The evening world., 1894-08-09

Dear Sir: More than ten weeks ago
your Committee. with my hearty APP
proval, selected Mr.. Stephen Little to
examine and make certain reports con-
corning the accounts of the Atchison
system. These accounts pertain to many
independent corporations, each having its
separate set OF books. During all the
time the entire accounting force of the
system has been at the ser
vice of Mr.. Little. At o'clock yester-
day afternoon your secretary handed me
copy of Mr.. I.ittles report, and from
letter shortly afterwards received, /
understand that you expect me to fur
nish by 2 o'clock to-day a statement
covering the matters which Mr.. Little
has taken weeks to investigate.
LAS YOU are aware, most of the books
Of the system are not kept in New York,
and I need hardly say that such books
are not kept by myself, but by book.
keepers employed for that purpose. The
principal charge is that the income has
during the last four years, been over
stated to the extent OF about 81, SOC, 900.
The earnings OF the system for the
period nam I'd amount to about $l80. 000, 900.
There Is no charge that the disburse-
ments have been overstated or that any
dividends or other payments have been
made the basement of the alleged
overstatement OF the earnings, and
as they are less than IL per
cent. of the total earnings for the
period named, you must assume that
there is an entire lack of motive for
wrongful statement To have stated the
a
would have been a great injustice to
security holders. and particularly to the
income bond holders.
In the short hours allowed me have
found no difficulty in pointing out some
of the errors into which MIR. Little has
fallen. l find that 81. 900 of earnings
Of the Atchison system deducted from
with the St. Louis and San Francisco
Railway Company of 1887, as shown In
the annual reports, and properly to be
cisco Railway Company, are totally ig:
nored. and yet all the stock of
that company is owned by the Atch;;
lson. Topeka and Santa Fe Railroad
ers OF the latter Company who paid a
large sum for the stock of the former
Company. are entitled to statement OF
such earning ,od IL nS other words MI @
ings Of the .Atchison Railroad and gives
them no place in the statement Of the
earnings OF the system.
II also find that Mr. Little refuses to
include a balance of s457,9 Omitted
States currencyI subsidy from the Mex
lean Government to the Sonora Rail-
panies,, which is an undisputed claim
recognized by the Mexican Government.
81 find also that an item OF $4,000.
covering earnings on freight In transit
each month. has been ignored by Mr..
Little, notwithstanding the fact that
such item was fully explained to
n n@ by r"s change Sss neff fam FORE
war'ed' basis Of freight accounting to
received basis. and ID strictly in accord
ance with well-esta blished and recog-
nzed methods of revenue accounting by
other railroads Of extensive mileage
81 further find that Mr.. Little has
either tn. Sverlooked or refused to recognize
o Dee sf dsfee Of sls% an
OF receivers). on advances made by the
Atchison and San Francisco companies
to the Atlantic and Pacific Railroad
Company. which interest so earned Is an
asset of these two companies and which
In adjustment OF the accounts of the
three companies named must be treated
as an asset o the Atchison and San
Francisco Companies. belonging to their
| income account.
sill further do find that Mr.. Little
has not included about $500. 900 Of profit
The items of slGl3l and sl52. 90. 4s.
making an aggregate OF 81. 76o .B.
proper debts to the franchise and prop
erty accounts. for the reason that they
represent expenditures made out OF the
S which applied to to- the Separations iSs
OF the property prior to the date of
reorganization, and should have
cages represented under the old Com
pany instead OF the two mortgages Of
the reorganized Company. This asset
ed the other side OF the income account,
and as Mr. Little himself has stated In
his report. I'm the end the effect on
the income account will be precisely the
| same.
THE items have mentioned more
than cover the alleged over-statement
of income for the period Of Mr.. Little's
examine ton by about $500. 00O I have not
time in the limited period allowed me to
go into further details To be strictly or
technically accurate, too. would have
10 do what Mr.. Little has done-take
the books and the accounting forms OF
the system and spend considerable time
MIR. Little thinks that hundreds of
so qa naFT nf Ssy sSe' H
thinks that 81. 10000 deducted from At
Gibson earnings and given under con-
tract to another line IN the system are
g.
| He thinks 81. 500. 900 Of profits on invest
meents Is not income: I think i Il.
~ repeat that the above items are
over-statement. and $50. 900 more. their
total being over 5000 600. and fully JUS
tifies every, statement the Company has
ever made.
Mr.. Little states that on the 10th day
of June. 1898. the Company did not have
| on hand the amount OF cash shown by
the books. While I fall to see what
bearing this statement has upon the
matters which Mr.. Little was called
upon to examine In relation TO the pro-
posed reorganization OF the Company. 1
yet desire to- state most emphatically
that on the date referred TO the Com
cash items the amount stated In its re-
New ~ yo "; R REL ia Presiaeht.
The Myers Committee met this after
noon apd sent 2. letter TO Col, Mccook
| retracting all that was said against
him In thu latter aani out hX tia Hroiacs