The New York herald., 1872-11-27


Eo q issue tae mgl N-t large emount
Nosbv esteg1 unioo slo. 5g means oi tas
t.ae H14as imme6ta.siF courerN 'e Into 8s0ck
as was uvne iu 1910 .y
THE ERIE RAILWAY COMPANY,
under the administration OF Daniel Drew, Jay
Gould, Smith and others. The holders Of tho North
western common stock were opposed to such issue,
while those who were short of that stock, and
therefore interested In the depression OF It's price,
were favorable to 1t. This difference of opinion
and interests excited
LARGE DEALINGS IN THE STOCK.
The Boston connagration occurred on, think,
the 9th Of November. 1t was expected that the
event would
PRODUCE PANIC
In the stock market, as did the Chicago Are in Oc
tober, 1871. The activity In Northwestern common
stock and the strength OF the holders aided in
tanning the market, and the expected panic did
not ensue. Persons dealing in stock who
relied upon these panic expectations were
large sellers OF the stock, and were not care
full IN all instances TO own the stocks Of
which they made speculative sales. am not, per-
haps an expert in relation to the condition OF the
stock market but should say that it was in
AN UNSETTLED CONDITION
after the first recovery rom the shock OF the Bos.
ton fire. Prior to the Boston calamity q consider
aDe depression in the price OF the leading specula
tive stocks had resulted from the lookup OF cur
rency, alleged to have taken place by the procure
MEssRs. DREW, GOULD AND SMITH.
lookup had, think, ceased prior to the Boston
hre but the effects OF the depression still rested
upon the market
O. State II you know in what relation Messrs
Jay Gould, Daniel Drew and Henry N. Smith. re-
specuyey, stood towards the market for North.
western common stock on November o. 1872, and
during that week. A. 1t is well known to the
owners OF the stock, and is an undoubted fact,
that
DREW AND SMITH WE'RE SHORT
OF the stock through their brokers and otherwise,
and It Is also . fact and generally Well known,
that Gould was an owner Of shares of Northwest
ern common stock. Drew and Smith were, there
tore, interested in
THE DEPRESSION OF THE MARKET
value of the stock, while, on the other hand, Gould
was interested to sustain and advance the market
price,
Q. In what relation did you and Augustus schel
stand at the same time toward the market for that
and other stocki A. Mr.. Schell and myself were
and were interested against depression; we were
also owners OF other railroad stocks, and were ad-
PANIcs AND THEIR CONSEQUENCES.
We were opposed to the lookup OF moneys, and
felt interested to alay the alarms of persons inter-
cause them That was our side OF the question.
q. DID you hear any intimation on or shortly be-
fore November ZEN % 22 Of any scheme to cause the ar.
him or his liberty or property for the purpose OF
Affecting the stock markets A. On the afternoon
OF November q it was rumored that scheme had
been devised to cause
THE ARREST OF NR. GOULD
at time and under circumstances calculated to
produce a panic in the stock market and to cause
0i course, great depression in the market price
OF the leading stocks.
rumor? A. The names OF Drew and Smith were
connected with 1T, and II was asserted that per-
sons connected with the Erie Railway Company
were parties to the scheme.
q. Did you have any interview with any ofiicer OF
the Erie Railway Company upon this subject2 II
so, state the circumstances. A. had no interview
with any officers Of the Erie Railway Company in
relation to the subject, except with the Hon. r. H..
watson. the president OF that company. Having
during the ateynoon OF the 2st and the early morn
ing OF the 22d n November learned that scheme
OF the kind you have referred to was matured or
about beng matured, called upon
MIR. WATSON
at the Erie ONCE about noon Of the 22d, and had
an interview with him on the subject.
q. State the substance Of what occurred az that
Interview. A. stated the case to Mr.. Watson as
have here stated It, and informed him a. to the
RuMoRs OF THE STREET
in respect to the proposed action OF
THE ERIE RAILWAY COMPANY:
said to him that II was openly stated and be-
Iieved by great numbers that smith, who had
QUARRELLED WITH GOULD
since the breaking up OF the lookup combination
had arranged with the Erie Company tc
should make certain statements duplicating Gould
this partner IN the transactions OF 1859, and be
himself released from his common liability with
Gould and Drew In respect to those transactions
Mr.. Watson stated that he had not released Smith
and had not agreed to do so, nor had he released
ceive this assurance from Mr.. watson, knowing
from his high personal character, that 1t could be
implicitly relied on.
q. Was anything said at this interview concern.
ing release RON the company to Mr. Goudf A.
The matter OF Mr. Gould's release was referred to,
aud think Mr.. Watson stated that lie was ADVISED
iy counsel that It was invalid, and suggested to
MN That whlle this might be so, and while
TO GOULD AND DREW
might both be impeached for fraud or other SUN.
clent cause nevertheless, until such impeach-
inent or invalldaton. the releases might have q
nearing upon the question OF preliminary bail.
Mr.. watson and myself interchanged opinions
upon the subject OF ball and upon the question OF
excessive bail said to Mr. watson tina, II was
lumored and generally believed that, disregardng
Goulds release, IT wasa
PART OF THE SCHEME
10 obtain an order for excessive bail and 10 have
Linn arrested at q time ana under circumstances
which would prove destructive to Mr. Gould and
result in
GENERAL HAVOC IN THE STOCK M,RYrr.
bnd further expressed the opinion to Mr.. Watson
1llt ruiz 80 the tposs interests ~ a narty as