The New York, New Haven and Hartford Railroad Company was formed in 1872 as a consolidation of the 63-mile New York and New Haven Railroad and the 78-mile Hartford and New Haven Railroad. In 1882 it leased the Boston and New York Air Line Railroad and obtained a controlling interest in the Hartford and Connecticut Valley Railroad. With the approval of its shareholders, the company charter was amended in 1881 to allow it to acquire and use steamers and ferries, as well as to buy and sell shares in any Connecticut company owning or operating ferry boats, providing the expenditure did not exceed two percent of the company’s stock. J.P. Morgan entered the scene and organized an elaborate (and expensive) system of railways, steamers and tramways, which by 1909 was approaching bankruptcy; plunging thousand of small shareholders into ruin. The scandal took on such large proportions, that the affairs of the company were thoroughly investigated, disclosing numerous instances of gross maladministration and illegal practices. Morgan himself was forced to the witness stand in 1912 to testify to this fact. The investigation was completed in 1914 with the Interstate Commerce Commission harshly ruling that the financial operations necessary for these acquisitions and the losses which they have entailed, have been skillfully concealed by the juggling of money and securities from one subsidiary to another;. This critical comment was particularly aimed at Morgan, in his position as banker as well as director of the railroad. The investigation had revealed grossly exaggerated prices paid for various railway acquisitions, large sums spent on influencing public opinion through the press, fictitious sales of the company’s shares to friendly parties to inflate share price and payments of money to politicians and legislators (some things never change!). Despite the commission’s findings, the railroad was allowed to survive, although its shares had sank to practically nothing, and not a single dividend had been paid for 10 years.
Harlem River Division First Mortgage Bond, issued in the 1950’s
Printed by the Columbian Bank Note Company
15” (h) x 10” (w)
This certificate has horizontal fold lines, punch hole cancels in the signature areas and body, and some toning from age.