The Sun.
London, England, 1868-12-07 00:00:00

THE LATE ERIE BATTLE.

A remarkable book, about which we shall have
something hereafter to say, " The Greater Bri-
tain," written by Mr. CHARLES WENTWORTH DILKE,
implies that New York is not an American city ; and
Americans will soon be thankful to any one who can
show this, so unenviable becomes the notoriety of
that great commercial capital, the head-quarters of
fraud—revenue frauds, gold-jobbing frauds, stock-
jobbing frauds, and naturalization frauds. The
rule of the city is so corrupt that the inhabitants
are actually being driven beyond the boundaries
of the State ; and had it not been for its unequalled
excellence of position, the city might before this
have sunk beneath its burden of corruption. The
Legislature is no defence, and the law no weapon,
for the one is influenced by the " rings" and the
other is their tool. For many years America has
looked on amazed and disgusted, while the corrup-
tion throve till it reached an intolerable point,
assuming national importance, for, if unchecked, it
spreads and infects the whole country. " Every
hour," as a leading New York paper says, " new
thieves and perjurors, and new combinations of
thieves and perjurers, appear and vanish like scenes
in a diorama." Indeed, lately they have all been
coining on the boards together, and the spectator
is bewildered at the groups hurrying on their fiend-
ish errands, retreating and advancing, crossing and
re-crossing, the stage. The " last thing out" is the
law-suit commenced by AUGUST BELMONT and E. B.
LUCKE against JAMES FISK, H. J. GOULD, and other
Directors of the Erie Railway Company. Some
papers describe this action as in the interest of
English shareholders; and the New York Sun
asserts that Mr. GOULD, remembering the Alabama
claims, like a true native American, declared that
no Englishman 'should be allowed to sit at his
board and turned out the only one representing Eng-
lish interests, when the aggrieved Britislaers deter-
mined to purchase the entire capital stock. To
effect this a great London "pool" was formal, and
the fight commenced, which has ended in a disas-
trous loss to the English. This is one way of ac.
counting for these disgraceful operations which
have brought so much dishonour on New York, and
which will tell as severely against American invest-
ments as the greenback agitation has against the
National Credit. If an English thief got on board
an American ship at Liverpool and stole the cap-
tain's chronometer, he might assert his motives to
be patriotic, for he had acted in remembrance of
the tea thrown overboard by American hands in an
American harbour. We daresay many English-
men will suffer, but the speculation has been essen-
tially one of Wall-street, where it is said "lame
ducks"—the nicknames for those hard hit by the
turn of events—abound. The history of the late
battle has been told before Justice Sutherland, of
the Supreme Court, New York City, in a bill of
complaint. It is to be sure partisan, though supported
by the affidavits of DREW and others, which crimi-
nate themselves. On the other side, a petition by
CHARLES M'lNTosll, owner of 200 Erie Shares,
made before Judge BARNARD, tells another tale,
but both substantially agree in prosing dishonesty
on the parties implicated. Originally DANIEL
DREW acted in conjunction with GOULD, FISK, and
the others ; and in his affidavit he states that he
manipulated the shares entirely to influence the mar-
ket,aiding the speculationsby the company's money.
The legally authorized common stock is 165,000
shares. To this was illegally added in May, 1866,
58,000 shares; last Feb. 50,000 more ; last March
another 50,000, when DANIEL DREW resigned as
treasurer and director in consideration of $1,000,000
given to settle claims, and he handed to GOULD,
his successor, the company's funds, amounting to
$1,600,000. On this they issued three millions of
convertible bonds, which shortly after were con-
verted into 30,000 shares, not merely illegal, but
in open defiance of an Act just passed especially to
prevent such a course. They then entered on a
job by which the company assumed the debt of the
Boston, Hartford, and Hudson River Railroad,
amounting to $5,000,000, on which Mr. ELDRIDGE
was got rid of. Then indeed the board became ex-
clusively controlled by Messrs. FISK, GOULD, and
LANE, who formed the majority of the five compos-
ing it. They appointed Mr. FISK sole auditor;
they met in secret, and carried out their schemes
without referring them even to the other two direc-
tors. Thirty thousand additional stock was first
issued, but they had to prepare for the annual elec-
tion, and that they succeeded, notwithstanding the
notoriety of their conduct proves, the difficulty of
guarding against the machinations of such a clique.
They actually elected the board they desired by the
purchase of proxies, by throwing shares into the
hands of their confederates, and other means, and
commenced their New Year by the fraudulent issue
of 230,000 more illegal shares. In a former number
we minutely described the process by which these
rings of speculators work. When DANIEL DREW
acted in conjunction with the paper mill which
turnedout the fraudulent shares he was a prosperous
man, fattening on the ruin of others, but when DANIEL
DREW lost his place in the clique and attempted to
work on his own hook outside he dropped his
money even faster than he had before made it.
In fact DANIEL DREW got into a very close corner,
where he was squeezed by FISK and GOULD most
unmercifully. He had sold short, and had 70,000
shares to deliver when he was caught. Perhaps he
forgot that he could no more manufacture illegal
shares, and that fighting against men who could
was merely backing his notion of where the pea
was against a thimble-rigger. It was all very well
for FISK and GOULD to sell short, but when BEL-
MONT and DREW did so they were operating against
men not only armed with their paper mill, but with
the enormous capital accumulated by the fraudu-
lent issues of Erie shares already made. Suddenly
Fisic and GOULD, who had been " bears" turned
" bulls." They had caught their opponents, and
they quickly sent up the market from 35 to 60,
after having previously knocked it down from 70
to 35, while the Bank vaults which held the locked-
up millions of greenbacks were opened, and the
city flooded with currency. JAMES FISK, jun.,
makes an affidavit in support of CHARLES M`IN-
TOSH'S application, wherein he says that on Sunday
morning, Nov. 15, DREW unexpectedly called to
make a clean breast, as he declared, and to throw
himself upon their mercy, being short of Erie Stock
by 30,000 shares. FISK. told him he knew he was
really short 40,000, more—he alleged that DREW
desired to turn traitor, caring only as he himself
asserted for number one, but FISK would not trust
him unless he made the clean breast first. Then he
'told him WORK, SHELL, LANE, and THOMPSON were
engaged iu a scheme to institute proceedings
which he offered to break up, but he would not tell
Iwho were the plaintiffs in the suit. FISK regarded
this as one of DREW'S old tricks, who ought, he
said, to be the last to whine about his position
with regard to the Erie. However he brought Mr.
GOULD, and he then learnt that the suit was in the
name of AUGUST BELMONT. DREW made noim-
pression on the Erie confederates, although he con-
tinued to plead till 10 o'clock that evening, and
returned at 11 o'clock, when he said "if you put
this stock up, I am a ruined man," and offered
nearly $lOO,OOO for the use of 30,000 or 40,000
shares for fifteen days. Finding this would not
answer, he tried the bullying tack with as little
success. All this is contained in Mr. FISK'S affida-
vit ; but the fact is certain that the stock was de-
livered, though some estimate the loss at 51,500,000.
However enormous were Mr. DREW'S former gains
as he dropped in the previous Erie battle more
than $500,000, caught in the same way, and
strange to say, by the same tactics, he had so suc-
cessfully applied to the ruin of others, no for-
tune can stand such tremendous losses. AN hen
settling day closed, Nov. 19, Erie fell to 451, and
on Friday evening, Nov. 20, to 431, and was
quoted Dec. 2 at 38g. It is said that FISK and
GOULD have cleared both by their bear and by their
bull operations enormous sums, a portion being
sent to Canada, another portion to Jersey City,