Newark evening star and Newark advertiser., 1912-12-20
CLAIMS WORKS BD.
INFLATED VALUES
Accuses Commissioners and
Declares Cashier Northrup
to BE incompetent.

$12, 900 900 was placed last year on
property acquired from the East Jer-
sey Water Company, although it was
! only worth about half that amount,
was the startling charge made at
yesterdays Board of Works meeting
by William E. Allen, of Price, Water
house & Co, the experts who recent
| ly conducted an audit of the depart
ment.
Mr. Allen made this statement dur
| ing a tilt with Commissioner Arthur
T.. Denman. Chief Engineer Sherrerd
! had submitted a report, admitting
that the deficit of s273,sS1.41 in the
water department which the experts
| discovered really existed "as the
| books stand
Mr. Allen then remarked that his
| finn had been accused OF Juggling
| figures in order to arrive at It's re-
lsults, and Commissioner Denman
who is chairman of the water COM
mittee, admitted that he made this
charge and that he was ready TO re-
peat it. This gave Mr. Allen an op-
portunity of starting after Mr.. Den
man.
AccukeS Water Department.
| lie questioned the commissioner
relative to shortages in the accounts
Of Cashier Northrup, and put all re-
| sponsibility for the discrepancies
squarely up to the chairman of the
water committee IL any juggling of
| figures was done, Allen said, 1t was
not the work of his concern but of
4t,1 -.,ata,- ,layo ~ ,,,a,,f ;foaIf opd he
| backed up this assertion by expls in
ing how the local water department
ccntrived to place a valuation of $12,-
! 900 on the property 1t secured
from the East Jersey Water Com
pany.
This property, the expert said, had
been purchased for fiat sum of
| sc, 900, 900. The addition of other land
brought the item up TO total val
uation of s6,219,56S.67. Until Decem-
Der 81, 1910, the property was carried
IN the books of the department at
this, its re al value. ! hen, he said,
an unwarranted entry of $5,7Sn,431. 90
was made, bringing the East Jersey
property up to an apparent valuation
of s12, ,000,O 900.
Shortage of $5S4.1S1.S3.
More than this, Mr.. Allen declared,
In reports made TO the United States
census bureau the valuation of the
property was raised to $20,000,O 900.
None of these facts, the expert said,
had been inserted in the records of
the water departmnt on the author
ization of the Board of Works. but
they contrived to hide a shortage of
1854, ,151S3
This" said Mr. Allen, made it
possible for you to sell your water
bonds Do you call it u juggling of
figures or an ordinary business way
Of doing things?"
Previously Mr.. Denman had
apologized to the expert for stating
that politics had played an impor-
tant part in the report of the audi
tors.
Have you had charged against
the cost of the water department the
$1,000 which the city pays you?" AL
len asked when demonstrating to
Commissioner Denn:an how the cost
o. operation was computed.
"I don't think it is up to me to
run the accounts of the department
replied Denman.
do you know what has been lone
about the trustee fund in which The
cashier is $259.79 short? He is also
short $241.70, which ought to be
represented by cancelled checks, but
which is not"
Denman Makes No Reply.
fn ma L-a an
this and Mr.. Allen then asked:
Didn't you tell me that Cashier
Northrup is old and rather ineoaa-
petent and should have been re-
moved long ago?"
II did not"
Mr. Allen then called attention to
the fact that Mr.. Sherrerd had ad-
mitted the report of his audit to be
correct and the books of the Ie-
rartment wrong, and the clash be-
tween him and Denman ended when
the latter offered no reply to a qpes-
ton as to what had been done about
the other Irregularities that had come
to light
Then Commissioner Charles F.
Kraemer, after expressing mis- sur
had been padded, said:
I'VE ought to have the water prop
erty appraised correctly. l shall re-
sign unless this is done before the
new year"
Oppose Expert Appraisal.
He urged that an expert be en-
ployed at once, and offered motion
that Price, Waterhouse 81 Co. be
empowered to employ one.
This precipitated a discussion, in
which it was contended that Mr..
Sherrerd and the accountants could
arrive at satisfactory conclusions re-
garding the valuations and the cost
of expert appraisal could thereby be
saved.
DR.. Kraemer's motion was lost, hut
a substitute motion that the account
ants submit names of appraisers at
the next meeting was passed.
The chief engineers opinion thar
the water consumers should be given
the benefit of future prosperity to the
department by a decreased rate was
not shared by DIR. Kraemer. Mr. Sher-
rerd stated that the revenues of the
water department were sufficient to
take care of the depreciation. in three
years to wipe out the depreciation
and in ten years a surplus of
$6,000,000 would be shown. The com
missioner contended that 1t was not
good business judgment to share rev.
enues in anticipation Of profits.
Mr.. Sherrerd's admission that the
audit Of Mr.. Allen was correct was
made after the former had read his
statement on the situation. While
the statement practically acknowl-
edged the accuracy of the account