New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-03-25
ERIE RAILWAY AFFAIRS.
AN EXPLANATION FROM MR.. DUNAN.

70 ne Editor Of TIE frsbuns.
SIR: In THE TRIBUNE of to-day l see the
report Of the Committee appointed by the Board OF
Directors of the Erie Railway Company on the subject
Of the accounts In which they give the floating debt
March 10. instant, under two heads a. follows;
LIST. What they term the floating debt
,d Accrued debt but which. under the Gus:
tom Of the Company not yet pay abe...... le7sse 81
Total %
The Committee say that beyond this they ind MOTH
Ing" ana then proceed with superior kind Of reason
ing by which they attempt 10 wipe out all Of this debt
save the amount OF a ST. but unfortunately their
reasons do not provide the means Of payment They
might be useful as arguments among themselves upon
the question the best TO to pay this debt
but until the coaterals to which they refer are CON
verted into money, the debt is likely to stand.
The Committee leave to each member OF the Board to
figure out among the items he choose to call
the floating dept. now help them to con-
clusiOn. Suppose the Erie Railway had changed
owners on the 1ath March inst, would not
all debts outside Of the funded debe Dc
classed under the head Of floating debit Now take 1t
that the Committee have only included in their state
ment that which either audited or In process OF
being audited, and passed upon, excluding oil the
numerous claims which had not at that date been
presented to the Company and those which
were presented and upon which there Ia some
disputed points-nevertheless they be debts. For
the accounts OF the Union anu JcHerSoh
Car Companies and the balance due for the rental Of
the Erie and Suspension Bridge Railroad Company pay
ment upon which has been deferred for year and
half the balances due upon the purchases OF the coal
lands the amount due upon the guarantee OF the inter
est on the Boston, Hartford and Erie Railroad
bonds; the numerous cases In litigation In New
York and other States. many Of which VIII
inevitably be decided against the Company
the unadu drawbacks and overcharges in
atszif andn
earned and paid In and which has for some months
amounted to OF 10000 per month; the ac
crued accounts for the purchase OF supplies and Tor
labor TO the 18th install these and many not enumer
ated amounting they do to several million OF dollars
have evidently been omitted from their statement.
Toe fact is, when I stated that the floating debt
reached the sum of o. believed that was far
below the amount OF the existing liabilities and be-
lieye SO now Their therefore, that my state
ment s obviously erroneous" must be accepted by the
public with doubt until they give the items COM
posing their account.
The Committee say further that all railways have
necessarily in the regular course OF business large
sums OF money due to them ana 6y them. ana
about balance each other" Now, the balances are
almost wholly against the Erie Railway In the proper
ton of say I've 10 one aud for the receipts balancing
the fact may and does exist on othr
roads but my statement the Board shows concusyey
that il does not exist on the Erie Railway 1t evident
reading their report that the Committee practically
c0ncede the truth OF my statement.
Referring 10 tho general statement made TO the Board
on the OF the the fiscal 1872 and
1873 they say that far as they know the entries are
correct" Gentlemen. thank you for nothing. know,
you Know, and every officer OF the Company VINO has
examined them knows, that they are correct The
yanous abuse heaped upon me by cashiers and dlrec-
words Of praise in the light of such an I'D
Dission ,
the Committee refer to the English policy" OF de-
carng dividends in justification oil the mode Oh stating
the accounts The English policy Is good one, and Ia
pursued n toward the stockholders, BY a cor:
poration carrying large bonded DEBT. But
its application TO American bookkeeping Is totaly
oven expenses out Of which to declare dividend II
carry out this policy you must declare dividend and
then earnings must either be Increased or the ex
pcnses decreased by cticOus entries and the amount
SO OF decreased must be capitalized In either
case. The American auditor who Is forced 10 adopt
Guilty III he decreases the expenses he Is
met IN the future comparisons by the
overwhelming proofs IN tue operating ohcers accounts
that there Is something wrong. Ii he increases the
he met other side by the evidence OF
the traffic off effect. This Is not pleas
ant position be nI have tried IT, and eau speak from
the Committee, they desire to defer their report un
future time. Now, gentlemen, one word NO more
81 Cooking" The Erie accounts are already oyerdOne
With reference what the Committee say az 10 the
nnder and the time at which my report
was made these remarks simply gratutous as hay
ing bearing whatever upon the facts contained III IT,
have no DOUBT that the full text OF their report was
cabed London in advance OF It's receipt by the Board
and vet make no commentary upon that TACT.
In reportorlal notes which precede the report you
state that 1t rumored that the late Auditor was
willing to become Receiver OF the road
There Is not particle OF ground LOT TINS assumption 10
rest upon nave been approached upon the sub
ect nor nave expressed any desire for the position
Respectiuliy. .ud,tor E r ~ VA 20
Baltimore, March n, 1874.