The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1914-12-03
VERSION
OFP..M, AFFAIRS
ANCERSCOUNSEL
There's No Evidence of Fraud
in $14.O0O,0O0 Bond Deal,
Declares Merriman
SYKES MAKES ATTEMPT
TO EXPLAIN STATEMENT
Says Money Was Received By
Company, But He Has Not
Learned Where It Went


the opening of the third day OF the
Interstate commerce commission
probe into the financial affairs of the
Pere Marquette railroad, Wednesday
morning, Attorney Seward L. Mer-
RAM, chief counsel for the railroad,
made strenuous objection TO the man.
ner In which Detroit newspapers had
reported the proceedings OF the COM
mission.
Attorney Merriam's remarks were
prompted by the publication OF testi-
mony brought out, Tuesday. wnen
Auditor Clarence l.. Sykes told the
commission that there were no rec
ords OF what became OF approximate
ly sl4,00O,000 OF a bond issue OF $780,.
600, 900, or of several million dollars
In notes issued by the company.
Holding a copy OF morning paper
In his hand and apparently greatly
agitated, Mr.. Merriam asked the at
tention Of the commissioner immedi-
ately after the hearing was called.
"Wednesday morning.
THE story which | have here pre-
supposes that someone has taken
something that did not belong to him.
he said. 1T gives the impression that
there has been fraud in the affairs OF
the Pere Marquette and there Is, in
fact. no basis for even supposing such
a thing.
Stories OF this KIND 90 all over the
state, and even all over the United
States, and they impair the standing
OF the company. both financially and
otherwise. II there is anything crook
ed in connection with the Pere Mar
quette finances | want Mr.. Gutheim
Counsel for the commission) or one
OF the commissioners to make fiat
statement 10 that effect before such
differences are published broadcast.
II want TO ask your honor If there
is not some way In which publication
OF such statements can be corrected
and the Pere Marquette and its otii-
Gals protected from such attacks"
Attorney Gutheim. for the commits
sion, replied that while he had not in
tended to make any remarks about
Mr. Merriam's protest, he felt obliged
to state that ii was not up to the COM
mission to make any statements as 10
the guilt or innocence OF former Pere
Marquette officials. He declared that
IL was not the purpose OF the COM
mission TO make any such statement,
at this time particularly.
The purpose OF this hearing Is to
get the facts into the record OF the
Interstate commerce commission he
said The representatives OF the
press have no outside means OF infor-
nation. We propose to bring out the
facts and they are privileged to sit
here and write whatever the evidence
indicates"
= Commissioner Hall assured Mr..
Merriam that anything published in
the newspapers would have no weight
with the commission, and assured him
that incorrect statements, II there
were any, were doubtless the result
OF an immature consideration of the
evidence.
Mr. Merriam made no attempt to
deny that large sums OF money had
not been accounted for, but Auditor
Sykes qualified his statement made
under examination, Tuesday. In
typewriter statement which he gave
to newspaper representatives. The
statement follows:
Il think | ought to make state
ment to correct the erroneous state
ments and interferences in the news
papers based on my testimony given
Tuesday The proceeds OF the notes
OF the railroad company given prior
to 1905, and retired with the proceeds
Of the $6,000,00O OF bonds issued In
1905. as far as | have been able TO
determine, went into the funds OF
the company and were used for the
company, but those proceeds were
not separated from other moneys OF
the company They went into It's
general funds that we're drawn upon
for all kinds OF purposes. and II is
for that reason only that cannot
tell how the proceeds Of those notes
were used. ] do not mean to infer
that the company did not receive the
proceeds OF the notes, or that there
was anything irregular in the hand
ling of this transaction. The books
themselves show the receipt of the
proceeds OF those notes, and that they
went into the general funds and were
used for the company.
Many OF the notes retired in 1905
were given, as far as | have been
able to discover, for equipment pur-
chased by the company. | have no
doubt that the commissions expert
accountants, who have been here for
FIVE months, are already aware OF
those facts"
Mr.. Sykes was kept on the stand
throughout the Wednesday morning
session. His testimony was almost
entirely corroborative OF matter now
In the hands of the commissions ex-
perts and dealt with the methods by
which the Toledo Railroad & Termin-
al comnanY was taken over by the