New-York daily tribune., 1858-12-31

very satisfactory is he explanation 1t Affords OF tue
presept state of the stock market and OF mo rum
Of Thousands, widows and orphans included, whose
money has been vested on the strength OF respects
bic nance but lost not 10 say stolen, BY wall street
operators
TIE Cumberland Coal and Iron Company was
incorporated a. long ago ss le4l, BY the Les''la.
ture Of Maryland, for the purpose Of mining ana
selling coal. Its mines coal lands and most oil. its
other real property were situated in Ahegany
County, Maryland, though its principal ofice tor
the sale of coal and the management OF Its man.
cial affairs has been, and s, in this city. a very
large capital has been invested in this business,
represented BY . capital stock at par value, o'
s5,MO,OOO, and BY 100000 Of funded debt.
Its property consists Of large body Of coal lands
containing the great vein Of the Cumberland re-
eion very favorabIy situated for mining and trans
por,ation; railway, which has cost bali million
of dollars, connecting the mines with the Cness'
peaks and Ohio Canal and the Baltimore and ONO
Railroad at the City Of Cumberland; aud OF
rolling stock, machinery boats, wharves &c.,
which have cost near another half million.
The bus ness of mining and transporting coal has
been in operation for Eve years past, and hiss In
cluded for the last four years an annual average OF
about two hundred thousand tuns. The Company
was regarded as a very promising speculation, bot
during the panic year ago, the Company stopped
payment and made an assignment for the benefit OF
its creditors. Subsequently the stockholders
advanced $243, 765 to pay of the hoating debt and
resumed the management Of their affairs, which
resumption sotn after resulted in the discovery Of
the alleged frauds and breaches Of trust which form
the subject of the complaint before u'. This
complaint sets out that in March, 1854 one eAndrew
Mehaffey was chosen President and Treasurer of the
Company, and that in the February following
Allen II. Sherman was chosen aDlrector to bill q
vacancy; and that these two persons continued by
repeated reflections to fll these two Offices down
Mehafey having been on the lst of May super.
seded as Treasurer by the Directors, but holding
on as President till the 7th of June, when he was
superseded BY the stockholders.
1t would appear from the allegations of the COM
plant that from the moment Sherman came into
assume almost the entire management of the af-
fairs of the Company, and that Mehaffey, who is
represented in the complaint as poor and nece,si.
tous, was made bis tool by means of an increase of
salary, allowed him by Sherman, but without au-
thority therefor, from $4,000 to $1,000, and by
additional sums secretly lent him by Sherman
without the knowledge Of the Directors, but studi
ously concealed from them) out of the funds Of the
Company, to the amount of 50, 232 II, of which
g., ,036 45 was allowed to be taken BY Mehaffey
only eleven days before the assignment, and while
the Company was struggling to sustain itself BY
immense sacrifices. After the resumption, Sher.
man undertook to settle this debt by raising Ne
h.Gar,. -, $ao,vvv, nVm marcn w. lcoo,
MehafFey having previou,ly settled Shermans &C.
count in an equally indulgent manner; and it was
the discovery of this proceeding BY the Directors,
and their refusal to sanction it, which led to the
resignation of Sherman and the Investigations and
discoveries which have led to the present suit.
The way in which Sherman acquired his control
over the affairs of the Company, is thus stated'
The Directors to whom the stockholders had
intrusted the management of their interests, at the
suggestion of Sherman himself, within ak weeks
after he became Director adopted bylaw BY
which they constituted an executive committee Of
three members. to BE- nominated by the President
and confirmed by the DirectOrs-the President also
to be a member, two of the four to be quorum to
transact business. The President nominated Sher.
man along with Francis Bloodgsod and Joseph
Torrey, two salaried employees of the Company, as
this committee and those persons on this authOri-
ty, assumed TO act as such down to May last;
Boodgood and Torrey, however, generally taking
no part in the doings of this Committee, which,
though it kept no record Of its acts, appears 10
have assumed pretty much the entire management
of the Company's affairs only employing the Board
of Directors to sanction and give legal character
to part of its acts.
On the 9th of October, 1855, on the motion OF
Sherman, the Directors appointed committee Of
six, of whom only three acted, Sherman and Me.
hafey being two of that number, to visit the lsnda
of the Company in Maryland, and to see if some
of them might not be advantageOusy sold,
and to report such lots, by routes and bounds
Sherman, as Chairman of this Committee, reported
TO the Directors, that they had better sell 54St
acres. which were bounded and described in the
report including a tract known as the Hoffman
mine. The report represented that the Compa-
ny's railroad, with its present equipment" was
capable of performing twice or three times its then
amount of transportation, and that, as the Company
no,sessed seven thousand acres Of coal lands,
wholly unnecessary for their own operations, in-
deed "worse than useless" as the report ex.
pressed it, by driving capital to other portions
of the coal field and thus preventing any increase
f hrs;nass on the Companys road, therefore,