The Detroit times., 1913-03-05
P. M. DEBTS SWELL
IN RAPID SHAPE
Atty.-Gen. Fellows Shows BY
State Reports that Conditions
Have Become Tangled
From a STAFF Correspondent.

rum StuU correspondents
LANSING, Mich. March 5.-The
Legislative probe committee chosen
to delve into the physical and finan-
cial affairs Of the Pere Marquette
railroad held q three hour sitting
Tuesday afternoon In which j. II.
Simpson. Of Detroit. former assistant
general manager and tax expert for
the p. NJ. was quizzed and Atty
Gen. Fellows submitted reports made
to the Michigan tax commissioner
and tax commission showing aston
ishing and unaccounted for increases
In the roads, Indebtedness In the
years since 1902.
For instance, during the so-called
Erb-Prince regime between 1902 and
1905 the bonded debt jumped from
33 and q quarter to SO and half
millions Of dollars In less than three
years. Where did all the money 60?
Is the query which the committee
will seek TO have answered.
When that question was put to Mr..
Simpson, his reply. 80 far as he had
any. was to assert II went for equip
ment, extensions and equipment Of
new lines; but nothing could be
found In the reports examined to
show value received.
Mr.. Simpson apparently was q
willing witness although the infor-
nation he could furnish was some
what limited on account Of his hav-
Ing been an expert employee rather
than q real "insider." However. he
succeeded In giving his hearers a
graphic though scarcely comprehen-
sible picture of the devious ways Of
high finance.
Shortly before the appointment Of
the Harmon receivership In 1908. the
c., H. 4 d. and the p. NJ. were COM
bined through the former buying q
interest in the latter and
at about the same time several small
roads were purchased and paid for
BY the issuance Of Pere Marquette
bonds, so that the p. M. bore the
debt while the c.. II. & d. controlled
the business.
Among these acquisitions was the
Chicago. Cincinnati & Louisville.
which was practically q junk line
road. It was supposed to run from
to Chicago. but had no
terminal OF It's own IN either place.
In a single year. according to the
testimony OF Mr.. Simpson. It's re-
ceipts ran 100000 behind operating
expenses. This line cost $3.500.000.
Another OF the unexplained invest
ments was the Toledo Terminal road
which also had been steadily losing
An additional complicating
factor in the situation was the leas-
ing by the c., Fl. & ID. Of the p. M.
to itself after acquiring controll-
ing interest Of the stock. and this
seems to have been typical OF the
business operation involved In that
period OF the roads history.
The next move OF the investigaf-
ing committee. according to acting
Gov. Rose, who Is it's head, will be
TO verify the newspaper report con-
tanned in an interview given out by
the counsel Of the present receivers
Of the road that they do not consider
at liberty to assist In the
Investigation or to allow the exam
ination Of the records In their pos
session without being 40 ordered by
the court, and IL this Is found to be
the case the United States court will
be asked to Issue an order. Access
to the records is counted upon to fur
nish a tangible basis upon which TO
continue the investigation.
II has also been reported through
he newspapers that Newman Erb, Of
New York. who Is credited with pos
sessing Inside" information about
zone staNes OF r. M. finances, has sig
nif,ed his. willingness to appear and
testify. He will Mt least have a
.hance to do 90. for acting Gov. Ross
has written to him with . view to
his cooperation.
The committee - not going at III