New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-03-20
Charges of Isaac M. Cate
Reviewed and Some
Are Upheld.
NO CORRUPT ACTS
OF OFFICERS FOUND
Directors Advised to Give More
Careful Supervision of COM
pany's Affairs.


pointed to inquire into the affairs OF the
American Locomotive Company as the
result OF charges brought by Isaac NJ.
Cate. large stakeholder. Of Baltimore,
was sent 10 the shareholders yesterday.
The report. which is concurred in by the
advisory committee appointed because of
the discussion which took place at the
annual meeting last October, is signed by
J. W. Griggs, formerly Attorney General
of the United States; Thomas Thacher OF
the law firm OF Simpson, Thatcher & Bart
| lett, and Albert H. Wiggin. president Of
the Chase National Bank. The advisory
committee consisted of William +. Will
Public Service Commission, and Dr. l..
Clarke Seelye, for many years president,
OF Smith College.
Mr.. Gates charges covered a great
range of topics. some of them rejecting
upon the integrity OF the officers and di-
rectors OF the locomotive company and
others criticlsing the business manage
ment and policy. Among other things
Mr.. Cate wanted to know why the manu-
facture OF automobiles had been discon-
tnued and why tho company had pur-
chased It's materials and supplies from
other concerns at prices alleged to be
higher than would have been the case
had they been made at the company's
own plant.
No evidence Of corrupt practice was
found on the part Of the officers by John
Havron, the expert retained by the COM
mittee of inquiry, but some of Mr.. Gates
charges were apparently substantiated, as
it was held that the directors had not
given as frequent and careful supervision
Of the compauys affairs as good business
requires. \ suggestion made by the COM
mittee early In its Investigation, that the
executive committee meet at least once
week and that all contracts and transac-
tons of importance be submitted for its
approval, was adopted.
Tho committee also recommended con-
sidcration Of the question whether IL
might not be more economical for the
company 10 manufacture various articles
which it now purchases from other COM
panies by influencing the railroads TO
change their specifications which required
such practice.
Some Of thcs officers OF the American
Locomotive Company charges Mr.. cate,
are receiving eXorbitant salaries in adj
dtion TO yearly bonuses. The committee
recommended that these salaries might be
reduced without loss of efficiency. The
bonus plan was also considered of doubt
full wisdom. The transfer OF the general
offices from this city. in whole or in part,
TO some one Of the plants was also con-
sidcred a practical means Of cutting down
general expenses.
REGARDING the discOntinuance of the
manufacture OF automobiles this, in part,
is said:
"The manufacture Of automobiles was
undertaken by the company under the
presidency of Mr.. Galloway At that time
the automobile business was in an eN-
detrimental stage, had not fully developed
and there was uncertainty which could
only be solved by experience as TO what
particular lines Of the trade would he
profitable The company confined itself to
the manufacture OF high priced cars.
During its whole operations competition
was very strong. The company tried to
get the best available managers, but it
did not always succeed in getting ideal
men. We can now see that it would have
been better if the business had been
closed out Ions ago
The sale of 1900 shares Of the pre-
fcrred stock of the American Locomotive
Company to Harvey Fisk q Sons, on
October 30. 1907 criticised as unwisc by
Mr. Cate. was defended by the committee
In view of tho unfavorable financial con-
ditlons existing at that time This trans
action" it said. actually showed the
company profit, for it sold the common
stock IT acquired in the spring and sum-
mer for an average Of over $50 and at
profit Of about $4,000