New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-08-06
ANOTHER RAID ON ERIE.
sTocK-JoBBNG EXTRAORDINARY.

/ THREE FICTITIOUS SUITS TO BE BROUGHT IN JHH
"BEAR" INTEREsT-ILLEGALA ACTS OF THE PRESENT
DIRECTORS MISUNDERSTANDING TO THROW
THE COMPANY INTO BANKRUPTCY-THE SUITS
DENOUNCED AS sToCK-JoBBISG MOVEMENTS.
For some days past statements of a startling
character have been in circulation in Wall-st. re-
garding the Erie Railway and its prospects, which.
if correct, would seem TO indicate that this his
| toric road is about TO enter upon another
era Of bitter litigation and acrimonious controversy
| These statements which were numerous and varied
were to the effect that series Of lawsuits were
about to be begun against the Erie Railway Com
pany by persons who claimed to have been injured
by alleged violation of official trusts the part
of the present administration, and by nOn-fulfll-
ment of its contracts with other corporations.
Close inquiry and investigation elected the in
formation that the most important Of these
suits would be brought by stockholders
of the Company, and by bondholders of a railroad,
portion Of whose securities had been guaranteed
by the Erie Diligent application for the facts
met by statements that the first SUIT would be
brought by q holder of certain amount of the
common stock and the second by an owner Of tho
Erie preferred stock. These suits, it expected
would be brought almost Immediately the COM
plants in the preferred suit to charge that the Erie
directors had violated the duties of their office
by issuing bonds, the proceeds from the sale
of which had been applied to the payment of the
last dividend On the common stock. The preferred
stockholders declared that this proceeding lie
gal, inasmuch the preferred stock entitled to
an annual dividend Of seven per cent, which must
be paid before any dividend could be paid on the
common stock.
The third suit, however was to be the most i'm
portant of all 1t was to be formal demand before
the courts for the adjudication of the Erie Railway
Company as a bankrupt for the nOnpayment of its
obligations. The necessity for this it alleged,
had grown out of the Erie's refusal TO pay the
interest on the bonds Of the Boston, Hart
ford and Erie Railroad which it had guaranteed.
Several prominent lawyers had been mentioned as
having been retained by the compliments among
them being David Dudley Field. ex7Judge Fuller
ton, and Aaron J. Vanderpoel. Inquiry, however,
failed to connect David Dudley Field with the liti-
CATION, but ex-Judge Fullerton and Mr.. Vanderpoel
are identified with the movement.
For the purpose of obtaining some information n
reporter of THE TRIBUNE called on Mr.. Vanderpoel
and asked him relative to these suits Mr.. Wander
poe said he had heard rumors of these suits for the
past ten days he declined to give any information
relative to the matter. Whatever suits of this
ture might be proposed or intended they were not
in such shape as to be made public now. Mr. Van
derpoel added that if any such suits were brought
good faith, and not as stock jobbng operations
He might have something to tell today or to-
morrow, but could not promise with certainty.
Ex-Judge Fullerton was next applied to for in
formation, but be declared that he had nothing to
impart as yet.
s. L. NJ Barlow counsel for the Erie Railway
Company said that he knew nothing of the projected
suits with the exception of the preferred suit,
This latter suit had been agitated for Fix months
past and was simply absurd. He characterized the
projected suits as stock-jobbng maneuvers for the
purpose of depressing the price of Erie so as to
enable the "bears" 10 cover the shorts" at q
profit
Efforts were made to ascertain the names of the
principals in the suits, but without effect, the pre-
lminaries not having been sufficiently advanced to
allow of their publication.
Jay Gould having been mentioned as party to
the projected suits was applied to for information.
He said that he had heard of these suits time
since through friend and believed that they would
be carried through, but personally he was not con-
nected with them.
AS much of Erie's later and eventful history il
connected with the Boston, Hartford and Erie Rail
road few words descriptive of that road may
not prove uninterestng. The Boston, Hartford
and Ere was organized for the purpose of
opening a through railroad from Boston 10
the Hudson River, and was to include
the Norfolk County, the Hartford, Providence
and Fshkll Railroads and the extension of the lat
ter by new constructions. According TO the allega-
tons of complaint in the interminable Erie litiga-
ton, it would appear that it was the determination
Of the projectors Of the Boston, Hartford and
Erie Railroad to build this road and make
the Erie pay as much possible for
its construction. With this object in view,
John & EldridQe the then President and principal
promoter of the Boston, Hartford and Erie, with
the aid of confederaes in the Board of Directors Of
the Erie Railway Company, managed TO secure
stock aud proxies enough to control the annual
election of the latter corporation. Upon the
organization Of his Board he elected
President of Erie Alexander S. Diven,
Vice President, and Daniel Drew, Treasurer.
Almost the first act of this direction was the ratih-
cation of contract between the Erie and Boston,
Hartford and Erie whereby the former was to
guarantee $5,O0OOO0 Of the seven per cent
first mortgage bonds of the latter corpo-
ration falling due in 1899. The interest
on these bonds was paid for a short time but pay
ment finally stopped and was never resumed. IL 10
upon this default that the bankruptcy proceedings
viii be instituted. The financial affairs OF the Bos
ton. Hartford and Erie Railroad became bad and
rapdly grew worse until finally the trustees undera
first mortgage of 800 executed March 49, 1865.
foreclosed and reorganized the corporation in the
interest Of the Erie Railway Company, under the
title of the New-York and England Railroad
Company. Frederick A. Lane, who was the Presi-
dent of tho Boston, Hartford and Erie corporation
at the time. refused however, to recognize the re-
organization. He resigned the pseudo Presidency
of the corporation, however. but went through
the farce of having John Rooney an employs in his
Office elected President. With view of ascertain