The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1868-11-18
FIRST EDITIO N
HOstilities Commenced in Earnest
The Fight to be Vigorously
PrOsecuted-$25, 100000
of Fraudulent Stock
Issued.

Between two and three O'Clock yesterday
afternoon Wall street, New York, became sud-
denly excited by the rumor-whlch subsequent
events proved but too true-that the Supreme
Court had granted an Injunction restraining the
. officers of the Erie Railway Company from
further proceeding with some of their business,
and that IN addition an applcauon Tor
Receiver OF the Company's effects had been
made to the same Court. The orders made by
Judge Sutherland are based upon very volu-
minous complaint in which August Belmont
and Ernest b. Lucke are plaintiffs Also on the
affidavits of Daniel Drew, Christian S. sloan,
Augustus G. Brown, Frank Work, and others.
The Complaint.
Belmont and Ernest Lucks VS. The Erie
Lane jay could, Alexaader = 'Biyen Diver g Ban Ban
rS Sne Dsv .r Jr Homer Ram.de osn a
ton, George N. Groves John Gansen, Charles @.
GeSTge M. Diven, and HOratio N. OTIS
The complaint sets forth that the plaintiffs are
copartners and own over four thousand shares
of Erie common stock, some OF them being
bought as early as March last, the prices at
which they purchased varying from S77'90 per
share to $4625. They include in their action
other stockholders who may join with them. 1t
then claims that, except under the ninth section
of the General Railroad law, the Company has
no power to increase its stock; That no proceed
ing under that section has been held, nor has
any act OF the Legislature ever authorized the
increase complained of. 1t then recltes the
matter CON plained of in the Erie suits brought
last spring and the proceedings in these suits;
early proceedings, the defendants, Jay Gould,
James Fisk, Jr., aud Frederick A. Lane,
entered into a fraudulent combination and OBJ
tanned absolute control OF the affairs OF the
company, and urged them for their Own advap.
iage, in fraud of the rights of the creditors aud
stockholders of the company, of those dealing
in the stock, and used the moneys OF the COM
pany and its receipts, which alone amounted to
about $l5, 600 000 per anuum, and the moneys
obtained from further illegal Isues of stock, in
their own private speculatons, and for the pur.
pose of influencing from day to day the condl-
tion of the money market and making money
scarce or abundant as their individual in
terests and speculations might dictate, and
also to perpetuate their power over the
Company and its affairs; that in pursuance of
their combination they got Mr.. Eldridge, the
President, to resign, and Jay Gould to be elected
President and Treasurer, and Fisk aud Lane
members of the Executive Committee, with
Thompson aud Davis; the first three forming
majority with all the powers Of the Directors
during the intervals of their meetings; that IN
order 10 induce Eldridge to resign, they agreed
to purchase of the Boston, Hartford, and Erie
Railway, OF which he was President, S5,00O,000
of bonds at so per cent; that Mr.. Drew, the
former Treasurer, when he resigned handed
over to Mr.. Gould total of upwards OF SIS, 900, 600
moneys of the Company, and then, by the pre-
tended authority OF the Executive Committee
81 COO, GOO of sterling bonds OF the Company
were sold at l03 per cent. from which
were realized another million of dollars; that
Gould paid Eldrdge, on account of the before'
mentioned purchase, So, 000 900, and gave him
acceptances and bonds of the Company for the
balance; and also paid out OF the funds OF the
Company several millions OF stock OF the Com
pany, which it was necessary to purchase to
carry out his schemes to obtain control OF the
Company; that they obtained control of the
election of the Company by purchasing proxies
with the funds OF the Company; that with this
object, in place of the usual thirty days closing
OF the books, they closed them sixty days pre-.
vious TO the election, thus securing the election
of Fisk as Treasurer; and Gould, Lane,
Tweed, and Miller lthe latter a brother-in- la "
OF Gould) as members of The Executive Com
mittee; that they caused the Committee
on Accounts 10 be abolished, and made
Fisk Comptroller to audit and allow accounts
against the company; that they changed the
bylaws go as to prevent voting on the stock
except in oersou, and changed the form OF the
stock certificates without publishing notice OF
the law, so as TO cut of the holders in Europe;
that they thus obtained complete control OF the
company; that the three directors have so far
abused the powers OF the company as to render
ii liable to forfeiture of its charter; that after
the compromise with Scnel they issued three
millions of stock, making the amount OF the
common stock at the time Of the election over
S37 900 900; that since that election they have,
IN violation of the orders of the Supreme Court,
made further unlawful issues of stock, to the
extent of about S23, 900, making an aggre-
Of stock in addition to the preferred
stock and the S2,00O000 Issued for the pur-
poses of the election; that all these Issues,
made without the consent of the bona fde
stockholders, had reduced the market price OF
the stock from 80 to 35; that the moneys
arising from the sale of stock since the elec-
tion IN October, am counting to many millions,
have been received by them as part of their
plans to increase the funds in their hands by
further increase of stock to control the market,
by oiyerting large amounts OF money from the
ordinary channels OF business, thus creating a
scarcity OF money In the market, and 10 further
the stock specuations OF Fisk Could
that these issues are in violation Of
law, and Will lead to the utter ruin
and destruction of the Company; that
the directors have low accumulated In their
hands some SIG, 900, 900 belonging to the Com
pany, not in the treasury OF Alhe Company, but
under the control OF Fisk Gould as individuals
that these gentlemen have secreted some pOr.
tOns of this, and sent some SO, ,000, 900 to Cauada
that Fisk is a man OF no means except such as
he has obtained by these means, and that the
responsibility to gender them safe custodians O
such large sum; that among their tran nsactions
has Ibeen the purchase of large amounts o
real estate, for which the Company has
been charged eXtraYagant prices large
portions of which are paid directly oil
indirectly to these directors as muses.. Amone
the rest Pixies Opera House ls charged to the
company at $3.50 600; nine dwelling houses in
Twenty third street and lands IN Hobokeu
charged TO the company at $3.50, 900, and Other
real estate in Jersey charged at 81, 800 900; thai
out Of this the directors named got 81 900 900 as
bonus: that the company is now largsly in
debted, and In danger OF insolvency under Its
present management. The complaint then pray.
OF the present directors.
This compliant Is supported by affidavits o
Daniel Drew, recting the proceedings IN tht
old war; and affirming the allegations of tht
complaint by an affidavit of Frank Work; by A
C. Brown, setting forth that he has examined
the acts OF the Legislature set forth IN the CON
plaint and that they are as stated therein; tina
he has examined the printed report OF the ID