New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-05-20


were acquired, when they were acquireo
mr. what VIA. paid for them. | thought
was entitled to 1t. ] thought might
questioned some time, as / am beihs que
TONED now. and I did not Ike 10 lee
that I'll 900 90 OF the New Haven none
had gone out. and ! could not give III
slightest idea who had expended IL en-
cent there was bushel basket fuii Oh
I do not know what
MsIIen Simply "Overawed.
DO YOU mean to say" asked MT. Foih
that this report, showing an expenditur
OF 81. oooo oo OF the New Haven money
without itemizing the subjects for whic'
IT was expended, wss presented 10 III
board of directors and adopted w'thou
discussion"
"It WAS presented as the report OF th
special committee that had been III seS
sion for fourteen months. acquiring thes'
securities through J. T. Morgan 70
and Oakleigh Ihorne, through specla
account No. 3, j. p Morgan e. Co, ana u
was the report the committee was giving o.
an account OF what they had done am
asking to have their action approved
ratified and confirmed and the committed
discharged. 1t was unanimously adopt
ed. The only knowledge have regardint
that Is what appears In the records o
the special committee.
Il think everybody had full confidence
in that committee. | did. In spite OF the
humiliating experience | had in connec'
ton with that matter. | never thought
for one moment there was anything
wrong about IT,"
WAS it through fear OF Mr.. Morgan
anger that you did not question 1t befor,
the other directors?'
mo. sir; I do not think | was afraid
Of Mr. Morgan, but ! had the greatest
respect for him. | Yielded my judgment
to him He was man of such tire
mendous force and success that ! dio
not feel-or, rather, | felt | was In the
wrong IN nine cases out Of ten when
disagreed with him. Perhaps 1t was COW
ardce; | do not know. | am Wiling II
should be put in that way. | stood IN
good deal OF awe-probably greater
amount Of awe Of Mr.. Morgan than any
man | have ever met.
II think the same reason actuated nae
that probably actuated all the others
We did not want to contend with MT
Morgan. They probably thought he was
right, although they had misgivings.
Mr. Mellen said that after the directors
meeting at which Messrs. Morgan, Rookie
Teller and Miller reported the expenditure
of the $ll, l55,OO0 several up-country dl
rectors called at his office ana held
sort of Indignation meeting. Mr.. Skinner
was one OF those directors.
Directors Were Indignant.
Skinner came in," said Mr. Meilen'
with both hands up. and said: HOY
Caesar Phillipil What in the world nave
you been doing? Eleven million dollars
of money! | sad: 4 will appoint YOU
Skinner. committee to go and hnd OUT
Not on your life! he said.
"That Is the way it occurred. That Is
the way all of them voted. l remember
that expression because | never heard IL
before. but | have heard 1t several times
since from the same man.
Samuel Hemingway was another OF
these directors who protested vigorously
Il cannot give the exact language
said Mr.. Mellen. "but 1t was about along
this line We'll, you have been Tying
pretty high, have you not, spending sll'-
600, 900? What did you do 1t for" l
said: You can search me- Well ne
said, don't you think you ought to nave
more information | said Yes. lie
said: why didn't you get it% / said: 1
will tell you what will do, Mr.. Heming-
way. will appoint you committee to
go and get IT from Mr.. Morgan. He said
NO you won't
THAT is the situation. That is not the
exact language. but that is the idea that
thew all had. They were all willing that
| should go and bark my shins, but they
did not one Of them want to go and bark
their shins.'
Mr.. Mellen said that the directors had
come to him to ask for an explanation as
to why sl1,000,O00 had been EXPENDED
without being itemized.
They felt, as | felt" Mr. Mellen sald'
that the report was not sufficient Tor a
transaction of that magnitude, and they
came to me to know what the report ola
not contain, and | had tried to put my
self in a position to find out. and /
WELL did not get 1t"
Mr.. Mellen said that the theory on
which the New Haven went into the
Westchester transaction was that the
New Haven was not to put in more than
Il 4
s.. 10000 and that the Westchester would
be able to float it's own bonds and finance
itself without any Endorsement. The
plan changed form after 1t became UNI
derstood. he said.
THE inception of the scheme contem-
plated an expenditure of 100000 of New
Haven money That was expected to be
sufficient as a foundation on which tc
issue bonds and sell them without any
guarantee by the New Haven Railroad
and construct the road with the proceeds
OF the bonds But If you will recall, the
Sll 10000 was expended just about the
time OF the height of the panic OF 1907.
1t was utterly impossible to carry out the
original scheme, and the New Haven
Railroad kept putting in a little more,
and little more. just like the subscrip-
ton book plan-pay little at a time
but in the aggregate It amounted to a
tremendous sum"
Mr.. Mellen's state OF mind was disclosed
in the following notation on a letter
written by him In February, 1909:
81 am sick and Disguised with this
whole matter | see nothing but trouble
and loss 10 come from II, and I much