The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-05-12

directors look after their interests and the deponeut
charges hat Hotchhiss became the tool Of Dwight and ~
sisted him IN me criminal proceedings with which ne
charged.
Dwight to work 10 get the whole board under his
bers thereof whose presence was dissgreeable 70
TO resign, promising that be would put wealthy men in
their seats He got appointed their place creatures OF
his own, smopg them Smith (the mnor) who 'mme-
disely took their seats and proceeded 10 lease
Of the road and all its property, for twenty years. 70
Mr.. Hamilton Spencer, conditions that he would pay of
the debts OF the company and mako certain annual pay
ments 70 the provided that the income the
expenses OF the road would warrant him in so
intend ul6l and tina. Dwight knew The fact aud ap
pointed his friends the board for the purpose carry
ing out this plan Dwight and Spencer then obtained
loan of $1t0,0C0 from Brown, Brothers & Co., giving
spencer's lease and mortgage Dwght country seat
at larry town. Duchess county, security. When the
shareholders and creditors became Of this lease
Saml Beardsley, ex Chief Justices, the matter and
they gave their opinion that the making of the lease
gross fraud and that all the parties 70 liable
thsr that Dwight, while director Of the company,
bezzled and converted 70 his ga 900 income
bonds, which he assigned 10 N. Potter Dwight aud
Spencer indicted by the Grand Jury for becoming
parties to the fraudulent lease, aud conspiring to
defraud the creditors Of the company; but as
vestgatop, Oakley Hall entered nolle prOseqti,
on the grounds that the Indictment would be quashed by
the law OF the Court OF Sessions stating that this the
sole and mot because he believed the facts in the
case were defective Dwight, alarmed at . threatened
prosecution confessed TO the board that he had taken
So OF income mortgage bonds and offered TO give an
order the restoration Of the S24 OF these bonds
signed 10 Potter. The offer accepted but the order,
was ever given mysteriously disappeared, and was
used. Deponent alleges that Dwight had taken
$40 000 Of second mortgage bonds with the understand
ing that they to be exchanged for bonds of numbers
$780, Of which had been decided 10 cancel $500 900
worth and that Dwight subsequently, issued this
worth Of bonos OF . number below 3,500,and appropri
sted the money 10 his own The next act Of Dwghs
board of directors to sell the franchise and all the
properties OF the company ubject 70 Spencers ease TO
firm called Fullerton Brown Il Heating, Of New York,
they contracting 70 pay all the debts Of the company
Dwight and his brother, and other friends The charter
of the company only extended TO two years longer than
the OF Spencers lease The laws Of New York the
depor states being obstacle to the designs Of Dwight
and his confederates, meeting Of the board sud
denly called, and Il was resolved. by majority Of
Dwight friends that the board should meet In future in
Bloomington, Illinois Three Of the directors Ho.chkiss
Wright and Quintsrd then resigned, and Mr. Alexander
the Secretary creature of DysQhts, Mr. Henry Gard
ner OF Joliet illinois and Dr. Spencer brother Of Ham
ton spencer elected in their place. Mr. Batchford
who wss then treasurer, seeing that fraud was medi-
ton from Judge Roosevelt restraining the Secretary Aex
snder) from touching them. The board however went
to Illinois removed, BY resolution Mr. Blachiord from
President creating Gov. Joel A. Matteson, Of Illinois,
President in his stead. Meantime Judge Roosevelt, on
complaint Of Mr. Lcbfeld OF the Northern Indiana Com
papy and others granted injunction restr aiming
Dwight Spencer gochkiss, and Brown Brothers Il Co.,
assgnees Of the lease and Fullerton from assign
ing putin II In the ground that made TO
hinder delay and defraud the creditors Of the company
and carrying out fraudulent intent An arrangement
subsequs ntly made between Mr.. Matteson and Mr.
tchfed by which they guaranteed TO pay the claim Of
Brown Brothers Co.. that they would devote themselves
for three years the interests OF the road and Of spen
GERS lease long lasted, or Of any company
which might be formed and that they would defend al
suits against Spencer account Of his lease and endeavor
TO procure the ohcontlnuance Of all suits commenced
with the provision that when they fulfilled Spencer
should surrender bis lease 70 a new company. II was
company should be mot and all bona fde stock should be
provided except such held collateral for the
payment OF Henry Dwghts debts thus sweeping out Of
existence all the shares hyposhecated by Dwight
for his private debts Spencer accordingly sur
rendered possession Of his lease 70 Aasseson
previous he had received all tho earnings Of the road
amounting TO q million dollars, he never made any
return Of the same 70 the COMPANY nor did he pay
Fullerton Co. then advertised the road, property and
franchises for sale at pubic auction, subject TO the lease
assigned 10 Matteson Ltchneld- the whole proper
~ being worth at 0ast eight millions The sale tool
place at the depot In Bloomington the 18Th December
ls6e. There were present e. deponent alleges Matte
bid only was offered q Is 900 By Msteson and the road
&C vss Knocked down 70 him. a bill was Iobbied
through the Illinois legislature confirming the sale and
creating Mateson Iltcnned and their associates new
con- pa1y, with full power 70 run the line The sepouen.
Charles Could concludes By praying that warrant Of
xay issue against INC said Henry Dwight and such
parsons Dave Deeu confeuerheu
With him Aforesaid, and that they may be cea with
the law directs upon those matters OF conspiracy do
fraud the said railway corporation and Of false preences
and Of orfer and OF perjures, and OF embezzemens
and Of false OF stock and Of bonds and OF frandu
eniy mailing Of and putting into instruments 10 hin
DER delay and dersud the creditors Of the said railway
corporation, which have boon herenbcoro forth
length.
This the history of this extensive case Of alleged
fraud involving charges Of perjury, embczzcmont and
coptpraoy against several parties prominent In
cal and financial sfslrs The further investigation will
doubt bring forth many details Of startling character,
which will throw much light the mole In which the
public are deffauded by the managers Of large oorpo-
rationa