Daily Los Angeles herald., 1878-07-25
Honest Jahn sh erm ~ .

The most notable feature in John
Sherman'5 connection with the in
yestigation into the Louisiana
election has been his anxiety to
deny compacts and transactions by
which he profited. This is not the
first time he has done this. He has
done it now in large transaction.
He has done it before I'm a small
transaction.
The sudden failure of the house
Of Jay Cooke & Co. found John
Sherman involved in its affairs.
Many public men were SO in
volved. The enterprises of the
firm constantly needed legislation,
to gain which the good offices Of
public men were valuable. The
expenditures of public men con-
stautly made them need money, to
gain which the good offices of the
firm were valuable. The transac-
ton was innecent-upon the
books of the company. The con-
sideratlon was mutual, but it was
not upon the books of the compa-
ny. There were many such ar
rangements, some of which have
seen the light, and some of which
have not. Ohe which has not yet
seen the light concerned John
Sherman.
The fall of Jay Cooke & Co.
meant the fall of the First Nation
al Bank of Washington. This bank
was simply a name under which
Jay Cooke & Co. did business with
itself. AT the failure it went into
the hands of a receiver, Edwin L..
Stanton. In the summer of 1876
he made a final settlement. An Of
fer in gross was male for all the
assets, real and personal, of the
bank, about sufficient t. meet the
principal of its liabilities, without
reckoning Interest. He deeme the
offer advantageous, and in depO-
sition, now on file in the District
Court at Washington in case No.
265, recited his reasons for consider
ing this offer in tho interest of all
parties concerned. 1t is in this
deposition that John Sherman ap-
pears as a man Sinking obliga-
tions by which lie had profited.
An assessment hal been levied
upon the stockholders of the bank
under familiar enactment OF the
National Bank law. 1t had real
lied little-so little that Receiver
Stanton Jumped this asset among
the bad debts OF the bankrupt cor.
poration. He tells why. Some
thing was paid in on 500 shares
representing $4,000, but the re-
naming A. 500 shares were nearly
all in the hands of Bankrupt MEM
bers of bankrupt firm-Jay Cooke
& Co. The receiver saw no prospect
of recovering anything from them.
The firm itself held 400 shares.
Half these shares, however, were
not the property of the firm. The
receiver believed they were the
property Of John Sherman. What
ever else has been charged against
John Sherman, he has never, dur
ing the last twenty years of his
public life, been charged with in
solvency; but the receiver consid-
cred the recovery OF the assessment
made against these shares al hope
less as the rest of th5 assess ments.
Sherman owned the shares. Sher-
man in effect admitted he had re-
ceived dividends upon these shares,
but when the transaction became
Improbable Sherman refused to
pay the assessment aud disclaimed
responsibility. This is what Re-
ceiver Stanton says:
"Of the 400 shares above speci-
fed as standing in the name of Jay
Cooke & Co., there are 200 shares
which stand on the books in the
name Of Jay Cooke g. Co. of Wash
ington. OF these John Sherman,
according to my information, Is
the rigbtful owner, and If the |
stockholders' liability were en-
forced, 1 would endeavor to enforce |
it against him as such equitable |
owner. But he denies his liability, |
that he cannot be consid-
dered to be q stakeholder within |
the meaning of the act of Congress
to their assessment, that |
the stock never stood in his name,
and was not assigned to him, that
be never voted upon 1t, that he
was never paid directly the divi-
dends upon it, and exercised no
control over the management of
Lhe bank. 1t is my own Individual
opinion that he IL liable; but on tho
3ther hand counsel whom he con-
suited advised him that he was not
liable either In law or In point OF
lonor.n
Several interesting considera-
Ions present themselves in regard
o this affair. If Sherman owned
his stock ard received dividends