New Britain herald., 1917-04-20
CROOKEDNESS BLAMED FOR
 DOWNFALL OF RAILROADS
l. c. c. Files Stinging Report on Wrecking of Pere Mar quette and Cincinnati, Hamilton and Dayton.

Washington, April 20.-The finan- cial downfall of the Pere Marquette railroad and the Cincinnati, Hamilton and Dayton railway is attributed in long report made public today by the Interstate Commerce Commission. Primarily to 'tbreach of trust by cor porate officials often for personal gain"
 That downfall with it's deplorable consequences. ''the report reads, can be traced only to betrayal within and not to compulsion without. Neither rivalry nor rate level nor regulation, nor all combined can be tound on the record to have contributed in any ap- .preciable degree to the disaster.
 Nothing disclosed in the record be- fore us is more to ,be regretted than the readiness of great banking insti- tutions in our financial centers to loan enormous sums of money upon ex- ceedingly precardous security in aid of such schemes as have been devised in the wrecking of these railroads.
 Not only this, but the high officers of such institutions, while acting os- tensibly as directors of the railroads, have, in fact, been little more than tools and dummies for the promoters The trustees of other peoples money seem to have little ompunction about violations of their trusts, for the ben eft of the promoters and at their de- mands.'
 The Cincinnati, Hamilton and Day. ton, the commission found. suffered ''the evil of deferred maintenance al- most from the close of July 2, 1904, of the successful Shoemaker Wood : ford management. Considerable i'm provement was made after the Balti- more and Ohio took over the foR{i. but 1t did not continue and the result was like that on the Pere Marquette.'' State Control of Securities Weak. '"rhe exploitation in 1903, 1904, and 1905. of the Pere Marquette and Cincinnati,> Hamilton and Dayton, ''the reportScontinues, twas not an in- cident of railroad construction. What ever control or regulation of the issue of railroad securities was exercised by the states in which these roads oper- ate was inadequate to prevent the ex- plotting or to forestall subsequent,
 
 ''To the extent that these fiotations ultimately lodged in the hands of in- nocent investors. whether here or abroad, the public was deeply wronged. Whatever control or regu- lation was had of the properties and operation of the two roads, was not sufficient to keep them in condition to satisfactorily serve the population dependent upon them.''
 The commission asks if the fate of these two railroads cannot serve to avert similar happenings to other roads in the future. Perhaps not en- tirely,'' the report continues, ESQ long as the financial circles, continue com placent toward financial explorations which prove successful. But it will help if minority stockholders are more watchful of their interests and if bond holders assert their rights before their security fades away for lack of up- keep, purposely neglected in order to pay interest and dividends, unearned. It would, in our opinion, render such exploitation more difficult if the issu- ance and marketing of all securities of common carriers were subject to fed- eral regulation. As, to that. we re- new the recommendation repeatedly made to congress in our annual re- ports. We also point to the lesson here again taught that access to cor respondence files is indispensable for thorough and accurate understand ing of the motives and purposes which underlie the formal entries made in accounts and records
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