Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-04-03
ERIE GUILTY OF
GIVING REBATE.
Railroad Lowered Shipping
Rate for New York Firm,
u. S. Court Finds.
Especial to the Evening star.I

TRENTON, April 3.-The Erie rail-
road was found guilty of giving re-
bates, by n jury in the United States
Court here last night in a suit brought
by the government, charging the road
with applying an improper rate for
a shipment of velonia from New
York to st. Joseph, Mo. William S.
Cowie, general eastern freight agent
of the road, Jointly indicted with the
Erie, was acquitted Trial of the suit
consumed six days.
The indictment charged Cowie, act
ing for the railroad, had directed that
the import rate of forty-four cents a
hundred pounds be applied on a ship
ment of velonia made by Marden,
Orth & Hastings, of Boston and New
York, whereas the domestic rate of
fifty-five cents a hundred pounds
should have been charged
Throughout the trial admission OF
evidence by the government was Wig
orously contested. and frequent
clashes arose between the attorneys
for the government and the defend
ants.
Although the trial has extended
over six days, the defense yesterday
fled motion asking that the jury be
directed to return a verdict of acquit-
tai on the grounds that the govern
ment had not proved that the Erie
Railroad Company and Cowie had
knowingly granted the concessions.
This motion, however, was oVerruled
by Judge Haight. Significance is at
tached to this case by those familiar
with Interstate commerce laws be-
cH1JGp of tho nffppt will have n q @
precedent in all other Federal courts.
No case has previously arisen where
1t became necessary for the court to
construe the Elliins act so fully.
That part of Judge Haight's charge
TO the jury which Is of most interest
is his definition of the word know
ingly," as found in this law. The de-
PENDANTS oontended that the word re-
ferred to meant that the government
must prove absolute knowledge on
the part of the defendant, bit the
court ruled in substance that even
If the defendants did not have abso-
lutte knowledge, vet if they remained
wilfully ignorant of facts which they
could have learned after reasonable
inquiry, they were chargeable with
knowledge, provided facts they did
know showed that a failure to make
further inquiry was the result of will
full intent.
The maximum penalty that could
he imposed on the Erie Railroad Com
pany for the offense charged is $4,000
fine. and the maximum sentence that
might be imposed on Cowie is two
years in prison.
The government was represented in
the trial by J. Warren Davis. United
States attorney; Alexander II. Elder,
special assistant assigned by the at
Corney- general. and Walter II. Bacon
assistant United States attorney.
The defense of the railroad was
sustained by ex-Judge Gilbert Col
Inns, of the Court of Appeals, ana
George S. Hobart Cowie's counsel
was composed of William y. Gourley,
eX- county counsel of Passaic county;
John w. Zisgen, and Nathan II. Pen
dergast.
Since the opening of the trial Mr.
Zisgen has been appointed assistant
general counsel to the Interstate
Commerce Commission to. serve under
Joseph W. Folk, general counsel, and
this fact led to his retirement from
the case of. the government against
the railroad.