Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1914-03-07

ACCOUNTS PADDED TO
ASSIST STOCK SALES
Earnings Of Two Corporations
of System Good but Fiaan-
CiaI Needs of New Line
Caused Juggling of Figures,

Av AoHNra JOURNAL spseiAl taAsso wiNE
Washington, Marrn 6.-Ihargcs
hat the book accounts of the Chicago
Milwaukee and st. Paul Railway com-
pany and OF its subsidiary the chs
cago, Milwaukee and Puget Sound
Railway company. have been so ma-
nipulatcd as 60 mislcad the public ana
tend 10 create a more favorable mare
ket for the securities OF the roads We're
contained In report made public to-
day by the Interstate Commerce com
mission after AN exhaustive investiga
ton of the financial affairs Of the
reads
While cridcislng and coniemning
ne accounting methods followed by
he companies. however, Commits
sioner Harlan, who prepared the ne.
port said
we do not megn 10 bo misunder-
stood by anything said as inumatne
that the ST. Paul company Is not "a
valuable property and is not achiev
ing the results reasonably anticipated
from the extension of It's lines TO the
Pacific coast
Serious Irregularities,
The disclosures by the Investigation
of what Commissioner Harlan de-
scribes in the report as SERIOUS ir-
/ Irregularities" in the accounting system
of the roads, were regarded hy the
commission as indCfensihle. although
the officers of lhp ST. Paul company
explained that they resulted from neg
upenco In attention and leck of fa-
milariW'on the part of the CnmpanN's IS
/ comptroller and those uuder him With
the requirements Of The commission.
'erhero IS NO sufficient hasls OF rec-
ord. says The commissioner report, 20
enable MS to condemn OF ae8Hlt the
comptroller. either of full responsible
ity or of his share of responsibility
for the condition of the accounts ot
these companies. hut there are
grounds for thinking that hts respon.
sihiliy was materially qualified and
minimized by The instructions ana di
rections given him by the executive
and other officials Whatever may b.
the fact ina that regard the commission
now feels that a more careful obsery-
lance Of our rules and regulations is
7 promised for the future. This we
confidently anticipate Will be real
lied.
Reports Must BE Accurate.
general admention contained in
the report made it clear that The com
mission hereafter viii hol to strict
accountability an common carriers for
the accuracy and truthfulness of tho
statements contained I'm their reporls
of financial operations.
I'm some instances todaY's report
explained, "a financially strong rond
lmakinr large net earnings would not
lhesitate To conceal the facts by add
ling 60 It's operating expenses accounts
sums dlshursed la improving ite prou-
erty. on the other hand, a fnaneiall'
weak road, seeking 90 enhance ila
Irredit bv "A good showing ef operpbno
Iresults. would include Ia IT'S property
accounts sums expended n operation
"Tho result was that "a carriers on.
uual and monthly statements OF nel
revenue often reflected nothing more
than the particular showing desired
r hv its executive These reports were
, often used for sneculatlve purposes
and the stockholder and the general
public were left without any assur.
. nnce as TO whether the dividends de-.
, clared were paid from income or sur
Plus or out OF caDtal
Accounts Heavily Padded.
"Tfuder the accounting rules of the
tNUtiNNiHNfNHs AiAt i1tt NNA iNltAAfHNN
/ was permitted to include IN fs ai.
To- counts "a proper revenue for HE trans
, portatiou of men and material rent.
for equipment and other Of lis facilt
r ties used I'm the construction of the
q puget sound line and interest on thf
/ funds advanced That course how
+ over was not pursued. ON the con.
< trary. the st. paul company included
s I'm its income accounts for the yem
e 1870 AN the interest rents and rove'
+ pues assignahle tu the period prior tt
july /, 1909. the sum total amountiu.
IS to over $4,000 600 in the same yeai
s 1t also decreased It's operating ex.
I penso accounts boy crediting thereto
ID more than 100000 on account OF th'
{ salvage of cars destroyed previous n
i the year 1907 Hy means of these en-
4 tries the income Of the Chicago, Mil
/ wausoe and So Paul Railway compan
: for the year 1910, was overstnicd bl
+. more than S5,0O0,000. As n result o
Il this ovcrstatemont of income, The re
I. port of the ST. Paul company for thl
z, succeeding year showed an upparen
falling off in revenue and income o.
@ over $4,000. 000 IN It's report 10 iu
{ stockholders FOR Che year 1911. The ev
q plnnation offered by the officers a.
the company Was ihat the large de-
'erense I'm the net operating revenue q
accounted for boy the inability 10 ob
T. bin increased rates and the great I'm
lcrensc in the ust Of labor
g Labor Expenses Not Increased.
eThi4 statement Was not In accord
- ance with the facts So for from be
- ing an increase ia the expenditures fo
v labor during the fiscal year 1911, tn
4 Expenditures on that account wer'
about 5000 less than In the prev
p ous year according TO the company
= own reports 10 the commission.
: "The delnquencies IA the account
r Ing OF the Puget Sounl company arc
}. however, Of even greater significance
q A large traffic was offered 20 the Pu
sel sOund iHu as SOON as it wa