, 1875-04-21


A financial operation Of somewhat com.
plicatcd character l,aa boon nlntlo tin fouu-
dation for NIL assault upon the sccrctary Of
thc Nnvy Of improper relations with privnto
bankers, hut tho full Rtatcsnent Of tho facts
seems to us to reflect credit upon hia conduct.
Tho facts, briefly, are tlscso: L,rcnF'Ei.n
Trotl,ers wcro building tho st. Tnnl & laci.tc
Railroad, md fni1ed; Legislative authority
hoing obtained, GnDo.o0o Of bonds wcro
issncd, mud tho main road completed. Land
grants werc ttlca, obtained for branch to
pcmbina. n deed of trust WIS ,nato, antl
3l6,o0O, 600 moro Of bonds, secured l'y first
mortgage, wcro issued mud sent 10 1irMAS,
Itoarw1nA1. t. Co., in Holland, for snlo. No-
fore being sold, tho bankers mule nlvcnccs,
and work WAS begun. With tho money.
33,000 tona Of rails woro purchased, Of
which $4,000 wcra 1ait1, tho otllers
remaining III warehouse in Now York.
Needing money, tho Company applied 10
tho bankera, wlsn saitl they ln,l sold
sg,n0D,0 QUO OF tho boi,tla, with Which they In
settled tho advances, pail interest, commits
Gions+ etc., antl tl,at nothing rcrnnincd. Mr..
MooRuEap, ono of tic Trustees, who wns
also ono OF tue contractors, being Il, nrrenrs
for wages 10 his worlmcn, applied 10 Jar
CoorE l. Co., who loaned him $500, ,Ot'o on n
pledge Of warehouse certificate for 900
tons Of raila. When this money waa cx-
1las,stc;l auothcr application was nado tn lilo
bankcrs, who answered that thoy intonltd TO
hold the $aC,000,noo uusold bonds 10 protect
thoir customers who held tic other l,ontls Of
the Company. Work WAS storped, and tito
rontl was pu. into tho l.antls or Receiver.
This WIS In 1879.
In 1878 came the rnnic, mud jar CoozE Il
Co., Of Philadelphia, obtained lonn from
lar CooKE, AcCu11ocn & Co., OF London.
irving tho warehouse receipts for tho 1G.00o
tons Of rnilroal iron on which ttoy had
n,hle their loan 10 tho Railroad Company.
Nevertheless, JAY Cooke & Go. fai1od.
Some tiine previously, tho London house Of
JaY COOKE, McCuLLoou e. Co. hnl beon ar-
pointed fiscal agents of tho United States,
md held $1,60o,0oo OF money Of tho Nayy
Department. Tho Socretnry had intmatcd
bis purpose Of withdrawing this money, md
Mr. A1cCuL1.oou camo to lilo United States to
prevent thin, If possible. Ile reached tho
United States tho dny after JAY CooEEa fail-
urc. a1r. MoCuLIoou, claiming Tint tho with
drawal Of 30 large deposit would foyco his
London firm into bankruptcy, in which caso
the Nary Department would lose ali, offered
to secure tho Department, and for that pur-
poso placcd in tho hatlds of tho Secretary
various securities. including the warehouse
receipts for tue 0D0 tons Of railroad iron.
Tho receipts, therefore, passed to the Score
tary Of tho Nary. Subsequently tho secro-
tary, having 10 forward s4oO,00U to Tho
Naval Payn.aster in London, loft it to tho dis
croton Of tho latter 10 deposit II with Cooxr,
McCuLLocu l. 10. or not. The raymastcr,
to mnko matters ccrtnin, required se-
curly, and CooXr, AIcCuLLocu s. Co.,
Of London, t.1rnod ont to him thu
warehouse receipts of. tho remaining
4.000 tons Of rnlroad iron OF the St. 1'au' l.
Pacific Railroad Company. siuco then tho
Co. hns gone into liquidation, Mr.. McCu1-
1ocu settling its affairB. Ho hne paid oil nll
tho dobts save tloso of tho Navy Department.
md llas paid t1lat in fact. Tho Sccretn:y Of
the Nnvy holds tho securities, including tho
warehouse receipts for the iron. :,
Now tho Dutch bondholcrs hare, through
tho Trustees Of the Company, brought snit
for the recovery Of tire IL, 600 tons ofiron orig
inally pledged 10 JAZZ cooKE l. Co., and by them
pledged to CooKE, hIcCuLLocn j. Co., Of Lon
DIM. md by tho Inter assigned 10 tho Secretary
Of the Navy. The bondholdors claim Tint tho
mortgage to them included tho railroad iron,
md that the act OF Mr.. MoonnEap, in p!etlg-
Ing tho iron 10 JAY CooxE & Co., WIS without
legal authority aud was yoil. twill be scon
that the Secretary Of the Navy Inns dono moth.
ing but to protect tho intorosts Of The Unitol
Suites.