The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1899-03-19
Great Bond Cbeft
Sixty. -Four Millions Stolen
From lIneIe Sans UaEltS.


nish a Gaboriau with plots for a lifetime.
The story in this lawsuit relates
That a whole issue of hrst mortgage
bonds, amounting to So, 100000, was uniaw-
fully held for many years by the metro
politan National Bank, Of New York and
used by it as a collateral to stave off i'm
pending failure.
That after the bank went to peices the
bonds were recovered by the United States
Treasury and held in trust for return TO
their riahtful owner.
That the whole $64, 900 was stolen from
the Treas ury and has never been returned
since.
That for thirty years a fraudulent issue
OF Pacific Railway bonds amounting TO
$4,000 900 passed unchallenged in the
markets of the world and purpOrted to be
the very securities which, il is alleged,
were stolen These securities in the end
were redeem ed and cancelled under a set
element by the railroads with ne govern
ment.
These states nents were set forth by J.
a Kuy kendall, of Springfield, H., who
represents the heirs of Charles Durkee,
once United States Senator from VISION
sin and later Governor Of the Territory Of
Utah. The story as told by representatives
of the claimants follows:
Charles Durkee was a United States Sen
ator from wisconsin and served his Germ.
President Andrew johnson made lin gov
ernor of the territory of Utah. lie was at
that time a rich man, worth, perhaps,
$1,000, 900 In Utah IN became associated
with c. p Huntington, Leland Stanford
and the Crockers. the prospectors and the
builders Of the great Union and Central
Pacific railroad lines. There We're large
financial operations N connection with
these roads, in which D1rllee took part.
"A little history of these transactions is
necessary here.
The construction of the lines was under
taken by private capital in the year 1860
A few hundred miles OF road were built,
and the promoters came TO the end of
kheir means and credit The bonds which
they had paid contractors and whict they
osred to raise money for the further con-
etruction went begging at fifteen cents on
The dollar. The promoters went to Wash
ington and asked Congress for help. In
1852 an act was passed and its terms were
Etese:
United States bonds to the amount Of
$4,000 were to he issued and paid to the
5ailroad companies for each mile of road
completed. These were thirty-year s per
cent bonds. They constituted a mortgage
pn the roads.
The act permitted the companies to issue
an equal amount of their own BONDS. which
would be a prior and paramount lein to
the Governors loanetaoinet oaitaoinoinyp
5he Governments loan That sto saw,
c0o1r,apE-'c iSs.,7a vr-o- FRI $780,
and the Governments issue second mort
gage upon the lines.
Part Of the railroads earnings was pay
hbIe into the United States Treasury for
sinking fund purposes.
The companies were bound by two con-
Hitons. FIRST, to settle up all existing
bonded or floating debt and second 10
Issue their prior and paramount lien bonds
only as of ''even amount, tenor date and
slime of maturity as those issued by the
'Tnted States
In compliance with these conditions,
Governor Durkee, acting for himself and
bthers, bought uD and held outstanding
construction bonds of the railroad COM
panies. For these he was to receive the
company's prior and paramount bonds
aIe did not receive them, practically to
the amount Of the entire issue. The amount
actually held by him at the time of the
completion of the roads in 1859 was SG4,-
62S512
Governor Durkee had a that time pri-
waite secretary, Franklin H. Head, whom
he had taken 10 Utah with him in the ca
pacity. Head was familiar with the Gov
ernor's affairs and know Of The existence
of these securities. He is 6ow living in
Chicago, is a millionaire and director in
several banks and corporations. He NAV
he called to testify in the Durkee suit.
When Governor Durkea died. in 1870. all
these bonds were in the possession of the
metropolitan National Bank Of New va~lz.
I4e told his wife on his death bed Of his
having given these bonds. in a tin box.
tnto the custody of the bank. The box
was found in the bank but It was empty.
All trace Of the bonds was lost for four
teen years.
After the Grant &, Ward crash the Met
Topolitan Bank Went down. in 1884. Is af
fairs came into the hands Of the Comptro1-
Ter Of the Currency. Charles 7 Fnrar was
then Secretary Of the Treasury and WI
Ham Lawrence was Comptroller. They
discovered among the banks assets the
whole Of these Durkee bonds. They had
been Pledged by the Metropolitan bank
10 secure lis own loans but NIr Felee-
obtained evidence of the actual ownership
OF the securities and recovered them.
Franklin Head, the administrator Of the
ostate of Durkee. meanwhile had settled II
and filed his final accounts. Ny. Da~lzae,s
widow HAD obtained 8baut 81. aD as her
sull settlement % her share IN .h, proceeds
IN the estate of her Suppoeed-.o-he-u2Ilfio,,
are husband. Her children had received
amounts i'm like proportion. Iesacfts of
large sums to educational and charitable
purposes were. or course. unpaid. for -bair
was no money TO pay. The IeEacies. how
ever, show that Durkee believed himself
4 be rich
Leonard c. Blas5en. NJ Chsn7sfr7 IN
whose wife was one Of Dur5es.s ss--s
81 The securities. TIE Secretary t,'5 hin,
That the bonds without douh, we~, -b.
lawful property Of the Durkee family
It remained only. So NJ F1rce~ r,r4 "
Blaisdeu, for him 10 present i, ,,y,.r ~,
attorney for a, IRE heirs ana the b,o7s
~oald be delivered
NJ Blsisdeu se- about getting -r,s on,
taor.zaton. While he was $, a7.-,--.7 ~.
fo-ser Went out Of office. When ,,r,.s-
- presented himself az tie United States
Treasury 10 claim the bonds mn rrs.s -
me securities could be found. They As5
Vanished Nor nave auv ever basn lis
covered since. None has offered in :ho
public markets.
securities ot par value NJ $1,000 0aa
had been swallowed mp in some unknown
e'l. Inc Treasury Officials could give 10
explanation Doubt was even raised as n