New-York tribune., 1874-04-23
ERIE'S. DEFENSE.
pRFcmpNT wATsoNs REPORT.

MANAGEMENT
At meeting of the Executive Commll'ec VI
,he Erie Railway Company, held at NO. 90 "~i''l's' ~
,be following correspondence was submitted oy tres
A., wo,.o Tho Committee, consisting OF Messrs'
wat.on porlow Duncan, and scnuschardt received
cha .ame and ordered copies to Do trans
,n,,tcd 10 the press for publication The corresPonueo
consists of a communication from President watson 10
,no BOARD OF Directors refuaton OF the statement Oh
ex.Anditor Dunap, and is supported by letters rom
Presidents Clarke and Tyson to President watson
Mr. Watson denies that he omitted the word "approXi-
ynateyD on Dunans accounts, so that instead OF ap
nearing as estimated accounts they appeared
20 be and were published as absolutely correct
He charges that the word approximately never
appeared in the accounts, Duuan not having
written IT, The rest OF the letter Is devoted TO ospro'
ting the allegations of improper motives In transferring
s7l9o from current expense account 10 caps'
on tho certificate OF VicePresden Clarke ana suos
ouenty s4O 3O4 % on the certificate OF VeePreSaeh
Tyson. =, -
10 he Directors Of ne Erie Rdcay Compd'Wb a,ges OF
Before leaving England tae @ Smf not In
detail What then seemed the most mp1r m finishing
and requiring immfdste lat oGS sRs@e statement made the
State Engineer, FOR the year ending agpnroxmaeIy"
40 tbst Scconnis which Mr. Dunan charged & nS1 nb
made by him, estimated aI a. corssect To this
I'"'a AZ once gave prompt denial wnieh wiGted NE
published the London po papers almost simultaneously
yeay yea, heinI 6ed here sent to the printer Mr. DI-
nan own % h md RON ii ms account and affidavit were
published without alteration or emenualon o-, r-os
This original manuscript was parity pIlnted ana VIZ
pariy in lls o WI handwriting. and herewith suo9lt
II 10 yon. This statement OF MI Duhah Is thuS us
M Snbcsoh made here he also lays stress upon
letter Of the 18th December alleged 10 nave Dee so'
IL is enough to say that while have MI Dunans et
ters dated shortly before ana anGe at hear
ing that date letter containing the substance or
the text Of the alleged letter from which he prints pre-
tended extract, nor any letter nllng 'e cn %
statements to the condition OF the COMPANY, & Wnleh
on the 5h Of December 1878, Mr. Duuan wrote me Iel
Ter from which make an extract as iOuoWs 10 @ ~ ,sn,
ssd rest 90 IS 70 permanent and rss feel the 3ee Of
,,t The sin aero the wster would and tbsI could give
you helping haad at the same TIME A9d not T19g oCse R % 70 @ '
hams With foil explanations the evidence 70 ioea me Iioyossa Ps
ON he ist Of December he wrote me- inclosinC first
proofs OF portion Of toe accounts In which letter he
SAYS: 81 did not tell him" (ir Robinson, VICE fresl-
averse to making the accounts public here before you
opportunity to examine them was that there
%fr r sIS4 hcm Ana nd & on the at Of Jsn2
ary. 1874 Mr.. punan again wrote me as follows A.,
y.eTy 10 i874 Also few copies which have bad printed for
really supposs YOU sail before could get them LOadO9
h.ye dispatch from BaroE g,n one iron IRON {SI sent, sB ,eo This
cannot Co. s the copy sent ,on was %sae up nal' ] "a M
when do alter The general results Of he ye but 90 alter the Ie
8
The last perfected account was identical with that
published by me in London 1t was wholly made by
out intimation from any one, except that inquiries
were made ss the details OF certain general state:
facts charges not only that the accounts in
question not complete, but that was in some man
privy his mistatements 1t Is clear Inference
which cannot avoid that the alleged letter OF 10Th De
oembeT fiction sent. and probably only written
suit bis purposes in the conspiracy With this bref
auson Mr. Dunan's general charges (hls gross eX-
sggeatoH Of our floating debt having been already
content
matter but his publications contain specific charges OF
Improper entries in The books OF this Company which
20 that the stockholders and bondholders Of
deirauded through this stock Ejo66ing conspiracy.
The principle governing the policy Of the Erie Railway
was long since announced. ii repeated in the tes-
tmony that subject elected by the Legislative Com
ssss TeetorS 81 ana hI simply
dividends Of net earnings should DO lnaoe 10 tne stoc
holders and hat the moneys necessary Iof the SAecu
tion OF proposed improvements and TO meet all con,
sluletion Expenditures should be added TO capital
scco1nt To this principle adhere. believe it to be
mot only sound in morals and IN hnance put nave tne
Dest reasons for knowing tat by an adnerehee 20 s
publicly avowed policy can alope secure that degree
OF credit with our propretors which Is necessary 10
enable us to carry out IN complete detall our
by which this great artery OF commerce. OF
the whole country, shall become as IL ought 10 pe te
cheapest and best means OF communication between e
.eaboard and the West. And now, freed from his mis-
statements Of facts aud his unwalranted assumptions
what his chaTges go far as they are important or
FTI That ordered s7lqGOO TO he transferred the
certificate of Mr.. Clarke V. P from current expense
Second: That ordered the further of $4o4,sl %
10 be similarly transferred as the eeruhcate OF MI
7lird That there is a deficiency in cars and engines.
This last item Is fully answered by the annexed
papers As 10 these transfers from expense TO capital
count what are theyl Journal entries were made by
authority N the usual manner without Gonceaeat or
proper and usual and were specifically referred 10 IN
examination the accounts for the six months ending
without usual dividend PERIODS, 1ouhd that an
unusually large sum, far beyond the eyerage OF previous
years had been charged as current working expenses
and this basis the true net earnings dld not appear
OF my own knowledge knew that large part Oh ms
thus charged not properly ehargeable TO the
called 1pon the second and Thrd VicePresdents for an
analysis of these items and for report as 70 the sums
which IN their Judgment should be withdrawn from the
expense account and charged 10 capital account.
Whether by this change the Items in questions were
or RECLAMATION Account made no practical dfere1ee
They might he charged either with propriety The
account Of disbursements for the period IN question and
10 deduct from any aud u So what sum- and carry IL
with a full KNOWLEDGE Of the facts aud upon the
reports Of the oIgef' IN charge, charge Of the par
ing proper entries 10 re made 10 correspond
with the facts ana az t9e time @ 70 the
were, assume thereupon, made by Mr. Danan through
the mere time OF making these journal entries is unim-
portant and this performance by HIM Of strict duty
which he then approved is all that IS now complained
Second and Third VieePresdents made at my request
ence my return which fully confirms the view which
they had in September last and shows the absolute cor
recness the transfer then made 10 account OF income
by my order Furthermore. you viii find tnat by ~,
report stated that had omitted to carry TO the credit
of income, but had charged wholly to expenses,
Of relaying over $50 miles OF iron rails
with steel or steel-headed rails, and tins Item
alone would have warranted much larger
transfer from expense 10 capital account than was
really made. refer only 10 this one item but there
are 10 fact many oaeIs Of the same character TO be
proved by more careful examination OF the details Of
expenditure. which might properly have been, but were
not the credit OF current income 1t may be
asked why, in pursuance Of my svowed policy, did
thus charge expenses these large items, when the
whole amount of these expenses ngnt nsNe Deen Ear