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, 900
How the Money Was Distributed.
JAY GOULD ON THE STAND.

Tammany Tactics In the Executive
Committee-How ~Iago" Lane
Worked on Both Sides.
The Erie Investigation Committee appointed by
the 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 che purpose of Fastening the work and
securing the presence OF Witnesses, most of whom
reside here, It was transferred to New York.
There were present yesterday Messrs. Babcock,
Chairman; Lincoln, Wight Crazy and Carpenter.
Sergeant-at-Arms Gering was also in attendance.
X. ARCHIBALD O'DOHERTY
was the first witness called. The following is his
testim0ny:-I have no official connection with the
Erie Railroad, and never had; have some &C
equantance with the workings OF the company in
the early part OF 1872 F. 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 II 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;
! first obtained some pledges from Mr.. Barlow that
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 di-
vided among four instead of three refused to give
Mr. Barlow
ANY OF THE PROFIT,
pointing out to him that he could make as much
money as he pleased from his knowledge of what
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-
tons (the telegram. has been already published)
tine result was that everything was arranged ex-
fcept 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 4 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
Q sort OF newspaper clerk he communicated with
the Erie directors and learned Lanes plans,
which he
IMPAIRED TO GENERAL sICKLEs;
Sickles, nettled at being left out Of our plans
made arrangements and set Crouch to nx matters
with our directors, so that they could tender their
designations on the same terms obtained by Lane |;
Sickies then communicated with McHenry and
offered to accomplish the same result
had proposed Tor 100000; McHenry ana his
friends Jailed to make good their agree.
ment with me; Sickles then saw Lane and
the smaller amount his services would be alto.
gether dispensed with Lane was 80 frightened
that ne refused to put the amount In one Of Bar.
Of faith; Barlow then sent on for the money, and
1t was forwarded to sickles,, showing that the
this exaspersted Barlow and me also. and tele-
graphed TO Mchenry:-"Beware; present plans
mind to 60 ''S to Gould IN sSe up
time and reveal the plot, l was SO
ngy McHsnry asking fer
quoted me; on the 1lth Of March we carried out
our plan to remove Gould from the presidency and
give McHenry absolute control Of the Erie road !;
he events Of that day are pretty wen known; we
net at Barlow's house in the morning; there were
blk, General Mcclellan and others; after settling
our plans. Lane and myself proceeded to the Erie
onices; Lane organized the board and, by the dis
PRESENCE OF MIND
and courage accomplished the revolution the direc
Gould was removed from his position, General Dix
was elected President, w. W. sherman was ap-
to oeTs to
other authority; meantime Gould showed fight, the
place was filed with rowdies and policemen, and
the second day General Slckles appeared on the
scene and entered into negotiations with Gould,
.sd c.uds for doing sas
no doust, an agreement which sickles signed re.
s EHs the 0a an Ct claims any ssan as
have read the letter from General sickles in
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,
who deceived not only Gould, but Horace Greeley,
troll majority OF Erie stock, and asserted that he
controlled Sickles soon after that went to Eng.
ow to take ' drecsion an Of ne 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
got Archer got So Co., Hilton $2S ooo otis
$4,000; Simmons, director, got, think, $4,000;
Ramsdell and Sisson got nothing to resign; Rams.
ali the amount that was at first used to efect
change, though beard that larger amount was
afterwards distrbutedas4 Goooy Mr. Mchenry On
Gardner got $4,000, and Crouch got $50. 600; we
got our money from McHenry Bischonshem fur
Mcaenry was the owner Of the Atlantic and
Western Railroad, and for this reason wished to
obtain control OF Erie; the eve Of the last cleo
tion which took place in July, 1872 the Erie direc-
tors placed IN the hands OF Bisch0nsheim Cold
schmd, OF London. consolidated bonds f0r negotla-
ton to the extent OF $4,000, 446; the Board was
then composed or men who had not been elected
by the stockholders; the election toeK place on
bonds was $4,000, OsO; that would give about
ninetyiour and one-third per cent IN currency for
every 500 in gold; on account OF these net pro.
ceeds Bischoffshem has paid 10 the company some
thing over $4,O0O900, leaving . large balance,
which, believe,
THE ERIE RAILROAD COMPANY WILL NEVER RECEIVE,
as the London bankers VIII doubtless repay the m.
selves for their former outlay the loan 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 $30O00,O 600 in
gold; but e23, 600 OF this was required to re-
place mortgages already in existence; the amount
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 Thomas Barlow had drawn $500 apparently
to pay General Sickies for services rendered by