davidaulloa/AmericanStories huggingface dataset:
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14

After detailing a transaction between
the New Haven and the New England
Navigation Company the report says:
The effect of tho transaction means that
the New York, New Haven and Hartford
Railroad Company advanced $4,000, 900 in
cash to another company to pay to Il
dividends on its stock and included the
amount so advanced in it's income account
as a dividend received. In other words the
New Haven set up In Its income an item
OF So 900, 900 on the other side.
THE accounts Of tho company are re-
plete with instances in which the profits
have been declared 70 he earned by the
transfer OF stocks bonds. debentures and
securities OF one of the subordinate and
subsidiary companies OF tho New Haven
system 10 another such subsidiary and
such profits are solemnly recorded as real
profits in making up the accounts OF the
system al a whole
transactions OF this kind do not make
real profits any moro than the transfer OF
money or securities from ono pocket 70
another would result in profit to an indi-
vidual.
THE frequency" says tho commission,
with which dummy corporations and
dummy directors appear in this record
leads TO the conclusion that some one high
in the councils OF the New Haven had an
obsession upon the subject OF the utility
of such sham methods,
The directors OF the Billiard Company
confessed that they were dummies and
knew nothing OF Its operation. Why men
OF respectability and standing as these
appear 10 be should lend their names as
dummies passes comprehension. Through
out the entire story OF deception the New
Haven management vainly endeavored to
hide the true facts behind these dummy
individuals and dummy corporations.
"sham Methods"
III master fnanciers behind these New
Haven transactions could use these sham
methods and thus give their Endorsement
10 the availability OF such crooked schemes
10 cover the true substance and fact 81
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14
Immunity Of witnesses.

The commission says that in conducting
It's inquiry 1t kept In mind constantly the
warning OF the Department Of Justice
against immunity from criminal prosecu-
ton IN respect to witnesses. The COM
mission has used only such witnesses as
seem necessary to answer the Senate's
questions as to why the Investigation was
held
with respect to Mr. Mcllen." says the
commission, ~ was the belief OF the com
mittee that his testimony was necessary
10 this inquiry, and the result In our opin-
Ton fully justlfos this position.
evidence of wrongdoing such as was
disclosed In this hearing IL difficult to
obtain. Men do not conduct such trans
actions I'm the open. but rather in secret
and I'm The dark Only those involved as
rule have direct information. So some
Of the evidence ~ necessity must come
through participants.
The commission has proceeded upon
the idea that II Is better to expose wrong
doing even II IN doing 40 II would be nee
essary 20 use few witnesses whose Asti-
mony might bring them immunity. than.
through fear Of bestowlng immunity on
some, leave facts unknown and uncovered
and therefore give immunity to all rot only
as TO Prosecution but to the stigma OF
exposure az we'll"
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14
The steamship Purchases.

The commission says tina. the New
Haven from time TO time felt the harass-
ing effect OF competition by water. and
President Mellen therefore proceeded 10
acquire the steamship lines and stfe this
Interference. He bought up steamship
lines amounting to s2i,772, 900. although
a physical valuation OF the properties
acquired approximate something Ike only
$40 900. 900.
In connection with the steamship pur-
chases the commission finds the money
payments were made for leases In New
York which were Enthusiastically improper.
The commission says there were payments
10 John Hall Mckay OF New York for
many thousands OF dollars for which no
itemlzed vouchers were given.
"Mr Mckay" says the commission. left
for Europe after this investigation was
commenced and his evidence could not be
secured"
The commission illustrates the devious
methods" of the New Haven management
by setting forth the number OF corpora
lions tina; were formed in order TO accom-
plish the withdrawal of the steamships
from the Eastern coast. and the control
by the New Haven OF the freigh, steamers
and wharf property.
These corporations were the Metropol-
tan Steamship Company, the Metropolitan
steamship Company OF Maine, the Hud-
son Navigation Company, the Chilmark
Company, the Pacific Navigation Com
pany. the Pacific Securities Company,
the Eastern Securities Company, the East
ern Steamship Company and the New
England Securities Company. The COM
mission adds:
THE devious methods used, the tangled
web of corporate transactions through
which this property passed and tho use
OF dummies who knew nothing OF the
purposes for which they were being used
all clearly indicate that the purpose Of
these circuitous methods was 10 conceal
the hand OF the New Haven"
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14

ION Its note there were turned over TO
II at one time s9.91s,0oo OF securities
bought and paid for with New Haven
funds. The inside facts as 10 fits dealings
show a continued operation in violation
Of Massachusetts, law and a violation OF
the injunction by the highest court Of
that State"
The commission holds that II Mr.. Mel
lens contention that Sanderson & Por-
ter own the stock OF the New England In
vestment and Security Company free from
any control OF the New Haven they would
be personally entitled 70 all the assets and
securities which have been purchased with
the funds OF the New Haven upon the dis
solution OF the so-called trust
The commission says that increases IN
capital stock OF the New Haven have been
made upon the basis OF transfers OF assets
from ono subsidiary company to another.
The commission finds also that the
New Fgland Navigation Company has
been utilized from time tn time as a hold
Ing corporation for the accomplishment Of
irregular transactions "indefensible under
any test OF sound business management"
The commission charges the New Haven
management with manipulation OF ac-
counts in order to eliminate from the
record dividend returns upon certain seou.
rifles. II accuses the management also
OF the shifting OF funds TO show dividends
earned in the year 1912.
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14
The Billard Transaction.

The commission holds that John l..
Billiard Of New Haven. who made n proft
OF S2.7OO.O00 without the expenditure OF a
penny OF his own, was merely acting as an
agent OF the New Haven and that the go
called Billiard transaction In Boston and
Maine stock was not AS Billiard and Mel
len contend bonaflde sale and repur-
chase. The laws Of Massachusetts made II
necessary for the New Haven officials TO
contend that this was a bonafide tranklc-
ton.
An the assets Of the Billiard Com
pany. says the commission, belong to
the stockholders of the New Haven road
All the money sunk in It's operations be-
longs 10 the New Haven suit should
be maintained by the New Haven agains.
Billiard and all who have participated in
this fraud upon the stockholders"
The commission finds that the New Eng
lana Investment and Security Company
was another agent OF the New Haven
and recommends that n suit be maintained
by the road to reduce 10 It's own posses
sion the assets controlled by that COM
pany. Until recently Charles s Mellen
held control OF the common stock of the
company through James Il. Brady as a
dummy.
These shares have been transferred 20
Sanderson Il Porter, a firm OF railroad
contractors and builders. who have been
engaged on the New Haven. The commits
sion says that this stock is being held by
Sanderson & Porter for the New Haven
"All profits which this company has
made In the past" says the commission.
have been the result OF transactions In
the purchase and sale OF securities IN
which the New Haven had title or large
Interests, not in the open market, but
under circumstances which would have
been fraudulent II this security company
was In fact an independent organization
entirely separate from tho New Haven.
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14
An Array of Causes.

The report then marshals the folowine
array of causes for the New Haven's
present situation:
The Boston and Maine despodl-
ment.
The iniquity OF the Westchester
acquisition.
THE double price paid 70 the
Rhode Island trolleys.
The recklessness in the purchase
Of Connecticut and Massachusetts
trolleys at prices exorbitantly In ex-
cess OF their value.
The unwarranted expenditure OF
large amounts in educating public
opinion
THE disposition without knowledge
Of directors OF hundreds of thousands
Of dollars for influencing public SEN
ttment.
The habitual payment OF untem-
ICED vouchers without any clear speci-
hcation of details.
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14

the head that they are ready to indors.
or approve anything he may do"
! The commission adds
THE handling of bank deposits and
security sales Of these corporations are
nassed In a few hands carrying with
them power and domination of large
amounts of banking capital as we'll as the
control OF great railroad systems. These
and other evils as tho result OF inter-
locking drectorates are now we'll recog-
hized and known and they have been EN-
phasized by the disclosures OF this inves-
tigation."
In the commissioners opinion there In
little question that the stockholders can
recover "A substantial sum of money that
has been wasted. The commission mem
lions specifically for possible recovery
100000 paid to Oal<leigh Thorne and
Marsden Perry in commission $1.524,0 900
Illegally spent in the Westchester fran
chise and s2,7fs,oo0 in the Billiard trans
action.
Question Of Recovery.
''ff any expenditures we're made in
violation of the antitrust laws of the
United States are not such expenditures
ultra wires and is It not tho legal obiga-
ton Of the directors to satisfy out of
their own fortunes any loss which results
90 the company" asks the commission.
only lawful expenses are authorized.
All Illegal disbursements are ultra wires.
Directors cannot without accountability
deplete the corporate treasury In ventures
which are in violation of the laws OF the
land"
or the responsibility OF the directors
under tho antitrust law the report says
THE evidence shows that in pursuance
OF the policy OF transportation monopoly
-the New Haven purchased the Connect
cut trolleys, the Rhode Island trolleys,
the steamship lines. the Boston and Maine
and other means OF transportation that
were available and purchasable.
THAT this plan was done in violation
OF the statute II seems quito clear. for
competition was sought to he destroyed.
That the directors were conscious they
were proceeding along lines that were
probably inhibited by law is evidenced by
the testimony of Director Elton that as
each line was purchased some one would
ask the question in tho board Of directors
II IL were not In violation OF Law, and that
Mr.. Robbins. general attorney for the New
Haven. would state to the board that the
New Haven charter permitted them to do
anything.
1T appears therefore that not only we're
these consultations contrary to law, but
these directors were cognizant Of that fact
and contented themselves with the advice
OF counsel that under the company's char
ter II could do anything II pleased"
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14
Complains Of Letters.

IN review or the correspondence, ! can
see such letters only as ire submitted BY
them. Whether they are all the corre-
spondence on the subject cannot say, be-
yond the fact that such is their statement
Correspondence between J. i. Morgan
& Co. and third parties on the transac-
tions will as a rule, be referred to such
parties and their consent obtained before
submission TO me for Inspection j. T.
Morgan Co. do not consider this proceed
ing before a proper tribunal. and It is only
before such body or court that "A proper
submission of data will be effected.
This procedure cannot be dignifed by
the title OF an investigation No sue
cessful investigation can be conducted
wherein the parties under investigator
specify the evidence and limitations under
which 1t must be accepted. All that I
could consistently state Is that ! have seen
certain accounts and correspondence per-
tanning 10 such transactions, substantially
confirming the profits and losses published
In their statement OF March 4. 1914.
Whether such records as I have seen
reveal the full story OF their relations with
the New Haven and its related companies
have no evidence beyond the statement
of the firms representatives. that such is
the case"
Then on last Saturday July II. Com.
missioner McChord, after n consultation
with members OF the committee, recalled
gram:
DAVID r. BROWN. District Accountant.
Hotel hcAlpin, New York city:
IN view or the statements made In
your report OF July and your wire OF
July 10 the commission ie OF the opinion
that II is useless for YOU to continue the
Investigation referred to- You will there
fore return TO Washington.
-. {. McCHoaD.
commissioner"
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14
Boston and Maine stock.

The commission also describes the New
Havcn's holdings OF Boston and Maine
stock as "a startling series OF TRANSIT s.
shifts and evasions"
These shifts and evasons began. ac-
cording to the commission. as soon as
the illegality Of the purchase was demon
strated by the decision of the Supreme
Court
The commission charges that by these
acts the New Haven sought to make II
appear that II had Invested itself of
Boston and Maine stock while at all
times It WAS being retained In friendly
hands and under the control Of the New
Haven.
This IL the history 81 the passage Of
controlling number OF shares In Boston
and Maine stock as given by the COM
mission:
"First-From Americ, Express
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14

gested to Mr.. Brown, your chief examiner,
and to your counsel Gov. Folk that a con-
ference might be desirable in order that
a method could be determined by which
your commission might obtain the in
formation which you desire and which,
so far as we personally are concerned.
we are entirely willing that you should
have.
Without waiting for such conference
we beg to suggest that II may be possible
for us to secure the consent OF the third
parties TO the extent that YOU may desire
In fact we have asked such consent in
the only two specific cases which you
mention In your letter and we are glad
TO say that the parties are entirely will
ing that their names he disclosed.
Answering your specific request. there
fore. we beg to say:
"First-The names OF the persons to
whom $4,000 shares OF stock we're sold IN
1910 by J. r. Morgan a Co. for the
accounts OF the navigation company will
be given your accountants.
"Second-The names of the purchasers
or the New York. Westminster and Boston
bonds. sold in 1911 and 1912 unstead
OF 1910 as stated In your letter. by J
7. Morgan 4 Co. for account OF the New
Haven road will be given your account
ants.
Ready 20 Get Consents
"rhird-When the name Of a third
party appears in any OF the entries upon
our books relating to our transactions
with or for the New Haven railroad we
shall endeavor to obtain consent OF such
third party to the giving up Of his name
FOURTH have not been advised OF
any difference between us on the cues.
ton OF correspondence. Your accountants
nave been and Will he allowed to inspect
any correspondence OF our firm with the
New Haven railroad or any Of its sub
salaries.
We appreciate your assurance that
you do not desire to gain Information
from our records other than that bearing
upon the subject matter OF the New
Haven situation"
Finally Accountant Brown on July Q
again reported back TO Commissioner
McChord as follows:
DEAR SIR; Replying to your favor 9Th
and answering question contained therein
"Flrst-Full access to the records of
J. i. Morgan and J. +. Morgan q 60. has
not been granted to me such items of ac-
counts as contain the record of the trans
actions published in their statement ad-
dressed to the chairman OF the New
Haven board dated March 4, 1914, have
been submitted. and all exposed data re-
lating TO the transactions under review
have been covered by papers, and in in
Vulnerable Instances where the name of a
third party was involved such information
was also covered up
STANDARDIZATION have been allowed
10 inspect all transactions on the books
of ]. r. Morgan a. Co relating to the
New Haven or Its subsidiaries am
unable to state
II do not know what accounts are on
their books except the few reported in
their statement previously referred to and
several deposit accounts, dividend and
interests accounts, which they voluntarily
submitted.
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14

The confusing INTERPOLATION OF the
principal company and its subsidiaries
and consequent complication OF ac-
counts
The practice OF financial legerde-
main in issuing large blocks of New
Haven stock for notes OF the New
England Navigation Company and
manipulating these securities back
and forth.
Fictitious sales of New Haven
stock TO friendly parties with the de-
sign OF boosting tho stock and UNI
loading on the public at tho higher
market price.
The unlawful diversion Of cor
poratc funds 20 political organlza-
lions.
The scattering OF retainers to at
torneys OF five States who rendered
no itcmized bills for services and who
conducted no ltlGation to which the
railroad was a party.
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14

Extensive use OF paid lobby IN
matters as to which the directors
claim to have no information.
THE attempt to control utterances
of the press by subsidizing reporters.
Payment OF money and the
prohigate issue OF free passes to legis-
lators and friends,
THE investment OF 100000 in SCI
curites OF New England news
paper.
The regular employment OF political
bosses IN Rhode Island and other
States, not for the purpose of hav-
ing them perform any service, but TO
prevent them, as Mr. Mellen ex-
pressed II, from becoming active on
the other sid
THE retention by John l.. Billiard
OF more than 100000 In trans
action in which no represented the
New Haven and in which he invested
not dollar.
1.-THE inability OF Oakleigh Thorne
N account for Sl,O32, 600 of the funds
OF New Haven intrusted to him in
carrying out the Westminster PROPOSE
tIon
THE story ~ Mr. Mollen as to the
distribution Of SI2o0000 for corrupt
purposes In bringing about the West
Chester and Port Chester franchises.
Dominating Factors.
RThA AnroIna,,ox~ "a
The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-14

Dominating Factors.
Sphe domination of an the affairs
Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-08-15
DECIMAL POINT GIVES
CONTRACTORS TROUBLE
In Eight Jumps Makes 81 ,OOo, 600
Look Like One
Cent,

A decimal point is not an imposing
looking object. It might be mistaken
easily for a period or a fly speck And
yet it can cause a lot OF trouble. In eight
Jumps 1t can make 100000 look like one
cent It can befuddle an engineers cal
culations or transform q contractors bid
into a fearful and wonderful thing. II
the decimal point is moved one place toe
far to the west In a unit bidding price. the
contractor and everybody else will be
surprised when the bids are read. Move
1t too far to the east and the lucky
bidder will reach for a life preserver
Mistakes like these are Of frequent oc-
currence.
A few weeks ago. at highway letting.
when the proposals were opened 1t was
found that one man had offered to do
the work for 81 $50 60. while his nearest
competitor had estimated the undertaking
at $2o,112, says the Cleveland Leader.
The low man sweated drops of blood In
convincing a board of road supervisors
that his bid was only one-tenth OF what
he intended, and that was all the Salts
faction he got, for his proposal was re-
jected. An instance where the decimal
point apparently jumped too far in an
other direction occurred In recent let.
Il Y when the contractor submitted bid
having a somewhat imposing total Of over
81. COO 600. The other estimates ranged
from $247. COO to 100000 The right lati-
tude and longitude Of the decimal point
is rather an important matter.
Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-08-15
SHIFTING BUSINESS CENTERS
Means Hard Work for Renting Man,
According to Writer.

For obvious reasons concerns in the
same or kindred lines Of business have al
ways gravitated toward a common center.
In most cases districts SO formed have
been named after that line Of business
predominating. according to Edward
Samson, in the Real Estate Magazine.
In the last dozen years there have been
some vast changes in the way Of shifting
business centers. resulting in great losses
as well as gains to property owners.
The renting man in the district which
Is being denuded has all his work cut
out for him. In order to stem the tide
he must consider the matter Of q reduc-
ton in rents. improving Of the premises.
bringing them up to date. and in addition
use his most convincing arguments to In
duce the tenant to remain. Instituting
economy In operating expenses or the
like at such a time would provo poor pol
icy.
Despite his best efforts there will be
vacancies to I'LL. He determines on GER
tain lines that would be likely to yield
him business and starts a personal can
yass in the proper season. keeping REQ
ord Of the results especially expiratonss
which will be Of value in subsequent cam
paigns.
Judicious advertising in the right pa
pers. calling attention to the building az
headquarters for certain lines. will be OF
help. For office buildings. circularix,ng
will be Of assistance, but the mainstay
in every case Ii the personal canvass.
Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-08-15
SLOGAN "WATCHFORATOWN''
ISNOLONGER NECESSARY
Congress Heights, an Attractive Suburb in
the Southern Section of the District of
Columbia, Now Has Several
Thousand Inhabitants.

the Insane, which are located between
Congress Heights and Anacostia, the
growth Of the suburb in a northerly d.
rection has been limited, but develop
ment Is extending to the south and east
of the central section Of the town.
There are scores of attractive homes
in Congress Heights. Modest cottages
and bungalows predominant, but there
are several large residences with ex-
tensive grounds. Those located to the
south of the suburb, along the Liv-
ingstone road, command an excellent
view down the Potomac river. and for
that reason are particularly desirable.
Where the residences now are located
was the scene Of considerable military
activity during the civil war. 1t was
along this high ridge. extending paral-
lei to the eastern bank Of the river,
that two OF the chain of forts guard
ing the National Capital were located.
By reason Of their location they COM
manded the entire river between
Washington and Alexandria, and would
have played an important part had an
attack on the National Capital been
made from that direction. In addition
to the two forts there were Q number
Of minor Notifications in tho neigh
borhood.