The New York herald., 1871-03-02
TIE ERIE CLASSIFICATION FRAUD.
EFFORTS FOR IT'S REPEAL At ALBANY.
Speech Of Mr.. southmayd Before the Railroad
Committee Of the Anemby-The Evils Of
the Act Clearly Explained = The
vllanous Finessing Of the
Present Managers Of Erie.
ALBANY, March !, 1871.

ALBANY, March l, ls7l
The Railroad Committee OF the House eld a
meeting this morning to consider the SUBJECT OF
repeating the Erie Railroad Directory Classification
act. Mr.. Southmayd, OF the firm OF Sherman d
Soutnmayd, made an argument IN favor OF repeal
4 Mr.. Swan, solicitor for the English stockholders.
was present The case is held open, anu tue COM
mttee decided this evening TO give nearing on
| the other side next Wednesday. Mr. South nayds
argument full presentation OF the case OF
| the stockholders and Is nsllercd an aoie one
The indications are that the committee VIII report
| a bill TO repeal the act.
| The following Is Mr.. SOuthmayd's speech
appear before you behalf of large number Of share
hoiers tn. Erie Railway eompany, whose pc ons have
vocacy tbs bi introduced by Mr.. ooarish for the
,sssa ea@%ous esed hs E. railway b q:
anar1ed the directors u this to classify them
ns from one :" & tive y.ars Tho nnnssr Of directors
three OF them ont OF Office each year. except that n some
years onr OF ssn.oa them go a;; , -, ...,, ,o, nm,
w pa, Of pf Flax s%S dSa% i.
t. hb ali the "h.r emses % the ooar are .uSserv ea
ion s,i easily percre th,t e Disseminated
n mprasesSe to do 90 by action ,hsn
ss on. ss Srecors o their way OF
Of tlss ana Gaa wsoa he s sy impraetcaSis
ter n ABILITY e GO int us at S9 3
Elections would he In powerlrss minority
: wholly overtwed by Fisk and Gould and their con-
federes and while ihc present rnnous course Of the
OF tie bsme attached 10 it, they coud really do nothing
In or,r u reform the administration Of this company we
need OF prominence need substantial men, of high
may ask in van Of this class to 20 into ibis soard at
the frsi and second under this classification
ate. Of fisk AID Gould ana Their coniedera,es
sonsen, or the risit could be optanei, would be
mpossse y gain maorty in less time than three years;
nd nnn nn rsn in
long as that there is 70 fear that they WI
value lett for tie .hsrehoders to care for .
The effect of this bi IL, and such
under management The object Of The discOa.
sey e has
o' whether .is sa eassac atom bl n' shah ''Ss Be
M ann or 70 h Be end
to vote at the annual election upon the
not the entire ma a,enens Mt oi ,n's company saa not
and Is maeri. for you to i1qre whether or noi their
sufficient friaa IA foundation for them to make
sonabe and ,ns that the oppor,unN y snoad be aore
now lei me cal your tent as orey AS may be- to the
win rnde that the history in detail OF the
ngs OF hes, ung their adm,ns,ato won oe very
investigation in the of law You naye neither The
here nor are pee any facr for esamina,on Into qaes
tor. Of fact which are disputed or fatty dspusee and
thai the results, "a which these men
aad shape For he Of III
have lay you rely escias usy upon
Sae s thai aas s OF the legal re-
For i6s EarpSsss y my pre.en. argument shall AL
yhich certainly ihey saiasay In The oncia report
Ss So e sa ssaSs hat E. VII @
The share capital then t4 2,2u being OF
po 81 ess IS on he 'he sos
!
,sss m eos % ans n ns Ss Sasa ssSs .
fiss and could almns,raton during the two from
Yhs mere Hs was nasd an
IF is II se Ss Sss sasP a ,s ss YOU win n
statement Of these @ for TIE year
easned according Inc subjects such sraaa
o1 nnd
houses msshne 80 ps machinery aa m n pres na n
amount G'asr a sa S al af s1a
amount inc ues ali expenditures FOR permanent improve.
equpmert which these claim to have been made On
Ike e'aea statement al the alleged for
these various purposes in the year running from sep
smosn he@ Now, sad taking fSsi
Snds to Ses ne amount % Of ns aaras hese
for The alleged :. S.TGwss % to s and
for aSe in the enrs psroS sa
for amouting to si7 ss S For ,hs denciency viii
derel shareholders IND no.hinc whatever in the way Of
or decit During the sane time they admit an ncrea OF
the funded deot the or 1905 % IL rueb that
shown ioatipg de6t S3sss 81 and they
knowledge floating de at the close OF the 1871 We
do ali credit the statement that floating debt then
e n OF r sss s shs %
the creation OF in place, the increase OF
debedness would be only IL s7, Il deduct this
from the deficiency before mentioned there viii still re-
of this property, 10 the permanent improvement OF
which they claim 70 have ADDED the sum Of s6tooo
they put in the less income they get
On 800 Of the book Of reports for 1868 appears
that in the year running from September sS TO September
1856: with capital swollen to %s,0000J0, under the
management Of Fisk and ould tie gross income wa.
Y4s75s7s the expenses sl17ls,l leaving surplus OF
| bonds and the rents the eafed They paid In
January 1885, diviend OF per the preferred
stocs-such dividend amounting to 1851 sot g. But this
ber 1857 September 1865 but paid ont OF the
hundred and seyent housani col which was hans
has been PAID IN the shape OF civdens npon
of the stock either prefer ed The
the company ha seaasy re nsel 70 pay any dividend %
the preferred stockholders by SUIT called upon them
alleged that this apparent surplus Of $i756 II
ali msake that Ia TACT there WAS no surplus whatever
applicable to the dIvitend on the preferred stock Now
compare the results OF the working OF this road before
Fisk an Gould with the Of ,hci
capital they put into the enterprise the less incom
| they get from il.
/ The remainder OF Mr.. Southmayd's address was
taken up with the enforcing Of the lessons dervable
| from the above statements. He especially depre
Gated the fact that he represented In part foreign
capitalists influencing the minds OF the committee
| ana exposed the methods by which the pretended
resolutions OF stockholders Of the Erie Company
were got up expressing their satisfaction with the
present management Of the company.