The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1914-07-13
Interstate Commerce Commits
sion Flags the Road in
Report of Investi-
cation.
VIOLATION OF THE LAW
Directors Held ResponsIbie for Loss
Of Over Sixty Millions TO
Stockholders Of the
Company.

| L OAAtSu Cos 1<OdoSu NlT0 oSiNaSO.l
WASHINGTON, July 13.-That the
monopoly theory on the New Haven
road was unsound and mischievous
that it's directors were criminally neg
ligent, and that substantial part Of
the stockholders money wasted can
be recovered was the gist of the inter-
state commerce commissions report
today to the senate in the New Haven
Investigation The report Is regarded
a. the most condemnatory document
ever issued by the Interstate commerce
commission.
The commission declares the New
Haven directors consciously violated
the federal anti monopoly laws.
No attempt was made to fix the
responsibility for the New Haven
transactions as between President Mel
len and J. p. Morgan, but the report
condemned the control generally
1t is up to the department of justice
to act upon the commissions findings
that the New Haven directors were
lcriminally Responsible. in the New
Haven transactions, an interstate
commerce commission official stated.
Chief Counsel Joseph Folk who con-
Quoted the New Haven inquiry said
that the report made the directors d.
rectly responsible for more than $67,-
100000. The total loss % the New
Haven stockholders through misman-
agement and carelessness is some
where between $G0,000,00O and $780,
100000 the commission estimates. The
commission put the matter squarely
up to the department of Justice for
action by furnishing 1t with a COM
plete record Of the testimony.
"The result of our research into the
tenn has disclosed one Of the most
glaring instances Of maladministra-
ton revealed in all the history Of Am.
erican railroading," the report reads.
"In the course Of investigation many
instances were uncovered Of violation
of laws Of different states. AS they
were not directly pertinent to our
inquiry under the senate resolution,
we could not follow them into their
details. AS pertaining to violation OF
state laws, we have turned over evi-
dence concerning local occurrences in
New York City to the district attor-
ney of the proper district and the tes-
timony relating to irregularities in
Massachusetts and Rhode Island have
been laid before the proper authorI-
ties in these states. The commission
has also furnished the department of
Justice with complete copy of the
testimony"
In arranging the directors the COM
cission said: eff these directors
who were faithless to their steward
ship, were held responsible in the
courts and at the bar Of public opin-
ion for the failure to do these things
they would have done, the lesson to
directors who do not direct would
be very Statutory"
That the directors should be held
responsible for the West-Chester,
Steamship, Rhode Island, Conn, and
Massachusetts, trolleys, and other
transactions was declared.
Testimony of "high finance" was
cited as follows:
Marked features and significant
incidents in the loose, extravagant
and improvident administration or
the finances OF the New Haven as
shown in this Investigation are the
Boston and Maine despoilment; the
iniquity of the West Chester asquisi-
ton; the double price paid for the
Rhode Island trolleys; the reckless.
ness in the purchase of Connecticut
and Massachusetts trolleys at prices
exorbitantly in excess of their mar
ket value; the unwarranted expendi-
ture Of large amounts in educating
public opinion; the disposition with
out knowledge of directors OF hun
dreds and thousands of dollars for in
fluencing public sentiment; the hab-
itual payment of unitenlized vouchers
without any clear specification Of de-
tails; the confusing inter-relation of