The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-03-21
TEE PACIFIC MAIL BATTLE.
Testimony Of Messrs. Stookwell and Baxter, Of
the Pacific Mail Steamship Company-Loan.
ing Upon Its Own stock-The Stock En-
HANGED in Value Owing to Their Mani
pu'ation Of It-Has Money Been
Used to Corrupt Congress?

The further hearing before Referee John s.
Lawrence In the case OF the application OF Luther
g. Ohallis for injunction to restrain the Pacific
Mail Steamship Company from Incorporating
the stock OF the company was resumed yesterday
morning at No. III Broadway.
Judge Fullerton being suddenly summoned before
the Judiciary Committee, the plaintiffs case was
deferred and the counsel for the defence recalled
Mr.. Stockwell, President OF the company, who
said that his evidence of yesterday was slightly In
accurate; he had supposed that Osborne Cammack
had put IN the notes OF the Howe Sewing Machine
Company as collateral for loan made them ny the
Pacific Mall but such was not the fact.
q. Why did william M. Tweed pay the interest on
mortgage loan, mentioned in your direct examna-
ton9 A. am not sure; learned that Tweed was
the person liable TO pay the mortgage, and as such
paid the interest
Q. Did the statement that Tweed paid the in
terest come from Mr. Believes, Vice President?
A. 1t did come IRON him.
@. You stated that these loans made by the COM
pany were made to accommodate The company.
Were they made for the mutual benefit OF loaner
and borrower. so that they could be called In or
paid at any timef A. Such was the case.
q. Has there been an increase or decrease OF the
business or earnings OF The company since you
became Presldent' A. 1t has increased.
z. Had this company any interest In your con-
tracts referred 10 III your previous evldencef A.
NO, SIR
were elected Presidents A. About iorty-slx
Q: What has been the course OF the market since
@. To what rates A. Sixty-three or sxty.fo
do not know the exact price at different times,
| but 1t runs from sixty three 10 siXty.iour.
Ii. II. Baxter, director OF the Pacific Mail Steam
ship Company was called ond sworn.
O. How long have YOU been o DIRECTORY A. Since
November; am also memoer OF tue Executive
wnen you came INTO onceS A. About $500, o0o
made an examination Of the exhibit or the old
board; II was, found correct; 1t was, believe,
q What mas become Of the governments gov then then
heldY A. Some have been soil; we have on hand
now about 5000, 900 governments.
Q. Why did you sell govcrnmentsP A. AS we had
contracts and liable to De called upon for money we
@. DO you know you got good price, A. Yes.
q. You are building steamersa A. Yes, four; the
old board contracted for three, we ~ tour steam
ers; we have $500, 600 governments, money, &c.
z. How much have you lost by loanss A. Not
O. Interest nor princlpalS A. Neither interest nor
principal
q. Have you borrowed from the company A.
Q. DO you not know some loans were made on
usurious interesta A. No, nor ior commission.
your co-directorss A. Not as nave learned
q. There is bylaw showing how funds are 10 be
q. Has it been observed A. Yes; the Execu-
tive Committee order the deposit and 1t cannot he
Withdrawn without the signature OF the President
Q. By MIR Crag-Have you been connected with
other companesY A. Yes.
Cross-eXamlned by Mr.. Nelson.
@. Have YOU not been able 70 buy your governments
back at lower rate than you SOLD A. Yes, about
Q. What do you say as to the custom OF corpora
tons TO loan their surplus on call loans here IN New
York; A. That has been the habit with companies
have been connected with.
O. Have not your loans been made In the same
manner US other companies, banks ana trust COM
paneS? A. Precisely, sir.
q. Is 1t not also true as TO the amount OF margin
REQUIRED? A. Yes, sir
o. BY Mr.. Uraig-Do you know Of any law to pre-
vent a bank loaning money on Its own stockY A.
There Is such d law relating TO natl onal banks.
o. DO BANKS ana trust companies loan on their
own stocksY A. National banks don't; as 10 State
o. Has your company loaned money on its own
stockS A. Yes; wnen we mad surplus money we
have made loans on collateras, with sufficient mar
gin to prevent loss; from ten TO twenty per cent
when upon the market value OF the STOCK.
q. DO you mean TO say that loans made of surplus
funds have not been used 70 manipulate the stock?
A. When we have surplus we loan without any care
whether it puts stocks up or down; think 1t Is
safer Tor the company 10 loan money Cd It's own
STOCK, for the reason that we know Its value.
q. Do you know Of RAILWAYS discriminating In
western Railway Company have done So
+, ". q. Believes, Vice President OF the COM
pauy, swOrn-I have been vice president or execu-
tive onicer for some years. have knowledge Of loans
made by the company under the new board; when
they came IN the cash assets were ABOUT $4,000 OOO
we had governments amounting TO ST, 500, 600: we
disposed OF part OF the governments only because
we wanted 10 raise money; we mad contracted for
four steamers for the China route, the hulls to be
S249 900 each, and the engines each $4,000, Colds
we make loaus on many stocks sold at u margin OF
from ten or twenty per cent; between 10Th Noven-
Der and 9th March all loans made were upon call
we loan OH our own stock sometnes never dis
crimlnated against 1t; on the contrary, preferred
H. and knew where IL all was; never lost anything
by loaning money between 15tn November and 5th
March, never loaned money on sewing machine
notes or stocks; don't know that StOckwe has
borrowed money from the company
q. There Is q bill pending before Congress for q
subsidy TO your c0mpany-do you know personally
whether or no any money or funds nave been eX-
pended IN the passage OF that bill
Mr.. NelsOn-Do you mean TO corrupt members OF
CongressS
The question suggests its own meaning. If you
do not answer We will refer 1t to the Court.
Messrs Shafer and Nelson tOr the deence) still
directed TO the question.
Judge Nels0n-We have no objection to answer
any question about c0rruptlng Congress; but we
admit we have an agent In washington, and there
Is nothing md behind the door. We do not object
to the admission Of evidence pointing TO the OF
money to corrupt Congress, or any member OF
Congress. -
the new board came Ia ? A. No, Sir.
Cross-examined BY Judge Nelson-I can't tell
how much mas been paid on these new ships, but
think between $400, 900 and 100000; our cash
assets have increased under present management,
and also our business.
new board compare with that OF the o.d9 A. l
don't see that there has been any change or policy,
and the management remains unchanged.
The hearing was adjourned until Saturday, at ten
O'Clock A. N.