New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1869-11-25
TIE ERIE RAILROAD.
IMPORTANT ACTION OF THE SUPREME
COURT.

AID FRAUD. - ,rs I
,urnEMH COURT, DELAWARE couNTY'~DEfoRh NM ~
.JosrDh r. RAMSEY, plaintiff agt. Jay uo"e"
nd Others defendants-Thc plaintiff has nieu 80 80
s,lant OF OF pages against the present Dliec' ~
Erie Railroad, or rather portion OF then' ' "a
rfeasrs Fisk Goud and Lane Of which the following -
4he substance: Mr. Ramsey holds some % no Sv,etb
Iiranoh Bonds, Of the sterhng Oon'' ga acme
mortgage bonds of the Preferred ga ON bobaf
of the Common Stock OF tho Erie halno"u al cred
of ALI stock and bondhoiders' VI" 81 r,,
=, ,ho Compapy he brings TINS Su'|
49,, tr,ssv recites tho history Vi u0
Erie Railway Company, that on the runs " ,,
pailraad Company under law OF lSOV NC" opy
,gas formed assuming the mortgages ah"R'NinS llo'
y ~, e,,ng debt of the old company; the pre-
w ,L a,nopptIng to 1885, $40 giving the holders
~, q, per cent out Of the earnings, postponed only W
20 te interest the mortgages; that at TINS ue ael
SERIOUS conversions Of bonds into stock there was out
ao1 a 600 OF common stock and S5OOOoO OF convertible
hands of the Company; that In 1868 the Erie Railway
ek gave ar lease Of the Buffalo branch OF the road
but under the management of Could Fisk ana Lane III
October last, default made In the payment OF the
rent TO the great peril of the Erie Company tat III 1000
hhe roed issued 100000 of sterling bonds that down 70
1851 the Directors OF the Company were men OF high
character not engaged stock specuations except Mr
Draw and except Mr.. Lane who II Is alleged IOrceu
himself into the Board by purchase OF proxies
but was powerless mischief till 1865 Down 10 Janu
nry 1883 it is alleged Company regularly earned dv-
ara CANNON stock and had developed the road, without
getting into serious litigation Thatn January, 1865 the
character Of the management not Oeihg de'eopeu'
Its first mortgage bonds stood at lOl It's second mortgages
at lO its third 9 its fourth at 9lt its th at St s
preferred stock at a. and its common STOCK al ~ "s
tetai value Of stock and bonds excluding steIling
sonda OF S4l655 s45 90 Beside these bonds however
the Erie Road was liable on some millions OF Lohs D
bonds. Their stock at this time was about Oh
as messenger and COaO freight 1t employed ABOUT
HxNQe
- init the pyoeet Of aiding the construction OF
tho Boston, Hartford and Erie Road OF "n'ch W.
Eldridge was President, had been previously inUo
kidered, but EldrdEe, not satiSneo WIN "hS' ' w
otors thought proper do, and he ana Lane casting
iho,. for re9pforcements found one Jay Gould, who
had had some small raiiroad Axperence Oh little
road near Lake Champlain and one James FISK Jr'
thoD lately from Boston, where he had been carrying on
some sort OF dry goods business aud then took them
into their being quallhed for the attempt in
2apd that the four oonspired together to obtain and
id Obtain by proxies for their interests and those
ot Boston, Hartford and Erie road, control OF the
election Of directors, and elected themselves MT FL
bridges brOther-ulaw, Mr. Edridges counsel James D.
wbpney interested the Boston road; William Evans
rdcnt England and Others directors six OF the old
directors being left that thereupon Drew took I'm
place as Treasurer and the bonds Of the Bos
ton road 20 the extent Of FIVE millions were guaranteed
THAT Eidrdge and Gould got into the Executive
lComnHtee The plaintiff, after general charge Of NAL
feasance against Could Fisk and Lane rectes the
visions VI the Erie Railway Articles OF Association re-
qrrng. 1. A quarterly meeting Of the directors. O. A
etandng Committee Of Ave. 8. The making OF reports
by inferior officers to the President The Vce-Presi
dents presidency during the absence Of the President
B Tho existence Of Treasurer, Secretary and
Auditor G. Transfer Of stock ten days before
ELECTION dividend floating debt TO be contracted,
except for ordinary supplies unless authorized BY the
Board Of Directors He also recites the bylaws OF the
Company providing for Executive Committee OF five
members who should keep minutes Of their proceedings,
act in the absence Of the President except four
members were present 1t charges that these and other
bylaws have been systematically and constantly violated
by the three Uniting the offices of President and
ressurer Jay Gould. a Uniting the duties Of Auditor
Committee Accounts in James Fisk, ir. In con-
erring Lane the duties of Counsel to the Company
and OF Davis and Devlne. l. BY rendering Owens po-
alton a. Vice President nominal By emitting reports
sAom tho Treasurer and Auditor. Q. BY usurpng the
,owers of the Executive Committee and Direc-
sprs. T. By emitting Directors meetings 8. BY
heating floating debt for the payment Of 4s,OOOOOO
,onds Of the Boston road BY keeping the Directors
I'D stockholders in ignorance Of the affairs Of the
company. BY issuing bonds and stock OF the Com
my. Going into details no says that in 1868 some
- yney was wanted for the road-more for the
3ck was attempted Issued under the guise of
tIpe bonds alarming the public and bringing on at
undertook the last half Of this stock in spite
~ ujunction issued and TO do this got counter In
Rsntof and without tho knowledge Of than one
bher rector got stock books for Ave millions signed IN
p plank Feing them for four millions; that the whole
rocesds gave been paid to the Company, $4,000
,s1 ~ the powerful influence in tho Courts Of
Nay City they have since exercised they fed 70
Jerse Cy that this issue Of stock afterwards de-
ed be Illegal but "sueb influences were used by said
oeId Fisk and Lane, and money OF said Company was
eaS expended" that they escaped with only nominal |
New.YOrk" The plaintiff then the Of Erie
Ppilway money to procure the passage OF the act OF
iks authorizing the issue Of the ten millions Of stock
ellie sending Of messengers aud money TO Trenton and
albany. from Jersey City, the frequent visits to New
rk the paid guard IN Jersey CITY; the visits 70 Al
brk. which secured them mpunity and the power OF
slnse of several hundred thousand doars that they
Ekunted suits at the expense Of the Company after
ward and spent money TO secure the influence Of the
mess; that for all these general voucher
bgsd; that they then made On arrangement at the |
Expense OF the Company by which Eldridge went ont
and they t usurped all the powers Of the Company that
10 making their arrangements, suppOsing Vanderbilt 10
ke interested in the litigation they agreed to him
tOO00O and buy OF him g. 900 900 common stock at 70
~ purchase OF Boston Railroad Company i've millions OF
clr bonds; Ia pay Richard Sehe $4,000 In resetement
"A suits; TO pay $25OoO to Gould fiskail at the e1-
sense of the Erie Railway Company that this Was car
ted out. Gould being elected President In place OF
Eidrdge Fisk, Lane, aud Gould entering the TX,
Jane beng made sole counsel OF the Company; Lanes
qualifications being by no means equal to the position,
Fisk Gould therefore employed other counsel at heavy
sxponse; from their coming into the Executive
Committee the annual election in 1863 the Board
81 Directors held meeting, and the two other members
81 the Executive Committee kept ia ignorance Of
dOiugs that they have Kept Otis In ignorance while
control they have received from Daniel Drew T. 900 IN
ettcmont have issued and paid the acceptanees OF the
sO90oe OF the Boston bonds have paid vanderbilt IoI
repghing their position and influence by arranging for
or the election Of Peter b. Sweeny and VIM. NJ Tweed
Directors aud causing them TO be elected IN 1865 Mr.
tweed being elected ia 1862 but Mr., SweeUY declining
nat they prepared many millions OF convertible bonds
r re purpose Of issuing StoSS 20 control the election
tbrough Gould, without the knowledge OF