New-York tribune., 1878-01-04
ERIE RAILWAY LITIGATION
rrFoRr TO STAY McHEyRY's SUIT.

Henrys suit H. Monroe County. which is ITSELF su' 10
stop rho present foreclosure OF the Erie Railway an IL ~
now proceeding. and 20 compel the Trust Company 10
foreclose the first consolidated mortgage instead
of or at least with tho second consoiidated
mortgage and thus defeat the reconstruction scheme,
came mp again for argument. yesterday before Junge
Brady 1t had been supposed thu; tie aihdayits were
exhausted except trihng contradictions OF John
Iiyingson's affidavit. New afidayits, and quite long
ones were read. charging. behalf Of Mr. Jewett tha
Mr. McIenry had Only sought the control OF Erie 10 re-
mb,se self for losses in Ills dealings In the Atlantic
and Great Western Railway Company and Cleveland Co
Iumbus Cincinnati and indianapolis stock, aud giving
history of how r Jcwct acceptance OF the presidency
OF the Erie Railway came ab)lt.
Mr. Jcwett says 10 his presidency that he was q
member Of Congress from Ohio, president OF three roads
and manager OF fourth, giving him practically as
much income as he derived afterwards from the Erie
Railway Company The reputation Of the Erie was bad
and once away TO Ohio to avoid the opportunities
OF friends TO take The position Finally lie accepted the
proposal OF 10000 for years Tl5cOoO 10 De
paid in advance lie did not then know the schemes or
Mr. McHenry and extent may have aided, unlil
tenionay. his plans, but as he discovered them
he began suits bring him, BischOfsham Goldsmith
and the IOncon Banking Association. to account
IA to his extrayagance in management, he
claims that lie reduced expenses largely in
1879 Sii7,O0o IN 1876, ard Sl,337G00 in 1877; IN
ALL between 1874 and 1879 T3412, 500. Of the holders
of the first consolidated mortgage the owners Of all OF
the GO0 except S9ii000 have accepted the re-
construction scheme than half OF the Stockholders
paying for it St5000Oo; and OF the 2li0oOoo
OF second mortgage bonds the holders Of all except
ri 0OO have surrendered their bonds ana O' 'iets are
continually coming in He admits that the broad gauge
sleeper grades sharper curves and want OF shelter iOr
mnslVe than the New-Yors Central Road hut claims
that allowance being made for these things the compir
lsOn is In favor of his management Oi Erie He claims
that McIIenrys comparisons were based on ooniound
ing Of different schemes OF bookkeeping
With regard 10 Livingston, some aifdaytts were READ
dcnOuncing hini oftous meddler and man OF no
character.
McIIeury thoroughly earnest In claiming tDat te
Erie his debtor. aud that s. H. NJ Barlow had limited
the JcweIt administration desire % compromise
Livingston was discaimed ~ an ally, and u was Verstu
that recently he had lunched with Mr.. Jcwett; TINS
seemed offend the plaintiffs lawyers. aud Mr LIVING
ston explained hc merely Invited To ln0ch IN
where Mr. Jewet and his friends were lunehng.
Judge Brady said And doubt you enjoyed tt Mr..
Evaris rc.pon led, smiling The dispute reminds me OF
the old yarorum reading Tineo DoHdos d' do"7'""%
Sir. Eyarts opened tho argument for the Trust Com
pauy lie claimed that the point Of attack Wa.
ihc reconstruction scheme and Mr.. Jcwct's supposed
favor it, That schemc was one for the coninuance 81
she Interests of the boudhoers in this property and
not for thcr destruction. That scheme 10 be car
rod under a decree 90 be carried 10 execution on
January 2i. That decree was not made IN the DARK.
The publicity OF tho proceedings and the noorcy OF The
company were aa abundant security TO the court
that an abundant opportunity had been gwen FOR
every fair examination or exposure; thar eyvery
had had the opportunity T. be heard ih1t
every interest had been considered What was ihc INIT
to the proceedings TO BE- completed uns retarded
by TIE Efforts of McIIcnry and his associates Thcy
dealt ony with the rrmodeinE ana re3rrdhs,Ag u.r ln-
tercsts of first and second consolidated mort
bondhOdrrs. Th> Grl Ave mortgages were lct undis-
TURNED That Was tho euire controyei.f. lh;1 ""n'i;
of the bonds round numbers twcn'yiVe ind HlN'ch
half millioushld put their heads together 10 &C.
terninc how aud by what energies their property.
legal and equitable. might he 50 aininlstrred tint u
"Y' ~ the s5 900 900 Of the second mort
no holder raised his voice. OF the holders 0I the rt
Iienry and his two appendant and appnrtclnt trends.
representing sol 900 The hodere of So; 10000
with simply deiering Of ave or six coupons TO the
future 10 5c still precedent lien to TO the second mort
gaze Tue injury TO thi> SDl 900 was The deierrng of
payment Of $1,000 for some years II to bear interest
ctwhilc. That the sole dcraugcnlgt % The ri-Ss
of The Hst .odltrd mortgage bCnjhodrr. unless IT
was derilkcinrt that these fcH were retarded 30 thrr
efforts to dcsroy What the others desired 10 si'e and
Wnat was the .eusaton' Mr. Evarts asked trre
va. carcfnv considered administrator decree which
accorded wish the Interest ~ the great na', az h2'd-
hoiders and hcrc "n. ms liitlr mrs. ~ h"I,i'
81 $4,000 -72Jo ANA 81 5000 81 the bona, op0-G
They came In and a.kcd that scheme natutcd - snrh
expense. with such untuimou- approval hr broken up
aud thcy. with their fol 900. b. l" tear u up
~ iher viii ~. Evart. urged that there WIS snnc-
o'Ncr motive than rrfnier>t ~ NJ bottom of surna
pioeectiug. I- claimed thar thr Monroe County suit
hrnu.h. L., NJ McllenIy was without iounda-
to4. True. bondholdrr msht sue on The bond bond
~ law. tut could not bring sllt 10 lore
close except Va rare instances That was power com
ntfcd To the discretion The trustee tO be eNctcsrd.
not ol the brnchi "i one but "i M p"IS N'.n 80, ''
trustee refused e. bring foreclosure s or thc 'r3'ce
acting 80 cortnpt that an appeal to nm ""hId u.
20 pui into MS hands thc means 10 e"nlh" hs "
coir.r. could ccs,ui que trust sue 10 forcose The
mortgage. Herr then demand nor corruption
alleged. The trustee came aud ~Ah No ohc
had asked lin furcclu-e thi- hr,t mort
grgr: that th" holder 81 Sl1,soo"pp ~ the
bonds asked him not TO that the rol.Olp hAd nr'tr
brought nj. attention any i-.liisacon The bond
holder. under the s.,Dud mortgage I'D not complain
r holicrs under the first delighted to
be rciu-taicd with lltr arrangement They dii not
bny their bonds To fussciosr but ~ bold. NJ 'ttaH-
argued that court might rc.tran an equity cut u
tie cutIiiie- before II larger aud superior '"
those 81 the suit restrained; mat M hrIl'nrjS
truo course would been tp come mao
The fort CLOSURE -ult. as b. hal right 10 dc,
nud not wait unui thr lat hour: that the court
would rot tolerate the Cnnfgc that 70 had been asleep
on negiccilnl Negligent ~ such wcllkno"h sIht
aud that DELAYING foreclosure would M 40 way serve
tnc femedir-. Whrh taking the whulcof Mr. hcil"ur}s
statements NJ true, he entitled H. nler he re-
quest Of the bondEodcrr, or hr great majority oi thrn
hc insi-lsd thai the TrJst Company bad exercised q
Wise discretion refusing 90 pursue tho fOiccOshrc Oi
thc hrst consolidated mOrkhge
IN Judg. Enoit replied at length, claiming mat
NJ Mc!Irury = sil bad larger equities aud rh,f pnt
s,s tlau the foreclosure sut-oDkiug To ihc fcmuNa
of q faifhlcs. trastc,-and the Trust Company should
have contested these questions In tnit suit that Mr. Ne
Henry could not bs compelled having special equities,
to come into suit framed by his opponents, ahd tat
SIR McIcnry. though small bOndhoIder, WAS entiticd
Ia full protection A.,
The argument Tor the defence will be continued today