The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1914-01-08
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POWER TO PUNISH.
LIMITED BY Law
Government Cannot Prose-
cute Railroad Officers for
Bad Management.
STATEMENT IS ISSUED
President Of New Haven 10 Have An
other Conference with Mr..
McReynolds Today.
STATEMENT IS ISSUED

The DEPARTMENT of Justice issued Q
statement yesterday designed to correct
certain reports that have been circulated
with regard to the criminal prosecution
of directors and officials OF the New
Haven road and other corporations.
II was stated that the department has
no authority under the law TO prosecute
railroad officials for improSidence or dis
he nesty in the financial management OF
road. The criminal provisions OF the
Sherman act give the Department OF JUS
tice the power to seek the indictment OF
officials OF roads charged with violations
of this act only on the ground that they
have personally been responsible for the
creation OF monopolies. The statement
was as follows
.'The Department of Justice Is constant
Iy receiving letters inquirins why II does
not direct the prosecution Of officers and
directors who have been responsible for
the financial Irregularities Of railroads
which have been disclosed from time to
time
These inquiries proceeded from mis-
taken. but very common, view OF the
powers of the Department OF Justice.
There is no law under which II can prose-
cute the officers. directors, or other
agents Of the railroad companies fo- i'm
provident or dishonest management This
H.
the Issuance of securities by corporations
created by States. or the conduct OF
fiduciary relations of their officers, but
has left those matters to the States, re-
spcctiyely."
Receivership II Opposed.
Senator Weeks. Of Massachusetts. &C.
companied by three members of the Bos-
ton Chamber Of Commerce-Russell
Robb, Charles F. Weed, and George
Hutchinson-called upon Attorney Cen
eral McReynolds yesterday to impress
upon him the importance Of the provi-
sions of an agreement for reorganization
of the New Haven road upon the BUSH
ness life Of New England They in
formed Mr.. McReynolds that the crea-
ton of a receiver would seriously affect
not only the larger business units OF New
England. through a possible disorganiza-
ton of transportation facilities. but that
II would work many hardships upon the
small investors OF the New England
States.
New Haven stock. they declared. had
for a long time been an important saw
ings bank investment In New England.
The Boston financiers, were reassured
by the statement from the Attorney Gen
eral that the reorganization plan now
under consideration by him and Presi-
cent Elliott. of the New Haven, does not
contemplate a receivership for the Bos-
ton and Maine. and that whatever dis
posal is made of the control Of this car
rier and of other carriers. whether rail-
roads, trolley lines, or steamship lines,
sufficient time will be allowed by the gov
eminent to permit their securities to be
marketed without loss
President Elliott did not call at the
Department of Justice yesterday. He had
conferences with his personal counsel.
Judge Grimm. at the New Willard. how
ever. with a view TO preparing for his
interview with the Attorney General to-
day.