The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1914-07-15
FINANCIAL OPERA
T|ONS ARE EXPOSED
RECKLESS AND PROFLIGATE
FINANCIAL OPERATIONS
EXPOSED
RECORDS BURNED
Every Effort Is Being Used To
Destroy Evidence of Crooked
Administration
RECORDS BURNED

Washington, July 13.-The story OF
the RECKLESS and profigate" 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 a report to the
senate of it's Investigations Of that
road.
It told of millions used like stage
money, Of corporations as pawns In
monster game with all the New Eng
land transportation as a prize, which
led the New 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 who figured in deals are at
least 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 $65 100000 and $90,00O,0OO, 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 a burden on it's 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 it
substantial assistance throughout this
investigation" s.N -
The New Haven combination, reared
by Charles L. Mellen, and approved by
the late J. Pierpont Morgan and Will
liam Rockefeller, the commission finds
TO be clearly in violation of the Sher-
man antitrust act and a monopoly IN
practical control of the transportation
of five states. 1,.,
The commission report is unusual
as regards the manner in which d1-
rectors Of the New Haven are scored.
It speaks of criminal maladm1n1stra-
ton and negligence, asserts with pos
itiveness that the directors knew they
were perfecting an illegal conbina-
ton and says that 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 its 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
itics, was a. 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 1t
did, the commission says, ito carry
out a scheme of private transporta-
tion monopoly imperial in its scope"
Directors Liable.
"If these directors who were faith
less to their stewardship were held re-
sponsible for their failure to do those
things they should hav edone, the les
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 RESPONSE
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 of
trust that was morally wrong and
criminal in it's fruits.
Directors should be made individ-
ually liable to civil and criminal laws
for the manner in which they dis
charge their trust. A corporation can
be no better or worse than than those
who operate it. 1t should be just as
grave a crime to plunder stockholders
or the public through railroad cor
poration as it is personally to rob an
individual"
| Laws Violated.
Of all the millions lost to New
Haven stockholders, the commission
estimates that possibly $4,000, 900 may
be recovered by proper action. Evi-
dence in its Rossission tending to show
violations of the laws Of New York,
Massachusetts and Rhode Island, has
been turned over to the proper execu-
tives In these states.
The department of Justice has been
furnished with a complete record of
the testimony secured by the commits
sion, but there is no federal statute
under which the government can aid
the stockholders in recovering any of
their losses.