New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-03-31
THE PROCEEDINGS.
FREDERICK A. LANES TESTIMONY.


OF the Ere Company before March, 1872 month OF
more before that time / met Henry Thompson at the
Ere offices and had conversation with him about
change: told him that II certain amount was para
Thought the Directors would resign; 100000 was suS
rested aferward saw Mr. Scott about 1t; ne wanteo
The whole Board out and would do nothing uness
Mr. Gould went ont; Mr.. Willard made a proposition TO
Gould 10 pay HIN large sum to 20 OUT atter~ard IN
conversation with Mr. Gardiner concluded the best
way would be to make arrangement with Mr.
McHenry through Mr.. O'Dohertyi called on him. and
be suggested he could get much larger sum- the nrst
dispatch was sent by Mr.. ODoherty to MeHenry con-
shifted O'Doherty because knew he any intimate
friend Of McHcnry, who depended on his word;
then followed the various cable dispatches; think
l saw all OF them; made distinct point that under
10 circumstances would undertake the removal OF Mr.
Gould ; I would only undertake TO give them majority
of the Board and give MI Gould the benefit OF their aid
thought him the best railroad man IN the country; he
is the only who appreciated the Erie road negot-
atoms went on for time until was informed by
Barlow U'Doherty OF Thompson that other Directors
were negotiating with Mr. Sickles; Mr. Thompson told
me Of the party had for him and had an inter
view with him the same day Barlow asked me 10
meet siekles and Barlow and Thompson that even
ing at Barlow's house the subject OF payment was
talked over; they put it quite low; told them
thought they ought to leave margin the next day
Barlow wrote a dispatch leaving the amount to be filled
IN in blank after some talk inserted an amount OF,
think, some pounds my recollection Is that IT was
about e75OOO; had been connected with Barlow IN
other matters; my arrangement with him was that
was 10 receive 100000 counsel fee, and that during
the year he would make at least S25OO0o in other
enterprses he wrote letter TO McHenry stating that
after payment Of expenses there would be only small
sum coming Inc, and thai he had made another ar
raDgement with them; have seen nothing OF the ar
raDgement YETI last year borrowed $4,000 OF McHenry
and gave him my note and with $4,000 bonds on secu-
rty be told he would received So 800 at the time
of the revolutions the check never went through my
bank account went pay for iron for another road
made arrangements with the other directors aud no
payments 10 them; the circular now produced is a
printed copy OF the private circular had printed III En-
gland and brought two three Of them 70 this cOun
try during the negotiation and before saw Mr. scRles
I made up with Mr.. Barlow a list Of directors that
thought would satisfactory and named among Others
Mr. Barlow, ODOherty, and Gardiner; afterward Gen.
siekles objected to ODoherty and Gardner there was
then fixed compensation OF $4,000 TO each OF them for
taking their names of the list Barlow fixed the pay
meDt afterward by giving draft on Nc
Henry; the drafts were, by mistake Of
clerk at Duncan shermans drawn for larger
amount and Barlow teleGaphed TO McHenry only to
pay $4,000 went TO Europe three days before MeHenry
ATrived he came with large number OF promises 10
supervise the election know nothing OF payments
made by him with regard TO that election, and know
nothing about the Bisehosheim contract except what
Europe keep down the bonds by long statements that
they fraudulent and not worth the paper they
written on. and teegraphed 10 McHenry to know why
be dared TO do such thing as let his agents make the
negotiations; Mr.. Sharpe advised a criminal action
against Mr. ODOherty for blackmaiing these securities;
I do not know Of banker in London who would have
taken these securities that time; do not consider
the per eentage large one was told that Mr.. Sckles
received 10000; McHenry told me that he demanded
alOOOOO but suppose that $4,000 paid by Bscho
thein.
TESTIMONY OF ?. H. WATSON.
p II. Watson testified: President Of the Erie
Railway Company, and have been since last July; pre-
vious 20 this had not been connected with it IN any
way am not acquainted with the circumstances at
tending It's change Of direction except by hearsay;
have learned OF them through the testimony which
has given before this Committee than had known
previously from all other sources; know nothing Of
money being used that occasion or who received 1t;
The last dividend OF the Company was declared the
nth day OF February, 1875 that dividend at the
rate OF per cent the preferred stock and Il the
common: do not remember the gross amount that
dividend declared the basis Of y statement Of
The 3lst Of December out OF the earnings of
he IL months preceding; do not know when the
preceding statement made; THE is the only
statement made during my administration; there
was a statement made at the meeting of stock
holders July, but the IboOks were not then
made up, and il was merely approximate esti-
mate It very difficult indeed TO make up this state
uent owing TO the irreguariy with which the books
had previously been kept the statement made up had
90 reference the July statement was made up from
the books and papers of the Office after
Kreat deal OF labor and Investigation, because
he books had not then been posted up:
Il had been Tmpracticabe to get them posted
nd for II only in october that obtained coInpe
Tent accountant would not have been willing TO have
declared the dividend anything but the profits of
civ akc IN at MIC
trnes and made very painstaking investigation, and
Only declared upon the fullest CONVICTION that ~ was
earned; have made change in the manner OF keep
iDg accounts since that time have tired 10 get the
accounts in shape so as " show now every dollar is
paid there is nothing PAD out now %nen boes not 20
construction aud repair accounts were not properly
car separation OF these it seemed be the view OF
everybody who was present at the annua, meeting July
cent, quarter Of per cent saved on the com,
mon stock, Il ought TO oe divided, divided ana
not applied 10 the construction OF the road or 70 is
IL seemed TO he reasonable that II should
be so and therefore resolved soon as could get
competent man TO make complete separation OF what
was expended Tor construction and for maintenance
chine as Erie road, IN which there are about 1900
M the &c eo Of mean esf in the
substitution OF an iron bridge Tor wooden one, or OF
rpe cuVert a wooden oulyert the difference IA the
cos of tho one over the other would charged the
capital account; 40 the Substitution OF
sterI rails for iron ones proper charge capital
them; the extension of the track for FIVE, ten,
.or twenty miles, of sidings, were charge
able 10 the capital account, &c. The replacement
of voTn-Out rOlug-stock would not be charge on the
itaI account but IL IL addition II would
he be one of the old 30fOot cars
winch eOst about g 900 replaced with 60fOot car
al cost Of 1900 then the difference between the 1000
md me s2l 900 Justly ehargeable think II there Is
hoeet nOn 10 make fair straight accounts there
o. no diculty about IT. IL is work Of labor; there
neveT haa Deen any thing OF tho kind before can get
JIaaent Of what has oeen CHARGED 70 and
,xh,cb will show how much was earned and how much It
cost 20 earn dollar; VIII have u prepared Dy h0ndsy
OF the road has been better dnIiDR the past
10 onths than before, because we have been getting