The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1858-05-13
From the Ne,U York Herald, May IL.
GREAT RAILROAD FRAUD.

ARREST OF NEW YORK BANKER ON CHARGES OF
PERJURY, ENLIGHTENMENT AND CONSPIRACY TO De
FRAUD-OTHER FINANCIERs INCLUDED-ExrosE OF
THE ALLEGED SwINDLING OPERATIONS OF SOME OF
THE CHICAGO, ALTON AND ST. Louis RAILROAD Dr.
REcToRs-THE STOCKHOLDERS FLEECED, &C., &c.
;, On the 22d of April Charles Gould, Esq, of
Madison square, attended by his counsel A. Oakley
Hall, appeared before Judge Russell to make a
criminal complaint against Henry Dwight banker
and broker of Wall street, upon which complaint.
substantiated by the allidavits of Mr.. Gould, and
those of Samuel NJ. Blatchford, Scabury Brewster,
and Stewart Brown, of the firm of Brown Brothers
Co., warrants for the arrest of Mr.. Dwight were
issued by Judge Russell, and warrant also for Mr..
Henry Hotchkiss, formerly President of the New
Haven County Bank and Mr.. Hamilton Spencer,
formerly Vice President of the Chicago Alton and
ST. Louis Railroad Company.
Upon these ailidavits Mr.. Dwight was arrested
on Tuesday last, and by order of Judge Russell re-
tanned in custody until to-day, when his examina-
ton will take place.
The allegations in the affidavit of Mr.. Charles
Gould go to show that in June, 1850, the firm of A
Il. Cowman Il Co., of which one Benjamin Godfrey,
OF Alton, Illinois, was = member contracted to
build portion of the Chicago, Alton and St Louis
Railroad, from Alton to Springlield but the firm
becoming unable to fulfill their contract, Godfrey
became their assignee and undertook the compile
ton. Godfrey applied to Henry Dwight banker
and broker of New York. who had previously adj
vanced $4,000 to Cowman Co., for further aid,
in a sum which would make his loan amount to
sos, 2S7, which Dwight agreed to give provided
that he received, in addition to Godfrey's own
property, S5O.O00 m bonds and $3.50 900 in stock of
the company, which acceded to-
Dwight then proposed to Godfrey to become his
financial agent in New York city until the road
should be completed, and that as it would facilitate
INN in raising money it would be proper to have
member OF Godtrey's firm There was no firm then
existing in New York to sign copartnership notes
he proposed that one of his clerks, Jas c. Smith,
who was minor under 81 years of age (and whose
contracts were consequently worthless should be-
come his partner. TIE this Godfrey, not knowing
who or what Smith was, assented, and money was
raised nd HbtUm on the notes of "Godfrey x Co -
signed by the infant Smith, on the strength of God
irey's name.
Dwight before entering into this engagement,
insisted upon Godtreys assigning to him all his
property. Three of the then directors of the com
pany soon after resigned, and Dwight got two of his
own tricnds-one of them his cerk-and himself
elected in their place: Soon after Dwight got the
disbursement of the funds into his hands He was
then absolute in the board of directors for he had
majority, and caused it to resolve that it was ey
pedlent to issue $1,000 600 of bonds to be secured
D Ii' FIRST mortgage on the companys property in
illinois. They issued pamphlet stating that the
amount of capital stock already subscribed and Sc
cured to the Co. So, 500 600 which the deponent
asserts was gross misrepresentation. 1000 900 of
LIST mortgage bonds were placed in Dwght's hands.
no which he realized Sl,7l7 ,402. Two more of the
directors resigned in December, 1852, and Mr.
Dwight caused two more of his clerks-kelso and
Herwig-to be appointed in their place. The board
then consisted of Mr.. Dwight, his confidential
irlehd W; H. Platt, and his three cerks--Quintard,
helso and Herwig. The deponent charges that Mr.
Dwight pledged $4,000 900 second mortgage bonds
for his own private debts also for the same purpose
S23O,OO of income bonds that being a director in
the board, he caused sundry frauds be committed
Tor his own benefit that he got into his possession
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 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 Springfield to
Joliet.
The report of the Chief Engineer of the road, o.
liver II. Lee, showed it in prosperous condition
the earnings being then Nov. 1859 $500 900 A
year, but requiring 1000 to complete it to JOLT
ct, which sum Dwight IA Used by passing his notes,
endorsed by the Company to the following parties:
New Haven County Bank, by Hotchkiss, Presi-
dent, $50, 900; Henry Hotchkiss $50 O0O CITY Bank
New Haven, by Read, President $50 900; Merchants
Bank, New Haven, by Peck, President, $50 900: s.
d. Pardee, Trustee, New Haven, Sl5. 900: Phnnix
Bank, Hartford 5000 David Skaats, President
of Seneca County Bank, $4,000; Edmund Dwight,
New York, $4,000; VIM. Swinburne, Paterson,
1000; Brown, Brothers 4 Co., lin iron) about
$4,000 Northern Indiana Railroad Company,
S300,0 Total, $500, 900.
Previous to this Dwight had given mortgage
bonds and stock of the company as collateral secu
rity for his individual debts to several New Haven
banks to the amount of 81 ,lS3, 900. These banks
therefore, had an interest in the management of the
company, and they got Dwight to procure the an
pointment of Henry Hotchkiss as one of the direct
ors, to look after their interests, and the deponent
charges that Hotchkiss became the tool of DWIGHT
and assisted him in the criminal proceedings with
which he is charged
Dwight set to work to get the whole board under
his thumb, and finally succeeded in persuading those
members thereof whose presence was di agreeable
to HIM to resign, promising that he would put
wealthy men in their seats. He got appointed in
thelr place creatures of his own, among them Smith
tthe MINOR who Immediately took their seats and
proceeded TO execute lease of the road and all its
property Tor twenty years. to a Mr.. Hamilton Spen-
GER, on conditions that he would pay off the debts
OF the company and make certain annual payments
to the company, provided that the income over the
necessary expenses of the road would warrant him
in doing, which conditions deponent alleges
Spencer intended to fulfill. and that Dwight
knew the fact and appointed his friends on the board
for the purpose of carrying out this PLAN
Dwight and Spencer then obtained a loan of
Sl5O,000 from Brown, Brothers & Co., giving Spen-
Ger lease and mortgage on Dwights country
seat at Tarrytown, Dutchess county, as security
when the shareholders and creditors became aware
" llls lease they were indignant, and consulted
C Sm u. Bronson and Samuel Beardsley, ex-
Eiici 'ustlces, on the matter and they gave as
ILL Vplioh that the making of the lease
gross fraud and that all the parties to it were La
pe 10 Indictment for misdemeanor
Deponent charges further that Dwight. while d.
rector OF the Company, embezzled and converted tn
his S2i 900 income honds III ~ t'o -. ~
signed to G. n. Potter. Dwight and Spencer were
indicted by the Grand Jury for becoming nart;es to
the fraudulent lease, and conspring to deraud the he
creditors OF the company; but as tho ;nd;tt
originated without preliminary investigation nan
ey Hall entered nole prosequi, on the grounds that
he indictment would be quashed by the law of tho
Court of Sessions, stating that this was the SOLE
son. and not because he believed the facts in H.
case were defective. Dwight, alarmed at a threat.
ened prosecution confessed to the board that he had
taken S54 900 of income mortgage bonds, and offer
ed to give order for the restoration of the S24
600 of these bonds assigned to Potter.
The offer accepted but the order, if it was
ever given, mysteriously disappeared, and was
never used. Deponent alleges that Dwight had
taken $4,000 of second mortgage bonds, with the
understanding that they were to be exchanged for
bonds of o ran