The Richmond Virginian. (Richmond, Va.) 1910-1920, 1914-03-07
St. PAUL RAILWAY
/. REPORTED FALSELY
FINDS COMMISSION
Interstate Commerce Commits
sion Condemns Irregularities
In Methods of Road In Its
Accounting.

WASHINGTON. March 6.--The In
terstate commerce commission hand
ed down q report today containing
serious charges against the manage
ment of the Chicago, Milwaukee and
st. Paul railroad. The commission
charged that reports by this great
railroad to the l. C. c. regarding its
income apd othe revenues features
were falsifed.
The interstate commerce commits
sion in condemning the irregularities
in the accounting in Chicago. Mill
yankee and st. Paul railroad, points
out in its report that the st, Pauf
company during the years of the ex-
tension of it's line to the Pacific coast
from 1906 to 1909, inclusive. trans
ported men and material for the
building of the new 400 extension
1t also advanced funds for CONSTITUTE
ton amounting to about $S2,ooo,ooo.
The commission says that as result
of this oyerstatement of income for
1910 the report OF the st. Paul com
pany for the succeeding year showed an
apparent falling off In revenue ana
income as compared with the previous
year of more than 100000.
The commission calls attention to the
fact that the st, Paul company, III i's
report to stockholders for 1911, ex-
planned this falling off as follows:
The large decrease in the net operat-
ing revenue is accounted for by the
inability to obtain increased rates ana
the great increase in the cost OF labor
This statement" the report pro-
ceeds, was not in accordance with
the facts In the case.
These departures from what were
the actual facts, are suific1entiy Sc
rious to merit the strongest condem-
nation"
The commission adds. however. that
the deliauencies in the accounting OF
the Puget Sound company. the ST.
Paufs subsidiary. are OF even greater
significance. The commission points
out that the outcome OF the constr nc
tion of that line was watched most
intently by the public, especially as re-
CARDS the returns TO the parent COM
rany: that showing or prohI IRON
it's operations could not fail 70 en-
nance the credit Of the st. aPui COM
pany. The commission adds;
s"The unlawful practices described
were continued after June 80, lslv'
ard the fictitious showing of income
for that period was used by the OIL
ficers OF the Puget Sound company 10
aid in the sale of its bonds. A letter
written by the chairman of its board
of directors and published in the Com.
mercial and Financia! Chronicle or
March Is, 1S11, contains TINS state
ment:
Although the Chicago. Milwaukee
ard Puget Sound Railway was open
ed for traffic only on August /. iaps,
IL Is already earning large surplus
over the interest on its first mortgage
bonds. For the six months ended
December 81. 1910, the surplus N
come of THAI company after the pay
ment of all charges including interest
On the sI23.000,000 first mortgage
bonds amounted to si,6S5,952.
1T should be stated that only s27,-
Il75.000 of these bonds have been sold
TO the public. the remainder being
held in the treasury of the st Paul
company"
The commission points out other
i oiation of the acco iltt IL rules m
the Puget Sound company's report OF
property investments.