The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-07
ST. PAUL TO REFORM METHODS

departures from the commissions regula-
tons. ST Paul was the first case investi-
gated and others are likely to follow.
The st. Paul officials explained the al.
legged misstatemonts on the ground that
their accountant had been accustomed to
old accounting methods. The accounts OF
the company are now being recast to
bring them into harmony with the COM
missions regulations.
Construction of Extension.
The commission In beginning points out
that tho st. Paul company during the
years Of the construction OF its line TO the
Pacific coast, from 1906 to 1909 Inclusive.
transported men and material for the
building OF the new l.fo0 mile extension.
II also advanced funds for the construc-
ton. amounting on January l. 1903. to
about fS2,00O.000. The commission adds !:
Under the accounting rules of the
commits sion the 81. Paul company was
permitted TO include In It's accounts n
proper revenue for such transportation.
rents for equipment and other of its
facilities used in the construction OF the
Puget Sound and interest on the funds
advanced
This should have been done from
month to month and from year to year
as the service was performed and the
funds so made available to the Puget
sound company. That course however.
was not pursued.
On the contrary tho st. Paul COM
pany included IN It's income accounts for
the year 1910 all the interest. rents and
revenues assignablc to the period prior to
July !. 1902 the sum total amounting to
over $4,000, 900
In the same year Il also decreased its
operating expense accounts by crediting
thereto more than $500. 600 on account of
salvage from cars destroyed previous to
The year 1897. BY means of the entries
the income of the Chicago Milwaukee
and 81. Paul Railroad Company for the
year 1910 was overstated by more than
5000. 000.'
The commission says that as a result of
this overstatement OF income for 1910 the
report of the 81. Paul company for the
succeeding year showed an apparent fall
ing OF In revenue and income. as COM
pared with the previous year. of NOR.
than 100000.
The Explanation.
The commission calls attention to the
fact that the St Paul company In It's
report TO stockholders for 1911 explained
this falling off as follows.
The large decrease in the net operat-
ing revenue is accounted for by the in
ability to obtain increased rates and tho
sf.nt increase IN the cost or labor"
This statement" say the commi ssion
was not In accord with the facts in the
case Had the income for the year 1910
been properly reported the net income
Tor the following year instead OF show
ing decrease. would have shown an In
crease Of about $500. 600 over the net
income for the fiscal year ended June
80. 1910.
1.-The reference TO the grea. increase in
AT Ia t.nas
with the real facts. In its report to this
commission for the year ended June 80
1910. the st. Paul company under the
heading employees and salaries shows
the following tables:
Number Of employees June 80. 1910.
excluding general Offices, 56.s5S: total
yearly compensation. s30s9S4ls.73: aver
age daily compensation. s2.23.
THE report for the fiscal year ended
June 80, 1911. gives the CORE spending
statistics for that year as follows:
'Number OF employees June 80. 1911.
oBcluding general officers is,Os3. Total
yearly compensation. s3O.sf2.12f.l0. Aver
age daily compensation. s2.2,."
SO far then from being an increase In
the expenditures for labor during the
fiscal year 1911. the expenditures on that
account were about $4,000 less than In
the previous year. according to the COM
pany's own report TO the commission
These departures from what were the
actual facts" says the commission, ARE
sufficiently serious to merit the strongest
condemnation"
The Puget sound Company.
The commission adds. however. that tho
delinquencies in the accounting OF the
Puget sound company. the St Paurs sub
sidiary. are OF even greater significance.
Tho commission points out that the out
come OF the construction OF that line was
watched most intently by the public.
especially as regards the returns to the
parent company, and that showing of
prof1t from its operations could not fall
10 enhance the credit oi III" 81, Paul
company. The commission adds
- large traffic was offered TO tho
Puget Sound line as soon as II was opened
and the evidence before us leads US TO
think that a correct showing OF the oper-
aling results for the first year would
nave been most satisfactory. Not con-
tent. however. with statement OF tho
facts the income of tho Puget Sound was
greatly overstated, variety OF expedi-
snts having been rcsorsed to Tor this
purpose.
AS We have heretofore Indicated tho