New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-05-26
COULDN'T FIND VOUCHERS
Did Find Large Checks Paid to
Lawyers, Scudder Says.
P.S C. ACCOUNTANT HALTED
Guthrie, Third Avenue Roads
Counsel, Would Not Allow
Issue of Statement.

Marvyn Scudder. the expert accountant
for the Public Service Commission who on
Tuesday testified to the distribution of the
proceeds of sS7, $50, 600 of Third Avenue Rail-
road Company bonds, was yesterday cross
examined by William D. Guthrie, counsel
for the reorganization committee of Third
Avenue bondholders. Chairman Wilcox of
the Public Service Commission was present
| for a portion of the time, and so were
Commissioners McCarron and Eustis, while
Milo r. Maltbie who has been present
throughout the whole hearing, was there
all the time. Passages at arms between
| witness and counsel were fairly frequent.
At one point Mr.. Scudder asked:
| May I make a statement
| You may mott" sharply exclaimed Mr..
Guthrie. Please answer questions, and
do not volunteer anything
| Neither the members of the commission
nor Oliver c. Semple, their counsel. made
any comment on the issuance of orders by
counsel for the petitioners.
No Vouchers for Legal FeessPaid.
Details OF the statement filed on Tuesday
by Mr.. Scudder show other large payments
for reorganization and legal fees besides the
| s3S5,000 to Hoadly, Jauterbach & Johnson
referred to on the direct examination Of
the witness. Among the sums paid by the
Morton Trust Company out Of the proceeds
Of the bonds issued to provide for improve
ments and betterments of the Third Ave
nue. system at the time the system was
leased to the Metropolitan. were the fol-
| lowing:
Frederick P. Olcott, chairman, 100000;
Stetson, Jennings & Russell. $4,000; Butler.
hoffman. Joline & Mynderse, $50, 7O9: Bowers
an
Hugh j. Grant, So. 600; Seward, Guthrie &
Steele, $4,000; Charles Macveagh, s1.1s4;
Niles & Miles, $50.
| Mr. Scudder stated on Tuesday that
these sums were paid by the Morton Trust
Company, but that no vouchers 70 justify
them could be found. Mr.. Olcott, now
dead, was president of the Central Trust
Company, and was chairman of q COM
nlittee formed at the time Of the bank
ruptcy of the Third Avenue Railroad Com
pany to study the means to reorganize. 1t
was through the efforts of the committee
that the lease to the Metropolitan Of the
Third Avenue system was brought about
and the 100000 paid Mr.. Olcott is sup
posed TO represent the expenses incurred in
the transactions. It in connection
with this same lease and the issue of
bonds that the fee Of S1S5,000 was paid to
Edward Lauterbach, of Hoadly, Lauter-
bach & Johnson, while other large legal
| fees were paid to persons and firms named
in the list above given.
Other legal fees are to be found in the
expenditures by the Metropolitan from the
construction fund for the Third avenue
and subsidiary lines. Besides the payment
| to Edward Lauterbach of s1S5,000 other
payments to lawyers were: Hoadly, Lau-
| terbach & Johnson, s25. 795; Sheehan &
! Collin $1,000: Nicol1, Anab1e & Lindsay.
SISSY; Lemuel E. Quigg, $3.50
Mr.. Scudder repeated to Mr.. Guthrie
! that no vouchers had been found for these
amounts The witness stated that the
Morton Trust Company had said it had no
cancelled checks, but the checks had been
found
Senpe Gave Specific Instructions
DO you not know. Mr.. scudder, that the
| large law firms in New York keep books
of account and render itemized bills?''
Il suppose they do
Gould you not have gone to the firms
mentioned and found out what they re-
ceived these sums for?''
| II had been instructed by Mr.. Semple to
| make my report from books and vouchers
| of the Third Avenue and Metropolitan
did Mr.. Semple ever tell you" shouted
Mr. Guthrie, that he was at one time
| clerk in my Office. and that we kept exact
books of accounts?"
He did not
Mr.. Guthrie showed the witness q letter
from William NJ. WINS, formerly counsel
| TO the commission on the first investiga-
ton of the Third Avenue company, set
ting forth that the accounts Of Mr.. Guth-
rie's firms-Seward, Guthrie & Steele
Guthrie Cravath & Henderson and his
present firrn-were correct and moderate
charges. Mr.. Scudder said he had never
seen this letter, nor had he seen the item
lied account which Mr. Guthrie produced
TO justify the payment to his firm.
Differ on Propriety of Payments.
A difference of opinion developed between
witness and counsel on the propriety OF the
payment Of large sums by the Morton
Trust Company to the Metropolitan Mr.
Guthrie read clauses Of the lease to show
that the Metropolitan had the right to
make all necessary expenditures for the
Third Avenue.
Read the next clause and you will find
the method of making such payments set
FORTH, INTERCEPTED Commissioner Eustts
Mr.. Scudder said he did not consider the
sums mentioned should have been paid
without the certificates provided for.
Mr. Guthrie took up the classihcations Of
expenditures by the witness as ''construc-
ton and equipment: doubtful including
liabilities and operating expenses. sun
dry liabilities. etc. He produced some
vouchers with invoices attached. and asked
whether Mr.. Scudder had seen the invoices
when he made his examination The wit
ness replied that he had seen the vouchers.
but had not seen the invoices. When he
could find nothing TO indicate what had
been done with the goods purchased he
marked the item doubtful"
DO you mean to say that these bills
and vouchers are false and fraudulent
'I cannot say; do not know. That is
why I marked them doubtful -
Mr.. Guthrie once more protested that
the commission should have allowed him TO
see Mr. Scudder's report before it was
placed in evidence.
Leslie NJ Ferguson. who. with Charles f.
Littlefeld, appeared for the Knickerbocker
committee of Third Avenue shareholders.
said he would like to put some questions
to the witness, but was not ready to do
so at once. The hearing was therefore 3D.
journed to Friday, at II a. m.
HOLDS SON OF OLD FRIEND