IRansportation"
LIBRARY
753,808

As
RTE's scient a verit
of
T Y
*
of E R
P R
. A
*;
&.
*
*
?





























*%- zéº-
27 Jrºad St. Y. Y;City, ...!
A * - - - 2% .--
2? 3 * - ** i g - --> 2.” * r ºss
%22a-cc.e. #.4% º, *…*** /ć. ºw &#. -
&
ERIE RAILWAY.
** - -
..s.º.º. --~~
..º -3- 3.
* -
* - * -
3. A &^ zº. -
*
ſy A. --
JOINT LETTER
TO
HON. H. J. JEWETT,
RECEIVER ERIE RAILWAY COMPANY.,
IN ANSWER TO
ALLEGATIONS MADE IN THE COMPLAINT OF CHARLES
POTTER AND OTHERS
Supreme Court of the State. of AVeſy York,

iransportation
library
H E.
9 7" |
E (237
B (24
ſº t
2444
//?-º-º-º-º:
| - 2. /-372
Ntſ}\§
*
HoN. H. J. JEWETT, RECEIVER:—
DEAR SIR:
HE complaint of Charles Potter and others, against “the Receiver,
the Erie Railway Company, and others,” entered in the Supreme
Court of this state, January 17th, 1878, contains grave charges against the
ability and integrity of your administration as Receiver, which embrace
the most unjust statements of figures and perversion of facts that could
be combined to make mere assertions appear plausible. Knowing that
the formal limitations of a legal answer preclude the completeness of
detail required for the justification of your administration, the under-
signed have thought it just and proper to make a specific reply to each
of the charges of the complaint that relate to the traffic, transportation,
and accounting departments. -
Our positions near you have made us necessarily and fully acquainted
with the details of your management, and we pledge our reputations
for intelligence and probity to the correctness of the answers herewith
submitted:— -
The complaint says (page 10, section 4, folios 40, 43,44):—
“That the Erie Railway Company was, on and before the 14th of July, 1874,
“and at all times thereafter, writil and including the 26th of May, 1875, in
“good condition as to its property.
“That during all the time aforesaid, and ever since then, the proportion of
“expense to gross earnings was much less, and the proportion of profit to gross
“earnings much greater, in the business of the rival and competing lines of the
“New York Central, the Baltimore and Ohio, and the Pennsylvania railroads;
“ and that the exercise of ordinary economy and honesty would have largely
“diminished the expense and increased the profits of the said period in the
“business of the said Erie Railway.
“That the said Erie Railway is fully supplied with the usual and proper
“equipment and facilities for handling the traffic which is offered it with econ-
“omy and dispatch, and that, judged by the traffic, resources, and earnings of
“either of the other three main trunk lines with which it competes for business,
“in any year when the transportation charges it receives are fairly proportioned
“to the service performed, it has the ability to pay interest on its entire bonded
“debt, improve its material condition; and ultimately yield dividends to its
“Stockholders.” w
It is farther alleged (page 53, section 17, folios 212 to 217, inclusive):—
“That the management of the said Jewett has been incompetent, improvident,
“ and extravagant in the enormous expense at which he has conducted the busi-
“ness of the said Railway.
(3)
4
“That the annual expense of operating the said Railway has been, during the
“whole term of the said receivership, at least $5,000,000 more than under
“proper and competent and honest management it show.ld and would have
“been; that the said Jewett has kept and paid in the service of the said Com-
“pany several thousands of wrynecessary and useless employés. That wip to
“April 1st, 1877, the said Receiver has paid to clerks and employés and labor-
“ers $14,420,072.66; that the rates of compensation paid to the said clerks,
“employés, and laborers were at least 20 per cent. more than the said services
“were reasonably worth, and more than other competing trunk railroads were
“at the same time paying for similar services, and that by such payments alone
“the property of the said Company was wasted, impaired, and diminished to
“at least the extent of $8,884,014.32; that during the whole term of his said
“receivership Said Jewett has paid extravagant and eaccessive salaries to his
“general and division superintendents, the station agents and clerks, and that
“the loss, waste, and misappropriation of the trust funds in the hands of the
“said Receiver by such excessive payments has been in excess of $500,000 a
“year; that the said Jewett, during all the term of his receivership, has in-
“curred and paid extravagant and excessive expense for the maintenance of
“way, and motive power and equipments, for agencies, clerks, and Superin-
“tendents, and for the receiving, handling, and delivery of freight, and that the
“annual waste and loss of the earnings of the road thereby has been not less
“than $3,700,000. - -
“That the said Jewett well knew that the payments and expenses aforesaid
“were extravagant and excessive. That a ready and convenient standard by
“which to judge of the proper and necessary expense in the management of the
“said Erie Railway was furnished and known to him, in the payments and
“expense of the New York Central Railroad. Company, the Pennsylvania Rail-
“road Company, and the Baltimore and Ohio Railroad Company, with all of
“which he was familiar, as the plaintiffs are informed and believe, and all of
“which were and are competing trunk lines transacting a business similar to
“that of the Erie Railway Company.” -
The complaint then proceeds, upon these mere assertions, to make
comparisons of the results of the management of this railway with other
trunk lines, in figures which are stated and answered on the 22d page
hereof. - -
Stripped of verbiage, the foregoing charges are:— t
FIRST. “That, May 26th, 1875, the Erie Railway was in GOOD CONDITION as
“to its property.” º
Therefore,
SECOND. “That it has the ABILITY TO EARN its entire interest, improve its
“material condition, and ultimately yield dividends to its stockholders.”
|Because,
THIRD. “It is FULLY SUPPLIED with the wsual and proper equipment and
“facilities, and could, therefore, handle its traffic with economy and dispatch;
and, - s -
FourTH. Supports for these bald assertions are sought in 80-called Com-
5
parisons with the results on the New York Central, the Pennsylvania, and the
IBaltimore and Ohio railroads.
These general charges are supplemented by others relating to specific
contracts, agreements, etc., the whole being relied upon in the attempt
to enforce the conclusion that the income is fraudulently and incompe-
tently lessened, which, added to wasteful expense, produce the climax
Qf alleged mismanagement from which the complaint seeks relief.
We answer each of the foregoing charges in the same order.
FIRST. “That the property was in good condition May 26th, 1875.”
Compared with its condition when you became president, it had been
but little improved at that date, as less than a year had elapsed, during
which it was impossible, with the complications forced upon you by the
proposed lease of the Atlantic and Great Western Railway and other
intricate matters, to learn the needs and efficiently reorganize the
service of so extended and complicated an estate.
We regret to assert that its condition was not good in the following
leading particulars:—
A. Its power and cars were insufficient in number, and defective in
condition, because usual depreciation had not been made good by repairs
Or construction, and condemned locomotives and cars destroyed had not
been replaced, thus requiring unusual outlays for repairs and renewals.
B. The various ages, patterns, and sizes of locomotives and cars were
serious drawbacks in attaining or maintaining the perfection in their
condition upon this line, which the ample equipments, uniform standards,
and thorough maintenance of the rolling stock of our rivals had enabled
them to secure and preserve.
C. The wear and tear of locomotives and cars was greater upon this
line, because it was laid mostly with iron rails, much of which required
renewal; upon a roadway largely of single track; and with higher grades
and sharper curvature, in comparison with the smooth double steel
tracks, more favorable grades, and straighter lines of its competitors.
D. Our engines could not be maintained in the condition of those of
Other lines, because our round-houses were inadequate to accommodate
them, entailing the two-fold expense of exposure to the elements, and
keeping up fires in the locomotives in cold weather to prevent them
from freezing.
E. These drawbacks were intensified by lack of equipments and by
a growing tonnage, which, acting jointly, necessitated constant use of
power and cars, and, therefore, limited the opportunities for their
proper care.
When repairs could no longer be deferred, they were expensively
made, as the shops were inadequate in size and number, and lacked the
improved machinery and economical appliances for utilizing material
and labor which our rivals possessed.
6
F. Our passenger and freight buildings were inadequate in number,
convenience, capacity, and condition. The same was true as to the
docks, wharves, and other terminal and transfer facilities, barges, floats
and tugs, stock yards, etc.
G. The larger proportion of the bridges, trestles, and culverts were
of wood, older than those on rival trunk lines, and had not been
replaced by iron and stone structures, as on those lines.
H. The roadway was not in good condition. The embankments had
been washed and not repaired; the ballasting was deficient; the ditches
had not been kept deep for proper drainage; the cross-ties were, there-
fore, more exposed to decay; increased expense was needful to replace
rails much worn; the sidings and yards were inadequate and poorly
arranged; the line trestles for coal deliveries were insufficient, and the
facilities at intersecting points and on branch lines were imperfect.
In brief, the rapid increase in the traffic of the line prior to 1874, far
exceeded the increase in its equipment, facilities, and conveniences.
SECOND. Its comparative gross earning power.
A. Excluding our branch and leased lines, we connect at twenty-one
points with twenty-four other railroads, but two of which have our broad
gauge, while all railways connecting with the New York Central, Penn-
sylvania, and Baltimore and Ohio railroads have one and the same
standard gauge.
The transfers, delays, costs, and risks necessary to overcome these
breaks of gauge, prevent many of our direct and secondary connections
from forming remunerative through passenger, freight, and express lines.
with us; and the same defects induce forwarders to prefer and use rival
non-transfer routes, and thus create competition where uniform gauges.
would induce co-operation. - ;
B. Our rivals own, lease, or control western connections over which
we must often pass to reach more distant neutral railways. The man-
agements of the roads so controlled naturally discriminate in favor of
their principals, in important traffic conditions essential to equal com-
petition, notably when private inducements are used to secure traffic.
We have no control over any railways west of us; no like power to:
inaugurate or contest any exceptional policy, however desirable, and
no like ability to secure new or improve former through facilities. The
New York Central controls 1,530 miles of such connections; the Penn-
sylvania 3,235 miles, and the Baltimore and Ohio 1,285 miles, other than
and west of their main lines; a total of 6,050 miles, which is about.
double the mileage of the parent railways. A large aggregate of the best-
paying traffic originates upon these extensions, at their important sources
of grain, lumber, live-stock, and other tonnage, for a large part of which
we cannot compete, because it is local to them, and for all of which we
are at a disadvantage. The powers of the principals to increase their
revenues and reduce their expenses in accordance with the primary
7
purposes, interests, and values of such leases, by methods and appor-
tionments beyond our influence or diligence, are exercised not only
upon the controlled lines, but the joint local and connecting influences
of the lessors and lessees are also brought to bear with equal force, to
our disadvantage, upon more remote connections. If we desire, as is
often needful, to use the routes and facilities of such leased lines, to
secure or transmit traffic, we are in many cases required to pay them
higher local rates, proportions, or mileages than those paid them by the
controlling trunk lines upon the same traffic; or, if such controlled lines
decline to furnish cars of the proper classes to the joint traffic with this
company, they necessitate even more frequent transfers of freights, mails,
and passengers than the natural disadvantages of our gauge create. These
and similar causes are clearly beyond our present control.
C. Our geographical location, and connections to and from other
western points and districts yielding large proportions of through
traffic, preclude average receipts therefrom per actual mile traversed on
this railway equal to our rivals, because of their shorter distances. Our
shortest routes between New York and Chicago, St. Louis, Indianapolis,
Louisville, Cincinnati, and Columbus, average 81 miles, or 10 per cent.
greater than the distances via the Pennsylvania Railroad.
The distances of our southerly rivals to Baltimore, Philadelphia, and
Pennsylvania and Maryland points, compared with ours to the same
points, are yet more to our disadvantage than to and from New York.
Our present routes between Boston and western cities, via New York,
average 150 miles, or 10 per cent. longer than via the New York Cen-
tral through Albany, with a greater disparity to points north of Boston.
Our greater distances, therefore, clearly debar us from equal earnings per
mile on the same traffic. These lesser results would be improved if
connecting lines shared our actual distances in the divisions of through
rates; but they exact the same earnings via our line as via their shortest
routes.
To illustrate:—
The New York Central distance from Buffalo to Boston, upon which
through rates are computed and divided, is 500 miles, which distance our
Western connections require us to accept, or decline to give or receive
Boston traffic via this route. We, therefore, receive but 500 miles of pay
for 650 miles of actual transportation, and even this result is lessened by
the necessity which devolves upon us to handle and insure the property
at and via New York. One cent per ton per mile via Albany, without
transfers, would, therefore, pay our route less than three-fourths of one
cent per ton per mile, including transfers and insurance, as well as the
farther payment of an arbitrary proportion to our connections between
Boston and New York.
Similar causes affect passenger results to an equal or greater extent,
enabling passengers and speculators to use New England tickets for New
York travel, to our loss.
8
The facts last recited are so important that they largely enabled the
New York Central Company to earn 11%g cents per ton per mile in its
last fiscal year, against #5 of one cent per ton per mile on the Erie,
this difference of rºw being equal to $668,751.73 upon our tonnage mile-
age of last year. In addition to this disparity of revenue per ton per
mile, is to be added the equally important fact that the average distance
transported of each ton of freight on the New York Central Railroad
was 255 miles, per its last annual report, against 180 miles on the Erie.
Had we transported our tonnage the same average distance as the
New York Central, in our last fiscal year, the additional seventy-five
miles would have increased our gross freight revenues, at our own
average receipts, of #5 of one cent per ton per mile, in the large sum
of $2,090,717.96 upon miscellaneous tonnage alone, or $4,404,996.33,
including our coal, as the New York Central includes its coal in
ascertaining its average. -
The first of the above items ($668,751.73) represents an actual differ-
ence of comparative profit, and our tonnage mileage could have been
carried the increased distance and secured the large increased revenues
shown above, without a corresponding increase of expenses.
Such striking facts have great weight and consideration in determining
results, but they are entirely ignored in the complaint.
D. The fixed through rates between seaboard and western cities are
greater per mile via the short routes to Baltimore, Philadelphia, and
Boston, than via the shortest routes to New York; the result of the
present geographical adjustments of long-pending and frequent contests
upon seaboard and export freights.
For example: When the rate per 100 pounds from Cincinnati
To New York via Erie is 30 cents for 861 miles,
To New York via Pennsylvania Railroad it is the same for 757 miles,
To Philadelphia, 28 cents for 667 miles,
To Baltimore, 27 cents for 579 miles.
The result being:-
To the Erie from Cincinnati to New York at the rate of #6 of one
cent per ton per mile.
To the Pennsylvania from Cincinnati to New York ###, of one cent
per ton per mile. -
To the Pennsylvania from Cincinnati to Philadelphia #5 of one cent
per ton per mile.
To the Baltimore and Ohio from Cincinnati to Baltimore ###, of one
cent per ton per mile. -
The differences of rates above noted between the three cities are the
same if rates be higher or lower than the figure assumed to New York.
In addition to the facts cited, rates are better maintained at Baltimore
and Philadelphia, because the traffic of Baltimore is largely exclusive to
the Baltimore and Ohio, Philadelphia to the Pennsylvania, and New
England to the New York Central, through their several controlled
9
connections and their superior local and terminal facilities. The
rivalries of more numerous rail carriers at New York, and of all with
the low rates of the Erie Canal for a major part of each year, reduce
the average New York rates per ton per mile of all lines below those
upon like traffic at the other cities and districts. A much larger
percentage of our total through tonnage being to and from New York
than via the other trunk lines, we are more seriously affected than they
by this important cause. +
Combining the shorter distances to New York, Philadelphia, Boston,
and New England with the higher fixed rates per mile; greater ability
to maintain the latter at Baltimore, Philadelphia, and Boston; and the
important fact that the largest proportion of the through tonnage of our
rivals are to and from those comparatively exclusive and local points,
while the majority of ours is to and from New York, they should
clearly earn and save more per mile upon the same competitive or
aggregate through traffic and rates than we now can, without their other
advantages to which we refer. -
E. The Erie meets fifteen rail lines competing at thirty-five points;
four of which, competing at seven points, have been completed since our
connection with this railway. This partially new rivalry, and the de-
crease in through rates since 1873, have reduced the local rates we can
now obtain, below those formerly charged and below those maintained
by the Pennsylvania and Baltimore and Ohio, because those companies
control their local rates by the control of their connecting local railways,
or by agreements with each other. Our local traffic is also much less
in quantity and regularity than the larger local business which the New
York Central derives from older and more populous cities, manufac-
turing points, and districts upon its line. *
The local conditions affecting quantity and relative profit are farther
dissimilar, as, for instance, our Delaware division runs through a moun-
tainous region, and is almost barren of local traffic, which entails a
greater burden of cost in operating the other more productive and
profitable mileage of the line. There are no corresponding non-
productive parts of the main routes of the Pennsylvania or New York
Central railways.
F. Upon the route of the Pennsylvania Railroad are Philadelphia,
Harrisburg, Pittsburgh, etc., with larger travel and tonnage than any
points on this railway, while via Philadelphia to and via Baltimore,
Washington, and the south, it has the largest travel that exists between
any American cities. Its shorter distances to and from the south-west
are utilized by through sleeping and mail cars on three quick through
trains each way daily, which, when combined, give it commanding pas-
senger advantages in comparison with our one through train via the
Atlantic and Great Western, or two upon our Cleveland route, the latter
with a transfer, and both upon longer distances. The Baltimore and
Ohio also possesses advantages of time, distance, and reservoirs of travel
10
at Washington, Baltimore, and Philadelphia, as well as more frequent
through passenger cars and trains between New York and the south-west
via Cincinnati. •
The New York Central has a large freight and passenger traffic
between the west and New York, to and from north-eastern New York,
Montreal, Canada, and New England points. These, added to its
watering-place, commutation, and Hudson river travel, with that to and
from the state capital and other large cities on and adjacent to its line,
give it a total of 8,919,438 passengers in 1877, as against 4,887,288 on
the Erie, or 69 passengers per train, against 57 on the Erie.
When the Government decided upon fast mail trains, in 1875, the New
York Central and Pennsylvania companies were enabled, by their un-
broken gauge and through trains, to offer such advantages over the Erie
that those companies secured the contracts for their carriage, which
resulted in a large reduction in our former mail compensation, and a
Corresponding gain to them. &
G. Our relative earning power, even upon New York business, is
farther deficient in the following:—
The Pennsylvania, by recent arrangements, runs freights to and from
New England, via New York, without transfer, and is enabled to take
Baltimore, Philadelphia, New York, or Boston freights without reloading.
The New York Central offers non-transfer lines to and from Baltimore,
(via the Northern Central,) Philadelphia, New York, Boston, and all New
England points. The Baltimore and Ohio route offers non-transfer to
Baltimore, Philadelphia, and New York, with a steam line to Boston,
and the Grand Trunk Company, by its Niagara and main lines, offers
non-transfer routes to Philadelphia, New York, Boston, and eastern New
England. - -
We have no access to Baltimore, and one or more transfers are una-
voidable to and from Boston and New England, as well as upon portions
of our Philadelphia and New York traffic. Forwarders and neutral con-
nections give their preferences to the routes that, at equal rates, give the
best facilities to and from the greatest number of points; as, for example,
they prefer to give their New York patronage to the line that carries
New England freights, rather than give New York tonnage to one
and New England freights to another line. -
As through travel usually follows the channels of greatest tonnage
movement between the same points, our passenger revenues are affected
by the same causes. -
Q. In addition to the important bearings of these facts upon domestic
freights, the Grand Trunk Railway receives and forwards foreign freights
via five ports: Boston, Halifax, Portland, Montreal, and through New
York via its Buffalo branch. as
The New York Central issues through foreign bills via Boston or New
York; the Pennsylvania via New York, Philadelphia, or Baltimore; and
the Baltimore and Ohio through Baltimore or New York; and each of
11
our rivals has one or more foreign steamship lines in its exclusive interest,
through contracts, port and dock facilities, or other means. We can
only export and import foreign freights through New York, where the
large quantities and varieties of “ spot” tonnage from railway, canal, and
coastwise sources, the greater competition of more numerous railways,
and the higher port charges of New York all secure to steamships
higher ocean rates than are charged at the other ports, while cheaper
rates and exclusive alliances enable our rivals to divert the rapidly
growing, direct, foreign tonnage to ports to which we have no access.
R. In farther illustration of the different earning powers of the trunk
lines, we note:–
The Baltimore and Ohio receives pay for its entire distance of from 375
to 384 miles upon all its Washington, Baltimore, Philadelphia, and New
England freight and passenger business. Its gas coals pass from Clarks-
burg and Fairmont over more than 300 miles of its line, while its largest
bituminous coal tonnage is from and west of Piedmont to Baltimore,
and passes over 201 miles of its line. The Pennsylvania Railroad
transports its Baltimore tonnage and passengers via its Northern Cen-
tral route, a distance of 246 miles, from Pittsburgh to Harrisburg,
while its large Philadelphia, New York, New England, and other miscel-
laneous freight, express, passenger, and mail service passes over its entire
main line, 356 miles; and its business to points east of Philadelphia over
its New Jersey leased lines as well, 444 miles in all, to New York. The
vast coal tonnage of the Pennsylvania Railroad, aggregating about four
millions of tons annually, is hauled, for the most part, over very long
distances. The gas coals with which it supplies Philadelphia, Harris-
burg, and interior points in New Jersey and New York, are hauled from
within 30 miles of Pittsburgh over its entire main line. These are
important elements in the earning and economical success of those
companies.
Attention is also called to the uniform haul of 300 miles by the New
York Central upon tonnage and travel to and from New England, which
are in excess of its through freights and passengers to and from New
York.
The Erie company has no such advantages of long tonnage haul. If we
possessed Baltimore facilities, they would utilize but 150 miles of our line
between Buffalo and Elmira. Our Philadelphia traffic leaves our route
at Waverly, 168 miles from Buffalo, and our New England traffic, via the
proposed all-rail line, through Binghamton, will give us 208 miles of
transportation from Buffalo against the 300 via the New York Central.
Our coal tonnage to the Hudson River gives us 91 miles of haul from
Hawley to Newburgh, or 136 miles in winter from Honesdale to Jersey
City, for coal which is transported in summer by canal, and 127 miles
from Hawley to Jersey City. Our Lehigh Valley tonnage gives us but
168 miles from Waverly to Buffalo, and our Delaware and Hudson
westward coal tonnage 102 miles more from Carbondale, with a large
12
number of smaller intermediate hauls for small deliveries to, or in
greater competition with, the large number of connecting and cross-lines
before noted. These differences in length of haul operate against the
Cost per ton and per passenger, per mile, as the increased cost is not pro-
portionate to the increased distance carried. -
Its expenditures. - -
At our twenty-one connecting points actual and expensive transfers of
persons and property are unavoidable, because of our exceptional gauge,
which transfers are avoided via the uniform gauges of competing routes.
To equalize this obstacle and secure a fair share of the carrying trade,
We must incur expenses not borne by other routes, as follows:—
A. More laborers for handling goods to and from other lines, or
to operate the mechanical appliances which partially obviate such
handling, and to transfer passengers, baggage, mails, and express goods.
B. Increased agency, supervisory, and clerical expenditure.
C.. Increased buildings, platforms, grain and coal trestles, etc., through
and at which this unavoidable labor must be performed with uniform
dispatch, regardless of weather. .* *
D. All cars and freights to be transferred must be taken to and from
the transfer hoists, houses, trestles, or platforms, necessitating increased
side tracks, to store, move, and handle cars, more power, fuel, employés,
trains, switches, and yards, than are required by rival routes of uniform
gauge. - -
E. More superintendence, laborers, and materials for maintenance
and extensions of the transfer and yard structures, grounds, and tracks,
than upon rival routes, whose uniform gauges render them in great
measure unnecessary. . . -
F. Much of our traffic incurs these transfer expenditures, both when
it is received from, and delivered to, connecting carriers, and an unavoid-
able and costly additional transfer at New York on all New England
and other traffic via New York, which is an important factor in com-
parison with the non-transfer New England routes of the New York
Central. -
G. These transfer detentions are complicated by an equal necessity
to afford as quick transit as rival routes, or lose the co-operation of
neutral connections and the patronage of forwarders. It is, therefore,
requisite to overcome them by greater speed, while our trains are in
motion, than on competing routes where similar causes do not control,
and whose through trains arrive and depart without being delayed,
broken up, transferred, and remade, and are .therefore in motion while
ours are subject to these transfers and delays. This greater speed
increases risks and the wear and tear of rails, roadway, power, and cars,
which are again increased, because 56% per cent. of the 706 miles
of this railway to Rochester, Buffalo, Niagara, and Dunkirk is of a single
track, while the Pennsylvania and New York Central have entirely
13
double, and partially triple and quadruple tracks, upon which slower but
continuous running speed makes equal or quicker through time, and
clearly at less cost. The extent of our single track requires yet
quicker running time, because of unavoidable detentions at single-
track passing points, and the need to run slow at the junctions of single
and double tracks. As we cannot entirely overcome all these detentions
by as quick through time on all trains, it results in a loss of traffic as well
as an increased expense.
H. Our train expense is increased by our higher and longer average
grades. The maximum grade of the New York Central is 42 feet to the
mile; the Erie 60 feet to the mile. The New York Central has but One
summit, and its highest point above tide is 912 feet. The Erie Sur-
mounts five summits, at elevations of 901, 1,374, 1,780, 1,700, and 1,615
feet. The total of the westward ascents on the Erie line, 459 miles, Jersey
City to Dunkirk, is 4,203 feet; the sum of the descents 3,602 feet, while
of the 444 miles of the New York Central, New York to Buffalo, its west-
ward ascents are but 1,894 feet, and its descents 1,332 feet, or less than
One-half the Erie. The New York Central has 195 miles of level road
between New York and Buffalo, while the Erie Railway has but 91 miles.
This advantage of the Central in gradients is supplemented by an equal
one in curvature, as its roadway crosses comparatively open country,
while ours conforms to the arbitrary topography of mountains, hills, and
more numerous streams. These combined causes reduce the Erie average
in 1876 to 138 tons per train, while the New York Central averages 180
tons, notwithstanding the fact that Erie locomotives weigh about 40 tons
gross against an average of about 30 tons each upon the New York
Central. The heavier power can transport but 16 freight cars over our
higher gradients, while the lighter power of the Central can haul 32 cars
over its highest gradients, and upon the whole line of the Erie the
average haul per train is from 26 to 27 cars, while that of the New York
Central is from 40 to 42 cars. In addition to the comparatively greater
time and expense in overcoming the resistance offered by this excess of
gradients and curvature, we are required to run at yet greater speed,
expense, and risk on more level sections to overcome the unavoidably
slower time on grades and curves, to which must yet be added the
greater weight of the power and cars required by our wider gauge, and
the excess of wear and tear upon themselves, as well as upon , the
roadway. When all these causes are combined and operate upon iron
rails and single tracks in part, they create an excess of expenditures
over rival lines that is too apparent to require argument.
I. Fifty-six per cent. of our total tonnage (coal excluded) is to and
from New York, where we must handle it twice—once on receipt and
again on delivery, and much of it three times, in addition to the stated
western transfers. We must transport freights to and from and main-
tain three stations in New York, in addition to the principal station at
Jersey City, and sustain a large, expensive, and unavoidable organization
14
for harbor deliveries and receipts at vessels, elevators, inspection yards,
and docks, according to the custom of the port and rival carriers. The
actual cost of this station and harbor service (exclusive of passenger ex-
penditure) upon the entire tonnage to and from Jersey City, including
the company’s freight, milk, and all freights handled by owners, was
equal to the average cost shown in the last fiscal year of operating forty-
five (45) miles of this railway. The proportion of our traffic upon which :
this equivalent terminal mileage accrues is greater than our rivals, as all
Our foreign, coastwise, and New England trade is via New York, while the
Baltimore and Ohio at Baltimore, and the Pennsylvania at Philadelphia,
by large expenditures for extensive and economical terminal facilities in
warehouses, wharves, and elevators, now handle their like traffic at those
cities but once, for which they make profitable charges for services
that create large expenses to us at New York. The majority of their
local deliveries at Baltimore and Philadelphia are also made in cars at
consignees’ warehouses, for which they not only make remunerative
charges, but the consignees then unload the property at their own cost
and risk. This clearly increases revenue and saves expense.
Upon the New England domestic and foreign tonnage of the New
York Central, which equals or exceeds its New York traffic, it incurs no
handling expenses in receiving it from western or delivering it to eastern
connections, which greatly reduces its expenditures. It merely hauls the
cars, while we must transfer, haul, and unload them, and then lighter
and deliver their contents to connecting steamers.
We also deliver and exchange freights and passengers at five points,
to wit: Rochester, Salamanca, Dunkirk, Buffalo, International and Sus-
pension bridges, varying from 5 miles to 240 miles of each other via
this railway; the New York Central at but three—all of which are within
twenty-five (25) miles of each other—and the Pennsylvania Railroad at
but two points. This disparity farther adds to our transfer delays, train
mileage, and service, switching and other labor, for which we receive
only the proportions of through rates allowed to our rivals.
K. We now incur larger expenditures for renewals and maintenance,
because 65 per cent. of the rail of our main lines is of iron, while the
entire lines of the Pennsylvania and New York Central companies are
laid with steel rails. From this fact the cost of iron and steel used in
the repairs of our tracks for the fiscal year 1876 was $281,240.06 more
than the New York Central.
The present need to maintain six rails, partly iron and partly steel,
upon the two tracks between Waverly and Suspension and International
bridges, a total distance of 194 miles, and the running of broad and
narrow-gauge cars in the same trains, palpably create greater expense
than the maintenance of but four narrow-gauge steel rails, and the run-
ning of but one gauge of cars thereon. •
L. Our wider gauge, when doubled for double track, requires the care
and maintenance of wider permanent way, embankments, and cuts, larger
15
yards and terminal grounds, freight warehouses, car and engine houses,
bridges, trestles, and masonry; and in the purchase of materials for their
construction, repair, and renewal, as well as for the cars and locomotives,
needful provisions must be made for the greater width and weight.
M. The control by our rivals of 6,050 miles of western leased lines en-
ables them to charge to those lines proportions of traffic expenses,
rebates, commissions, and allowances, which we cannot similarly exact.
N. Prior to your connection with this railway, contracts were made by
which, in various forms, it leased, operated, or maintained fourteen local
branch lines. We believe diligence has been used to render them as
commercially and economically productive as practicable, or modify their
onerous terms; but these efforts could not avail much against the force of
business depression or the agreements under which they were operated.
There was a direct loss in operating them, for our last fiscal year, of
$323,989.22, and a loss from the same cause during the period from July
1st, 1874, to September 30th, 1877, of $899,103.66. The reports of rival
trunk lines do not show like losses.
O. Your administration has been involved in undue expenditures
growing out of prior onerous contracts with the Union Car Company,
Jefferson Car Company, the National Stock Yard Company, and others,
largely beyond control.
P. The New York Central has been under its present management
fourteen years; the Pennsylvania practically twenty-three years; and the
Baltimore and Ohio twenty years. During the shortest of these periods
the Erie Railway has been managed by seven presidents, with yet more
numerous subordinate officers.
The unfortunate results of these frequent and entire changes have
appeared in diverse local and through traffic policies; as, for instance,
commutation travel has been retarded by frequent changes in local
trains, the manufacturing interests on the line were not uniformly
developed; and the relations of this railway to local and terminal
connections varied, as temporary purposes encouraged or opposed
them. Connecting lines and the public preferred to establish their
permanent relations with routes whose stability of purpose and
management were apparently more assured than the Erie. This cause
can scarcely be computed in its disastrous effects upon the develop-
ment, improvement, and retention of the traffic resources and facilities
of this line at periods when its rivals were strengthening every avenue
to their resources. This cause is especially pertinent in the results
of discarding or changing former, or adopting entirely new, patterns
of locomotives, freight, passenger, and coal cars, iron and wooden
bridges, trestles, depot buildings, etc. We, consequently, have a greater
variety in their patterns, sizes, and capacities, than any rival or other
railway of which we have knowledge. The extent and variety of
material and patterns, from this cause, required to be kept on hand
for repair and renewal, create expenses for purchasing and carrying
16
...them and applying labor, much in excess of the like needs or expendi-
tures upon trunk lines whose continuous able administrations estab-
lished and adhere to uniform patterns and standards, subject only to
adaptation to demonstrable improvements, which policy and action
largely reduced their cost of construction and 'maintenance, materials
on hand, interest account therefor, and the labor of manufacture. To
illustrate this important point, there were, in 1876, upon this railway
eighty-three (83) patterns of locomotives, two hundred and thirty (230)
of freight cars, about ten (10) of passenger, and fifteen (15) of coal cars.
Q. Some of our expenditures during the periods quoted in the com-
plaint were fixed by contracts, as our bituminous coal from the ‘Bloss-
burg fields (since reduced in contracts elsewhere alleged as fraudulent);
and the growing scarcity of timber has maintained or advanced the
prices of cross-ties and some classes of lumber.
R. The reasons set forth why wide-gauge tracks reduce earning power
and increase expenses have been proven in the narrowing of the Ohio
and Mississippi and Grand Trunk railways to the standard gauge. Those
companies showed increases of traffic and reductions of expenditures
after the changes of their gauge. Our larger traffic and more numerous
connections may be expected to accomplish equally or more favorable
results to the Erie Railway if its gauge be made uniform with connecting
roads. r
For the reasons set forth our exceptional broad gauge cannot, in our
judgment, secure gross earnings or net economies per train, per pas-
senger, and per ton per mile (the units of all railway traffic results)
equal to lines upon which the same causes do not operate, or in the same
HOO 93.SUITé.
THIRD. That this railway “is fully supplied with the usual equipment and
“facilities to transport its traffic with economy and dispatch,”
A. From New York to Buffalo and Suspension and International
bridges, and Dunkirk and Rochester, 706 miles, being our main lines
opposed to the New York Central and Pennsylvania railroads, we have
401 miles or 56% per cent. of single tracks, and 65 per cent. of the total
distance is laid with iron rails, while the main lines of the New York
Central, from New York to Suspension and International bridges and
Buffalo, are entirely double-tracked, and for 225 miles it has actually, or,
including its Harlem and Suspension Bridge lines, it has constructively
four tracks the entire distance, and all of steel. - r
The Pennsylvania Railroad is entirely double-tracked with steel rails
from New York to Pittsburgh, and has 146 miles of third and fourth
track, in addition to customary sidings. *
The relative economies of moving a large traffic, upon equal through
time, with such dissimilar facilities, are too apparent for discussion.
B. We have not the “necessary and proper equipment and facilities”
17
in station and transfer-houses, conveniences, sidings, etc., at most of the
points of transfer intersection, even with our present gauge.
C. We are farther deficient in the “equipment and facilities” of rival
lines, particularly at the most important points of Rochester, Buffalo,
International and Suspension bridges, and New York, in the aggregate
of freight and passenger depots, grain elevators, docks, wharves, and
storage warehouses, by means of which traffic is secured, expedited,
and retained, and fewer cars enabled to do a larger traffic with greater
“economy and dispatch.”
We have access to but one grain elevator at Buffalo, while the New
York Central tracks at that city reach six, with a united capacity of
2,375,000 bushels, and including the one reached by this railway. The
New York Central also connects with two grain elevators at Boston,
holding 1,500,000 bushels; it has recently completed one at its own New
York terminus equal to 1,000,000 bushels, and has contracted for another
at New York. The Pennsylvania owns or controls five grain elevators,
holding 2,400,000 bushels, at Philadelphia and Baltimore, and the Balti-
more and Ohio owns and operates two at Baltimore, holding 2,000,000
bushels, while we have direct access to none of those or others at tide-
Water. - -
The New York Central, via Boston and at New York, the Pennsylvania.
at Philadelphia and Baltimore, and the Baltimore and Ohio at Baltimore,
all have additional wharves, docks, and facilities, by which transfers of all
freights other than grain are made direct to and from steamers and other
vessels.
We have none such at any port.
We, therefore, lack the “wsual and proper facilities” in these essentials
to secure like “economy and dispatch” to the largest classes and volume
of traffic, and incur lighterage and handling instead.
D. In comparison with the New York Central, Pennsylvania, and
Baltimore and Ohio roads, this railway is deficient in cars and power, as
shown by their last annual reports, when regarded in relation and pro-
portion to gross tonnage and the gross mileage it traverses. The New
York Central and Pennsylvania, and their connections have each more
than double our number of cars in their through lines, and the same
deficiency exists via the Erie in cars for local traffic exchanges.
E. We note our great deficiencies in adequate shops for construc-
tion and repair, and car and engine houses. With few exceptions
those we have are inadequate in size, wrong in location, deficient in
number, and lacking modern improvements in labor-saving appliances,
tools, and machinery. To illustrate, we can house but 321 of our 475
engines, or less than 68 per cent, and much of that room is located so
that a large proportion must stand out of doors.
Where our limited power and cars are so fully used, these draw-
backs to the maintenance of uniform good condition by prompt repairs
when required, are serious defects in our equipment and facilities. The
18
superiorities of our rivals in these important particulars enable them
to better construct and maintain engines, cars, bridges of wood or iron,
wheels and other castings, forge axles, construct water and other
stations, and to manufacture many articles of railway use below the
cost and profit we must pay private manufacturers therefor.
F. It is of public knowledge that our passenger and freight structures.
and facilities are not equal in construction, capacity, economic appli-
ances, condition, or security to those of rival lines, and the insurance or,
risks we incur thereon are, therefore, greater than theirs. A comparison
of our station and other, buildings, docks, wharves, shops, and yards at
New York and Jersey City, with those belonging to the New York
Central and Pennsylvania roads at the same points for like purposes,
afford easily accessible and fair standards for comparisons of the like
facilities of the three companies at all points on their lines.
G. Our line is not equipped with the electric signals, nor the steam or
air passenger brakes, one or both of which are in use upon the New
York Central and Pennsylvania roads, and to the important extent that
these are “equipment and facilities,” and aid “economy and dispatch,”
and security, we are clearly deficient.
H. All money expended upon railways is intended to improve
some or all aspects of their condition, earning power, and equipment.
The Pennsylvania Railroad increased its cost of road and equipment
$24,551,947.51 between its annual reports of 1867 and 1875; and the
New York Central Railroad increased its like items in the same periods
$42,256,331.72, which amounts, being judiciously expended for those pur-
poses, have placed the present earning and economic power of those
properties far in advance of our own. -
We next proceed to answer more in detail the 17th section and other
so-called comparisons of expenditure before referred to:—
A. The charge that the “annual expense has been $5,000,000 more than
“competent administration would have shown,” is an unsupported assertion
which requires no other answer than the facts herein stated.
B. That we “have thousands of wSeless and unnecessary employés.”
There is a present necessity for more employés on the Erie than on
other lines, because it requires more men to take care of a roadway
laid mainly with iron, needing renewals, than on a perfected roadway of
steel; more men to watch and repair wooden bridges, than those of
iron and stone; more men at switches where double and single tracks
join, and more because of our poorly-arranged yards; more men to
transfer freights and passengers, which other lines do not; more men
to watch and guard our more numerous and imperfectly-sloped cuts
against land-slides and detached rock, and secure safety equal to other
level open lines; more men to get our trains at equal through time over
a partly single line; more men to work with defective repair and shop
facilities, station buildings, and transfer houses, than with complete ones;
19
more men to handle freights at terminal points without proper elevators,
docks, and warehouses, than upon lines which have them; more men to
work our greater proportion of branches, and our more numerous terminal
and connecting points; and more in other minor particulars resulting
from the causes stated.
We also have more men proportionately as we perform transfer Ser-
vices in and about New York and the harbor, and at Jersey City, which
our rivals perform by contract. Our Jersey City and New York station
pay-rolls show that we employed in this service 993 men in March, 1878.
Notwithstanding these unusual needs, we have reduced our employés
as follows, during a period in which our business has largely increased:—
There were in June, 1874, when you became president, all classes..... 15,449 men.
There were in April, 1877, date named in complaint... . . . . . . . . . . . . . . . . 11,314 “
Reduction 27 per cent., or . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,135 men.
To reduce long-established forces, and to add the labors of the dis-
missed to those who remain, without increased compensation, required
individual effort consuming much time and discriminating care.
C. That we “have paid 20 per cent, more than the services were worth, or
“were paid therefor by other lines.”
We believe the wages paid superintendents, agents, and clerks were
not more than they were reasonably worth, and were not more than paid
by other lines, as comparisons show, notwithstanding former deficiencies
in the condition and facilities of the road, which required more skill to
operate it without accident. The delayed payments of wages induced
our laborers to discount their wages. These were difficult conditions to
change in addition to a great reduction of forces, and without inter-
rupting our business; yet it has been largely done since dates covered
by the complaint, by regular and prompt payments of wages when due
and by reductions accomplished the past season in the rates of wages.
The differences of wages at no time amounted to 20 per cent. on any
class of employés.
D. “That we have paid excessively for maintenance of way, motive power,
“and equipment, as shown by the tables, which offer ready and convenient
“standards of comparison.”
We have detailed dissimilarities of prior condition, present earning
power, expenditure necessity, and equipment and facilities, which prove
the so-called standards and comparisons of the complaint worse than
valueless, because they are false.
Other causes operate upon true comparisons, such as–
The geographical differences of climate.
The varying accessibility and cost of fuel.
The differences in the demand and supply of labor in different sections
and seasons. For examples: We can get more and cheaper labor in
Buffalo in Winter, when lake and canal navigation are closed, than in
?
w
20
Summer, and we must pay more at New York than the Baltimore and
Ohio pays in the mountains of Virginia.
E. It is next charged that the Erie pays more than the other com-
panies, as follows:—
F*. General Superintendence—More than New York Central............ $21,383
F*. All offices, not including above—More than New York Central..... 51,973
F*. Clerks, &c., and in general offices—More than New York Central... 103,140
F*. Station agents, clerks, and foreign and emigrant agencies—
More than New York Central. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403,960
F°. Supervisors, foremen, laborers, watchmen, flagmen, &c.—
More than New York Central. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171,853
More than Pennsylvania Railroad. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,923
More than Baltimore and Ohio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,807
F*. Maintenance of way, motive power, all cars, agencies, general super-
intendence, and handling freight—
More than Baltimore and Ohio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,477,804
More than Pennsylvania Railroad. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,150,476
More than New York Central Railroad. . . . . . . . . . . . . . . . . . . . . . . . . . 3,619,002
We can find no such figures in the annual statements to the state
authorities, but we do find the following:—
e New York Lake P I *
F1. Erie. Central. Shore. ºna
General superintendence..#141,810 $194,198 $220,565 $184,109
Thus Erie is less than... . . . . . . . . 52,388 78,755 42,299
This charge is, therefore, clearly false, and in this respect our expenses
are less, notwithstanding our greater difficulties of management.
F*. Clerks, &c., and in general offices.
No such items appear in either report, and the figures are apparently
fictitious.
F*. We reported as paid general office clerks, . g . $158,322 52
To which they seem to have added item, clerks to Supts., 18,813 00
(No such item appears or exists in our accounts.)
$177,135 52
Making total, . & e g g * wº
Which they have compared with arbitrary item on New
York Central; and no such item appears in its accounts, 73,995 00
This entire comparison is, therefore, false.
F4. Station agents, clerks, and foreign and emigrant agencies.
The amounts charged to each or the aggregate of these items do not
appear in the reports or accounts of either company, and are, therefore,
€I’I’OI) eOllS. * -
F*. The necessity for more supervisors, foremen, laborers, watchmen,
and flagmen, has been shown. They were not paid more each than the
average on other lines, and we secured and kept their services at irregu-
lar and delayed pay, while other companies offered the reverse. f
The wages paid each of these classes of men are shown in Appendix
(marked A). -
21
F*. Maintaining way, power, cars, agencies, superintendence, handling
freight, being $3,749,094 more than the average of the Baltimore and Ohio,
Pennsylvania, and New York Central for like expenses.
The amounts quoted as ours, as well as those of our rivals, are untrue,
garbled in being extracted, and combined and grouped so as to misrepre-
sent actual results. The income and outgo accounts of the trunk rail-
ways represent aggregate transactions ranging from twenty to sixty mil-
lions of dollars per annum on each of the different lines, and each made
up of thousands of entries which conform to. methods, forms, books,
systems, and tables, distributions and assignments, which vary according
to state regulations, methods of division with branches, personal judg-
ment or preference, local precedents, rulings of boards, or other causes,
and are then represented in annual and other reports, under various
heads, classifications, names and amounts in the items, but correct
in the totals. Even approximate accuracy in the comparison of
details is, therefore, impracticable, if honestly intended, while the di-
vérsities of systems afford ample opportunities for intentional or igno-
rant misrepresentations, as in the present instance, where $975,610 of
the Erie expense, $560,563 of the Baltimore and Ohio, $4,734,284 of the
New York Central, and $1,847,657 of the Pennsylvania Railroad have
been omitted, and the actual results and comparisons with all those lines
distorted to our detriment.
For examples, we cite:—
22
ERIE CHARGES IN ITS ACCOUNTS FOR 1876.
Items.
To amount
Of
To account called
While New York
Central accounts
show
Supervisors, maintenance of
way, superintendents, and
insurance. . . . . . . . . . . . . . . . .
Cleaning & housing engines. .
Operating telegraph . . . . . . . . .
Agents and clerks, including
fast freight lines. . . . . . . . . .
Labor, loading and unload-
ing, including lighterage. .
Porters, watch men, and
switchmen. . . . . . . . . . . . . . .
Conductors, baggagemen, and
brakemen, dispatchers, &c.
General office expense.......
Legal expenses. . . . . . . . . . . . . .
Hire of cars. . . . . . . . . . . . . . . .
In this item we charge only
difference between amounts
paid and received on this ac-
count, and service.
$92,498
288,453
112,999
904,170
753,257
321,634
1,272,764
88,611
92,908
218,115
Superintendence and
• contingencies.
Account called same.
Telegraph operators.
Agents and clerks.
Labor, loading and
unloading.
Account Same name.
Account Same name.
Account same name.
Account Same name.
Account same name.
No such items or
heading.
No like account.
No similar item.
Only $597,304 un-
der same head.
It charges fast
freight lines to
labor, loading
and unloading.
Therefore see
next item.
To this account,
$999,931; and
to light erage
and cartage,
$830,538; total,
$1,830,511; or
$1,077,254 more
than Erie.
Same account,
but a mount
w a s $678,738
largely in ex-
cess of Erie; but
next item.
Same item, $751,-
268, but does.
notincludesta-
tion, baggage-
men, or yard
brakemen.
Charged to office
expenses, sta-
tionery, &c.
Charged to con-
tingencies.
$1,524,952, seven
times Erie.
amount. New
York Central
charges this to.
expenses, and
credit what it.
receives to
earnings.
Equally diverse systems, as compared with our own and with each
other, exist on both the Pennsylvania and Baltimore and Ohio railroads;
but enough has been shown to prove the falsity of the comparisons of
the complaint, their worthlessness as standards of management, and that
the only true bases of comparison are aggregate annual statistics reduced
23
to the few items of receipts and expenses per train, per ton, and per
passenger per mile, and even those results must then be honestly and
justly considered with reference to the conditions, peculiarities, gauges,
disabilities, and facilities, which surround and determine them upon
each railway. -
The complaint next proceeds within our departments to particularize
certain hearsay charges of mismanagement, corruption, and improvi-
dence. • * -
We note and answer them in their order:- -
Page 42, section 15, folios 165 to 169, inclusive, is in effect:-
“That during the month of March, 1877, the said Jewett made an illegal
“agreement with one Thomas Dickson, who was at the time the president of the
“Delaware and Hudson Canal Company, and also one of the directors of the
“said Erie Railway Company, by which agreement an unjust and unwar-
“ranted rebate was made to the said Delaware and Hudson Canal Company
“by said Jewett, receiver, of sums aggregating more than $71,000 upon ac-
“cownts amounting to $156,000, while at the same time the said Delaware and
“Hudson company owed the receiver $298,000.” - - -
The accounts show this statement of amounts to be incorrect and mis-
leading, and to cover periods different from those stated.
Regarding the actual sums due us, the Delaware and Hudson company
held certain amounts payable for transportation as an offset against
the final adjustment of balances claimed to be due to it for Erie guarantee
upon Boston, Hartford and Erie bonds, etc. -
The court authorized an arrangement, but the matter is not yet finally
adjusted. . . . - *
The following are the facts respecting the lesser transportation rates
charged to the canal company:— .
We deny any illegal agreement, or the payment of unjust or unwar-
ranted rebates. All the rates and arrangements made were necessary,
and clearly within the authority conferred upon you in the orders ap-
pointing you receiver.
August 22d, 1876, prior to the dates in the complaint, the so-called
anthracite coal combination was disrupted, and not renewed during our
last fiscal year. - - -
A contest ensued among the coal companies and their own and other
transportation lines, which finally reduced the prices of coal at tide
water and Lake Erie and Ontario ports about one-half.
Many of these joint mining and carrying companies competed with
coal companies using, and railways connecting, with the Erie, among
them being the Lehigh Valley, the Philadelphia and Reading, the Penn-
sylvania, the Central of N ew Jersey, and the Delaware, Lackawanna and
Western railways. It is idle to assume that those or any railways
charged or received, or could do so, as high rates of freight when coal
24
sold at $2.50 per ton as when it sold at $4.50. The miners and trans-
porters last named, therefore, publicly, and simultaneously with the re-
duced prices of coal, reduced their coal-transportation rates for all their
patrons and to all their tide-water termini, in competition with coal com-
panies and connecting carriers using this railway. The latter then repre-
sented to us that, after deducting their contract transportation rates from
sale prices realized at points of competition, equal to those realized by
competing coal companies and carriers at the same or equivalent points,
they would incur large, continuous, and unavoidable losses, the result of
which would be that they would send their coal, when practicable, to other
and more profitable points, cease its transportation via this railway, or use
all available routes rival to our own, which sought the carriage of the whole
or any part of their coal at their reduced rates, to all common points and
for any periods. Diligent inquiry confirmed these and other facts, which
were farther substantiated by the actual sales results from like coal
mined from our lands and sold under our control. The alternative pre-
sented us was to modify our rates in accordance with the facts, and
thereby carry our proportion of coal during the lapse of the combination,
or by declining, to risk the loss of our competitive coal tonnage pending
a new combination, since formed. -
The following considerations also influenced the conclusions: If we
charged prohibitory rates our coal cars and power would remain idle
at greater loss and risk to themselves than if in use, and our patrons
and coal companies would promptly establish rival purchase, sale, and
transportation relations elsewhere, and be difficult to regain. The percent-
ages of production to which this railway and the coal companies in its
interest might otherwise be entitled in any subsequent apportionment,
would, in that event, be reduced to the extent of the traffic surrendered,
which, having been voluntary, its return could not be made compulsory.
Rival coal miners and carriers were actively soliciting our patrons at the
prices at which they were carrying coal for others. The Receiver of the
Central Railroad of New Jersey has recently testified to the Senate com-
mittee of New Jersey, at Trenton, that his company transported coals
during this period at 40 per cent. of the prices realized at tide-water.
We declined its carriage at such rates for lesser distances, and main-
tained without abatement the contract basis of rates to our non-competi-
tive stations.
In addition to these competing routes eastwardly, there existed west-
wardly routes via the Lackawanna, Lehigh Valley, Southern Central,
and Northern Central, all in connection with the New York Central, via
the Philadelphia and Erie and Buffalo and Philadelphia railroads, the
Erie Canal and Lake Ontario, all of which placed coal at Cleveland,
Detroit, Chicago, Milwaukee, and other competing points at freight
rates below our contracts. This competition was aided by the reduction
of former Erie Canal coal tolls, as the total freights to Buffalo by rail
could not exceed the reduced rates to tide, added to those of the canal
from tide to Buffalo; and the coal rates from Charlotte, Oswego and Fair-
25
haven upon Lake Ontario, in returning lumber and grain vessels were
lower than ever before known. -
All our contracts with the canal company also required us to give
it, in any event, as low rates per mile as we accepted from other compa-
nies; and our Lehigh Valley and other connecting contracts required,
according to uniform custom, that we prorate the through rates made,
which were also prorated upon the longer routes via the New York Cen-
tral. In addition to the stated rail, canal, and Ontario routes westward,
the Philadelphia and Erie Railroad to Erie, and the Buffalo, New York
and Philadelphia, and the Lehigh Valley, Northern Central, and New
York Central routes to Buffalo, made and divided between different com-
panies lower joint through rates over longer distances than ours from
Carbondale to Buffalo, all of which we received; so that at equal through
rates, like coals paid our rivals less rates per actual mile carried, than the
same rates paid to us.
Prudent forethought for our immediate and permanent interests, there-
fore, rendered it obligatory for the essential reasons set forth, that we
share with our coal companies and connections reasonable concessions,
based upon actual sales and the rates known to have been made by com-
peting coal companies and carriers, in order to secure to both interests just
and due proportions of the then and future sales and transportation of their
and other coal. Such rates and arrangements and none other were so
made. The coal companies simultaneously reduced the prices charged
for coal consumed by this railway; waived certain of their prior contract
rights; and the canal company further agreed to carry coal over its rail-
way and planes, from our mines, to Honesdale and Carbondale, and
necessarily passing over its lines, at the reduced rates per mile we charged
to it; and, in other and valuable particulars, assumed its proportions of
the required abatements.
Our concessions were made principally in winter months when our
coal cars and power would otherwise be comparatively idle, owing to
the closing of lake, river, and canal navigation. Your action in retain-
ing our own and diverting other coal tonnage from competing routes
resulted in a gain of coal transported by us to tide for the canal com-
pany alone of 11,780 tons, or 29% per cent. in December, 1876, and
January, 1877 (the months named in the complaint), over the same
months of 1875 and 1876; in a gain of 117,524 tons, or 229 per cent, in De-
cember, 1877, and January, 1878, over the same months in 1876 and 1877,
and a gain of 129,304 tons, or 326% per cent. in December, 1877, and Jan-
uary, 1878, over the same months of 1875 and 1876. The rates were re-
munerative if applied only to the periods of the concessions; but, com-
puted over the longer terms of the improved permanent results secured
thereby, the action was needful, wise, and profitable, and has been so
demonstrated, as the recent coal combination secures to our coal compa-
nies, patrons, and this railway, percentages of the total production and
transportation larger than could otherwise have been secured; since
26
which time the rates have been advanced to their original basis westward,
and are rapidly advancing eastward. We transported the coal at the
reduced rate with fairer profit than otherwise, by carrying as much as
possible in returning box, cattle, and gondola cars. t
The only part of this line to which the Delaware and Hudson com-
pany guaranteed 100,000 tons annually was the three miles of the Ho-
boken Railroad Company from Jersey City, and that guarantee has not
been waived or the rates thereon reduced.
The next charge is (folios 176 to 180, inclusive), that—
“On or about the 28th day of January, 1876, the said Jewett fraudulently
“and corruptly entered into a contract with one John R. McPherson, of New
“Jersey, and caused to be executed by Said stock yard company to the said
“McPherson, pursuant to such fraudulent contract, a lease of all the yards and
“property owned and controlled by Said Stock yard company, except the pro-
“perty known as the Fortieth street yards, in the city of New York, for an
“inadequate consideration, and at a much less rental than other and responsible
“parties had offered and were ready to pay therefor, as said Jewett well knew,
“and although said lease did not include said Fortieth Street yards, and said
“Stock yard company was liable for the rent of the same to the amount of over
“$20,000 per annum, yet said Jewett corruptly caused a clause to be inserted in
“Said lease and agreement, whereby the Erie Railway Company guaranteed
“and Secured to said McPherson yardage on the small stock billed to New
“York, and passing into said Fortieth Street yards, and thereby deprived said
“stock yard company of such yardage; and the plaintiffs, wipon information
“and belief, State that this clause alone in said lease is a loss and waste of the
“trust funds, in the hands of said receiver, of not less than $50,000 per annum.
“That in like improvident and corrupt manner the said Jewett caused to be in-
“serted in said lease and agreement a clause, whereby the Erie Railway Com-
“pany agreed to pay said McPherson the sum of $1 for each and every stock
“car unloaded and cleaned by him at Oak Cliff and other stations on the Erie
“Railway, the said Jewett well knowing that said price was exorbitant and un-
“just to the Erie Railway Company, and that responsible parties, as plaintiffs
“are informed and believe, were ready and desirous of taking the contract, not
“only of whloading and cleaning said cars for nothing, but to pay for the
“manure taken from said cars the sum of $5 per car load; that this provision
“in said lease and contract has caused a loss and waste of the said trust fund
“in the hands of said receiver of many thousand dollars per annum; that said
“lease and contract is, in many other respects, onerous and unjust to the Erie
“Railway Company.” t
Replying thereto, we state:—
Prior to the said contract, its proposed terms were carefully compared
with reliable information, and the text of similar agreements of rivals at
New York, and connecting railways elsewhere, and we were then, and
are now informed and believe, that the contracts of other railways and
stock yards at New York, Jersey City, Philadelphia, and Boston, which
are terminal yards, where live stock is offered for sale and delivered to
27
consignees without being reloaded in cars, as well as the contracts of the
Union Stock Yard Companies at Chicago, the National Stock Yard Com-
pany, at East St. Louis, the United Stock Yards Company, at Cincinnati,
and the Union Railroad Transfer and Stock Yard Company, at Indian-
apolis, at all of which live stock is unloaded; sold, and again reloaded
into cars, are each and all upon terms not more profitable or more
carefully guarded than the contract with McPherson.
Prior to that time the inefficient management of the National Stock
Yard Company had, for a series of years, caused annual loss to this estate,
in lieu of the present guaranteed income, and our live-stock traffic and
the revenues of the National Stock Yard Company had also been reduced
from the same cause. Its sales markets were small, poorly attended,
and realized to our patrons and the yards less returns than at any other
sales yards in or adjacent to New York. After we acquired their control
the desire to correct and improve these results was made generally
known, and proposals solicited for their lease or other management.
The aggregate price the lessee finally agreed to pay ($65,000, in addition
to the Fortieth street yards), was and is largely in excess of the proposals
of other parties therefor; the only other tenders having been one of $36,000
and one of $60,000 per annum, the first excluding and the latter includ-
ing the Fortieth street yards. But one-half the interest in the Fortieth
street yards was controlled by the National Company prior to, at the
time of, or since the contract with McPherson. The Union Stock Yard
Company, connected with the New York Central, paid for the remaining
half interest, and received the profit, if any, thereunder. The lessee is
therefore entitled to only one-half the profits, if any, at Fortieth street,
and was, and is, required to assume and pay all the obligations of the
National Company for its interest therein, including rentals, repairs,
maintenance, enlargements, labor, &c., thereat. The guarantee of
the lessee covers all the yards upon the line, and he determines at
what point or points to collect yardage, but he has none other than the
rights to collect the same which were formerly granted to and exercised
by the National Company, and which are the same as those granted to
and customary with all similar stock yard companies.
The yardage charges paid to the stock yards by this railway occur at
New York and Jersey City only, and are then charged as agreed and
customary by and between the New York Central, Pennsylvania, and
this railway, and in co-operation and by agreement with connections of
the trunk lines to Chicago, St. Louis, Indianapolis, Louisville, Cincinnati,
Columbus, Detroit, &c., and intermediate points. The agreed public and
fixed yardage rates upon hogs and sheep only (not cattle in any event),
are always added to the rates of transportation which would otherwise
be charged, and when western companies divide the through rates, this
allowance is specifically given to all the trunk lines, over their usual
shares. Owners or consignees, therefore, pay the yardage, and not the
railways, except as trustees, and all other yardage and all charges upon
28
Cattle as well as upon much small stock, are collected by the lessee from
the owners or consignee, of animals yarded, weighed, sold, fed, watered,
and delivered.
Live stock cars could be unloaded and cleaned more economically at
the prices agreed to be paid to the lessees of the stock yards than to hire
laborers therefor, because the unloading and cleaning is done by the
same men at points where we had no other laborers; and our current
statements indicate that the remote location of the Oak Cliff yards from
the resorts and homes of laborers, added to the necessities for unloading
stock promptly at all hours, has caused a loss to the lessee, at the price
agreed to be paid therefor, which price also includes responsibility for
damage to animals while being so unloaded, and also includes unloading
and reloading at Deposit, and driving animals destined to New York on
board the transfer barges at Oak Cliff. The cleaning is necessary to
prevent damage to return freights, and to preserve cars from rot; and
only the price provided in former contracts between the National Com-
pany and this railway is paid. -
No proposals have, to our knowledge, been received, nor do we know
parties who will pay $5.00 per car for the manure taken from the cars, in
addition to unloading and cleaning them, as they arrive, and we believe
such allegation to be false. No manure of appreciable value or quantity
is taken from sheep or calf cars. It takes the cleanings of 40 cattle and
horse cars to make one car of manure, or of 100 hog cars to make one
car of manure, which would make the manure cost from one hundred to
two hundred dollars per car-load, beside the labor of unloading, if paid
for at the rate named in the complaint. The manure was reshipped
over and paid this railway local rates beyond those formerly charged.
The net revenue derived from the manure unloaded from 4,593 cars at
Oak Cliff for the calendar year 1877 was but $677.50, after paying our
rates of transportation; and still farther, the manure is sold for our
account, and does not belong to the lessee.
The next charge is (page 45, section 15, folios 180 and 181):—
“And the plaintiffs further show that said receiver made unlawful and
“fraudulent contracts with one Nelson Morris and sundry other persons, where-
“by he paid to them $15.00 for each and every car-load of cattle shipped over
“the said Erie Railway during the period of his receivership. That the said
“moneys were so paid out of the trust funds in the hands of said receiver, and
“have amounted, up to the present time, to over four hundred thousand dollars
& 4 ($400,000), for which no adequate Services were rendered to the estate.”
This brief statement is false in the following particulars:–
A. There is no contract. -
B. There is no fraud in the payments or results.
C. Fifteen dollars is not paid on “each and every car load of cattle
“shipped over the Erie Railway.”
D. The total amount actually paid upon cattle within the period
quoted was but little more than half the amount alleged.
29
E. Adequate services have been rendered the estate.
In proof of which we further answer: June 21st, 1875, the three
trunk lines appointed eveners for their hog and cattle traffic. Mr. Morris
was selected as the cattle evener on behalf of this company. The
facts and objects were and are as follows: Every prior form of agree-
ment and pool for the maintenance of live-stock rates for years had
failed. The number of western railways involved; the relations of Some
of them to some of the trunk lines; the complications of western and
eastern live stock markets; the facilities afforded this trade, unlike
others, to stop animals at sales points, transfer its ownership, and change
its destinations more than once, which offered opportunities for substitu-
tion; the great concessions offered large shippers by through lines in
joint interest; the complications of stock-yard interests, and the ability of
large forwarders to control the purchase and sale markets through the ex-
cessive drawbacks formerly allowed to them by the railways—these facts
and experiences led the New York Central, the Pennsylvania and Erie
companies, and some of their connections to first agree upon the pro-
portions of live stock arriving at New York to which each trunk line was
entitled; and they then agreed with certain large and responsible for-
warders that if they would actually purchase and ship stock sufficient to
keep upon each route the proportion to which it had assented, regardless
of markets and the difficulties above referred to, that, in consideration
of such purchases, risks, and division, they would pay fifteen dollars per
car on cattle only, only when they came from or through the western
terminal stations of the trunk lines, and when destined to New York
only, which compensation is prorated with connecting companies from the
starting points of through rates. We do not, therefore, pay on any class
of stock to or from our local stations, or to Philadelphia or Pennsylvania.
points, or other competing live stock, upon all of which the equalizing
plan enables us to now maintain better rates.
This plan has also accomplished equality of New York rates, and in
two years from June 30th, 1875, our cattle traffic increased 9,434 cars, or
186 per cent. Over the two corresponding years next preceding. When
the plan began, the cattle and hog rate from Chicago to New York was
25 cents per 100 pounds; it is now 55 cents, and the cattle rates at present
average two and one-half times the rates charged upon grain, flour, and
provisions, which have no corresponding method of division and mainte-
nance of rates.
The charge next following is on pages 46, 47, 48, section 15th, folio 182
to 191, inclusive, being in substance as follows:—
“That the Lehigh Valley Railroad Company agreed to provide a third rail
“of steel, with joints, to be laid on our roadway and sidings, from Elmira to
“East Buffalo, at a cost not exceeding $66.25 per ton, and freights to Waverly
“added; that we paid that price, that wrongful and fraudulent over-payments
“were made therefor, exceeding $100,000; that even the amount paid the Lehigh
30
“Valley company, $903,478.99, added to the actual cost of labor and material
“used in making it ready for use, did not exceed $974,798.15, and as we
“charged $1,060,038 in our accounts therefor, there is an overstatement of
“$85,233.85.” -
The authority of the Supreme Court, granted February 21st, 1876, au.
thorized and approved a contract with the Pennsylvania and New York
Canal and Railroad Company, guaranteed by the Lehigh Valley Railroad
Company, for laying a third rail upon both tracks of the Erie Railway
from Elmira to East Buffalo. Its value to this company was derived from
the following facts:—
The Buffalo, New York and Philadelphia Railroad had been opened
from Buffalo to Philadelphia under the patronage of the Pennsyl-
vania Railroad Company. The Lehigh Valley company had acquired
interests since resulting in purchases by it of the Geneva, Ithaca and
Sayre, and Cayuga Shore roads, and had made large cash advances to the
Southern Central, by all of which connecting routes were established be-
tween Philadelphia and Pennsylvania points, and Rochester, Buffalo and
beyond, via the New York Central, and all of them rival to the Erie, in
addition to the former through route of the Northern Central and New
York Central. Those routes were diverting the increasing western Phila-
delphia and Pennsylvania coal, freight, and passenger traffic, near and
tributary to our line, away from our route with its two transfers, and the
said contract was, for these and other reasons, carefully entered into.
The price to be paid for the steel rails was to be deducted from the
thirty subsequent monthly balances arising mainly from increased traffic;
it was the market price paid by various railways for like steel at the same
time, and we are advised it was the price paid to its manufacturers by
the Lehigh Valley company, partially in consideration of the promptness
with which it was delivered in anticipation of Centennial traffic.
The rail was laid with due and proper economy by our own employés;
the full sums charged were actually paid for the rails, joints, spikes, bolts,
transportation, labor of altering switches, cutting ties, providing frogs,
connections, and sidings, and laying the rail. All the material charged
to us by the Lehigh Valley was received and used, no portion having
been abstracted or misapplied, and the portion of material we purchased
was at the lowest rates, and providently and economically used.
The chief engineer's prior estimate was $1,042,662.
In laying this rail it was found that if iron rails were substituted for
steel upon the sidings, we could have 2,033 tons of new steel for our main
line, where it was needed, and with the written consent of the Lehigh
Valley company, now on file, it was so laid, all of it west of Elmira, and
upon the main tracks having three rails.
The results this rail and connection have accomplished are as follows:
It secured to us the large Centennial traffic of the year 1876. Com-
paring the nineteen months of its use, from June 1st, 1876, to December
31st, 1877, with the next prior nineteen months, we increased 216 per
31
cent. in number of passengers exchanged with the Lehigh Valley, with
an increase of 515 per cent. in our passenger revenues therefrom,
because of the large increase in through travel. In the same periods
there was an increase in coal received by us from the Lehigh Valley
of 242,577 tons, or 76 per cent, that company having guaranteed us
250,000 tons of coal per annum in the contract. Our general freights,
other than coal, increased 156,666 tons, or 78 per cent, with gains
in our revenues from the freights, excluding coal, of $138,121.86, or 43
per cent. Without the third rail not only this increase, but much of the
former traffic would have been diverted to the stated rival routes, and we
believe that comparatively as favorable results will follow the change of
gauge of the entire line. Had this contract been delayed until the
Lehigh Valley purchased the more northern railway lines referred to, as
it has since done under foreclosures, that company would not, in Our
opinion, have provided the funds needful to lay the third rail, and we
could not, as now, have paid for it from permanent increased and
guaranteed traffic.
The rail also established valuable connections with the narrow-gauge
roads of the Northern Central; Utica, Ithaca and Elmira, and Tioga rail-
road companies, as well as with our western narrow-gauge connections
for Pennsylvania and Philadelphia business, and to that extent reduced
our transfer expenses at Buffalo, and aided the increase of our equip-
ment by the use of the narrow-gauge cars of connecting lines.
It has also a large prospective value, looking to its extension from
Waverly to Binghamton, by which our narrow-gauge New England con-
nections are expected to be made. We are assured that the present
active construction of the Boston, Hoosac Tunnel and Western Railway
by prominent Boston capitalists, by which we hope to secure within this
year a large, steady, permanent, and valuable new traffic to and from
New England, which all administrations of this company have sought for
years at large expenditures, would not have been commenced but for
the laying of this third rail, and this important project largely influ-
enced the purpose and belief in the ultimate value of the Lehigh Valley
contract. It is also a large factor in the ultimate narrow-gauging and
economical results of this railway, in enabling us to commence the
narrowing of power and cars, and is a valuable nucleus to the farther
gauge and roadway improvements proposed to be made through the
intended reorganization.
The charge next following is (page 48, section 15, folios 191, 192, and
193):—
“That all or most of the freight passing by the Erie Railway to and from
“New York is carried, or procured to be carried, over the Hudson river by the
“said Erie Railway Company. - -
“That the said Jewett has made extravagant and improvident contracts with
“the New Jersey Lighterage Company and other carriers, for the transportation.
32
“of such freights across the said river, at rates much above fair and reasonable
“rates of compensation, and much above the rates for which such transportation
“could and showld have been effected, as said Jewett well knew.
“And the plaintiffs charge and aver, woon information and belief, that the
“Said Jewett and other officers of the Erie Railway Company were and are in-
“terested in the said New Jersey Lighterage Company, and are stockholders
“therein, and were influenced and induced to the making of such contracts by
“such personal interest, in fraud of the] said Erie Railway Company and its
“Stockholders.”
This assertion contains the following misstatements:–
A. No contract exists or has existed with the New Jersey Lighterage
Company since your connection with the Erie.
B. The same is true of all other harbor carriers.
The Services are paid for as rendered, but without contracts.
C. The rates are not above fair and reasonable charges.
D. The rates are not above those for which transportation could be
effected.
Our rivals and other companies at New York have furnished us the
rates paid by them to contractors on their entire harbor traffic; and
they are in every instance much greater than the rates paid by us on a
Small part of our own.
E. We annex hereto (marked B) the affidavit of the president of the
New Jersey Lighterage Company, that no present officer of the Erie com-
pany has or has had any interest in his company as a stockholder, or
otherwise, and that we have reduced his rates since your connection with
this railway. The further facts are that constantly decreasing quantities
of property are transferred to and from this railway by the lighterage
company, and only from day to day, as may be ordered by merchants
or otherwise. Our payments to it for the thirty-one months of this
receivership to December 31st, 1877, aggregated but $77,199.49, or less
than $2,500 per month, and $118,000 less than the amount paid for the
corresponding next prior period. This arises from reductions in the rates
paid as well as from the performance of the transfer of increased quan-
tities by our own employés.
The only other harbor carrier, whose services we pay, transfers grain,
because we have not the requisite tugs and grain boats therefor, and be-
cause it could not be performed by us at less than the prices now paid; and
we are informed, believe, and affirm, that the rates paid by us therefor
are but about one-half the average prices paid by other companies at
New York for their grain transfers and deliveries.
Of our entire tonnage received and delivered in the harbor of New York
for the last fiscal year, the lighterage and grain freights aggregated but 19
per cent. of the total, and the remainder was handled by and transferred
upon our barges and by our tugs and employés.
The next charges are as follows (page 49, section. 16, folios 195 and
196):-
33
“That the said Jewett has made excessive, unwarranted, and improper re-
“bates and commissions upon charges for transportation of coal, cattle, oil, and
“other freight. That among others to whom such rebates were made, were the
“National Stock Yard Company, the Central Stock Yard and Transportation
“Company, the Standard Oil Company, the Erie and North Shore Line, the
“Great Western Despatch Company, the Acme Oil company, Charles Pratt &
“Co., C. B. V. Ward & Co.”
We answer:—
The rebates and commissions upon our charges for transportation, after
being properly and carefully prepared and certified by the general
freight and passenger agents, pass the inspection of each and all the
undersigned, and we aver that the above charges are unfounded, ignorant,
and malicious. Much the largest parts of all sums so paid were under
agreements with rival, and the authority of connecting, carriers, who pay
their several and aggregate large proportions thereof. In such cases
they are mainly charged to our co-operative fast freight lines under the
contracts in Appendix (marked C), pass the inspection of their general
managers, and the final audit of all the railways in interest before payment.
As to the smaller portion of drawbacks paid upon our local traffic, full
rates were first collected to secure penalties for the non-performance of
the promises or agreements of forwarders to increase quantities, in speci-
fied periods; to encourage new or foster old traffic, or for other reasons
known as proper, customary, satisfactory, and within the authority given
you for the management of this railway,
Replying specifically to the charges as applied to each of the parties
named, we affirm:- *
During this receivership, no rebates or sums whatever have been paid
to the National Stock Yard Company, or the Central Stock Yard Com-
pany, other than sums agreed to be paid to them by contracts; that no
rebates in the customary sense have been agreed to be paid, paid, or
are due to either of them, and the only amounts which we have paid
them have been for yardage of live stock, and the unloading of cars, as
detailed in the section of this paper relating to the McPherson contract,
and for certain services aggregating not more than $250 per month, ren-
dered to this company for labor at Buffalo, which we would otherwise
have to supply at equal or greater cost.
The next charge relates to the Erie and North Shore and Great Western
Despatch Fast Freight lines.
The Erie Railway, with thirty-seven of its connections, are the sole
parties to the contracts for their formation, operations, receipts, expenses,
and results. They are both governed by boards of managers or directors,
consisting of one officer from, and designated by, each railway in interest.
All their officers, agents, and employés are engaged at fixed salaries, and
34
there are not and cannot be any private interests, gains, or emoluments
whatever in their operations or results, and they are not companies. They
are merely the designations or trade marks of certain routes for marking
and the quicker dispatch of goods, as freight trains are designated by
numbers, or passenger trains by titles. All of the railways, parties
thereto, act co-operatively under the two said contracts, and each and all
share any and all profits, gains, rates, drawbacks, concessions, advantages,
or disadvantages whatever in their business, and pay their total expenses
in the proportions of their several earnings in said lines, which are ascer-
tained and stated monthly at a meeting of the railway freight officers
of the companies in interest, by whom their forms, systems, vouchers,
and accounts are fixed and regulated, upon personal examinations.
All railway officers interested and present at the monthly meetings sign a
joint certificate of audit, upon which the expenses are refunded each
month, to keep full their capital or managing funds, which are con-
tributed entirely by, and belong only to, the railways in interest. Their
managers and agents have no power whatever to make or change rates,
agree to drawbacks, collect or refund moneys, or do anything but solicit
traffic at rates fixed solely by the railway companies, or take such other
action as the railways authorize. We make these explicit statements and
attach a copy of the North Shore contract in Appendix (marked C) to
disprove effectually false, ignorant, and malicious statements of their
character, scope, and operation, which have been persistently repeated.
This railway formerly had fast freight lines covering private interests, the
last of which was entirely eliminated by your order, May 1st, 1875.
While we have but two freight lines, the New York Central has seven,
the Pennsylvania Railroad Company has three, and the Baltimore and
Ohio Railroad two.
The charges relating to the Acme Oil Company, which is a western
forwarder, and Charles Pratt and Company, Brooklyn consignees for oil,
are answered in the clause hereof relating to the Standard Oil Company.
C. B. V. Ward & Co., mentioned in the complaint, is probably intended for
C. V. V. Ward who is the ticket agent of the general passenger office,
to and through whom only the miscellaneous expenses, including a few
passenger commissions are paid, in amounts which have averaged but
$300.89 per month during your receivership to January 1st, 1878.
Upon page 49, 8ection 16, and in folios. 196 to 202 inclusive, the com-
plaint charges more fully as to the Standard Oil Company, in substance as
follows:— ~.
“That we have continued in operation a fraudulent contract with the Stand-
“ard Oil Company, of date April 7th, 1874, for transporting oil to Weehawken,
“at rates no higher than it paid other lines; that it contained no provisions ex-
“empting us from carrying freights at less than cost; that it could be abrogated
35
by six months' notice, which was not given, but continued, so that we carried its
“oil at great loss to this railway, said loss amounting to #285,235.88 less than
“we could have received in three specified months had we charged the one cent
“perton per mile, which the complaint charges is the lowest reasonable or re-
“munerative rate for such transportation.” ... •
This statement is false in the following particulars:—
A. The contract of April 7th, 1874, made by your predecessor, and
named in the complaint, was discontinued by your order March 1st,
1875.
B. The contracts substituted therefor were carefully considered; are
made for no fixed periods, and can be annulled at fifteen days’ notice,
which renders provisions exempting us from carrying oil at loss, needless.
C. Substantially the same contracts as our own as to rates and condi-
tions have been and are still in force with the New York Central, Penn-
sylvania, and Baltimore and Ohio roads.
D. To believe that we could secure oil at higher rates than those
charged by other trunk lines, or that it was more profitable to decline its
carriage for a brief period of low rates, lay up our idle cars and power,
and risk the loss of the traffic to the extent we surrendered it when rates
advanced and would continue to rule high, is a striking characteristic
of the ignorance and malice of the complaint.
E. To set up one cent per ton per mile as the minimum of profitable
rates when the gross annual tonnage of all the trunk lines in their last
fiscal years, including the period cited, average less than that sum, is a
sufficient answer to that portion of the complaint.
The contracts made were rendered necessary by the large extent of
the business, its peculiar character, the limitation of our risks, the uses
of our oil yards at Weehawken, and the relations of both contracting
parties to connecting and rival lines, as well as to the port of New York.
The contracts do not name rates, and since their dates we have accepted
only our proportion of such rates as were made by agreement between
the trunk lines and their several connections, all of which have been
first authorized and the property started and delivered to us by the
receiver of the Atlantic and Great Western and by the Lake Shore com-
panies. Had we declined its carriage the Atlantic and Great Western
would have lost its eastward transportation. At only one brief period
were the rates of questionable profit, which resulted from the action of
the Pennsylvania Railroad from causes in which we had no part, and
since adjusted to give us an increased proportion of all the oil arriving at
the seaboard, and at rates now as high as have ever prevailed on oil
freights via any of the trunk lines since our connection with this railway.
At this time the oil rates from Cleveland and Oil City to New York are
more than double other fourth-class freights, while the oil moves in
much larger quantities, and the contracts exempt us from fire and other
risks. -
The average of the oil rates in any and every of our fiscal years has
36
been more profitable than any other of our eastward through freights.
and are rendered more so, as we have received a specific charge upon
every barrel of oil delivered at Weehawken, as all New York oil has been,
while the New York Central Company at the same through rates, but in
the absence of like oil docks, has paid from its like proportion a
lighterage to Hunter's Point, adjacent to Brooklyn, on all its share of
said oil.
An average of forty-eight per cent. of the oil arrives at Weehawken
in cars which we mainly reload upon their return with coal from Car-
bondale, Waverly, Elmira, and Corning at profitable rates, and for these
reasons the carriage of the oil was equally or more profitable to us
than to rival carriers transporting oil between the same points at equal
rates and divisions, but without such or other return freights. Still
further, our oil traffic for the period of your receivership to January
1st, 1878, increased 2,103,160 barrels over the same period next prior
thereto, and at better average rates.
The foregoing statements as to the Standard Oil Company are equally -
true as to Charles Pratt & Co. and the Acme Oil Company.
We notice the following charge (page 49, section 16, folio 195):-
“That he (the receiver) has placed and kept in office and in the employment
“of the company numerous dishonest, idle, and incompetent persons, many of
“them his relatives and personal friends, and many of them in positions en-
“tirely sinecure, to the great detriment and waste of the said trust estate.”
Of the total number of persons in the employ of this railway in March,
1878, all of them but 95 are in the departments of the undersigned; and
the charge that either dishonest, idle, and incompetent persons are inten-
tionally retained is untrue. It is impossible, considering their large
number, to certify to the actual character of each and all of them, but
dishonesty is promptly punished, idleness and incompetency are met by
prompt and permanent dismissal, and the systems of accountability,
inspection, and supervision are so complete that statements to the con-
trary are utterly without foundation. - -
Of the whole number of employés in all departments a careful investi-
gation shows but two persons now in the service in any way connected
with yourself; not more than five persons have, within our united de-
partments, been appointed upon your recommendation or request, and
but three of the latter are, to our knowledge, now in the service.
The statement that sinecure positions exist in this company is untrue,
as a comparison of its staff with the other trunk lines indicates that the
line is operated with fewer general officers and agents than either of the
trunk lines with which our results are compared.
The complaint next proceeds to charge (page 52, section 16, folio 206),
as follows:— * , - , *
37
“That among the other contracts improperly made and continued by the
“said Jewett as receiver as aforesaid are the contracts of the Pennsylvania Com-
“pany and the contract of the Tioga Railroad and the Blossburg Coal Com-
“pany, a contract with Homer Ramsdell, and a contract with the United States
“Express Company.”
Replying thereto, we say: The eastward contracts of the Pennsylvania.
“Coal Company are those in existence prior to your or our connection
with this railway. A careful examination and comparison shows that
they are desirable; that, owing to the cheaper prices of coal and other
causes operating at this time they could not be renewed as favorably as
when they were made, and that they secure to us as high average rates
:as are paid by any other coal company to its transporter within Com-
peting districts and periods upon like coals for equal distances.
The westward contract with the same company, made by yourself,
secures to us all its westward coal at rates the same as those charged via
longer rival routes, in addition to which it placed upon our line 400 im-
proved coal cars of a capacity of fifteen tons each, to utilize more fully
our third rail, and upon terms that we were and are unable to get any
other parties to adopt. These cars are to become our property upon the
payment of only the sum usually allowed by other lines for the mere
mileage of like cars until their cost is cancelled. All the terms of the
westward agreement were first assented to by the Lehigh Valley Com-
pany as equitable and customary.
The joint contract with the Tioga Railroad and Blossburg Coal Companies
was required by the completion of their new railway to a new junction
with our own at Elmira, instead of connecting at Corning as before.
It reduced the price paid by this railway for its coal from $2.50 per ton
to $2.15, and waived the former guarantee to purchase 150,000 tons per
annum. It is more profitable than the one formerly existing, and secures
to us better rates per ton per mile than are paid to the New York
“Central routes for the carriage of the same bituminous coal over its
greater distances.
The contract with Homer Ramsdell is of date October 13th, 1869, under
which he was to build and did construct fifty box cars, in consideration
for sending certain local freights via Newburg and his barges; the cars to
be paid for in instalments. There is now due to Mr. Ramsdell $7,000.
He is willing to release the company from its terms upon payment of
the balance at any time we desire, but it has not been deemed best to
so discontinue it.
As to the contract with the United States Express Company, no contract
upon our records was more thoroughly and minutely considered. It is pro-
fitable and desirable, upon a basis carefully ascertained to be customary
with other competing railways and express companies, after full com-
38
parisons with various other like agreements known and shown to us, and
was rendered necessary by the competition of rival routes with both the
railway and express, which had reduced express as well as railway
freight rates. It farther transferred to this company 5,000 shares of
fully paid-up stock in consideration of the said contract and in settle-
ment of old and disputed items of account.
The complaint proceeds to say (page 52, section 16, folios 207 and 208):—
“That in the early part of the year 1876 the said Jewett, as such receiver,
“made numerous improvident and unprofitable contracts with shippers of
“through freights over the Erie Railway Company for transportation of through
“freights, for the period of one year from the respective dates of such contracts,
“at less than the cost of transportation thereof to the Erie Railway Company,
“and that such contracts included and embraced the greater portion of the
“through freight carried by the said Erie Railway Company during the said
“year. And plaintiffs further charge and aver, upon information and belief,
“that the said contracts were manifestly and clearly improper and unprofitable,
“and are known to the said Jewett so to be, and that certain of the principal
“officers of the said Erie Railway Company were interested therein and made
“large profits therefrom, and that said contracts were carried out by the said
“Jewett to the great loss of the trust estate in his hands as receiver aforesaid.”
This statement contains the following that is false:–
A. The contracts did not “embrace the greater portion of the through
“freight carried by the Erie Railway during that year.” None were made
upon any eastward through freights, which is the vast majority in ton-
nage and revenue. . .
B. They were neither improper nor unprofitable.
C. None of the principal or other officers had, or could have, by any
methods, any interests therein or profits therefrom. The systems of
making, examining, auditing, and paying them by 38 railroads in interest,
as before detailed, absolutely precluded even a foundation for such a
statement. They were made at the rates of other routes, and no shipper
or receiver would pay to or share anything with any officer or agent of
this company to obtain rates which were freely and openly offered by any
and all rival lines. We attach the affidavit (marked D) of the general
traffic manager of the New York Central Railroad in confirmation of the
fact that that line made similar contracts, and that no personal benefit
could accrue from them. Yourself and every proper officer of this com-
pany used every means to avoid them, as is of abundant record, but
unsuccessfully, and none were authorized via this railway until those
efforts failed, and we had ample information that they were being
numerously made by rival routes. The alternative was then presented
to have returning business for cars which would otherwise go west
empty, and could, therefore, be moved at a scarcely appreciable dif-
ference of cost, or relinquish the business to rival routes, as no reasons
existed why shippers would pay us higher rates than to Our better
39
equipped non-transfer rivals. If we carried the freights at the rates and
for the periods known to be guaranteed by the New York Central and
its connections, and openly offered by the Pennsylvania, we believed that
upon their expiration the Erie would thereafter control its share of the
traffic at the full prices. If we declined we would risk the entire loss of
competing westward traffic for about one year, which would result in
equal or greater losses eastward, which combined losses would not only
be absolute for their duration, but more or less affect subsequent periods,
because at even rates merchants cling to the companies first giving and
continuing their former special rates. The agreements were, therefore,
made with a clear profit, both in the immediate carriage and greater
subsequent profit, as follows:–
Since July, 1877, a division of west-bound competitive business from
New York has existed among the trunk lines, and we were able, by
retaining our full share of westward traffic at the time referred to, and
in the manner indicated, to secure 33 per cent. of the total westward
tonnage, which is as much as any other carrier received, and the profits
of this later period have been since then and are now, and, it is hoped,
will continue, greatly in excess of those during the periods of the said
contracts. The trunk line commissioner certifies that our increase in
net earnings therefrom from July 1st, 1877, to March 31st, 1878, was
$642,015.24 over the larger tonnage for the corresponding period of the
prior year. The larger part of this later profit would have been lost to
this railway if we had not carried the property at the rates of the prior
period.
AVING thus fully answered the charges made in the complaint of
Charles Potter and others, and shown them to be untrue in every
particular, it is but just to you to show that notwithstanding the disad-
vantages we have enumerated in the management of the Erie property,
your administration has accomplished the following comparative and
positive results. Some repetition cannot be avoided in a full summary:-
1. The gross tonnage for the last fiscal year indicated a gain of 209,633
tons over the next prior year.
The following is a comparison of the gross tonnage of the trunk lines,
as shown by their annual reports for the fiscal years stated, included in
your receivership of this estate:—

rania | Balt. & Ohio.
Termination of fiscal year. N.Y. Central. Peºn”. Through and Erie.
proper. coal.
1876. . . . . . . . . . . . . . . . . . . . . . . . . . 6,803,680 9,922,911 2,280,682 5,972,818
1877... . . . . . . . . . . . . . . . . . . . . . . . . 6,351,356 || 9,738,295 || 2,117,071 6,182,451
Loss. . . . . . . . . . . . . . . . . . . . 452,324 184,616 163,611 ..........
Gain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209,633
Showing that the Erie was the only trunk line which transported an
increased tonnage in 1877 over 1876.
The tonnage of the Pennsylvania Railroad for the year 1876 included
its large transportation of material for Centennial buildings and exhi-
bition.
Our last fiscal year included the labor strikes of July, 1877, causing in-
creased cost and loss of traffic during unusual depression in trade and
finance.
The expenses for the fiscal year 1877 compare as follows:—

Cost per pas-
Gross Per | COst per ton | Per Per
expenses. cent. ... Cent. seºper Cent.
Less than 1874. . . . . . . . . $2,663,898 19 |##, of a cent. 17 |1+$o cents. 41
Less than 1875.... . . . . . 1,779,291 || 14 |#% of a cent. 21 |#5 of a cent. 25
Less than 1876. . . . . . . . . 1,331,362 | 11 |#5 of a cent. 15 # of a cent. 21
These reductions were made, notwithstanding our increased tonnage of
1877 at reduced rates.
The expenses of 1875 and 1876 were greater than they would otherwise
have been by the need, no longer avoidable, to make good the deprecia-
tion and lack of improvement of the years 1873 and 1874, which had
been postponed in anticipation of means to change the gauge. For this
reason there was expended for new equipment in 1875, $124,894.14, and
in 1876, $580,671.54, all of which was charged to working expenses.
(40)
41
2. During the same period the following statement of the reduction in
gross expenditures is in like manner taken from the said annual reports
of the four trunk lines:–

N. Y. Central. remºnie Balt. and Ohio. Erie.
1876............. ..] $16,124,172 34 $12,452,689 23 $5,411,635 53 || $12,231,201 78
1877. . . . . . . . . . . . . . 14,946,161 87 10,751,138 64 4,605,151 87 10,899,839 60
Decrease.... $1,178,010 47 $1,701,550 59 $806,483 66 $1,331,362 18
The operating expenses of the Pennsylvania Railroad for 1876 were in-
Creased by and for its Centennial business, and many of its improve-
ments were equally valuable in 1877, otherwise its reduction would not
have been so great.
3. June 1st, 1875, the arrearages of wages and supply bills was
$2,749,512.87, which required us to pay more for labor and material to
compensate therefor. Wages are now paid promptly as due, and have
been to an important extent reduced, and as we now ask no better credit
terms than other companies, we buy supplies as cheap.
4. The gross tonnage of this railway has been as follows: Fiscal year
ending September 30th, 1874, total tons, 6,364,276; fiscal year ending Sep-
tember 30th, 1877, total tons, 6,182,451.
The tonnage of 1877 was handled, moved, and delivered, and the road-
Way and equipment as well maintained as heretofore, with more than
four thousand less employés. -
A larger part of the power, cars, &c., is now being manufactured at the
Company's shops than has heretofore been done by preceding manage-
ments. •
5. During the period from September 30th, 1876, to the opening of this
year there have been added 41 new locomotives, 62 new passenger cars,
317 new freight cars, and 10 new baggage and express cars, the entire
Cost of which was charged to repairs to replace former lack of main-
tenance.
Two of the most important bridges on the line (at Port Jervis and
Portage) were also permanently rebuilt, after being destroyed in 1875,
and their cost charged to renewals. Each of these disasters decreased
Our traffic and increased its cost of movement in that year.
6. Notwithstanding the onerous leases of various branches, the annual
losses they have caused have been reduced in the following amounts:—
Reduction
- of loss.
1875 below 1874..................................................... $146,449 50
1876 above 1875 (caused by changes in the system of accounts)........ 135,815 31
1877 below 1876. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...................... 15,897 28
1877 below 1874. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. 26,531 47
7. The purchase of controlling shares in the Suspension Bridge and
Erie Junction railroads reduced the annual guarantees thereon from
$105,000 to $70,000 as legal interest upon the sum invested in the said
purchase, equivalent to an annual saving of $35,000.
42
8. The former lease of the Hackensack Railroad, which caused a loss of
$40,368.87 in 1874, has been changed to a contract, under which no loss
is incurred, but profitable local rates are paid this company to and from
our junctions. . -
9. Modifications of the former contracts with the Jefferson Car Com-
pany have resulted in an annual saving of $105,000 above the legal
interest upon the payments to secure that result.
10. The entire ownership, direction, and control of the Union Steam-
boat Company has been obtained, by which a traffic beyond the influence
or control of rival interests, and larger than the like traffic delivered to us
by any and all of our all-rail connections, has been permanently secured.
That company now owns seventeen steamers, of an aggregate capacity of
18,500 tons, and two sail vessels, carrying 60,000 bushels each. Five
steamers have been built under this management, aggregating 8,000 tons,
the whole now constituting the largest and best-conditioned fleet of ves-
sels on the lakes. The Union Steamboat Company farther furnished its
credit during 1877, to place in the service of this railway 300 cars much
needed for the carriage of grain. The control of the steamboat company
has likewise enabled us to complete, for the year 1878, a contract for a
division of the large traffic of Lake Superior ports, not possessed by this
railway since 1872. - -
11. The Lehigh Valley third-rail contract increased the traffic of the
Erie for the nineteen months since it was opened, to December 31st, 1877,
as compared with the same period prior thereto, 242,577 tons of coal;
156,666 tons of general freights, and 111,522 passengers, beside accom-
plishing the proportionate payment for the rail mainly from this in-
crease. It narrow-gauged nearly one-half the Buffalo and Niagara line,
Secured a guaranteed increased coal tonnage for a term of years, and
will establish narrow-gauge New England connections, and tide-water
terminal facilities at Boston that could not otherwise have been secured.
12. The local inter-state competition of the New York Central Railroad
with the Erie Railway was harmonized by contract, which took effect
August 1st, 1877, and which has secured improved results to both interests.
13. Your administration was largely instrumental in securing the west-
bound division of tonnage taking effect July 1st, 1877, under which the
joint-commissioner certifies a gain to this estate of $642,015.24 for the
nine months ending March 31st, 1878, for a smaller traffic than that
transported in the same period of the next prior year.
14. The same spirit of harmony has secured arrangements by which
the hog and cattle shipments over this railway have increased 9,853 cars
in two years over the corresponding period prior to said arrangement,
and the oil shipments have increased 2,103,160 barrels during the period
from June 1st, 1875, to January 1st, 1878, as compared with the same
period next preceding, at rates now restored to as high a standard as
paid any trunk line at any prior time of your administration.
15. The property of the National Stock Yards has been acquired,
covering valuable real estate and franchises at Buffalo, Deposit, and 82%
43
acres of valuable land on tide at Jersey City, with improvements, all
valued at $1,000,000, the same having then been leased to J. R. McPher-
son, who is guaranteed by other responsible persons, by which this com-
pany now receives $65,000 annually, in lieu of a deficit to this company,
during the year prior to the lease, of $7,05475. The same contracts
farther secure to us, in important contingencies, our share of the trans-
portation of live stock.
16. The westward contract with the Pennsylvania Coal Company,
secures not only its entire competitive coal traffic, but 400 new and much-
needed coal cars, with a capacity of fifteen tons each; the said cars to
become the property of this company upon ordinary mileage payments
on the coal actually transported in them, until their cost is paid.
17. The contract of November 1st, 1876, with the Tioga Railroad and
Blossburg Coal companies secured the exclusive co-operation and tonnage
of those companies, and the price charged this company for fuel was
reduced 35 cents per ton, equal to $39,000 per annum, and a guaranty to
purchase 150,000 tons per annum was waived.
18. There is now in progress a revision of the former and present
sleeping car accounts with this railway, which promises valuable results.
19. Prior arrangements were annulled and remaining rates with the
New Jersey Lighterage Company reduced, resulting in gains, as compared
with the former methods of performing the like service, aggregating
about $58,000 per annum on westward and eastward freights, by reducing
the rates and by performing that service by the company’s employés.
20. As compared with former contract methods, including grain and
the freight handled by the lighterage company, the cost of the handling
and lighterage at and about New York and Jersey City, has been re-
duced from an average of 58 cents per ton in 1873, to an average of
34%, cents per ton in 1877, equal to a saving of $440,274.91 on the ton-
nage handled in 1877, as compared with the total at the cost under the
contract system of 1873.
21. A consolidation of the Commercial Fast Freight Line, the Diamond
Fast Freight Line, the Erie and Milwaukee Fast Freight Line, and the
North Shore Transit Company, was accomplished December 1st, 1876,
into one new co-operative line, called the Erie and North Shore Despatch
(consolidated), effecting a saving to this estate of $33,790.25 for its first
year upon a larger business.
All private interests in the Erie and Pacific Dispatch were eliminated
May 1st, 1875, and the interests were consolidated with the Great Western
Dispatch Fast Freight Line, and by that and other changes in the ad-
ministration of the Great Western Dispatch, economies amounting to
$236,638.97 were effected for the thirty-one months including Decem-
ber 31st, 1877, compared with the same period next prior thereto.
22. An adjustment of former questions at issue with the United States
Express Company and the present contract secured to this company
five thousand of its fully paid-up shares, of the present market value of
$250,000. -
44
23. The participation and payment by western and other connections
nas been secured for their due proportions of the expensive New York
harbor deliveries at irregular points, formerly borne solely by this rail-
way, by which the earnings of this railway were increased $241,260.73
during the two years ending December 31st, 1877, compared with former
divisions on the same traffic. The co-operation of connecting and rival
Companies was also secured in sharing the yardage on hogs at New York
in the manner stated, by which this company saved $26,000 during its
last fiscal year as compared with prior methods. -
24. The adjustment of the grading of grain in New York harbor, which
your administration largely aided, has resulted in gains of traffic to this
port and its carriers, and equalizes, as far as practicable, the disparities
of terminal facilities for grain at New York under which we labor.
25. The long pending and vexatious traffic differences between this
Company and the Atlantic and Great Western Railroad Company were
adjusted to the satisfaction of the latter management in April, 1876, as
per copy of its assurance to that effect in the Appendix hereto (marked
E), which adjustment continues in effect at this date.
26, Valuable through passenger connections have been established
between New York and Chicago, via the Pittsburgh, Fort Wayne and
Chicago Railway, and equally important freight connections with the
leased lines of the Pennsylvania Railroad, via Urbana, to and from
Chicago, Indianapolis, St. Louis, and elsewhere, to the equal gain Of the
Atlantic and Great Western Railway. These connections were largely
due to your own former relations to the Pennsylvania Company.
27. The reductions in our rates of wages which took effect July 1st,
1877, in which month the almost national labor difficulties occurred,
have resulted in an average monthly saving of $55,000.
28. In addition to these gains in items readily specified, we believe the
discipline of employés is improved, more rigid systems of accountability
are enforced, and the line service is more harmonious, and that these
results have been accomplished, particularly during the past year, not-
withstanding the efforts of opposing parties to create disaffection.
We have endeavored to state fairly within our departments the un-
avoidable and avoidable disadvantages of this railway, and what has been
done in part during your administration to remove the latter.
The whavoidable may be stated as:—
A. Our geographical location upon longer average distances, pre-
cluding earnings per mile upon like through tonnage equal to our rivals.
This includes our relative disadvantage for traffic to and from Baltimore,
Philadelphia, and New England.
B. The disparity in control of connections.
C. Rivalries with the state canals and railways.
D. (Contingently) our gradients and curvatures.
The disparities noted as unavoidable may be modified in the following
particulars:— . A
45
A. Some of our gradients and curvatures may be reduced by ade-
quate Outlay.
B. Our disparities in New England distance via New York, as com—
pared with the Central, may be reduced from an average of 150 miles to
40 miles, by the completion of the Hoosac Line, and somewhat reduced
by the completion of the New York and New England Line via Newburgh.
The avoidable may be summarized as:—
A. Our exceptionally expensive gauge to operate. -
B. The losses of traffic it involves by transfers and inability to utilize.
connections.
C. Our iron rails and single track.
D. Inadequate shops, terminal facilities, equipment, and stations.
E. The changes and uncertainties of management and policy; and,
F. The reductions of rates we have sought to avoid and shorten,
rather than cause and prolong.
Both these unavoidable and avoidable defects have continued in joint
effect to this date; otherwise the economies stated and the reorgani-
zation of the service would have indicated more favorable results in the
annual exhibits. The avoidable disadvantages have clearly had a greater
influence upon results than the unavoidable—for which reason we under-
stand the leading purpose of the reorganization to be to cancel them by
narrow-gauging the line, completing its second track and steel rail, and
providing the needed facilities of all kinds to establish a parity with rival
routes, and closer relations with connecting lines.
These will be reinforced by certain local advantages which have not
been stated; such as our milk and oil trades, our coal traffic, the cheap
fuel, &c., as well as from a large and, to us, entirely new New
England all-rail traffic via Binghamton, upon the level portion of our-
line, which avoids the expensive grades and curves of the Delaware and
Eastern divisions; improved connections to and from Lake Ontario via.
Fairhaven; new sources of tonnage in a connection with the Central
Railroad of New Jersey, via Carbondale, and with the New York Midand,
at Middletown; the probability of an Albany, Troy, Saratoga and Mon-
treal route to and from New York, upon the west shore of the Hudson,
in connection with our line, and other improved results from local causes.
If these be farther supplemented by the ability, through foreclosure, to
justly modify Onerous obligations; if the return to specie payments
restores national prosperity, and gives low, fixed values to labor and ma-
terial; if diligent and upright management be secured and continued to
avail of them, and if rates be harmoniously maintained, as a common
interest now requires, we believe this railway will permanently accom—
plish much better results for its proprietors than heretofore.
Respectfully submitted. - -
G. R. BLANCHARD, Assistant to the Receiver.
E. S. Bow EN, General Superintendent.
STEPHEN LITTLE, Auditor.
NEW YORK, April 20th, 1878.
ATPPENDIX.
A (see page 20).
COMPARATIVE STATEMENT OF WAGES PAID IN APRIL, 1877, IN MAINTENANCE OF WAY
BY SUNDRY RAILROADS,

Occupation Erie N. Yºent. Pennsylvania, Balºre
* Railway. Hudson Riv. y | Ohio.
Per month. | Per month. | Per month. Permonth
Road Supervisors. . . . . . . . . . . . . . . $70G)$90 $70 00 $806)390 None.
Track foremen... . . . . . . . . . . . . . . . 45(3) 65 42 00 45(3) 65 $36 00
Assistant track foremen. . . . . . . . 40(a) 50 40 00 35 None.
Bridge flagmen. . . . . . . gº tº e º 'º $ tº e º tº 40G) 50 30 00 32(3) 45 30 00
Per day. Per day. Per day.
Watchmen and flagmen. . . . . . . . $1 25 $1 00 32(3) 41 $1 05
Per day.
Track laborers.................. 1 25 1 00 $1 00 1 05
Yard track laborers. . . . . . . . . . . . 1 35 1 00 1 25 1 10
Erie Railway prices are now reduced 10 per cent. from above.
B (see page 82).
NEW YORK SUPREME COURT,
CEIARLES POTTER AND OTHERS AGAINST HUGH J. JEWETT AND OTHERS.
City and Cownty of New York, ss.:—
J. B. Gaddis, being duly sworn, deposes and says, that he is at this time and has
been for about five years, or prior to and for the entire period of the connection of
Hugh J. Jewett with the Erie Railway both as president and receiver, the president
and general manager of the New Jersey Lighterage Company, and that in said
capacities no payments are made without the authority of this deponent.
That he has read the complaint in the case of Charles Potter and others against
the said Hugh J. Jewett, receiver of the Erie Railway, sworn to on the 18th Jan-
uary, 1878, and particularly as to the following charge:–
“That the said Jewett has made extravagant and improvident contracts with
“the New Jersey Lighterage Company and other carriers for the transportation
“of such freight across the said river, at rates much above fair and reasonable
“rates of compensation and much above the rates for which such transportation
“could and should have been effected, as said Jewett well knew.
“And the plaintiffs charge and aver, upon information and belief, that the said
“Jewett and other officers of the Erie Railway Company were, and are interested
(46)
47
“in the said New Jersey Lighterage Company, and are stockholders therein, and
“were influenced and induced to the making of such contracts by such personal
“interest, in fraud of the said Erie Railway Company and its stockholders.”
This deponent deposes and says, that the charges now made by the New Jersey
Lighterage Company to Hugh J. Jewett for the transfer and handling of Said
freights are not, and have not been, during the whole or any portion of the said
period, in excess of those charged by the said New Jersey Lighterage Company to
other railroad companies; that said charges are, in most instances, less than those
collected by deponent from other railroad companies. That the deponent's charges
to the Erie Railway Company are, to the best of the deponent's knowledge and
belief, less than, those made by other lightermen or companies to their respective
carriers. That since the said Jewett's connection with the Erie Railway, he has
reduced the allowances by the said Erie Railway Company to the said New Jersey
Lighterage Company from seventy-five cents per ton upon west-bound freights to
sixty cents per ton; and, in addition thereto, the said Jewett has greatly reduced
the quantities of business transacted with this lighterage company. That the said
Jewett has also taken away from this company, and now performs himself the
transfer of the east-bound harbor business from the said Erie Railway at Jersey
City, formerly transferred in and about the harbor of New York by the New
Jersey Lighterage Company. -
And deponent further avers that, at this time, and for about three years last past,
the only business done by this lighterage company for the said Jewett or the Erie
Railway Company is that which is taken by this company in small lots from
vessels, warehouses, &c., remote from the stations of the Erie Railway to Jersey
City, where the said Jewett or the Erie Railway Company has not the requisite
barges or those of the proper sizes or capacities therefor.
Your deponent further avers that since the said Jewett’s connection with the
Erie Railway no officer or agent has, or has had, any direct or indirect interest in
or been allowed any commission or rebate whatever upon any of the business
transacted with the Erie Railway, or the said Jewett as receiver.
Your deponent further avers that neither the said Jewett nor any of the officers
of the Erie Railway Company have been, or are, interested in the said New Jersey
Lighterage Company since the connection of the said Jewett with the said railway,
nor are they stockholders therein, excepting twenty-five shares purchased by E. T.
Hopkins prior to the said Jewett's connection with the said railway. That said
Hopkins is connected with the said Erie Railway as a subordinate agent, and the
said Hopkins purchased and holds the same as an investment, which has so far
proved to his loss. • •
That the dividends upon the said stock have been for the past three years two
per cent, in 1875, three and one-half per cent. in 1876, and three and one-half per
cent. in 1877, the total payments, therefore, to the said Hopkins being in the
aggregate not more than $225. That no contracts or payments are made or author-
ized, or moneys paid or Orders given this deponent by the said Hopkins, except on
instructions from his Superior officers. That no contracts whatever have been
made by the said Jewett or any of his officers with deponent or the said lighterage
company, excepting Such verbal arrangements as are made from time to time for
the necessary prosecution of the business between these parties; and further your
deponent Saith not.
(Signed) * J. B. GADDIs.
Sworn to before me this 11th day of February, A. D. 1878,
(Signed) EDSON D. HAMMOND (43), Notary Public, New York &ounty.
48
C (see pages 33 and 34).
ERIE AND NORTH SHORE DESPATCH CONSOLIDATED.
AGREEMENT made between The Erie Railway Company, by Hugh J. Jewett, its
receiver, The Great Western Railway Company of Canada, The Grand Trunk
Railway Company, The Canada Southern Railway Company, The Michigan
Central Railroad Company, The Detroit and Milwaukee Railway Company, by
C. C. Trowbridge, its receiver, The Toledo, Wabash and Western Railway Com-
pany, by J. D. Cox, its receiver, as follows:—
Whereas, There are now in existence four several fast freight lines running over
the Erie Railway east of the Niagara river and west of said river by way of the
several railroads, parties hereto, as follows, respectively:—
First.—The Erie and Milwaukee line, so called, by way of the Great Western
and Detroit and Milwaukee railways, to and from Milwaukee, Wisconsin, and
other common points. -
Second.—The Commercial Express, so called, by way of the Grand Trunk and
Michigan Central Railways, to and from Chicago, and other common points.
Third.—The Erie and North Shore Transit Company, so called, by way of the
Great Western Railway of Canada and Michigan Central Railway, to and from
Chicago, and other common points. -
Powrth.--The Diamond Line, so called, by way of the Canada Southern, Michi-
gan Central, and Toledo, Wabash and Western railways, to and from common
western points.
And Whereas, for the purpose of reducing expenses and maintaining rates, it is
for the interest of all the railroad companies, parties hereto, that the said several
fast freight lines should be merged into one line, on such terms as shall secure to
said railroad companies, parties as aforesaid, their herein agreed division of ton-
nage revenue and expenses hereunder:—
Now, therefore, this agreement witnesses as follows:— -
1st. On the 1st day of December, 1876, the four lines aforesaid shall be consoli-
dated into one line, to be known and designated as the “ERIE AND NORTH SHORE
DESPATCH CoNSOLIDATED,” and shall be operated as a fast freight line, in manner
following, viz.:-
East of the Niagara river, by way of the Erie Railway and its connections.
Between the Niagara river and the Detroit and St. Clair rivers, by way of the
Canada Southern, the Grand Trunk, and Great Western Railways of Canada.
West of said Detroit and St. Clair rivers, by way of the Toledo, Wabash and
Western, the Michigan Central, and the Detroit and Milwaukee railways. --
The business of said consolidated line shall include the transportation of all
through traffic between competing points on line way-bills passing over the roads.
of the companies, parties hereto; excepting, however, all coal west-bound, and
live stock east-bound, and traffic from and to the Chicago and Lake Huron rail-
road via Port Huron, billed through.
2d. The general management of the consolidated line shall be vested in a board
of managers, which shall be composed of one representative from each railway
company, party hereto, and in such board each manager shall have one vote.
3d. The said board shall appoint a general manager of the line, and such other
officers and agents as may be necessary. They shall define the duties of general
manager, officers, and agents, and fix their compensation. They shall have gen-
eral supervision of the business of the consolidated line, prescribe the manner of
keeping its accounts, and make all necessary rules and regulations for transaction.
of its business.
49 *
4th. The board shall meet in Detroit on the second Wednesday of January,
April, July, and October in each year, and records shall be kept of all the pro-
ceedings of such meetings, and copies supplied to each company, party hereto.
Two members of the board may call a special meeting at any time, by giving to
each member thereof two weeks’ notice in writing, specifying the time, place, and
objects of the meeting desired.
5th. The general manager, appointed as aforesaid, shall keep accurate accounts
of the joint earnings, expenses, losses, damages, and overcharges of the consoli-
dated line, and shall apportion monthly amongst the several companies, parties
hereto, all joint expenses, losses, damages, and overcharges, in accordance with
the divisions herein provided, or as the same may be from time to time otherwise
agreed upon by said board. He shall submit such accounts for approval at the
regular meetings of the general freight agents, or other officers of the several com-
panies, parties hereto, as may be delegated to act in the premises; and when the
same shall have been approved, the said several companies, parties hereto, shall
be charged with the respective amounts therein found due from them, and the
same shall be paid accordingly.
There shall be placed in the hands of the general manager, for the purpose of
payment of expenses, losses, damages, and overcharges, when approved as afore-
said, a line fund, to which each of the companies hereto shall contribute in pro-
portion to the number of cars herein provided to be contributed by them respect-
ively to the line equipment; the amount of such fund shall be fixed from time to
time by the board of managers. >
As Security for the faithful performances of his duties, and for the proper appli-
cation of the funds so placed in his hands, the general manager shall give bond
in the sum of twenty-five thousand dollars, which amount may at any time be
changed by the board. - .
There shall be a regular quarterly audit of the accounts of such general mana-
ger by an auditor or auditors, under the direction of the board, and the result
thereof shall be reported to each company, party hereto.
6th. The companies, parties hereto, agree that within six months from and after
the first of December, 1876, they will furnish suitable cars, properly marked and
numbered, for exclusive use in the transportation of the traffic of the consolidated
line, and to such equipments they will respectively contribute as follows:—
Cars.
The Erie Railway Company. . . . . . . . . . . . . . . . ............................... 1,641
The Great Western Railway Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470
The Grand Trunk Railway Company....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325
The Michigan Central Railway Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 937
The Toledo, Wabash, and Western Railway Company. . . . . . . . . . . . . . . . . . . . . .
*The Detroit and Milwaukee Railway Company............................
The Canada Southern Railway Company........ • * * * * * * * * * * * * * * * * * * * * * * * * * * 325
And that until the expiration of the period so limited, and thereafter, from time
to time, as required by the board of managers, they will each contribute such of
their common cars, respectively, as may be necessary for the prompt and proper
carriage of the traffic of the consolidated line. *
7th. At any time after the entire equipment of the consolidated line shall have
been furnished, as above provided, the board of managers, by a two-thirds vote of
their whole number, may increase such equipment from time to time as the busi-
* In the original contract there are 273 cars apportioned to the Detroit and Milwaukee
Railway Company; but until it is definitely decided the amount is left blank,
50
neSS requires, in such ways and by such means and under such apportionment as
they shall deem expedient. It is expressly understood that no company, party
hereto, may reduce its quota of cars, except by and with the consent of two-thirds
of the managers thereto had and obtained at a regular meeting of the board.
8th. In the exchange of cars between the companies, parties hereto, for the
purpose of the business of said line, the existing rules and regulations of the
master car-builders (copy whereof is hereto attached and made a part of this
agreement) shall govern and control in all questions touching losses, damages,
and repairs to such cars, except so far as said rules may from time to time be
modified by the board.
9th. The cars of the consolidated line while moving upon the several roads of
the companies, parties hereto, shall be under the direction and control of the
respective superintendents thereof. -
10th. Each company, party to this agreement, shall keep and transmit to each.
other of the companies, parties hereto, accurate statements of the mileage of all
cars of the consolidated line, and other cars carrying line traffic passing over its
road, and settlements of mileage accounts between said companies shall be made
in the manner usual and customary between connecting railways.
11th. The cars now used by the several fast freight lines hereby consolidated
shall be run over and by their respective routes as at present, and shall SO con-
tinue, for the purposes of exchange, with their present marks and designations,
until it shall be otherwise agreed by and between the parties to this agreement.
12th. The line cars shall be used exclusively in the business of the consolidated
line; provided, however, that in the event of any such cars being dispatched
empty, any of the parties hereto may load such cars with freight destined to or
beyond the terminus of its road and in the direction in which such empty cars
are moving; but in no event shall line cars be used for traffic between way-station
and way-station on the same road. -
13th. The railway companies, parties hereto, respectively agree to give the con-
solidated line as good through rates, time, dispatch, and facilities of every kind,
as they have heretofore severally given to the respective freight lines hereby con-
Solidated, and further agree to place the consolidated line upon as good a footing
in every respect for all traffic as the most favored line operating over their road
by way of any other routes or railways.
14th. The several parties hereto agree to be and become responsible for all dam-
age to or loss of property happening while upon their respective roads, or in their
respective possession, for which they are responsible as common carriers, and, in
the event that such loss or damage cannot be definitely located, the same shall be
divided between the companies over whose roads said property was carried, in
the proportion of their respective earnings from the transportation thereof.
15th. Rates by the consolidated line, both east and west, shall at all times be
as high as those of other competing routes or lines. Through rates, west-bound,
from common points of shipment to destinations, shall be made exclusively by
the Erie Railway Company; and through rates east-bound, from common points
of shipment to destination, shall be made by the western company with whom
such shipment originates. -
16th. The Great Western Railway of Canada, the Grand Trunk Railway Com-
pany, and the Canada Southern Railway Company hereby agree that the aggregate
of all the tonnage passing over their respective roads, between the Erie Railway
and points on and west of the west bank of the Detroit and St. Clair rivers
eaccepting, however, coal west-bound, live stock east-bound, and traffic from and to
51
the Chicago and Lake Huron Railroad via Port Huron, as aforesaid; and the
revenues derived therefrom shall be divided, as nearly as may be, between them
in the following proportions, viz.:-
To the Great Western Railway of Canada, fifty (50) per centum thereof.
To the Grand Trunk Railway Company twenty (20) per centum thereof.
To the Canada Southern Railway Company thirty (30) per centum thereof.
And to the end of accomplishing such agreed division on west-bound traffic,
the Erie Railway Company agrees to distribute amongst said Canadian roads the
west-bound tonnage of the consolidated line, together with all other tonnage
from its own road, destined by way of said Canada roads to points on or west of
the west bank of the Detroit and St. Clair Rivers, in the proportions above pro-
vided, and in such way that the revenue derived therefrom shall be received in
the like proportions.
And to the end of accomplishing such agreed division in east-bound traffic, the
Michigan Central Railway Company agrees to distribute the aggregate of the east-
bound tonnage of the consolidated line, together with the local traffic of its own
road, destined for transportation over the Erie Railway, so as to equalize the fore-
going agreed percentages of the Canadian lines—both in respect of the amount of
tonnage and.the revenue to be derived therefrom.
And to enable said Michigan Central company so to do, it shall receive weekly
from the general manager of the consolidated line a statement of the east-bound
tonnages of Said line, and from the Erie Railway Company a statement of all
other tonnages received for transportation over its road, wia Said Canadian lines,
from points hereinbefore specified. Such statements shall also show the propor-
tions of said tonnages carried, and the revenue derived therefrom by the said
Canadian lines respectively; and in all cases the dates of the way bills shall
govern.
Monthly exhibits of the tonnages and revenues so equalized shall be furnished
to each other by the parties hereto, and each will afford the other prompt and full
opportunities for verifying the same whenever desired.
17th. The Canada Southern Railway Company hereby agrees, that during the
continuance of this agreement it will contribute to the business of the consolidated
line the same proportion of east-bound traffic, from or through Toledo, that
contributed to the Erie Railway, via Diamond line and otherwise, during the
year ending September 1st, 1876.
18th. It is hereby agreed between the Michigan Central Railroad Company and
the Detroit and Milwaukee Railway Company, the other parties hereto concurring,
that the latter company is hereby formally admitted to a participation in the con
Solidated line, as formerly in the Erie and North Shore Transit Company. And
it is also agreed that the business between Milwaukee and points upon or by way
of the Erie Railway, in both directions, when consigned, shall follow the route
the Michigan Central or Detroit and Milwaukee railways as designated, and when
unconsigned, shall be divided between said two companies as nearly as may be in
equal proportions, having regard both to tonnage and to revenue therefrom.
19th. Any railway or transportation company may become a party to this
agreement, by and with the consent of two-thirds of the managers thereto,
formally had at any regular meeting of the board.
20th. This contract shall continue until the 1st day of January, A. D. 1878,
and thereafter shall continue, unless and until the same shall be terminated at the
option of Some one of the companies, parties hereto, by three months' written
52
notice of their intention so to terminate, given to each of said companies on the -
first day of January, April, July, or October, in any year.
WITNESS the hands of the respective officers of the several companies, parties
as aforesaid, to this end, duly authorized, this fifteenth day of No-
vember, A, D, 1876.
The Erie Railway Company,
3. H. J. JEWETT, Receiver,
by G. R. BLANCHARD, Assistant.
For the Grand Trunk Railroad Company, t
- L. J. SEARGEANT, Traffic Manager.
The Michigan Central Railroad Company,
by H. B. LEDYARD, General Superintendent.
The Great Western Railway of Canada,
F. BoughTON, Gen’l Manager,
per JNo. CRAMPTON, Asst. Gen'l Manager.
For the Canada Southern Railway Company,
W. K. MUIR, General Manager.
C. C. TROWBRIDGE, -
Receiver, Detroit and Milwaukee Railway.
Toledo, Wabash and Western Railway Company,
* Note A.—The Chicago and Alton, Milwaukee and St. Paul, Chicago and North Western,
and other companies have become parties to this agreement since its date.
. NoTE B.—The Great Western Despatch contract is almost identical with this, but more favorable
in that the Erie company does not pay any part of the New York or Boston expenses of the line
offices, agents, or clerks. -
*
* - D (see page 38).
City and Cownty of New York, ss.: - +
James H. Rutter, being duly sworn, deposes and says, that he is the general
traffic manager of the New York Central and Hudson River Railroad; that he has
held the said position, and that of general freight agent, for over five years; that,
in reference to that portion of the complaint in the case of Charles Potter, and
others against Hugh J. Jewett, the Erie Railway Company and others, sworn to
on the 18th of January, 1878, which is as follows:—
“That in the early part of the year 1876 the said Jewett, as such receiver, made
“numerous improvident, and unprofitable contracts with shippers of through
“freights over the Erie Railway Company for transportation of through freights,
“for the period of one year from the respective dates of such contracts, at less than
“the cost of transportation thereof to the Erie Railway Company, and that such
“contracts included and embraced the greater portion of the through freight car-
“ried by the said Erie Railway Company during the said year. -
“And plaintiffs further charge and aver, upon information and belief, that the
“said contracts were manifestly and clearly improper and unprofitable, and were
“known to the said Jewett so to be, and that certain of the principal officers of
“the said Erie Railway Company were interested therein and made large profits
“therefrom, and that said contracts were carried out by the said Jewett to the
“great loss of the trust estate in his hands as receiver aforesaid”—he deposes and
, says:–
That during the spring and summer of 1876 it became necessary for the New
York Central and Hudson River railroads, in order to meet competition, to make
contracts running for various periods, but principally to July 1st, 1877, upon com-
53
peting west-bound freights; that such contracts were made and authorized by this
deponent through the various agencies of this company, and the fast freight and
despatch lines operating via its route; that the said contracts were made at low
prices for their duration; that the said contracts were ordered and carried out in
good faith by the said New York Central and Hudson River Railroad Company
and its connections; and that the manner of making and fulfilling the said con-
tracts precludes the possibility of a profit to the agents in making and fulfilling
the same; and deponent, from his general knowledge of the freight business, and
from the knowledge he possessed at the time that similar contracts were made by
the Erie Railway, believes it impossible for agents or officers of that road to have
secured higher rates than they obtained, and retain the freights, or to have de-
rived any profit or benefit to themselves personally therefrom.
(Signed) J. H. R.UTTER.
Sworn to before me this 5th day of April, 1878.
W. J. WANARSDALE, Notary Public. (7), New York county.
E (see page 44).
J. H. Devereux, Receiver
Of the Atlantic and Great Western Railroad,
* CLEVELAND, O., April 6, 1876.
G. R. Blanchard, Esq., Assistant to the Receiver:—
DEAR SIR: In reference to the proposition for a change of percents, as per letter
of Mr. Vilas, general freight agent (see Note 1), dated 8th of February, 1876, I
beg to remark:—
After a full consultation with Mr. Cochran (see Note 2), that officer will to-day,
as I understand his letter, advise Mr. Vilas of the Atlantic's acceptance of the
percents upon oil rates, to take effect the 7th inst.; and, upon other New York
business, also accepting the divisions heretofore existing.
In this final settlement of a vexed and much misunderstood matter, I wish to
thank you for the consideration you have shown and to express my sincere appre-
ciation of the policy of the Erie towards this line and its connections, so particu-
ularly manifested by the results of this recent investigation, and so plainly spoken
in the sentiments of Mr. Vilas’ letter, which I had not seen, I believe, until you
furnished me with a copy. Very respectfully yours,
(Signed) J. H. DEVEREUx, Receiver.
NoTE 1.-Mr. Vilas is the general freight agent of the Erie Railway.
NOTE 2.-Mr. Cochran is the general freight agent of the Atlantic and Great Western
Railroad.
No changes have been made in the divisions referred to by Receiver Devereux
since the date of the above letter, except those that are in favor of the Atlantic and
Great Western Railroad. G. R. BLANCHARD.
|||||I||

№rſ”， (， ， ， ， ， ， ， ， ，**********************************
*****************************************************************************ſºººººººººººº
.*（.）
~*~$£§！-- * *