The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1879-08-20
LANES M.HENRY,s FAILURE.
A Jademast for ee 900 900 in Favor of tn,
Erie Eailway-His Connection With tn,

A Jadgmest for % 100000 in Favor of the
Erie Eaflway-His Connection With the
New York Tribune.l
yoxpoS. Aug l5-The well-known financial
xRent, James McHenry, is unable to meet his
IiapiIlties A tremendous run exists az mis-
ONCE in Victoria street, Westminster, His
liabilities are estimated at <o,UU0,OU. The
assets are believed to be very poor.
The failure of Mr.. McHenry was not
wholly unexpected in this city by those IA
miliar with his affairs. 1t Is thought, how
ever to have been precipitated by the judg
ment against him, rendered last month by
the master of tho rolls in the court OF chan
Gerry. The judgment was for over $2,OOO,O00
and in favor of the Erie Railway company.
Mr.. McHenry had appealed from, the de-
cision of the court, but 1t is not known
whether he had obtained, pending the ap-
peal. a stay of proceedings, as is usual in
this country. One of the New York counsel
for Mr.. McHenry gave last evening the fol
lowing account OF the suit:
SIT grew out of the purchase OF large
number of shares of the stock OF the Cleve-
land, Columbus, Cincinnati and Indi-
annapolis railroad. The control OF that
road would have given to the Erie road
an outlet to the West over the
Atlantic and Great Western road, in which
McHenry was largely interested When
Mr.. Watson was made president of the Erie
company, he and H. B. Hurlbut OF the
Cleveland company, s. L. M. Barlow and
McHenry entered into an agreement In lsI2
to buy controlling interest in the Cleve-
land road McHenry returned to Londons
having given to Mr.. Barlow q power OF
attorney to act for him. In fulfillment OF
the contract, nearly $4,000 shares of stock
were bought. President Watson sent Erie
bonds to London, which McHenry sold
there. He used a part OF the proceeds to
pay for the stock. About that time the Ohio
Legislature passed law that in order for
one road to lease another the consent OF
two-thirds of the shareholders of the leased
road must be obtained. The scheme conse-
| uuently failed, but the money had been
| used and some one had to bear the response.
bility. The Erie company repudiated the
contract made by its president. and claimed
| that McHenry had bought the shares on his
| own personal account. Suit was begun by
| the company in 1877, and the decision was
rendered early last month. The court held
| in effect that the contract was illegal, and
that a corporation could be bound only by q
sealed contract.
"McHenry's connection with the Erie road
began in the early part of 1872. Through
| his efforts some of the directors OF the com
/ pany resigned in favor of persons designated
| by him and Mr.. Barlow. In this way Nc
Henry gained possession of the Erie proper
ty, which he virtually controlled unit
recently He has held controlling interes
| ia both the stock and bonds OF the Atlantic
and Great Western road, and at one tims
had large share of the Erie stock. Sine
| his differences with Mr.. Jewett in regard Il
the management of the road, it is though
that he has disposed of his stock in tina
company. Mr.. Watson and Mr.. Jewett wer
elected on proxies from London, by McHen
~ and the London bankers, Bischotfsheiu
and Goldschmidt.
"McHenry was man of gigantic schemes
He was slightly visionary and saw things IL
a rosy light. He lived extravagantly, mad
money rapidly, and has failed magnificent,
He was a very liberal man"