The New York herald., 1868-03-12

He denies all the allegations Of the petition to the ef
ence In the Executive Committee or Board Of Direct
ors OF the Erie Railway; and denies that he caused
any portion OF the policy to be adopted or any one OF
the measures or any part OF the action to be
proposed or taken which is imputed to him or
made the subject Of complaint In the petition.
or co-operated In said measures, he did so in
good faith and in the exercise OF his best judgment
for the interests OF the Erie Railway Company, and
IN SO far his support cooperation involved the
exercise OF any legal right or franchise by the Erie
Railway Company, he acted on the advice OF one or
more legal advisers, whom he had reason to believe
and did believe, to be competent to give such ad-
vice; and in such support and cooperation he be.
ed ne ony tSe M Pn @
In regard to the allegations at f0i0s fortytwo to
fortyve relative to specializing in stock, he says
Railway Company stock than as the stocks OF other
companies, 1t being the fact that he has In the
course OF his business bought and sold stocks OF OF
In the rise and sometimes in the fall OF their stocks
and In these and other particulars he exercised his
calling in like manner other persons In the city Of
New York engaged in the same general business Of
buying and selling stock And SO far as said allega-
tions are intended to mean or imply more than the
above they are not true. In regard to the aega-
tions from folio forty-fve to folio sxtyfour depo-
nent says that the allegations at folios ifty-seven
and fifty-eght are not true, and 1t Is wholly
untrue that he gave any pecuniry inducement
to Mr. Berdell, that Mr.. Berdell was interested in
any way with deponent In regard to any stock or
bonds received by deponent from the Erie Rail-
way Company at the time referred to in the petit
ton or in the year 1885, That while deponent Is not
able to speak accurately as to the sales OF stock made
for some months prior to May 1866, he, to the best
Of his belief and opinion, denies the allegations con-
tanned in folos fortyve and fory-six, except that
to the best of his recollection he had sold Erie stock
to considerable extent during the period referred
to. And deponent denies that he made sales of Erie
stock as alleged, in reference to acquiring the
twenty-eight thousand shares of stock the
$30OOOO Of bonds; that he did not desire to have or
or er a the ws not we're O ms
or delivered to him, but against his wishes
he was persuaded and induced to take the same by
the solicitation Of members of the Board of Directors
Of the Erie Railway Company, and because they
urged and he believed that it the best thing that
could be done for the company under the circum-
stances And deponent denies the allegations at TO-
lios forty-eight and fOrty-nine to the effect that
the proceeds Of the sale Of the bonds made IN
shares OF stock from hypOthecatiOn, and he denies
that said $4,000 shares had been hypothecated 10
deponent, and he denies the allegations at foits
fifty to fifty-five. That while portions of the
tract relative to said stock are set forth correctly in
to said contract and he says that he
ceived only fiftyfour thousand OF said shares, and
not tfty-eight thousand shares. And deponent
says that he did loan to the said company sum
equal to sixty per cent on the twentyeght thousand
shares OF their stock and $500 600 of their bonds
and that he received as collateral thereto not the
whole Of said stock and bonds but S5,40OO0O
thereof. That depOnent was authorized to sell and
dispose OF the same as was necessary to enable him
to complete his advance to the company. That he,
of course gave the company security, for he
them the money; but afterwards they desired secu-
rity to the amount of 900, which he gave them,
and he also agreed not to return the security
and demand his money until they could pay the
same out of their surplus earnings, and they made
a corresponding agreement not to make such pay
ment until they coud so pay the same out of such
surplus earnings. That in regard to the ale
cations at folios fifty-nine and sixty as to sup
pressing q report of Stock deponent says that
he had no part in what is charged as sup
pressing report of the stock; and deponent has
been advised and believes that there being right
claimed by the company to have said stock re-
turned to the company 1t was not proper to report
company and he denies the allegations at folio 63
but he admits that he disposed OF said stock in the
usual manner, and he denies that under any
circumstances he can be accountable to return
to the company more stock than he received, which
was ffty-four thousand shares; and depOnent denies
that he was largely short of the Erie Railway stock
as charged in the sixty-ffth folio OF the complaint
though he was under contract to deliver consider
able amount OF said stock and he denies the other
OF the sixtysiXth and siXty-seventh folios and he
denies the allegations of the sixtyeghth, seventy
third and seventy fourth foos of the complaint To
the end OF the paragraph, at about the middle OF
folio seventy-four; and he controverts and denies
ss sSnut contained 3ne oas in o he
nine and ending about the middle of
folio seventy; and he controverts the claim con-
cations at foos seventy-fve and seventy-six, and
especially those to the effect that he procured
contract to be entered into; and he AYERS that he
did not propose or suggest the making OF any con-
tract the subject there referred to; but 1t having
been proposed by others he acted in regard to the
Of the Erie Railway Company required and he
denies the allegations in the seventy-seventh and
seveny-eighth foiOs Of said petition. And deponent
denies the allegations Of the seveny-ninth to and
including the eighty-fourth folios Of the petition,
except that the resolution referred to, and which was
passed December 4, 1867, though general, was eX-
plained at the Board as intending to apply to
the stock in the petition referred to, and deponent
believes that such facts were known to every men,
ber Of the board that Frank Work was present when
the resolution OF the board passed and heard said
explanation and the resolution passed unanimously,
nndh int fn Gtaf nn1 halin
he never did make the statements charged TO stock
being issued, as is alleged in the eghty-second and
eghty-third foliOs OF the petition. And deponent
in respect to the transactions with the said BUFFALO,
Bradford and Pttsburg Railroad Company further
says that said road connects with the Erie road
at about sixty miles west OF Dunkirk; that
1t leads into most valuable btumnous coal
fields in Pennsylvania, having the right to
several short branch roads into different coal
sections; that the company own several thousand
acres OF those very valuable coal lands; that 10
of great Importance to the Erie road to control this
road SO rs to be freed from the eXactions of other
western roads, over which they must otherwise OBJ
tain supply OF coal for the use OF their road its
western portion; that IL deemed best by the
directors and deponent believes 1t was for the best
interests Of the Erie road to make the several con-
tracts with and ultimately to lease this road as was
done; that besides the needs OF the Erie coal there
the additional consideration that the demand for
the coal for common use In this State was rapidly in
creasingand must be ofgreat profit To the
Erie Company. And deponent SAYS that several
contracts made at different times between the
two companies: but the lease OF the Buffalo Bradford
and Pittsburg Railroad was made on and not after
January 5, 1866 That by said lease the Erie Com
pany agreed TO pay the bonds Of the Bradford road
which had been used in the construction Of their
road. These bonds bore an interest OF seven per
cen and weret convertible into stock. The statute
authorized the exchange OF Erie stock for the stock
of the said Bradford road, and IL was thereupon
agreed between the companies that the holders OF
the said per cent bonds which the Erie road
liable, might be converted into stock and then
| exchanged the bonds at eighty per cent for the
stock OF the Erie Company at par, and II was done
The effect of this transaction was that the Erie Com
pany relieved themselves from the payment OF seven
per cent interest and ultimately of the principal Of
bonds, whether they earned IL or not and incurred
liability to pay dividend amount of stock only
twenty per cent greater when they should earn and
declare 1t. And the deponent further says that tho
denias which refer to the foos upon the copy served
\ upon him, which IL partially printed and partly
written, and not to the foliOs upon the pamphlet
which nc understands TO have been written since.
/ ID. DREW
sworn to before me, this 9th day OF March, ls6s.-
I Richard Stackpooe, Notary Public.
| The Licensing Power Of the Mayor Under the
Municipal Charters.
4 10 hso