The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-04-27
ACCOUNTANTSANSWERPHILBN
MFTROPOLITANS REPORTS ARE
CORRECT-ERRORS ARE HIS.
The CHASTITY simplicity Of ssms q H1s
Many Minion.Dsilar "Mistakes" u
Pointed Out by stephen IAttls. ~.
auhar j. MaeTae and Easktns & Oels.

! President II. H. yreeland Of the In
! terurban Street Railway Company mailed
I last night TO the 1000 stockholders Of the
! Metropolitan Street Railway copies OF Q
report rnaie by Stephen Little, Farquhar
! j. aiacRse and Haskins 4 Sells, than whom.
! as expert accountants. none stands higher
/ in this country, upon the memorandum
! of the company's condition made by the
/ Hon. Fnme-and-F fortune Philbin by way Of
; a report to his clients, Braker and Doyle. and
, given TO the newspapers by Mr.. Philbin
week ago last Thursday. Accompanying
the findings Of the experts Mr.. Vresland
sent the following letter:
10 the Stockholders Of The Mefropoiita~ Street
, Rui!rdv Company:
In view OF the wide publication Of nis-
: leading and Injurious statements regarding
t.e financial Affairs OF this company which
pave recently appeared In the news apers.
4 have submitted these statements 70 Msssrs.
Stephen Little. Farluhar j. MacRae and
Hasklns A Sells. certified public accountant.
with the request that they investigate them
fully and submit a report OF the result OF their
Investigations which | could place before
the stockholders Of the company. accord
ingly hand you herewith a copy Of their
report. Yours truly. H. II. yREHLAED.
NEW YORK. April rs.
The report Of the experts dissects Mr..
Philbin's memorandum from the first hne
to the last Some OF his findings arc char
acterlzed Us absurd, some as ludicroD and
some as showing ignorance OF the principles
OF accounting and bookkeeping.
OF course. the Amory- Philbln oufat
didn't like the report Of tho experts. Thy
pooh-poohed 1t. and finally asserted that It
didn't answer a single one Of the statemants
In the Philbin memorandum. The legal end
, Of the outfit said this and then set AmoSy.
Phibin's railroad expert. TO show In D.
tail how absurd the company's experts were.
The report OF the experts fslows:
II. Fl. Vreeiond. Esq.. President.
Sir: We have received your redusse -
examine and report upon Q memoranda,m
containing allegations. differences and con-
illusions claimed 70 be based principally upsa
the reports Of your company 70 the State
Railroad Commissioners for period Of yeafs.
This memorandum appears 10 b idsntical
with the publications made In the New York
newspapers on April 10. 1909 and you inform
US that II includes the substance Of the charges
respecting the management Of your com
pany which were called to your attention By
the District Attorney Of the county OF New
York.
We have examined this memorandum In
detail. Its contents are undivided Into
twelve articles. each Of which We have care-~
fully Investigated. Our comments upon
each OF them are contained In the report
herewith submitted.
We have no hsaitstioA IN -aaydAA ~ tnseo
u nothing In the reports and other papers
| referred to In this memorandum, - far a.
their contents are brought before ua and
nothing In any OF the comparisons and an
slyses therein made. which affords the allght-
esi ground for any charge Of corporate mis-
management. or for the suggestion that any
funds OF the company have been mtsap-
propriated. Nor does an examination Of tn,
memorandum raise any doubt In tbs mind
OF AN accountant as to the accuracy OF your
Official reports at the time when they were
made. or as to the propriety OF the sxpeudi-
lures therein reported.
The least that car be said In comment upon
the allegations. differences and conclusions
OF the memorandum to which You have called
our attention Is that they are wholly mis-
aiken. Very truly yours.
STEPHEN LITTLE.
FAEorHAH J. MAcRAE.
HAsAIss 4 SFLLR,
Certified Public Accountants.
NEW YORK. April %
The Report.
II. n. Troelond, ESQ, Prssidenf:
Sin: We submit herewith in detail our
report upon the memorandum you have
divisions contained therein in their numerical
order. retaining i'll each case the caption that
appears In the memorandum.
40. !.
cash disbHrsCmCnts FOR n'u construction,
The allegation under this headline 10 In
eject that during certain specified years
tie cash q disbursements for new construction
and equipment were reported TO the Railroad
Commissioners as amounting to sss Sis,Iai. sb
in the companys cash statement, while In
the com pany's general balance sheet they
we're 81 TO amount during the same period
AZ. .plx
Tie figures stated 10y the persons who pre-
pared this memorandum arc incorrect. The
for the period stated Was S25,7 as 20: but
the difference for the purpose OF this inquiry
Tie question which this comparison seeks
70 raise is; Shat became Of the plssine ten
is mistaken. misleading and contrary 70 all
principles Of accounting. The oompeny's
obi cations paid during the specified period,
While the increase in the amount charged
as shown ON the balance sheet. represents
obligations ncnrred. The two thinss are
obviously 40 different that any attempt 70
10 meaning whatever,
The reference 70 loans and investments and
and the balance sheets in respect Of thsee 10
met by the same answer. We repeat that
statement with the balance sheet. nor l. any
Inference whatever to be drawn from the
fuCt that they 90 not agree. 10 base q charge
oil corporate Acknowledgement upon the fact
that ID disagreement does exist Is simply
absurd
NO. II.
False balance Of IS, 900. 900 due from tessor
com pdnies carried forrard frpnl 1901 TO 1901 .
The suggestion made under this heading
IL tiat becsuse your company reported 70
the Railroad Commission report OF 1901,
page i07il: Amount due from lessor CON-
panies June 80. 1901. 2.245 .6st Is. and the
next year reported page iiOsl Balance due
from lcsso. companies, June 80, 1901. W,7<S.-
SOS IS IL follows that false balance wns
stated, amounting to G .o00. 900. This infer
ence II entirely unwnrrar ted The trans
action embodied in these two reports was
simply this-t3 600 600 had been paid By the
lessor companies 10 the Metropolitan In notes
Oh account OF additions and betterments
made by the METROPOLITAN company upon
their respective lines, and the notes, falling
due. were not paid by the lessor compantes
but were taken up by the Metropolitan COM
pany. Thcreupon the o.. 600 900 OF mdebt-
edness to the metropolitan company repre-
scnted by the notes we're, OF course. charged
back to the lessor companies accounts on the
Metropolitan company's books.
NOS. III. ~. ". vi.
am In relation to the Second Avenue
Railroad Company" UV.) Repeated ekarpss
for sqNe construetion vGrk on esrfotn tesssd
lines" ". "Ercessite charge for reeonstrvo-
fion on the Thiriy-fourfh Street Crosstor~
Raliuay ComponE" VID -N6o'fcf 10 report
in dead cost 81 neW oonefrucfion pear BY yedy"
The points rnised under those headings