The times. [volume] (Richmond, Va.) 1890-1903, 1894-08-11
NIX. REISBEARt,s KhPLf.
what lie Says of the Alleged Oversia'e-
menf o. Topeka and ttcbison Earnings


President j. w. Reinhart, OF the Atch-
ison, Topeka and Santa Fe railroad, sent
to the Reorganization Committee yester-
day his reply TO the implied charges or
Expert STEPHEN Little IN reference TO
certain alleged Oyerstatements Ia the
earnings OF the company, amounting 10
more than $4,000. lie did not appear
personally.
The committee promised To give out
both statements for publication late in
the day. ln some other way, however
Mr. Remnants statement found It's way
into the afternoon papers.
Directors Thomas Barring ana McCOok
attended the meeting Of the committee
by invitation. and explained that they
mad been entirely In the dark IN REFER
ence 10 the alleged condition OF the aa-
counts, II anything was wrong WIN
them.
They rad placed implicit confidence in
MT Renhart and they thought That
the rumors should be set at rest by the
Iullest KIND Of an examination, ana lt
anything wrong were discovered the conf
mittce should place the responsibility
where IL belonged Mr.. Barring said that
he had been able TO give but very little
attention 20 the accounts for several
years, because OF his absence In Europe.
The statements Of Messrs. Little ana
Renhart We're referred 10 a committee,
with power 70 act. consisting Of Chair
man X. ;. Hayes. MIR Fleming, OF the
London committee. and Mr.. Luden. or
the Amsterdam committee. Their decis-
ion will be awaited with deep interest.
for If they uphold the report OF their
own expert. Mr.. Little, the consequences
may be far-reaching.
After stating that the shortness Of the
time does not permit an exhaustive am
swer. Mr.. Rcnhart says, I'm his letter to
the Reorganization committee:
THE principal charge ~ that the in
come has during the last four years been
OYerstoted to the extent OF about $780,
q fIn. 80.
period named amounted 20 about $4,000,
There is no charge that the disburse-
ments have been ONerstated, or that any
dividends or other payments have been
made on the basis Of the alleged over
statement Of the earnings. and As they are
less than IL per cent. OF the total earn
ings for the period named. you must
assume that there Is an entire lack u
motive for wrongful statement. To
have stated the earnings AT less than the
actual figures would have been great in
Justice 10 the security holders, and pay
ticularly 10 the income bond-holders.
I'm the short hours allowed me | have
found no difficulty In pointing out some
OF the errors into which Nh. Little has
fallen. | find that 81 10000 OF earnings OF
the Atchison system deduoted from it's
income account under the agreement with
the St Louis and san Francisco Railway
Company, Of 1887. as shown in the annual
reports. and properly 90 Doe created to
the ST. Louis and san Francisco Railway
Company, are totally ignored. ana yet ali
the stock Of that company Is owned by
the Atchson Topeka and santa 'e Rail-
road Company. and certainly the stock
holders NJ the latter company, who paid
"a large sum for the stock OF the former
company. are entitled 10 statement or
sucn earnings. ln other words. Mr. Little
ignored 81 lyp.eOD of actual earnings of
the Atchlsou Railroad. and gives them no
place in his statement Of tine earnings OF
the system.
Il also md that Mr. Little refuses 10
Include "a balance of $bi.99 united states
currency. subsidy due from thu Mexican
Government 10 the Sonora railway zone ~
tue Atchison auxiliary conpaniesl. which
is an uudisputed claim, recognized by the
Mexican Government
IL find also that an item Of $4,000. COW
ering earnings on freight In transit on
through billings. for the last week In each
month, has been ignored by Mr. Little.
the fact that such item
was fully explained To him. This item
was necessarily created by change from
a forwarded basis Of freight accounting
To- "a receiver basis. and Is strictly In ac-
cordauce with well est iblishcd and recog-
nZed methods of revenue accounting by
OF her railroads OF extensive mileage.
Il further find that Mr.. Little has either
overlooked or refused 10 recognize 3. 332,-
900 of Interest earned from January !.
1880. To December %. lS8 date of appoint
ment Of receivers, on advances made by
MES to the Atlantic and Pacific Railroad
Company, which interest so earned IN an
asset OF these Two companies, ana winch
I'm adjustment Of the accounts Of the three
companies named must be treated as an
asset of the AtchisOn and san Francisco
companies, belonging TO their income ac-
count.
Still further do I find that Mr.. Little
mas not included about ti,5OOOW OF prolt
earned by the company upon its invest
memt ln terminal properties. -
The items Of 81 ,6l2 10 and $l52,9ol, max
lns an aggregate Of S,1J6,00l, which Mr.
Little also refers To, were proper debts
10 the franchise ard property accounts,
for the reason that they represent eXpeu-
dtures made out of the revenues OF the
reoreanizcd company subsequent 10 DC
tOber l. 1889. but which applied 10 the
operations Of the company prior 10 The
date Of reorganization, ana should nave
been cared for under the Old company
Instead OF the two mortgages OF the re.
organized company. This asset was used
TO Offset charges which affected the other
side Of the income account, and, az Mr..
Little himself has stated In his report.
in the end the effect ON the income dc-
count viii be precisely the same.
"rhe items / have mentioned more IMAM
cover the alleged overstatement or IN
come for the period of Mr.. lAttle's eN-
animation by about 10000. ! have not
time in the limited period allowed me -
30 into further details To be strI9tiy or
technically accurate j. TOO, would nave
10 DO what Mr.. Little has d1ne-take tle
books and the accounting force Of The
system and spend considerable time IN
examination.
"AIr Little thinks that hundreds ot
thousands OF dollars earned as ii SUBSIDY
are not earnings. / think thry are. no
thinks that 81 90 deducted from Atchi-
son earnings and given under contract 20
another line In the system are NOT sya-
tenn earnings. think they are. lie thlnhs
$4,000 of profits on investments i9 ITO"
income. ! think ID Is.
81 repeat thar the above items are SUM-
Gent % account for the alleged over,
statement and 10000 more. their tothl
being over 8 000,00D, and fully Justlh's
every statement the company mas ever
made. - -.
"Afr Little states that on the Nlh day
OF June, 1893 the company ia not nave
on hand the amount of cash SHOWN ~
the books While fail 10 see WIZ -. 80,
INK this statement has upon the matters
which NJ. Little was called upon ID eN-
anime in relation to the proposed te-
orrgufzltiOn of tn. company, J y"t desire
10 state most emphltic1ly that On the
date referred e. the company actually nSl
on hand I'm cash and cash Items tps
amount stated iu lts report on that ddte'
New York Herald.
~ ..t.,,. l,-..'nr r'4tfns
NEW YORK. August 20. President Rein
hart ba, RESIGNED his position aa president
~ the Atchison road The matter Nlh 10
ee..1 i,.o. -g1rroW - meeting Of the
diraetr~e of that road in Bos'on. lie nag
ais, resigned from his position as one OF
the receivers OF the company.
What Boomer Say.