The New York herald., 1879-08-26


lateral. Mr.. McHenry at this time held large
amount of assets OF the company andI would have
done anything reasonable at that time in order TO
get control of those assets.
Mr. storne here read the testimony of Mr.. Barlow.
in which he said that loan was made OF 600 by
the Finance Committee, because Mr.. Steboins was
member of the committee and warm friend OF Mr..
acHenry. and asked the witness il that was fact
Mr.. Jewett replied that he did not know. 1t might
| be, but Mr. Barlow might be mistaken.
| @. When did you discover that Mr. McHenry was
largely indebted to the Erie? A. can't answer; 1t
| was before became receiver, in May, 1910; the
$4,000.
In reply to the question why money was paid
counsel on account of tho juagmentof OF Mr. Mcaenly:
when he indebted to the company Mr Jewett @
said Mr. McHonry could have seized the
assets Of the Erie Company in London 70
large amount so = was policy .do 10
various efforts to adjust the difficulties between the
| Erie Company and Mr.. McHenry and the London
Mccnllsch and others; after the failure in
structed counsel to try to effect settlements never
could get a plain statement of the account from Mr.
McHenry; Mr. Gray reported that McHenry's
count varied always; believed Mr. alchemy owed
the Erie Company the oseoun, srp On re Ss
prices ranging according to Mir. jew
etts recollection, at from As to 62; q
lJewett) was trying to rectify; Mr.. Jcwett gave
account of wrongs he saw regarding proxies. and
advised the directors to take measures to rectfy
them; in Mr.. McHenry's account item Of
$40 paid for proxies never gave the attorney for
the Erie instructions allow this item; the habit of
selling proxies is highly Objectionable; holders of
stock as collateral can have the stock registered
vote thereon wronsfuily; in other cases stock esH
purchaser is voted on by the registered holders;
the subject OF the wrong of proxy voting is one
which should be regulated by the Legislature;
but Mr.. Jowett could not advise what means should
be taken TO prevent them. Had Mr.; McHenry only
voted his stock he would have had very
small power; by the payment of comparatively
small sum not holding any stock might obtain
control; the company cannot go behind the stock
book to ascertain the real ownership of' stock the
object of the shareholders in the reorganizad Erie
Company in depositng controlling portion OF
shares in the hands OF trustees to vote thereon
until dividends earned on preferred stock was
to rectify omissions in the law and prevent outside
parties getting control OF the company by buying :.
proxies; think better administration of railroads
could be by stockholders if they would select
men to conduct the who were not stockholders
and had no interests to but those or the rail-
way; the power Of Mr.. McHenry's proxies ceased in
president Of the New York. Lake Erie and Western
Railroad has never been fxed he only receives salary
receiver.
Being questioned why the New York, Lake Erie
and Western road did not furnish its own cars in
stead of depending car trust for equipment, Mr..
Jewett said the payment of assessments on stock
holders did afford the necessary funds to supply
cars and SO the % car trust was hasa ereatea propo
cars to be paid for in fve years through the car
trust; under this cars were obtained at low rates.
certificates being issued at first bearing seven per
cent afterward six per cent; all the cost of the
trust $4,000 per year-the pay of clerk and
expenses; trustees do not make any profit; the New
York Lake Erie and Western company are so
guarded in their dealings they certain of getting
well built cars at cost and without any profit
enuring to the trustees
Mr.. Jewett. on being questioned regarding past
operations of the Erie Company, said he has had
much to do in caring for the business of
the companies that he has had no time to go
into old transactions; the settlement with Jay Gould
express stock, par value. but the said stock
issued to the company finally $500 900 OF stock
was issued on this account to the Erie Company.
COMBINATIONS.
Know Mr.. Cassatt fourth vice president Of the
Pennsylvania Railroad, who has charge of the
portation; there was an Empire Company doing
business that road. in 1877; discoyered that the
Empire line controlling pipe lines: also building
refineries at Philadelphia and Comm unipaw, which
would ifalowed to divert large amounts of the
oil transportation from the New York Central and
Erie roads much to the detriment of the trade of
New York city; by strong efforts the operations Of
the Empire Company were checked, 20 that the trade
was not taken from New York and the trunk lines of
this State threaened the result the Standard
Oil Company divided its business between two
New York trunk lines. the Pennsylvania Central and
the Baltimore and Ohio; do not know that the Stand
ard Oil Company afraid of the operations of the
Empire Company entering into the business of oil
refining. but the Erie Company and the New Yerk
Central were; thew demanded OF the Standard Oil
Company that it should not support the Pennsylva
MIA Central in its efforts to control the oil traffic
through the Empire Company; first heard of the
American Transfer Company about the same time
the controversy occurred with the Pennsylvania
Company; regarding the Empire Companys con-
with the Transfer Company, 1T was made Janu-
AIRY l. 1877, and approved by the directors the Feb
standard OH Company on oil transported
but to the American Transfer Company; do
not know that American Transfer Company
is another name fer Standard Oil Company;
after the contract was made q drawback of twenty
cents was allowed in consideration of their RUNNING
all risks; believed then, now. that the services
rendered by the Standard Oil Company i'll running
the risks of loading aud in fact all risks. equal
to more than ten cents per barrel-that Is, it was
cheaper than to take the risks; agreed for those
considerations to give them rebate OF ten cents
from the guaranteed rate have offered the rate
to others never refused to divide facilities the
Standard Oil Company do a very large businessNnd
substantially all the facilities.
Mr.. Sterne handed Mr.. Jewett the testimony Of
Mr.. ODay. treasurer of both the Standard Oil Com
pany and the American Transfer Company taken in
Pennsylvania investigation, in which was a letter
stating that the Erie and the New York Central roads
paid him twenty cents per barrel on all crude oil
shipped over their roads.
MIR. Jewett-I don't like to conslrue other gen.
tlemens letters am asked to read this letter from
O'Day dated February 15 1878, at the Office OF the
American Transfer Company Oil City, it says,
reading:-"We have been for many months receiv-
ing from the New York Central aud Erie roads GER
tain sums instance less than twenty cents per
barrel on every barrel OF crude oil carried by each
OF these roads,
O'Day meant to say that the Erie hallway Company
paid to the American Transfer Company twenty
per barrel all oil passing its lines, ho
states that which do not believe 10 be true. 1t
cant be. ~
perhaps tine American Transfer Company has loie
of pipes through which at Allegheny City the oil
reached the Erie road and TO which o O'Day might
fer; he did not know what the New York Central
road pays; he never communicated with them
the subject he did not know that the pipe line
toned tUnited) was the only one; he would state to
the committee what the Eries arrangement with the
Standard Company was--wh hat they agreod to make
u rebate for the extent of that rebate, but since
that through competition. &c. there had been
changes in the rates with which he not familiar;
did not know how the Erics oil traffic paid; further
than that IL very low; Mir. Jewett had heard
somo years ago OF an organization known the
South Improvement Company; never had any
nection with it,
SPECIAL RATE?
O. Is your oil traffic carried under special arrange
ment by which bills made out? A. IL SO. it
is without my knowledge don't think 1t IL true;
but IL it done there is probably sufficient
for it; don't know whether not we have schcd-
ule rate for OIL
'joint letter" of himself ana Mr.. Vanderbilt on
Especial contracts"
Mr.. Jowett--I understand Mr.. Stcrne to say that
state that joint letter that have special
the Erie Railways ask him to point me to the