New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1872-11-23

H..
affdavits OF Peter H. Watson. President OF me Eric
Railway Company. and Henry n. Smith OF the hfm OF
Smith, Gould, Martin Co.
Mr.. WATSONS AFFIDAVIT-IS PART.
Ee,c- York. Supreme Cotrt-Ihs Erie Raioay Company
agL Jay G0uld-Ci and County Of Neo York, ss-First
Peter H. Watson OF the City Of New-York, being duly
swo1p says that he s the President of the Erie Railway
Company and by virtue OF his Office has general control
Of its books OF account and vouchers. and from such
books and vouchers and from other facts which nave
come 70 his knowledge since he became President OF
said corporation he able TO state and does hereby de-
pose and say that the Erie Railway Company the above
named plaintiff has of action against jay Could
the above-named defendant for than the sum OF
S25n g. to which interest is TO be added as Is herein
after mentioned and that such Of action NJ ses
from the fraudulent detention, embezzlemcut and mis-
ION OF the moneys and property Of the said
the Erie Railway Company by the SAID defendant Jay
Gould. the course OF bis employment rs the Pre- dent
and Treasurer OF the said corporation the pa'ntj and
while acting FOR the said Company in hdnciarY eipac-
guilty Of fraud in mourning the obligations for when
hiSacton Is brought as Is hereinafter particularly set
MALFEAsNycE IN OFFICE.
Second That the particular circumstances growing
out OF which the said Obligations arose arc as follows:
That in the year 1901 the said Jay Gould elected
Director OF tho said Erie Railway Company, and as
sumed the duties Of such Office.
the 10th day Of July, 1903 the said Jay Gould
then being such director Of said Company, was elected
Treasurer Of sad Company and Immediately thereafter
assumed the duties OF such ONCE ana thdt on thG SOtu
day OF July 1863 the said Jay could was elected Pres
dent OF the said Company, and from thenceforward.
during all the times hereinafter mentioned duTing
vAch and when he so fraudulenty misapphed
the moneys and property OF the said Company as Is
hereinafter stated and when the causes OF acton LOT
which this action j. brought arose. he continued 10 be
the President and Treasurer OF such Company ana ~
the course OF his employment as snch PRESIDENT ana
ienty msappied the moneys and property OF said Com
Is brought and thereby the SAID company became en-
Titled to against said Jay Gould tie aforesaid
sum Of S9.7265n &c, with interest as Aforesaid
BHBEzzLEs FOUR MILLION FIVE HUNDRED THOUSAND
DOLLARS.
Third: That az the times during which the aforesaid
fraudulent misappcatou Of the COmpanys money and
property occurred and when the moneys hereinafter
mentioned were recovered, the SAID Jay Gould was
copartner with Henry n. Smith, Henry II. Martin, and
James B. Bach under the firm Of Smith, Gould, Martin
& Co.. and such firm did business in the City Of New
York as bankers and brokers, and became and we're
factors agents. and brokers OF sad Company IN respect
OF the transactions hereinafter set FORTH and that all the
time 10 the credit OF said Railway Company in
the books Of the said Arm of smith. could Martin Co.
were received for said company said Gould and his
said firm during the time that the SAID Gould was such
mes from he Sd day Of August 1858 to the 9th day OF
November 1862 the said Eo Railway Company created
amounting the aggregate TO 4OlJI shares or there
caDia2 stock of the Erie Railway Company exclusive OF
TSst in tbe proceedings OF the various Boards Of D
rectors and Of the Executive Committees which autlOr-
lied creation and issue or TINS increased cdn at
the various times when the was increased the
aid ay Gould took prominent and active part such
director and Otacer aforesaid ana such increase was
alleged by him 10 be legal and necessary LOT the egt
mate purposes Of the said Company and 70 the extent OF
40 347 shares Of such increased capital STOCK as le
same was created and issued was Issued directly 10
the sad jay Gould as such President and Treasurer OF
the said Company or to his SAID nrm OF sulth, I0uu
Martin d Coz such agents and brokers' 10 De by mem
"A
That of the aforesaid shares Of SAID stock belonging TO
said Company, and issued 10 said jay Gould or through
MIN TO his Eaid firm OF smith, Gould, Martin q So
9I7 shares OF the p0r value OIL SIOA9O were ueLE
by said Jay Gould or through his agency ana uhde
his direction to the said firm OF Smith Could Martin
Co, and were at various tmes eelu gy th9 se,u nfn
under his direction, and the same produced, ater Ge
Quoting charges and commissions the net sum OF fz,
6O3O59 %, or thereabouts whch sum was received ny
SAID firm from the purchasers thereon as appears
on the books OF his lsaid hrm to which is
respective days when such stocks were So sold, and
although the said firm OF smith, Could Martin Co.. as
appears by Their books OF accounts as between inc sad
film and said Jay Gould, have accounted to him ana
have paid him In cash the whole OF the Aforesaid sum
of s26O5c9 a. Deng tne hei proceeds o. sale o sun
stock received Aforesaid the SAID Jay Gould las
frauduently received in the course of his employment
such President ana treasurer OF Tue sald tne Eo
Railway Company large part Of the Aforesaid net pro-
a. as appear by the said books, and has
Verted and applied the same 20 his own use ana was
me amount Of which with interest added 10 this date,
this action Is in part brought.
TRANSFER OF STOCK TO PRIVATE ACCOUNT.
Fourth Tnat by Of the sale OF the stocks afore-
said and other property OF tho Eric Railway Company
by the aforesaid firm OF Smith, Gould, Martin Co..
and while acting IN such fduciary capacity as the
factors agents. and brokers of said railway, there APP
peared TO the credit the said railway the books Of
said Arm the LIST day OF August 1909 as the results OF
certain sales OF stocks and properly Del9hg.hg 10 sa
railway, tho further sum OF O6l7D 49, Whioh sum was
then Justly due and payable 10 the said the Ere lWhy
COMPANY without deduction or offset, and on tLbt day
the said II rim of Smith, Could Martin Co.. as appears
by the books OF the said rm and upon the express
direction OF the said jay Could depOnent is informed
and believes transferred the Aforesaid 10 the credit
ON the books his said firm. OF the said JAY Gould IN
dividualy upon the false and fraudulent prehse tnat
the Erie Railway Company then largely indebted 10
him the said Jay Could and that he would account TO
the said COMPANY for the afOresaidsum or O61OO 10,
when In point OF fact, the SAID Jay Gould was then
largely indebted 10 the said Railway Company That
such aforementioned transfer OF the money OF the safd
COmpany to the credit OF the SAID Jay GOu
on the books Of his said firm was made Tor the
purpose frepayng b. the said Gould In speculation In
cold carried by him ana for MS individual account
enS as between himself and his said firm appears by
the regular books OF accounts OF the shld rn the whole
OF said thereupon became payable 10 the SAID jay
Gould Individually ana he tnerept rauuul.tS en-
bezzled and misapped the moneys OF the said railway
for which he liable as member OF sald nfIn ana
also as President and Treasurer OF said Ere Railway
Company In the Of his employment as suc ana he
thereby committed fraud IN mourning ths upsauon
10 the intent aforesaid for which further sum- with In
terest added az Is hereinafter stated this actsn Is In
part brought.
NCREIsR OF STOCK AND EMBEZZLEMEST or PROCEEDS.
TENN That on about the 2sth day Of December
1870 further increase OF 1900 600 Io the capital stock
OF the SAID Erie Railroad Company was made through
the agency OF the said Jay Gould such President ana
Treasurer and ON The I3th day Of January lHl fur