The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1914-07-13
MAkESDRAST|C REPORT
Declares, in Statement to Sen
ate, That Officials Should Be
Made Individually Liable TO
Civil and Criminal Laws

washington. July l3.-"One of the
most glaring Instances of mal-admin-
istration revealed in all the history of
American railroading." is the inter-
state commerce commissions charac-
| terization OF the findings of the inves-
! tigation Of the New Haven railroads
| financial affairs, reported today to the
| Senate.
In report of thirty thousand words.
probably the most drastic in terms OF
any ever made by the commission, the
New Haven's directors were pronounc-
ed "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.
"a reasonable estimate of the loss
to the New Haven by reason of waste
and mismanagement" says the report,
"will amount to between sixty millions
and ninety millions. The directors
should be made individually liable to
civil and criminal laws for the manner
in which they discharged their trust"
All of the commissions structures
were upon the management of the
New Haven system under former
President Mellen. THE present man
agement," the report says. "coo-perat-
ed with the commission and rendered
substantial assistance in this investi-
CATION" The report cites these sig
nificant Incidents:
The marked features and significant
incidents in the loose. extravsgant
and improvident administration of the
finances of the New Haven, as shown
by this investigation. are the Boston
& Maine dispoilment; the inequity of
the West Chester acquisitions: the
double price paid for the Rhode Island
trolleys; recklessness in the purchase
of the Connecticut & Massachusetts
trolleys at prices in excess Of the
market value; unwarranted expendi-
ture of large amount i'm educating pub
lie opinion; disposition, without
knowledge OF the directors. of hun
dreds of thousands of dollars for in
fluencing public sentiment; habitual
payment of unitemzed vouchers with
out any clear specification of details;
confusion i'm the INTERPRETATIONS OF the
principal company and subsidiaries
and consequent complication of ac-
counts; the practice of financial leeer-
demain In issuing large blocks of New
Haven stocks for notes of the New
England Navigation Co.. and the man
ipulating of these securities back and
forth; fictitious sales of New Haven
stock to friendly parties with the de-
sign of boosting the stock and unload
ing on the public at a higher market
price; unlawful diversion Of corporate
funds TO political organizations; scat
tering of retainers to attorneys Of five
states who rendered no itemized bills
for service and who conducted no liti-
cation TO which the railroad was a
party; extensive use of n paid lobby
in matters of which the directors
claim TO have no information; at
tempts to control utterances of the
press by subsidizing reporters, pay
ments of money and prohigate issue
of free passes to legislators and their
friends; investment of four hundred
thousand in the securities of a New
England newspapers: the regular en-
ployment of political bosses in Rhode
Island and other states, not for the
purpose of having them perform any
service, but to prevent them, as Mr..
Mellen expressed it, from becoming
active on the other side; and the re-
tention by John L. Billiard of more
than two million. seven hundred thou
sand i'm a transaction in which he rep
resented the New Haven and into
which he invested not dollar; the
story of Mellen as to the distribution
of twelve hundred thousand for corr
rupt purposes in bringing about
of the West Chester and
Port Chester franchises: domination
of all the affairs of this railroad by
Morgan and Mellen, and the absolute
of other directors TO the
will of these two; the unwarranted I'm
crease of New Haven liabilities from
millions i'm 1903 20 four
hundred and seventeen millions in
Continued on 9th Page, 4th Column.