Debate was stopped by the publication in August of the report of an expert who had been selected to examine the books of the Atchison Company. Few more disgraceful instances of the juggling of figures have been brought to light in the history of American railroad finance. Whereas the reports of the company had shown net earnings steadily increasing from $7,600,000 in 1890 to $12,100,000 in 1893, being ample to meet existing charges and to pay from 2 to 2¾ per cent on the income bonds besides to the time of their conversion, Mr. Little, the expert, reported that the net earnings had never exceeded $8,085,608; and maintained that an annual deficit had occurred each year from 1894, which reached the portentous amount of $3,000,000 for 1891 alone. The condition of the company was far worse than had been imagined, and all plans had to be thoroughly recast. The following is an abstract of the report in question: “I have already advised you verbally,” said Mr. Little, “that income was, in my judgment, overstated in these several years (since ’89), to the extent of $7,000,000 or more, and I now confirm this specifically. These overstatements may be classified as follows: “(1) _Rebates._ For the four years ending June 30, 1894, the debits for rebates to shippers on the Atchison system aggregated $3,700,776, and on the St. Louis & San Francisco system $205,879, or a total of $3,906,656. “This sum was charged, not to the earnings from whence it came, as it should have been, but to an account entitled, ‘_Auditor’s Suspended Account-Special_,’ and was reported from year to year as a good and available asset, while in fact it had no value whatsoever. “(2) _Additions to Earnings and Deductions from Expenses._ Next in order of importance to the rebate account comes an aggregate of $2,791,000, which, on instructions from the East, was credited from time to time to the earnings and expenses respectively, but which credit has no foundation in fact. Of this aggregate $2,010,000 was added to earnings and $781,000 deducted from operating expenses, the sum of the two being debited to ‘_Auditor’s Suspended Account_.’ “(3) _Improvements._ The sum of $488,000 was in the period under consideration transferred, improperly as I contend, from Operating Expenses to Improvements or Capital Account, these Improvements being finally closed into the account of Franchises and Property, which represents the cost of the road and property. “(4) _Traffic Balances._ It further appears that a traffic agreement for a division of business was formed in November, 1890 (running to July, 1891), between the Atchison Company and certain other companies, whereby such other companies were charged with a balance of $305,843, which the Atchison Company was unable to collect, and which is absolutely uncollectable, and should have been heretofore written off, though it still stands as an asset, and hence must be written to the debit of profit and loss.”[439]