The daily morning journal and courier., 1903-05-05
FINDS NO CROOKED WORK
EXAMINATION OF BOOKS OF ME-
 .TROPOLITAN R. F. CO.

Report of Expert Teers Made Public by District Attorney Jerome-Deficit Claimed Not SubstantIated Either In Principal or In Facts-Omission of LiabiIities-Pay of Dividends.
 New York, May 4-District Attorney Jerome late to-day made public the re- port of the expert accountant, Arthur w. Teele. whom he employed to look over the books of the Metropolitan Railroad company after complaints had been lodged with him that the company was in default.
 The: following is the conclusion of MT. Teele's report:
 ''The results of my examination may be briefly summarized as follows: (A) The deficit claimed by Messrs. Hertle and Tiechman is not substantiated either in principle or in facts. The lia- bilieies which have been omitted from the balance sheet other than taxes, would, when brought into the balance sheet add assets os corresponding value. f51t
 
 claimed that dividends paid were un- warranted or unearned, is entirely wrong in principle.
 f(C)-The reports by the Metropolitan Street Railway company to the railroad commissioners are not full and complete statements of their financial condition.
 "(D)-The stocks and bonds which it is claimed were issued without consid- eration were issued for value and in ac- cordance with the application for in- crease of capital made to the state rail- road commissioners.
 "(E)-It is not to be expected that statement of cash receipts and dis bursements will agree with the balance sheet or income account.
 "(F)-Marked differences do exist be- tween balance sheet of March 31, 1902, and the report rendered to the state board of railroad commissioners and to the New York Stock Exchange. These differences arise from an evident lack of uniformity and care in the stating of balance sheets and the method, while open to criticism for not giving full and complete presentation of the finan- cial condition. does not result in any
 
 det1iment to its stockholders. s ,5"(G) )-The difference between the net income as shown by the quarterly re- port and the application to the stock exchange and the difference between the affidavit of MT Vreeland in the Wormser suit and the quarterly report is due to the adjustment of items not directly chargeable to the current per iod reported. Those adjustments are not unusual, and are of little considera- tion when explained. The differences between the items of the income in the two reports are due entirely to report ing in one case gross figures and in the other case part gross figures and part net
 "(H)-The increase in the investment at the various dates specified is due to actual transactions. s&. =.l S"I)--The changes quoted in the bal ance sheets of the several quarterly re- ports referred to, of the Thirty fourth Street Crosstown Railroad company and of the Twenty-eighth street and Twen- ty-ninth Street Crosstown Railroad companies, are due to regular transac- tions y.5- t, rg+ balance due from lessor companies, June 30, 1907 is due to regular transac- tions not specifically reported. ! "(K)-The s7,00o,000 Second Avenue Railroad company bonds have been is- sued in accordance with the provisions of the deed of trust.
 ."G)-The ss50.00O South Ferry Rail- road company bonds, and the S2,500,0O0 Broadway Surface Railroad company bonds were omitted from the balance sheet on advice of counsel, on the ground of there being question of the direct liability of the Metropolitan Street Railroad company for the same. The $350,00O South Ferry Railroad com- pany bonds have since been brought on to the Metropolitan Street Railroad company's books. and, in my opinion, the $2, 500, 900 Broadway Surface Rail- road company's bonds should be brought on with the assets of corre- spending value.
 "In conclusion beg to repeat that my examination of the books and accounts of the Metropolitan Street Railway com- pany, has been confined strictly to the points raised in the findings or conclu- sions reached by Messrs. Hertle and Teichman, and in the question submit ted to me by you for this purpose the officers of the company have afforded me every facility"
 After making public the report Dis trict Attorney Jerome issued state ment in which he said:
 ''Mr. 'Teele finds the specific conclu- sions of Messrs. Hertle and Teichman and the specific charges of MT. Amory are entirely without foundation so far as they involve criminal wrong doing, and in this view concur" D. 4 H1HrT Ir I'M HrrrpnnnAM nfrnKn nu