New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1886-11-24
ROBBED BY ITS TREASURER
ANOTHER BIG DEFALCATIoN IN BOSTON.
WILLIAM REED. TREASURER OF HORSE RAIL
ROAD ARRESTED AND CONFEssEs.
fnY rpIPGR APH To THE TrIBUsE.1

ROAD, ARRESTED AND CoNFEssEs.
tBr TELEGRAPH TO THE TRIBUNE
BosroS, Nov 23.-A sensation created In
Boston to-day by the arrest of William Reed. broker
and the treasurer of the South Boston Horse Railway
Company on the charge of embezzlmg large sum from
the company and OF making overissue OF stock to
considerable amount. He was placed in the Charles
Street Jail has confessed bs crime and made over
his property to the company he defrauded The bulk
his property unfortunately for the company, con-
ssts too largely in wild cat stocks Mr. Reed has held
the Office treasurer of the company for about ten
years. and has always been regarded a. reasonably
conservative business man, energetic faithful In
the discharge OF his duties He was member OF the
Brokers' Board. and had office at No. 53 Devon
shrest His dealings on his own account were heavy,
largely in Low priced stocks About five years ago
be was first pressed bard for money! and as The markes
was against him he would have been compelled to
dispose of some rites at heavy loss sold at that
time and he was then tempted to use the funds OF
rhe railway company The lack OF q careful business
system in the mana cement Of the financial afairs OF
the CORPORATION offered him opportunity to hlcb or
boz row the funds without immediate detection ana ne
did not resist the The r nSe,Seo, Joseph b.
Crosby in the habit Of signing the certincates OF
stock In blank which Reed i-sued and the amount Oh
fictitious stuff he put out was measured Dy ms imme-
diate necessities He shrewd enough not 10 per-
nit these certificates to get INTO the hands OF IN
dividual inv estors who supposed they were ,o
| He carried on this practice beginning In 1881 ior
about three years. long. IN fact as Mr. Crospy re-
mained president The extent OF his operations IN IN
direction is not known. He hlmset kept no account
OF them except in his memory: Some OF the uandu,
lent shares redeemed by him and destroyed and
there were further reissues from time time No
| knows how much is now outstanding. Mr. Reed Is
able to remember about $50 shares, having market
yalne of about $35 900. but there Is probably much
more. and some persons who are Pretty Wen "piS 70
Judge place the amou-t as high as 600 shares It's
certain, however, that none OF IL is hed oy investors
all OF it being placed collateral with banks and other
Another method of operation adopted by Mr.. Reed
WAS a simple but ingenious He had full charge OF
the accounts with supply dealers The amount OF
these accounts for hay grain, horses etc. was
Whei bill was presented Mr. Reed. when IN need Oh
| money for his own use, sometimes psid II with time
draft of the corporation bearing interest. bill PAID
In that manner would Of course he receptec Dy tho
supply dealer and it would appear as Voucher ior & 80
much cash paid out. Detection IN this could only
come about by accident provided the drafts we're
or extended when they came due. AS matter OF iaes
Mr. Reed made many such drafts some were pani,,, pn,
hui more were renewed from time to time and are still
outstanding The amount OF tins paper can only oa
estimated Mr.. Reed thinks ~ IS ABOUT $500 ~ , Ur'
ther explanation of Mr. Reeds transactions Chares
Galag her attorney for the corporaon states tnat
| tbe hooks show that unaer the presidency OF Mr.
crosby the treasurer issued notes OF the corporation
without authorization which the president discounted.
Mr. Crosby not, however, charged WIN alsnones.y
in these transactions The detection OF the treasurer
: frauds came about partly by accident. frtsiaens
Charles r. Hersey learned about ten days ago that
were Outstanding claims against ,baS ss h books
Showed He st once began making inquiries ana ms
suspcons were confirmed and with Director ben AMIN
| Dean A thorough investigation was begun "heh CON
n;nce5 that crave irregularities existed the Two mel
demanded an explanation from MI. heed. INC ne
treasurer at first stoutiy de nied tla Tue o
> amount When, however, other matters were prYusn
nm the treasurer immediatey broke down anu con
tessed that he had been guilty oil ons series NJ ~
frauds lhe shock OF discovery was so great tna' Mr.
: nesd was nhyscally as we'll mentally overcome
and he was obliged u take 10 his bed with sever.
attack OF nervous prostraton. lhis was on ssnes
Sav last That evening Gallagher called In D,
/. Messrs Hersey and Dean TO attend to the 'ega
It features of the Almost the entire night Wa
spent at Mr. Reeds bedside IN the endea'or 10 oo'
u | an adequate idea OF the situation. !, - , 4.
4, The treasurer had only his memory 20 rely on and IN
s mis- broken down CONDITION he could do lt'le 70 ad u
: the nvestiqation lie said at that he had no de
fence TO make that he had begun his crhhai cofs
e with no intent to defraud but only uhoev pressure
IT the fullest restitution III his power, anu te ne
p ready to suffer just punishment ior hs onehahg
81 lie al made over to Mr. ualiagher AZ ao'ny ~
the company all his property including MS seat III ~
tls Brokers Board worth about Sl3,OVo Inc othe
" securities are a of stocks, most o, then WI =
ir cats" of little value. Mr. Reed also oneren
e do evervthng in his power TO straghten out he sna
re IN which the company's affairs we're involved by ~
operalions Finally Reed requested TO be taken 10 Ja
Wiz TSn a"onnt Of Mr. Reeds bond treasurer is no
s s,aten one member OF the Board OF Directors
surety tor $1,000 on H. Mr "es% a nrcnoses TO pIea
III gniltv in the Superior Court and to begin at once
a s"rSs ss,ve his sentrnce Regarding Mr.. Reeds othe
business relations there is thought to pc baSia noSn
nj rrong He the treasurer and one OF thc nea'ie'
IN Dar ot the Mexican Telephone Company. tie stat'
OF Fiat his accounts there all right and the otn
g, olicers of the company yet know nothing 10 u
IL contrary. NJ. ..hox,,amapt WA
we great surprise to all his acquaintance. one W,
sts Knows him intimately said Inns auar e1P'r r.
m something that could never before uhue'stna. ~ ~
as Reed has always acted in very pompoIs manner Az
go has talked great deal about his telephone STOCK
Wexico He has asserted that he owned every tei
~ - IN WeIico never put much confidence In q
mt Statement but now that this embezzemsnt Is oronS
he TO light there is possibility that he spoke .he ueu
W. Mr. Reed is about hity. lie Is nafrle" ou. na' r
we children IL il SAID that he has been separated Ho
- his wife for some tme
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