The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1914-12-03
p. Nj. RY. PROBE
is CALLED OFF
FOR THE PRESENT
tContiuued from Page OneJ


CONTINUED from PAGE One,)
did not cover period prior 10 the con-
solidation 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-
eept in a few instances. The COM
missions experts are working with
the matter that is available, and VIII
have Il In shape for later presentation.
he said
Clarence 8. Sykes. auditor for the
Pere Marquette receivers, was on the
stand when the hearing was resumed.
Thursday morning. Under close ques-
tioning by the commission 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
81 miles long between New Buffalo
and Porter. Instead OF building the
extension, II developed, IL sold bonds
20 the amount OF s460.000, turned a
portion OF the money over 10 the Pere
Marquette OF Michigan. and allowed
that road TO build the line itself, which
it did at cost OF approximately $ll6,-
goo more than the amount turned
over There is approximately $4,000
unaccounted for which probably rep
struction Co. on the deal
Cvly f,,tA q he I'd
letter from Newman Erb. former
receiver OF the Pere Marquette to J.
! T. Howard, former auditor of the rail-
road now deceased, In which Erb
speaks Of Enclosing vouchers for
$4,000, 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 &C
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
I OF Indiana. He had, he said, endeay-
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, TIE
commissions attorney who question
| ed Mr.. Cramer, announced that this
statement was borne out by one made
I 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 al
fairs of the Pere Marquette OF lndi.
ana made q matter OF record.
In the testimony introduced We'd
nesday afternoon an account OF one
transaction involving a net loss OF
several millions was read into the rec
ord by Auditor Sykes.
The deal originated through the
sale of ss,000.0 900 in notes TO j. p.
Morgan & Co., shortly after the reor-
ganization of 1900. The Pere Mar
! quette received only s7600,000 for
these notes and, as security. put up
$4,000, 900 In bonds of the company
When, in 1908. the Morgans had been
unable TO collect the amount loaned
on the notes, they sold the securities
under the hfmmer for s6.000,O00, max
/ ing the Pere Marquette responsible
for the difference between the origi'
nal loan and the amount netted by
the sale, as well as bearing the bur
den OF redeeming the sl6,00O,OOO In
bonds.
Following this transaction. the Pere
Marquette denied responsibility for
payment OF the boDds, alleging that
they were bought in by the Morgans
who. II was claimed, still hotl them
for the balance due on the original
loan. The matter involves a compli
Gated legal question. which is still J,
the courts.