The Evansville daily journal. [volume] (Evansville, Ia. [i.e. Ind.]) 1848-1862, 1858-05-18
Astounding Rail Rosd Fraud.

frauds upon the criuiUors anu stocA-
holders of the st. Louis, Alton, and Chi
scago railroad in Illinois. The papers
contain an account of the astounding
swindle. 1t appears that Benjamin God
frey, of Alton, was the contractor in 1850,
to finish the road to Springfield, and be
constituted d wight his financial agent in
New York, who was to advance him, as
he required it, 100000. To secure
Dwight, for his advances, Godfrey trans
ierred to him all his individual property,
and also $4,000 in bonds end $4,000
stock OF the company. was acceded to.
| Dwight then proposed to Godfrey that as it
would facilitate him in raising money it
would be proper TO have member of God
frey's firm, in New York. to sign copartncr-
ship notes, he proposed that one fills clerks,
James c. Smith, who was minor under
"A years OF age (and whose contracts were
consequently worthless }, should become his
partner. ~
To this Godfrey, not knowing who or what
SIN, til was, assented, and money was raised
al Hbifum ON notes of"Godirey& Co. ~ signed
by che infant Smith, on the strength of Col
this engagement, insisted upon Godirey's
assigning over to him all his property
Three of the then directors of the company
soon after resigned, and Dwight got two Of
his old friends one Of them his clerk and
himself, elected in their place. Soon after,
Dwight got the disbursement of the funds in
to his hands. lie was then absolute in the
board of directors, for he had majority, and
caused il TO resolve that il was expedient to
issue 81 900 900 of bonds, to be secured by
first mortgage on the company's property in
Illinois. They issued a pamphlet stating
that the amount of capital stock already sub
seribed and secured to the company was ST.
500 900, which was gross Misrepresentation.
81 900 900 Of First mortgage bonds were
placed in Dwight's hands, on which he re-
allied 81 III 400. Two more of the direc-
tors resigned in December, 1852, and Mr..
Dwight caused two moro of his clerks-Kel-
so and llcrwig-to be appointed in their
place. The board then consisted of Mr..
! Dwight, his confidential friend, w. II. Plat,
and his three clerks f1 A'1i-
! Dwight pledged 81 900 900 second mort
| gage bonds for his own private debts; also
I for the same purpose $3.50 600 of income
! bonds; that being director in the board.
! he caused sundry frauds TO be committed for
| his own benefit that he got into his pos
session, and had used at various times, four
million dollars of mortgage bonds: and that
! none of them were used for the purpose OF
/ laying down a double track, as agreed upon
\ by previous contract, according to which
| he was TO get six millions for laying. such
track and completing the road from SPRING
I field TO Joliet. The report of the Chief En-
/ gincer of the road, Oliver ii. Lee showed j:
in Il prosperous condi:ion-thc .rnings be-
ing then Nov. 1867 $3.50, 900 year, bu:
requiring 100000 TO complete it to Joliet
which sum Dwight raised by passing his
notes, endorsed By the company, TO the fol-
lowing partics:-Ncw Haven County Bank,
by Hotchkiss, President, 5000; Henry
8otchkiss, so 900; City Bank, New Haven
by Read, President, $50 900; Merchants
Bank, New Haven, by Peck, President, $50 :
eg9; 5, d; pardee, Trustee, New Haven
$4,000; Phoenix Bank, Hartford, $50, 900
David Skaats, President of Seneca Bank
| $4,000; Edmund Dwight. New York, slS,
900; VIM. Swinburne, Paterson, $1,000
Brown, Brothers az Co., Gin irony about
$500 900; Northern Indiana Railroad Conn
pany, $500, 900. Total, $50 1910.
Previous to this, Dwight had given mort.
gage bonds and stock OF The company as col
lateral security for his indi vidual debts Il
several New Haven Banks, to the amount o
sl,ls3,oo0. These banks, therefore. had al
interest IN the management of the company
and they got Dwight TO procure the appoint.
ment OF Henry Hotchkiss us one of the Di
rectors, to look after their interests, and tn,
dcponent charges that Hotchkiss became tht
tool of Dwight, and assisted him in tn,
criminal proceedings with which he is eharg
ed.
Dwight set to work to get the whole un-
der his thumb, and finally succeeded in per-
shading those members thereof whose pres
ence was disagreeable to him to resign
promising that he would pat wealthy mel
in their seats. lie got appointed in tlleI
place creatures of his own, among then
Smith the minorl who immediately tool
their seats and proceeded TO execute q leas
of the road and all its property, for twent
years, to Mr.. Hamilton Spencer, on condi
tons that he would pay off the debts OF thu
company, and make certain annual payment
to the company, which conditions Spence
never intended to fulfil, and that Dwigh
knew the fact, and appointed his friends OF
the board for the purpose Of carrying on
this plan. 81 Z > Ergga ga
Dwight and Spencer then obtain ed q loal
of $3.50 600 from Brown, Brothers & Co.
giving Spencer's lease and q mortgage OF
Dwight's country seat at larry town
Dutchess county, as security. Deponen
+ charges further that Dwight, while dirccto
of the company. cmbezzlcd and inverted t
his own use ga 900 income bonds, which Il
} assigned to G. n. Potter. r.4
The next act of Dwight's board of direc
SOio WIS W oSik IuO 1fuuCillSc anu all III
properties of the company (subject tn Spcn
c GERS lease 20 Il firm called Fullerton, Brow
q & Heating, of New York, they contractin
to pay all the debts OF the company, glyin
j. the preference to the claims of llotchkisl
4 bank. Dwigh. and his brother, and otht
friends. The charter of the company onl
9 extended to two years longer than the teri
6 of Spencer's lease. The laws of New Yorl
the deponent states, beng an obstacle to I'll
:, designs of Dwight and his confederates,
: was resolved, by majority of Dwight
friends that the board should meet in iutui
9 in Bloomington, Illinois. Three OF the Ill
y rectors, lIotchkisS, Wright and Quintar,
- then resigned, and Mr.. Alexander, the Sc,
: rotary, creature Of Dwight's, Mr.. Henry
Gardner, of Jolietti Illinois, and DR.. Spence
brother of Hamilton Spencer, were elcctc
Q in their place. 3 81
Z The board went to Illinois, removed,
y resolution, Mr.. Blatehford from his post
,f Treasurer, and Mr.. Brewster from his Off,
a of President, creating Gov. Joel A. Matt,
son, of Illinois, President in his stead. A
|. arrangement. was subsequently, made b,
q tween Mr.. Matteson and Mr.. Litehtield,
which they guaran teed to p.y the claim
e Brown, Brothers q Co., that they would d
vote themselves for three years to The int
ests Of the road and of Speneer's lease
. long rs it lasted, or of any new compan
~ | ,,,irrht h.a formA1 and that they