The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1914-06-03
FELTON, QUITS
AS RECEIVER OF
p. Nj. RAILWAY
Continued prom rage One.J


Mr.. FELTON, on the stand explained
ia detail matters relative 20 the physi.
cal equipment OF the road He said
that about l.20O cars were sidetrack
ed al the present time awaiting dis
position. A majority OF these cars
he explained will have 10 be con
dCmned Also. he stated. about 3,400
of the roads cars are In bad order
due 10 lack of funds TO keep them I'm
proper repair The value OF the T..
200 cars. most OF which must be con
demned he placed at about S400 each
less depreciation. This valuation APP
pears on the books, although the cars
are useless. In addition. SO locomo-
tlyes that have been iunked also APP
pear on the books but Mr. FELTON,
explained that the records would
show that these locomotives have
been condemned and are awaiting dis.
position
The number OF bad-order cars has
increased three-fold during the re.
ownership" said Mr.. Feltdh. "The &C.
foundation OF these cars has been so
great on account OF neglect previous
to the receivership, that il would
make an abnormal cost OF operation
to drop them from the books"
Mr.. FELTON, also stated that In a
trial inventory taken last fall short.
age Of 100000 was discovered. He
explained that the shortage was due
largely 70 the neglect OF division
officers 20 properly charge mp mate.
rial mostly rails. He insisted that
there was no intentional violation Of
the Interstate commerce act when
property was taken out OF the invoice
and hot charged up to operation.
Judge futile insisted that at least
half Of the 100000 ought TO have been
charged TO operating expense.
Mr.. FELTON, explained that in add.
ton To the. obsolete cars and en-.
gtncs. other items were carried In the
suspense" account TO be charged out
monthly.
Hilton +. Spalding. attorney for
some OF the underlying bondholders.
asked for statement from the audit
or Cf the road showing under which
equipment trust each Of the /, 200 cen
demned cars will come. He also ask
ed for similar statements regarding
the 5s locomotives, and the 400 bad
oruer cars. He also wanted 10 know
how $2b0.000 estimate for new
equipment was TO be expended what
the income or the Canadian division
OF the road amounts 10 and the cost
or all supplies that went from the
United States to Canada?
Mr.. FELTON, stated that since the re.
ceivership the Canadian lines have
been self-supporting
In answer TO a final question from
Mr. Spalding, Mr.. FELTON, stated that
the effect OF the companys bad credit
was noticible last fall.
Mr.. Blair, on the stand. stated that
!. was his personal opinion that the
original inventory ought to have
made allowance for the deprecated
vaine OF the roads old cars.
When you discovered that the
operating expenses were being made
to appear less than they were by fail
ing TO have all the figures appear in
the monthly report. why didn't YOU
come straight 10 me-" demanded the
judge.
Mr. Blair replied that ne wanted TO
ind out all about the shortage first.
WAS II kept secret from your" was
the Judges next question.
Mr. Blair replied Il think that the
matter was known to somebody a
shcrt time after last October I got
my information after had asked for
a copy OF the suspense account
which carries several millions OF dol.
lars, all OF which must sooner OF later
be charged TO operating expense.
When found out about the 'sus-
pense' account ! went to Mr.. Sykes
and told him | did not like that way
OF keeping books. | also went to see
Mr. Campbell. The interstate com
merce commission approved OF
charging the back pay OF enginemen
TO profit and loss instead OF operating
expense"
Mr.. Blair went on 10 say that ap.
81 900, 600 has been spent
by the receivers that does not show
on tie books He explained that
when the matter OF carrying expend.
itIires in another fund to avoid In.
creasing the operating expense was
taken mp In a meeting Of the receiv-
ers. Mr. FELTON, assured him that he
had arranged 10 have everything
out at the end OF the fiscal
year. completely cleaning up the
books
Mr.. Felton's explanation aid not
completely satisfy me, but | accepted
1. and will have TO be responsible for
my share OF IT," said Mr.. Blair, add.
Ing that there was nothing illegal i'm
the practice followed by Mr.. FELTON,
and the other receivers.
Judge futile tried TO fnd out from
Mr.. Blair What the receivers were
figuring on doing by not charging ac-
counts 70 operating expense, but al
though IL was apparent that the re.
celvers we're anxious 10 keep the oper.
ating expense down to make a show.
Ing the Judge did not get a definite
answer t. his question.
Attorney Spalding then cross-exam-
ined Mr.. Blair regarding the roads
financial transactions since the re-
ceivers took hold, the issuance OF Ger.
tifcates, notes etc. The hearing vas
adjourning at IL o'clock and con,ln-
ued at o'clock when Dudley f.
Waters, OF Grand Rapids. the third
receiver, took the stand
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