New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-08-22
SOME HEAT AT INQUIRY
DIR. WINS W4XES WARM
bookkeeping Methods of INTERIOR
ough Under ,SearchHght.

William NJ Twins special counsel for the Public
Service Commission occupied most of yesterdays
hearing with examination Of witnesses OF the
Interborough Rapid Transit Company as TO the
correctness of the bookkeeping Of that company
Apparently Mr. WINS attempted to show that the
salary of August Belmont. fees paid TO lawyers
and fnanciers discounts for underwriting bonds.
the of publishing souvenir book and other
items We're entered the books of the merger
in such a way that eventually the city of New
York itself would have to paw them. while they
Cthe items) constituted no legal or legitimate
charge on the city.
Paul u. Cravath. Of counsel for the merger,
made a full explanation of the system Of bookkeep-
ing showing that the entries had been made in
such way that the city would he called on to pay
them or that the company had any idea that they
would be settled nv the city.
At one point during the hearing Mr.. Nico. of
counsel for the company. heatedly interrupted say
ing that an entirely wrong impression and one not
warranted by the facts was being given. Mr..
WINS replied with equal heat that the items under
discussion would up. They come up under
penal statuter' he shouted THAT is how they
come up. This railroad is reporting to the city
formally and officially. Expenditures for subway
equipment are s245456lS Of which they have given
detail. hut which contain these particular
items"
We can take care of that in any court of law
retorted Mr.. Nicou- Don't let that worry you
any"
1T is a question" continued Mr.. WINS. whether
not that is report under the statute for which
some is to be held personally responsible. That
Is for the District Attorney. not for me-
Don't let that worry you any said Mr. Nicoll-
CoMPANYs GIFT TO n. c F.
Much amusement was caused by President
Bryan's reply a question what he thought
the city should give the company $500 that IT
had given 10 the National Civic Federation.
Thirty DAYS" he replied This gift was made by
Mr.. Belmont
Commissioner Wilcox. who presided at the In
vestigation. finally suggested that mistake
in the understanding of the system of making
entries might lead serious results II would be
well to have it explained thoroughly. Mr.. Cravath
then made his explanation and the matter was
Strengthened out
II brought in the testimony that when
Mr.. Parsons chief engineer for the Rapid
Transit Commission he accepted without a
schedule the property Of the road, although the
contract provided that schedule Of the equip
should be filed with the board IN duplicate,
It further brought that MI Parsons
associated in business with the merger and is one
OF the directors of the steinway tunnel
PRESIDENT BRYAN ON STAND
President Bryan was called when the hearing
began A1r. WINS called his attention to some
provisions Of the lease between the city and the
marlborough company. In compliance with one
Of these. the witness said the company mad fled
an inventory Of its property about a year and a
half ago but had not fled inventories each
succeeding half year, the charter required Mr..
Bryan said he thought that memoranda Of any
changes additions had been fled instead. Mr..
WINS then read from the report Of the auditor Of
the Interborough company showing capital invest
ed to October 81, 1905 It the following figures:
Capital stock issued to acquire lease of subway s2 100 o9
For subway equipment expenditure q 23a5ss
Total ............. s37. see. ssI
The gross receipts were sss21e58: operating ex-
penses s31o1 sS4; earnings 81 S197ls; in
terest city bonds, 81 42s 2s9; balance. S2S742s.
Mr.. WINS then took up the question Of bookkeep-
ing He asked Mr.. Bryan whether his salary Of
s35 900 was charged under operating expenses or
construction equipment. Mr.. Bryan replied that
II should be charged 10 construction He said that
he was also president of the PETERBOROUGH Rapid
Transit Construction Company. he would be
surprised he said TO hear that his entire salary had
been charged the books OF the rapid transit
company.
The witness remembered the sale OF 100000 Of
gold notes to August Belmont & Co and that that
firm had received discount Of $4,000 the trans
action. This discount had been carried on the'con-
struction account Of the Company's books Asked
if he knew that that was element Of value
which the city might be called TO pay If it
took over the road he replied that he believed it
legitimate charge.
DISCOUNT FOR BELMONT COMPANY.
Mr.. WINS then brought out the fact that besides
the discount Of $4,000 which Belmont & co.
CeiVed II also received commission or threequaT-
tiers of per cent for doing the business This com
mission was also entered in the books under
struction. Mr.. Bryan. after first declining to say
whether he considered that q proper charge.
swered in the affirmative.
Q.-Now do you know that August Bemont's
salary the president Of the operating company,
tTeIgI,s SI9, Of t5a hooks and vas tinat
" ChaTgeable back to the city? A-The auditor
Q.-Can You tell why in 1853 an item Of $500 as a
contribution to the National Civic Federation was
entered under construction and was ultimately
chargeable back to the city, Al cannot
Q.ICan you. say why a souvenir book, costing
under constructor and SO is chargeable back 10
the city? Al consider IL an asset to the com
pany. The sum of Sl34Il charged for 1t was proper
Mr. Wins then showed that the directors
pensaton was also charged to construction. H
then pointed out that the company lessee
company from a municipality with agreement
on the part of the latter to reby it's properties at
the end Of a term of years Mr.. Cravath then in
terrupted to say that there agreement 10
reT,urchase the properties. but TO buy back the
tangible properties He added that the company
was perfect liberty to employ its funds in other
enterprises in the scope Of its charter The testi-
mony then as follows:
Mr.. Ivins-But in the mean time all these charges
made the subway?
Mr.. Nicoll-It is iInmaterial whether they are
made TO the subway not.
Commissioner Willcox-Dont you get the clty's
bonds for construction?
II into sinking fund which redeems them, and the
property back to the city without any charge
whatever
Mr. Ivins-They are charged to miscellaneous &C
count.
Mr.. Cravath-No; they charged 10 capital
in the Interboroughs accounts not TO the
subway. Mr.. Gaynor can explain IL.
CoMPANY's AUDITOR TEsTFIEs.
Mr. Gaynor auditor OF the company. then
sworn. Interest in the hearing at this point was
intense. Commissioner Afaltbie moved closer 10 the
witness to hear better and there a general air
of excitement and expectancy in the chamber.