New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-07-15
BILL WAY 1CCOUAIS.
PIX OF TIE ASSEMBLY COMMITTEE.

4 DEFENCE or THE RAILwAYS-A WITNESS CHARdtu
WITH MAKING MISTAKE or Ten MILLIONS IN
TIE ERIEs ACCOMPLISHMENTS or TIE NEW
YORK CENTRAL's INCREASE OF STOCK
Alexander Robertson, an accountant VINO
severely criticised the bookkeeping OF the Erie Railway
and the Ncw-York Central Railroad on saturday. was
severely cross-examned by the lawyers Of those com
NAMES before the Assembly Railroad Committee yester
day The counsel of the Railway charged MIN with
having made an of some SlOOOOOOO IN thelr ac
counts in an affidavit made In 1878 by confouhdinS
"recepts and disbursements " witt" earnings ana ex
penses" and thereby credited the Erie with money due
other raj ways and intermxed the accounts Of the re-
cever with those Of the Eric Railway not credited to
the receiver.
Chauncey NJ Dcpew, counsel for the NcwYork Cen
trail Railroad said that he desired to state that while
the cures taken from Poor's Manual regarding tn
yearly financial statements of that road-commented
upon by Mr. Robertson Saturday-werc officially cor
rect that the account called "reserve fund" IN the
manual was Especial construction account" on the
books of the railroad. When the NewYork Central was
consolidated with the Hudson River Railroad in 1862
the capal stock the consolidated company was made
81 900 in excess OF the combined stocks OF the two
corporations The company had used this excess for
construction account instead Of borrowing money. The
ga 900 900 had been accumulated since 1882 Instead
OF paving all money earned to the stockholders the
officers Of the road had invested much OF 1t In Improving
these Investments and enhancement III value were rep
resented IN the S44,O00,0O0.
Mr. Robertson testified tnat for the year ending Sep
tcmber So 1S70t Of capital stock OF the New
York Central and Hudson River Railroad was Si3,34o'-
go %. The report for September 80, ls72 showed
that the term was changed to "baance reserve fund.-
when IL was named as S42,G25,jG2 70, Between 1865
and so the stock and capital OF the NewYork Central
and Hudson River Railroad was increased $i5.0oO00o.
in Tho mi iXp
aud p per cent In the New-York Central. From 1868
10 1865 there was a surplus OF about SG,500,0OO The
railroad had epOchs in its history. From 1893 TO
1868 the road paid dividends regularly, and had sur
plus Of Sc 600 From 1868 to the present time there
was different situation Of affairs Dividends had been
paid regularly, but the accounts charged TO the con-
struction account he thought were wrong The earn
ngs had not been sufficient TO make such construction
account The state Engineers report for 1870 declared
that the receipts the road the previous year had been
500 3663I9 81 and the payments other than for
struction S22 36G319 67 II might have been possible
that the amounts precisely the same, but 1t
singular coincidence Fuller reports ought TO be made
10 the State Engineer The concealed in the term
revenue from miscellaneous sources which amounted
to $5f2, S55 AZ, ought to be given in detail.
The witness then crossexamincd by Auditor
Little OF the Eric Railway. In reply to questions put
by him. he said that he never had Kept railway accounts
In s77 he partly examined the books OF the Erie Rail
way. He denied having COMPOUNDED two accounts in
making an affidavit about that examination He did
not think he had COnfOunded receipts and disburse-
ments with the earnings and expenses" Mr.. Little
said that part OF the receipts OF the Erie were paid back
to other roads 1t would not be just to include the
money due other roads In the earnings OF the Enc The
witness said that he not aware that he had over
stated the earnings SO000O00 lie was not aware thar
tine interest on the funded debt charged on the
Erie RAILWAYS ledger and not on the receivers books
He did not find any such entry as funded debt on
the receivers booksj although he dld mud II on the
Erie RAILWAYS books The report TO the state Engineer
faulty in not reporting the deauted and accrued
interest the funded debt. The expenses VI the road
ought to be known 10 the public
Auditor Ltlc-We carry load OF grain from Chicago
to New-Iofk WOud ~ pc falr To take the whole re-
ccpts earnings and take account of the Lake
shores share of those receiptsi
Mr.. RobcrtsOu-Certainly not They must have their
share If you collect the whole freight for a train-Oad
or carload of -four brought from Chicago earnings
not the gross Mount SO received Dut merely your
receipts proportion OF the gross receipts 10 which
your haul over your road entities you; assume OF
pavment YOU pay over foreign roads their share Of
The gross earnings the entire haul, which would be
Mr Littlc-Was there any preence in the report say
1877 that the company had PAID the whole OF the in
tarast for any one wear
Mr. Robertson-I should say so decidedly it reads
"payments other than for construction" should say
that the two terms IN the report aS required IN It's FORM
"rccepts" and " payments are ml-nomers, because
under such report part Of the receipts may not have
been received, and part OF the payments not
have been paid On the assumption that the report
profit aud loss account should suppose that there is
nothing in il that does not with the books. As
sumug, which do not, that the report required by the
ohscurttv the accounts Is such Is due To the defect
OF the law. ,,.,., ,,,..
of the inquiry about the profit and loss account the
state law did not require its insertion IN the annual
norris OF the companies. Mr. Hepburn said that he
thought the inquiry very important one whether the
state law was such TO require profit and loss nc.
In reply TO questions Mr. Robertson then said that
form report prescribed by law was indeed detective
and the reports OF the railroads. therefore, in many
spects misleading through ho fault OF their own. The
witness said that Receiver Jcwetts ledger showed
IL NUI#
p1ny's books showed thar it was only S2,jOO,OOO Mr.
Little claimed that the companys books vas clear
the receivers and that there was no such discrepancy
MI Banchard-If the railroad companies render true
ard accurate accounts 10 the state Engineer must not
the balances shown 10y them, # accurate, be In tact
| effect profit and loss account
Mr. Rdbertson-It would be possible to construct II
profit and loss account from d.
A long discussion followed between the witness and
witness and officers of the Erie Railway at the time
suits were brought against the company blythe Farmers
Ian and Trust Comuanv IN ISIS These aniiavts
showed that Alexander Robertson, the witness, ON
JanuaI, 10. 1878, rad sworn mat on December 10,
lS77 he had eAamned the books OF account the Erie
/ Railway Company. These books showed, the witness
SAID, that the condition OF atds under the admustra-
ton Of Mr Jewett had been far more favorable than
was shown in the books OF tho company, namely that
it was ll 900 600 more favorable than had been pre-
ment Robertson stated tat the books showed that he
gross earnings Ere Railway Tor the twenty eight
months Of Mr.. Jewctz recciyership appeared 10 have
been SlS.5Gl271 40 and the operating expenses OF the
road the period were 36392 3jl 81 leaving
a balance OF Sl2l7I9IG I6 10 which was % De added,
as received from other sources SI7lG372 o. making
total s13sss DIS 81 applicable to The payment Of IL
tcfcSt.
Auditor Little replied a. this affidavit with counter
affidavit on January %, 1873 In his an iaylt ne stated
that the system accounts Of the Erie was similar
that used bv the other great railways and that Sir.
Robertson, IN his statement, had distracted certain
items from the condensed exhibit OF the cash account
filed with the Court and COMPOUNDED tncm with the
earnings and expenses profit aud loss account II the
receiver The earnings and expenses OF railway Were
very different from its receipts and disbursements, and
were never stated 30 The cash account The receipts
contained Large sums on account OF Oih9 railroads for
when the road, tuc collecting railroad acted a. mus
merely and the Disbursements contained large sums
charged To other companies The result OF
kolrItsuB's misunderstanding was astounding. The
.JG4 III - cited az gross earnings by the raIl-
way were, ~ fact, the gross cash receipts Rom TIE
transportation OF gnt, passengers aud malls Other
railroads were concerned IN the Items 81 freight and
"pl.s NIGER" " 80 that the actual earnings Were, IN
nm nuLN -. NIn.ll -. Im.LnAh Oh Inc ELn..