The New York herald., 1869-10-20
SUPREME COUsy--caAMscas

Iut argument SsOfO S8sets-luJuEgIfOuA
Against the Gold Exchange Banls and the
Steck Esschause-How the Emsiuess Has
Been Condncted--Fur;her AHisiavits.
Before Judge Cardozo.
Smith VS. COr.-In pursuance of adjournment
from last week the argument in the Wall street gold
Injunction cases came up yesterday morning before
Judge CardoZo, when q large array OF counsel ap-
peared on botn sides.
Mr.. David Dudley Field and MIR. Dudley Field
appeared on behalf OF the plaintiffs; Messrs. Clar-
,ence II. Seward, Marvin ami Da Costa for tho New
YORK Gold Exchange Bank and Mr.. Marbury for the
New York Stock Exchange.
The case OF Smith VS.. Cox was hit upon a test
case for four others also in issue.
Mr.. Dudley Field. In opening his motion to the
court said that four of these motions came up on
the original order Of injunction which was accom-
panied by order to show cause why The injunc-
lions should not be made perpetual or why they
should not be continued until the trial. In the
fourth case the Injunction was absolute, and the
defendant had obtained an order to show cause why
the injunction should not be set aside, which was
retnrnable to-day. The cases were almost IDENTICAL
except that OF Willard. lie would. therefore, go on
and give a statement Of the cases as contained In
the complaint
Ei,card K. IvitGrd, Plaintiff ps. WfRial VI.
Nettsoa, as President or NE Neto YORK stock Er-
change, aud TOlrasend coz, as President or ne
NeG York Gotd Exchange, Witlidm II. Neilso,a
Noses II. Wheel0ch, B. o. lYhite, George II. BrOdd-
Bend, Thomas r. Ahers ana George IhipDs, DeJe,d-
ants.-The paintT complains and alleges:-
Farst-That this action Is commenced on behalf OF
himself and OF all other members of the New YORK
Stock Exchange and of the New York Gold Ex-
change who are similarly situated and who may
contribute 10 the expenses OF this action.
SecOhd-That the New YOrk Stock Exchange is
joint stock ASSOCIATION, composed OF several hun
red persons associated together for the purpose of
tlpo
and located and traDsactlng Its business only in the
city and county OF New York.
stock association, composed OF more than 200 men,
Ders or persons associated together for the purpose
Of transactng business III buying and selling gold III
the city ana county OF New York.
FOusth-The plaintiff Is a member Of each of the
said associations, and IS broker in gold; the de-
fcndant Nelson IL President Of the New York STOCK
Exchange, and the defendant Cox is President OF
the New York Gold Exchange; the defendants
WheelOck, White and Broadhead are each offcers OF
said New York Stock Exchange and the defendants
Hoyt, Bend, Akers and Phipps are each officers OF
Fyrh-By the bylaws of the New York Gold Ex-
change 1t Is In substance prescribed that all con-
tracts mace by its members with eacn other for the
purchase sale OF gold shall be settled through the
New York Gold Exchange Bank, unless otherwise
provided by the terms OF the contract.
SfLLt-rhe said bank Is clearing hOuse, by the
aid OF which the members Of the said New York Gold
Exchange have been for a long tune accustomed TO
settle the balances due from them to each other upon
dealings In gold and by this means the said mem
bers have been relieved from the necessity OF settling
all the transactions in detail that II broker sold
gold to twenty different persons and bought gold
from twenty other persons he would, under the Oper
alton OF the said rue have 10 pay out receive only
the difference between the whole amount OF his pur-
chases one day, whereas IN the absence OF such
provision the contract would be much more Onerous
and he would have TO deliver the whole amount OF
ms sales and obtain actual possession in one day OF
such an amount 0f gold Tor that purpose and also to
Obtain IN one day currency sufficient to pay for the
SerenfH-On FRIDAY, September "a, 1869, the trans.
actions or the said the New York Gold Exchange In
gold between Its members were very large, exceed
ing $3.50 000 600 in coin and $780, 900 in currency
and almost the whole OF these transactions were
made under the. rule aforesaid, with a distinct un-
dersianding among all parties that they would be
settled through the said bank, ana such arrange
ment was an essential element OF the contracts and
particularly OF those made and entered into by this
plaintiff with other members OF the said New York
Gold Exchange.
Eighta-lt was. and is utterly impossible to per-
form these contracts by separate deliveries and bay
ments and was wei known TO the parties thereto,
there not being enough coin or currency in the conn
try 10 40 1t. And no provision made or coniem-
plated by the parties for the failure of said bank To
act as a clearingi house. The said bank has neg
lccted 10 clear the transactions Its alatrs
In great CONFUSION, its sovency is much impaired II
not desroyed, and 1t IS now restrained by inlunc-
ton from doing business and Is IN the hands OF a
receiver.
clearance OF the said transactions is task OF eN-
treme delicacy and great dlnicnlty involving the
exercise OF the highest personal discretion, and the
duty Of making sucn an adjustment cannot lawfully
be devoved upon any person otn er than one agreed
upon by AIl parties.
TpaH-Tne plainufr and many other persons are
members OF the New York Gold Exchange and also
Of the New York stock Exchange, and contracts
have been entered into by the palntl ana Others
members Of both exchanges, with reference to the
rules and bylaws OF the New York Gold Exchange
and subject thereto for the sale Of god which con-
delivery OF the gold or cleared through the Colo Ex
change Bank. 1t Is now claimed by some Of the
these contracts shall be closed at the New York
stock Exchange, under and IN accordance with its
laws OF the New York soid Exchange, under ana in
pursuance OF which such contracts were made.
Eterenth-Eacn Of the SAID Exchanges has rule
OF bylaw, by which the president or other officer Of
each 10 required TO buy or SELL as the case may be,
for the account OF any member OF that Exchange neg
lecting to fulfil his contracts as q member thereof
and sucn member is bound To pay the deficiency &C.
cruing upon such sale or purchase, and IN default
thereof is liable to expulsion from such Exchange;
but the said rule In each Exchange was ana s In
tended 70 apply only to transactions conducted
under and with reference to the bylaws OF tRat
been applied transactions made with reference 70
the rules OF any other organization
n. 'Hc Nc v"rr s1ocr ExcSans ~ any e s,,,,
and enforce the rules and bylaws oi the said New
York stock Exchange to said contracts made Tor the
pnrcnasc ana sale OF gold between members OF the
sad the New YORK Gold Exchange, and with reic-
renee and In subOrdtnatl0n tO the rules and
bylaws OF the SAID New ac,k 70 ,S Sog Ns yosS
EXCHANGE or some other officer thereof, 10 buy and
sell aOld on account OF sacn persons claimed TO be
deDtOyH on the adjustment Of said transact0ns and
ns the paintifY Ia Informed ana believes the prest-
dent or other officers Of said New YORK STOCK
Exchange will do So and members falling 10 conf
pIeto transactions 80 made their account by the
president or other officer Of said New iolA S.ocA
Exchange will be expelled from said associaIion.
will be deprived OF the power to deal as puolic
broker In gold and will lose his credit and standing
among brokers, bankers and business men, thereby
sufYering damage irreparaDe, and wholly incapable
OF being estimated or made good by pecunmry com.
pensatiOn, and oven II compensation ior sncn
injuries could be made u win be impossible 10 ascer
tain the persons legally liable to pay It. ,.a.,-
wherefore the plaintiff prays Judgment
l. That the defendants and each Of thsm aud the New
Work stock Exchange thereof be restrane,
Nv injunction buying selling gold on account OF AM
member Of aad York Gold Exchange, when the grouns
OF such purchase or sale failure Of soh member y per
form contracts entered into under and with reference 70
rues or bylaws the New York stock Exchange and IRON
Sscsring sdjudgng member 10 default ~ reason "