AMERICAN "RINGS."

Evening Star, Issue 3126, 25 February 1873, Page 3

AMERICAN "RINGS."

One of the most startling, as w'ell as the most remarkable, frauds that has been committed in America tor some time—rivaling in extent the Eric swindle—has just been brought to light. It relates to the Onion Pacific Railway, which, line forms a section p| the Trans-Continental railway, over which Australians -and New Zealanders pass who travel to Europe via San Francisco, It join-* the Central Pacific at Odgen, >Sa : t Lake, and connects with the Western hallway system at Omaha, in Nebraska. The Union Pacific Company received a commission of “twelve million acres of the best farming and mineral lands in America,” besides Fe feral bonds and other subsidies ; and for a time ‘ nothing occurred to excite suspicion, The line was built ; dividends were paid; and but for their neglect in constructing snow sheds, the directors Would ; have received the unanimous thanks of travelling public. There was a “ snow llxckado,” however; and now’, we have a S)Muoi&l blockade, which has been eetabV*i*hei by th« York iimli, It

broadly charged that a “ Directors’ Ring ” was established, by which eighteen million dollars, belonging to the company, were transferred to the pockets of the conspirators. A Congressional committee is inquiring into the share of Congressmen in this fraud ; but little is expected from it. A suit at law is, however, threatened ; and this must lead to startling disclosures, and accorddig to cxcell nt authority, to a refund of the money. -s we understand the case, it appears to be this Ihe directors of the Union Pacific Railroad entered into a contract with Mr Oakes Ames, of Massachnssets, for the construction and equipment of 607 miles of road, on the 16th August, 1867 On the 15th October, 1867, the contract was assigned by Oakes Ames to seven trustees, all of whom were directors of the Union Pacific or lapse shareholders therein, for the sum of “ one dollar lawful money of the United States, to him only paid hy the party of the second part [the trustees], and for divers other good and valuable considerations herein, thereunto moving and on the same date a contract was entered into with the Credit Mobilier.of America, of hich Oakes Ames is a director, to advance to the sain trustees the money to carry out th contract, charging 7 per cent, interest until repaid, and 2i per cent, by way of commission on advances, the seven trustees being the leading raembcis of the ( redit Mobilier. The money, it is understood, was raised on Federal and State bonds issued to the railway company. In other words, Oakes Ames and a Directors’ Rng of the Union Pacific Railway conspired to defraud the shareholders of the Company, and they succeeded, it is averred, to the amount of eighteen million dolhva, since the c’ose of 1867. Ex-Speaker Colfax and Speaker Blaine are implicated ; and a long list of Congressmen’s relations are published, who purchased Union Pacific Stock at par from Oakes Ames, when live times that amount could have been had for it, to the great loss of the shareholders and forwarding of the conspirators’ job through Congress. We have not full particulars. The foregoing is a rough outline of the situation ; but should the 'threatened prosecution come off, as a leading capitalist remarked when interviewed by a Herald reporter, “the manner in which the fraud was perpetrated will then perhaps come to light, and will, no doubt, make a very interesting chapter in our (American) financial history.”

Taming from the Union Pacific to the Erie, we have a new development. “ Jay Gould restores property value nine million dollars to the Company.” This is the Herald's announcement, and it is regarded as “ Erie’s greatest triumph.” The law suit was settled, anti Erie stock jumped up 3 per cent, the same afternoon. The ex-Prcsi-dent’s letter, in which he offered a compromise “for the sake of peace,” is a remarkable production. In it he states that the greater part of his property was purchased by him for the use of the Company ; some of it with his own money ; but as it is necessary for the Company, lie would convey it ami the Grand Opera House, owned jointly by himself and Fisk, free of mortgage, on being credited with the amount claimed by the Company, namely nine million and eighty-six thousand dollars, the property is worth to the Company the amount stated. As Gould made threo million dollars by skilful manipulation of Erie stock wh n forcib'y ejected from its Presidency, it is not improbable that ho may net a considerable amount by his voluntary surrender. Indeed, this would appear to be pretty certain. The Herald rema'ks

“ t is stated that before this thi'g was consummated. Mr Gould was allowed to pick up all the Erie shares he possibly could in this market and at London, and that he is now the orvner of something like two hundred thousand, shares, on which he expects to make more money than he surrendered to the company by giving them 90 ■ ,000do!s. securities. When the ievolution in the Erie Lirectory took place, Mr Gould was fortified in the fame way, and report says made a fot tune. He now gives to the Erie Company a large amount of securities, and is also fortified with Erie Stock to make up the same. It is aho stated that the money derived from the sale of these securities is to bo used in laying a third rail, whereby the narrow gauge roads of the West ra»v have another outlet to K ew York with-nt breaking bulk; and further, it is reported that Mr Gould will throw his i’ fluence in the North-west Company ip favor of bringing its traffic over the Erie when its third rail is laid ”

Ex-Mayor Wood, of New York, has a new :eusation in store for Wall rire°t. It is thus explained by Mr Richard Schell, of New York, one of its leading capitalists, when *■ interviewed ” recently in reference to the Credit Mobilier prosecution : “ Hut there is another matter just now which begins to interest ns almost as much as Credit Mobilier in Wall strert. Yon perhaps noticed that, a short time since. Mr Fernando Wool introduced a resolution in Congress demanding an investigation into the manner in which money was lent in Wall street, and the rates of interest charged upon it. Do you know what will be Ihe effect of this? Simply that all the money made by firms in Wall street over and above the legal rate of interest will go to the poor of the city. And you have no idea of the rascalities and robberies which will be then brought to light, nor the names of high people who will be implicated. Then the public will learn bow reputable people send boys down into the street to bid for money and send up the rate of interest, thus bidding aeainst themselves, but when the rate is thus forced up lending money at usurious interest. The beauty of the law is that it enables the investigating committee to examine books and papers, so that there shall be no me ms of escaping the punishment. Hy law, you know, the penalty for charging an illegal rate of interest is that all tho money made by it is to go directly to the poor, and I have expectation and every hope that such will be the result of au investigation in*o this most corrupt of practices.” This is certainly spreading tbo net wide, that the poor and the needy may be gathered in to the feast of good things accumulated by Wall-street sharp practice.—A. Z. Herald.