Evening journal., 1914-07-13

less TO their Stewardship we're held
responsible Ia tho courts and at the
bar Of public opinion for the failure
to do those things thay should have
done, the lesson 10 directors who do
not direct would be very Statutory"
That the directors should be held
responsible for the Weatchoater,
steamship, Rhode Island, Connecticut
and Massachusetts trolleys and other
transactions was declared.
Testimony OF thigh finance" was cited
as follows,
Marked features and significant in.
eidents in tho loose, extravauant and
improVident administration OF the nnnn-
ees OF the New Haven as shown In this
investigation are the Boston and Maine
deapoilmenti the niquity OF tho West.
chester acquisition, the double prico
paid for tho Rhode lsland trolleysi the
reeklessness IN the purchase Of Conneoti
cut and Massachusetts, trolleys Rt pricea
eNorbitantly in excess Of their market
valuoi the unwArranted expenditure OF
large amounts educating public opin.
ioni' the disposition, without knowl
edge of the directors Of hundreds Of
thousands Of dollars for influencing pub
lie sentiments the habitual payment oil
unitemized vouchers, without any clear
specification Of details; the confusing
inter-relation of the principal company
and its subsidiaries and consequent COM
plication Of accounts; the practice Of
financial lAgerdemnin 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 design OF boosting tho stock and un
loading on the public at the higher
market price, the unlawful diversion
Of corporate funds to political organika
tionsi the scattering Of retainers TO at.
torneys Of five states, who rendered no
itemized bills for services and who con.
Quoted no litigation to which the rail
road was party; extensive use Of a
paid lobby in matters as to which the di-
rectors 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 legislators and their friends;
the investment Of 100000 in securities
of a New England newspaper; the regu-
lar employment of political bosses in
Rhode Island and other states, not for
the purpose Of having them perform any
service but 20 prevent them. as Mr. Mel
len expressed it, from becoming active
on the other side' the retention by
John l.. Billiard of more than 5000, 600
In transaction in which he represented
the New Haven and into which he in
vested not n dollar; the inability Of
0akleigh Thorne to account for 81 ,032 900
of the funds OF the New Haven intrust
ed to him in carrying out the Westohes-
ter proposition; the story Of Alcllen as
to the distribution OF 81 100000 for cor
rupt purposes in bringing about amend.
ments Of the Westehesfer and Portehes-
ter franchises: the domination Of all the
affairs of this railroad by Mr.. Morgan
and Mr.. Mellen and the absolute subor-
dination Of other members Of the board
OF directors TO the will Of these two; the
nnwarranted increase Of the New Haven
liabilities from S03,000.000 in 1908 to
S4l7 100000 in 1875 the increase in
floating notes from nothing in 1909 TO
approximately $40O00O00 in 1913 and
the indefensible standard Of business
ethics"
The commission designated the III
nancial transactions undertaken by
the directors as Financial joy-Rid-
ing"