Evening star., 1914-07-17

centiy demanded that the directors JOIN
is designed to force restitution from
those responsible for funds alleged to
have been illegally expended in building
up the New Haven system.
Judge Brady issued an order Of notice
returnable next Friday to show cause
why receiver should not be appointed
and why an injunction against the dis
position Of the defendants, stock should
not be issued.
List pf Defendants.
The defendants, who include various
New Haven directors since 1903 and es-
tates of deceased directors. are Will
liam Rockefeller. Charles NJ. Pratt, Lewis
Cass Ledyard. H. NICK. Twombley,
George McC. Miller. George J. Brush,
James S. Hemingway. A. H. Robertson,
Frederick E. Brewster. Charles F. Brook
er, D. Newton Barney, James II. Elton,
Henry K. McHarg, Robert W. Taft. Will
liam Skinner. Charles s. Millen, Alex
ander Cochrane. J: P: Morgan estate.
Edwin Miner estate. 1. de v. Warner
estate. Amory w. Lawrence estate. In
addition, the plaintiffs name John L.
Cuyler, Edward Milligan. F. T. Maxwell
Theodore n. Vail, S. W. Winslow. Lau-
renee Minot. Samuel Rea. Morton F.
Howard Elliott, James L. Richards. w.
NJ. Crane, A. T. Hadley and ]. H. Hustis
as having been directors since 1909, but
as to whether their failure to cause the
road to institute restitution suit has
made them liable on account Of negh-
gence and violation Of iduciary duty the
plaintiffs state that they are not advised
and make no specific averment.
In Form of Equity Action.
The litigation is in the form Of an
equity action entered by the attorneys as
trustees under the will of Olea Bull
Vaughan. They own fifty shares Of New
Haven stock and bring the action ''in be-
half of themselves and all other stock
holders of said corporation who may be-
come parties"
The bill of complaint declares that the
defendants. on account Of breach Of d.
rectors duty, chiefly through causing the
New Haven to acquire illegally its Boe-
ton and Maine, trolley and steamship
properties. are bound to pay to the New
Haven $162, 600 600, Withdrawn therefrom
wrongfully and for ultra wires and u
legal purposes" 1t is alleged that the
losses resulting from these acquisitions
approximate $1O2 100000. and that under
the federal antitrust act the New Haven
is entitled to recover from the defendants
three-fold that amount, or $3o6O0O.OOO.
Reject States Offer.
Haven and Hartford Railroad Company
directors at a special meeting yesterday
decided unanimously to stand by their de-
cision not to sell to the state OF Massa-
chusetts their Boston and Maine rail-
road stocks under the terms imposed by
that state.
These terms contain the provision that
each certificate must bear stipulation on
- h. xr,srI
Sell his shares to the state of Massa-
chusetts at any time named. The New
Haven directors say compliance with this
sirable as a purchase on any fair basis.
Emphatic denial was made of rumors
that application for a friendly receiver
ship was contemplated.
Negotiations Probably Renewed.
President James Hustis, who presided
at the meeting, declined to amplify the
formal statement dealing with the Boston
and Maine situation. 1t was inferred.
however, that the New Haven directors
had re-opened negotiations with the De-
partment Of Justice on this point and that
further extension Of time might be
granted pending an adjustment of this
question.
AS a matter of fact Attorney General
McReynolds gave the New Haven direc-
tors until midnight Of Wednesday to ar
rive a. some agreement regarding the
sale of the Boston and Maine stock. This
time was extended when 1t was learned a
special meeting of the board had been
called for yesterday.
The only direct reference to the inter-
state commerce commissions scathing de-
nunclation and arraignment of the for
mer management was contained in the
bare announcement that a committee Of
three was to be appointed to consider the
commissions report.
Persistent Fumors of anticipated resig-
nations from the board were not SUBJ
stantiated.
The statement of the board Of directors
OF the New York, New Haven and Hart
ford railroad that "the directors have
neither receded from their positions nor
closed the door to further negotiations is
an dfcation, it is said today. that the
contemplated dissolution suit under the
Sherman law may yet be averted. The
bill in a suit in equity for the separa-
ton Of the Boston and Maine from the
New Haven system have been prepared
for some time. according to advices from
Washington.
In view Of the statement of the New
Haven directors intimating that nego-
tiations with the Department Of Justice
might be reopened, 1t was understood
here today that high officials OF the sys-
tenn expected an announcement from
Attorney General McReynolds as to the
policy of the administration.
Another point covered in the directors
statement brought out that action had
been taken previous to the interstate
commerce commissions report to recover
funds from tse John K. Billiard company
which the commission declared belonged
to the stockholders of the New Haven
railroad. This was taken to mean a
lawsuit for the recovery Of the greater
part of the 81 700. 900 which Billiard ad-
mitted to the Interstate commerce COM
mission he made for his company out of
his Boston and Maine transaction.
Dissolution Suit Likely.