The daily Evansville journal. (Evansville, Ind.) 1862-1863, 1862-05-28

A GIGANTEC FRAUD DIsCOVERED
Some months ago our present State
Agent, Col. r. N. Hudson, discovered that
large amount of our State bosds had been
fraudalsntly issuea in New York, where
the Agency is locateds by his predecessor,
Daniel g. Stover, who was appointed by
Gov Willard 10 ill the vacancy created by
| the resignation of hon. j. A. Cravens. The
! amount of the illegal issue could not then
be certainly sscertained, and as tw0aor three
wealfby Wall street brokers were impliea-,
ted, abdsa prospect Of covering all or the
greater p07ti0n of the fraaddlent bonds ap-l
peared 10. this fact il was deemed BEST by
the New York Authori'ies to make no ex-
p,sufe OF the-affair till the effort to recover
the bon1s had failed. They thoHght that
if the. frand were exposed, the depreciation
of our securities would be greater than the
whole amount Of the over issue, and would
moreover affect the whole stock market
Government securities and al, injuriously,
at a very critical period OF our financial.
history, and thus do great deal of mischief
without adding a particle TO the chances of
saving anything to the State. Gov. Nor
ton, whose frequent visits to the East have
been made chiefly t1 prosecute the work of
recovering these illegal securities at 6rst
strongly insisted on an immediate exposure
of the whole fraud, but yielded 10 the sug-
gestions of the District Attorney, A. Oakley
Hall, and the Attorney General of New
York, Daniel S. Dickinson, rs we have at
tempted to state them, and consented TO a
suppression of the affair. The work of re-
covering the bonds has beeu going on ever
since, and, up to last Friday. when the /
fraud first got wind in New York, aoout
$4,000 had been recovered. The amount
yet outstanding is not certainly known, but
from the statements of some of the parties
implicated, it is believed that il will not
exceed $500 600, of which the whole will
probably be recovered from The parties or
the securities of the State Agent Private |
advices on Saturday notified the State au-
thorities here that The affair had been made
public enough ia New York to affect our |
securities seriously, aud as further conceal |
ment cnn no long avail the State, and a
full statement may destroy the injurious e.
feet, on our credit, of exaggerated rumors,
we deem i; best TO tell the whole story at
once. e-sr
1t is fficult to give history of the pro-
gress Of the fraud, because nothing beyond |
the fact thai the fraudulent bonds were is
sued, and that Daniel @ Stovtr did it, is |
known. He has confessed his own guilt, but |
has given particulars beyond the names
Of has eOnfedvratts, two we'll known Wall |
street brokers, vi hose names we are advis ed |
it is best to suppress for a few days. Col. |
Hudson FIRST discovered that fraudu ent
bonds had been issued, BY the presentation
at the Agency OF some $50 000 of them, by
a banker with whom they had been by
pothecated by one of Sfover's accom-
plices, The banker, knowing that the
person in question could hardly be
hnnaGt uOGGoS9i0n nf larna
amount, came to Colonel Hudson with
{ bouds 10 see if all was right on
the States books. They were found to te /
fraudulent. Col. Hudson at once set TO
work to investigate be matter, aud notified
Governor Morton of it. Tue accomplice |
who bad by ypothecated the bonds was laid /
hold of, and be, to save himself, replaced !
them. The bad ones were Immediately |
cancelled Others of the fraudulent issue
came in. They were traced to a certain
wealthy banker aud broker. He was nori-
fed of the fraud, and made it good, thus
confessing his guilty participation in the
busines As cften as the fraudulent bonds
were encountered these two sharpers were
made to redeem them. Thus the work of
getting in the fraudulent issue has been1
going on till now, resulting, as we have
stated, in the redemption and cancelling Of
100000, saving the State that amount, in
any event
The fraudulent bonds were detected by
the fact thar they were not registered, ac-
cording to law. On March 9th, 1859, an
act was approved, TO take effect on Its pub
lication in The papers of this city, which
was made on March lIth, providing that
on the surrender of any certificate Of stack
tue Agent should send ito the State AUDI
or here, who should issue new one and
register it, and on its reception at tie
Agency the Agent should also register if,
and deliver it to the holder The fraudu-
lent certificates, of course, would not be
registered at the Agency, as no correspond
log registry would exist at the Auditors
ofice, and the fraud would be detected at