An onerous contract then
existing between the Boston d Maine
and the American Express Company,
with six years TO run. was extended
for period Of twenty years. BY this
extended contract the Boston & Maine
is likely to lose. conditioned upon the
same volume of business, approximate
ly Sl0.000,O0o
with the American Express Com
pany stock. other stock Of the Boston
& Maine was gathered in by the New
England Navigation Company, acting
on behalf OF the New Haven, until the
latter road had controlling interest
in the Boston & Maine.
This move. disastrous as il was to
prove to both roads. was illegal under
the Massachusetts laws. and without
serious doubt under the federal anti
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14

OF the New York, Westchester &
Boston Railway the report says;
The Westchester is story OF the
profigate waste OF corporate funds.
The road was not necessary as a part
Of the New Haven system. II parallels
other lines already owned by the New
Haven and tlavcrses territory wnlch
the New Haven already served. The
onornouS sum of SIG. I3i, ! IS % was eH-
pended for a road only 1893 mics IN
cyteDt. which is being operated AZ an
annual loss of Approximately Sl'2'o'oVo'
and which will have 70 increase ITS
earnings four and one-half fold before
j. can pay its operating expenses and
fixed charges. II is inconceivable that
this enterprise could have been entered
into by the New Haven as result OF
the mandates Of good judgment and
proper railroadlng.
"Tbc Westchester acquisition was
planned and executed by special com
rittcc Of the board. consisting of d.
rcctors Morgan, Rockefeller and NIL
Ter. with President Mellen as chairman
The first information the board had
concerning the eXtrayagant acquisition
Of WcStcheSter and Port Chester Sc
curitics was on November :. 1907, when
this committee made its only report.
L was then learned that 100000
had been expended in obtaining CON
troll OF these two insolvent promotion
schemes. and that this expenditure car
RED with it an obligation to construct
two railroads. under franchises Of
doubtful validity, parallelling the eX-
;.4i,,r limo Of tho NgW HaVpu'
The report reviews President Mel
lens representations to the late J. p.
Morgan about the Westchester transac-
ton and speaks OF the franchise diff
culties and litigation which followed:
Tangle of Litigation.
"With all this conflicting litigation
uonding,' says the report, matters
were necessarily in a most unsatis-
factory state and al tangled stand
still After all the large expenditures
which this committee had made in ac-
curing the stocks Of these companies
there was still outstanding 3l.053 2
shares OF the stock Of the New York.
Wcstchcster & Boston Railroad Com
iany. which proved to be the instru-
ment Of delivery. According to tho tes-
timony OF Mr.. Melen, the deliverer APP
pearcd in the person of The late
Thomas J. Byrnes, at one time an in
spcctor Of police in New York City.
"ThCre were Just thirteen things that
had to be done, according TO Mr.. Mel
len, t. get the Westchestcr out of its
franchise difficulties. and IT is signiii-
cant that all amendments 10 the fran
chises were obtained and the sequence
was that the New Haven, in addition TO
these things. received 30,l3l OF the
3l.052l2 outstandig shares Of the New
York. Westchestcr e. Boston Railroad
Company stock. which Mr.. Mellen tes-
tined was not worth 10 cents pound.
he testimony is somewhat occult, but
the character Of the transaction is no
less certain.
This money was used for corrupt
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14

trust law; but impolitic, unwise, IL
legal and disastrous as IL was 10 prove,
il was undertaken.
Shifts and EyasiOns.
with the realization OF the lie
gality Of its control Of the Boston &
Maine STOCK began the startling series
Of transfers. shifts and evasions BY
which it was sought to make 1t APP
pear that the New Haven had Invested
itself of the Boston & Maine stock,
while at all times il was being re-
tanned IN friendly hands and under
the control Of the New Haven.
This stock was. during all these
migratons, financed, owned and con-
trolled by the New Haven. And by
virtue of this ownership and control
of this stock during all this time 1t
placed its own officials in charge OF
the Boston & Maine and selected d.
rectors thereof.
"The movement downward Of Bos.
ton & Maine stock did not begin unit!
the Mellen- MorganR Rockefeller man
agement was forced upon II. The de-
probation of the Boston * Maine
stock after coming into the control
of these men was indeed rapid. Ihese
great names proved to be of no reli-
ance to investors.
THE management Of the Boston q
Maine by the New Haven was unwise.
IL began in illegality and IN a lust
for extended monopoly and has re-
suited in great depreciation and seri-
Gus impairment of credit.
Thus by mere exchange of stock
those controlling the New Haven were
enabled to extend their domination
over almost the entire railroad prop
erty in five states. Those who at hrst
we're merely employed as fiscal agents
Of the railroads to negotiate their Sc
curjties used that knowledge in the
effort to become the masters IN su-
preme control of the transportation IN
terests of the country. This IS an
illustration of what has been most
dangerous tendency in recent times
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14

"Jbis investigation has demonstrated
that the monopoly theory Of those co..
trolling the New Haven was unsourd
and mischeyous in It's effects. To
achieve such monopoly meant the rcck-
less and scandalous expenditure Of
money: 70 meant the attempt 20 control
public opinion; corruption Of govern
nent: the attempt 10 pervert the po-
Hucal ard economic instincts Of the
people iu .ngOlent defiance Of law.
Through exposure Of the methods 81
this monopoly the invisible government
which has gone far in It's efforts %
dominate New England has been made
visible. II has been clearly proved how
pubiic opinion was distorted; how Oh
cials who were needed and who cOg d
De- bought we're bought; how De"sra-
pcrs that could be subMdizcd were sub
sidized; how college professor aId
pUblicjsts sccrelly accepted money from
the Ncw Haven while masking as a
representative of Il great American M
verify and ~ the guardians 81 the .a-
terests Of the people; how agcncic5 Of
information % the public we're prost.-
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14
PPOFLIGATE WASTE IN The
WESTMINSTER TRANSACTION

nurposcs. and the improper eXpendl-
lures covered up by the transfer to the
New Haven Of these worthless securI-
tics.
ain explaining how these negot'a-
lions were conducted Mr.. Mellen test
fed that it was intended that one snare
Of New Haven stock should he eN-
changed for three 'hares Of Westches-
ter stock. When the New Haven s'ocs
was not Immediately al hand he issued
10 the messenger who brought West
chester stock a due bill which was IN
terms an order on himself 10 pay on
demand to bearer the specified number
of shnrcs Of New Haven stock, or IT.
ccuivalert in cash al Sl5O a snare
with accrued dividends. Hany OF these
due bills were not presented until MI
Mellen's connection with the New Ha-
ven was severed. and five of them, az
gregating 900 approximately, are
still outstanding. go,
During the time the due DIS were
outstanding Mr.. Nellcn collected tire
dividend. on the New Haven stock
which they represented, and at each
dividend neriod unknown mes cngers
would appear in his Office a. the Crane
Central Station IN New York City and
demand these dividends, which Mr.
Ncllen would then pay with his per
,onal checks. so drawn that the iden-
titv Of tho persons casning them could
not be ascertained Il seems very
strange that Mr.. Mellen was not able
to identify with any particularly any
enc with whom he had these transac-
lions EXCEPT the late Thomas J. Byrncs
Corrupt and Unlawful"
"No comment is necessary 10 make
clear to the mind the corrupt and un,
lawful nature OF this transaction, ana
it would seem that the amount illegal
lv expended could be recovered from
Mr.. Mcllea and the directors who au-
thOrized il.
THE total sum expended a the re-
suit of the action OF this commute,
aggregate Sli,090.00S Is.
"When the details OF TINS acquisi-
ton were exposed in this investigation
il was urged in explanation that. b.
reason OF the heavy terminal charge
eXacted from the New Haven on pa
eengers delivered ct the Grand Central
Station. it was very desirable that the
New Haven should have another en-
trance into New York City and that
the Westminster provided such an en-
try. A very casual study. however, OF
the map Of the Wcstchcster and tn
New Haven lines into New York i'm
peaches the rcasonablcness Of any such
explanation.
"What could have been the motive
of unloading the Westchester upon the
New Haven at the expense of the
stockholders Of the latter must be left
largely to conjecture. The ono accom-
plishcd result, however, Of the West
chester transaction was the sitting OF
possible competition into New York
City from Now England.
"The blame for the Wcstchcstcr rests
,ouarelv upon the directors OF the New
Haven road. Some are guilty for acti
committed; others, the greater number
for their failure 10 act. They are
alike culpable and responsible to the
stockholders"
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14

al the expense OF the stockholders or
the New Haven. upon whom ana 'he
public the yoke OF giving vaIue TO th1se
securities ultimately rested, ana 'hs
New Haven stock was diluted to the eA-
tent OF the water thus added.
This gas company also owned some
Connecticut trolley lines, and II 'its
made further condition of the Rhode
Island trolley acquisition that the Ne"
Haven take over these properties.
when the details mad been worked
out By Mr. Mellcn for the assum ng
Of this additional burden the board OF
directors without question acqulesccd.
Mr.. Mellen testified that these Connec-
tlcut trOlleys represented payment OF
about sl0,000,000 more than their
value.
This transaction seems such an eX-
travagant purchase "a makes X mat
ter OF interest just who owned the Sc
curitics of the Rhode Island Securities
Company. This information could be
furnished from the stock bonds Of that
company. but during the progress CT
this investigation 10 was learned that
these books had also been burned.
The Rhode Island and Connecticut
trolley ventures are further evden ,es
OF the prodigality in the expenditure
of the money OF the New Haven stock
holders in carrying out an unlawful
policy OF transportation monopoly.
Devious Steamship Deals.
As to the steamship lines which we're
acquired at an approximate cost Of
$4,000, 900. the report has this 10 say:
THE testimony shows that The
physical valuation of the properties
ACQUIRED as result of these OUTLAWS
approximates something like $1,000
600
These steamships lines were not ac-
quired by the New Haven openly. but
coyertlv and b. devious methods
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14

said Mr.. Mellen. was done with my
complete knowledge and sanction. with
two exceptions. | am prepared to de-
fend every one of these acts before any
tribunal in the country, including the
great tribunal of public opinion
The refusal of the directors to sell
the roads steamship holdings and the
Westchester deal were the TWO eXcep-
tions to which Mr.. Mellen referred.
eff the purchase OF Boston & Maine
stock by the Boston Holding Com
pany," he continued. sis TO be the basis
Of prosecution under the Sherman anti
trust law. or any other law, the COM
monwealth OF Massachusetts should be
joined rs co-defendant and cO-conspir-
ator against the law of the United
States and the welfare Of the people
of New England, for, as is well known.
this purchase was expressly authorized
by the Massachusetts Legislature.
81 wish the federal prosecuting au-
thorities would name the common
wealth as a Joint defendant. | would
gladly testify to the implication of
some men who are quite prominent in
Boston financial circles.
81 am getting out OF this only the un-
certain glory of having been a twin
commander with the late J. p. Morgan
Of crew Of piratical buccaneers. |
think that it is great honor to have
been associated with Mr.. Morgan. If |
had 20 choose my associates there is no
man in the world | should prefer to be
associated with.
"The commission had to knock some
one. and as | was the only live man
they could get they picked me as the
target
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14
MEN WHO SERVED
ON NEW HAVEN BOARD

The list of directors Of the Ne"
York, New Haven & Hartford Kali
road as last constituted under the
presidency of Charles 5. Mei'en
was given out yesterday at the Ne"
Haven Offices as follows:
William Rockefeller, New York;
Charles +. Brooker, AnsOnia, Conn.,
Edwin Miner, Moosup, Conn;
William Skinner. HolyOke, Mass
ID. Newton Barney. Farmington'
Conn: Charles ). Mellen, New Ha'
ven: Robert W. Taft. Providence'
James :. Elton, Waterbury; James
s. Hemingway, New Haven n
Heaton Robertson, New Haven;
Frederick +. Brewster, New Haven;
Henry n. McHarg, Stamford; Alex
ander S. Cochrane. Boston: John l..
Billiard, Meriden; George T. Baker,
New York: Samuel Rea, Philadel-
phia: Laurence Minot, Boston; VI.
F. Plant, Groton. Conn: J. DE v.
Warner, Bridgeport; Thomas DE
Witt Cuyler. Philadelphia: Edward
MilIigan. Hartford; Theodore y.
Vail, Boston; Francis 7. Maxwell,
Rockville. Conn; Sidney W. Win
slow, Boston: John 7. Pratt, New
York.
Other men who served as direct
Ors of the New Haven at some time
during the period covered by the
Interstate Commerce Commissions
report are:
John VI. Hall. New Haven: Percy
II. Todd. New Haven; \. ID. Os-
borne, New Haven; J. ". White
more. Naugatuck. Conn; 7. W.
Cheney, Manchester. Conn: Charles
7. ChOate. Boston: Augustus >.
May. New Haven: T.. ID. Robbins,
New Haven: John e.. Parker. New
Haven: II. Nick. TwOmbly. New
York; George J. Brush. New Haven;
William ID. Bishop, Bridgeport;
George VI. Miller. New York; Lewis
Cass Ledyard, New York; Nathaniel
Thayer, Boston; Amory \. Law
renee, Boston; Royal {. Taft, Provi-
dence: Joseph Park, New York; C..
VI. Depew, New York: Carlos
French. Seymour, Conn; +. l..
Maxwell, Rockville, Conn.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14
N. H. DEFENCE WILL
Be LIMITATION LAW
Old Directors, if Sued,
Will Say That Statute
Gives Immunity Now.

Beyond a refusal by James II. Iustis,
acting chairman of the New Haven, to
discuss the Interstate Commerce Com
missions report until II was before
him in its entirety. no formal state
ment was forthcoming from the New
Haven management yesterday.
Privately officers and directors OF
the company admitted that the report
was a severe arragnment OF the COM
pany and that il called for action. but
thcY said that none could be had until
& meeting Of the directors Is held.
This meeting will be called 10 order
Thursday. hurry call having been is
sued yesterday afternoon. Some az
ton may then be decided upon. though
it is more likely that because OF the
immensely of the proposition placed
before it. the board will require time
TO agree on any course.
Those OF the former directors and
officers OF the company. in charge in
the Mellen days accessible yesterday
were not discussing the report for pub
LEGATION. The Tribune violates no con
fdence. however. when il states that
they will take the position that what
ever losses accrued TO the company
were the results of errors Of judgment
that IN any event the statute of limi-
tations will act as bar 10 practically
any action that may be begun. The
statute runs six years.
Howard Elliott. chairman OF the
company, whose management the In
terstate Commerce Commission was
careful to specify is not to blame for
what Il CrtiClseS. will be at the meet
Ia, l., -,
II. for a brief rest. but will probably
arrive in New York this afternoon or
tonight to resume full charge OF the
company's affairs.
Mr.. Elliott will direct whatever suits
may be begun in line with the report
and recommendation Of the commits
sion. although there was grave doubt
IN New Haven circles yesterday as TO
what suits, if any, could be maintained
because of the operations of the statute
of limitations and of evidence showing
culpable neglect. or worse. According
to lawyers familiar with the New
Haven's affairs. both of these elements
seem TO have been overlooked By the
Interstate Commerce Commission.
With the statute of limitations run
ming six years. these lawyers point
out. that the Westchester transaction
was. in the main. completed before the
panic Of 1907. and is. consequently.
beyond litigation. A few months re-
main in which action might be begun
TO recover the 100000 paid through
Inspector Byrnes for Westchester
stock by Mellen. and some OF the vast
sums spent for lobbym. ~ Massa-
chusetts and elsewhere.
None Of the directors who could be
seen yesterday would discuss the re
port of the commission. j. p Morgan.
who was director for few months
after the death of his father. had not
seen the report. and George NJ. Miller,
who was active in the Westchcster
matter, was silent for the same reason.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14

Dummy companies and dummy orcer;
and directors were used IN nnancIdi
manpuvrinc that resulted IN tne NC"
Haven controlling these steamship
an connection with these steamship
purchases il was necessary 10 nav
nicrs The record shows money pay
ments in connection with pier leases
yhich were Enthusiastically improper
and these payments were covered up
nv being charged on the books OF otnel
companies 10 the New Haven uhie,
such headings as repairs on steamers.
There were payments TO one JVhi'
Hall McKay Of many thousands OF 'oI-
lars. for which no tented vouchers
were given. Mr. Mckay left for Europe
after this investigation was con
menced and his evidence could not De
secured. These pier leases IN the Ivy
OF New York are controlled by PUBIC
officials. as the municipality owns lhe
piers. and arrangements for the leases
had TO be made through these otlciais;
But because of the methods employeu
TO conceal these expenditures oy IN
creases of capital stock and otherw Sc
IL has been impossible 20 give an!
total amount OF these payments.
After Mr.. Melen had obtained con-
trol of every boat line of any impoir-
lance in New England, he suddenly
changed his attitude when the public
discovered the real ownership. 1t vas
then that he proposed and urged that
they be disposed Of. but in this ne was
ovcrridden by his board.
"One of the most complicated prob
lens resulting from corporate entan-
clement and intercOrpOrate transac-
tions is the method by which the New
York. New Haven & Hartford Railroad
Company eliminated the steamers Yale
and Harvard from competition in New
England passenger traffic and secured
control of certain freight steamers and
Mharf nronertN In BOSTON"
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14

"Ihc purchase Of the ,,hodc Island
trOlleys was another instance Of mill
ions wasted IN acquiring propertleS
that bring an annual deficit instead Of
a surplus, and constitute liability IN
stead Of an asset IN the New Ho7ca
system.
"The evidence shows that the Rhods
Island trolley transactions were delib-
eratcly entered into with n full kHow'-
edge Of the large deficit that hey
would bring. and with the determina-
tion TO acquire trolley control in Provi-
dcncc regardless Of expense.
"A committee Of the board Of direc-
tors Of the New Haven had beer APP
pointed for the purpose Of looking into
the Providence trolley situation. wi-r a
view OF purchasing that property. and
this committee, after considering he
proposition, reported adversely. = IL
content 10 abide by this action of his
board, Mr.. Mcllen, after some six