New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-05-05
DID NOT SEE VOUCHERS.
JEROMES NAN REPORTS.
TeeIe Finds Discrepancies, but Up
holds II. S. R. Statements.


Teele. the accountant employed by District At
torney Jerome to examine the accounts OF the
Metropolitan Street Railway Company with ref
erence charges the reports of John c.
Hertle and Max Teichman. was made public
yesterday 1t practically acQuits the MetrOpoli-
tan company of the allegations made by w. n
| Amory in court and the discrepancies shown
| in the report of Eugene A. Philbin. but it Is
| apparent that it is an incomplete, iuconclusive
| superficial document
Mr. Jerome in a statement accompanying Mr.
Teeles report. expressly states that no general
investigation was made as to whether dividends
had been paid ont of capital; whether charges
| had been made to construction account. which
should have been paid out of operating expenses;
| whether generalization had been placed upon
securities at the time of their purchase; whether
/ excessive amounts had been paid in construction
for labor and services rendered and materials
furnished and whether charges had been made
for legal and other expenses where the expendi-
lures were in fact not made for such purposes.
because the determination of these questions
would take many months and involve the ex-
penditure of many thousands OF dollars
! Mr. Teele also specifies that as to charges of
overconstructicn he did not verify the ex-
! penditure" as shown the books. by the
! vouchers.
/ Regarding the charge that unearned dividends
would warrant the District Attorney in taking
| John Doe" proceedings Mr.. Teele says:
| have not made an examination of the revenue
| and expenditure such as would be necessary 70
earned but the m e6ncusons reaehed in the repors
OF Mr. Herte and Mr. Teichman that DIVIDENDS
paid unwarranted or not earned, because OF
the deficiency claimed by them are entirely s un.
that the comraHy's net income June 80. 1901 is
IN led fb @ ct 5co 5s hoWs beyond the face Of
the books as apparently no question s+ mas Oeen
raised as 10 the accuracy OF the accounts
The question naturally arises whether Dis
trict Attorney Jerome. in view Of this entire
absence Of reply to Mr.. Amorys charges. Will
make still further investigation He would not
say as to this yesterday but in his formal
statement there was this:
Investigation has been confined to the charges en-
bodied in the report Of Messrs Hertle ana ~ LeSn S
Schurnnan The District Attorney is not ex-offcio
vested with vistoriai powers over corporations.
and in the absence Of apparently well founded in
formation It is not his duty nor Wltnin ms powers
Mr. TeeIe finds that the SPECIFIC c9pciuslon me- OF
charges Of NJ Afnory are entirely without founda-
ton. so far as they involve criminal Wrongaolhs'
and in this view Mr.. Schurman and I concur
The Teee report. dated April 90 1908. was a
bulky document of twenty-four typewriter
pages with an appendix of four pages Of sta
tistics. It disposes Of the controversy about
liabilities representing the funded debt Of lessor
companies by saying that If these liabilities |
were omitted from the annual statement cor |
responding assets were also omitted No deduc- |
ton from the surplus was made for the ST. |
100000 taxes due this city. because counsel OF |
the company held that such taxes would not /
ultimately prove a liability" AS to the arbi- |
trary writing up OF the value OF securities. Mr..
Teele says that the company purchased some
stocks and sold others. the difference between
the amounts involved accounting for the in
crease in the value Of securities held
"The cash in these transactions was passed
through the construction cash account" says
the report. The construction cash account is
not what. perhaps. its would indicate; it
is, in fact. q general cash account, through
which are passed all cash transactions not
passed through the operating cash account.
While I have not compared the receipts and dis
bursements shown by this account with the
quarterly reports, I am informed by the auditor
that in preparing the quarterly report the gross
receipts and gross disbursements are not shown
as they are in connection with the operating
cash account but only the net transactions are
Other extracts follow:
1t is quite true that the reports made by the
set out the companys financial condltion, IN that
the Metropolitan Street Railway Company is liable
Ny b does fStd not fb dsS0se any
balance sheet would not. necessarily. be accom-
a
The net result affecting the surplus therefore.
The practice followed by the Metropolitan Street
Railway Company Of emitting assets and liabili-
Other than this. however. the company has made
TepoTts to the Railroad Commissioners as Of March
81 1892, and to the Stock Exchange of the
sioners as Of June 90 1902 and June 80. 1soi
The methods followed in stating these two bal
for without access TO the books and papers refer
a |
task 10 reconcile the two statements. Z
In supplemental report Mr.. Teee attempts
to answer the allegations relative TO overcharges
for construction and the mooted S11000O0O
which Mr.. Amory. quoting President Vreeland's
affidavit in the Wornser suit. charged was for =
debt incurred in the purchase of stock of the !
Third Avenue Railroad" which stock. he fur
-her charged was paid for two years previous
y The apparent cost of S6,0OO.OOO a mile on
he Thirty -fourth-st. crosstown road NJ. Teele
>, lIains by saying that, while owning As mile
IF road the company operates go miles. fur
lishing equipment therefor. and S2,O00000 the
original cost of property and franchises. while
1ro erly included as part of the total cost Of the
property on the books OF the company. Is i'm
properly used in the calculation to arrive At the
ost a mile of road.
AS to cost on other parts Of the road. only '
killed engineer could tell about overcharges. q
fr Teee says. adding that his investigation Il
lid not contemplate such examination. or the v
IL 100000 he says. without referring TO Third L
\, euue ct all:
Under the terms OF the Interurban lease it is pro-
ided that out OF the A SSp @ 20 shat @ 9s pald pTao
tded for Of the Metropolitan Street Railway :.
l. 1902 reference 70 the balance sheet made TO 81
he Stock Exchange OF that date shows that debts
u 900 600 with the contingency OF other debts