The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1914-12-04
P. M. RY. PROBE
IS CALLED OFF
FOR THE PRESENT
Local Inquiry Halted Because
Commissioner Hall Has to Re-
turn to Washington
FINANCIAL TANGLES
CROP UP FREQUENTLY
Latest Has To Do With the
Building of Line In
Indiana

Because Of the necessity OF the
presence of Interstate Commerce
Commissioner Hall and attorneys for
the commission in Washington, the
probe into the affairs OF the Pere
Marquette railroad, being conducted
by that body, was adjourned at IL
o'clock, Thursday morning. No defin.
lite date was set for the hearing to be
resumed.
representing the commission, said
that he did not believe further de-
tailed testimony relative TO the finan-
cial AFFAIRS or the company was nee
essary at this time. Reports and let
tiers introduced In the record can be
compiled. he said, and presented TO
the commission In the form OF COM
plete statistical report, which will
make II much easier to reach a clear
understanding OF the roads financial
management.
Later. he informed the commission
er. he intended to examine present
officials OF the road in order to COM
ply with the congressional demand for
information as to the condition OF the
system at present as compared with
that or some years ago.
Commissioner Hall requested that
the reason why the present hearing
did not cover period prior to the con-
Isolidation be made a matter OF record.
and Attorney Gutheim replied that
books and papers OF the companies
which are now parts OF the Pere Mar
quette system were not available, ex-
cept In few instances. The COM
missions experts are working with
the matter that Is available, and will
have II In shape for later presentation.
he said.
Clarence s. Sykes, auditor for the
Pere Marquette receivers, was on the
stand when the hearing was resumed.
Thursday morning. Under close ques-
tioning by the commissions attorneys
he detailed the steps In financing the
Pere Marquette railroad OF Indiana.
which was built by the Marquette
Construction Co. described as "a
wheel within a wheel" of the Pere
Marquette. OF Michigan. This COM
pany was awarded the contract for
the construction work of a line about
Fl miles long between New Buffalo
and Porter. Instead of building the
extension, IL developed, II sold bonds
to the amount of 100000, turned a
portion of the money over to the Pere
Marquette of Michigan, and allowed
that road TO build the line itself, which
Ii did at cost OF approximately Sl16,-
600 more than the amount turned
oyer. There is approximately $4,000
unaccounted for, which probably rep
resents a profit to the Marquette Con-
struction Co. on the deal.
Auditor Sykes read into the record
a letter from Newman Erb. a former
receiver of the Pere Marquette, to J.
z. Howard, former auditor OF the rail-
road, now deceased, In which Erb
speaks CT Enclosing vouchers for
$399,000, representing expenditures
made by the Marquette Construction
Co. and vouchers for other expendi-
lures amounting to about $4,000.
Asked whether he had ever been
able to find the vouchers referred to.
Mr.. Sykes said that he had been un-
able to locate them, or any record OF
them, although he had made careful
search.
Attorney Gutheim supplemented
this information with the statement
that the commissions expert investi.
gators had also failed to find the
vouchers.
Various discrepancies In the ac-
counts OF the Pere Marquette of In
diana were explained by John j. Cra-
mer, present comptroller of the Pere
Marquette, who testified that, when
he took charge of his present depart
ment In 1904, there was neither Jour-
nal nor ledger OF the Pere Marquette
OF Indiana. He had, he said, endeav-
ored TO collect the correspondence of
the company and to compile, from
that, a journal and ledger, in order to
keep the company's records In shape
John NJ. Morgan. of New York, the
commissions attorney who question
ed Mr.. Cramer, announced that this
statement was borneout by one made
by Auditor Sykes relative to the
vouchers referred to In the letter
from Newman Erb to Auditor Howard.
and supplemented this statement by
saying that evidently Mr.. Erb was
not anxious to have some OF the af-
fairs of the Pere Marquette of Indi.
ana made a matter of record"
In the testimony introduced Wed
nesday afternoon an account OF one
net lObb VI
several millions was read into the rec
ord by Auditor Sykes.
The deal originated through the
sale of s8,000,000 In notes to J. p.
Morgan & Co., shortly after the reor-
ganization of 1900 The Pere Mar
quette received only $7.60O,OO0 for
these notes and. as security, put up
s16,000,000 In bonds OF the company.
Il
unable to collect the amount loaned
on the notes, they sold the securities
under the hsmmer for 100000 900, max
ing the Pere Marquette responsible
for the difference between the origi.
nal loan and the amount netted by
the sale, as we'll as bearing the bur-
den OF redeeming the s16,000.000 in
bonds.
Following this transaction. the Pere
Marquette denied responsibility for
M of fha hnnA. onoofnw 49,.