Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-07-14

Maine despoilment; the inequity of
the Westchester acquisition; the
double price paid for the Rhode Is
land trolleys; the recklessness in the
purchase of Connecticut and Massa-
chusetts trolleys at prices exorbitant-
ly in excess of their market value
the unwarranted expenditure of large
amounts in educating public opin-
ion;" the disposition, with knowledge
of the directors, of hundreds of thou
sands of dollars for influencing pub
lie sentiment; the habitual payment
of unitemized vouchers without any
clear specification of details; the con-
fusing INTERPRETATION of the principal
company and its subsidiaries and con-
sequent complication of accounts; the
practice of financial ledgerdemain in
issuing large blocks of New Haven
stocks for notes of the New England
Navigation Co. and manipulating these
securities back and FORTH fictitious
sales of New Haven stocks to friend
ly parties with the design of boosting
the stock and unloading on the public
at the higher market price, the I'M
lawful diversion of corporate funds to
political organizations; the scattering
states, who rendered no itemized bills
for services and who conducted no lit
igation to which the railroad was
party; extensive use of a. paid lobby
in the matters as to which the direct
ors claim to have no information;\ the
attempt to control utterances Of the
press by substituting reporters; pay
ment of money and the Issuance OF
passes to legislators and their friends;
the investment of 100000 in securi-
ties of New England newspaper;
the regular employment Of political
bosses in Rhode Island and other
states, not for the purpose OF having
them perform any service but to pre-
vent them, as Mr.. Mellen expressed
it. from becoming active on the other
side;' the retention by John L. Bill
lard of more than S2,o00,0Oo in a
transaction in which he represented
the New Haven and into which he
invested not dollar; the inability or
Oakleigh Thorne to account for w.
O32, 900 of the funds of the New Ha-
ven entrusted to him in carrying out
the Westminster proposition; the story
of Mr. Mellen as to the distribution OF
81 100000 for corrupt purposes III
bringing about amendments OF the
Westminster and Portchester iran
chises; the domination of all the az
fairs of this railroad by Mr. Morgan
and Mr.. Mellen and the absolute sub
ordination of other members OF the
board of directors to the Will of THESE
two; the unwarranted increase or the
New Haven liabilities from 930Oo,0oo
in 1903 to $417,000, 900 in 1913; the in
crease in floating notes from nothing
in 1908 to approximately $40,0oO,oo0 In
1913; the indefensible standard OF
business ethics and the absence OF
financial acumen displayed by eminent
fnanciers in directing the destlnles OF
this railroad in it's attempt to estao-
lsh a monopoly of the transportation
of New England. A combination OF an
these has resulted in the present de-
nlorable situation in which the al
fairs of this railroad are involved
Stockholders to Recover
From the facts developed in this i'm
vestigation it would seem that there is
! little question concerning the recovery
/ of a substantial amount of the stock
holders money that has been wasted
! Several items of this nature will be
| briefly summarized:
"Overpaid Perry and Thorne in COM
missions 5000, $50.
Illegally spent in obtaining West
chester franchise changes $1,524,0727.
! In the Billiard transaction $2,74S, 700.
THE money with which Billiard ac-
| CURED the 1915 additional shares of
common stock and 527S shares of pre-
! ferred stock of the Boston Il Maine
| Railroad Co. was furnished by the
New England Navigation Co. This
stock was turned back to the naviga-
ton company for s3.37O0s2. 1t would
seem that a suit by stockholders for
| the recovery of the profit which is
Justly due the navigation company, if
any was made by Billiard in the trans
| action involving these additional
| shares, could be maintained.
IF any expenditures were made in
! violation of the antitrust laws of the
United States, are not such cxpendi-
lures ultra-vires and is it not hte legal
| obligation of the directors to satisfy
ont of their own fortunes any loss
which results to the company"
These are all pertinent questions in
the light of the developments brought
about by this investigation.
only lawful expenditures are au-
| thorized.
"All illegal disbursements are ultra
| wires.
| Directors cannot without account
ability deplete a corporate treasury in
ventures which are in violation of the
laws of the land.
| Immunity for Few
Tn the Investigations the commits
sion is required to make from time to
time. 1t has. in accordance with it's
usual custom, exercised due caution
| not to require the testimony of wit
| nesses where immunity might result
except when it is necessary in order
To get at the truth. The purpose of
the immunity statute, as the commits
sion understands it, was to aid in
the search for facts by removing the
obstacle of witnesses refusing to tes-
tify on the ground Of Standardization
| and under the statute the commission
has always endeavored to exercise