The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1896-12-05

BALTIMORE. Dec. +.-Chc report OF
s,cphen Little, the expert accountant to
he baltimore y Ohio RECONCILIATION
,,n,r!t,cr. was made public to-day. The
..rouu,ant ilnds, among other things, mn
oy.- statement OF the net income
amounting TO s?.7gl,OG1 from June 20,
80, Ia June 80. 1895. This amount Is d.
,,ijsL as follows: For 1892. S95jii1; for
,SSg siIs, sol: Tor 1891, IOl,Od3: for 1895.
,.y,, s7b He also finds that OF the &c.
80 ~; Maid In dividends during the perl
II mentioned. only sSIl.iid WAS earned.
The Items Withheld from operating eN'
r,,n.as and the methods OF swelling the
r.rslp;s each year are etvon III detail.
ne writing UP the values OF stocks owned
and other such practices the net income
Was swelled by amounts that should
a1yc gone 10 profit and loss. Two I'M
rr5yIs,d profit and losti accounts were
,nened, one designated, general adjust
rieE; siScount. and the Other "sccur!-
TED adjustment account
Mr.. Little says there Is mischarEc OF
. worn out equipment 10 profit and loss
instead Os the Income. amounting to a.
N5596.
Charges to income Of s2.c5i,74l were
improperly capitalized under the title o:
"s0nslrUstion, main stem, etc.
improvements and bettermentS Of
based and dependent roads amounting
% s3.J15,l53 were Improperly charged 20
Clr.tal account,
Tho total OF these Improper entries Il
SI..D4,65S FOR the seven years and twO
months ending November 90. 1895. Dur
i7E the period under scrutiny. there We're
declared g., 95s 800 In stock and s3.3l2. .OS6
IA cash dividends on the common stock.
ClncucreH. with the stock dividend OF .
;er cent In November. 1891. was the sale
80 syndicate Of $509s,0OO additional
rNmEan stock. and in February. 1892
S1IG! $50 mGre common stock was issued
Ut exchange for l?0.l0o shares OF Pitts
bgr= * Western common stock At SIS q
share
NJ Little says that the liabilities OF
;he cowpo,ay on November 80. 1895. were
U1larsta:ed by s5.iSl.S2I and shat the
f5.,i1E debt was sl6,?l?.T3O. The net In
CTrIse IN liabilities for the period under
'gTiew has been t2?.lSV.0I2.
Ir. Little. Comments.
Mr Litt!e's report shows that for an
ascer:aInment OF the causes that
brought about the financial condition
q the company on November 80. 1895,
he wen; back TO September 30. 1855,
when after an expert examination, made
gaier the ausp!ccs OF It's board OF IL
r=ctorS, the company was considered
solvent.
Mr. Little says, In regard to "the
:n.scbargc OF worn out equipment 10
7:oht and loss instead Of income:
There ts no :ault 10 be found with
sGt On the contrary every commenda-
tioa for-the Ttsdon OF writing off the
Equipment, as i disappeared from the
lists Having, however, cleaned Up. so
"a speak In the fiscal year 1883. by
charging 100000 o! this equipment to
rroA; and loss. there was no pr0pricty
= continuing to make the. charge to
that account. IL should. In my judg-
TeHt, nave beer charged to income and
for the purpose OF ascertaiHing the trlIe
income OF each succeeding year since
-As, have so dealt with It.
IL commenting OF the amount stated
~ De- wrOngfully credited TO income
under the ''capltal!zatio OF charges TO
i1came under the tide Of construction
main stem. etc. etc.." the expert says:
Cal! these Improvements by ThaIev-
'T name we may. extraordinary or 9TH
''".5r, their character Is such that
"a" see no pr0p-lcty in capitaliZiHg
them"
Concerning The payment of uuelrned
t!ytdeHds the report says:
Ati"r pointing out for each year the
difference between the declared net In
come Of the road and the income ns 1t
tl5uii have been according to MIR.
LN;.e's figures. he concludes his treat
meet OF this branch OF the subject by
indicating. that, II no unearncd divl-
uends hEd been paid during the period
EHGr: consideration. the road would
nave remained solvent. Mr.. Lit.!c's
''"F!s are as follows:
Radical, perhaps. rs my treatment OF
lAe income account may be considered.
tA" facts will not be disputed. The con-
tract between the fictitious and the real
L@t earnings capacity az this great pro-
p-Fty IL, by II. all the more strongiy
brought out. Taking the year 1895 as an
meek 10 the situation, there WAS. after
if"E.I!ng for all charges and the fun
dividends Of 100000 on the first and
second preferred stocks, u deficit OF
'-'i.N5 81. Strike these dividends out
'hH you have a surplus Jf q, 9j5 80. 80
'aHt II adequate capital can be obtained
N.th which 20 fund its floating debt and
i1-Hish facilities for the enlargement. OF
70 business and the economical hand
AES Of the same, there is nothing dis
.glFaEinB In the prospect of the ability
e.. the company to earn the Interest and
".r7, on all its direct obligations now
outstanding. Indeed II we take the
ale'igc Income FOR any twelve months
d.. he seven years and two months. as I
i1'n revised Il. the surplus over all
,aa'cer, Including the dividends OF
'''"010 on the first and sccOnd preferred
tiasE5. n 1895, $50 10. Rrl including these
o.,ii"Edq Il is Si3j.550 70. The rcsltR
,1f tGc Eve months ended November 80.
.''o, "hOw surplus over all charges nf
.N-,i'i OS. but Il Is no. % be taken ds nm
Indication OF what the whole year may
HsycOp"
liabilities EnIr estimated.
Under the head under estimate OF
,.1lh.iiyIes." Mr., Little, after giving a
'hh.. N Items. says:
h" U!i"r-s statement OF It's liabilities
l" which ! refer and al which no official
t.h'.ra has bceM made publicly, con-
~ X the $j,ISi.S3. 20. Not being n
,"'.aet debt It has no place OH It's books
"a. 'H' company lE, nevertheless. Bound
hJ is7 c1lofscmcnt. These loans. more
.~. 80. sun further secured by the
tHEe OF u own c0llatcrals In cOnjunc-
r2n with those Of the ittrhurgh e West
wa RHd ihc Valley railway q Ohio"
Extending Indu-,ri,N.
General TruGlC Manager Randolph.
OF t!' Baltimore &: Ohio Suuthcwcstcrn,
'i,E recent Y!sit 4, ,his city to sec
"'"f aia ~ The Baltimore g Ohio rail-
.,h'i, S0.d hr j. paying considerable
',"luun lGst nov to the Development
-, N" local !ndus'reH ai0NG iig line,
VI, 4 Annhor Of gears he Baltimore
= ,Ih'I southwestern has fdStpgch rs
"'El .NlU5;r3cg and "nJcnyurcl IN