The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1914-07-16
80 MILLION STOLEN
FROM NEW HAVEN,
us. BODY'S CHARGE
Commerce Commission Bares
Loot of Eastern Road.
BLAME PUT ON DIRECTORS
Federal Body Calls Financing Ono OF
Most 0larInq instances Of Malad-
nInistratIon In History Of
Nations RallroadInQ.

Washington, July 14.-"One OF the
most glaring instances OF maladminis-
tration revealed in all the history OF
American railroading,' is the inter
state commerce commissions charac-
terization OF its findings In the inves-
tigators of New Haven railroad finan-
cial affairs, reported to the senate.
In a 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 ls-
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 seo,ooo,ooo.
"A reasonable estimate Of the loss
TO the New Haven by reason Of waste
and mismanagement," 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
were upon the management Of the
New Haven system under former Pres
ident Mellen.
In Justice to the present manage
ment, the commission says II is but
fair to say that Chairman Howard
Elliott and Walker ID. 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:
Marked features and significant IN
cidents In the loose extravagLnt and
improvident administration of the
finances Of the New Haven, as shown
in this investigation, are:
Boston & Maine despoilment
Inequity 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.
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 party.
Attempt to control utterances Of the
press b. substituting reporters.
Payment OF money and the profigate
Issue of free passes to legislators
and their friends.
Investment of 100000 in securities of
a New England newspaper
Regular employment Of political bosses
In Rhode Island and other states, not
for the purpose of having them per
form any service but to prevent
them, as Mr.. Mellen expresses It..
from becoming active on the other
side"
Retention by John l.. Billiard of more
than s2700, 600 in transaction in
which he represented the New Ha-
ven and in which he invested not a
dollar.
Inability Of Oak)eigh Thorne to &C
count for 1882, 600 of the funds of
the New Haven intrusted to him IN
carrying out of the West Chester
proposition.
Story OF Mr.. Mellen as to the distribu-
ton Of s1,200000 for corrupt pur-
poses in bringing about amendments
OF the West Chester and Port Chester
franchises.
Domination Of all the affairs OF this
railroad by Mr.. Morgan and Mr.. Mel.
len and the absolute subordinatlon
or other members OF the board OF di.
rectors TO the will of these two.
Unwarranted increase of the New Ha.
ven liabilities from $4,000. 900 In
1903 to s4l7,00000O in 1913.
Increase In floating notes from moth.
Ing in 1903 to approximately $40.
100000 In 1913.
Indefensible standard OF business eth.