The sun., 1873-05-17
THE ERIE INVESTIGATION.
REPORT or THE SELECT COMMIT
TEE or THE fssEMBLT.
How the Dividends were Declared The His
tory Of the Coup d'Etnt- Action Of III"
Enropenu Stockaoidcrs--Rc X cckicss Use OF
Money Wrung from the People.

Enropeuu stock holders Reckless Use oi
Money Wrung from the People.
The select committee appointed hy the
Assembly TO investigate the affairs Of the Erie
Hallway Company have made an elaborate re-
port based upon evidence taken In New York
and Albany, and covering several hundred
closely printed pages. Owing to the snort time
given the committee In which to report, two
witnesses, whose testimony was believed TO hc
vital upon the question of bribery aud COrrup-
ton pcrtaining to legislative matters, wcrc ad
vertised Us to the time necessary TO sb sent them
selves from the state.
In order that positive and correct conclusions
should be arrived at, and no Injustice he done
to any one, IL was requisite that much more
exhaustive examination Of the books and ac-
counts Of the company he made, and which II
was simply impossible To- do in the time allowed
Conscpucn'lv the committee confined IL tnNes
tigation to the following subjects:
THE FONTS ISNEsTIGATED.
I. Whether the dividend declared uron the
stock of the company outstird ~ ny5dns, !, ~
Iebruary l93' was paid out Of the net earnings
g As TO improper cIpsnditure Of money by
TO effect the transfer of the tnanag smcnt in
March, 1872, and ~ TO the fact of a corrupt con
tract in the negotigtion OF It's bonds, or felm-
bursemcnt out Of the treasury of the company
for or on that account or other accounts.
g. As To payment Of money to influence Ie2is-
Irregularities.
After rccting tho fact Of the payment of divi-
dends on the preferred and common stock for
the year is7", the committee say =,
The testimony ~ Mr, Levi, Comptroller of
as showing that the method or making up the
statements OF the Erie Railway Company upon
which their dividends were declared, is identical
with that adopted by all the roads controlled by
the Pennsylvania Company, and allowing that u
H. proper and In accordance with the view OF
Mr WaIg n. Il
account Of all additions TO the railway not
Necessary to keep the road and equipments IN
from the testimony, that this dividend
was earned, and VS. properly declared 4;
followed up, viii greatly Increase the capital Of
all railroads, and has already led to the donb,
ling within a recent date Of the nominal capital
Of the New York Central and Of the Lake shore
roads. Whatever course is finally deternined
upon and adopted 10y the Legislature should he
! taken by means OF general laws, IS there Is no.
thing in the recent action OF the Erie Railway
Company that warrants any special leg .lation.
As TO Improper expenditure Of money in tho
transfer Of management, and as to reimburse
| ments ON that or other accounts " suCn eN-
penses from the treas Iry Of the Eric Railway
TnE BRrTisH STOCKHOLDERS.
In tho latter part Of 1871 the British stock
| holders rrprcsented by Bischorsheim and Gold
| schmidt of London and SOnthmayd and others
| In the United states determined upon vigorous
measures 70 displace the Gould direction, and
/
! procure legislation for that purpose. He placed
! $l3,JO IN the hands of AttoTney-Generh Bar
! low, who employed as counsel Messrs. Trem ain,
Hale. Smith, Mcfarland and James Z. Carter.
paving them retaining fees out of the funds
| placed In his hands.
| Railway COMPANY, which occurred on that d1N
| put the parties in interest In the proposed suit
IN possession ot the road, thus removing the
| necessity Tor bringing action.
1t has been charged that smith was retained
because he was member ~ the Legislature NJ
Z the fine. Hut there W. no evidence before the
committee 81 owing such 10 he the case.
From all the circum-ta your committee
nnI no reason to doubt that the Attorney ten
eril ncted from proper motive, In this matter
The statute Il 1870 rcquires all actions for the
| removal Of directors of a corporation TO be
hrough, by tho Attorney-Grncrai. under which
It becomes proper for him To- employ or desiR-
cecdcl to do, hut without, In the opinion OF
! your committee. IN any manner COMPROMISING
/ himself a, the law onircr OF the state.
THE corr D'ErAr
/ was arranged by BARLOW. Crouch, and Sickles
b BI-chon holm a Go. enclosed 4 credit to Barlow
IN favor of Sickles for 5000. The arrange
ment was carried out, the old directors tesisn-
ing fora price, and a new board was elected
the nominees of the English stockhoiders,
which gave thom abe plute control OF the Erie
road. MIR. Gould wa evidently not unaware of
the matters In urugress, but chose 10 allow the
he was 60 brinsto his aid his old ally, an iniunc-
tton. TO he served at the opporiune moment
ami thus To- thwatt the scheme midway In exc
cution, but the aggressive party were 30 relk-
less 10 heed tins restraining power and 10y de
regarding the injunction. got actual posses ,ion
ofthc hoard and Offices Of the company.
Gen. Dix was elected President, II. W. Shcr-
man. Treasurer, and :. L.. NJ. BARLOW. counsel
This action was made legal next day bv Gould
rcsiguiuc the presidency and causing reelection
Of the new board, the reported con liberation
for which was the conarmation of certain re-
leases from claims by the Erie road.
Tic amounts al. i.hursed for the reform A
Erie To the vnrious director who resigned were
s6iFH each 10 Lane and Ihompron, $4,000 -
simmons. $4,000 To- Archer. and S25OO1 each Ia
otis White, and Hilton, making IN al ssMeO
Mr. O'Doheity afterward received t25,GD, and
Gardener $25.0IG. Crouch was also paid $iOOD
and Gen Sickles on his return TO London was
an M or s wSs also y, rendered. HSs S
Sickles amounting to about tG1Opl, for disburse
ments aud expenses, Including his hotel bllll
directly paid out Of the treasury Of the Etl'
Company. for which vouchers were shown. lh'
couI, d'tdt was stated before the hoaru hy Nc
Henry himself In july last, as per Barlow's tos
7 timuuy 10 he about S,t0Vpl.
MOTIVES OF FOREIGN STOCKHOLDERS.
McHcnry and BischoGsheim & Co.. Of London
appear most prominent ~ the persons clalminl
70 represent the great BODY OF English stock
holders, and as there l. no evidence that thcS
permanently owned any cons crahlc amount o
stock before July, ls!2 hut that they were large
/ ~ interested In the Atlantic and Great Western
/ Railway, the committee deem IL their NANTES
Intention to benefit the Atlantic and Grca
! Western Railroad. which must have been the
chicf object In the overthrow ~ Gould.
Aside from the motives which inspired th'
! overthrow ot tho Gould direction, the manner
and tho means cannot but be regard ID win n,
3 everest Recommendations The spccterle II d
United states Minister tpa foreign court leaving
| hia duties there and lending himself In the exc
1 tion Of a scheme of this Kind Is not calculated I,
+ heignteu our respect tor or to inspire cOnhdpurt
in the integrity OF the public service under oui
Government.
As 40 REIMBr RSEMENT or kNPRNsEs.
II is in evidence that the bill of Gen. sickle.
| for expenses and employment Of counsel hy hin
and others, amounting to about $4,000, wa
: paid oul OF the Erie treasury. At the July cleo
/ tiun Of directors Mcllenry and other foreigI
/ parties represcnting stock Of the company wer,
I present, and claimed that the whole amount o
si5lUO ought tO be a charge upon the company
and after the election, at u stockholders meet
/ ing at which S5O,0J,UUO Of stool, were represent
cd, IT, was voted unanimously that the director
/ Of the Erie COMPANY should take an early
method Of relmbursing all the actual eNpendI
tuTcs incurred 10y those few stockhOldcts.
COMMISSIONS on LOANS, ~ PER CENT.
"As to whether this ia an unusual comunissiou
on the s1O1O,O1 there seems to be some conflict
Of opinion, but your committee are of opiUioi
I that under all the circumstances the rate o
commission at that time wis not too large upoI
the amount Of b0uds actually negotiated" Hu
! upon the Ss}OD,oh which were 10 he exchange,
the rate of commission seems too high, and ma
! have been Influenced bY past services renGrre,
itk BlsrhONsNciu in eneClnE the revolution %