The Tabor independent. [volume] (Tabor, S.D.) 1913-19??, 1914-07-16
PROSECUTIONS MAY
FOLLOW EXPOSURE
or RAILWAY LOOT

washington. July 14."One OF the
most glaring instances OF maladminis-
tration, revealed in all the history Of
American railroading," Is the Interstate
tion OF its findings In. the investigation
Of New Haven railroad financial at
fairs, reported today to the Senate.
In a report OF $4,000 words, probably
the most drastic in terms OF any ever
made by the commission, the New
Ravens directors were pronounced
"criminally negligent"
Evidence pointing to violation or law
has been transmitted to district at
torneys In Massachusetts,, Rhode ISL
and and New York, and the federal de-
partment OF Justice.
A reasonable estimate Of the loss to
the New Haven by reason OF waste
and mismanagement," says the report,
will amount to between $60,000,000 and
S90,000,000. Directors should be made
individually liable TO civil and criminal
laws for the manner in which they dis
charge their trust"
All the commissions structures were
on the management OF the New Haven
system under former President Mellen.
In justice TO the present manage
ment, the commission says II is but fair
to say that Chairman Howard Elliott
and Walker ID. Hines, special counsel
have-co- operated with the commission
and rendered it substantial assistance
through its Investigation"
Story Of Loot.
The report cites the "significant In
cidents:"
Marked features and significant
Incidents in the loose, extravagant
and improvident administration Of
the finances of the New Haven as
shown in this Investigation are the
V n Az H. - - a.
despoilment; the iniquity of the
Westchester acquisitions the
double price paid for the Rhode
Island trolleys, the recklessness in
the purchase of conneeticut and
Massachusetts, trolleya at prices
eNorbitantly in excess of their mar
ket value; the unwarranted ex-
educating public opinions" the
disposition without knowledge Of
the directors of hundreds Of thous-
ands of dollars for Influencing pub
lie sentimentj the habituaI pay
nnent of unauthorized vouchers
without any clear specification Of
detaiisj the confusing inter-reIa-
ton Of the principal company and
its subsidiaries and consequent
complication of accounts the
practice of financial lseerdemain in
issuing large blocks Of New Haven
stocks for notes of the New Eng
land Navigation company and
manipulating these securities back
and forth; fictitious sales Of New
Haven stock to friendly parties
with the design of boosting the
stock and unloading on the public
at the higher market price, the
unlawful diversion Of corporate
funds TO, political organizations;
the scattering of retainers TO at
torneys OF five states, who render
ed no iten1ized bills for service and
who conducted no litigation to
which the railroad was a party;
extensive use Of paid lobby in the
matters as to which the directors
claim TO have no information; the
attempt to control utterances Of
the press by substituting reporters;
payment Of money and the profit
gate issuance of free passes to
legislators and their friends; the
investment Of $4,000 In securities
Of New England newspaper; the
regular employment Of political
bosses In Rhode Island and other
states not for them TO perform any
service, but TO prevent them as MIR.
Mellen expresses il from be-
coming active on the other side;
the retention Of John 1. Billiard for
more than $2,700,000' IN a trans
New Haven and into which he in
vested not dollar; the inability Of
OakIeiuh Thorne to account for
S1,032, 600 of the funds Of the New
Haven intrusted to him in carrying
out the Westchester proposition;
the story of Mr.. Mcllen as to the
distribution of S1,200,0o0 for cor
rupt purposes in bringing about
amendments Of the Westchester &
Portchester franchises; the dom
ination of all the affairs Of this
railroad by MIR. Morgan and MIR.
Mellen and the absolute subordina-
tion of other members of the board
of directors to the will of those
two; the unwarranted increase of
the New Haven liabilities from
&93,000,0o0 in 1908 to $417,o0O,oo0
in 1875 the increase in floating
notes from nothing ia 1908 TO APP
proximately $40, oo0, 900 in 1918; the
Indispensable standard Of business
ethics and the abser-cs of financial
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