The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-02-24
The New Haven Railroad Spurious Stock
Honor In Wall Street.

II is not generally known that an action is
pending at the present moment between "the
New York and New Haven Railroad Company"
PENDANTS for the recovery Of the stock which
was Illegally and fraudulently issued by Robert
Schuyler. It is hardly necessary to premise
that when Robert Schuyler issued this stock, ne
sold or pledged it for money to various parties;
and that, being to all appearance identically
the same as the genuine stock, it was so b,ught
OF received as collateral by many persons who
hold 1t to this day or have in their turn trans
ferred it to others. No one has yet been able
to distinguish this spurious stock from the
genuine; and partly from this difficulty, but
more from sense of honor, the policy Of adopt
ing the spurious stock and recognizing it as
valid has been strongly urged on the COM
pany. 1t has been argued that the COM
pany appointed Schuyler, and gave him full
powers to issue stock, and that they are there
fore bound by the contracts which he made in
the capacity in which he was placed. Reference
has also been made to the fatal consequences
which could not fail to ensue from the repu-
diaaon of this stock, on legal or technical
grounds; and the railroad interest of the city
and the State have been warned that it were
better economy for them to lose twice the two
millions involved in the spurious stock, than to
destroy their credit by disowning the act of
their duly appointed officer. Well after six
tons, the New Haven Railroad Company,
which in the meantime has passed under the
control Of new men, resolves to proceed by
suing given number Of stockholders, who in
the opinion Of the directors are holders Of the
spurious stock, and claiming the surrender of
the same. The action is based on various
grounds; but the main one, on which the chief
reliance Of the company is placed, is the plea
of usury. Il is alleged in the declaration that
the defendants obtained their stock "for cor
rupt and usurious consideration" that is to
soy gave less than the par value, as is the case
in every railroad security except first mortgage
bonds; ard on this ground the Company demand
that :heir title to II be resiliaed and the stock
restored to the directors.
IN commenting or transaction OF so fragrant
character as This the Journalist is embarrassed
to know which Of It's many scsndaloas features
20 notice first. How can the company tell
whether the defendants stock be genuine or
spuricus9 An 0dip1s would fail to perceive
any distinction between the two issues. so pre-
oisely alike are they in every respect. Then
again, the law Of New York declares tina. cor.
porations shall not plead asury: a provision
apparently iatsl to the compaoy's action. But,
NJ donb. some hsi- splitting lawyer will argue
ma. declaration is not plea; a. all events,
he lsw OF New Yo.k is not the law OF Connec-
ticu., ard there The company may plead usary
with src:ess, while IN mis- State the share
holders, themselves s1sd, are thus tied from
suing the company Again this t:ticn, or
rather these Two hanjred actiors oro.gb.
asainss two Kindred difsren. Fe-scns wiz cos.