The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-04-27
THE FALL RIVER DEFALCATIONS.

no CHECK ON THE CORPORATION TRxAsURERs
IN ISSUING NoTxs-A NEW SYSTEM INsTI-
rurED-coRPoRATIoN MONEY LENT.
FALL RIVER April "a, 1878.
In Iosking the field alter excitsment caused
by the disclosures fraud and dealcation has some
what abated several points Be discovered
bearing the careers Of Hathaway and chace
that sight Of during tho ~hrl Of public ee
ing that swept the city in tho early part Of inc
week The expert finds tho accounts much mixed
and tangled and will experience consider
able difncuisy yet before he can arrive q
. comprehensive statement or understanding
Of the actual condition Of tho Border City and Saga
more corporations. The system OF making the notes
H the company payable to the treasurer aud indosed
vol signed by treasurer, has been carried on
70 very large extent, not only by Hathaway and
Chacs, but by other corporations. There has
always pson more less apprehension about
the wisdom safety Of such practice when Mr.
Chacs fell Colonel Daniel Needham. State Examiner
OF National Banks went TO the bank officers In THIS
The corporations 10 change their methods OF Issuing
notes. Mr. Chace's pracsice was 70 issue notes IKE
the following
Four months ansr date Union Mills promise pay
Angler chass or order ton thousand dSr cu.cR
These notes werc duly Endorsed, OF course, by ;. A.
Chace aud discounted by tho banks. Colonel
duly su,horizsd, numbered, and recorded In
book Kept tor that purpose, ana coun-
:sr:sned BY some person appointed for .na. purposs:
directors cOuId NJ amy time ind out how much Of
their paper had been issued and IN what condition u
Was. Tho bank officials promptly adopted the suR.
Ssstion and recommended II 70 the manufacturers
81 the city who also received with favor and deter
mined 10 put u 10 practice. This u was which put
sudden stop to Mr. Hsthaway's career and prevented
him IRON issuing any moro paper 10 cover up his
LEGISLATION SUGGESTED
In order to bring the matter before the manufac-
VIA. has been partially adopted as precautionary
more binding, Colonel Needhsm has succeeded
IN in.o inc nn1 uns ssas h ~
legislation to protect corporations against
The fraudulent issue OF corporation paper or an over
ISSUE Of tho same The design 10 TO secure legislation
Frs-T6a. no corporation papor shall DO ISSUED I'm.
Sec0Nd-Al corporation paper shall be recorded IN
book kept for that purpose and the number as we'll
7Aird-Every note shall be couutcrsigncd by an
eflicer appointed by the corporation.
nj no,ss inst A. ,hero "a now for an over,ssnc n
stock As the law stands, for the laSter crime
the penalty u mot less than one yoar nor moro than
ten years the state Prison.
Chacs and Hathaway, Il appears. follow custom
which 10 much too general In this class OF fnancsr-
The Union Mills TO Chace's personal order, made MIN
party 20 H. and II y on thai ground that certain law
CORPORATION M0NKY LExr.
Another leak which boon discovered 10 in the
porations interest parties who needed and
we're willing to pay good interest Tor ITS use.
the habit OF doing this pretty large extent and
that some Of IL has never been paid In. This money
borrowed good faith, and there 10 evidence
u COLLISION between Hathaway and the borrower.
YALsE STOCK RECORDS
One disclosure made respecting tho holding Of stocks
Mat never paid for a surprise the drec-
Tors. who knew nothing concerning the affair. IL II
said that hathaway represented over LOO shares,
lar. A,vida pdo nnst howo 1nAn than
ssockholders' nurnes without .hoir knowl-
guissd the fact that he held many shares Another
way that when some OF this stock WIS given by
down against the Of both parties The state
nsent 10 put forth today that whom the
Charter !. was nscsssary ina. all Of tue t stock
should be paid In but bsfsre IL paid Hathaway
Alter he nad this is said Mr.. Chaoo would
mention this action ~ means OF obtaining money
from Hathaway wnsn hs needed u: aud ina. IRON
Inc money IN some way or other II
should believe all OF the rumors about tho Saga
more, no would come TO the conclusion that but .
small amount oil stock WAS PAID In but that much
money raised by mortgage II s stated that both
Bsnk Of boston At ono time held 900 oach,
anu were secured by mortgages on the land and tene
m<nia Most OF the money due ON the has been
paid, 10 said. some $l5O.000 Having boon paid since
January. Some OF this Same land has boon sold
Impossible to ' state - how musn paper
the banks Of tho place hold. said
that there three that do not hold any, and
she notes eli largely held Ia many comparatively
small places. Every day new ones beng heard vi,
bat u wall probably be some time before record
u all oil them Can DO obtained. Corporations are
generally appointing men to countsrsgn their
netsS John ID. Flint has beeE chosen the
Flint MILLS and Robert q. Davis ~ the Wampanoag.
fhe total number OF shares the Border CITY Mil
books stated be 7So. 3l0 the reports come
Of the hardships that The small stock holders viii
have 70 undergo, some OF whom will have TO part
With shsir homes, and u being realized what rum
Chaos and Hathaway have caused.