The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-04-24


The Erie Railway Investigation-For-
eign Spectators and American In-
terests.
The legislative investigation into the affairs
of the Erie Railway Company closed Yesterday
and the committee are now about to prepare
their report. Their duty is plain one. Much
time has been consumed in the inquiry into
alleged cases of bribery and corruption forced
upon the committee in the course of the in
vestigation, and the suspicion has been excited
that these side issues have had for their object
the concealment Of the real evils Of the present
Erie management But however strongly the
practices of railroad corporations at Albany,
they cannot evade the duty of placing before
the Legislature the facts that have been devsl-
oped in regard to the operations of the re-
formed Board of Erie Railway Directors and
the foreign stock spectators, without convict
ing themselves of being swayed by the very
influences they affect to condemn. Their re-
port must be truthful fearless and impartial,
regardless of all interests save those Of the
public, or they will find it difficult to persuade
the people that their official honesty is any
greater than that of the average Albany legis-
lator.
The Erie Railway is a great public high
way, one of the main arteries of the
commerce of the country. Its stock
holders enjoy valuable franchise, in re-
turn for which they are bound to manage
their road in o manner consistent with the in
terests of the people. The prodigality and
gross usurpation of jay Gould's management
are notorious; yet even under that rule the
road itself was we'll cared for, and the public
we'll accommodated It has been charged that
the directors who have succeeded Jay Gould
and his associates run the corporation in the
interests Of foreign stockholders and specula-
tors and to the damage Of American interests;
that the funds of the road have been used to
pay the cost Of effecting the overthrow
of the old Board; that an I'M
earned dividend has been declared by
increasing the debt Of the road at the bidding
of English brokers, who demanded it for
stock-jobbing purposes ! that while the Com
pany was thus saddled with increased burdens
the necessary repairs OF the road and the roll
ing stock were neglected that scheme exists
for saddling the Erie Railway with the burden
of bankrupt corporation--the Atlantic and
Great Western Railroad-in order that the for
eign holders Of the worthless stock Of the lat
ter may get back the money they have lost.
1t is the duty Of the committee to say whether
any Of the money expended in effecting the
overthrow of the Gould usurpation has been
paid by the reformed Board Of Directors /;
whether the dividend declared on the Erie
stock was paid out of the actual earnings Of
the leasing of the Atlantic and Great Western
road by the Erie, or for the consolidation Of
the two corporations in the interests Of for
eign stockholders in the former.
| The committee have found that among other
payments sworn to have been made by
the English stockholders Of Erie for services
performed in their interests, is one item of
twelve thousand dollars to Attorney General
Barlow for disbursement to other parties.
This amount has been paid by a vote of the
reformed Board of Directors, and the voucher
and receipt have been produced before the
committee. Another voucher and receipt for
fifty-nine thousand dollars have been put in
evidence, which was wholly for services per-
formed in the interests of the English
stockholders, and the full amount of which
has been paid by the Erie directors. In re-
gard to the recent dividend, the evidence has
been conflicting; but the Erie directors, upon
whom devolved the duty of proving that the
dividend was earned by the road, have failed
to produce such proof. They have not shown
by figures that they earned, in the last half Of
the year 1872, sufficient to pay the dividend,
some one million seven hundred thousand dol
lars, while it has been shown that at the end
of the first half Of that year, after
paying the dividend on the pre-
ferred stock, they had only o
surplus Of ten thousand dollars If the money
had been earned and had really been in the
hands of the company at the time the divi-
dend had been paid, it would have been easy
to have shown where it was received, where
and by whom it was deposited, and when
and by whom it was drawn out of the bank or
the treasury of the road for the purpose of pay
ing the difference The failure to prove the earn
| ing of the money by positive evidence, when
the proof could have been so easy, leaves the
weight Of testimony against the directors.
But if the dividend was really earned it
should not have been paid in the interests of
foreigners while the necessary repairs and
equipment Of the road were neglected, to the
damage Of the American public. The testi-
of Mr. Archer, an ex-vice President Of the
road and now its freight contractor, proves
conclusively that the road, locomotives and
cars have not been properly repaired and are
not now in efficient condition. AS to the Eng
l;sh cchanna Of consolidating the Eric md