, 1872-11-23
JAY GOULD.

Arrest CT the Ex-Presfdent OF the Erie
Aaalway-The Company Sues to Re-
cover About Ten Millions Alleged to
Have Reen UnlaxEfuIly vVithhe cid by
18in-ERe Gives Bail In One million.
NEW YoRK, Nor. DAT last tile new Erie
Directors are able to act. THIS afternoon, at the
suit of P. H. Watson, President Of the Erie Rail.
way, Jay Gould has been arrested. The warrant
vas issued by Judge Fancher, OF the Supreme
Court, and is based on an affidavit which charges
Jay Gould with Wrongfully taking to his own
use, while in control of the Erie Railroad,
$9,5O0, 600 Of money belonging to the Erie stock
holders. The Buretles in the order Of arrest are
Butler Duncan and Wm. r. Travers.
At go P: E m. Jay Gould presented himself at
schell and Horace +. Clarke who lad consented consented
to become sureties on his bail bond, the bail
being fixed at 100000 Each Of the
bondsmen justified, Thereupon Gould was re.
leased by the Sheriff. The counsel for the Erie
Railway, however, will object to the sureties, On
the ground that they should have justified in
one million each.
Tie affidavit Of President Watson, Of the Erie
Railway, AYERS that that Company has cause OF
action against Jay Gould for more than the sum
Of S9,726,A1;2G,, to which interest
is to be added; that such cause OF
action arises from the fraudulent detention, en-
bezzlement, end misapplication Of tho moneys
and property Of eaid Company; that Gould
while acting as President and Treasurer Of said
corporation, has been guilty Of fraud in
bing tbs neon hG Is oEgs S9gati0n ba for at TSs iSs
sane time, Gould was . co-partner With
Henry N. Smith, Henry b. Martin, and James
B. Bach, under the firm name Of Smith, Gould,
Martin d Co., bankers and brokers, and the
agents and brokers Of the Erie Company; and
that all the moneys claimed as having been at
any time to the credit of said Erie Company on
eeiyed c 0'01 for " said 10 Railway "e5 Company my
during the time Gould was it's President and
Treasurer; that at various times from the Sd Of
August 1868, to the 9th OF November, 1869, the
said Erie Company created and issued 407, SAT
shares, Of the par value Of $40 734, 700, increas
ing its capital stock, exclusive OF preferred
stock, to $4,000, ,06o; that in tie issue
Of said stock Gould took prominent
fad pef setgG nS I Ipa IS ssea dn s9 e9ef to h bnd
as President and Treasurer, or to said firm Of
Smith, Gould, Martin {, Co., as agents and
brokers. to be converted into cash for the ben
eft Of the Erie Company. That the aforesaid
stock under Goulds direction produced after de-
Quoting charges and commissions S12, ,s08, ,o59.23,
which sum was received BY said firm, as appears
from their books, and that while said firm has
accounted in cash for this amount to said Gould,
said Gould has fraudulently received . large
Part OF the net proceeds Of T. said stock to wit
said books, ;, and has converted
and applied the same to his own
use that by reason Of sales Of stocks and other
property Of the Erie Company, by Smith, Gould,
Martin & Co., there appeared On their books on
the 1st Of August 1853, the further sum Of s3,--
deduction or Offset; and that on that day, by ex-
press direction Of Jay Could it transferred to
his individual credit upon the false and fraudu-
lent pretence that the Erie Company was largely
- t-I T. L.. L.
was then. largely. indebted to said Com
pany. That this transfer was made
Tor the purpose OF repaying to said
firm the losses then recently made by
said Gould in speculation in gold, carried on
by him and for his Individual account, and as be-
tween himself and snid firm, as appears by their
regular looks Of accounts, the whole Of this
sum thereupou become payable to said
Jay Gould individually. and he there
BY fraudulently embezzled and misaPplied
the moneys Of said railway, for which he is la
ble as member of the firm, and as President
and Treasurer Of the Erie Railway Company !;
also, that on or about the 10th Of November,
1868, Gould commenced speculation On bis indi-
vidual account in the shares Of said
Of snid stock through said firm, upon
which he had then g. very large loss, arising
from depreciation Of the market value of such
shares after purchase; that to relieve himself
from this loss, and fraudulently to throw upon
The Erie Company the burden Of his private
Ii bis % agsnts 1''' and Sau attornays 'nteen co}pe
siyely, and as deponent believes, by b
fraud upon the Court Or one Of it's Judges, pro-
Company OF its officers to repurchase in the
market for the purpose Of cancellation, d large
number of shares Of said Company, heretofore
issued BY and under the approval Of said Gould,
but which, for the purpose Of said application,
doubtful @ Taidity, and that, IN eonsumnation ] ton Of Of
such fraud, said Gould caused 121, 400 shares Of
said stock to be charged against the Erie Com
pany on the books Of said firm on the 9Th Of
August, - 1899, S69, at the average price
Gf tns aoe aeere per to shass smep55ti1g on5 1S
assumed cost Of said shares was on that day
charged to the Erie Company On the books Of
the firm, in nominal satisfaction Of moneys then
belonging to said railway company in the hands
Of Smith, Gould d Co., that these shares we're
transactions we're made in the market at that rate
That Gould, by the devices above set forth,
fraudulently misapplied the monies of the Erie
Company, and was thereby guilty Of fraud upon
SAD Company COMPANY to the sztsat Of Ell ~ s5s for
been in tie early part Of 1858
engaged in speculation in shares Of the Reading
Railroad, and having lost S359, ,612, as appears
by the books OF said firm, on May II ordered
said loss charged to the Erie Railway Company,
and On the 3lst Of December, 1869, transferred
to his own account the further sum Of $168, ,804.-
So. Then to th credit Of the Erie Company On
the books of said firm, which said Gould frau
also charged with fraudu1ent1y misapplying
913, $50 of the Company's money in January,
1866, to cover his loss in specula-
ton in New York Central stock also
Withdrawing from the moneys of the Erie
Company on the Cd Of August, 1869, the sum
of 361, 900, which he paid to James Fisk, Jr.,
whom Gould knew had no legal claim for said
sum or any portion thereof also, with paying
out Of the funds Of the drie 923, ,554.75, without
authority or warrent to secure his OWL relation
as director, in October, 1868; also, with,
on the 28th Of December, 1870, further
the capital stock Of Erie by $2,000,-
600 on the 18th Of January, 1871, further in
cEeasing the same by 81 ooo, 600 at the rate of
$11 per share, or thereabouts, and misapplying
the whole proceeds to the extent of $3.50, 900.
Henry n: Smith, in his affidavit, says he has
read the affidavit Of Peter Watson, President Of
the Erie Railway Company, plaintiff, that the
facts therein stated, touching the organization
and existence, and business Of the firm Of Smith,
Gould, Martin &; Co., are true, and deponent
1<