The daily telegram. [volume] (Clarksburg, W. Va.) 1901-1926, 1914-07-13
BY Interstate Commerce Com
mission in Most Drastic Re-
port 1t Ever Made.
MANY MILLION DOLLARS
Are Lost by MaIadministration
/. and Evidence is Sent to Sew
eral District Attorneys.
tsr AsseclA1to raIss,

I WASHINGTON, July 13.-"one OF
THE most glaring instances of NAL
administration revealed in all the
history of American railroading" is
the Interstate Commerce Commis-
sion's characterization of its findings
in the investigation of New Haven
railroad financial affairs reported to-
day to the Senate. In a report of 30,-
900 words. probably the most drastic
in terms of any ever made by the
icommission, the New Haven's direc-
tors were pronounced "criminally
negligent" Evidence pointing to vio-
llation of the raw has been transmit
ted to district attorneys in Massa-
lchusetts, Rhode Island and New
York and the federal department of
Justice.
: "A reasonable estimate of the loss
ITO the New Haven by reason of waste
and, mismanagement," says the re-
port, will amount to between $780,
100000 and 500, 100000. Directors
ishould be made individually liable to
tcivil and criminal laws for the man
ner in which they discharged their
trust" All the commissions stric-
lures were made upon the manage
ment of the New Haven system un-
der former President Mellen. In
Justice to the present management
| the commission says 1t is but fair to
say that Chairman Elliott and w.
/ Hines, special counsel, have coop
Grated with the commission and rem
dered 1t substantial assistance
Throughout this investigation" The
report cites these Significant Incl
idents:
Marked features ana tie significant
/ incidents in the loose extravagant and
Iimprovident administration of the f.
nances Of the New Haven as shown
in this investigation are the Boston
and Maine despoilment; the inequily
tof the Westchester acquisitions; the
double price paid for the Rhode Is
land trolley ;the recklessness In the
purchase Of Connecticut and Mass
achusetts at prices exorbitantly in ex-
cess of their value; the unwarranted
expenditure of large amounts in agi-
tating public opinion; the disposition
without knowledge Of the directors Of
hundreds OF thousands of dollars for
influencing public sentiment; the hab-
itual payment Of unitemized vouchers
without any clear specification Of de-
tail; the confusing inter-relation Of
the principal company and its SUBJ
sidiaries and consequent complication
of accounts; the practice OF financial
legerdemain in issuing large blocks
OF New Haven stock for notes of the
New England Navigation Company and
manipulating the securities back and
forth;. fictitious sales of New Haven
stock to friendly parties with the de-
sign OF boosting the stock and unload
ing on the public at the higher mar
ket price; the unlawful diversion of
coperate funds to political organ
ization; the scattering of retainers to
attorneys Of FIVE states who rendered
no itemized bills for services and who
conducted no litigation 10 which the
railroad was a party; extensive use of
paid lobby in the matter as to which
the directors claim to have no infor-
nation; the attempt to control utter
nnces of the press by substituting re-
porters; payment of money and the
profiigate issue OF free passes to leg
islators and their friends; the invest
ment Of 100000 in securities Of a New
England newspaper; the regular en-
ployment Jf political bosses in Rhode
Island and other states not for the
purpose Of having them perform any
service but to prevent them