The sun. [volume] (New York [N.Y.]) 1833-1916, 1879-05-13
VOL. XLYl.--N0, 30.
Mr.. JAY GOULD INDICTED.


The tiitni of the Irhigh Ear Manufacturing
Company, nnd tue Chnnc ,iiot's Opinion thnt
Tn, were ucfrnudcd- securities that are
Now Alleged to be Utterly Worthless.
TrriHoup. Nj. May l2.-The Monmouth
c.tt,v Grand Jury have found a bin of md.ot-
t...t against Jay Gould as President Of the
- J.,soy Southern Railroad Company
T.. s,.r.ary u the road and others. for
sm. o' their operations shortly after the
c.r.any was declared 10 be insolyent When .
G.uIl and Fisk entered upon the scene there |
wA.u5 better paying railroad in the country I
tqn the Long Branch ami Seashoro Rail- |
r5ai. which the Camden and Amboy company |
haI lu.lt from Sandy Hook TO Long Branch. to |
compete with the old road that terminated at
Port Monmouth. 1t was operated Us a summer |
roaitota.e advantage % Long Brnnch's grow
ing popularity rs a sensible resort. and under |
IT, charter IL could lle idle all winter when
railroads i'm tha; region did not pay. Fisk and
Gould bought controlling Interests in it as well
a. the connecting roads and consolidated them
under the name Of the New Jersey Southern.
They put ON magnificent steamers. bought ho-
tolls. and for while kept business lively. But
Goull's busy brain did not rest content with
this. II st abou, obtaining contracting inter-
ests In tle Ninolanj Railroad. Delaware line
AL 9th 'r roads. 10 make through connections.
aulsoon the large earnings " tho Long Branch
operations and it was heavily mortgagcd. al
though 10 was free and clear when he got con-
trol Of IT, The panic Of 1873 caught HIM nap
ping. and the New Jersey southern came TO
full stop at the close ol that year
The New Jersey stockholders rushed through
law authorizing the Chancellor to appoint a
receiver After gallant fight in the L"gisa-
ture In which Gould called 70 his aid Thomas
c. Shearman. Abram Browning, Leon Albeit.
and others Superintendent Suedn was ap-
pointed receiver and under bis management
the road was successfully operated for some
months until the first mortgage bondholders
had forpclosed their mortgage and put eX-
Chancellor T. rnjamin Williamson in control as
receiver and trustee under a mortgage from
them in December 1873. number Of suits
were instituted against the company. The
IackawRnna Coal and Iron Company got iudg-
nent against them for S42.2s5.06. on Jan. 49,
ls74. and levied upon the rolling stock. Bar
ker Gummere on behalf Of the receiver, con-
tended that the rolling stock was covered by
the mortgage rs plant connected with the real
estate. The late Attorney General Nanatta,
who represented both the l.aek savanna Coal ana
Iron Company and the States claim for taxes.
argued that the rolling stock was SUBJECT 70
levy As personal properly the trustees mort
gage NOT having been filed when they made
The Chancellor. upon the argument, took the
latter view, which doctrine, however,, has since
been oveithrown by the Court Of Errors and
Appeals. Before the Chancellor had appeared
Leon Ahh~tt. Robert Allen. j. and r. Wayne
Parker who represented lien claimants. Coun-
seilors Stafford and Lanning who spoke Tor the
wages for the train hands ;,id Tor John !. mn OF
Jersey City who press-l the claim OF the Le-
high Car Manufacturing Company. out OF which
grew the present allegation OF fraud against
Jay Gouid ami The oth"r otrs 81 the Nv J,r,
Company in July and August 1913 sold and
delivered 10 the New jersey southern Railroad
Company s'venty-hve tox cars for sso5 each,
under written contract 10y which the railroad
company agreed 10 take 100 cars at that price.
ana pay for zach twenty five delivered. in notes
secured by fret mortgage bonds OF the com
pany AZ the rate of seventy per cent The last
because Of the insoyrnry Of the company.
From the price of the sevrnty-iive cars the rail
road company deducted 3l3.2o072 for alleged
dchrienri.- IN ih. quality 81 tn- car wheels, ami
uortgure ion1s. on Dec. % 1873 the railroad
company. having become u-oN-nt, gave M
their IA road and rolling stock 10 the trustees
of thc nr-t mort ,ase boudhnlder- Tho ear
wheels " .r. furni-hDd 10 tn L.high Car Man
uigtur n Compen{ hy ,tIhr Iaylor Iron Norfss
Tavnant nari securities which had been given
e the L-Eish Car MHuuia turing Company.
After thr first ms rar- hai b-~n delivered
ties which they bad tns"n w'r" not FIRST mort
gnee bonds. ns had been trlr--enird To- th,,m en-
ditor Of the raftond company. who assured b n
that they We're first mortgage bonds. Ia No
works company as 'ertunrd. as it IL
CHARGED. iha' pot only, wnrree they , not
utterly worthless The President Of the iron
works company. Mr.. Lewis II. Taylor, there
ulph in Arlln,S "["." [ a",Inm WINNIE up,u rp,lrr ,,.'
because ol the alleged fraud IN the securities
the latter company refused to comply. ~ De-
cemher IL" railroad went INTO Tue hanls oi O
Te'e 'eiver. soon uiterWhrd the attorney OF ih'
car ronnluy mnde slu,unr demand upon he
ceiver Williamson. rendering 90 him all tn
notes and bonds which they had received The
receiver refused to deliver up the property, in
sisung that tle car company coul! not reseine
the contract and retakH the cars. because they
did not eject 20 10 so within reasonable time
which however was restrained 10y the Court %
Chanrerystnd transferred before that court
ready under consideration.
Tho Chiuceilor n his decision said; " Tha
action under 'pnsidrratiOn there is no room t6
doubt. They were 10 receive Hs collateral So
curiy some oi the very bonds ior the noiltr'
Oi which the complainant Receiver william
Eon. Is trustee, and the price oi tho cars was q
br secured % them hy The v,ry mortgage oi
which this suit WIS brought. Instead OF beiuL
security 90 them for IA" price oi ihtr prop
eriy. il Will IL their claim g. rrscind bee not al
viii be- tuk-n without condensation for tn'
benefit OF the nr-t mortgage uontho.ders
There is no room L. DOUBT that they w"r'
grossly driraudrd lu tnr substitution Of whu
was called consolidated fret mortgage bomb
iIl th" hrsi mortgage bonus OF the ralIro"
Nj Bentley. by whom the contract was mad
iur the iHii company 'Apftr7y uislin'7 ll'
Us the first moriEhsr u1nl nl the rtllr1al com
IAuy was meant rNultly what tIrrNUr-ss ION i'm
..N-, nHh lri llr- also li i..l-" 'I piIy uh'
fuel fpiYI- in tIr amount OF sl1OOnp whom thl
contract was made. Tho s,'r 'inry "nd Auditor
when inquired of about tl" character o. NJ
bonds. Iut Hn end % th Hpp'eu.us ON oi th'
Iresiitnt of the car company, 10y hs~urlni
I'm uatthey were 100 .lc-d me nr-i morgagl
bonds 90 thr railroad "lninuy: The h1ndi
purport % Doe part of uu I.-u' ~ sluuOuOO. th'
payment ~ which i- aI."-"i to h, secured hy
ne1. by m. NV Jrr-.y uthrrn Railroad
Compnuy 20 j Nm r. G.rl"nd and Waller %
lf