The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1914-07-13

building of new railroad. much less
one at q cost of 5000. 600. 1t is am
biguous and was evidently intended to
CONCEAL a secret purpose The full
BOARD was not taken into the confidence
OF those directors who wanted these
Securities purchased, and no report was
fver made by this committee placing
THE situation as they found IT before the
i board.
sQuarely upon the directors of the New
Haven road. Some are guilty for acts
committed; others. the greatest number.
for their failureSto act They are alike
culpable and responsible to the stock
holders.
Rhode Island Trolleys.
The purchase of the Rhode Island
trclleys was another instance Of mil
lions wasted in acquiring properties
that bring an annual deficit instead OF
a surplus, and constitute liability in
stead OF an asset in the New Haven
Taxing into account this expendi-
ture and the interest on the money
which the New Haven has invested
in the Rhode Island trolleys. these
properties have stood the New Haven
system an average annual loss OF
approximately $s4S.6s0.
The evidence shows that the Rhode
Island trolley transactions were de.
liberately entered into with q full
knowledge of the large deficit that
they would bring, and with the de-
termination to acquire trolley con-
troll in Providence regardless Of ex-
pense.
Steamship Deals.
-The New Haven, from time to time,
had felt the harassing effect Of COM
petition from the steamship lines
that piled between the several large
cities that II served. Restless OF any
limitation of his power. President
Meilen proceeded to acquire the
steamship lines and thereby stifie
this Interference with the New Haven
properties.
portation Company cost the New
Haven 53S,91e.7s; the Eastern
Steamship Corporation cost $4,000 900;
the Merchants and Miners Transpor-
New Bedford Marthas Vineyard and
Pawnicket Steamboat Company cost
s141,7o0; the New England Steamship
Company cost s12,l0e.0e0: the Maine
steamshiP Company $1,000, or total
'fhe testimony shows that the physi-
cal valuation of the properties acquired
as a result of these OUTLAWS approx
mates something like 100000. The
New Haven advises that 1t has re-
Gently disposed of its holdings In the
Merchants and Miners Transportation
Company at loss OF sS.5e4,5oo
Acquired Covertly.
These steamship lines were not ac-
ouired by the New Haven openly, but
covertly and by devious methods.
Dummy companies, and dummy officers
and directors were used in financial
maneuverfng that resulted in the New
Haven controlling these steamships.
In connection with these steamship |
purchases il was necessary to have
piers. The record shows money pay
ments in connection with pier leases
which were Enthusiastically improper,
and these payments were covered up
by being charged on the books of
under such headings as repairs on
steamers.
Boston and Maine Deal
Before he New Haven secured con-
troll OF the Boston and Maine railroad.
the stockholders of the latter had real
lied substantial dividends for a period
Of more than fifty years. Its credit was
high and its stock was. in the year
1900 officially valued by the railroad
commission of Massachusetts at $50
Per share.
The Boston and Maine. before the
New Haven secured control, was con-
ke[NauNeIy mdnd8eQs udQ q tOW Gdpi-
talization, and only moderate debt.
Its capitalizationswas 100000 common.
$4,000 preferred. and its debt was
Sss.00o0o0
this railroad in the hands Of its former
management would have continued to
pay dividends and serve its constitu-
ency OF passengers and shippers with
reasonable rates and adequate facilities. |
AT this stage of the fortunes of the !
Boston and Maine, Gardner Lane. of
the banking house Of Lee, Higginson & ]
Co.. of Boston, approached Lewis Cass |
torate Of the Boston and Maine 5000 |
shares of stock held and owned by the
American Express Company. Mr.. Lane |
made a proposition to Mr.. Ledyard that |
the express company should exchange
!ts Boston and Maine shares for New |
Haven shares.
Buys Express Stock.
IA the result of these negotiations. |
the American Express Company sold
its stock to the New England Naviga-
ton Company. subsidiary OF the New
Haven. This was the beginning OF
evil days for both the Boston and
Maine and the New Haven.
With the American Express Com |
psny stock, other stock of the Boston |
and Maine was gathered in by the New
England Navigation Company. acting |
on behalf OF the New Haven, until the 1
latter road had a controlling interest |
IN the Boston and Maine. This move, |
disastrous as il was TO prove to both |
roads, was illegal under the Massa- |
chusefts laws and. without serious |
doubt, under the Federal antitrust law;
hut impoitic unwise, illegal. and dis |
sstrous as it was to prove, 1t was I'M |
dertaken. |
It's illesality was soon demon |
strated by a decision Of the supreme |
court of Massachusetts,, relating to |
the New Haven holdings in Massa- !
chusetts trolley companies.
Transfers and Shifts.
with the realization of the illegal |
ity Of it's control OF the Boston and !
Maine stock began the startling |
series of transfers, shifts. and !
.vasions by which II was sought to |
make il appear that the New Haven |
had Invested itself Of the Boston and
Maine stock, while at all times II was |
being retained in friendly hands and |
under the control of the New Haven. |
The management OF the Boston and
Maine by the New Haven was unwise. |
II began in illegality and in lust for |
extended monopoly and has resulted |