The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-03-22
THE ERIE INVESTIGATION.
The Astonishing Story Told by r.
Archdall O'DOherty.
How the English Shareholders Obtained Control
Of tho .Road-Directors and Officials Bribed
to Resign-senators Receiving $50, 600
How the Money Was Distributed.
JAY GOULD ON THE STAND.
His Story of Last Years Coup dEtat-
Tammany Tactics in the Executive
COMMUNICATION "Iago" Lane
Worked on Both Sides.


COMMUNICATION "Iago" Lane
Worked on Both Sides.
The Erie Investigation Committee appointed by
srhe Assembly held its first session in this city
yesterday, at the Fifth Avenue Hotel. The investi-
CATION had previously been going on in Albany.
but for the purpose Of Fastening the work and
securing the presence OF Witnesses, most of whom
reside here, 1t was transferred to New York.
There were present yesterday Messrs. Babcock,
Chairman; Lincoln, Wight, Crazy and Carpenter.
Sergeant-at-Arms Gerng was also in attendance.
r. ARCHIBALD O'DOHERTY
was the first witness called The following is his
testimOny:-l have no official connection with the
Erie Railroad, and never had; have some &C
equaintance with the workings Of the company; in
the early part Of 1872 +. A. Lane saw some OF the
Erie directors, ana arranged with them that they
sshould resign their positions in consideration OF
receiving some pecuniary considerations; he COM
municated with me and asked me If the English
shareholders would pay for the control Of the Erie
road; / telegraphed to McHenry the same
might; his replies for some time were
in dispute; he finally agreed to pay the amount;
in telegram, dated the 10th OF February, he de-
desired me to communicate with his agents in
New York: did so, speaking to Mr.. Barlow first;
4
the affair was to be kept secret that the amount
to be paid was not to be reduced, and that he (Mr
Barlow was 10 have no share in the profits Of the
transaction; the amount agreed to be paid was
one and half millions; the next proceeding was
made by MIR. Barlow, who wanted the profit d.
yded among four instead of three; refused to give
MIR. Barlow
ANY OF THE PROFIT,
pointing out to him that he could make as much
was going to occur; he replied that he did not
want to speculate in the stock, but he sent tele
gram to McHenry, suggesting that it would be
well to advance money to carry out my sugges-
tions 1.-THE telegram has been already published) !;
tine result was that everything was arranged ex-
tcept the payment OF the money; McHenry sent
out man by the name OF Crouch, who was placed
at my disposal: not thinking he could be Of any
use to me introduced him to Messrs. Day Bar
low, to assist them is the lobbying operations
which were being carried on in Albany; having
been in the employ OF the Erie Railroad before as
sort OF newspaper clerk he communicated with
the Erie directors and learned Lanes plans,
which he
IMPAIRED TO GENERAL sICKLEs;
Sickles, nettIed at being left out Of our plans,
made arrangements and set Crouch to nx matters
designations on the same terms obtained by Lane ;
Sickies then communicated with McHenry and
onsred to accomplish -, the same result I
msns with me; scSies then saw 1'i Lane sSa and
the smaller amount his services would be alto
gether dispensed with; Lane was so frightened
lows kilograms, who also tsOk part in the breach
Of faith; Barlow then sent on for the money, and
pes on 80
graphed 70 McHenry :-"Bswars; present plans
mind to 90 to Jay Gould in the mean
time and reveal the plot was SO
iniormaton Barlow soothed my angry feelings and
quoted me- on the 18th OF March we carried out
our plan to remove Gould from the presidency and
give McHenry absolute control Of the Erie road ;
net at Barlow's house in the morning; there were
Dix, General Mcclellan and others; after settling
our plans Lane and myself proceeded to the Erie
orices; Lane organized the board, and, by the dis
PRESENCE OF MIND
and courage accomplished the revolution the direc-
tors whom we purchased retired one by one then
was elected President, W. W. sherman was ap-
orders were given to the officers to recognize no
other authority meantime Gould showed fight, the
place was ed with r9WSes ana and
scene and entered into negotiations with Gould,
sd GeuSs for doing tns
no doubt, an agreement which Sickles signed re-
L. En the Existence q claims any su ssaas
Management was strenuously denied, but l
have read the letter from General sickles in
which the agreement was alluded to; Lane, lear
ing that the plot would fail, told Jay Gould Of the
whole plan, SO that Gould was as well informed as
ourselves when we walked in on the morning Of
the 18th; Gould relied on an English banker
CALLING HIMSELF LORD GORDON,
he to
troll majority OF Erie stock, and asserted that he
controlled Sickles; soon after that went to Eng
Ian hnuIn Vn nd nff In hu 10
low to take direction Of measures which
were about to- be instituted for the re-
in the sincerity OF Mr.. Barlow; / saw Barlow pay
by check $67. 500 to Lanes agent Henry thompson
So sss}an 1t
$4,000; Simmons, director, got, think, $4,000;
Ramsdell and Sisson got nothing to resign; RAMS
all the amount that was at first used to effect a
change, though heard that larger amount was
the eve Of the July election; myself got $4,000;
Gardner got $4,000, and Crouch got $4,000; we
got our money from McHenry Bischonsheim fur
McHenry was the owner OF the Atlantic and Great
western Railroad, and for this reason wished to
ton which took place in July. 1872, the Erie dlrec-
tors placed in the hands OF Bischonsheim Cold
scnmid Of London co9soidated bonds f9r negotla
then composed OF men who had not been elected
by the stockholders; the election toeK place on
bonds was $eooo,oso; that would give about
nnety.four and one-third per cent IN currency for
every 500 in gold; on account of these net pro-
seeds Bischonsheim has paid 10 the company some
thing over S4,oo0,sOo, leaving . large balance,
which, believe,
THE ERIE RAILROAD COMPANY WILL NEVER RECEIVE,
as the London bankers Will doubtless repay them.
selves for their former outlay the loan was issued
under contract made on the 9Th OF May, 1872; the
contract is binding on the Erie Railway until the
year 1920 the mortgage under which these bonds
were issued was for total sum OF $4,000, 600 In
gold; but Sas, 100000 OF this was required to re-
place mortgages already in existence; the amount
realized by Bisch0Ysheim q Godschmid was about
100000 In gold on the sale OF the bonds; in add
ton they have got one per cent half yearly on
the interest; General Dix was President
OF the road at the time the contract was made;
published in the Times an Erie voucher, showing
that Themas Barlow had drawn $50, 900, apparently
to pay General Sickes for services rendered by