The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-07-01
An ENORMOUS DEFALCATION
A Discovery that Amazed the Chesa-
peake & Delaware Canal Company.
The Treasurer Confesses to DefalcatiOn Ex-
ceeding 100000, Brought About by
Means Of an 0Terissue Of Stock.


PHILADELPHIA, June 30-A hasty summon
ing of the members of the board of directors Of
Chesapeake and Delaware Canal Company, at
an early hour this afternoon, created stir in
financial circles. and the report quickly few
about that heavy defalcation had been discov
cred in the accounts of one of the officers. The
company is one OF the oldest. and was, in earlier
times, one Of the wealthiest corporations in the
Middle States, holding charter under the Leg
islatures of Pennsylvania. Delaware and Mary
land. The first rumor that reached the street
was that Treasurer James A. L. Wilson had de-
faulted in his accounts to the extent of $17S 000
The facts, as subsequently ascertained more ac-
curately, were that an overissue of bonds TO
the amount of $612, 600 was made under the
thirty-year mortgage loan of the company of
July, 1856. for 500. 100000. The loan was due
tomorrow, and preparations had been made for
at the Office to-day, but on his desk was note
containing confession of guilty knowledge of the
fraudulent transaction He left the city last
night, it is alleged, in company with H. P.
Lesley, a former treasurer under whose admin
istraton the overissue was made.
j. A. L. Wilson, the accused defaulter, is
about sixty five years Of age, and for over thirty
years has been connected with the Chesapeake
and Delaware Canal Company. having been its
treasurer since 1883. when he succeeded Henry
v Lesley. The annual report was regarded as
a very good one It stated that the total reve-
nue. for the year ending May 81 was $2l0. 974,
and the expenses. including $4,000 interest on
mortgage loan, were $178, $50 and the net earn
ings $50, 344, which. the directors thought con-
sdering the unsettled state of labor and
the depression in business, was
gratifying exhibit. It was also learned
at the meeting that considerable number of
the bondhoders had given their assent to the ex-
tension of the company's boat loan at 5 per
cent for thirty years from tomorrow. The
amount of these bonds outstanding was sup
posed to be 81 1893, $50, although, by the fraucu
lent overssue, the amount standing to the
credit Of loan holders is s., 608 $50 AT meet
ing of the board of directors this afternoon,
the facts of the defalcation were briefly
announced by President Gillingham, who said
that peremptory action by the board would be
necessary, in view of the proposed extension Of
tho loan. which was to go into effect tomorrow.
The letter left by Treasurer Wilson on
his desk, which was written closely
and at some length on several small
sheets or note paper, was then read
to the board. dead silence fell over the room.
The defaulting treasurer gives a full account of
the overissue. which had remained secret for
SO long time. He said the overissue was made
when the loan for So 8OO 900 mas first negotiated,
at the time H. V. Lesley his own first cousin,
was treasurer. Mr.. Wilson. who was assistant
secretary and treasurer at the time was the
only person outside of Mr. Lesley who had
guilty knowledge of the transaction. During
the years he had held the position of treasurer
of the company he had continued to keep the
mattor secret, but after to-day a revelation could
NO longer be averted. -
| A discussion at some length and at times con-
siderably animated, followed. A tedious exami-
nation of the books and accounts was made and
the number of the fraudulent loans ascertained.
The action of the meeting eliminated in the fol-
lowing notice, which was directed to be pub
lished:
"The company makes The following state
ment: Defalcations by the treasurer of this
company having been discovered this day, the
interest of the loan due July l. 1886, will not be
paid until further notice, and the extension of
the loan cannot be carried out
in the mode provided for. Holders of
certificates on the loan are requested to
produce them at once at the Office of the company
for examination. Transfers of the stock and
loan will not be made until further notice. BY
order of the board of directors
u. e. GILLINGHAM, President"
In the neighborhood where Treasurer Wilson
lived, in west Philadelphia, the residents uni
versalv regarded him as man OF large wealth.
His daughter was married short time ago, and
all the surroundings of wealth and fashion were
visible at the wedding. Among the presents
received by the bride was handsome villa,
ready for occupancy, at Wayne station, on the
line of the Pennsylvania railroad