Daily capital journal. (Salem, Oregon) 1903-1919, 1914-05-19
u
R. R. Dr. ;%gQRS
BOWED DOW g
MORGAN s WISDOM
President Menen Tells Of En-
jOying Great Financier's
Confidence and Trust
WAS STAKE HOLDER"
OF NEW HAVEN STOCK
Believed the Westchester and
Port Chester Projects for
Holding Up Road

Washington, May 19.-The inside
story Of the financial undoing of the
New York, New Haven & Hartford
railroad was told before the interstate
commerce commission here today by
Charles S. Mellen, former president of
the corporation. In response to ques-
tons asked by Solicitor Folk. Mellen
said:
l was president of the Northern
Pacific railroad for six years. Tne
late j. Pierpont Morgan made me pres
ident of the New Haven road. One
day L was called by telephone by Mr..
Morgan.
/" Is this you, Mr. Melleni' he ask
ed. told him it was, and he said:
Can anyone hear what we sayP'
When | told him our conversation
would be private he asked me if I
would take the presidency of the. road.
That was all he said, as Morgan was
never effusive.
II told him / would tale the presi-
dency. As head of the New Haven I
wes called Morgan's man. / enjoyed
MS confidence and tried to merit It.
was proud to be Snown as Morgan Is
confident.
Morgan was only one of the direc-
tors of the New Haven, but he domi-
mated its affairs. The directors bowed
to his great experience.
Here Mellen identified a telegram
from Kuhn, Loeb & Co., New York
bankers, asking permission to bid on
the Boston and Maine bond issue.
THE issue, however" continued
Mellen, 'twas assigned to J. P. Morgan
Co. l was made stakeholder of
5000 shares of New Haven stock
which were to be exchanged for $4,000
shares.
Mellen said because Inspector Byrnes
wanted to do business with individuals
instead of with the corporation. "the
affairs of the corporation were uncer.
tain. " He said there were about "a
due bills covering $225,OOO issued in
tnis transaction.
Mellen declared that much of the
stock remained in his name long after
1t had been turned over for exchange
for Westchester stock. He said he
drew down the dividends on the stock
but paid the mOnev to Byrnes on de.
mand, usually by messenger. The wit.
ness said he was convinced that some.
one collected the due bills en- bloc and
ater distributed them to other PARTIES.
ne declared he did not know, however,
who was tne original collector.
firmly believed" added Mellen
that the Westchester ana Port Ches.
ter railway systems were both project.
ed for the sole purpose of holding mn
the New Haven road"
From his letter files Mellen produced
remarkable prophecy he wrote in
l9Ul. 1t referred to the Westchester
deal, wherein the New Haven road paid
$soo'oVooOO for 26 miles o. railroad and
franchises Mellen wrote:
Many populations will be damaged
and in the end will be the goat. ;,
He admitted this was how the affai,
had worked out, saying that while
others had gone to Carlsbad, he had
been left to face the music The wit
ness then told tale OIL the Juggling ot
millions. Menens letter files indicated
that Tammany Hall had to be "taker
care of in connection with the West
chester deal but he said that organiza
tion had cleared its skirts by PLACING
the responsibility up to Okley Thorne
New York finaneier and politician.
/ 81 don't feel proud of the part
played in the Westchester deal,b saiC
Mellen. 81 should never have been
dragged into it. But even l was kept
in the dark until all the details had
been arranged. j. Pierpont Morgan and
William Rockefeller approved the deal
They believed the Westehester road to
be valuable but i thought its stock
was worth about ten cents pound
And now ] know was right
Mellen said that he clashed only once
with Morgan and that he emerged
worsted, humiliated and shamed.