The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1862-06-04
The Fraudulent Issues or Indiana state

Anc rrauuulent Issues OF In0iamS SsS
Bonds.
Wall street has been In q commotion
for several days past over the preliminary de-
velopments of fraud in the issue Of Indiana
State bonds that bids fair to assume gigantic
dimensions, and il likely to eclipse anything OF
the kind that has taken place in Wall street
during the last twenty years, possibly exceed
ing the Schuyler frauds SO long notorious. There
is yet great deal of mystery about the whole
affair, and no one knows the number Of bonds
Issued or the amount fraudulently thrown upon
the market. There appears to have been the
greatest possible looseness about their issue,
and as yet no one can tell-not even Mr..
Slower himself-the amount that has been Of
fered to the public.
Whatever fraud there Is in this matter seems
to have grown out Of the loose manner in
which the business was done at the Office Of
the Indiana State agent in this city, and ex-
tends back to 1859. It appears that the State
authorities have been in the habit of sending
blank book of bonds to the State agent in this
city each and every year. These blank bonds
were all signed by the necessary State officers
and registered before they were sent from In
dianapolis, and only needed to be filled
up by Che agent here and counter
signed by him to make them valid;
nor did the State officials require
statement of the number issued, or the return
Of tie books at the close Of the year. The State
agent, up to the latter part Of the year 1859,
was also permitted to employ the signature Of
his deputy, or clerk in verifcation of the GER
tificate as finally issued This practice pre-
vailed until the hazard Of this looseness caused
change in the system of veriication but,
strange to say, the State officials did not even
then recall the blank books that were used
under this loose system, but left them where
further irregular issues could be made. It is ru-
mored that one or two of these books disappeared
from the Office and that the blanks were filed up
and extensively used to raise money in Wall
street. The State authorities long since appa-
rehtly had suspicion that irregular issues were
being made, but took no steps to stop them,
simply securing the passage Of law declaring
that the State would not be responsible for any
irregular issues made in New York.
u further appears that the State officials Of
Indiana were here about six months since, or
at least as long ago as last January, and were
at that time cognizant of the fact that there
was large irregular issue; and after consulting
with the State agent legal officials and parties in
Wall street, pledged themselves to keep it a
State secret on the ground that an exposure at
that time would injure the credit of the State
and prevent their negotiating the six per cent
war loan then on the market. In this manner
they succeeded in covering it up and keeping
the fraud from the public until few days
since, and are thereby guilty, under the laws
of this State, Of compromising the felony and
punishable by Imprisonment. All those OFF,
Gals who knew that this fraud existed, and con-
nived at il by not taking immediate steps to ex-
pose and arrest it and punish the guilty par
ties, have committed criminal act, and are
punishable alike with the principal in the affair
by imprisonment and let us see if our legal
officials and courts of justice will discharge
their duties.
1t has already been ascertained that nearly
two millions were irregularly or fraudulently
issued and disposed Of here, and It may yet be
shown that as many more, or even double and
treble the amount, may have been sent to
Europe and disposed Of there Inasmuch as the
agent was permitted to fill up the blanks just
as he desired and dispose Of them whenever
he chose, there is no telling at present what
has been done nor the real extent of the fraud
committed. The Indiana State officers who
consulted with parties here several months
since in regard to the exposure acted, it il
said, under the idea that the credit of the State
would suffer by the exposure. Their silence
in the matter, now that it has come out, has in
jured the States credit hundred fold more
than if it had been promptly and fearlessly
met at that time. Had o decisive course been
taken by the State officials the financial world
would have seen that there was desire on the
part of the authorities of the State to protect
its interest and credit; but, on the other hand
they being in possession of the facts, with full
their countenancing the act until the natural
result Of business makes it known to the public
places the State in the position of aiding and
assisting the fraud and makes its officers accom-
plices in compromising the felony by keeping
it . Estate secret" Their case IL one that de-
mands immediate, decisive and prompt action
on the part Of our legal officials here.
Mr.. Slower, the person who is charged with
being the principal in the affair, has been ar
rested, and will no doubt be punished; but the
matter should not be permitted to rest there.
1t is of the greatest possible moment that the
financial record Of the Northern States should
be without blemish and purged Of every sus-
picion Of fraud during the trying times that
We are now going through. European govern
ments should mot have the opportunity to point
to . single act on the part of any Of the
Northern States that could awaken the least
suspicion or tend to injure our credit. The
connivance in this fraud on the part of the
officials Of one State reflects upon all Of the