Lynchburg daily Virginian. [volume] (Lynchburg [Va.]) 1852-1861, 1859-08-27
Tho Schuyler frauds In court Again.
Injunction Againsf.he ktw Hdrea Raiiroad C6m-

pday. t' stts 5fi
1t is now over Ave years since tho community
was startled by the intelligence that the head Of
no of tho great financial firms of Wall stroet had
.cd tho country after having psrpetrated iraud.
n Il most gigantic scale. 1t WAS on the 3d Of
'uly, 1854, that Mr.. Robert Schuyler thus abscon-
led. Ile had been President and transfer agent
{ the New York and New Haven Railroad Cum
amy; and to the directors Of that company he left
note calling their attention 10 the stock ledger.
vhcre. he said. they would finds much that was
yrong A careful examination OF this ledger
howed that an overissue Of 1880 shares, ire
,resonting at par value Sl,7I3,OO0) had been
aade.
The question then arose ns 10 who were 10 DO
esp ,nsiblc for this ovsrissue Of stock. Tho hol-
ers had purchased il in good faith. The regularly
ppointed agent Of the company had issued it,
t there was blame to be laid anywhere, except,
t the door of tho principal malefactor, it wns to
nscribc to tho board Of Directors, who, by their
* system Of management, had given facilities for
he commission of tho fraud. Besides, 1t was
mpossiblc to separate with any certainty tho gen
inc from the spurious issue. All bore tho Same
mrks of genuneness, and were, up to tho mo-
rent of tho exposure. treated by tho company and
heir presidents n genuine. An arbitrary rule wits
doptcd, which was to treat only as absolutely gen
inc TINT which was issued prior to October 1854
Though in the litigation that ensued testimony
.is given to show that the fraudulent Issue com
Fenced as early l84S, md that In 1850 oyor II
housand shares Of f. audulcnt stock had boen is
ued.
In this difficulty the courts of law were appeal
4 To, Tho bona fde holders Of fraudulent stock
ould make no terms with tho company by which
ler stock. purchased in good faith and from the
sally authorized agent OF the company. would
.e recognized. After some years Of litigation it
vas finally decided in favor Of the comrany mud
gninst the interests of the holders ofuvcrissu
. i stock.
Tho company had in the meantime. immed-
Z tcly after the flight of Schuyler, employed TN
i ,untnnt, Mr.. George lIolbrook. Of Boston. To
-certain the amount of stock overissucd. After
Ais job had been completed he WIS required ~
eparate the genuine from the false. lle agreed
, make the attempt, but after weeks trnl he
,und it impossible to effect separation with any
ertaintv of correctness. Nevertheless, he was
rged to pcrseverc, and with what light he had
% made out II list of tho stock supposed tn DO
cnuine, never supposing. m he says, that his ex-
mination was 10 be final and conclusive. On this
st, made out, the directors have since acted,
aging dividends to the holders Of the stock there
II comprised.
1t appears, however, that in 1859 Mr.. IIul-
rook, having conscientious scruples as to the
ectness Of the principle on which he had made
he separation, entered into corspOndenee wit the
irectors Of tho company, and was employed TO
make another examination. lIc spent two months
1t it, and arrived ut results very different from
hose he had arrived Mt in the first instance. But
ocing in the act Of preparing list Of the genuine
'tock, in accordance with the last examinations hc
told by tho president that he might Il are him
scfthnt trouble--they wanted no new list.
These important facts have all come out in the
course of proceedings that have been recently in
stitutcd in the Supreme Court in this county.
Messrs. Underwood, the holders both Of gem
nine nd spurious stock, having asccraned that
tho last examination showed results more favora-
ple to them have sued out an in junction 80 restrain
he company from paying the semi-anua dividends
ust declared until il il ascertained what il aud
What is not genuine stock. On the application
n afidavitb by Mr.. IIolbrook setting out the facts
Sc ha sun married., III ven The temporary in
JUNCTION was granted and morrow the dcfenants
to show cause why it shall be made perpct-
ua.
Thus the whole subject of the Schuyler frauds
is re-opened The farest aud only practicable
way Of settling the question justly. was to have
recognized all the stock issued by the authorized
agent of the company. II may have to come to
al. Ic.k ~ 4