, 1873-10-28
LAKE.sHoRE AND UNION TRUST.


Dcniuls OF Thcln.
From tho Nep York Tribune, Oct. u.
Ever Blnco 1t waB known that tho Union Trust
COMPANY Ind loaned 81, 1851 900 of Its funds to
tho Lake Shore 1sai1road Company, which tho
1attor oithor could not or would not pay, thero
hare boon rumors Of frauds and complications Of
various kinds. It was alleged that tho stocks
with Grinnell d Co. were originally bought for
tho account Of Clark schell & DankerH aud TINT
tho margin was from aoourltioB Of tho Union
Trust Company and tho Lake Shore Raiiroad
Company; TINT whon tho panic carne 1t WAS tho
iutontion to transfer thcBo accounts to the Lake
Shore Railroad Company as far as practicar
bio, and allege TINT tho speculation
was for itB account, as the survivors
Of tho triu1nyirato wore mombers Of the
tion would throw tho loss upon the railroad and
not upon tho persons responsible. These ru-
mors arc given as tho drift Of ourront discussion
on u tho street," aud AFRO not Youohod for BY tho
Tribune.
Another statement recently publtaled, to the
oiFoot TINT 81, ,250, QUO Of Laso Shore bonds were
atolon from tic safo Of tho Union Trust Com
pany by tho Into Secretary Carlton, or tnhon out
by other persons aud uaod for purposes OF spocu-
posed to contest it's dobt Of 81, 10000 to tho
Trust Company bocauBo tie Iatter held these
bonds, was the subject OF Investigation yoeter-
day by Tribune reporter James g.. Banker,
Treasurer Of tho Lake Shore Railroad Company,
said very empllatically, that ho lad never hoard
the statement boforo, and that it was falao In
every particular.
G. q. Williams said tho bonds Ind been trans-
ferrod to George 3. GrlunelI / Co., aud wero
now doubtless In the possession Of various pnr-
sons to whom that firm may have transferred
thom in tho col1rso OF businoaB. Tho proceeding
in tho transfer to Grinnell Il Co. had been por-
foctly straight on the part OF tho Union Trust
nor used as collateral by unauthorized persons.
As to the statement that tile Lake Shore COM
pany had questioned its liability for tho 81, $780,
900 due tho Trust Company, ho had heard no in
timntion of that character.
i. Is. Wesley, Noceivor Of the Union Trust
Company, said tho bombs were transferred to
George b. Griunell q Co., aud Ind beon receipt
cd for by them. and the Trust Company waB in
possession Of the receipts. The transfers wore
made regularly by the authority q tho Troasuror
transfor Of aome Of tho bonds standing in tho
namo Of Griunell and Co. had been stopped re-
contly by order OF tho Lake Shore Company,
but ho could not say what roason there might DO
for the proceeding. It might be in pursuance
Of restrictions imposed by tho injunction, or
thore might be other reasons. Tho Union Trust
Company Was not in debt to tho Lake Shore
nor lad any question Of liability for 81, 10000
boeu raised ut all, to his knowledge, by tue lat
tor Company.
From the Ncto York Tribune, Oct. 25. -
Nnmor charged. IN addition to what has already
Shore bonds we're transferred BY tho Executive
Committee Of tho roud. consulting Of Horace Of
Clark, James II. Banker, and Augustus Sclol1,
to Grnnoll & Co.. as margin in thcir gigantic
manipulation. OF the stock market; that tho
operations originally promised SUCCESS, but WHOM
tho panic came they Lost tue margin ant moro
beside; that tho Luke Shoro Company never re-
ceiyod any compensation for these bonds; and,
further, that heavy dofalcation by olllcora Of
the Company, lad been discovered, and its
ru1no,a, doubted at first, gained credonco whom
takon in connection with tho formal tranafor
Of 9700,000 or moro Of property, by james H.
Banker, to Commodore Vanderbilt. Owing to
these rumora and to heavy aales OF stock, thoro
was q worry marked decline In Lake Shore, tho
price dropping from G5 ut the opening to 81,
amid considerable excitement aud apprehension.
Lator, however, it reacted to 85. Efforts to OBJ
full, owing to the reticonce Of noarly all the
officials aud the bruHqueneBa Of some OF them.
Commodore Vanderbilt, when questioned, said
that ho know nothing about the Lake Shore
transactions during the ilness Of Mr. Clark.
not to mako good the loss Of any bonds by the
Lako Shore Company. Further than this he
could say nothing
Nlr. Schell was very reticont, saying TINT he
did not purpoae to answer newspaper attacta
we're properly issued md properly applied, aud
that all transactions in regard to tholn were por-
fectly satisfactory to the managers Of the Lake
Shore Company.
Mr.. Grinnoll Of George Bird Grinnoll & Co.,
said that the bonds in question wero transferred
to the firm BY MesHr8 Clark, Sohell, and Banker,
the Executive Committee Of the Lake Shore
Company, as collateral for purchases Of Lake
Shore stock. Whether these purchases wore
made for private interests or for tho benefit OF
tho Company ho was unable to soy, but ha sup
posed the lattor to be the object.
=. @. Worcester, Acting Treasurer Of the
Lake Shore Railroad and Secretary Of the Now
York Central Railroad Company, said that ho had
beon acting Us Treasurer since tho departure Of
James Fl. Banker, tho actual Treasurer, for
Europe, about year Or more ago, on business
Tor tho Vanderbilt roats. Whom Mr. Dankor re-
turned he had All accumulation of other busi-
greater intoroats whiul required attention, 80
TINT he Ind boen unable to attend to tho details
Of the office. Alr. Worcester had therefore con-
tlanod to perform tho duties. Speaking, from
thore was no truth in tho statements of tho enl-
bezzlenient OF 81, ,250, 600 of bonds. rhcBo bou1a
had been regularly paid for nld tho rocoiptH
turmoil into tue treasury OF the Lake Shore
| Company, and tho transaction regularly cloaod
long Hince. TLeir transfer had boon stopped
simply because Of the peculiarly delicate nature
| Of Affairs WHOM tho Company was aorved with
the notice in the ,Grinnoll bankruptcy case. A
question uad arisen ~ to the legality of the
and tho Company Ind decided to await q judicial
| construction Of the matter, which would DO had
to-day, as the case had bcen sot down for argu.
ment IN the morning. Az to tho dofalcatio1
In tho troaaury Of tho Luke Shore Company, II
current r'mors were to be believed, thero waf
very lttlo money In the treasury. Thero hat
boon no embozzloment or deialcatlon
Fortunately Or unfortunately, as tho
case might be, tho Lake Shore Company had oil.
tered upon, a series Of improvements designed
to benefit the road. aud thiu for tho time had re-
q1ired their available oash. It waa for this pur.
| poso Tint tha toan from tho Union Trust Com
pany had been obtainod. This loan would llayt
been met " time from tho eRrniugs Of tho road
which wore ample. Some msaprrolonsion OF:
listed as to tho precise character Of tho negotia
tions in regard to tho loan of s1,750, 900. AZ
Impression appeared to prevail thai Commodore
Vanderbilt had assumed tho obligation because
tho Lake Shore Railroad was unable to moet it
This was not tho caso. Tho Lalo Shore Railroat
could very vol pay, 1t. and would do SO in ths
regular course OF buainoss, but of course th,
toady money was not obtainablo immt dintoly