Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-04-17
THE DIFFERENCE !?
Well, Attorney PhiIbin Says It
Is Just $16,804,0OO.
He Is Talking About Metropolitan
Railway Of New York.
In Connection With Recent Charges of
Encouragement.

Post, today, prints the following: The
, o,.lplete findings of Eugene A. Phil
bin, former district attorney of New
York county, as counsel for certain
stockholders of the Metropolitan Street
Railway Co., were made public, today.
This paragraph occurs:
1T is clear, therefore, when the COM
pany's own statements are analysed
| that the Interurban lease was calcu-
lated to provide and has actually pro-
vided many millions of dollars in ex-
cess of the honest requirements Of the
Metropolitan Co"
The report also finds that in 1898,
1893, 1900 and 1901; the Metropolitan
Co. stated in it's annual reports to the
state railroad commission that it had
expended for construction and equip
| ment, "a sum in cash exceeding by mil
lions of dollars the actual sum in cash
which is proved by the company's gen.
eral balance sheets to have been so ex-
pended"
Mr.. Philbin says the company asked
for $23,000,000 to pay the unfunded
debt incurred in the purchase of stock
of the Third Avenue Railroad Co. and
to defray the expenses of extending the
miles still operated with horse cars and
upon analysis the report says only $14,-
1915 was required for these two pur-
poses.
The report further says the company
proposed to create a refunding mort
gage to secure an authorized issue of
100000 of per cent, 100-year re-
funding bonds, of which about $4,000
- Il \
fund the q issues of existing bonds Sc
cured by liens upon the various parts
of the Metropolitan system, excluding
the Third Avenue lines.
The total issue of such issues, Mr..
Philbin says, was exactly $48,196,000,
and not about 54,000,O00.
1.-The difference" the report says,
between $4s,196,O00 and s65,O00,OO0 is
SIC, 804, 900"
The report says that the increase
in the bonded debt, instead of being
about $11.000,000 as appears to have
been pretended, turns out to be ex
actly $19,S04000. t.
In 1900 Mr.. Philbin says the company
made application for an increase of
capital stock from $45, 000.0 900 to 2,000,-
600. OF this increase 100000 it was
claimed would be required to pay the
expenses of the change and 100000
to pay the floating Indebtedness Of the
company, contracted for the purchase
of stocks in other street railroad COM
panies in the city. The sum of &c.,.
500,420 was received from the sale of
this additional stock, which was Of
fered to the stockholders of the COM
pany at 100. In 1901, 100000 was ex-
pended OH new construction and loans
amounting to $7144, 1906 were paid
The report of the company for 1900,
the year the purchase of the Third
Avenue Railroad Co. was consumated,
shows that temporary loans to the
amount of $7,S50,000 We're contracted
and cash was disbursed for stocks and
bonds of other companies in the sum
Of $7.402, 1884.
1T is apparent, therefore" says the
report, when all these facts are con-
sidered, that the sale Of 100000 of
new stock provided 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 Ave-
nue. stock. but of other railway stocks"
This follows the statement that the
Cohipdily 1JVS dShcu LII
part of which was to be used in pay
ing the unfunded debt incurred in the
purchase of the Third Avenue line.
LAS a matter of fact" Mr.. Philbin
says. lit can be conclusively shown by
the company's sworn statement that
the Metropolitan on that date could
not have owed a single dollar of UNI
funded debt incurred in the purchase
of Third Avenue stock"
Dealing with the Interurban's lease
the report says: while the Metro
politan Co. has been continuously since
the date of the lease and is at pres
ent. a creditor of the Interurban Co,
yet in July last the Metropolitan Co.
issued $11, 200, 900 of it's own bonds and
turned the proceeds thereof over to the
Interurban Company, in accordance
with the arrangement described in the
Interurban circular, and as agreed up
on by the two companies in the lease.
1T is clear that this $11,000,00O was
provided for the purpose of enabling
the Interburban Co. to carry out it's
contract to pay per cent. guaranteed
dividends on the $52.O40,000 Of Metro
politan stock, for the Interurban Co.
has not earning capacity of its own. |
and its only earnings are represented |
by the earnings of the Metropolitan
Co. itself, which never have been and |
are not at present equal to per cent, |
on its capital stock.
'''Accordinly the anomaly is pre- /
sented of the Metropolitan CO., al Il
though creditor of the Interurban, in
its own liabilities by $1,000. 600.
so as to enable the Interurban Co. to
carry out its guarantee of paying divi- Il
dends upon Metropolitan stock" Il
During 1898, 1899, 1900 and 1901 the
report says the company reported ex-
pending for construction and equipment
s35, 1922, while the actual expen-
ditures, according to the balance sheets
were 1925, S55,5
On the subject of excessive valuation
on investments, Mr.. Philbin's report n
says: ',fhe total value of investments II
set out in the general balance sheet of
June 30, 1901. was s21 $50, 42s.3s, and
year later s22.565, 471.7e. These values |
CONTINUED on page 81