New-York tribune., 1879-11-27
RIILWII Ne rs.
TIE LOCAL INXESTIGATION.

CLOSE OF THE TESTIMONl-S. l. Ne bAhibN AN'
n. c. Villas BrFOgE THE ASSEMBLY COMMITTEES
TIE MANAGEMENT OF EIIf.
81. NJ. Barlow was the first witness before
tue Assembly Committee appointed TO Investigate the
management Of the state railroads at the session yes
terlav morning. His testimony related In his connec-
ton with the Erie Road director from 1872 to 1876
and as counsel lie said that the original change In the
Board of Directors brought about by resignstons'
somo voluntary and Others were paid Tor
at a rate sos 900 each. The Old Board with the ex-
ception OF Dix Watson reflected In July 1872
The witness dd not think that at that time Mc;Icpry
had any controlling interest In the Erie Road During
the Gond-Fisk adminlstrat Oh lease OF the Atlantic
ana Great Western Road was Effected The witness dil
not remember whether proxies were purchased IN TINS
city for the election In 1S72 Before 1t went into the
receivers hands the Erie Il ad paid the wit
ness "a Judgment Of $4,000, which he obtained
or advances made by McHenry. The English proxies
ON the Erie stock were given the control Of the com
pany on This side In perpeuity. The Erie Company first
learned Of the claim against McHcnrY afier Mr Gray
returned from England lie had received very large
sums in Ere bonds, upon whi he had obtained ad-
vances. which, In turn, were given to MI watson lie
said had transferred 10 the company all tue proceeds
the bonds and suspected he had converted to
his own Use nearly 81 800 900 $20CO000 Mr. Bar
low then took up the question OF the two Erie dividends
He said that the Erie Board corrcspondcd with the Lon
don men. and that Mr.. Watson willing and anxious
declare large dividend as the earnings OF the road
would warrant. lie said that the English accOun tants.
who examined the Erie books did decide that the dyi-
dends did not come from tho earnings; but Tins was
mmateriaas the earning charged to the consruc-
ton account and The remittances from McIlenry the
proceeds OF the sale OF bonds, were used to
pay the dividends. The result was the same
had been taken from the earnings. and
the proceeds of tue London bonds lad been Put in the
construction The chairman asked the witness
II there would have been surplus In case tue ex-
penses the road in 1873. the time when tue dividend
eoared had been CHARGED against tue earnings OF
the road. The witness Thought not The road was then
laying double track, and II TINS had pren @ cnargel
against the earnings there would not have been any sur
plus The fact tha, 3l9 per cent was paid on the
preferred and Il on the common stock.
The question of Mr. Jeweps salary was then taken up,
and Mr.. erne asked many questions In regard 10 Mr.
Jcweus connection with the western roads After Mr.
Watson went out efforts were made, MI Barlow sad 10
secure Colonel Thomas Scott OF The Pennsv vana 10 d.
Barlow then looked around Tor suitable nan Mr:
Jewett strongly recommended by Mi. Garrett, OF
the Baltimore and Ohio Road, and Colonel Scott aud
finally take the place n the company would
advance him $l5O.0OO. being $4,000 year for ten
of his administration the witness thought that Mr.
Jewett saved five times the amount OF bis
The financial troubles OF Erie arose primarily on ac
count OF the S3,50OOOO which was abstracted from thc
New-YOrk treasury and which was held In London by
MeHenry. .
II never was in New-YoIkf
Mr. Barlow Well, It ought to have been here. and
en- n was virtually absIracied II we could have got this
money there would have been no receiver and the
earnings would have increased ana tho ROAD would
have prOspefed.
Afrer the recess Henry NJ. scudder, counsel OF the
Standard OIL Company, argued for the acceptance OF
series OF to questions which the committee had
sent John ID. Archibald and Others connected with
Tue Standard On Company or with IFS aiflated
comp Mes The committee. however. found that many
Of VIVA, regarded the most important questions
renamed unanswered and for that reason
refused TO accept tine reports final. After some DIS
they accepted for the purpose Of a-
uon committee will decide whether to call Arch
bald Rogers Bostwck Pratt Others for the purpose
of plenentng the report with with examination
r. G. Nlas, general freight agent Oi lhe Erie Road
then testified that there not 100 special rates
his road. In answer To questions by Mr. sterne, the
said that the number O special rates hhd Dten
reduced every year since Mr.. Blanchard became con
nected with the company. Mr. Sterne then took up a
list special rates granted to certain shippers over the
Erie Road which the witness had prepared several
weeks and which he had handed To tle committee
He said differ mt considerations led TO the granting OF
special rates. Each almost unique, and had
to be decided after Investigation of the circum-
stances surrounding IL; The road had had more se-
years than on any other article OF freight. Mr.
Sterne asked the witness II his policy was 10
encourage the industries MS line, by granting special
rates II his road suffered and he replied that the
special Instance cited. The road trird 10 treat
all the industries fairly so that they could compete
with each other. Mr. Blanchard cross-exalnined the
witness at length in regard TO rates. The witness
said that unsuccessful attempt had been made by
the Erie Road pool the business Of Binghamton
with the Delaware and Lackawanna Line 50 as to put
Delaware and Lackawanna Line refused TO agree to
the arrangement.
AT 3:l5 tho committee announced that so far as the
general purpose of the Investigation concerned. no
more evidence would be taken. Tue special topic OF
the elevated railroads. however might come up afer
the arguments, when will be begun AT 10 a. m to-mor
row, the Chamber or Commerce, nv CnauDcey M
Depew, counsel of the kew-York Central Road. The
summing up VIII occupy several days.