, 1873-04-07
THE ERIE INVESTIGATION.
Tcatiinony at President Watson nnil
Auditor Dullula.


Tho following Testimony Inns boon giyon be-
foro tho Eric Investigating Co1nmlttoc, III Bcs-
Blon at Now York -
7. q. Watson tost'sscd' I am President Of
last July previous to thia Ind not boon con-
tloctc,l with 1t In any way am not acquaint-
cd with tho circumstances attending It's change
Of direction oxeopt by l'oaraay l,nwn LEARNED
bcon giYon bcroro this Committee, tlan lad
lnown previously from au other gourocs know
nothing Of money boing used or that occasion,
or who received III tho laat dividend Of tho
Company was DECLARED 9n tho alth ay Of Fobru-
cont on clio proforrod stock, and W OIL tho COM
mon do not romo1nbor tho groaH anlotlut; that
dividend waB doclarod on tho basls Of my stato.
mont Of the 31nt Of December, out Of tho oaril-
know when tho preceding atato1nont was made.
This Is tho ouly ntatomont uado during my i'd
ninistratton. Thoro WINS statement nlndo at
tho moo.ng Of qtootholaors ; RS, IN Fry, hit tito
eSgs nSt Sa aeo IT wss cy SsSy
indeed to mako up this Btatolncnt OWING to Tho
irrcgrlarity with which tho books had previously
boon kept. Tho statcmont made up had no
roforonco to tho July statement. It wla made
groat doal Of labor md Investigation, because
tho ..books hud not thon boom posted up.
It had boon impraotlcablo to get thom roatod
up, for 1t wns only in October TINT obtainod
willing to hnvo dcclarcd tho Into dividend On
anything but tho pro0ta Of the road. spent
elk wooks, working ut night sometimes, and
mado worry pofnstaiung investigation, nnl only
declarod It upon the fullest conviction that It
waa enrilcd. I havo made change In tho man
ner of keeping Rccounta sinco that time. hnYe
tried to got tho accounts In shape, no as to show
how ovory dollar is paid there Is nothing paid
out now which does not 60 upon tho boo1ts show
k1~ a. In
atraotion and repair accounts wore not properly
kept bcforo camo in; re have underworld to
make d oloar 1opnratlon Of these. It seemed to
bo tho Wow Of everybody who was present at tho
was not moro tIan one-half Of por cent, or a
quarter. Of | per cent, saved on tho COM
mon atock, 1t ought to be divided, and that tho
not earnings Of tho stockholders should not bo
applied to the construction Of tho road or to it's
enlargement !; 1t Boemed to bo reasonable TINT 1t
should DO 80, and therefore resolved as soon as
I could got q competent man to ta,.o complete
separation Of what was expended for construo-
tion and for maintenance, and hayo endoayored
road, III which there are about 5000 employees,
1t will bo soen thnt you cannot got 1t mado out
at once by tho cost OF construction moan In
the substitution Of IN iron bridge for wooden
ono, Or OF stone culvert for d wooden oulvert {;
tho difference in the cost OF the ono over the
other would bo charged to tho construction or
capital account; so the substtntlon Of steel rails
for iron ones Ia proper charge to tho capital &C.
count-that i8 tho difference In yaluo between
or twenty milea, or Of sidngs, wore chargo
able to tllo capitnl ncoount, DO. The rcplaco-
mont Of worn-out rolling-atook would not DO
charge on tho capital account; but 1t 1t was IN
Of tho old s0~foot passenger cars, which cost
about 90 900, was replaced with 60-foot chr, at
a cost Of 824, 600, then tho difference betwoen
the e6: 600 and tho e24 900 Is Justly chargeable;
think If thore il IN honest intention to
ty about it; 1t IL d work of 1abor; thero never
has boon anything Of tho kind before; can got
o statement Of what has boon charged to con-
atruetion and what to ropaira account, md sub
NIT II to the Committee, which will show how
dollar; will have it prepared by Monday; tho
bnsinosB Of the road has boen better during tho
past twelyo months. than before, bocauso wo
hare bcen getting bottor ratios and putting more
have boon larger relative to tho o1pondi-
turca; this systom Of declaring dividends,
# followed up from yoar to year, would incrcase
tho Indebtedness Of tho Company so long rs
construction was going on, rs tho foad is boiug
principle TINT capital would increase from tho
time tlat tho frst Bpadoful Of earth Yas dug II
the road was complete before they began to work
1t, thon thoro would be no additional charge for
." '@H"t ".+ 49,
earnings would be divided among tho stockhola-
araor II shn zane 10 t see e. Ut 70 buy
thoy 1na sr tpo. Sp J,,t,'a pun 49, 81 a. tno
iil:d thore Won 1ts ;nda3,nit, ~ ~ 10y
n, cvta,s;nn ~ w. r., ~ - enaI
be- increnaod as Tho rocd T. " onIaroe a-tomSa1 mS
or improved IN value-anything that would tend
~ 5ysi,;,n snI t'oo - sno UtRonsS, AAG WIG
Gomnany % a,n,d ~ to.dou s'unvu ronrasont sno s1
ond t,,ayso s,,n1,3d - muay ,sty aopaosent g.,
tn ~ roa ~ at;o ~ &c terss t aaaoa
ond that atoc1 attor 1T .o ~ 1ly5r "
nstnai ~ Al M nm r,8@r ac"uoiWtad t., 2au2
wav VII, to ~" o , ~ genot
NM stntoment ~ ta racs;n,a ~ ~ a ~ ot euo
thnt accruo to him ind vidnaiiv. ri sua netos
nnnn that controct ~ ,naomnG H. 1oono9
,pon It ~ tomnora, no 1n"t1a. o,, uus lto !2oaea
Gp,n,anu 70 n'st ~ ~ ,h th;.ss is;y July LIME Tue
coat nn cnEning n he.a mu 1nrd ~ aucn !oss
tIin1a that raonirca chonae Ror9a 9soas .1aa many
L,iIte sAaS soaa19u o1oIs1; 1oue was moi
aanaot p,s - 10y, ano sno Elao nn!iloaa company
iaana Ininos ua ~. u EGou eGnoison n day
t hase M9tSoo vety ungently slhco nave been
4glus pAs tiae!e 4lo great mhny matters tint