The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-03-25
THE ERIE INVESTIGATION.
TESTIMONY OF s. L. M. BARLOW


$4,000 for Services Rem
dered-Behind the Scenes in
the Erie Railway 0facea
mo Assembly committee resumed the investi-
cation yesterday morning at the Fifth Avenue
HOTEL at ten o'clock All the members or the COM
mltee were present, Mr.. Babcock in the cnair. NO
witnesses were examined at the hotel as the COM
nittee Immediately adjourned TO the Erie Railway
of,ces for the purpose of having access to papers
which were to be brought In as evidence. The ses-
non was held in the directors room. Mr.. Watson,
President of the road, was present, and one or
two of the directors. g. L. n. Barlow was the first
witness called. He testified as follows:-I was
counsel for Bischoffsheim Goldschmid ct the time
the change in the Erie direction was made; took
IN active part in that change; some time In Febru
airy Mr. f. A. Lane said to me that 1t would not be
dtncult to secure the resignation OF the majority
o. the Erie directors II the proper measures were
used; before l consented to undertake any part
N the business pledges were asked Of me,
The nature Of which have been ted by Mr..
O'Doherty; was then told Of the nature of the
steps which were about TO be made; commune
sated with my friends on the other side, and the
names OF number Of persons were sent on as
proper persons for directors; Mr.. Lane then said
that 1t would require $l,00o.0o0 to buy up the
directOrs this large sum was not at first objected
to, and sent a telegram to London stating that
compensation would be required, leaving blank
for the amount, which was afterwards filed up by
Nh. Lane for the amount Of 100000 instead Of the
larger sum; as ! was engaged as counsel for
General Sickes in o similar suit said that must
mpart she nature of Lanes plans to him; Sickles,
On hearing OF it, assumed control OF the matter.
and called on McHenry to send the money to him
instead OF to me; the money was sent to him;
exactly $500, 600; after some consultation between
Nh. Thompson and myself it was finally agreed
that the directors should resign and my nominees
be legally elected.
] DIsBURsED THE AMOUNT
myself; Lane and Thompson got $67,50o each,
Archer $4,000 and White $4,000; some days after
was told by Lane that the whole plan would fail
except would pay Mr.. O'DOherty $4,000 and an
associate OF his, Colonel Gardiner, the same sum;
he said that except those men were paid the whole
plan would fail; agreed to pay them $25, 900 each
b the event Of the scheme being successful; the
Dnly other sum ever heard Of being disbursed was
the sum paid to General Sickles for his services
during the four or five months he was here; there
we're other smaller sums paid to counsel; immedi-
Ately after the organization Of the new Board a
setter was submitted from General Sickles stating
81 at the stockholders on the other side had paid
his expenses and claiming large compensation for
his services; the matter was referred to commit
lee, consisting OF General Mcclellan and Mr.. steb-
bins who reported that as they were only appoint
ed to oil vacancies they did not think themselves
justified In authorizing the payment OF very large
to General Sickles on vouchers presented by him
NJ for him at the new election in July It was rep
paid by the London stockholders was $50 OOOO, in
cuding large compensation paid to General Sckles
and $4,000 to man named Crouch; at a meeting
Of stockholders held some time after. representing
200, 1t was recommended that the directors
should take some steps to have the expenses paid,
but the recommendation, according to my knowi.
EDGE has never been acted upon although the
stockholders in England have consented to accept
half the sum Bischofscheim's account has never
been closed, although the stocks have been trans
.ss ne s% Nv sSsSsss
an unwilrhgsess on the part Of some Of the direc-
ton taken by the Board relative to settling Bschoi
Dheim's claim know OF no other sums being paid
what have named to bring about the
she eth Of March 1t was found that $1,000 900 was
owing by the Company to the friends Of the old d.
BANKRUPTCY STARED TIE COMPANY
n the face; l telegraphed to Bischofsheim, offer
market: an answer was returned in q Jew hours.
the money was received, and by that means the
Company was saved; the common bonds were held
chiefly by Gould, who had bought them up; the
consolidated bonds could not be sold in London,
until the bends in the hands Of Gould were re.
Gould, ana the bonds were finally recovered;
Aeesrs Homan d Green, the London directors,
:He was and
as result the bonds were all sold, and the actual
profit to the company was about two million dol
lars; as rapidly as the bonds were sold BischOffs
helm was repaid for the advances made on the
nIst Of January last 900 was st in the hands
ton agreed to take these bonds at ninety-one
eents; when Mr.. Homan came over in July he was
asked why 80 large commission was paid and he
n n 9TH
banker would have charged for similar services J.
f. Morgan Sons were paid $4,000 commission,
ttated BY them; Homan was not think, one Of
ohe men who advanced money to efiect the change;
BIScHOrFSHEM GOLDSCHMID
nsh stockholders In making the disbursements;
they did not claim that the large commission
TO, and did not have reference to services per-
formed; assume that the amount actually in the
claim is due to them; the bonds were payable in
London and New York the rate Of interest charged
an1 oSsr Was tne same 70 e ERE Karoad as to
here always insisted that this ESQ 600 should always
be paid to him; according to the contract Bis
chonsheim was not to claim the two an O half per
cent named except upon the bonds which were &C.
tualy negotiable; and more than this, he has
paid to me and my firm for the services rendered
by me was $4,000, and since that time have been
paid half years salary at the rate OF $1,000 2
md payment Of $500 to me, but the money does
not belong to me, and know nothing OF the pay.
nent; we had no written contract with the Far
mere Loan and Trust Company for SIS 000, 900 de-
posted wish them; don't know what commission
they were paid; the contract with them was made
before we obtained control Of the road the CON-
mission paid to Morgan Sons was $71,OOO it
was paid by Bischo1sheim although, as / said be-
fore, NO negotiation was made by him; the Far
mers' Loan and Trust Company have rendered no
account to the company; Bischofsheim 4 Co. have
made no claim upon the company for any commits
sion on the $1S 900 held by the Farmers Loan
and Trust Company; when the idea was started in
the newspapers that Bischonsheim was to be paid
IA ADVANCE OF the sale Of the bonds l wrote to
LONDON and received an answer stating that the
STATEMENT was incorrect, no commission being
charged except on what were actually sold; If at
any Time during the thirty-three years any Of the
Donds are issued they are entitled to their commits
SION IL was intended that II all the bonds were
SOLO sne same commission was to be charged; /
sought TO protect the company against having com
mission on bonds which were moi sold ana 4 tnine