Morning journal and courier., 1889-02-15
COLONEL srEvENsoN,s REPORT.

COLONEL sTEvENSON'S REPORT. The RousatOnic Manager Examined
 Before the Railroad Committee Yes-
 terday Concerning Ills Report 10 the
 Railroad Commissioners. Which
 They Sent Back For CorrectfOn-The
 General Assembly.
 HARTFORD, Conn.,, Feb. IA. Especial Correspondence of the JOURNAL AND CoUR-
 IER.1
 Colonel W. H. Stevenson, general manager of the Housatonic railroad, was under ire at the railroad hearing to-day. Colonel Steven son, alike with President Starbuck, appears to be in blissful ignorance concerning the methods of bookkeeping by which the de- ductions in the recent report to the railroad commissioners were obtained. Colonel Ste venson, however, made better showing as a witness than did his chief, MT. Starbuck, the New York fnancier, but the characteristic of both the witnesses for the Housactonie so far l heard is that none of them can give any in- formation concerning the financial figuring of the company The other day MT. Star buck said he did not know about the figures 1 in detail, but Col. Stevenson was the man who did. To-day Col. Stevenson said he did not know but Auditor Bestor made up the report which he (the W1tness) sWore 10 ana sent to the commissioners.
 Auditor Bestor appears to have been as- sisted by one Buckley, a New York account ant and & man who is now in Virginia had something to do with assessing valua~ tions. The Auditor. Bestor, is the only one of these left in this State and therefore with in reach of the committee. His testimony seeming peculiarities in the Housaton- l ic's report. He said to-day that l he could explain all this when he is put on l the stand. The railroad committee, bond | holders of the Housatonic and the public, desire to hear him.
 The hearing to-day was principally occu- pied in cross-examination of Colonel Steven son upon the annual report his company made to the railroad commissioners. after short investigation as to the witness railroad experience and his statement that the survey the Housatonic had just made for new road was over the route ot the proposed New York and Connecticut Air Line which paral- leled the Consolidated between New Haven and New York at distances of from few rods to mile.
 build this new road if allowed. A map of the route was shown. It taps the Derby just beyond the Aliingtown cut in Orange.
 Judge Harrison began by questioning the witness as to the circulars sent out to stock- holders in November, 1887, proposing the
 
 of S2, POO, 900 bonds in question which the legislative committee is enquiring into on the claim that they were illegally issued without sufficient assets.
 Colonel Stevenson said this egg was laid by the Barnum- Bishop management, but they did not stay long enough to hatch it. When the present management took hold they found big debt of unpaid guaranteed dividends and everything in a chaotic state. An expert was put on to examine the books, so person. ally Colonel Stevenson knew nothing about the figures or finances. He only knew of one vote that the directors took concerning the increase of the bonds while he has been di- rector, which was in October, 1887. "Did you," asked NIT. Harrison, "or any representative of your company represent to the railroad commissioners that $500, ,000 was about the increase of stock asked for?" ''I don't think we did. replied the wit ness. 1T think that statement was put into 1 the report by the commissioners as gossip for people to talk about"
 "When your report was sent back by the commissioners did you not know that they l thought it illegal?' asked Mir. Harrison. Do you really want to know what l thought? said the witness. 'I thought that you had something to go with it, said Judge Harrison.
 ssSo," said Mr Harrison, ''the greatest railroad manager in America, and President Starbuck, the greatest fnancier, laid awake nights about me-"
 Colonel Stevenson continued that they had not thought their bond issue illegal as they had paid "Iargely" for legal advice.
 eI don't doubt it," said Mr. Harrison "for it costs largely to tempt some men," MT. Stevenson was then cross examined on the last report, which the Housatonic road made to the railroad commissioners, which was 20 defective that the commission CTS sent it back. He said that he made oath to it as correct, according to his best knowledge and belief, but the report itself l was made by the bookkeepers. The peculiarity of the amended report sent to the commissioners as it stands to-day without explanation of the bookkeepers who
 made it is that the assets are given at $6, 33S,- | 204. 34, an increase since last year of over ] &, ,O00, ,O00.
 In order to obtain this amount of assets | the construction and equipment account of ! the company has heen increased on the books by a valuation of the amount l of $2, 159, 1868. 50.
 The assets of the road, aside from the real | estate account and the construction and | equipment account, are reported at s, ,S14,- | O25. 91. By the addition of the revalued construction and equipment, reported at $2,- 1 15O, ,36s 50, the assets are raised to s5, ,964,- l 394 Al Then the revalued real estate Is put | in at S373, sos. 93, though it had heretofore | been valued at $61, ,000. This brings the assets up to the amount which would legalize the bond Issues or o,USO,UUU. But the last item of assets, real estate, | $373, ,O00 also appears as one of the items of the reconstructed increased construction and | equipment accounts as follows:
 RevaluatioR of construction and real = | estate accounts ts.-.-.............-..S 763,314 63 Additions and bettsrmsnts from 1870 ! 10 1SSV sVo,Ul4 10 1 Fetal aI........................ 15o ses 50
 As it appears, and the railroad commis- sioners can figure it no other way, although | Mr. Woodruff raied to do so to-day at the hearing, the real estate item is used twice over in the same column to make up the re- \ sult once as one of the assets and again as | ons of the items which make up the total of the increased construction and equipment | account, which is also added to the same list ! of assets.
 Auditor Bestor of the Housatonic will ex- plain this when he goes on the stand by
 saying that the $373, ,000 is another item of real estate not included in the s763, ,374 63. Continuing the cross examination on this report MT. Harrison asked MT. Stevenson if l the original report (shown witness) which he | sent to the commissioners placed the capital I stock at $2, ,000, 900 or $3, 1S0, 900. | MT. Stevenson said it was $2, GOO, 900, but explained that the report was made out by | an auditor who had just come into their em- ploy and was unfamiliar with the forms re- | quired by the State.
 | The report was sent back by the railroad commissioners with letter calling attention ! to the discrepancies.
 sI sent for the auditor" said Col. Steven son, "and told him to fix the report just ss | the commissioners wanted 1t. He did so. \ The report was absolutely correct so far as the balance sheet was concerned, but faulty ! in form only"
 The letter from the railroad commissioners ! was read calling attention to the defects of | the report and inquiring about the item of 8
 decrease of s97, 900 on debt which had been less than $50, 900 in all the year before | Q. Did you make any statement of she
 receipts from the sale of bonds in your origi- nal reports
 A. did not.
 Q. Did you make any explanation of the \ extraordinary increase of the construction &C., \ A It WAS altared aftarMard. One day