" S?fW
wpwp
J.
The Commoner
VOL. 14; NO. 8
14
-r n,,t . m -rrr,K, T.J1-5
President Wilson Directs Action Against
New Haven Monopolists
Following arc special tolograms to the New
York World:
Washington, July 21. By direction of Pres
ident Wilson and with his entire approval Attorney-General
McRoynolds is to institute at once
a ault In equity to compel the dissolution of the
New York, Now Haven and Hartford Railroad
company.
At tho same tlmo, and also by direction of the
president, tho evidonco collected by the attorney
general involving tho criminal aspect of the case
will bo laid before a grand jury with a view to
eocuro the indictment of those directors of tho
road who wore responsible for its looting and
the loss of millions belonging to tho stockhold
ers. These two things wore decided on at today's
cabinet meeting, at which the entire situation,
developed sinco tho Now Haven balked on its
own proposal to purchase tho stock of the Bos
ton and Maine, was carefully gone over.
PRESIDENT DIRECTS McREYNOLDS TO
BRING SUIT
A letter from the president to tho attorncy
gonoral directing' hlni to take action was given
out to-night. It says:
Tho Whito House, Washington, July 21
My dear Mr. Attorney-General: '
I have your letter of today, 'inclosing a copy
of your lettor of- July 9 to Mr. J. H. Hustis,
president of the Now York, Now Haven and
Hartford Railroad company, which together dis
close tho failure of the directors of tho New
York, New Haven and Hartford .Railroad com
pany to comply with the terms of settlement pro
posed by them .and accepted by us in tho matter
of their railroad holdings.
Their final decision in this matter causes me
the deepest surprise 'and regret. Their failure
upon ho slight a pretext, to carry out an agree
ment deliberately and solemnly entered Into and
which was manifestly In the common interest, is
to mo Inexplicable and entirely without justifi
cation. You have booh kind enough to keep me fully
lnformod of every stop the department took
in this matter, and the action of the department
has throughout mot with my entire approval.
It was just, reasonable and efficient. It should
have rosultod in avoiding what must now be
done.
In tho circumstances the course you propose
la tho only one the government can pursue. I
therefore request and direct that a proceeding
In equity be filed, seeking the dissolution of tho
unlawful monopoly of transportation facilities in
Now England now sought to be maintained by
tho New York, Now Haven and Hartford Rail
road company, and that tho criminal aspects of
the case bo laid before a grand jury. With much
regard, sincerely yours,
WOODROW WILSON.
With tho president's letter to tho attorney
general were given out one from Mr. McRey
nolds to the president and from him to Presi
dent J. H. Hustis of the New Haven.
McREYNOLDS CRITICISES INTERSTATE
COMMERCE BOARD
In his lettor to the president Mr. McReynolds
points out that the New Haven directors repudi
ated their own agreement. He gives a brief
hiBtory of tho case and shows that ho had al
ready prepared a dissolution suit which was
"halted because the now management of the road
Mr. Elliott's) had assured him that it desired
to act with tho law.
Tho attorney-general criticises the action of
the interstate commerce commission in calling
to the witness stand former President Mellen of
the Now Havon, who, he declares, is "flagrantly
culpable," and expresses tho fear that he may
have secured immunity in that way.
Ho calls attention to tho fact that tho presi
dent has approved his course in the entire con
duct of tho situation and ends by advising both
civil and criminal action against tho New Haven
Tho attorpoy-goneral's letter to Mr. Hustis
was written July 9. It goes into the caso in
even greater detail. Mr. McRoynolds puts the
responsibility of the consequences of the suit
squarely up to tho Now Haven board
Ho shows that the $alo of the Boston and
Maine stock owned ,by the New Haven under
the enabling act of the Massachusetts' legisla
ture, which the directors have repudiated, would
have been mado under the same conditions which
tho state has always imposed on the New Haven.
Ho ends by saying the president finds it hard
to beliove that such men as the directors of the
New Havon could fall to carry out their agree-
ment.
SUIT WILL PROBABLY BE FILED AT ONCE
It is expected that the attorney-general will
file tho bill in equity in the southern district
of New York at once. The document has been
prepared for months and would have been filed
long ago had it not been for the agreement which
was entered into between the officials of the
New Haven and department of justice for peace
able settlement of the points at Issue.
The evidence collected by the attorney-gen-oral
which will be used in the criminal proceed
ings, likewise will be turned over very soon to
a grand jury for action.
NEW HAVEN REPUDIATED ITS OWN
AGREEMENT
Washington, July 21. The letter of Attorney
General McReynolds to President Wilson, calling
attention to tho unsuccessful efforts of the de
partment of justice to bring about a peaceful
solution of the New Haven situation and recom
mending that criminal and civil suits be insti-.'
tuted against the road, follows:
Department of Justice,
Washington. D. C, July 21.
To tho President, the White House.
Dear Mr. President: Some days since, I re
ported to you that the board of directors of the
New Haven railroad had advised me that they
would not carry, into effect the approved pro
posals made by them last winter for bringing
the affairs of that company into harmony with
tho federal statutes. .
Following your direction, I wrote to the pres-.
ident of the company on July 9, expressing your
views and my own in opposition to the position
assumed by the board. A copy of that letter is
attached hereto.
Saturday last I received a request to confer
with a committee composed of members of the
board on yesterday Monday. They came here,
and wo discussed the situation. I emphasized
the position of the government as outlined in
my etter of July 9, and energetically called at
tention to the results which would necessarily
follow adherence to the position taken by them.
THE NEW HAVEN'S REFUSAL
They refused, however, to admit any obliga
tion to conform to the Massachusetts enactment
and firmly declined to carry into effect their
own proposals for an adjustment.
During the past year you have been constantly
in touch with my actions in respect to the New
Haven road, and you have been good enough
to express satisfaction therewith. It seems
however, not inappropriate again to remind you
of some aspects of tho general situation.
Prior to 1908 the attention of the department
of justice was called to the unlawful Combina
tions and monopolies in which the New Haven
ft thQ PrhlSlpal par' May
of that year a proceeding under the Sherman
law was instituted wherein the government
sought to correct certain of the existing eX
This suit was dismissed June 26, 1909 There
after the monopoly proceeded to strengthen l
hold upon the carriers of New England
By the time your administration began thn
New Haven aud the Boston and Maine rlilroads
had been reduced to the unfortunate conation
now unhappily too well known: their ZS
widely distributed among small investors hS
shrunken enormously in value, aSd the com
merce and industries of all New gland we
under severe strain. bmna Were
ru .i SU!T PREpARED BEFORE
Directly after assuming this officfi hni
vinced that the situation Bdemauded'a thou
investigation by capable counsel, I retained Mr
T. W. Gregory, well known to vnn i ,
ability, industry and InteSty aw imnoihST
In due time he reported? resu ?S?"ta
searches, and I instructed him to prepare
filing at the earliest possible rnoment a proceed
thf lanweqUUy t0 KVent further violationsof
moBiQfrt0r thIs could b0 accomplished the rail
road company selected a new chief officer and
ho earnestly asked to enter unnn m ,
with me looking toward anffimenfU out
the necessity of a suit. You have been ffiffj
with the outcome; and, as the terms of thpiaS
agreed on were published, they became generally
known.
, Because of the important consequences in
volved directly to New England and immediately
to the rest of the Union, it seemed most im
portant, first, to accomplish, if possible, a' restor
ation of lawful conditions in the transportation
facilities of that section with the least possible
further distress to impoverished investors and
unsettled industries; and I have acted accord
ingly. GAVE NO HOPE TO CRIMINALS
The criminal aspects -of the case have been
kept constantly in mind, much data bearing
thereon was collected months ago, and care has
been exercised to permit nothing which might
interfere with proper prosecutions at the ap
propriate time. We have not held out the slight
est hope that parties guilty' of criminal viola
tions of the law would escape. .
In April and May last, there being indication
that the interstate commerce commission, by
examining them, might immunize certain central
figures in the unlawful arrangement, it was
asked carefully to consider the effect of such
action;
Nevertheless, Mellen, and perhaps others fla
grantly culpable, were put upon the stand, and
any criminal prosecution hereafter instituted
probably will be embarrassed bv a claim of im
munity interposed in their behalf.
SOUGHT TO AID STOCKHOLDERS
With the utmost jpatience and in an intense
desire tD enforce the law "in such a way as to
bring no unnecessary hardship upon New Eng
land or the unfortunate .holders of the railroad
securities, we haVe sought to compel a restora
tion of lawful conditions; but, as I believe, with
out proper justification tho board of directors
resolutely decline to proceed. under an approved
arrangement adequate to that end and alto
gether fair.
I am of the opinion, therefore, that the time
is at hand when we 'should file a" proceeding in
equity, seeking the dissolution of the unlawful
monopoly of transportation facilities in New
England, and that tho criminal aspects of tho
case should be laid before a grand jury. If
these suggestions meet with your approval I will
immediately give the necessary directions.
Faithfully yours, J. C. McREYNOLDS.
STOPPED FIRST STTTT WHEN ROAD GAVE
ASSURANCES OF GOOD FAITH
Attorney-General McReynold's letter to Pres
ident J. EJ. Hustis, under date of July 9, calling
attention to the attitude of President Wilson and
the department of justice on the refusal of tho
direcors to accept the legislation providing for
the sale of the Boston and Maine stock, follows:
Office of the Attorney-General,
'Mr t XT asJlinSton, D. C, July 9, 1914.
Mr. j h. Hustis, President the New York, New
Haven and Hartford Railroad Company,
New Haven, Conn.
it?2 P,eaTriSiro: ,Permlt me to reply to your
iS a 2nly 8' InclosInS copies of resolutions
?wl y the diretors of the New Haven
SioStdi conlpany on June 25 and July 8 re
spectively, i also have a letter of July 6 from
your counsel Mr. Moorfleld Storey of Boston.
i,J,5rH- uese communications announce that
1 fh8,stSe recently passed by the Mas
Naw WnlLleglature' wanting power to the
totlnS aynenflrailroad company to dispose of its
K stJn, 0 majority stock of the Boston and
fh rLfcf 0ad !Gserves o that commonwealth
h?opE of fy 'J? hereafter to purchase such
leS lif filiation, to be ascertained by
to ?hnZ? sses' yr directors feel at liberty
sSlSmn r Jiny ,fUrther effort t0 com&y with the
toSS n57PSttl Which thQy heretofore made
brinr nf d7?ich AGre approved as adequate to
with the law that comPanv lno compliance
LAYS ONUS ON NEW HAVEN
ana Su Iw13!0601 t0 the course Proposed,
action rnVianat U ,s. without justification. Their
SortanPA 5a qj;estIon of very large public im
Ff nPrfoaiTanding serious consideration; and
rector- m U" y0UlcPany, its officers and di
tto inSv ffnhi aCCept the 80lG responsibility for
uio inevitable consequences.
teredunL1; Ve DTresent administration en
fj0" "s dfutIes, I employed special counsel
oTthe N fTT0t an tayestigation of the affairs
ascertalnfZ naVen raIlrad for the purpose of
it dev oi efGMaCt tions. In due time
violated ami riat the anti-trust lavs were being
tion nf ' Hni1 accordmgly directed the prepara
mfractions strain aud prevent further
Before this could be written and filed, and
ft' ii
.
