The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-02-19


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How fTie stock Is Managed Among tho
"Baih and Benrs'-Danic, Drew,s Last
Grand MOve-S5.S00,O 600 Worth Of stock
i" the Hands ef One Mau-Why stocks isiss
aud Fall.
Wall sreet-thxt Is, the vampires and s,ocsiobbing
leeches Of that all lair and above board locality
thrown into unusual trep daon Monday las, by
the dropping in their mdt OF torpedo shape Of
o Supreme Court injunction. based upon ,he complaint
and aiiavits OF Frank Work, OF the directors Of
the Erie Railway Company, against Daniel Drow, the Ellie
Railway Company aud Board of Directors THIS order
Of the eDjoIns the defendants from paying Drew
amy part Of the principal or interest OF certain moneys
amounting to the sum Of Sa4s0,0oo, switch were
cevsd by the company at various times during the year
1856 from Drew loan or advance OF sixty per cent
upon 20 900 shares stock, and 900 900
worth OF the convertible bonds OF the company
Ever since the organization Of the Erie Railway Com
pany, In 1851 Daniel Drew has been one Of It's directors
having been annually Reelected and is at present ono OF
the Executive Board and tho Treasurer Of the company
Tho corporation formed upon bass OF sll5O0 900
worth Of stock in shares OF 500 oacn par value and
by subsequent acts Of the Legislature OF New York. I'M
der the laws OF which the campany created was
authorized to issue preferred stock to the amount Of
S. 500 600 Tor the liquidation Of unsecured and Judg
meat Indebtedness Of the New York and Erie
the Erie Railway Company" formed,
and whose liabilities and had assumed to IN
Its capital by Issuing 5000 900 Of common
stock for the construction depois machine shops an
other buildings necessary for The business OF the road
and to issue capital stock TO an amount not exceeding
$3O0O0O in ALL for the purpose OF canceng certain
bonds issued by the Comp roller OF the State OF New
York. The payment Of these bonds has SINCE been
extended to 1897 and this three millions Of stock
therefore required for The purposes Tor which was
authorized and been issued On the 3lst day of
December 1867 tho total amount Of the capital stock
Of company appeared by its stock books and the
report 251 $50 shares OF $lcC each making
total valuation OF SIS 105, 500, folowsProerred
stock, $s,5S5, 200; common stock, $l6,570,l0o or
this common stock $1l, 900 had been issued
| in exchange for that amount Of the stock
| Of the old company New York and Er!e),
s2,S000 900 in exchange for the fourth mortgage bonds
OF the old company, and 500. GOD which had been
issued part S. 600 900 construction. Thus
tue company at that not au horzed to ISSUE
urther stock than ths remaining 81 900 OF tue
$1,000 0O nor mas 1t since been 40 empowered 10 DO
\ In and PRIOR to May, 1865, Daniel Drew was largely
engaged specuaiions In Erie STOCK, particularly ia
thai particular OF transactions selling
| shortn which consists OF agreeing furnish pnr
chasers with stock which the seller does not POSSESS
| or to larger amount than no owns, specified
time, iu expectation OF being himself able 10 pur-
the amount required at lover prce than that az
och M had agreed 4, deliver it, Of course IL ia 10 the
interest oi sorL' seller depress the market value
oil stock that no himself purchase IL cheaper,
and different lodges are rom time 70 time esorted u TO
eject this OBJECT. one o. these methods Is to prec Pr
large quantity OF tho stock upon the market a
ue, thereby making the supply 10 exceed the de-
such and who have borrowed money on hyRotne-
OF such stocK and otners who haze al 'anced
money hypothecations, are by this means con
PEELED sacrifice he nypotnecatei Tor the pay
Of tho ionus advances made on i.
Drew had large short sales AT an average OF
about $40 per share. and required sevtra thousand
SHARES htl bis contracts, and no had
been compelled to 60 into the market 70
| procure II tao price IN consequences Of his
| demand WOULD materially advanced, ana diminished
his profits tie wont to his oo-urectofs ANA induced
them a majority Of them, 20 s.uc to him the $4,000
shares remaining from tho 5000 shares lnd
deliver 20 nn unsecured bonds OF toe company
to the amount OF So 600 600 he agreeing sixty
per The sock aud Donds, payable In s"o years
ineret cent, and To have tho right 10
speculation and return II at the expiration oil
The two years.
loaned So oo0 900, and the plaintiff, WORK. alleges
COM ered turee bonds into stock thereby
securing control IS 600 shares Ers Inclusive Of tue
600 shares Of stock authorized for consttucot
purposes. This an immense po.er to be welded u
tne market by Que mind, and II Is charged that la
used this stock III his 'shot' sales, at average
$40 per SNARE thus securing profit tho difference 30
tween and the amount he had asre d 70 pa,
tho company tor the stock borrowed II - ciame'
that he has by this made profits more than sun
cent 10 repay his advances Win interest VI coats
there was query against this method OF ''rasrg
STOCK, and il was suggested that he should be CON
peiled 10 account but tue credlof Erie bad wns
Drews credit good ana nobody else wished 70 loan
| the company Tic $3Ooo,c0J V required Drew kne Z"
precisely afsits stood, ana took Whatever risk
there was In advancing to them, to secure this man
| motn 'pinin."
| Mr. Mo,k has now brought this suit against
| him, Gaining tDat the covenant cn,ered into
| by Drew with MS co-directors was iTandul nj
and that the Company etiled TO have IL aside.
| aud 10 have accounting by hin q all profits thsi
| have accrued from his control aud sales oil the
| Is OOO slaros; that the issue him or tue
| 2s oyO shares was Illegal the stock was by
act OF the LEGISLATURE authorized be Issued Tor ina
construction o. depots double track &C, tha, Ia cen
1 pf lne
tao ponds having having scattered AM transferred
INTO hands other aud tond de holders IS nov
Impossible idenr,y them from valid STOCK; and th'
plalnliu this connection Asks that the company 81
compelled t. can Ell . sufficient amoGLt OF rs stock
| reduce lis CO pi,al amount authorized by law
The prayer OF the complaint asks irtber that bTe7
be required, by the judgment OF the court, 20 delye
TO tho company 5000 shares OF the capita
stock and Ia default thereof that he be adjudgod 10
tue company the par value thereog, SlCo per shsi
with INTEREST," thai Drew DO enjo ned from demand.n
from the company any payment Of tue principal ~
tcrest OF Tie advances made oy hn on the stock en-
bcpds; and that all OF any payment or accountlns
| the defendant Drew of moneys aGcrung from I'll,
| transaction be enloned and prohibited.
THIS, far, Is tho present aspect OF this Oh
10 be decided by tue coars and Is Substantially whotbe
tho affairs of great railroad, whose tire
Or tue richest States in tue Union, sua be man lge,
Tor the sole benefit Of ITS officers aud empi yes
for The benefit of It's stock holders, whose money
inyesieo it, Ii the Whole Of the material portions
ho complaint be true II develops OF the repre-
bensibe specgat that has been kpowp a. wei
rs one oil. Tho most comprehensive put ~ jobso u
gambling that asOnshed tue Wall stree
| money peders. IL formed yesterday the
principe topic VI Conversation in ali aud con
circle, ana wl OF cUurse, attract large snare
| OF attention every where.
ASSASSINATION OF A RAILROAD CONDUCTOR.