The New York herald., 1879-07-15
FRIES CIRCULATION.


BooKKEEprNG"-m cHAUNcEy DEPEw's Ex-
PLANTATION.
After the opening of the session Of the Assembly
Railroad Investigation Committee in tho Supreme
Court General Term room yesterday Mr. Chauncey
Depew stated that had found that the figures used
by Mr.. Alexander Robertson in his testimony on
Saturday taken from Poor's Manual. officially
correct but that the of the account called tho
'reserve fund.- in the Manual was "spscial con-
struction account" the books Of the New York
Central and Hudson River companies. In order to
understand this only necessary to explain that
when the consolidation of the companies took place
1869 the capital stock of the consolidated company
was made $4400 900 in excess of the combined
| stock of the two corporations. The company used
this for construction account instead Of bor-
| rowing money.
Mr.. Alexander Robertson, the expert continued
his testimony as follows :-Poor's Manual for 1870
first gives the item of S4sO0OOoO of capital stock
as excess Of capital stock cost of property.
S4334 $50 25;'' in the report for 1872 this is repre-
sented by the item, "balance fund.- &C..
$40. 562 70; the amount of increase OF capital
stock from 1868 to 1872 S44 OOO, ,0O0 dividend
of so per cent on the New York Centrals stock was
declared 1868; under the terms of the consolida
ton further increase Of S5 per cent the Hudson
| River Companys stock made. and another Of
27 per cent on the stock Of the New York Central
! Company; a surplus was earned by the company
between 1853 and 1868 of over SG.s00 900 over and
above the payment Of dividend ard the pay ynents
for construction; tho surplus appeared in the con-
structon account in the reports to the State Engi-
neer that account showing an increase Of S14 100000
during that period; in 1865 the bonded debt of the
company was sl4627 GOO, but it was reduced to
900 in 1865; part Of the surplus may have
been used to reduce the bonded debt.
cURIosrTIEs OF RAILWAY MANAGEMENT.
0. Now, Mr.. Robertson, tell the committee
whether the increased stock Of the New York Central
Company since 1869 represents increased value of
property on account of dividends which
| earned being retained from stockholders and used
for construction and equipment as claimed in Mr..
vanderbilts and Mr.. Jewett's joint letter to the
| Chamber Of Commerce? A. From 1868 to 1868 the
company paid regular dividends out of the
S6,S0OOOO surplus; since 1860 the amounts charged
! to construction account wrong. in my judg-
ment; the earnings of the road since 1869 were not
sufficient to meet the expenses charged in the con-
struction accounts after the consolidation there was
no surplus equal to S4l, 1000; Mr.. Depew's
planation this point sufficient when he stated
| that the stock increase used in constructive
construction account-Qaus hter); in the reports OF
the New York Central to the State Engineer there is
absence of detail such as is required by law; in
| the earnings of the company there is q very large
| amount set down under the head Of miscellaneous
In answer to Auditor Little the witness stated that
the gross earnings OF the Erie Company for twenty
eight months amounted to s4s.564.OOo
| O. Do you not know that these were the gross re-
ceipts and that large amount thereof was due to
other companies? A. Certany all the gross receipts
are the gross earnings. and whatever you pay to
other companies is credited back to you
O. Why did you not come to my Office and find out
whether these were all earnings? A. Because was
you were not" retorted Mr.. Little "You testi-
fed that you were fortnight examining the books"
mainder of the examination and rctaiiated on Mr.
Little at various stages by asking on what principle
| Erie books. Judge Shipman repeatedly interposed
objections. stating that the witness was arguing not
answering, the questions. He had no rght while
on the stand to open cross-examination his own
| account. The Chairman directed the witness to
the questions directly hrst and then give expla-
nations. III only DESIRE" said Mr.. Little, "that the
witness and shall understand each other" to which
the witness replied. II guess We will before we get
| HOW RAILWAY HOUSEKEEPING IS DONE.
At one O'Clock recess was taken, and when the
| on the stand. He questioned particularly con-
cerning the differences between the receivers and
the company's books. The examination. which was
| Robertsons original testimony, and demonstrated
only difference in the systems of bookkeeping be-
| tween the experts. The examination proceeded
O. Do you not know that the interest on the funded
debt is not charged the receiver ledger? A. But
| it is charged there.
| out.
witness-Yes can; here it is pointing to men,
orandum) in your own handwritng there is
credit profit and loss account OF $6,36cOl2 At;
asked you at the time how you arrived at these
| figures. or how the company had made the money.
and you gave me this memorandum Showing mem
orandum from which figures We're read). stating
that you had credited $S.s74271 10 to profit and
loss. which produced this deficit of s6.36s012 AZ,
d%on's % think / have overstated the earnings at
$4,000 000 aud am not aware that the interest
| the funded debt charged on the companys
ledger and not on tho receivers books; did not
find any such entry FUNDED debt the
ceiver's books. although did find it on the COM
| pany's books.
Q. DID you find any difference in the floating debt
accounts. '1oans and bills payable" in the reports
to the State Engineer and the items of that account
O. Did you find any differences in other regards
Q. In what other respects? A. The defaulted and
interest not charged in the funded debt
Interest payments are gwen under the head OF 'ex-
penses other than lruction and transportation
expenses are given under the same head
10 you a ,hnh h :, eIs a,ds Is' % NJ i
the law says not. II you collect the whole freight
for train load or car load OF -four brought from
Chicago your earnings not the gross amount SO
received, but merely your receipts proportion of
the gross receipts which your road entities you to-
assume, OF course. that although you may receive
the entire freight payment, you pay to foreign
roads their share of the gross earnings on the entire
haul which would be that part OF 1t west of Buffalo,
o. Was there any pretence in the report-say of
1s77-that the company had paid the whole OF the
SO. decidedly; 1t reads "for payments other than
| DUE TO A DEFECT IN THE LAW.
O. But there is balance sheet there. is there not?
A. No. sir, l don't it-oh, yes, there it is the
amounts substantially the same.
A. Then there Is no such prctence rs that? A. Yes
sir. still say that there is: here ii is in plain terms
| ''pay ments other than for construction" should
say that the two terms in the report as regarded in
its FORM 'receipts aud "pay ments. msno mers
because under such report part OF the receipts
may not have been received and part of the pay
ments" may not have been paid; ON the assumption
that the report is profit and loss account. should
suppose that there is nothing in 1t that does not
agree with the books: assuming, which do not,
that the report required by law is profit anu loss
account then this obscurity of the accounts is such
is due to the defect of the law.
MIR. Sterne claimed that tho law did not require
profit and loss account aud that the words profit
and loss were not used.
Mr. Hepburn said he thought this important
question, and Mr.. Shipsnan coincided that 1t was
very important to determine whether the law was so
obscure to lead TO difference of opinion between
experts to whether the account required under 1t
profit and loss account or not. With a view