Newark evening star and Newark advertiser., 1912-12-19
S273,931 WATER
DEFICIT ADMITTED
BY WORKS BOARD
Sherrerd. However,
Says 1t Is Only a
Book Shortage.

Forced to admit the existence of a
deficit of $685. Al in the water de-
partment, the attempt on the part
of the majority members of the Board
of Works and Chief Engineer Morris
r. Sherrerd to discredit the report of
the experts has blown up.
The admission will be made this
afternoon at the meeting of the
board, and it is understood public
retraction will be made of statements
by the Republican members which
reflected upon Price, Waterhouse &
Co, the accountants who made the
audit
Following the acknowledgment that
the findings of the accountants are
correct will come demands of ex-
plantations of the shortage in the
trustee fund and manipulation of
figures. This serious condition has
received no attention as yet By the
board or the chief engineer.
Commissioner Arthur r. Denman
az last weeks meeting of the board
openly charged that politics was back
of the investigation and that the
party who made it was not disinter-
ested. He added that the chief JUS
tice had instructed the grand jury
to take up a probe of the deficit.
William E. Allen, who made the
audit, heard the attack and con-
strued it to be a personal one upon
him.
Mr.. Sherrerd and Mr.. Denman still
maintain that $685. 600 worth of bonds
are not in existence and that it is
unfair to charge them up on the liza
bility side of the ledger.
Inquiry by Star reporter has
brought out the fact that the bonds
have not been cancelled, as was held,
but are still in existence, and interest
is being paid upon them by the Sink
ing Fund Commission.
The bond issue, it is also learned,
is being taken care of out of the
taxes, so that in reality while the
water department received the $685.
900, not a cent from the department
income goes toward wiping them out.
This situation makes the charging of
1856, 900 on this account in every way
regular.
In the face of the confession that
Price, Waterhouse & Co. are right
and the Board of Works wrong, then
automatically the truth of the condi-
ton of things. as contained in this
paragraph of Mr. Aliens report
stands out:
Whatever the actual value of the
property may be. the fact appears to
remain that 1t cost the city a sum
of S6,219, 56s.67, and, even if enhance
ment in value has occurred, it is un-
realized, and in the ordinary course
of events 1t is not the purpose of the
city to even attempt to convert the
increment into available funds. The
only effect, therefore, of the entry
above referred to is: "a To place an
arbitrary value upon the property,
which, while almost double the actual
cost. may be below it's fair value, and
(2) to create a large book surplus"
In a statement which he present
ed to the board this afternoon Mr..
Sherrerd laid stress on the point that
the deficit is only an apparent" one.
and is due entirely to the system Of
bookkeeper. which is characterized as
obsolete. The experts at no time con-
tended that the deficit was anything
than the result of faulty keeping of
accounts. They argued that their re
port was based upon the showing by
the water department books. and ex-
(ContInued on Second Page.l