South Bend news-times. (South Bend, Ind.) 1913-1938, 1914-05-14
Provided "SIuSh Fund" to Cor
rupt New York Aldermen,
Judges and Police Officials,
Says Former President.
JUDICIAL DECISIONS
ARRANGED IN ADVANCE
System Of "GO-BetWeenS" Used
to Protect "Higher-upS" in
Distribution of Graft-SayS
Morgan Made Him Head.

WASHINGTON. May 14.-That the
New York. New Haven and Hartford
railroad through Charles s. Mellen.
gave due bills for stock 10 mysterious
persons and that these persons were
directed 10 place the due bills in the
hands Of New York city officials to OBJ
tain a number Of changes in the fran
Chise of the New York. Boston and
Westchester railroad. an electric line.
were the principal revelations which
Governor Folk, chief counsel for the
Interstate commerce commission, de-
glared he had CLEANED from today's
examination Of Mr. Mellen.
These due bills constituted a sort
OF slush fund. said Governor Folk.
with which il was hoped TO corrupt
New York aldermen. judges and police
officials. The New Haven wanted thir-
teen changes made in the Westchester
railroad franchises before taki1g over
the road, and it took this means 10 get
them made. l have evidence 10 prove
that the changes were arranged for
and that even certain judicial decisions
10 remove obstacles in the pathway OF
the changes were all arranged for in
advance. Mr. Mellen gave these due
bills which were handled by east side
gO-beJweens and subsequently turned
up in the hands Of the higher ups. It
was not expected that these officials
would cash them themselves The
cashing i'm would naturally be done
by other go-betweens in order that the
trail of the New Haven stock might be
entirely obscured
Present Holders Scared.
Now the present holders Of these
due bills for New Haven stock % the
value of $4,000 which Mr.. Mellen
testified We're outstanding. are afraid
to present them for fear they Will be
asked where they came from, how they
obtained them. who they are being
cashed for and all that II seems "A
shame for the due bills are as good as
gold. When they are presented. Mr..
Mellen must turn over the stock. If he
has 10 go into the market 10 obtain
it."
Mellen said that the late J. =. Nor
san made him president OF the New
Haven.
"He had the directors elect me.
was a director of the Northern Pacific
and met MIR. Morgan in his New York
office. My connection with the North
ern Pacific required me to visit New
York often. Ny connection with that
road brought me in close relation with
Mr. Morgan. Mr.. Morgan simply told
me he was going to make me president
of the New Haven. thought II was
reward for good service. No ar
was made about salary. but
I received $50, 600 a year for time
and afterward 100000.
May Call Aldermen.
Governor Folk strongly intimated
that every man who was a member or
the board of aldermen in New York
eSty at the time the deal for the acqui-
sition Of the Westchester Electric line
by the New Haven was pending viii
be summoned as witnesses. Folk be-
lieves that many aldermen, police Of
fcials and judges received by grape
vine mail due bills for large amounts
of stock from Mellen.
Governor Folk questioned Mr.. Mel
len regarding the expansion OF the
New Haven system. Mellen testified
that when ne took charge OF the road
he found il had been acquiring out
side interests for about a year-par-
ticularIv trolley and steamship inter-
ests AIr Mellen stated that this pol
icv of expansion continued during his
term and that he WAS in accord with
it, He said the acquisition OF the
Central New England railway was ne
first step in accordance with this pol
lev IL was accomplished by acquisl-
ton Of the majority Of the stock from
the stockholders. II vas purchased
for S10,OO0.000.
The ACQUISITION Of the Worcester and
Connections Eastern trolley line was
the next step because it paralleled A
New Haven trolley line. IL was own
ed bv Sanderson and Porter conrac-
tors. who We're afraid that their bonds
would be defaulted ~ they couldn't
meet the interest and that their future
business reputation would be impair
ed. This stock was bOught for about
q dollar q share.
Get More Trolley Lines.
The trolley lines ~ the city oi NeW
Haven were next acquired. Mellen said.
Five million dollars worth Of stock of
these trolley lines was exchanged Tor
New Haven railroad dehentures ~
equal amount.
The ratio. he said. was about three
10 one That is one New Haven see
curitv OF 500 par value for three -
the same par value OF the NeW Haven
trolley The New EaVeu suffered mo-
loss drought this deal he said. The
next deal was the \ew London trolley
acquisition
"How about the Westchester Ael-
len was asked
There are two roads called tne
yVestchester The directors were uu-
willing 60 hurry the acquisition of the
KEestchester and NcW York company
because they desired 90 delay until
certain changes were made u the
franchise and until certain acts cr
Guest lOuable validity We're rendered
valid. Eight thousand shares of NeW
Haven were placed in ms hands in
escrow pending the making ~ the
franch lse changes after which Was
understood that am exchange ot stock
CONTINUED OK PAGE Il.