New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-02-06
BOND BROKERS IN JAIL.
BIG FRAUDS ALLEGED.
Head of Imperial Trustee Company
of Nezc-Jersey in Tombs.

John S. White president of the Imperial Trus-
tee Company, of No 10 MontgOmery-st., Jersey
City; Robert q. Ruxton. broker, OF No. 81
Broadway. and Clyde Colt, also broker. with
Offices in the Vanderbilt Building, were arrested
yesterday by United States Marshal Henkel on
the charge of using the mails to defraud. The
complaint was made by Inspector Cdrtelyou.
The prisoners arraigned before United
States Commissioner Shields on bench warrants
issued by Judge Lanning, of Trenton, as a re-
suit of indictments returned last month by the
federal grand jury of Trenton.
According to the inspectors who have been
working on the case, Colt and Ruxton sent out
thousands df circulars representing themselves
as having clients with millions Of idle capital to
invest in first class securities. and especially IN
the bonds of newly formed corporations of an
Industrial character. When visited by repre-
sentatives of these concerns. it is alleged that
Colt and Ruxton promptly offered to handle the
bonds or stock offered. provided il was guaran-
teed by the Imperial Trustee Company OF Jer-
sey City.
White represented the concern as a highly re-
spectable and solvent institution. It is sald and
in position TO handle millions of bonds. 1t Is
alleged that he charged the applicants from
5000 to $1,000 to guarantee the bonds White
also demanded It is said, that a percentage
from the sale OF the bonds be deposited with his
company TO furnish a sinking fund 10 pay the
securities at maturity. AS no bonds, so far as
could be learned, were sold. no money was
obtained in this way
MANY complaints from alleged victims were
received by the Superintendent Of Banks or
New-Jersey Finding that the postal laws had
been violated he asked for the cooperation OF
Postoffce Inspector Cortelyou. who brought the
evidence before the Trenton grand jury last
month and Indictments were returned against
the three men. White, IL is alleged, learned
that the proceedings were about to be begun
and kept out of the Jurisdiction of the New
Jersey courts He was traced to this city
where it was found that he had a furnished
room al No 81 West 1lth-st., where he was ar
rested yesterday.
When arraigned. White Colt and Ruxton
were represented by Joel NJ. Marx and Hugh
Gordon Miller The lawyers asked for time to
ipouire into the nature of the complaints, ana
on adjournment was taken until February ~.
psu vas fixed at 81 500 for White and SZooo
aocb FOR Colt and Ruxton. Not having a pohos-
man in court the prisoners were remanueo W
tho care of Marshal Henkel. Colt was released
ON hail but the other two men were later loused
in the TOmbs.
None OF the accused men would discuss the
nature of the charge against him further IMAM to
sav that he was not guilty. There is no hleaiiS
of knowing how much money the three men oD-
tanned" said Inspector Cortelyou, put the coni-
many guaranteed bonds way up In the hlllilon''
,rha companv got into difficulty with the baiiA-
ing Department through its annual s'ateiho.'
which claimed assets in excess OF s1'ooo'0oo
- tho Ranking Department asked White
where his cash was deposited representing Inv
s,r,lrs and undivided profits amounting to
Iad
cuses and finally 10 say u ~
not be that large
Two specific instances OF alleged uell@uuins
oro made against the men. One is that or the
Ccrapton Factoryville and Tunkhannock Rail-
way Company. This corporation arranged Win
Colt TO float $4,000 of it's fifty year per cent
bonds T. b. Carter. the counsel or the roao'
was asked to have the bonds guaranteed pS tho
Imperial Trustee Company, and inspector Cor
teIyou says that White received from the roao
81 600 for his services, but that not single
bond was sold. similar experience. II Is sald
was that of the Commonwealth Heat and Light
Company of PittsbuTg. It's president. c. G.
Hale. paid $500 TO have $4,000 OF its per
cent gold bonds guaranteed and marketed. None
OF these bonds We're ever sold, il Is charged
The scheme, according TO the inspectors, has
been in operation for three years. and in that
time, II is alleged the three men have swindled
many concerns
Late last night Inspector Cortelyou arrested
Frederic Waugh who, II is said, the Phil
adelphia representative or the company. He
arrested AT the Occidental Hotel and was
lodged in the Tombs TO await examination. In
spector Cortelyou said that Waugh had an Of
flee as a broker in the Drexel Building In Phil
adeIphia but that ne had engineered several ir-
regular deals for the company
The Imperial Trustee Company has a suite Of
five rooms in the Lincoln Trust Company Build
ing. at Montgomery and Washington SITS. Jer-
sey City. 1t began operations over four years
ago John l.. White directed the affairs of the
concern. The company operated under a New
Jersey charter. which is now under a cloud.
a jury found the company guilty OF not COM
plying with the banking and insurance laws.
which is equivalent TO forfeiture of the char
ter This verdict wns rendered on December 20
Continued on second page.