Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1914-07-14
Interstate Commerce Commits
sion Files Report of AS
founding Mismaoageme0t
Under MeIlen's Rule.
TENS OF MILLIONS GO
UP IN THIN AIR
Suits May Be Filed by Stock
holders to Recover Money
Stolen or Misapproptialed
by High Finaaciels,

soRnHc louHnAt SPECIAL trAarp Nfaef
Washington, Iuly i3.-The story of
the reckless and "profligatc" financial
operations of the New Haven railroad
one of the most remarkable chapters
ln the history of American railroad
Nnd American finance WAS revealed in
pnrt taday by the Interstate Conn
merce commission IN a report to the
senate OF les Investigation of that
road.
Il told 80 millions used like stage
money of corporations as pawns In u
monster game With all New England'a
transportation as a prize, which led
the New Haven IN the ten years lust
passed from the height of prosperity
to the point where not a dividend has
been passed. where dissolution suit
is threatening and where criminal in
dictments OF many Of the directors
who figured In its deals are at least
possibility. Hampefed by unwill-
Ing witnesses. bN burned books and
hy an the mazes which lawyers in
vented to cover the trail. the commits
sion estimated that In the progress to-
ward monopolization OF New England
transportation, the New Haven stock
holders hnve lost between x65, 100000
and $40. 900 OO0. but little OF which
they may recover In return the re-
port said they have an their hands
properties which pay no dividends.
which eat into the earnings of the
parent road and which viii be a bur
den on IT'S capacity for many years
10 come
Compliments Present Management.
The report which deals with the
management of the New Haven under
former President Charles :, Mellen,
says of the present directing head,
Chairman Howard Elliott and Walker
y. Hines. special counsel. they have
co-operated with the commission and
rendered il substantial assistance
throughout this investigation. The
combination reared hy the hands OF
Mr. Mellen and approved by the late
j. T.. Morgan ana William Rockefeller,
the commission finds TO be clearly IN
violation of the sherman antitrust
act and monopoly in practical con
trol Of the transportation of five
states.
Directors Severely scored.
The commission report rs unusual
IN the MANNER IN which the directors
of the New Haven road are scored for
their deeds, II speaks OF criminal
maladministraton and negligence. as
serts with positVeness that the di-
rect0rs knew they were perfecting an
Illegal combination aud says that the
dream of a transportation monopoly
was unsound and misrhleNous. The
New Haven, the commission says,
employed dummy directors, manlpu-
lated accounts used questionable
methods In increasing lts own stock,
paid its dividends of subsidiaries 10
make a showing and used many other
devices to deceive the stockholders
ana the public 1t dipped into poll
tics. was factor in invisible gov
ornment made large campaign eeh-
tributons to the two dominant politi-
cal parties bought officials and tried
to distort public opinion All this, i
did. the commission says. 10 carry out
q scheme Of private transportation
monopoly imperial in rs scope.
should Hold Directors Responsible.
"If these directors who were faith
less to their stewardship were held
responsible In the courts and ut the
bar Of public opinion for their failure
to do those things they should have
done. the lessons 10 directors who do
not direct would be very salutatory,'
says the report,
Most Of the directors of the New
Haven accepted their responsibility
lightly They failed to realize that
thoir names gave confidence to the
public ana that their connection with
the corporation led the public To in
vest. When these directors were neg
ligent and serious lossos resulted
therefrom they were guilty Of q grave
of duty aud breach Of
trust that was morally wrong and
criminal In its fruits
should BE Liable Under Law.
Directors should be made individ-
ually liable to civi and criminal laws
for the manner IN which they dis
charge their trusts. A corporation
can be no better nor worse than those
who operate H. / should be just as
grave crime to plunder stockholders
oe the public through railroad cor
as II is personally to rob an
or an the millions lost to New Ha-
ven stoc llholdors the commission es
Inmates thnl possibly SS,o00,O0o may
be recovered by proper action EVE
dcnoe ia its Investigations tending 70
show violations OF the laws of New
Y ork. Massachusetts and Rhode Is
land has been turned over TO the prop
or executives in those states
No Federal statute Available.
The department of justice has been
furnished with a complete record Of
.he testimony obtained by the COM
Out there is no federal stat
ite under which the government can
iid the stockholders in recovering any
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