The Anderson daily intelligencer. [volume] (Anderson, S.C.) 1914-1915, 1914-07-14
MILLIONS LOST
ON NEW HAVEN
: RECKLESS AND PROFLIGATE
FINANCIAL OPERATIONS
EXPOSED
RECORDS BURNED
Every Effort Is Being Used To
Destroy Evidence of Crooked
Administration
RECORDS BURNED
(By Associated Press. }


Washington, July l3.-The story OF
the reckless and proiigate" financial
operations Of the New Haven railroad
one the most remarkable chapters In
the history of American railroad and
American finance. was revealed in
part today by the Interstate COM
merce commission in n report to the
senate OF its Investigations OF that
road
II told OF millions used like stage
money, of corporations as pawns in
q monster game with all the New Eng
land transportation as q prize, which
led the Now Haven in the ten years
just passed from the height of pros
perity to the point where a dividend
has been passed, where dissolution
suit is threatening and where Grim
inal indictments of many OF the d.
rectors VINO figured in deals are at
lenst a possibility.
Millions Lost.
Hampered by unwilling witnesses
by burned books and by all the mazes
which lawyers in vented to cover the
trail, the commission estimated that
In the progress toward monopolization
OF New England transportation, the
New Haven stockholders have lost be-
tween .s65. 900, 900 and $4,000 900. but
little of which they may recover. In
return. the report said, they have on
their hands properties which pay no
dividends. which eat into the earn
ings Of the parent road and which Will
be burden on its capacity for many
years to come.
OF the present directing head
Chairman Howard Elliott and Wal
ker D. Hines, special counsel, the re-
port says. ''They have co-operated
with the! commission and rendered II
Z substantiaf assistanee throughout this
inyestigation:".s t,.. -
The New. F: .ysn cc;rh!natit5E, reared
by Charles L. Mellen. and approved by
the late j.. Piorpont Morgan and VIII
liam I,ockefelier. the commission finds
10 be clearly in violation Of the Sher-
man antitrust act and monopoly In
practical control OF the transportation
Of five states.
The commissions report Is unusual
as regards the manner in which d.
rectors OF the New Haven are scored
1t speaks, OF criminal maladministra-
tiOn and negligence. asserts with pos.
itiveness that the directors knew they
were perfecting an illegal combina-
tion and says thar the dream of a
transportation monopoly was unsound
and mischievous.
The New Haven, the commission
says employed dummy directors
manipulated accounts, used question
able methods In increasing It's own
stock, paid the dividends OF subsidiar-
les to make showing, and used many
other devices to deceive stock hold.
ers and the public. 1t dipped into pol
tiles. was factor in invisible gov
ernment." made large campaign con-
tributions to the two dominant polit-
ical parties, bought officials and tried
to distort public opinion. All this II
did. the commission says, ito carry
out scheme Of private Transports
tfon. monopoly imperial In its scope II
Directors Liable.
II these directors who were faith
less to- their stewardship we're held re-
sponsible for. their failure to do those
. things they should hav .edone, the leg
sons TO directors who do not direct
would be very salutary," says the re-
port. Most of the directors Of the
New Haven accepted their responsi-
bility lightly. They failed. to realize
that their names gave confidence to
the public and that their connection
with the corporation led the public to
invest. When these directors were
negligent and serious Losses resulted
therefrom. they were guilty OF grave
dereliction Of duty and breach oi
3 trust that was morally wrong AMI
criminal In its fruits
Directors should be, made indiyid-
ually liable to civil and criminal laws
for the manner In which they d;s-
charge their trust. "A corporation car
be no better or worse than than those
who operate It. It should be just az
/ grave crime to plunder stockholders
or the public through railroad cor.
poration as 1t Is. personally to rob IN
indiYidual." ~ 4 l !.
KaWs Violated.
Is :Of all the millions lost 81 to New
Haven Stockholders. The commission
(. estimates that possibly s., 900, 900 may
! be recovered by proper action. Eyi.
dence in its possission tending to show
: violations OF the laws Of Ne = York
Massachusetts, and Rhode Island. has
been turned over to The proper execu.
tives In these states: i ~ ,. !, ~ ~
The department OF justice hRs been
4 furnished with a complete record OF
& the testimony seaured by the commits.
B sion, but there iH no federal statute
! under which the government can aid
the stockholders III recovering any D.
a their 1Oaae4, spS n ~ ~ : St 81