The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1871-05-09
THE ERIE RAILWAY WAR.

Jay Gould Again on tho Stand hose Converti-
BILE Bonds"-what Has Become
of the Stock2
The reference in regard the 1854 shares claimed
by Heath and Raphael the English shareholders,
was resumed again yesterday al one O'Clock, before
the Master, Mr. Kenneth G. White.
Mr.. Beach, Mr.. Morgan and Mr.. Lane appeared for
the Erie Railway Company. and Mr.. Southmayd and
Mr.. Tweed for the English shareholders.
EXAMINATION OF JUSTIN D. WHITE.
The witness now produced two check books OF the
Erie Railway Company. OF December and January
last The amount Of $1l0 which appears In the
check book Is loan from Willard, Martin 4 Beach,
or the Sd Of January and was as stated therein de-
posted In the Marine Bank on that date;
$4,000 received from the same firm on the
18th OF December was similarly disposed Of; 100000
received on the ensuing day was deposited In the
Tenth National Bank; no stated that an arrange
ment had been entered into between the Tenth
National Bank and the Erie Railway Company by
which the company was to keep standing balance
In that bank OF $4,000 and was not to draw against
that sum-
An inspection OF the statement prepared by M.
Giovanni Morrisn. the auditor, showed that In De-
cember 1870, the sundrles debtor TO cash stood as
follows:-S4 4s7, 52l 95; cash debtor to sundries,
$43o0,l24 So In January, 1871, sundries debtor to
cash stood $o5S,6s5 IS; for the same period cash
debtor to sundries stood 81, 7l2 oil 06.
JAY GOULD RECALLED.
Mr.. Gould was then recalled and examined.-He
produced copy OF the minutes Of the Executive
Committee or the Erie Railroad Company
Q. Do you recoect the circumstances connected
with the issue Of the two convertible bonds Of the
company for SO, o00,0 900 In December and January
last9 A. Yes
Q. BY whom were the bodies OF the bonds drawn
A. One by Mortimer Smith, assistant secretary, and
the other by Frederick A. Lane.
O. In regard to the bond for 81, Ooo Ooo-was that
issued in pursuance OF any resolution of the Board
OF Directors Of the cOmpanys A. 1t was issued by
resolution or the Executive Committee, IN pur.
suance OF the powers conferred upon them Us
board.
O. What Is that power A. The power TO issue
convertible bonds IN any great emergency; 1t was
general resolution authorizing their issue; can FUR
nlsl copy vi that resolution; there was no special
pct0n on the part OF the Board OF Directors with re-
gard to the issue OF these two convertible bonds;
they were sued upon the order OF the Executive
Committee, under the powers conferred upon that
committee by the board.
Q. DO you know when the minute was made In
regard to these convertible bonds BY MIR. Smith and
signed by MIR. Lanef A. don't know.
q. Was 1t done at the timer A. don't know, but
l presume so.
q. Do you recolect seeing It until reccnty9 A.
No; recollect the meeting OF the Executive Commit
q. Who was presents A. Fisk Lane aud Gould;
IT was held in the Presidents ollce; Mr.. Tweed was
not present; Mr.. Mortimer Smith. the assistant Sc
cretary, was absent but don't know where he was
recollect the meeting 18th January, 1871 at which
II was resolved to It's another million VI convert
bic bonds; Fisk, Lane and Could were present.;
don't remember whether the issuing OF those bonds
or the action Of the Executive Committee was noti-
lied to the absent member, MIR. Tweed.
q. DO you know whether or not Mr.. Tweed was
consulted or knew about the issuing OF these bonds
A. reported the matter 10 the Board some time
subsequently.
q. How long subsequently A. think It was In
April; that WAS tue first Oilcia intmation given TO
the Board OF directors or the issue Of these bonds;
the matter was generally known to the directors.
O. How was 1t made known 10 the directorsY A.
They knew we were IN want OF money and should
have 1t by some means; can't specify any one
member OF the board whom informed OF this issue.
Q. Can you recollect your mentioning to single
member OF that board The issue OF these convertible
bonds until after The facts mad become known totne
Mr.. WHITE think knew OF II.
Counsel-Mr. White testified he knew nothing
A. stated to Mr White, when gave him money
IRON time to time, that II was the proceeds Of these
O. Can you state MIR. Whites evidence in this re-
gard IS ncorrectY A. About the LIST December,
we wanted money, and there was only one way OF
obtaining 1t; at the next meeting OF the Executive
Committee these bonds were resolved 10 be issued,
and did inform Mr.. Wllle, suppOSlng lie UNDER
stood II; stated the matter.
q. DO you recollect saying to any other member
Of the board anything about the issue Of the bOndsp
A. stated II to the committee; don't remember
when that report was made, but IL was after the
bonds were issued; don't remember whether 1t was
after the TACT mad been dlvulged In those proceed
ings; my impression is too 1t to other members OF
the board before this investigation mad been lnsti-
tuted, but cannot say positively; can't name any
person positively to whom told 1t; think men,
toned II to Messrs. Ramsde Eldridge ami ThOmp-
sOn; MY impression l. founded on the fact that they
were members Of the committee who locked over
necessary TO inform them Oh II.
Q. When was that committee appointed, to the
best OF your knowledge Was ii not after the
n nj
10000 shares oil stock and the order OF the Court
directing their restoration TO my cents A. should
say 1t was alter, but before tie public knew any
thing OF the issuance OF these bonds.
z. That was the nrst time you mentioned this cir.
time ! remember the resolution OF the Executive
Committee directing the issuance Of the two con.
vertiDe bonds for S3,0Oa,0J0, which were recorded
on the minutes; the meeting OF the directors ut
which the issue OF those convertible bonds was au-
thorized Was about The 18th OF April.
Q. LAS the issue OF these bonds oeen communi-
Gated to other members or the Board besides those
whose names aie signed to the resolutiony A.
think the minutes OF that meeting were read at the
next meeting OF the Board; do not know or it;
tweed knows Of the issue OF these convertible hon ds
$1,ooO,Oo0 convertible bonds were converted into
10000 shares OF. stocx; l gave, the order for
the conversion OF the STOCK; the BOND was issued
in the morning and converted In the afternoon;
the INK had not Teen more than SIX hours dry on
the bond when 1t was converted into stock; 1t was
converted into stock on the 18th OF Decemoer; was
the owner and holder OF that bond at the time ii was
converted
Q. Had you advanced anything to the Erie Rail-
way Company as a consideration for the issue of
that BOND before Its conversion INTO stockY a. Yes.
q. How muchY A. | cannot say without looking
at The Items December l6, $glo00
z. When did The executive committee decide to
Issue that stockl A, ON the 28th OF December, and
sol. 900 received from willard, Martin Beach TO the
Erie Railway was part OF the consideration OF the
bond
O. Were not shares Of the Narmgansett Steam
Company and the JEFFERSON Railroad Company
collateral for that sum advanced 10y Willard, Martin
| II Beach, A. They were not nlerchaniaDe securi.
ties, but Mr. Whtte thonJlit that Willard. Martin q
Beach held them; tins $4,000 Is an item In the
| account current TO this date
e. How did you become the owner OF the bOndp
A. / bought The bond OF the company at the market
| value; advanced $4,000 on that bond; at the
time this 500 900 had been lent by Willard, Martin &
Beach 10 the Erie hallway Com any there had been
given collateral security for IL STOCK OF the Nara
| gansett Company, but gave them up ~ Mr.. White;
! bought this bond from the company, and agreed
| N fhn | ia n IN