The chronicle=news., 1914-07-13
NEW HAVEN'S DIRECTORS DECLARED
To BE "CR|M|NAL[y NEGLIGENT

Elliott and Walker T.. Hines, spe.
ctal counsel, have cooperated with
the commission and rendered il sub.
stantial assistance throughout the
investigation"
The report cites these Significant
Incidents:
| Marked features and significant
incidents in the loss, extravagant and
improvident administration of the
nm ances of the New Haven as shown
IN this investigation are the Boston
and Maine dispoilment; the inquiry
N the Westchester acquisitions; the
double price paid for the Rhode Is
\ land trolleys. the recklessness in tho
purchase OF Connecticut and Massa-
chusetts trolleys at prices exorbit-
antly in excess of their market
value; the unwarranted expenditure
or large amounts in education of
public opinion: the disposition,
without knowledge OF the directors,
OF hundreds OF thousands of dollars
for influencing public sentiment; the
habitual payment of unadvised
vouchers without any clear specin-
cation of details: confusing inter-re-
lation of the principal company and
Its subsidiaries and consequent COM
plication of accounts: the practice
of financial lcgerdemain in issuing
| large blocks of New Haven stocks
for notes of the New England Navi-
CATION company and manipulating
these securities back and forth; fic-
titious sales of New Haven stock to
friendsly parties with the design OF
boosting the stock and unloading on
the public at the higher market price
the unlawful diversion OF corporate
funds to political organizations: the
scattering OF retainers to attorneys
of five states. who rendered no item
lied bills for services and who con-
Quoted no litigation to which the
railroad was a party: extensive use
OF a paid lobby In the matters as to
which the directors claim to have no
Information: the attempt to control
utterance Of the press by subsidizing
reporters: payment Of mohey and
the issue of freep asses to Legislators
and their friends: the investment OF
$500. 900 in securities of a New Eng
land newspaper: the regular employ
ment of political bosses In Rhode Is
land and other states. not for the
purpose of having them perform any
service, but to prevent them. as Mr..
Mellcn expresses 1t. from becoming
active on the other side: the reten-
tion of John l.. Billiard for more than
81 ZOO. 700 In a transaction in which
he represented the New Haven and
into which he invested not n dollar;
the inability of Oakleigh Thorne to
account for 81 ,032 900 of the funds
OF the New Haven intrusted to him
in carry out the Wcstchester propo-
sition: the story of Mr.. Mellen as to
the distribution of S1.20O.0G9 for
corrupt purposes In bringing about
amendments of the Westchester and
Port Chester franchises; tho domi-
nation of all the affairs of this rail-
road by Mr.. Morgan and Mr.. Mellcn
and the absolute subOrdination OF
other members OF the board OF direc-
tors to the will of these two: the
Inwarranted increase of the New
Haven liabilities from $33,O0O,OGO
in 1903 to $417,0OD,0 900 in 1913: the
increase of floating notes from moth
ing in 1903 to approximately $io.-
600, 900 in 1913: the indefensiblc
standard of business ethics and the
absence OF financial acumen display
cd by eminent fnancicr in directing
the destincs of this railroad In Its
attempt to establish monopoly OF
the transportation OF New England.
A combination OF all these has re-
suited in the present deplorablc sit
uation in which the affairs of this
railroad arc involved.
From the facts developed In this
investigation it would seem that
there is little question concerning
the recovery of Il substantial amount
of the stockholders money that has
been wasted. Several items o! this
nature are briefly summarized.
"Overpaid Perry and Thorno in
commissions. S303.f5O.
illegally spent in obtaining
Westchcster franchise changes.
$1.524.O72.77.
"In the Billiard transaction.
s2.TiS.7Oo.
"The money with which Billiard