The New York herald., 1871-04-19
THE ERIE WAR.
The Company CcntumaciOus and
the Books Still Withheld.
The Master to Make Report I'm
mediately.

stock claimed BY Heath and Raphael, the English
shareholders 10 be their property, was resumed yes
rerday. u Will be seen from the subioined report
that the proceedings were very important and that
the Erie Company still hold fast TO the books which
the plaintiffs allege would, If produced, disclose the
character OF the management OF the company ana
OF the in which they desire to suppress the
same
Mr.. Soutnmayd appeared for Heath and Raphael
and ex.Judge Pierrepont and Mr.. Morgan for Erie.
THE PROCEEDINGS YESTERDAY.
Mr.. Southmayd-The first question is whether the
books called for in the Masters order, which has
been served on the Erie Railway Company, and
proof OF which service has been ed have been pro-
ducedp Mr.. Southmayd read the order and said:-
al ask whether that order is complied with or
noty'
Mr.. Pierrepont said it had been stated in some OF
the papers that theIe was an agreement on his part
that the books should be produced. All that was
understood yesterday was that, by the adjournment
to-day, the case would stand III the same position It
did yesterday, he tMr. Perrepont) stating that he
would advise the company to produce the books.
Mr.. Southmayd-An that was said was that you
would advise the company to comply with any
order the Court made. He tlr. Southmaydl asked
was the order compiled with
Mr.. Pierrepont-I have not the books here.
The Masler-Mr. Otis is here.
Mr.. Soutnmayd-Mr. OTIS can be sworn as to
whether he has complied with the order.
Mr.. Ots-The books are not in my possession.
MI. Pierrepont him In formal way,
that 1t may appear on the record.
| MI. southmayd-I will examine him merely as to
compliance with this order. l have q witness on
the stand, whose examination will suspend in
order to 60 on with the examination OF Mr.. Otis.
For the single purpose Of ascertaining whether he
| has complied with this order will now examine
Mr.. Otis.
| EXAMINATION OF HoRATIO N. OTIS SECRETARY OF
THE ERIE RAILWAY COMPANY.
| Horatio n. Otis swOre and examined by Mr.. South.
mayd-l reside at Yonkers; am, he said secretary
OF the Erie Railway Company; have been secre-
tary Of that company since Its commencement in
1861; was served the 18th Of April with dupli-
cate original OF this order made by the Master
/ paper produced); this appears to be the duplicate
of the paper that was served on me; suppose
there are In existence such books and documents
called for IN that order; have not seen such
! books to my knowledge for more than year; had
nothing to do with them.
| O. Have you anything TO do with any Of the books
of the company A. some OF the BOOKS OF the com.
| pany; do not know any thing about these books
called for in the order as to where they are; 1t IS
/ my understanding that the company has stock
ledger; the transfer clerk has custody Of the stock
| ledger; know OF no such book as register kept
| ior convertible bonds issued by the company.
O. Is there any book kept for theentry Of cOnvertf
| BILE bonds when they are issued-do you know OF
not M in my W Keeping; can only tell YOU my under.
standng there Is no book kept. to my knowledge,
IN which the issue Of convertible bonds is entered;
when convertible bonds are issued l have nothing
to do with 1t In any shape or form.
O. Who hasP A. The president.
president gives dlrecuons
Q. Does ne keep the books in which the COM
Q. Then who keeps those bookss DO you mean
to say that when this company makes an issue Tor
Sl,OOO,000 ana an issue Tor S2,OO0OOO OF bonds IL
| Keeps no books for entering tnemY A. understand
such bonds are entered In the transfer book.
Q. What do you mean by the transfer oook-the
stock transfer book, Is it2 A. Yes; vouchers for
O. When bonds are issued for borrowing money
authorized by law, Is entry made OF the issue
| OF the bonds in any book Of the company? A. An
entry is made of the proceeds arising from the bond
O. Is an entry made OF the issue OF the bond Itself
A. l suppose the auditor Keeps an account OF 1t
himself.
O. Have you anything to do with the signing OF
convertible bonds? A. have not signed any Tor a
o. DO you know OF the issue OF two convertible
bonds-one for 81, 000 900 and the other for $1,000
00o-in the months OF December and January last7
A. knew nothing whatever about it; heard OF 1t;
i did not hear OF It until saw the statement about
1t III the papers, since this examination commenced.
Q. Is that The first the secretary OF the company
ever heard Of such bonds being issued9 A. Yes.
q. Now, IN what book OF the company would ap-
pear any entry Of any proceeds which were received
bonds, II any such proceeds were received A. In
the cash book. should suppose.
z. VINO keeps !hatY A. 1t Is kept py the assistant
O. is he now to be found az the office A. Yes,
q. Have you anything 10 do as secretary, with the
cash accounts and transactions OF the company
A. Nothing.
q. Nothing to do with the transfer Of its stock
o, Or with the stock certlfcatesY A. No, sir.
q. what Is the general nature OF your business
A. My duties TO assist In conducting the cores
pondence, TO assist In drawing up contracts, at
tending TO the taxes, the Long DOCK property and
rh delegated
department 80.
A. To assist the secretary in those various duties
and also supervise the transfer book and the GER
tlfcates OF stock. he has nothing to do with cash
general supervision OF that's think L. w. Spencer
assists him in that cashier l think there are no
taken to the audit office; do not know what BOOKS
Mr. White keeps g. p. Morrison is In the audit OF.
hce; the general financial entries OF the company
are made In the auditors offices say II Nor
rlson keeps the books himself; there forty or
fifty clerks in the audit office and lie is the chief
ditor. The contract books OF the company are In my
possession; cannot produce any Others no books
of transfers, stocks or finances; / understand that
all the books OF the company are IN the control OF
q. Have you made any attempt to comply with
the order OF the Masterr Have you applied TO Mr..
Could, the president OF the company, Tor leave TO
have these books produced or for any directions as
to compliance Noncompliance with this order OF
the Masterf A. have not; Was informed by the
Marshal that an order similar to the one served on
me had been served on the president, and If he had
any 0ruer 10 give lie WOulu ADVISE
Mortimer L. Smith, Assistant Secretary OF the Erie
Railway Company, was 1urther examined. lie
said-I knew OF this issue Of convertible bonds for
SO, 600 900 OF Erie stock IN December anu January
last, from the fact that signed the stock.
Mr.. Pierrepont-1hese convertible bonds, what
have they to do with the matter under inquiry?
MIR. Southmayd-These convertible bonds we're
issued In furtnerance OF the frauds OF the Erie RAN
way Company. and were sent, with 80, 900 shares OF
the stock OF Heath n Raphael, to the Farmers Loan
and Trust Company IL beng well known tnat,
unless the original stock was cancelled no new
stock could be issued In It's place. When TINS stock
was substituted for their stock In the Office OF the
Farmers Loan and Trust Company IL cord not be
registered, and ITS marketable value was thus
destroyed.
The witness proceeded to say 10 not recollcct
when first heard OF these convertible bonds: there
were Two OF them-0ne for 81 600 900 and the other
for 81, ,000,000; do not remember II signed those
bonds IL Is not necessary that they sn0uld be signed
by the secretary the assistant secretary: one or
both OF us are sometimes absent from the Oice ana
secretary DrO tenn. Is appointed; do not remember