Show v WESTERN RAIL INQUIRY CLOSED I C C Says Building of T Western estern Pacific Was Yas Blun Blunder er ByTho WASHINGTON W July By aO-By o The 1110 Associated The Press Press The In- In In Interstate commerce commIssion held today that the tho InsolvencIes and receiverships of the Western Vestern and the Denver 8 Ulo 1110 Grande Grando railroads are are all trace trace- traceable traceable able to one ono source tho the assumption In fn 1905 1 05 by the Denver com companies panIcs of obligations with lIh respect to the Western Pacific and Its securIties whIch were beyond their abilities to fulfill This conclusion was announced In reporting ot of the tho Investigation commIssions commIssion's year five-year investigation Investigation tion Into the financial operations and practices of the Western ettern Pa- Pa Pacific Pa Pacific and Denver 8 Rio Grande roads and their holding com com- companies companies companies 1 I Regarding the construction of othe the Western Pacific which was backed by the Denver companies to complete the tho Gould chain of railroads across the country the commissIon asserted that the enormous losses lossel by stockholders and bondholders and the tho long period of Impaired railroad service followed as the natural economic results of that one ill advised un- un undertaking undertaking un undertaking IN 1 DESERT DESEnT REGION The greater creator part of the Western West West- Western ern frn Pacific the commission said traversed a mountainous and desert country which was utterly unable to contribute any substantial substantial substantial amount of traffic Ample railroad facilities already exIsted for traffic moving between the Pacific coast and all territory east of the Rocky mountains The report declared that In order to make good the deficit during the tho Western estern Pa- Pa Pa Pacific's stage of adolescence Gould bound that burden upon other roads of ot his system with little concern to whether or not they could bear It without ImpaIrment of the ability to servo serve tho the public pubic adequately over their own rails ralls The early activities of Gould and president Jeffrey 1 E l T Jeffrey dent of the old Denver n m n Initiating Initiating ing ing- the Western Pacific project said fald the commission were were car car- carried carried car carried ried on by use of funds and upon credit of or the old Denver Dell with with- without without without out the authority of the company's com com- com company's pany's directors or stockholders It If the project was undertaken as s a personal venture such mis- mis misuse misuse mis misuse use of company funds cannot be too 00 eve severely rely dO denounced and this I l c Is is made a e with full e og from and upon the credit of the theold theold old Denver were later repaid It If the early Initiation or of o the project was on behalf of the old Denver the undertaking was un- un un unauthorized authorized and the use of com com- company com company om- om pany funds hinds and credit In that un- un undertaking un was likewise unauthorized unauthorIzed unauthorized SPREADING RISK The commission found no evi- evi evidence evi evidence 1 dence that the Insolvencies of the Western estern Pacific Wc and the tho new Dea- Dea Deaver Den Denver ver er were brought about for the personal profit of the tho roads road's of- of offIcials officials of officials but added that thai shortly after atter the Missouri Pacific established established established control over o the Denier companies those companies theretofore profitably My and con con- conservatively conservatively con conservatively managed were com com- committed committed committed to an unwise sT which was Intended to benefit aU all railroads of ot tho the Gould system whereas Its lis risks would b be borne berne by the Denver companies alone That such a a situation could have been brought aBout through through- A ownership of ot only 30 SO per cent ofa of ot a railroads railroad's stock the report continued is Illustrative of the Inequalities which were formerly possible within a railroad system controlled through h Interlocking d No o order was entered In con con- connection connection con connection with the Investigation although al- al although al although though the proceeding was de- de de described scribed as for tor the tho purpose of determining de- de de determining the manner and method In which the business of ot these thelle companies had been or was as being conducted with a view to the making of a a report and such or- or order order or order der or orders order as ax mh might ht be proper In connection with their accounts and practices and the Issuance by them of securities |