Norwich bulletin., 1914-07-14

Washington, July 13.-The story of the relentless and profigate' financial operations of the New Haven railroad, one of the most remarkable chapters in the history of American railroads and American finance. was revealed in part today by the interstate commerce comm mission in a report to the senate of it's investigation of that road. 1t told of millions used like stage money. of corporations as pawns in monster game with all New Engiands trans portation as prize, which led the New Haven in the ten years just passed from the height of prosperity to the point where a dividend has besn passed, where dissolution suit is threatening and where criminal indict- nents of many of the directors wno figured in it's deals are at least a pos Ability.
 Commission Hampered in Every Way.
 Hampered by unwilling witnesses. by burned books and by all the mazes which lawyers invented to cover the trail, the commission estimated that Tn the progress toward monopolizations sof New England's transportation the New Haven stockholders have lost between s65, 100000 and $90, GOO, 900, only a little of which they may recover In return, the report said. they have on thcir : hands properties which pay no devil dends, which eat into the earnings Of the parent road and which will be a burden on it's capacity for many years to come
 The report deals with the manages ment of the New Haven under former present directing head. Chairman Howard Elliott, and Walker D. Hines, special counsel, the commission says:
 They have co-operated with the commission and rendered it substantial assistance throughout this investiga- tion.''
 Reared by Mellen, Approved by Mor-
 gant
 The combination reared by tho hands of MT. Mellen and approved by the late J. Pierpont Morgan and Will liam Rockefeller, the commission finds to be clearly in violation of the Sher- man anti trust act and monopoly in virtu&l control of the transportation of five states.
 The commissions report is unusual in the manner in which the directors of the New Haven are scored for their deeds. It speaks of criminal malad- ministration and negligence, asserts with posltiveness that the directors knew they were perfecting an illegal combination, and says that the dream of a transportation monopoly was un- sound and nlichievous.
 Questionable Methods.
 
 says, employed dummy directors, manipulated accounts, used question: able methods in increasing its own stock. paid the dividends of subsidi- aries to make a showing and used many other devices to deceive the stockholders and the public. It dipped into politics. was a factor in invisible government" made large campaign contributions to the two dominant po- litical parties, bought officials. and l,-4- T. s- -s-.- A ks-. it did, the commission says, ito carry out a scheme of private transportation monopoly imperial in it's scope"
 Faithless Directors.
 If these directors who were faith less to their stewardship were held responsible in the courts and at the ber of public opinion. for their failure to do those things they should have done, the lesson to directors who 10 not direct would be very salutary," says the report.
 Most of the directors of the New Haven accepted their responsibility 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.
 .sWhen these directors were negli- gent and serious losses resulted there from they were guilty of a grave dereliction of duty and breach of trust that was morally wrong and criminal in it's fruits.
 Directors Should Be Held Liable.
 Directors should be made individ- ually liable to civil and criminal laws for the manner in which they dis charge their trust. A corporation can be no better or worse than those who operate it It should be just as grave a crime to plunder stockholders or the public through a railroad corporation as it is personally to rob an individ- ual.
 Of the millions lost to New Haven stockholders. the commission esti- mates that possibly sS,000,080 may be recovered by proper action. Evidence in it's possession tending to show vio- lations of the laws of New York, Massachusetts and Rhode Island have been turned over to the proper au- thorities in those states, This de- velopment of justice has been fur testimony secured by the commission, but there is no federal statute under which the government can aid the stockholders in recovering any of their losses.
 A suggestion is made that any ex- penditures in violation of the anti trust act were beyond the powers Of the directors and raises the question Of whether the directors may not be held personally responsible to satisfy any losses which resulted.
 "Directors," the c0mRzissieH declares, ~C8nn0t without accountability dep1ete . corporate treasury by ventures which are in violation of the laws of the 1and."
 f1H it's invest;sasion the commission found tba1 tho NeW HaNaa had @s5