New-York tribune., 1879-05-14
RAILRO4D uEN LN0ICTED.
PROCEEDINGS IN MONMOUTH COUNTY. N. j., AGAINST
JAY GOULD AND OTHERS.

PROCEEDINGS IN MONMOUTH COUNTY, n. j., AGAINST
JAY GOULD AND OTHERS.
Indictments against Jay Gould and officers
of the NeY-Jersey Southern Railroad Company nave
been fould by the Grand Jury of Mon
month County y. j. The indictments are based upon
Transactions with the Lchigh Car Manufacturing Com
pany il 1873
The New-Jersey Southern Railroad Company was
formed by the union of several lines Among these was
the Long Branch and Seashore Railroad, extending
from Long Branch 10 Sandy Hook. OF this road MI.
Gould was at time president Ihr NcM-JrrS'y
Southern became nsolvent in 1873 The funded DEBT
January l. 1s7l was follows: Fir>t mortgage bonds
50 900 600 second motgag bonds, II 900 O00
Toms River Branch bonds 100000; and usolidacd
MORTGAGE bonds, Il. 100000. The company had au-
thorzed the issue Of S7OOo0OO first mortgage bond,
dated April 1873, into which the other bonds of ihe
company then outstanding were to be merged. TIE
bonds were secured 10y mortgage covering the rail-
WAYS Of the company ana tho consolidated railroads
The bonds stated thai the represented the entire
funded debt Of The New Jersey Southern Ralroad aerthe
exchange for the bonds OF the consolidate companies
is claimed Iat the proposed consolidation was meyer
accomplish and the bonds never cXch2nged. The
Iackawauna Coal and Iron Company M January. l6'4,
got Judgment against the company or Sl22sJ Os ana
levied rolling stock. The receiver cAhtu lhHl
the rolling stock covered by the mortgage, ana the
C,rrt of Nupels sustained this position From tnis
suit has sprung present allegation 81 fraud against
Mr. Gould and officers OF the New-Jcfsey southern
The Lchich Car Manufacturing Company in July and
August 1873, delivered to the NcW-Jersey Southern
Railroad scvgnty-iyc box ears. Under the contract,
pavment was 10 be made by notes secured by hgst
bonds OF the railroad company, at 20 cents on
the dollar. The wheels for these Gd DcCn sdlpHCu
bI ibe TAYLOR Works. of II gh Bridge. N j., which
had agreed 10 accept III payment the securities receiver
by the ear COMPANY. The bonds belonged t. the Issue
OF April l. 1873. The president OF the ear company
had assured BY officers OF the NcWJrIsey southern
that ibe bonds were first mortgage bonds
Early 1874 the road placed ~ the hands OF Ec-
cgiV-r williamson, trustee O' the hrst mortgage
bonds. Tnc ear company then made a demand an The
receiver rendering 20 m the notes ana bonds received
under tie contract. The TtCtlyr refused 10 SURRENDER
tae proper.y, and The car company then brought IN
action of Tcpicyn. Ihls action rtstrnc 10y the
Court Of Chancery. The CHANCELLOR IN his decision said:
That the car company deraudtd N the transac-
tion under consideration there is ~ room to duubt.
They receive collateral security some OF tue
very bonds the holders OF which the complainant,
Receiver williamson, f. trustee. ana the price of the
ears was to secured them bv the very mort
Wnich TINS suit was brought. Instead Oi being
ity 10 them for price Of their property, IL will,
tneir claim to Tesciud be not allowed b. the means by
ton for the benefit OF the first D.rrrgage bOudhOdcrs.
There 10 doubt that they were grossly de-
frauded the substitution of what called cOnsO
Ist mortgage bonds for the FIRST mortgage bonds
OF The railroad company
Mr.. TAYLOR, president or the Taylor Iron Works, laid
before the Grand Jury proofs support or The opinion
given Dy the Chancellor, aud an indictment has been
found IN accordance with them IL Is claimed III behalf
of Mr Goud the present prOccedlug has been
suit which Is now pending IN the The Taylor
Iron Works, after the demand on the railroad company
brought Ncw-YOIk a civil suit for $4,000 against
il, to which answer has been filed.