The Birmingham age-herald., 1903-04-17
METROPOLITAN CO.
 REPORTED ROTTEN
PhiIbin'S Investigation Develops
 a Big Sensation
EXCESSIVE VALUATIONS
Interurban Lease Has Provided Many Million Dollars in Excess of the Honest Requirements of the
 Metropolitan Company.


 today prints the following:
 'The complete findings of Eugene A. Philbin, formerly district attorney of New York county. as counsel for certain stock holders of the Metropolitan Street Rail- way company were made public today" This paragraph occurs:
 Tt Is clear that when the company 8 own statements are analysed that the h. terurban lease was calculated to provide, and has actually provided many millions of dollars in excess of the honest require ments of the Metropolitan company"
 The report also finds that in 1898, 1899, 1900 and 1901 the Metropolitan company stated in its annual report to the state railroad commission, that 1t had expended for construction and equipment a sum in cash exceeding by millions of dollars the actual sum in cash which Is proved by the company's general balance sheets, to have been so expended"
 The report continues that the increase In bonded debt, instead of being about s1l 900, oOo as appears to have been pre- tended, turns out to be exactly $19,S04, 900.
 Applied for an Increase.
 Tn 1900 the company" says MT. Phil bin, made application for an increase of capital stock from s45 COG, 900 to S52,OoO, 00O The sum of sIO, 300, APO was received from the sale of this additional stock. In 1901, $1,3000o0 was expended on new construction, and loans amounting to ST. 1906 were paid. The report of the com pany for 1900, the year the purchase of the Third Avenue Railroad company was consummated, shows that temporary loans to the amount of s7S50,0oo were con- tracted and cash was disbursed for stocks and bonds of other companies in the sum of $7,402, ,2S4."
 Tt is apparent, therefore" says the report when all these facts are consid- cred, that the $7000,000 of new stock pro- vided a sufficient sum of cash to pay for new construction and to pay in full the debt incurred in 1900 for the purchase not only of Third Avenue stock, but of other street railway stocks"
 This follows the statement that the company in 1902 asked for S23 GOO GOO, part of which was to be used in paying the unfunded debt incurred in the purchase of the Third avenue line. "As a matter of fact MT. Philbin says. it can be conclusively shown by the company 2 sworn statement that the Metropolitan l on that date could not have owed a sin | the purchase of Third avenue stock"
 The Interurban Lease. Dealing with the Interurban lease, the report says:
 While the Metropolitan company has been continuously since the date of the lease ,and is at present creditor of the Interurban company, yet, In July last the Metropolitan company issued $11,- l 100000 of it's own bonds and turned the l proceeds over to the Interurban com l pany.
 These $11, 900, GOO were provided for the l purpose of enabling the Interurban com l pany to carry out its contract to pay I per cent guaranteed dividends on the S52,- 1 040000 of Metropolitan stock for the In- 1 terurhan company has no earning capa- city of it's own, and It's only earnings are represented by the earnings of the Met ropolitan company itself, which never l have been and are not at present equal to seven per cent on its capital stock" During 1898. 1900 and 1901 the report says the company reported expending for con- struction and equipment $S5, 413, 421, while the actual expenditures according to the balance sheets. was S25,S55,572.
 Excessive Valuation.
 On the subject of excessive valuation of investments, MT. Philbin's report says:
 ''The total value of investments set out in the general balance sheet of June 30, 1901, was $21, 6S3 42S.26 and a year later $22. 565 41l.76. These values are represent ed by more than $12,O00, GOO of Metropoli- tan stock issued in 1897 for the acquire ment of part of the stock and bonds held at present as Investments and by | the cash proceeds of other shares of stock devoted to the purchase of such invest ments.
 ''1he total of such stack issued Is about 1 $2O000,0O0 face value on which the com pany Is paying ' per cent dividends, or at the rate of $1400,000 a year. But the companys income from these Invest. ments, as its own annual reports prove is but about $3O0,OOO a year. In other words, the company Is paying out an. nually $l,400,0O0 to receive in return $500. 900. and if this Is the case, some one is necessarily prohting to an equal ex. l tent"
 MT. Philbin contends that entries 1T the company's reports of S50O,OOo in 1o0t and 2'@5OOO in 1901 paid by lesser com. | panles," are pretended. In conclusion h. says calculations and estimates 'clearl, indicate that the Metropolitan companS has claimed for 1902 an expenditure o cash for change of motive power, exceed ing by more than $o.O0O.OOo the true cos thereof"