New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-03-17
NO MONTHLY INTEREST.
TEXAS AND PACIFIC INCOME BONDS.

DISCREPANCIES IN THE COMpANY's INCOME AC-
COUNT POINTED OUT.
The Stockholders OF the Texas and Pacific Railway
yesterday met TO receive the annual report OF the Gl
rcctors for the year ending December 81, 1891. The
election OF directors does not occur under the bi
enpial rule until next March The report submitted
WAS unusually complete and circum,,anta) Core
spondonce was made public In connection with The
recent passing of the March interest on the second
mortgage income bonds. President Gould on January
requested the trustee Of the secondincome mortgage
the Mercantile Trust Company. make an examination
Of the accounts in view of the fact that in case the
interest on the seconds not paid on March l the
trustee on application Of third Of the bonds could
take possession OF the property The trust company
APPOINTED Price Waterl0use a Co.. expert account
ants 10 make the examination. The report Of the
accountants made the balance Of income available Tor
payment OF interest 81 ,52 ,0G5; deductlng the i'm
perative interest Of 81 26S272, balance OF $232'9'
was left exclusive of credit balance of rl4O643
brought forward from the year 1890.
The accountants in presenting their income account
which differs from that of the company, say
I'VE have written back the amounts charged
against income for cars, locomotives ana buiN
ings (which were not in the nature OF requirements
or renewals. We are informed that there were 10
purchases OF rolling stock and equipment between
december 81 1857, and the date of the corganza-
ton and lin the absence of any official inventory at
the latter date we have for purposes of compaison
adoned the inventory contained in the report lot
1857 From a comparison of these inventories ana
from the information which we have otherwise Cd
tanned we find that the rollingstock has not only
been improved in general efficiency by the replace
mont of 600 csrs and locomotives but that i'll addi
tor thereto the number of these has been increased
by 37s. an,
eve are aware Of the obligations which the COM
pany assumed under the mortgages granted 10 INC
trustees of the bondholders but while the expense
incurred by the increase in efficiency OF the cars ana
the possession Of heavier engines is fair charge
AGAINST snoome. we do not think that. in ADDITION
thereto the company was justified in charging such
substantial increase in the rolling stock against he
income, which would otherwise have been aVallaoe
for payment OF interest the second mortgage in
Gomez bonds however advantageous such increased
motive power and equipment may otherwise nave
BEEN
"No reserve has been made for depreciation OF
buildings or of rolling stock, but the valuations OF
the latter by the superintendent Of motive power show
IN increase during the year 1901 OF S3e,G@o. we
have also dsaOwed a credit of Soils for unclaimed
wages prior 10 January J. 1891 1t Is not leglti-
mate addition to the income Of the year.
Whilst showing the above-stated balance tS233.'S'
for so1 exclusive Of the credit balance Of s14o043
brought forword from $500 Of income, apparently
available for payment the holders OF the second
mortgage bonds, we do not think that Che hpanclal
position and requirements of the company would al
nit of such payment being made"
In reply to the accountants report, the directors
quote from sweeping provision of the second mort
gage and say: 1.-The company is thus required to
maintain its equipment-by additions as well as re-
pairs and replacemens-tO the standard Of cnicicncy
prescribed by the mortgage and in determining the
net of the property the cost of maintaining TINS
standard Is an element which the directors are re-
ouirel by the mortgage to consider. An examination
of the annual report and especially of the statements
in regard TO the condition and extent OF rolnestock
will show that not only has the company restrained
its expenditures for equipment within reasonable
limits but that further additions to its rolling stock
should be in order TO keep pace with the growth
of traffic. ,,, -,
The presidents report shows cOncluslVely now
severe were the losses suffered 10y the company IN
consequence of the runouS reductions In rate OTucicd
Inv the Texas Railroad Commission, created In APRIL
1881 Hope Is expressed that " better counses VIII
prevail In the future, and that the people OF IcXas VIII
finally be brought 10 realize the Tact that tley cannon
infIict undue hardshps upon the railroads without
seriously affecting their own Interests ana lh'oNi"s
the commercial welfare Of the state" .
The stockholders approved the action OF me dlTec2 h
in voting make no payment OF interest," "Po" INV
second income bonds. -......i,.o- p,
There was q meeting Of general representatives oi
the bOndhOders who are proposing 70 examine w ~.
whole situation and determine what snail DE uoie' ,.
is confidently sad that strong committee ldS pc''
secnred and that the Gould interests are cordially co
operating In the work.