The evening world. [volume] (New York, N.Y.) 1887-1931, 1914-03-06
Commissioner Harlan Accuses
Company of "Serious Irreg-
ularities" in Accounting.
ITS FIGURES.
Declaration That Changes Of
Millions Were Shown by
Irregularities.

WASHINGTON. March s.--"serious
irregularitiss'' In the accounting Of
the Chicago. Milwaukee and u. Paul
Railway and its subsidiary. the Chi.
cagc, Milwaukee and Puget Sound.
were charged In the report Of an
Interstate Commerce Commission In.
vsstigation to-day by Commissioner
Harlan. which makes the direct al.
issation that irregularities In reports
Of operations submitted to the com.
mission were made for the purr oss
Of influencing favorsbly deposition
Of b. Paul Railway securities.
The irregularities disclosed by this
inquiry. Commissionsr Harlan points
out. are similar to those revealed by
the commissions investigation into
the financial operations Of the New
H1vsn and the Frisco system. II 10
ssleJtsd that the Income Of the
PUGET Sound was greatly ovsrstatsd.
. variety Of sxpsdisnts being 70.
sorted to for this purpose" and that
the "nctitious allowing Of income was
used BY the oflicsrs Of the Puget
Sound Company to ald In the sale Of
its bonds."
n The lansvAss Of Commlseieusr
Harlan. =, Oh serious dslinqusnciss
merit the strongest condsmnation
II 10 charged that II. Paul over.
lftAted ~ incens IN 1eie ~ epAeeq
and In tho Following year BY Juggling
6surss ~ rsvshuss showed an appar-
sat falling on Of eaoop.soo. THIS was
due. according 70 the road. because
Of its inability to obtain Increased
rates and Increased cost Of labor.
The commissioner declares that the
statement 10 not true and II Q proper
report had been made an increase Of
u. 900. 900 would have been shown.
incrsasss In labor sxpsusss for 1911
were $4,000 isss.the commission says.
than the previous year.
Generalization In equipment and In
vsstments In Putss Sound rated at
eSes, ~. 80 the commissions says v
800. ooo.ooo In excess Of cash invest
ments Of the parent company.
No rejection 70 made by the 70.
port upon the financial condition Of
tho two roads. ~ the results Of their
operation must be regarded - vsry
fsvorsble;" but the report says thu,
the accounts OF these companiss
have lot correctly shown the facts
= condition Of affairs not crsditsbls
to the 81 Paul lines or 70, their on
csrs."
The report offers - an sxplaua.
ton Of 81. Paul ofIicisls that the,
were not sufaeisntly familiar with
tho requirements Of the eommissios
In accounting. but that explanation
10 not accepted. The report pointi
out that recent years have WIT.
messed the exposure OF Qiaring In.
stances of the wreckinS OF transpor.
tatton agencies BY those In positioui
of authority" and that much Of thil
trouble might have been avsrtsd ha<
proper accounting methods been fol.
lowed.
The report viii be served upor
every common carrier In the United
States with notice that the penalties
Of the Law Will b Invoked not onlI
shall make . wrongful report, bu
those penalties will be visited witt
even greater severity upon any ont
abovs the accounting ofilcer In ~.
thority who may share In the respon'
sibility for any violations Of the 40
counting rules and regulations whicl
have been prescribed"