The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1916-12-01
INTERISLANDT TO
BEG|NDEFENSEOF
.EITS BOOKKEEPING
Night Sessions Planned To Hear
X, Comprehensive Case Of
Attorney Warren
CRoSS-ExAMINATIoN OF
, AUDITOR FIELD IS ENDED
@"Ls@ tbhci hgg Al a
All Issues Raised By Auditor To
Be Met BY Company In
voluminous Report


e., JCross-examination Of H. Gooding
Field, auditor for the public utilities
commission in the Investigation Of the
inter. Island Steam Navigation Com
pany, was completed yesterday by l., J.
Warren, company attorney. Presenta-
ton Of the Inter-Island 3 case will be.
gin at the next hearing, tomorrow aft
ernoon. - .-..
Night sessions will probably be held
next week, as well rs afternoon hear
ihgs, to provide time to cover the ex
tensive range Of the defense that At
torney Warren plans for the company
accounting methods. He is preparing
Co file with the commission a volumin-
Gus report covering, from the com
pahy's point of view, all the issues
Field has raised and showing a COM
plete audit Of the company's books.
,."We are going to throw down the
bars and lay open every figure on our
books to the commission q investiga
ton" said Warren.
Company Retains Auditor
NJ. N. Graham, manager of the Audit
Company Of Hawaii, has been retained
BY the company TO aid in this work
and will be put on the stand as an ex.
pert witness for the company. In add
tion, company officials will testify.
With Charles r. Forbes, chairman of
the commission, absent yesterday, At
totney Warren bad n clear field for &C.
ton, and rapidly brought to q close his
questioning Of Auditor Field, which for
the last two weeks has been progress.
ing as a duel Of wits, words and rep,
artee between the two.
Discussion yesterday centered on q
charge of $4,000 to the book values
of the steamers in 1908, which is ono
Of three points covered in a resume of
the findings and recommendations made
by Auditor Field in his report. This
resume, summarizing the auditors con
tentions, Consists of;H5
Moro Of Fieid's Figures
First: tabulation showing that the
auditor believes the net profits of the
steamers for the last eleven years are
actually tSl7, 206.24 more than as
shown on the eompany's books. Audi
tor Field 3 statement follows:
Net profits on operation Of
steamers from December
81, 1905, to June 30,
1915, as shown by the
books Of the company. 81, l00, 10 go
To which Field adds the
amounts charged to OPP
Grating expenses of the
steamers and paid out
In stock dividends. S17 ,206.24
This sum is made up Of
amounts from insurance
- = fund, July /, 1905. ... 95,992.sl
From repairs fund, $l25,-
. 900, and from insurance
fund, $476, 1915, June
80, 1909, making ...... COL 1918
From insurance fund, $77,-
O7s,71 and from con
struction and repairs
fund, $42,941.47, March
], 1915, making ...... 120,02O.1S
Total of actual net profits
on operation of steam.
ers from December 81,
1905, to June 80, 1915. 81 ,9l7 ,5l6.S4
Depreciation Again
Second: q TeeOmme ndatiOn regarding
the steamer depreciation fund as fol
lows: "To transfer from surplus to
the steamer depreciation fund the sum
of 32,020.70, which was standing to
the credit of this fund on December
A. ON
when FLOATING Property of the com
pany was arbitrarily reduced by a cor
responding sum-"
- Third, a recomme ndation regarding
the floating property account as fol
lows "To reduce the floating pro-
perty account by the sum of $3l4O00
which was the amount Arbitrarily
charged to the book values of the
steamers on December 81, 1908 when
the floating property account was open
ed on the books of the company"
On the issues raised in this resume
and issues growing therefrom, the ar
gument has eentered since the report
was fled. Yesterday Attorney Warren
questioned Field at length on the sub
jeet Of Tie e3l4,000 transaction with
ont gaining any concessions from Field.
Increased Values
J, According to Field the $4,000 was
charged to the book value of the steam
srs, thereby increasing their value by
that sum, and was credited to the in
suranee account and the construct ton
end repairs account, 1924 900 to the
former and $50, 900 to the latter. ].
l.. Mclean, vice-president of the com
Pany, defended the transaction as being
founded on sound financial methods.
On the subject of steamer net profits
Commissioners Garden and GignouI
quiszed Mr.. Mclean yesterday with
particular reference to the charging of
coal, merchandise and drydock facili'
ties to operating expenses of the steam
ers. In this connection, Mr.. Mclean
said; 't.
aDoipg the business that we do in
the coal, ship chandlery and drydOck
departments, both with our steamers
era 18th outside firms, we are able Ia
give the steamers commodities and ia
cilities from these departments at a
zach lower price than the steamers
"'ouid have TO pay to get the same from
auV other source in Honolulu. From
these departments we charge to the
steamers at the current market prices