The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1870-03-29
PRESS.
Tuesday Morning, March 20, 1870
The vanderbil, w.r
PORTLAND


Which is now going on in the New York
Courts is legitimate offspring of the first
great Erie fight in the summer of 1858. In
July of that year, when Jay Gould became
president OF the Erie railway, and Jim Fisk
member of the directory, Daniel Drew, at that
time also member of the board, was "short"
of Erie stock, and, consequently bear in the
market. Vanderbilt was at the same time,
large holder of Erie shares, and, very naturai-
ly, bull at the stock exchange. The bgnt
between Drew and Vanderbilt waxing hot
the Commodore one fine morning gave an un-
limited order to sustain the market. Fisk
and Gould, to relieve brother Drew of his
shorts, and to satisfy the longings of Wander
bilt, thereupon issued s10,OOO,OO0 of bonds
convertible into stock, which the courts have
since decided they were empowered to do by
statute. The bonds were Immediately con-
verted into stock; Uncle Daniel took 5000
900 worth of same to meet his contracts, and the
willing James kindly filled the Commodore's
unlimited order with the s., 900 900 worth, still
remaining at 10. The unexpected issue of
this large amount Of extra stock deprecated
the market value from 70 to %. Vanderbilt
then brought an action against the Erie COM
pany, claiming the issue to be illegal, and sued
out an injunction, the court at the same time
appointing a receiver to take charge of the af
fairs of the road. To avoid the decree of the
court, Drew, Fisk and Gould made their ia
nous pilgrimage to Jersey City. Their exile
being irksome, and the Commodore still keep
ing his injunctions in force, a settlement
was made, terms OF which were as follows:
The Erie board, that is, Fisk Drew and Gould,
repurchased the stock with which V vanderbilt's
unlimited orde; was filled, at 20; make good
his losses on sales he had made, in corse-
quence of the extra issue, which transaction
involved the payment to Vanderbilt of $4,5Oo,
900. In lieu Of this, the Commodore took 81,
100000 in money, and the balance in sundry
bonds. Daniel also had margin, between 20
and 10, made up to him, on the S5,OOo,OOO
worth of stocks he had purchased to cure his
shorts, and lett the board, whereupon Gould
was made president and Fisk controller. The
present action is brought by these last named
parties, to recover of Vanderbilt the S4,5OO,
900 paid him in settlement, the allegation be-
| ing that the transaction was fraudulent and
therefore void. 1t requires no judge to see
that it was fraud on the stockholders, to
which both the above named plaintiffs and de-
fendant were what? An honest Judge,
moreover, would decide at once, that the ac-
tion could not be sustained, but the influence
that the Erie bretheren have before Judge
Barnard makes the result exceedingly doubt
full.
Concomitant with this proceeding is that of
the movements, of Mr.. Burt, the English bar
lister, who is here looking after the interests of
the Erie stockholders in Europe. This move
ment originates from
ANOTHER ERIE swEETMEAT,
or rather two of them. A few weeks subse-
quent to the settlement above referred TO,
Fisk & Gould issued S32, 100000 more of con-
verlible bonds to two brokerage firms on " all
street, OF both of which they are members.
These bonds were Immediately converted into
stock and the latter was sold by the brokers
above referred to, in the English market,
mostly to capitalists, simply by inoorsing the
certificates over, instead of having the same
transferred Oil the books of the company. In
this way thousands OF shares were left stand
lug upon the books of the company, in the
names of Fisk q Gould's brokers, aud by their
votes upon these shares in the fall OF 1869,
these two Worries we're reelected to the man
asement of the road. The decline in Erie
has since been SO rapid that the unregistered
shares above alluded 10 were ruled out OF the
English stock exchange.
r. fnmSur~0s'y sseSs a... -ra<ss iuv
bried through the legislature, providing that,
thereafter only one-hith OF the Erie board
should be retained each year, and that in the
order of election. The effect OF this statute
was to pu, Fisk & Gould into the control oil
the road till 1S47, unless before that time re-
peaed. The present stock of the road Is S75-
100000 or this S50,OO0,OOO are owned In
England AMI on the continent Mr.. Burt
representing the European shares, is now be-
tore the legis lature urging the repeal of the
bill last referred TO. 1t he can nav more
bribe money than Fisk & Gould, he will Sc
cure its abrogation, otherwise not. fNe,s
York Cor.