New-York tribune., 1873-05-17

the July statement, swore that t was state
company Tor the first six months the year eee page
ESQ II showed excluding the dividend on the preferred
stock
Total earnings 92l
loal tAFe4scs.'ss of-JV
N.ts.rri,y. .............. SE1.a5
On tho 'onIrry the statement made up by $ H. Du.
nan, tae present auditor OF tuo company. ana upon
when The February dividend was declared showed Tor
the same identical six months: .
I.'ll & e.Iias. Ssg2ss ss
Ne. ~ gg7Ol9
Csee exI.bit No. i6, pages $40 anu 5i7j
Mr. Duuau testified shat the statement presented by
hun correctly drawn from the books aud accounts
former auditor. Again. Prcsd WatsOn's testi-
mony TO the effect snit he mad TO satisfy himself,
gone carefully through books ana accounts OF the
Company. and was satsn.d tnat the statement OF
Auditor Dunan correct T4e discrepancy il the
Two stttcucht my De acGodnod IOr III part from lhe
fact that ina Mr. MOrOsiuis statement the rentals and
interest the mortgage aud floating debt are added 10
menttncy Omitted but brought into the profit and loss
account upon which the dvdcuds were declared. Mr..
Watson claimed that the money which should have
been IN tile Treasury, with winch to the dividend,
proper pay back out OF the proceeds of
the foreign loan AT the needing which declared tho
the ground that the act ineGpedent while the
Company borrowing money TO Increase It's ttcliues
and pay interest its deDt TIe other directors 13
IN all, based their acuOn upon the statements Ol the
ItoslH hli mr watson, dnu Lle AuIOr, without any
personal AnOweOgo VI tner OWd IN relation 10 Ehe prOh
OI tle Company.
PRESIDENT wATsON's INTEGRITY.
The testimony much in conflict that your commit
tee come TO absolute conclusion upon this
branch is though. but Just state that they do
believe that the present officers OF the Erie Railway
Company have knowingly falsod the statements made,
a. taken from the books of the company. The new
Auditor claims TO have found the books in disorderly
condition and to have introduced new system of ac-
counts These may, and probably have led TO the
CONFUSION and discrepancy stated. The witness Horace
CaIh ana Others gave evidence that the expenses OF
rdiiroauing had, Of late, largely increased. Audi
crease OF expenses, which could hardly have
been unless an undue amount had been car
Ird to construction account aud too lttle allowed for
appreciation cd trscS aud equipment Your Committee
bere take occasion 10 say that they have the fullest
OF the Erie Company. and believe that he Is earnestly
tudeayoUrS promote the welfare Of the great Com
Jiuy OF which De Is the head. and tha the affairs OF
ta road are being conducted by Inn with the sole pur
IOse OF reosta9 i6bug its ere it aud Of economzng
is revenues. III" tJsk of making this road paying
Investment it, stockholders easy With
is broad paus, anG It's heavy grades the Enc Railway
Is, on that o one oil the most expensive 20 operate
partial Offset 70 this Is its proximity TO the coal
very large. Ldre amounts Of convertible bonds have,
under former aduui,t t:aJns, been issued the
ruiuOus rates and aftcrward converted into stock,
which now stands at It's par value aud on which diy
comes from The traffic passing over the railway The
as shown by the stltemrnt for the year 1872; are
about S12oOOoOOO. This sum will bc considerably in.
creased II the proposed reduction Of gauge and
dOubie-tracking is proceeded win. To make a fair
economy and wise far-seeing ana energetic manage
ment. The committee are fully justified in aluding
thus TO this great highway OF internal commerce be-
Tween the anu the lakes aud the great West.
because 1t Is matter Of pubic concern and interest
and the LEGISLATURE may very properly and should, We
believe restrict by statute the formation Of any unprOf
stable alliance Complications between different roads
Dc limited in creating debt.
FRAUDULENT EXPENSES or THE COUP D'ETAT.
As TO improper expenditure OF money IN the transfer
OF management, and as to rombursements on that or
other accounts Of such expenses from the treasury Of
the Ere Railway Company. On commencing the exam
Ination the first witness called Attorney General
Barlow From his ties imony 1t appears that, the
latter part of the year 1871 James McHenry, esq Of
London. aud other English stockholders, who
represented on side by the bankers Bis
choGsheim and Godschmidt. also Of London and
another called the Heath and Raphael party,
mayd and Others determined upon vigorous efforts TO
djsplaee the Gould direction tlen managing aud con-
trolling the Erie Railway Company Accordingly Gen.
kckes, having obtained leave OF absence from his
sfmed with the necessary authority aud means TO pro,
such legislation aud TO institute such proceedings
In the courts a. would result IN the desired change OF
management The objects OF the suits to be brought
were twO-told-one to remove the officers Of
cali them 10 an account for alleged misuse
aud misappcation OF tue property Of the corporation
Accordingly Cen sickles III letter dated Dec 80, 1871
informed Gen Barlow tndt he was authorized TO employ
counsel. aud requesting hs personal cooperation, and
king him TO indicate ne names oI sch associate coln
a. ~ would insure vigorous prosecution O the neces-
baud e sum $1,000 for disbursement IN the matter
lie afterWurd inclOsed 81 900 more.
Tho Heath ami Raphael party addcd 70 these sums
81 200 making In al $l350 placed in hthC hands OF
Attorney General Barlow Mr.. BdrIOw' at once pro
reeded % CmplOy as counsel MeSsfh Ifenaln' Hdle
smith Mcfarland. and James q. Carter, paying them
retaining fees out Of the funds placed ID MS hands
Delays occurred IL Thought advisable 10 nfst OBJ
tain passage the Legislature Of Ulu 30 Jat the
officers OF the company cOulO be suspended IOm once
while the suit progress Dill was d5O
repeating the sO-calied Classification act But at the
time neither Of these bills bad been passed by tue
Legislature. Preliminary steps were being taken ot
the commencement OF the suit This was the bluaIlOn
Of matters on the lith DAY OF March, lo2 ,
The coup dciat Ia the ganagonent VI the Erie hai-
Company, which occurred on that day, put the par
ties interest An the proposed suit IN possession OF the
road thus removing the necessity for bringing action
and consequently none WAS brought. Inc passage Oi
the first named bi also rendered useless Ibe Ol
repeating the Classification act afterWard passed
with little n any opposition. The greaJof part OF the
by him for counsel fees ana other expenses, and the
balance Of E3,S0l 10 was returned by check 10 Cen
6iekes, with detailed statement 10 Items disDuroed
Gen. Barlow was solicited by Slckes, In let
ter to retain this balance IN his hands for personal
services but which declined, and Tor which gave
bis reason (see letter, page s. printed eyIaeuoe The
iestmODy Of Mr. 5Outhmayd 10 Ike effect (see eYi-
dsDee page f IL has charged that the retaining
OF smith ia cOnsequenco of his being member OF
the Legislature al the time But there was ~ evidence
committee showing such ~ DC TIE
BarJow swears positively that he mol retained.
and SOuthmayd testified tat IL had NO efence tO tnt
f.c fDages 7b aud 55) La cOnsutdsOn between these
swo M VA decided mat tho best selection would he TO
,sk tne counsel hat had boen employed In the Ramsry
i,tI1aton These we're fireman.. hae, anu Smith The
parties named were al iei%insa =. lHg saiIv u's sa
ere paid tLc same fec. M Shntb du LOT dIalt either
- t'f nm. tr,.eueq aud diI nUF appear OeiOie