The daily morning journal and courier., 1903-04-17
DISCREPANCIES OF MILLIONS
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 in 1900, Mir. Philbin says the conn pany made application for an increase of capital stock from s45. 1000, 900 to $52.- 100000. Of this increase $3,000,OOO. it was claimed, would be required to pay the expenses of the change and S4 ,000,00O to pay the floating indebtedness of the company, contracted for the purchase of stocks in other street railroad compan- les in the city. The sum of $10,500,420 was received from the sale of this addi- tional stock, which was offered to the stockholders of the company at 160. In 1901 $3, 700, 900 was expended on new con- struction and loans amounting to S7,- IA, ,906 were paid. The report of the com pany for 1900, the year the purchase of the Third avenue railroad was consum- mated shows that temporary loans to the amount of $7,S50, ,000 were contracted and cash was disbursed for stocks and bonds of other companies in the sum of ,2S4. Tt is apparent, therefore" says the report, ''when all these facts are considered that the sale of $7,000.00O of new stock provided 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 Ave- nue stock. but of other street railway stocks
 This follows the statement that the company in 1902 asked for $21,00O,000, part of which was to be used in paying the unfunded debt incurred in the pur- chase of the Third avenue fine. "As matter of fact" MT. Philbin says, it 4 r-1,oy I,1y% pany's sworn statement that the Metro politan on that date could not have owed single dollar of unfunded debt incurred in the purchase of Third ave- nue stock"
 Dealing with the Interurban's lease the report says: While the Metropol tan company has been continuously since the date of the lease, and is at present, creditor of the Interurban company, yet in July last the Metropol itan company issued $11,000,0OO of its own bonds and turned the proceeds thereof over to the Interurban com pany in accordance with the arrange ment described in the Interurban cir cular and as agreed upon by the two companies in the lease.
 "It is clear that this $11.000.000 was provided for the purpose of enabling the Interurban company to carry out its contract to pay per cent. guaranteed dividends on the $52 2040, 900 of Metropol- N itan stock, for the Interurban company has no earning capacity of it's own, and it's only earnings are represented by the x earnings of the Metropolitan company itself which never have been and are rot at present equal to $7 per cent. on its capital stock.
 Accordingly the anomaly is presented of the Metropolitan company, although a creditor of the Interurban, increasing its own liabilities by $11,oa000O, so as to enable the Interurban company to car ry out its guarantee of paying dividends upon Metropolitan stock"
 During 1898, 1899, 1900 and 1901 the re- port says the company reported expend- ing for construction and equipment $S5,- 413,421, while the actual expenditures, according to the balance sheets, was & $25,355.572.
 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 s21,6S3, 42s.36, and a y are represented by more than $12, 1000 ,00C of Metropolitan stock issued in 1897 for the requirement. of part of the stock and bonds held at present as invest rnents, and by the cash proceeds of oth- CT shares of stocks devoted to the pur- chase of such investments.
 ''The total of each stock issued is about $20,000,00o face value, on which the company is paying per cent. divi. dends, or at the rate of s1,4oO0OO year But the company's income from these Investments, as its own annual reports prove, is but about $300,000 a year. IT other words. the company is paying ou annually $1,400,000 to received in return $300,000.
 ''No one could possibly doubt, afte consideration of these and other perti nent facts bearing upon the subject tha the company's investment account ha been manipulated to the advantage O some person or persons, for it is clea that if the company is losing over $1, 100000 annually through these invest ments, some one is necessarily profitin, N to an equal extent
 Mir. Philbin contends that entries i, the companys reports of $50O,000 in 19O and $2,035,00O in 1901" paid by Jesse companies, "are pretended. He sai none of the lesser companies were oblig ed to pay the Metropolitan any sum 0 cash on account of addition and better ments on leased lines. In conclusion h says, calculations and estimates "clear ly indicate that the Metropolitan com pany has claimed for 1902 an expendi ture of cash for change of motive powe <. exceeding by more than $6OOOOOO tn true cost thereof"
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