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

stock. the New York, westchestsr and
Boston stock. and the Rhode Island
trolleys.
Prom a careful consideration Of the
method in which expenditures have
been made it is submitted that rea-
sonable estimate of the loss to the New
York New Haven and Hartford Rail-
road Company by reason Of waste and
mismanagement will amount to between
$50 coo 900 and s90.90o0 0n.
The splendid property of the New
Haven railroad itself will be called upon
for many a year to make up the drain
upon its resources resulting from the
objectionable folly of the transactions
outside the proper field in which stock
Folders supposed their moneys were in
vested.
But honesty and efficiency of man
agement Of this property as q railroad
only, will undoubtedly, in time, restore
Its former standing.
Directors Negligent.
1T is uncomfortable that these wrongs
could have gone on without interference
il the members of the board Of direc-
tors had been true to the faith they
owed the stockholders. A number of
directors appear in many instances to
have voted without knowledge and to
have approved the expenditure Of many
Iu4IlOuS
According to the testimony of some
of the directors. they merely. approved
what had been done by some COM
mittee or by some officer Of the COM
pany. The directors minutes reveal
that Is was largely body for ratif-
cation and not authorization, as the law
intended a board of directors should
be. None fthe directors would have
been so careless In the handling of his
own money as the evidence demon
strates they were in dealing with the
money Of other people. The directors
actively or passively acquiesced in the
efforts of the Mellen-Morgan-Rock
Teller regime to extend the domination
of this corporation over the whole
IF these directors who were faith
less to their stewardship were held re-
sponstble in the courts and at the bar
of public opinion for the failure to
the lesson to directors who do not d.
rect would be very salutary.
Criminal In Its Fruits.
Most of the directors of the New
Haven accepted their responsibilities
lightly. They failed to realize that their
names gave confidence to the public
and that their connection with the cor
poration led the public to invest
When these directors were negligent
an dserious losses resulted therefrom,
they were guilty of a grave dereliction
of duty and a breach of trust that
was morally wrong and criminal in
its fruits.
Directors should be made individual
ly liable to civil and criminal laws for
the manner in which they discharge
ter or worse than those VIA operate
it 1t should be just as grave a crime
to plumber stockholders or the public
through a railroad corporation as il is
to personally rob an individS-i.
Subsidiaries Condemned.
ut was found in the investigation
of the New Haven system that there
were 336 subsidiary corporations, and
the books of the New Haven road
proper reflect only a small part Of
the actual financial transactions Of
the railroad. Many OF these sub
sidiary corporations served no pur-
pose save an evil one. They were
used to cover up transactions that
would not bear scrutiny, and to keep
from the eyes OF public officials mat
tiers that were sought to be kept
secret. The commission should have
the power to examine not only the
books. records, papers, and CORE
"
of subsidiary companies as well.
Remedy Outlined.
The insuring of honesty throughout
the management of the great rail-
roads of the country is a most i'm
portant question before the people
today, and only when Through ex-
posture of wrongdoing and an
awakened public conscience coupled
NTH anactiye laws this result ia nro-
duced, may railroading be placed upon
/ 1.-THE high level that 1t should occupy.
The revelations in this record make
IL essential for the welfare of the
nation that the reckless and profigate
fnanciering which has blighted this
railroad system be ended, anad until
this is fully done there will be no
assurance that the story of the New
Haven will not be told again with
the stockholders of some other rail-
ha Irinfir,S