New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-14
LITTLE CHANCE
TO RECOVER LOOT
Report Declares Financial
Operations WaSteful
and Illegal.
DENOUNCE DIRECTORS
NO Federal Statute Under Which
Government Can Aid Stock.
holders to Recover.

Washington July 13 The story of
the reckless and profigste" financial
operations OF the New Haven Railroad,
one Of the most remarkable chapters
IN the history OF American railroads
and American finance. WAS revealed in
part to-day by the Interstate Com
merce Commission in report TO the
Senate Of its investigation Of that
road.
This report tells OF millions used
Ike stage money. OF corporations az
pawns IN a monster game with all
New Englsnd's transportation as a
prize. which led the New Haven in
the ten years just passed from the
height OF prosperity TO the point OF
where dividend has been passed,
where dissolution suit is threaten
ing and where criminal indictments OF
many Of the directors who figured in
It's deals are at least possibility.
Hampered by unwilling witnesses. by
burned books and by all the mazes
which lawyers invented to cover the
trail. the commission estimated that
in the progress toward monopoizs-
ton Of New England transportation
the New Haven stockholders have lost
between 65,OOO,oOO and 1000 900, but
little of which they may recover. In
return. the report says. they have on
their hands properties which pay no
dividends. which eat into the earnings
OF the parent road. and which will be
a burden on its capacity FOR many
years 10 come.
The report deals with the man ge-
ment of the New Haven under Charles
). Mellen. its former president, and it
says OF the present directing head,
Chairman Howard Elliott. and Walter
d. Hines. special counsel: They have
co-operated with the commission and
rendered IT substantial assistance
throughout this investigation"
In Violation of Lay.
The combination reared by the hands
OF Mr. Mellen the commission finds TO
be clearly in violation of the Sherman
antitrust act and monopoly in prac
teal control OF the transportation Of
five states.
The commissions report is unusual
IN the manner in which the directors
o. the New Haven are scored for their
deeds. IL speaks Of criminal malad-
ministration and negligence. asserts
with posl,iyeness that the directors
knew they were perfecting an Illegal
combination, and says that the dream
of transportation monopoly was un-
sound and mischievous.
The New Haven, the commission
says. employed dummy directors. ma
nlpulated accounts, used questionable
methods in increasing its own stock.
paid the dividends Of subsidiaries to
make showing and used many other
devices to deceive the stockholders and
the public. II dipped into politics. was
factor IN invisible government"
made large campaign contributions TO
the TWO dominant political parties.
bought officials and tried to distort
public opinion. All this it did. the
commission says. "to carry out
scheme Of private transportation mo-
nopoly imperial in its scope"
"lf these directors, who were faith
less to their stewardship. we're held
responsible IN the courts and nj the
bar Of public opinion for their failure
% do those things they should have
done the lesson 70 directors who do
not direct would be very sautary."
says the report. "Nost Of the directors
Of the New Haven accepted their re-
aponsibility lightly. They failed 70
realize that their names gave conf
dence 10 the public and that their con
nection with the corporation led sh.
public to invest. When these directors
we're negligent and serious losses re-
suited thcrefrom they were guilty OF
grave dereliction Of duty and
breach cf trust that was morally wrong
and criminal in its fruits
Directors should be made individ-
ually liable 70 civil and criminal laws
for the manner in which they discharge
their trust A corporation can be 10
better or worse than those who operate
il. Il should be just as grave a crime
20 plunder stockholders or the public
through a railroad corporation as II rs
personally to rob an individual
Nsy Recover Little.
OF all the millions lost TO New Hs-
ven stockholders the commission ,stt-
mates that possibly sS000,0 600 may be
recovered b. proper action. Evidence
in its possession tending TO show vie.
lations of the law Of New York, Mas
sachusetts and Rhode Island have beer
turned over TO the proper authoriuct
in those states. The Department Of
Justice has been furnished with = COM
rlcte record Of thc testimony secured