Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1888-01-18
AFTER JAY GOULD ANn sAaE.
President Cleveland Asked 20 Assisa in
Bridging the Railroad King Bak for
Criminal Prosecution w.


President Cleveland Asked 90 Artist in
Bringing the Railroad King Bask for
Criminal Prosecution. zzz@-ss
st. Louis Globe Democrat
NEW YORK, jan. IS.-Tha Kansas Pa
cifc bondholders are leaving nothing IN
done to accomplish the recovery OF the
proceeds of the Denver Pacific stock,
which they allege 10 have been Illegally
distracted from TIE Kansas Pacific Com
pany's treasury by Jay Gould and Russell
Sage while acting as trustees of the COM
pany. The following letter on the subject
WAS sent to President Cleveland to-day:
NEW YORK Jan. l3, 1873.
To the President:
The recommendations contained in the
reports of the Pacific Railway Commits
sioners, now pending before you, H.
wolves serious consequences to tie hold
ers CT consolidated bonds OF the KspsSs
Pacific Railway Company. The lien
which the government possesses upon u
lsrge part OK thst property is superior in
rank TO the consolidated mortgage, and
connected with this priority the govern
ment has the tight to require sucn sink
ing fund appropriations from the
earnings Of the Kansas Pacific
road as viii secure its re-
payment But there are special
circumstances relating 20 the trust in
tended 70 secure consolidated bonds
which entitled the holders TO the indulgent
consideration Of the government. The
Pacific Railway commission devo:e5 con-
siderable labor to the discovery CT the
facts concerning the spoliation of that
trust. They established that the trustees,
Jay Gould and Russell Sage, took $780,.
600 Of securities ont of the trust and ep-
propriated the proceeds to their own
uses. A copy Of the application to the
District Attorney OF New York for the
recovery Of this trust property by crimi-
nal process, as we'll as for the punishment
Of the trustees, is herewith submitted.
The decision of that officer vas rendered
in the following terms:
TIE DISTRICT ATTORNEY OPINION.
IL the matter of Jsy Gould aud Russell
Sage. This is Ed application to present
80 the grand jury charge Of larceny
against Jay Gould and Russell Sage, IN
der section al of the penal code. In my
opinion the acts with the commission Of
which the defendants are charged consti-
tute crime. 4 possible obstacle to the
successful prosecution CT the persons
complsined OF, IS tbs statute Of limitation
YET, there sre strong reasons tor believ-
ing that obstacle is not jnsuTmountable.
The statute under which it is sought to
prosecute may ne SO construed as to en-
able the people TO proceed,
Notwithstanding the statute CT Iimita-
ton, and such construction would
have much support in reason and
common sense. The question is so close,
anu the interests involved here, as well Of
the people Is OF the defendants, are so i'm
pOrGEDt that it seeDs proper to leave the
determination Of this question oflaw to the
courts, and, ii order to effect this result,
tie facts should be laid before the grand
jury, and il proven, an Indictment found
ana tried. RANDOLPH B. MARITIME,
December 81, 1887. Dist. Atty.
The above judgment is ins he hands OF
the present incumbent Of the district at
torneyship fer lis action thereon.
THIS action IS on the line urged by all
the government Commissioners, and
involves the compulsory restoration OF
the property, amounting, with incre-
II nts, 80 nearly so per cent. of the out
standing issue Cf consolidated bonds OF
the Kansas PGcifc. Railway Company. In
this connection the identity CT the inter-
ests Of the Uafted States and the con-
solidated bGndholders should be noted.
A COMMON DEBTOR.
They are both creditors of q common
debtor, end IN respect OF their mortgage
on 400 miles ot railroad, the rights of the
bondholders are subordinate to those of
the government. On the other hand, the
sr1 ~tA - =
been taken by the trustees. With the re-
storation Of these trust assets the con-
solidsted bondholders would be enabled
to meet the strict requirements OF the
government. The sole obstacle to the
accomplishment Of this result consists in
the fact that Jay Gould, one of the trus-
tees, who was the recipient of much the
larger part of the trust assets, is out Of
the jurisdiction, and in the absence of
txIsdition treaties covering this crime
can be brought back for trial only upon ex-
ecutive request, through diplomatic
channels. According TO the precedents in
such cases, formal application for his rem
dition will be duly laid before the Depart
ment OF state. Under the foregoing circum-
stances we submit that the consolidated
bondholders should not be subjected to
the rigid enforcement Of the rights of the
government until the restoration of the
trust enables them to secure 8 proper
msrshsling Of the assets, as between them
and the government. We urge that the
sinking fund requirements to be imposed
on the Kansas Pacific property should
lesve sufficient amount to pay the inter-
est on these junior securities until the
trustees are compelled to make the trust
whole and the bondholders are thus Sc
cured Independent of the property i'm
pressed with the government lien. Very
WILLIAM b. DELANcEY.