The daily gazette., 1878-01-02
THE WALL STREET. FAILURES
From the New York Herald of Tuesday.

From the New York Herald of Tuesday.
Yesterday was another exciting day
in Wall street In consequence of the
unexpected announcement, at the be-
ginning of business hours, that John
Bonner & Co., brokers, and the Bank
ers' and Brokers' Association, of
which Bonner is president, had sus-
pended and "gone to smash"
This Is repetition, on larger scale.
OF the similar collapse of Meter & Co.
last week. Is is good symptom that
the street preserved so much steadi>
ness and balance as it did yesterday
under the circumstances.
The method OF obtaining money by
bonner " Co., is precisely the same
as that resorted TO by Meter & Co.
They lent money on a pledge of stocks
and then borrowed money of other
parties on q pledge of Ihese same
stocks. This may be illustrated by an
instance taken from the transactions
OF Bonner. A firm borrowed from
him 100000, hypothecating bonds
valued at $50, 900. 30 far it was a
legitimate business transaction and
perfectly safe one for the the lender
by the ample margin. 1t was the un-
dersIanding that the bonds would re-
main IN possession of Bonner s. Co..
until the debt matured, ,and be returns
ed TO the owner who had pledged
them when he repaid the loan. But
Bonner, as soon as these eighty
thousand dollars worth of bonds
Came into his hands, goes out and
rehypothecates them with another
money-lender, borrowing scventy-five
thousand dollars on them. This alse
would have been proper business
transaction If the bonds had belonged
to Bonner, and 1t was safe oLe for
the new lender, because the margin,
though considerably less, was still
sufficient. But as Bonner was not the
owner of the bonds he committed
deliberate fraud; not, however, a
fraud against tho patty from whom
he borrowed the seventy-five thousand
dollars dollars, but against the firm to
which he had lent the 10000, and
whose property he had used in such
manner as to involve gross breach of
faith. 1t Is as arrant piece of swind-
ling as was ever practlsed, but il Is a
species which, 80 far as we know there
is no law to punish. The only way
for the real owners of the bonds to
recover possession of them is by pay
ing the debt for which they were
rehypoth ecated. they might then
bring suit against Raaaner & Co. for
damages, but as thAs Nm are utter
bankrupts this last would be bootless
proceeding. The instance we have
mentioned is merely one of countless
operations of the same kind by the
collapsed firm of Bonner & Co. Bonner
was completely "cleaned out" by the
panic of 1878, ana during the four
years that have since elapsed he has
maintained false show of credit by
his expertness and inventive genius
as Jeremy Diddler. The losses hap
pen in the case to fall upon operators
in the street, and lnasmuch as the
victims are mostly sharp, shrewd men
supposed to be capable oil taking care
of themselves, less commiseration will
be felt for them than for the poor
depositoIs in broken savings banks
and the victims of swindling life
insurance compaaies. BY the failure
of Meter 81 Co. even so skillful
a tinancier as Mr.. Vanderbilt is among
the heaviest sufferers, and Jay Gould
is said to be among those who we're
badly bitten by the failures yester-
Aau