The Oskaloosa herald., 1914-07-16
MILLIONS STOLEN
FROM NEW HAVEN
COMMERCE Commission eAREs
LOOT OF EASTERN ROAD.
BLAME IS PUT ON DIRECTORS
Federal Body Calls Financing One OF
Most Glaring Instances of MaIad-
noinistration in History Of
Nations Raiiroading.

ninistration in History of
, Nations Railroading.
Washington, July 14.-"One of the
most glaring instances OF maladminis-
tration revealed In all the history OF
American railroadiRg," is the inter
state commerce cc@mission's charac-
terization Of its findings in the inves-
tigators Of New Haven railroad finan-
cial affairs, reported to the senate.
In report of 10000 words, prob
ably the most drastic in terms of any
ever made by the commission, the
New Ravens directors were pro-
nounced "criminally negligent"
Evidence pointing to violation of
law has been transmitted to district
attorneys In Massachusetts,, Rhode Is
land and New York. and the federal
department OF justice.
The report, moreover, will be made
the basis of proceedings by stock
holders to recover millions of dollars
alleged to have been wasted by the
management.
Loss Put at SOC, ooo, 900.
"A reasonable estimate of the loss
to the New Haven by reason of waste
and acknowledgement" says the report,
will amount to between sixty and
ninety million dollars. Directors
should be made individually liable to
civil and criminal laws for the man
ner in which they discharge their
trust"
All the commissions structures
we're upon the management of the
New Haven system under former Pres
ident Mellen.
In Justice to the present manage
ment, the commission says 1t Is but
fair to say that Chairman Howard
Elliott and Walker D. Hines, special
counsel, have co-operated with the
commission and rendered 1t substan-
tial assistance throughout this inves-
tigation."
Citations In Report.
The report cites these significant
Incidents:
cidents in the loose. extravagLnt and
improvident administration of the
finances OF the New Haven, as shown
In this investigation, are:
Boston & Maine despoilment.
lnequity OF the West Chester acquisi-
ton.
Double price paid for the Rhode Is
land trolleys.
Recklessness in the purchase of Con-
necticut and Massachusetts, trolleys
at prices exOrbitantly in excess of
their market value.
Unwarranted expenditure of large
amounts in educating public opin-
ION"
Disposition, without knowledge Of the
directors of hundreds of thousands
of dollars for influencing public
sentiment
Habitual payment OF unitemized
vouchers without any clear specifi-
cation of details
Confusing INTERPOLATION of the princi-
pal company and its subsidiaries
and consequent complication of ac-
counts.
Practise Of financial legerdemain 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 unload
ing on the public at the higher
market price"
Unlawful diversion of corporate funds
to political organizations.
Scattering of retainers to attorneys of
Ave states, who rendered no item
lied bills for services and who con-
Quoted 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
Attempt to control utterances of the
press by substituting reporters.
Payment of money and the profiigate
issue of free passes to Legislators
and their friends.
Investment of 100000 In securities Of
New England newspaper.
Regular employment of political bosses
in Rhode Island and other states, MOI
for the purpose Of having them per
form any service but to prevent
them, as Mr.. Mellen expresses 1t
from becoming active on the Other
side"
Retention by John l.. Billiard OF more
than $2,700,O00 in a transaction II
which he represented the New Ha
ven and in which he invested not ,
dollar. .s
Inability OF Oakleigh Thorne to &C
count for $1,0S2,000 of the funds o
the New Haven intrusted to him II
carrying out Of the West Cheste
proposition, ..
-. lf,k