St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-08-10
LITTLE GIVES DETAILS.
Figures to Confirm His Charges
of Overstatement.


of Overstatement.
New YORK. Aug. 9-Concerning the
overstatement of the income of the
Atchison, Topeka & Santa Fe and St.
Louis d San Francisco system for the
four years ending June so, 1894, Stephen
Little, the expert accountant, made to-
day detailed statement. After recount
ing the fact tn t he had been appointed
by the committee to look into the affairs
of the road, and that he had made a
verbal report that an overstatement of
S7,000,000 in the earnings of the road
had been made, he says:
Now Confirm This
specifically. These statements may be
classified as follows:
First-Rebates. For the four years
ended June so, 1894, the debts for re-
bates to shippers on the Atchison syste N
aggregated $500. 1862; and on the st.
Louis & San Francisco system $685.
sT9.49; total, s3,906, ,656.41.
This sum was charged, not to the
earnings, from whence it came, as it
should have been, but to an account
entitled: Auditors suspended ac-
count-special,' and reported from year
to year as good and available asset,
while in factiI had no value whatever.
Here L would inform you that in
June, 1891, the so-called Auditors
suspended account--Special" of Sl,31S,-
5S2 .95 on the Atchison books, as above,
was credited with Sl.612, 1885, thus
setting up an apparent credit balance to
1t of 1923. 527 90.
II this credit of S1,612, 110.55 was a
proper one, the appropriate course for
it would have been FRANCHISES and
Properties" debtor to operating eX.
penses Instead of a reduction of the
debit Auditors suspended account
Special" although in the end the
effect OH the Income part would be pre-.
cisely the same. The Auditors sus-
pended account-special" was one
of those accounts which, so far
from being an asset. naturally
closed or should have been closed
against income or profit and loss. The
entry by wich this transfer of S1,612.-
1lO.55 was made from the rebates (au-
ditor'S suspended account-speciaD to
the account of franchises and proper
ties" is in these words, viz: "Repre-
Sentng net charges to earnings and
operating expenses made after Oct. l,
1889, unit! Feb. 2S. 1891, probably ap-
plicable to the relations or the company
prior to the mortgage indenture, as per
telegram j. w. r., 173 w. 7-91," from
which it is made to appear that charges
to this extent had been
ErrOneous1y Included
in the operating expenses of the reor-
ganlZed company between the dates
mentioned. instead of being added to
the cost of the road and property. If
this view can be supported by facts and
figures which SO far L have been unable
to obtain, then 1t would be proper for
me TO revise my judgment as to the
81, 612. 110.55, otherwise | must hold that
its transfer from rebates to capital was
improper.
SecOnd-Additious to earnings and
reductions from expenses. Mex. in Or
der of Importance 10 the rebate account
comes an aggregate of S2,791, 600, which
on instructions from the East was
credited from time to time to the earn-
lngS and expenses respectively, but
which credits had no foundation in
fact. OF this aggrega,e S2.201, 900 was
added to earnings and $751;, 200 deducted
from operating expenses. the sum of the
two being deblted to "auditor's sus-
pended account" There were two
accounts of this character, one termed
auditors suspended account" which
held the additions to earnings and
deductions from expenses" and the
other, auditors suspended account
special" which held the rebates.
Third Improvements. The sum of
S4S9,000 was, in the period under con
Sideration, transferred improperly, as l
contend, from operating expenses to
improvement or capital account, the
improvements being finally enclosed in
the account OF "franchise aud proper
ties" which represents the cost OF the
road and property.
Fourth-Trathc balances. 1t further
appears that traffic agreement for a
division of business was formed in No
vemOer, 1890, running to July, 1891, be-
tween tire AtchlSon company and GER
tain other companies, whereby such
other companies were charged with
balance of S305, $3.50, which the Atchi-
son company was unable 70 collect, and
which is absolutely uncollectible, and
should have been heretofore written Off,
though 1t still stands as assets, ana
hence must now be written to the debit
of profit and loss.
For Clearer ElucidatioR
append thereto a tabulated statement
classifying the foregoing account by
fiscal years, both for the Atchison sys-
tenn and the st. Louis u San Francisco
system respectively.
The Atchison system, S7,2S5. .62O.51;
ST. Louis d SaE Francisco system, $685.
S79.49; total, both systems. 81, 49l 500.
The whole of this amount should, as
look at 1t, be written to the debt of
profit aud loss. except the S1.012, 14l.02
for Atchison pertaining to the fiscal
year 1854, which must go against, or
In reduction Of, the income for that
year,
That I may be fully understood, l
designate hereunder the accounts that
should be thus written off, viz:
AtchiSon System Franchises and
property. S1.6l2,l11lhRk keaarayamasta