The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1854-07-07
The Recent Wall Street Fraad-IeSisla 4
Required.


People are not generally aware Of the extent
Of the disaster which the over-issuc Of New Ha-
ven railroad stock has caused. It is we'll that
the facts should be stated at length. It is dis
covered that within the last few months, Ro-
bert Schuyler being at the same time President
and New York transfer agent Of the New York
and New Haven Railroad Company, certificates
for $4,000 to 10000 spurious shares Of stock
have been issued, and pawned to banks and
capitalists. The only requisites to render the
certificates valid were the signature Of Robe .
Schuyler, President, and the cognizance Of the
same Robert Schuyler, Transfer Agent. The
company had such confidence in him, that he
had been invested with both these Offices and
clothed with sole uncontrolled power. In fact
with the exception Of one or two very cautious
individuals, no one seems to have thought that
any check would have been salutary or pru-
dent. Thus exposed to temptation, and need
ing money daily, it seems that Robert Schuy-
Ter issued and signed certificates for the amount
Of stock mentioned above, in addition to the
capital stock Of the company. These fraudu-
lent certificates were handed to banks and CAPT
talists as collateral security for loans to the
firm of r. Il G. L. Schuyler, and were received
with the confidence which the New Haven r Ill
road and the name Of the Schuylers always
used to inspire. 1t is now found that they are
spurious The net consequence is that the
New Haven Railroad Company, which, Up
to the payment Of its last dividend,
has been doing business on capital
Of three millions Of dollars, has now in
circulation floating capital Of five The GER
tifcates fraudnlently issued by Robert Schuy-
Ter are as good, in the hands of bona Jide hold
.er and as against the company as any other evil
dences of stock. The banks who lent money
on them are safe. Whether the fraudulent GER
tifcates were issued in the name of the Schuy-
lers or in that Of the creditor, they are valid
negotiable securities, and represent an equal
proportion of interest in the earnings Of the
company with all the other certificates of stock.
This point is unquestionable, at whatever con-
clusion the easy conscience of director and the
ingenious distinctions of pettifoggers may ar
rive. II follows, as an obvious consequence.
that, the holders being safe, the innocent share
holders are the real victims of the fraud that
has just come to light. To illustrate &, mat
ter practically,a man who few months gro
invested--as many did-a trife under ten
thousand dollars in the purchase of one hun
dred shares ofNew Haven Railroad stock. now
finds. his interest," by the operation Of this
fraudulent issue, reduced to value Of some
three to four thousand dollars. A or B who
invested his savings in the proverbially safe
stock, loses, independently Of the decline in
value produced by the Norwalk accident and
other causes, twoffths of the money he paid
through Mr. Schuyler's conduct. If be held one
hundred shares, he understood at the time of his
purchase, that be was possessor of one three |
part Of the property and profits of |
The New Haven Railroad Company the over
ssue Of stock reduces his interest to one five |
nundredth part In the same property and pro-
hts 1t Is true that with judicious management a |
compromise may be effected that will place tho
shareholders In better position than this. If |
the company, instead Of recognizing the spuri- |
Gus stock, pay the holders thereof the amounts
tney have advanced on 1t in bonds of the COM |
pany at six or seven per cent some twelve
hundred thousand dollars worth of bonds NAV
sweep on the over issue and leave the capital
stock At its present figure But for the pre-
'ent, that capital stock virtually stands at 1--WE
instead of three millions, and every honest
is cheated of his proportion of the
Inference between these two sums.
Much clamor has been made about this nefa-
ious transaction, and the mercantile commu-
lity have been grievously shocked at SO whole
ale swindle. Considering the character OF |
he company and of Robert Schuyler, aston
shment is certainly warranted. But we must
lot forget that 1t Is not the first instance Of the
ind We have known. Only few weeks ago, |