Indiana State sentinel. (Indianapolis, Ind.) 1861-1865, 1862-06-02

ated pursuant to this act shall be transferable
only IN the city of New York. and books to be
provided for that purpose by the State,
but no transfer shall at any time be permitted,
except on the surrender and cancelment of the
outstanding certificates"
The stock was created by the surrender by the
holders of the outstanding bonds of the State
by the surrender of the bonds the holders be-
came entitled TO certificates of stock by the act
created, one-half of which was charged upon the
canal, and to be paid only by its tolls and other
incomes, and the other half are to be paid by
the State. 1t being this latter class of stock that
false certificates have been issued upon, the
canal stock need not be further noticed.
The law required the State stocks to be evil
denced by certificates, signed by the Treasurer
and Auditor of State, attested by the seal of the
State, and to be countersigned by the Agent of
the State, and they could only be issued in place
OF State bond to be surrendered by the holder.
The Agent could not by law issue original
certificate, unless it was to holder of bond or
bonds TO DE by him at the time surrendered; nor
could the holder of any certificate, whether true
or false, transfer the same in any manner except
IN the city of New York upon the books of the
State 1t will be perceived that there cannot be
an innocent holder of State stock certificate
issued to him without having surrendered a bond
OF the State for it, a certificate of stock origI
mating in the surrender of such bond.
Not only is the mode of transfer of the GER
thcates of stock limited by the act before cited,
but form of the certificate is prescribed by the
act, and upon the face of the certificate it is de-
clared to be transferable upon surrender in the
city of New York in books provided for that
purpose by the Agent of the State there resi-
dent" The acts under which the stock is crea-
ted, is also referred to in the certificates so that
| no person claim to be an innocent holder of
tho fba b,s a
rectly to him for bond or certificate surrendered,
and when the agent issued to any person a certif
icate or certificates of stock without such person
having surrendered either State bonds or valid
certificates therefor, he acting without
thorty, and if the same was done for the purpose
of obtaining credit thereon in any manner, where
by any person might be deceived or delrauded
the law of New York made all parties parti-
cipatng in the fraudulent act, guilty of for
gerry.
Had the Agent of State recognized these false
issues by accepting and canceling them, aid Civ
ing others instead thereof to an innocent holder,
it might be questionable whether the State would
not be under moral obligation to protect the
holder of such certificate. but from my investi-
CATION OF the matter am satisfied that no false
certificate has ever been transferred ut the Agen-
ey, either by Slower or the present incumbent.
But suppose am mistaken in this, and that some
of the false certificates have been recognized at
the Agency, how can that benefit the holder of
other false certifcatesl As well might the hold
ers of counterfeit bank notes expect to make the
bank liable for their payment, because the officers
OF the bank had ignOrantly or cOrruptly Gf you
! please) paid like paper.
These false certificates, called can irregular
issue" certify that the State of Indiana owes
some named person certain sum of money.
That person, whoever he NAV be, is a cOnfeder-
ate and principal in the crime of the issuing the
/ false certificates called irregular" How can
he be a bona fide holder? and under what obliga-
ton is the State 70 pay him? Whenever he seeks
to transfer it at the Agency upon the books of
the State, he and his contemplated assignee will
be met by the objection that the certificate is spu-
rious.
But, says the Herald, in offering reasons why
the State should assume the payment of these
| forged certificates, and recognize them as genu-
inc, that the Loan Commissioners were about
to sue the guilty parties, and "were inform
ed by the District Attorney here New York;
and also by the Attorney General of In
diana, that it was very doubtful il they
had any case" land their defense is that
the bankers and brokers whom Slower had con-
| trived TO involve in his transactions had capital
and reputation enough at stake to redeem the
whole irregular issue if no expose was made. "
Il rs udc bctu SliOMu, tueTt COulus Dl pOSolDtl-
ity, be an innocent holder of these false certf-
Gates. Mr. Slower contrived to involve no one
who was not willing, and who not active
/ participation with him in the crime A certificate
exhibited to me, supposed TO be false, was filled
up in the name of one Hallett, and had blank
/ power OF assignment Endorsed on the back OF IT..
| Now, if this was really false certificate, and
this Endorsement upon the back was Eis genuine
signature, he has not been involved in that trans
action by Slower, but was an equal participant in
the fraud with him, and neither will venture to
assert that the State is able nor will any holder
of these certificates, whether by purchase from
or pledged for loans to Slower and his cOnfeder
ates have any better success in charging the
State with their payments, for the plain reason
that the law of Indiana allowing the issuing of
stock certificates forbid such purchase or pledge,
and that there might be no mistake, and that all
persons proposing to take these securities might
distinctly understand how it was TO be done,
they are notified in the body of the certificates
that the same not the subject of transfer and
/ assignment except upon the books of the agency.
| No amount of fraud at the agency, or insecurity
of any kind therein, will Justify such holder in
the belief that the State is under any obligation
whatever TO pay them. Such holder is bound to
know that the agency has but limited and special
authority, and that the State is only bound to
/ the extent of its lawful exercise When he reads
his certificate he knows he has no property in it,
( till it is transferred at the agency, and has no
right to expect that it will be so transferred if it
is false or illegal in any respect So that, in my
Judgment, the State is under no obligation what
ever to recognize any of these spurious certIf-
Gates as genuine, and indeed it could not be done
without legislation and probably an amendment
/ of the Constitution of the State. If the Agent
of the State or any OF its officers presume to rec
Ognize them as valid, and pay interest upon them,
they will be liable upon their bonds for the funds
of the State thus unlawfully appropriated. There
is but little probability that there will be special
| legislation in Indiana in favor of Slower and his
confederates, and quite little in favor of the
holders of the spurious certificates who have
ventured upon the integrity of some broker per
/ haps to take them and advance him money upon
them though expressly warned by the certificate
itself that 1t would not be good in their hands
Being the Attorney General of the State of In
diana at the time the frauds of Slower were dis
covered by the Governor, my attention was by him
called to investigation of the possible liability of
| the State for these false certificates, and | was
then satisfied from an investigation of the subject
that there no liability ON the part of the State
! for their redemption
As an attempt has been made through the press
| in New York TO cause it to be believed that Gov.
Morton and other State officials connived at
| keeping THIS lrauu secret TOIn tne puOnc 10 us
prejudice | have to say in answer TO that imputa-
/ ton that some time last winter, in February,
think, in the city of Washington, received a
dispatch from Governor Morton to Immediately
go to New York; upon my arrival there was in
formed by him of the fraudulent issue of these
certificates OF stock, and required to take such
action in my judgment the interest of the State
demanded. An examination OF the affair in con-
nection with an eminent lawyer of New York
satisfied me that the transaction did not involve
the State of Indiana in any manner whereby an