Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1886-07-01
S6l5,2OO.5O STOLEN.
A TRUSTED TREAsUREk's FRaUDU-
LENr ISSUE or BONDS.
over aaIf a N,liion OF securities OF the Chcsa-
peake aud Delaware canal Company
sold TO Innocent Holders-The Guilty
oricial Writes q Letter.

when President J.. T.. Gillinghau, Of the
Chesapeake 4 Delaware Canal company, |
stepped into his office, at No. 52S Walnut |
street, Philadelphia, about half past niue |
o'clock, Wednesday morning, he was some |
what surprised to find that Mr.. Wilson, |
the treasurer, had not yet arrived. He passed
into his private office aud lying on his table
was sheet of letter paper. lie picked it up
carelessy, but the first sentence he Isd
caused him to start in astonishmeut 1t WAS
as follows:
''There is an overissue of bonds of this COM
pany to the amount of S6l5, 90 The bal
ances in bank have not been properly reported
for long time This overissue occurred a
number OF years ago. l had hoped TO De
able To spend part OF the day in the ONCE 10
fix up things before leaving, but as the loan
falls due tomorrow | am afraid to face IL, AS
the facts would become known. Lesley and
l alone are TO blame
"My heart and life are broken. For years
you have believed me and trusted me. am
partly responsible. | have borne the burden
and hidden the crime. The canker has been
gnawng at my heart all these years
He further stated that he had none OF the
money on hand, that 1t had been absorbed IN
covering his tracks and in his family eN-
penses He said that he had not decided
whether TO go abroad or stay aud stand trial
His only wish was to shield his family as lar
as possible from want and shame.
He closed his letter with some advice as to
the future management Of the business of the
company.
Alter recovering from his surprise, Mr.
Gilingham consulted with other members of
tho board of directors and an investigation
followed. 1t was found that since Wilson
has been secretary aud treasurer of the COM
pany about $4,000 in cash had been stolen.
HOW IT WAS DONE.
The chief part of the defalcation was on
over-issue OF the compsny's loan falling due
today This loan, known rs the Chesapeake
* Delaware canal is, legally amounts TO
81, QlS, $50 and the note stated that the whole
amount actually issued was S2,bOS,95O TO,
which makes the amount of over. issue S6l5,-
200 80. 1t was further stated that the first
Over-issue was originally made during the
term of his predecessor, Lesley, who Is
cousin of Wilson, part OF ii dating from the
original issue of the mortgage loan as far
back As lS56, when the aggregate legal amount
of IOan was 81 500, ,0OO the company having at
different times since redeemed and cancelle
$500 80, making the present legal amount
still outstanding 8, ,993,15O
The canal company some time ago deter
mined to redeem $3.50 more of this loan at
maturity Wednesday, and extend Si,975,OO0
for twenty years at i've per cent interest To
accomplish this tran sactiOn circular was is
sued, offering the loan holders the privilege
of exchange for the new loan and extension
at par, and An arrangement was made with
the Investment company of Philadelphia by
which that company was to provide money
to redeem such portion OF the loan as was not
extended by its holders. This option was to
have matured Wednesday, and at the same
time three per cent interest on the old loan
was due and payable, amounting to S59Sl2
AS discovery and exposure could no lOrger
be delayed, this precipitated the confession
and flight of the treasurer, whom detectives
are following.
The president of the canal company hastily
summoned the directors in special session
and the absconded treasurer's confession was
laid before them. 1t was stated that the
| holders of about one-talf Of the loan had
notified their intention OF extending under
the new arrangement, leaving some 100000
to be paid Off to-day The accounts and
books of the company were gone over and 1t
| was found that there had also been defalca-
| ton in the treasurer ) cash account he having
| a double system OF bank books by which the
| Company's bank accounts were manipulated.
| One deposit book had been used in dealings
with the bank, and another to exhibit to the
company.
ACTION OF THE DIRECTORS.
The directors, finding that il was impossi.
bic to meet their engagements tor to-day
under advice Of counsel issued notice an
nouncing that defalcations by the treasurer
had been discovered and that "the interest
on the loan due July lst, loS6, will not be
paid until further notice, and the extern
sion OF the loan cannot be carried out
| in the mode provided for" The holders
of loan certificates were requested to pro-
duce them at once at the office of the com.
pany for examination, and all transfers of
stock and of loan certificates were stopped.
The defalcation appears to have been
easily made under the business system
pursued in issuing this loan. The Ger.
titicates were for odd amounts Of
| money, and no registry system appears to
| have been had until recently. AS old certi-
| ficates were sold and came in for transfer,
| frequently going to more than one buyer it
seemed not very difficult to issue new ones
| for 4" raised " amounts. In order to accom-
| plish this II was necessary TO manipulate the
| books and also to watch the markets for oc-
| casOnal purchases, as 10 get the proper
| basis for" raising " the certificates. reg.
| istry would have easily prevented this. As
| the defalcation continued many years the
| semiannual interest on the Over-isSue had
| also to be provided, requiring additional
| defalcations, so that thus the amount stead ily
| grew to its present appalling proportions.
| To raise the vast sum Necessary to be paid
| to redeem the over issued bonds was i'm.
| possible, aud the flight and confession re.
| suited.
THE GUILTY MEN.
| Wilson left home at his usual hour Tuesday
morning, but before leaving told his wife he
| was in trouble and might have to leave the
| city. He did not return that night Lesiey
is supposed to have left town on the same
evening, and it is supposed in company with
| Wilson.
Mr.. Gillingham had been informed tina
| Wilson was engaged in building operation.
and needed ready money. He took g, 90
| from the company's funds and gave ii TO
I,.,I tnlrs ,l,a