The chronicle=news., 1914-07-13

Washington, July 13.-"One OF
the most glaring instances of NAL
administration revealed in all the
history OF American railroading," is
the interstate commerce commits
sion's Characterization of its findings
in the investigation of New Haven
financial affairs. reported today to
the senate.
In a report OF 10000
words, probably the most dras-
tic in terms of any ever made
bv the commission. the New Haven's
directors were pronounced "criminal-
ly negligent" Evidence pointing tn
violation of law has been transmit
ted TO district attorneys in Massa-
chusetts. Rhode Island and New
York. and the federal department OF
Justice. A reasonable estimate OF
the loss to the New Haven by rea-
son of waste and mismanagcment,
says the report, will amount to be-
tween 100000 900 and 100000, 900.
Directors should be made individu-
ally liable to civil and criminal laws
for the manner in which they dis
charge their trust"
Criminal negligence" and one Of
the most glaring instances of NAL
administration revealed in Ii the
history OF American railroading." !"
were the terms the interstate com
merce commission employed today
in reporting to the senate on Its IN
vestieation OF New Haven railroad
financial affairs.
The commission's conclusions may
be summed up this way:
Losses to New Haven stockholders
for the acts OF their directors will
900. Suits to recover the money
should lie in some cases.
Many of the transactions. charac-
terized violation of the laws of New
York, Rhode Island and Massachu-
sets and tho federal antitrust laws,
have been reported to the authorities
OF the states and the federal depart
ment Of justice.
The depreciation of the Boston
and Maine began when the "Melien-
Morgan-Rockefcller management"
came into control.
John l.. Billiard and the Billiard
company were merely agencies OF
the New Haven: Billiard never used
a dollar of his own money and burn
cd his books and papers. 1t was not
the understanding of the New Ha-
ven board that he should take
profits of more than $4,000. 900.
"All the assets OF the Billiard COM
pany belong to New Haven stock
holders. and n suit by the railroad
against Billiard and those who par
ticipatcd in the transactions should
lie maintained"
Dummy corporations and their
use. which the report says In the
New Haven was frequent. are con-
demned in unmeasurcd terms.
The system OF intcrlocking direc-
tors is condemned as 1t existed on
the New Haven and in general. The
commission says 1t found most every
other interest was better represented
on the New Haven board than the
average stockholders.
President Mellen's dealing with
former Police Inspector Byrncs OF
New York. in the Westchester trans
action were branded as corrupt and
unlawful" The amount Illegally OK
pended should be recoverable.
The purchase of Rhode Island
trolley lines and coastwise tcamships
were described as extravagant and
wasteful.
All the transactions the commits
sion holds. were consummatcd with
the object OF setting up complete
transportation monopoly in New
England In violation of the federal
statutes.
This stock was turned back to the
navigation company for $3.37O.OS2.
1t would seem that a suit by stock
holders for the recovery of the profit
which is uniustly due the navigation
company. II any, was made by Bill
lard in the transactions involving
these additional shares could be
maintained.
IF any expenditures were made in
violation of the antitrust laws of
the United States are not such cN-
penditures ultra wires. And is II
not the legal obligation or the direct
crs to satisfy out OF their own tor
tunes any loss which results to the
company?
DIRECTORS cannot without ac-
countability deplete a corporate
treasury in ventures which arc IN
violations of the laws of the land"
Washington. July 13.-All the
commissions structures were on the
management OF the New Haven sys-
to,,, ,p5or formor prosidopt Mollon