The New York herald., 1922-05-11
Enabled Friend to Take
Back Equivalent of Third
of Commissions.
CHADBOURNE DEFENDED
He Was No Agent in Sale of
Jay Gould Assets, Says
Latter's Son.

HOW George j. GOulQ received an
unencumbered gift of 100000 from
Washington Connor in financing the
purchase of the Wheeling and Lake
Erie Railroad in 1901 was revealed
yesterday in the trial OF the suit for
$12.600,000 which the receivers of the
Wabash Pittsburgh Terminal Railway
Company have started against Mr..
Gould and Myron T. Herrick as mem
bers of the Pittsburgh and Toledo syn
dicate of that period. The case began
this week before Justice Finch in SUI
preme Court.
Cross examination of Mr.. Gould by
Louis Marshall, counsel for the re-
ceivers, evoked references to litigation
i'm which Mr.. Gould has been involved
in,recent years.
mr.. Marshall submitted a ledger of
the Mercantile Trust Company showing
that on April 4, 1901, an entry OF Slo2,-
900 was credited to Mr.. Goulds account
and on the same day S47s,5S4.oU IN
cre<it and a debit of 100000 against
Afr.Connor. Mr.. Gould said:
"I think Mr.. Connor paid me over a
profit in the Cleveland, Canton and
Southern syndicate"
Appreciated Gould's Generosity.
Mr.. Connor was called TO the stand
and in examination by Edgar t. Bracket,
for Mr.. Gould. explained that the gift
to cMr Gould was result OF his gener-
osify in handling the Wheeling and
Lake Erie syndicate subscription and
allowing Mr.. Connor to take $1,000
600 interest instead of S1,o0O,00o which
lie e,eeaid he expected. Mr.. Connor fig
uReH that at Is per cent. he would get
a $500, 900 commission from dlsposing
of mis- block. His payment to Mr.. Gould
was approximately one-thind Of his ex-
pected profits. He explained:
se'At the time when Mr.. Gould told me
what percentage ! was to have in the
Wheeling and Lake Erie syndicate and
when he told me that 1t would be So
900, 900 instead of the s1.o00.000 which
/ anticipated | told him that would
give him an interest in the Cleveland
Canton and Southern syndicate. The
$1n2000 was the outcome of the inter-
est-I-gave to George J. Gould in that
syndicate
Cleveland Canton and Southern was
,elpsely held. private syndicate, he
safdIuthe principal holders being mem
bers of n few families in New York and
Cleveland. He explained that he had
paid Mr.. Gould by drawing personal
chsskssbecause the market at that time
was Odns 'feverish state" and he did
not jwqsh to weaken the position # his
osvn--Bfekerage house. Connor & Co,
through which he did much of his
financing.
Mr.. Connor denied that he had given
MrGouii one-thrd of the commissions
az a. present. or that 1t was in any way
aSaenSarHhfor the $1,oo0,o00 guaranty.
Defends Thomas l.. Chadbourne.
on cross Mr. Gould ad-
mitted, that he mad been removed as
executoreand trustee of his fathers
estateIg Concerning the deal in Western
enion stock in which Thomas l.. Chad
bcurnesshis attorney. was implicated in
the sale Of l0.02S shares from the ests te
OF hissfather. jay Gould, he said he
did not consider IL fair to say that Mr..
Chadbourne acted as mis- agent, adding.
II didn't ask him to do so. He was
an Intermediary for the telephone COM
panys as much as he was acting for
, ffe ,ssi1
Mr.. Gould would not admit that the
estate was entitled to the profits of
thesc sctransa ction. Concerning litigation
over missouri Pacific Railroad securi-
RES eIIsaid he took and paid for them.
and denied that the estate had any
share I'm that transaction.
ssisT Project Was s17,OOO,OOO.
John II. McClement. expert railroad
appraiser and accountant, testified that
he had gone 10 Pittsburgh at the re-
quest of officials OF the Mercantile Trust
Company to make a report which would
aid the trust company in liquidating
large advances made to the Pittsburgh
and Toledo syndicate.
There were no written instructions
he said, but he was empowered to
ascertain how much money had been
spent and II " had been well spent.
and also TO estimate how much more
would be required In refinancng The
total amount involved was sf7, i19. ass. 10.
Re testified. OF which he accounted for
all except $4,000. Purchase OF the
Wheeling and Lake Erie. he found. had
amounted to nearly s55o0.O0o: detailed
construction accounts Of half dozen
small corporations which the syndicate
had taken over amounted to more than
s10.s79. 900: interest In the opcn account
OF the Mercantile Trust Company up 10
July !. 1908. was $500. 1880. and there
was cash on hand In the amount OF an
proximately $1,000
The trial will continue to-day.