The Birmingham age-herald., 1917-04-29

pointed both the Pere Marquette and Chicago, Hamilton and Dayton were hopeless bankrupts. In the meantime, the Erie directors had actually passed a resolution to send J. P. Morgan vote of thanks for selling them the bankrupt Chicago, Hamilton and Dayton system, copy of which was to be forwarded, suitably engraved, under the corporate seal, and signed by every director" The report then continue
 This sordid tale has been told with out adjectives. The facts speak for themselves, and they have been given in all their nakedness, without other com ment than such as would serve to tie them to other facts, also of record"
 Declaring that promoters were guilty of criminal action it is added
 Tt has been the endeavor of Morgan & Co throughout this proceeding to prove that they were not aware of the actual condition of these two roads when J. P. Morgan made the suggestion to President Underwood of the Erie, which resulted in the latter's purchase of the Rollins holdings of the Cincinnati. Hamilton and Dayton stock. We have stated in detail the many facts of record to the contrary With all that the records shows as to the free hand" of the Erie in making this purchase of the Cincinnati Hamilton and Dayton, we find no reason to doubt that 1t was the Morgan influence in Erie affairs which dictated that purchase, and the Hartman influence which so soon thereafter forced Morgan to release the Erie from It's bad bargain. Through that recission of it's contract of purchase the Erie escaped all loss.'
 The report then shows how, against the advice of its own comptroller, who had made & careful investigation, Balti- more and Ohio in 1909, after the first re- ,fr1 tba IIoy,, ilton and Dayton; how the Baltimore and Ohio to date has put up s35, ,S92, 1923 to pay for it's bad bargain, of which $10, S92, 323 was charged to profit and loss by Balti- more and Ohio in its statement just is- sued for 1916. The report continues:
 Nothing disclosed in the record before us Is to be more regretted than the readi- ness of great banking institutions in our financial centers to loan enormous sums of money upon exceedingly precarious se- curity 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 ostensibly 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 had little compunction about vio- latfons of their trusts for the benefit of the promoters. and at their demand"
 Breach of trust by corporate officials, often for personal gain, the report says. was responsible for the downfall of the Pere Marquette, the Cincinnati, Hamilton and Dayton. the New Haven, the Frisco. the Rock Island and the Alton, and other similar cases investigated. Much has been made during the past two years is the final comment of the fact that "oNer 10000 miles of our railroads were under recelvership."
 It fs then pointed out that lover 40 peD cent of that mileage made up of 69 differ ent railroads is In systems which, as shown by our investigations. have suf- fered principally from financial misman- agement and exploitation. R. l.. B."