The New York herald., 1868-03-26
THE STATE CAPITAL.

Diven and 0thers-!aefusal Of One Of Drew's
Brokers to Appear Before the Committee.
ALBANY, March 25 1868.
The Senate special committee on the Erie inyesti-
cation continued the taking OF testimony to-day and
the following important facts were elicited:-
David Groesbeck sworn-I live In New York and
am stock broker: haye done business for Daniel
Drew the last twenty years. have sold stock for him;
sold it short; should say not s50OoOOO; that
was at various times; had nothing to do with
the Sd OF March transaction; prior to that
time Mr.. Drew was short my books mil
lion or million and half; on or about the
10th February, | should think. Mr.. Drew might
have been from 5000 to 10000 shares OF stock short
on my books; William Heath Co., Whitley 4 Nelson,
Rogers, Dornn Beaucock, Fisk, Beldon 4 Co., do
business for Mr.. Drew; only know from hearsay OF
stock being put on the market about the Sd OF March,
about February II l purchased from Mr.. Drew
5000, 900 of convertible bonds at 721s per cent;
ceived the bonds and converted them into stock;
paid for the bonds by crediting the Erie Railroad
Company on my booas and paid them from time to
to William Heath 4 Co., 2s,4Oo shares; Smith,
Gould, Martin Co.,. 5000 shares; Robinson,
Cox Co., $1,000 shares; when purchased
guaranteed me against any loss the transaction;
he ordered me to deliver that stock at Office prices
at about sixty per cent; delivered according to Mr.
Drews orders and charged him with the loss; that is
the whole story; MIR. Drew always has q margin in
our house. but do business with HIM just the same
Q. Was this purchase of stock for the benefit of
Mr. Drews A. | purchased those bonds OF Mr..
Drew as Treasurer OF the Erie Railroad Company and
Mr.. Drew gave me his individual written guaranty
against any loss.
Question repeated. A. There is but one answer to
that; It was; he guaranteed me against losses Of
course he was to be benefited by any profit; that Is
the only answer; presume the stock put on the
market as soon as they got IT from me; think the
was sudden decline; do not remember what on;
9th there was decline.
customer of mine should tell you no; the answer
to it was, there has been lot OF new stock the
market; do not think | ever had single transac-
the Erie Railroad Company; only knew by hearsay
how the proxies were obtained in the last election OF
the Erie Railroad Company; had nothing to do with
any 5000, 900 issued but that have mentioned Mr..
Drew Is not member OF our firm.
Alexander $; Diven sworn reside In New York
pany; have been so little over three years. II Is the
duty OF the President, the Vice President the Secre
tary or the Transfer Clerk to sign certificates or the
Auditor any director the company may designate;
when Mr.. Burdel was President signed most or the
common stock and Mr.. Burdel the preferred stock;
have charge OF the transportation; on or about the
7th OF March signed some certificates OF stock;
about five O'Clock in the evening" as was leaving
the office, stepped into the Presidents office and he
then signing had just finished signing book;
lie said to me these transfers Of stocks were much
In the street that It kept him signing most OF the
him; told him II he would give me the book
would take them home and sign any quantity he
might want, and he directed the clerk to give me
some books containing blank certificates, which
took to my house; signed part Of them there even
ing and Sunday; took home three books that the
transfer clerk sent up Sunday morning; when he
gave the books he said he was crowded, and he
might want one the next day, and wished ! would
sign the one having the first number, making four
books and he did send up after that another book;
l am inclined to think, from some examination
have since made, have had five books, two hun
xral0 iHaof nh mo nnf
that these certificates were to be used for the issue
OF new stock; on the contrary the President said u
was Ior transfers. lsnouu not nave signea tneIl naa
known so because there was an injunction which
should have paid regard to.
O. They were, in fact, used for the issue Of new
stock? A. have reason TO believe they were; l
knew OF the Injunction; was served with one on the
Sd at my house, do not know whether these certifi
Gates were blank or not didn't look up to see; do
not think had signed any certificates for week be-
fOfe the bonds that were sold were sold for 721 per
cent; am told the money received is in the posses
sion Of the Company; cannot tell whether the stock
holders gamers losers; consented to the SALE
with the expectation that they to be converted
the money I have no knowledge Of Mr.. Drew's SELL
ing stock short on or about March 7th or 9th; have
sold short; have no knowledge Of his stock opera.
tions; know nothing OF the other directors dealing
IN stocks about that time; did not know that Smith,
Beden a Go. were short dealers or bond dealers;
only know from report where Mr.. Drew Is; have
seen him since the transaction at Jersey City; have
seen him two three times since the transaction;
saw also Mr.. Eldrdge Mr. Gould and Mr.. Fisk there.
Q. Why do they remain there 7 A. l could only
give you my opinion about 1t, and what they say
| suppose similar to those have been subjected to;
heard from the attorney OF Erie Railroad Company
that they had made application to the New Jersey
Legislature for the passage Of an act; am con-
nected with the traffic OF the road; should say 1t
for the advantage of the road to have an exen-
sion OF their line OF travel the most important thing
being the extension OF the broad gauge to
Chicago and the connection with the Canada
roads, connecting with the North Shore line by this
freight he taken through without breaking
buik do not remember OF any question being raised
In the Board OF Directors as to the legal right TO
issue bonds have mentioned was not present at
the Executive Committee; am not a member; sup
posed the money to be raised under the section
in the statute: the proxies Of the last election were
obtained in this way; there was party advertised
for proxies In the papers called the Vanderbilt party,
and Mr.. Drew and were working for proxies TO.
gether the other side; understood the agent Of
the Drew party sold himself out to the Vanderbilt
party; the agent was Mr.. Lane; understood some
thing PAID or on 1oT he %
tanned from the sale OF bonds IL.
william b. Bradford, from Fisk, Beden Co.'s,
testified that he knew nothing OF negotiation by his
firm OF the Erie stock but would have been consulted
had II been made In regular way.
The committee also examined Henry H. Piers0n, OF
Brooklyn, w. j. Edwards and James N. Cross OF
New York, but no new facts were elected. The CON-
mittee subpened Mr.. Heath, one Of Drew's brokers,
but he has refused to attend. AZ his testimony would
be important the committee have under cOnsidera-
ton the question whether they shall apply to the
Senate to have an attachment issued against the de-
Mr.. Heath and other witnesses to attend Is con-
sdered here strong point against the Erie side Of
the question.
The sergeant-at.Arms After Unwilling Wit.
nesscs-Thc Senate and the Governors APP.
p0intnlents.
ALBANY, March 25, 1868.
The Sergeant-at-Arms Of the Senate has gone to
New York TO bring to Albany the officers OF those
corporations that have refused to answer the Comp
trollers questions under Senator 0'Donnels resolu
ton with reference to taxing corporations.
The Senate to-day held q session Of nearly an
hours duration; but the Governor sent In no new
name for Auditor OF the Canal Department, and the
senate did not confirm any OF the nominations for
Harbor Masters and Port Wardens.
The day calendar for March 20 contains:-Nos. s.,
!, IL, H. 13, IL, Is, 17ls, a. rs, q, Is, 20, 0.
NEW YORK LEGISLATURE.
SENATE
ALBANY, March IS, 1888.