Show t rc I I CRITICIZES GOULD UlD PROGRAM lor f Insolvencies of Two Lines Declared Traceable to Western Pacific FIVE YEAR STUDY E Enormous Losses Said to toBe Be Results of III III- Advised Undertaking Undertaking Under Under- taking g WASHINGTON July 30 AP AP- AP The AP ie Interstate commerce commis- commis on commis-on on held today that the c es and receiverships o or of the Vestern Western West West- ern Pacific and the Denver Rio Grandc Crande railroads are all traceable e t to one source the assumption In 1905 by the Denver companies of Obligations with respect to th the e Western Pacific and Its securities s which bich were beyond their abilities t to tot o t fulfill This conclusion was announced announce d completion of the commissions commission's commissions commission's commissions commission's com com- missions mission's year five-year investigation i into to the financial operations and an d practices of ot the Western Pacific a and d Denver Den Rio Grande roads an and d their holding companies TO COMPLETE CHAIN Regarding the construction of th the Western Pacific which was backed by b the Denver companies to com coin compete complete pete the Gould chain of railroads railroad s across the country the commission asserted that the enormous losses losse s b by stockholders and bondholders bondholder s and the long period of impaired d railroad service followed as th the e natural economic results of that on one e undertaking The The greater part of the Western wester n pacific the commission said traversed a mountainous and desert deser t country countr which was utterly unable e to contribute any amount of traffic Ample railroad facilities already existed for traffic moving between the pacific coast and all all' territory e east st of the Rocky I mountains BOUND BURDEN The report declared that in order to make good the operating deficit during the Western Vestern Pacific's stage of adolescence Gould bound that burden upon other roads of his s system stem s 's tem with little concern to whether or not they could bear it without impairment of the ability to serve the public adequately over their own rails raUs The early activities of Gould and Jeffrey E E. president of ot the od old Denver in initiating the Western Pacific project said the commission were carried on by use of funds and upon the credit of the old Denver without the au authority authority au- au of the company's directors or stockholders LATER REPAID If the project was undertaken as a personal venture such misuse of company funds cannot be too se severely severely se- se verely denounced and this statement statement state state- ment is made with full recognition that the loans obtained from and upon the credit of the old Denver were later repaid If the early initiation of the project was on behalf of the old Denver the undertaking undertaking- was unauthorized unauthorized un un- authorized and the use of company funds and credit in that undertaking undertaking ing was likewise unauthorized The commission found no evidence evidence evi evi- dence that the insolvencies of the Western Vestern Pacific and the new Denver Denver Denver Den Den- ver were brought about for the personal personal per per- profit of the roads road's officials but added that shortly after the Missouri Pacific established control over the Denver nver companies those companies theretofore profitably and conservatively managed were committed to an unwise speculation which was intended to benefit all railroads of the Gould system whereas its risks would be borne by the Denver Den companies alone That such a situation could have been brought about through ownership ownership ownership owner owner- ship of only 30 per cent of a a. railroads railroad's rail raU- railroads railroad's roads road's stock the report continued Is illustrative of the Inequities which were formerly possible within within within with with- in a railroad s system stem controlled through interlocking directorates No o order was entered in n connection connection connection tion with the Investigation although al although al- al though the proceeding was described described de de- scribed as for the purpose of determining determining deter deter- mining the manner and method in which the business of these companIes companies compa compa- nies haa had peen neen or vi i il beIng neing conducted conducted conducted con- con ducted with a view to the making of a report and such order or or orders orders orders or- or ders as might be proper in connection connection tion with their accounts and practices practices tices and the Issuance by them of |