The New York Herald Newspaper, November 23, 1872, Page 4

4 ‘An Old-Fashioned “Corner” in : the Stock Market. WORTHWESTERN ADVANCED TO 200. A Rise in One Day of 105 ; Per Cent. iA BATTLE OF WALL STREET GIANTS. jSay Gould, the Leader of the “Bull” Clique, Arrested at Suit of the Erie Railroad Company. Alleged Embezzlement of Nearly Ten Millions of Erie Funds. (Henry N. Smith, the Leader of the “Bear” Clique, Turns State’s Evidence. \A FALLING OUT OF OLD FRIENDS. [The Speculative Object of the Arrest Alleged To Be the Demoralization of the Northwestern Pool. \A CONTRARY EFFECT THE RESULT. Excitement and Dismay Among the Victims of the “Corner.” Interviews with the Leading “Bulls” and “Boars.” A “CORNER” IN THE GGLD MARKET. The Historical “Corners” of Wall Street. WALL STREET, Fripay, Nov. 22—5 P. M. On 'Change to-day cotton was only in limited femand and easy. Flour was firm; wheat and corn were quiet and easier. THE FOREIGN MARKET. Advices by cable report a further improvement in the quotations of the London market and a con- tinuance of the easier feeling in money, which is quoted at 6 a 7 per cent outside of bank, MONEY ALTERNATELY STRINGENT AND EASY. The money market was stringent during the earlier hours of the day, but suddenly relaxed and became extremely easy before the close of banking hours, The first business was at seven percent, coin, from which the rate advanced to as high as a quarter per cent per diem, equivalent to90per cent per annum. Within the next half hour, and considerably belore three o'clock, there ‘was a sudden pressure to lend, and balances were placed in this period of the day at as low as three per cent. THE EXPLANATION Of this remarkable fluctuation lies in the manipu- lation of the gold premium and speculation in the gold market incidental to and playing an impor- tant part, in which was a requisite command of money. The gold poo), in essaying to engineer the “corner in the gold market, of which intention they had made sign the previous day, were under the necessity of locking up the gold as fast as with- drawn from the market, and to do so had to borrow money upon it as collateral. They bought gold very heavily ali day Thursday, and knowing that this gold was coming to them through the Gold Bank to-day they were enabled to SQUEEZE THE “SHORTS,” ‘who had to make their deliveries through the Clearing House, To make gold scarce for the Gold Bank they had, of course, to keep a large propor- tion, if not nearly all, of their gold in their own hands; but in endeavoring to find a place for it | late in the afternoon were thunderstruck to dis- cover that the banks, acting upon instructions con- tained in a circular issued from the Clearing House, would not lend themselves to any “locking-up conspiracy” such as condemned in the circular and Buch ag would render any bank participating therein liable to EXPULSION FROM THE CLEARING HOUSE. In the sudden scurry for money caused by the ‘necessity thus imposed upon them of making a place ior the gold which they had bought so liber- | “ally the day before, money being a prime essential to make good their bank accounts against the checks they had given the sellers of the gold, the rate on call ran up as narrated to a quarter per cent for its use over night, the borrowers hay- ing recourse to the regular open market in which the stocklrokers procure their loans from day to | day, This spasm over money reacted and went to the other extreme of three per cent per annum, because of the pressure of a supply which pre- viously had been taken up in carrying gold. Com- mercial paper was quoted as betore, and foreign exchange was nominally unchanged; but nothing ‘was done in the latter in view of the scarcity of cash gold, ERIE RAILWAY EARNINGS. ‘The following is the regular return of estimated | | market quotation of the shares. o'clock the great rise began to manifest itself in bid; 103, 104 and 105 following each other in rapid succession On the telegraph tape, and drawing a | crowd of brokers and speculators to the arena and | railings of the Stock Board. To the great mass of both brokers and deaters who thus flocked to the Board, colliding with and intersecting each other in their | passage to and from the Exchange, or as they darted 1n or out of its portals, tossing aside in | their mental abstraction the umbrellas so needed | to shield them trom the falling torrents of rain, the arrest of Jay Gould was wholly unknown, the fact not transpiring until quite near the hour for ad- weekly earnings of the Erie Railway Company, commenciug April 1, 1872, as compared with last year:— tiie 871. 1872, For week ending Nov. 15 (seven days)....... . $471,966 Previously reported. 11,672,535 Total earnings since April 1...... + $12,140,044 $12,144,801 fncrease for week + al 2,727 Increase from April 1 to ALC. se ereree sees - 8,857 GOVERNMENTS STEADY. The government list was steady and almost un- changed, the absence of fluctuations being in re- markable contrast with the feverish movement in wold and the variations in the rates for money. The following were the closing prices:—United States currency sixes, 11334 a 113%; do. do., 1881, regis- do, do., coupon, 1163 a 116%; do, five-twenties, registered, May and November, 112}g @ 112%; do, ao., 1862, coupon, do., 112}, a 112%; do. do., 1864, do. do., 1121; a 112%; do. do., tered, 115% a 115% 1865, do. do., 112% @ 113; do. do., 1867, registered, January and July, 116 a 115, 115%; do. do., 1868, do, do., 1154 @ 11634; do. ten- forties, registered, 107% a 108; do. do., coupon, 108 & 108%; do. fives of 1881, registered, 109% 110; do, do., coupon, 10934 a 110, THE RAILROAD BONDS. ‘The following were the bids for the railroad bonds :-- New York Cen 6's, 1865. £9 New York Cen 6's, 1887. 3 New York Cen 0° 5 New York Cen 0? York © Rew York o7', at 97 a 93, clined their was offered, the sales for cash forming quite an item of the day’s transactions at this figure. Sales of odd lots were made at the same time at 92 do, do., 1865, cou- Pon, do., 116811535; do. do., 1867, do, do., 11534 a 1 The buyers NEW YORK HERALD, SATURDAY, NUVEMBER 23, 1872.-TRIPLE SHEET. ir Ed =o: Peneeeeee $2: Bost, H & E ist m Union Pac income Wie: 26 Cedar k& Minn Ista. SL nio n a Til Cont 7 per cont, '75..100" Bur, OR & M's, lat, g. 88 SOUTHERN SROURITIES FIRM. The Southern State bonds were higher and firm, the several more active features showing an ad- vance of fully # half per cent. The following were the closing quotations :—Tennessee, ex cou- pon, 76a 7634; do., new, 764 07654; Virginia, ex coupon, 48 @ 650; do, registered stock, old, 88 a 42; do. sixes, consolidated bonds, 65% a 56; do, deferred scrip, 16 @ 17; Georgia sixes, 70 a 80; do. sevens, 87 @ 90; North Carolina, ¢x coupon, 35a 37;do., to North Carolina Railroad, 48 a 50; do., funding, 1866, 28 a 30; do. do., 1868, 2628; do., new, 21} a 25; do., special tax, 14 a 16; Missouri sixes, 94 a 94%; do., Hannibal and St. Joseph, 91 a 92; Louisiana sixes, 55 a 60; do., new, 50a 60; do. levee sixes, 50a do. do. cights, 70 a 75; do, do. eights, 1875, 70a 80; Alabama fives, 57 a 60; do, eights, 82 a 85; South Carolina sixes, 50 a 55; do., new, January and July, 24a 2444; do. do., April and October, 27a 30; Ar- kansas sixes, funded, 45 a 50. GOLD 1133¢ A 118 A 114 A 113%, The gold market was excited and feverish, with the comparatively wide ductuation in a single day of one percent. The price opened at 1134, but, under a popular disbelief in the merit of that quo- tation and an apprehension that the clique were endeavoring to “rig” the market to sell out upon it, declined to 113, Here the clique commenced the “squeezing” process, and advanced the rate for the use of gold to 144 per cent for the day, although late in the afternoon they were quite willing to lend their balances free of interest. As the corner increased gold went up to 113%, but again receded to 11344, Still later and in the general flurry at- which tending the “corner” in Northwestern, seemed to frighten THE LAST REMAINING “BEAR in the Gold Room, the price rose to 114, but re- The ceded once more under clique sales to 11314. Sub-Treasury paid out $297,000 on account of re- deemed five-twenties and $52,000 on account of interest. The spesle engagement for to-morrow is The nominal and consists of silver bars only. course of the market is shown in the table:— bs + 1134 + 113% 113 '5 In the gold loan market the rates ranged {rom fatto 14% per cent per day for borrowiag. The operations of the Gold Exchange Bank were as fol- lows :— Gold cleared wold balances. 7,600,509 Currency bala: 9,007,805 ‘These balances indicate the extent of the locking- up efforts of the gold clique. THE NORTHWESTERN “CORNER.’? The great feature of the day was .reserved for development in the stock market, however zealously the Gold Room had already bid for excel- lence in the creation of a sensatien, The reader who has got thus far in the money article would do Well at this stage of our record to peruse the adjoin- ing narrative of the legal proceedings in.connection with the arrest of Jay Gould, on which incident hinged the more important events of the stock market. He will be able by so doing to understand more readily the influence which this circum- stance exerted upon the course of speculation dur- ing the day. The early tone of the market was rather indifferent, if we except the dealings in Erie, in which stock there was a further prosecution of the speculation on the part of Mr. Drew and his frionds, and an advance to 571;, although the Lon- don price still came only 5235 a 52%. Sellers’ op- tions of fliiteem days were offered at 53, showing a disposition to sell for English account. The rise in Erie led to a great DIVERSITY OF OPINIONS and snrmises, and some of the onlookers at the telegraph tape were even sagacious enough to be- lieve a rumor that the new lever in the Erie rise was Jay Gould himself, although the movements of Daniel Drew were largely intended to ensnare the supposed ‘short’ ventures in Erie of that operator as a partial satisfaction for the losses the more venerable of the two speculators had suffered by the corner in Northwestern. The general market was weaker in face of the example of Erie, $142,803,000 and slowly declined under the pressure of the stringency in the money market, the removal of which ural influence and produce the usual reaction, because of a fear that the trouble in which the Northwestern speculation had involved so many of the street would Invite a panic if not a “break” in later on failed to exert its nat- the rest of the list. The prevalence of this feeling caused a decline of % a 2%; per cent—the latter ex- treme occurring in the case of Pacific Mail, while the DEMORALIZATION OF THE “BEARS” in Northwestern was reflected in a decline of Erie to 543%. Meantime Northwestern had opened weak and on a light business had de- to 95, at which the pool limit of purchases and took all that a 93, or twoto three per cent below the market. By the time that money had shown some signs of relaxation the price had risen to 10034, a 34 higher than the highest point on Thurs- day, the buyers being parties who had taken the chances of a speculative sale when the voice of the street had been almost unanimous against so dangerous a procedure and were now constrained by these fears to undo their venture, | despite the wisdom of the current admonition of the market to “sell stocks when they are high"—a piece of advice the fallibility of which will be long remembered by THE VICTIMS OF TUE “CORNER,'? and all the more poignantly because if anything was high it was Northwestern at 100, which ts | about 30 per cent above the ordinary and average | Toward three | | tapes the wild suggestions of a disordered imagin- a series of such quotations as 101, 102, in the hallways and upon the street The PROGRESS OF THE RISE was henceforward in geometrical arithmetical ratio, journment, ing at 100 at the me time. then bid 120 for more. 130 and the succeeding one at 1590, “corner? had culminated. was brief-lived. to appear on the tape. 180 was offered. the price up to or revenge. That was the universal verdict. day, however, the fixed | rather than From 106 the price next leaped to 106 and then to 106)4, a small lot of 8 shares sell- The next sale was at 107, the next at 103}; and a third at 108, The buyers now took all that was offered up to 112 and A desperate “bear’ graibed a hundred at 125. The next sale was at ‘This brought out some long stock and occasioned a relapse to 140. But the recovery to 150 was almost instanta- neous, the next sales being at 155, 160, 161, 166 and back to 160, Here there was a breathing spell of five or ten minutes, and the “shorts who hadn't covered began to felicitate themselves that the But their happiness A few ominous gales at 165 began Next 175 was bid, and then The last sale had been at 165, Bow bid 187 without being gupplicd, | ab what Ogure ie corer might be alovogd, Noble ment ee 200 Was BID, which elicited one or two sales, and was still bid for more as the Stock Exchange closed on the re- luctantly departing and highly excited orowd. There were, of course, no failures, as it was after banking hours when the rise assumed such enormous proportions; but there will doubtless be heavy losses in the morning to settie, should the pool insist on keeping the price at the standard reached to-night. On this point there are again @ great many different and conflicting opinions. In some parts of the strect the conviction is entertained that the rise of 105 per cent this afternoon was the work of the “shorts” themselves in their desperate efforts to cover, and that it was against the policy of the Jay Gould clique to force an advance, which, like the slaughter of the hen that was LAYING GOLDEN BGG, was certain to defeat the object of the corner by suddenly bankrupting all the “shorts.” On the Other hand, it is said that when the “bears” ar- rested Jay Gould they thought that they would thereby demoralize the “bull clique and scatter the stock, im revenge for which strategy the “bulls” put on the screws and ran 200. It ts only fair to say, however, that the brokers operating for the “bulls” aisclaim the latter course, although it may have been the result of orders to other brokers than those usually recognized as inter- ested with the clique. We give in adjoining col- umns an account of the legai proceedings attend- ing the arrest of Jay Gould and .the reasons therefor, as well as a résumé of previous remark- able “corners” in Wall street, HIGHEST AND LOWEST PRIOES, The following table shows the highest and lowest prices of the principal stocks during the day :— Highest, Lowest, New York Central. + 95% 984 Erie. + 67! 5A Lal h + 89% 88% Wabash... 60 Northwestern . seer 95, Northwestern preferred. 87 Rock Island, 107% St. Paul.... 52 51g St. Paul preferred. 1% TAM Ohio and Mississippi. 45% 45 Union Pacific 34% 34 ., C, and I. ©. 32) 81% Western Union Telegraph. 10% TM Pacitic Mail.......... é 86%, EXCITEMENT IN WALL STREET. Skene Suddenness of the RisemA Hundred Per Cent Advance in Three-quarters of an Hour—The Scone at the Stock Ex- change and in the Brokers’ Ofiices. The story of the last great corner in the street is, 80 far, by no means so dramatic and exciting as might be guessed from the extraordinary advance in the price of the stock involved. This was, how- ever, mainly owing to the extreme suddenness with which the curtain rose on ITS CULMINATING TABLEAU, Startling a8 was the rise, it is all the more won- derful when one remembers that it was the work of three-quarters of an hour. For more than five out of the six business hours of the day the stock MEANDERED ALONG with comparatively trifling fluctuations, between 96 and par. Then suddenly came the news of the arrest of Gould, and almost simultaneously the stock tape began to tick ominously forth the evi- dences of mischtef, The truth about Gould's ar- rest, however, arrived ina SOMEWHAT DISTORTED SHAPE, and it was not generally known, even at the close of business, that he had successfully been rescued from the toils of his foes, That he was charged with the embezzlement of ten millions was the current report, but this, authentic so far, was coupled with the yet more astonishing rumor that he was held in the same mount of bail, and was in tiis respect more sub- limely unfortunate than any American of whom we have historical record. This, however, was near enough to give the men of the strect SUFFICIENT DATA upon which to founda theory of the suddex furry in Northwest which seemed to meet with general credit. This was that in this stock the corner had been so carefully and neatly and artistically built up that the victims must either gracefully consent to have their FINANCIAL THROATS cut, ov make one desperate stroke for compromise And as Henry N. Smith was one of the m ost deeply involved among these victims, and as, fur ther, in his capacity of former partner of Gould at the time of his presidency of Erie, nothing could be more natural than that he should still possess proofs that would hand over that gentleman to the tender mercies of the pres- ent virtuous rulers of Erie, so noting again could be more natural than that he should have done so, From early in the FINANOIAL SKY in the private parlors of the more prominent Operators there were signs of trouble. 100 the losses involved in the corner would have been sulticiently severe. began to show the Even at But when the indicators FINAL COUP D’ETAT, upon which Mr. Gould and his friends and asso- Clates had at last felt themselves strong enough to venture, there was the most intense excitement, though, as before stated, the rise was too sudden to have its full effect, for it was too late in the duy for settlements to be made, it being already con- siderably PAST BANKING HOURS, so that checks ‘for differences” could not be cer- tified. Thus, even ifa man had failed, it would have been impossible to discover it, and his verbal faith was a8 good a3 his formal check, without the usua; guarantee. at any rate the interest of the occasion lacked the It can easily be seen, therefore, that usual ex citing incidents of FAILURE AND SUSPENSION, though there were pale faces and bustle and con- fuston enough to confirm to some extent the pre- | dictions of the croakers as to the evil that was to be consummated on the morrow. The whole thing was, indeed, so sudden as to take away one's breath, and men stood bewildered and mentally paralyzed in the midst of a storm such as, in the same limited arca, Wall street had only seen a a very few times before. In t..e bankers’ ofices the brokers stared at the tell tale Ogures on the tape in mute astonishment ; 120, 25, 30, 40, 50 and so on up to 180 seeuted to be simply incredible, and even if he did not say 80, a man could not resist a suspicion that for a brief season, the operator at the Stock Exchange had been seized with A FIT OF INSANITY, and was writing simultaneously on thousands of ation, But in the Exchange itself the excitement seemed to approach almost tragic significance. We ail know what the FLOOR LOOKS LIKE in ordinary seasons—the noisy, shabby-lookin crowd below, all in ancient hats, and Cauipped with pencils and note-books, broken up into knots of varying strength asthe interest of the fight changes about from this to the other specialty. But yesterday alternoon, for the last half hour of business, there was but ONE SINGLE CROWD; there were but operations in a single stock, and not very many in that. Every man on the foor gathered around the Northwest clique brokers, who stand usually near the Wall street door, and LOOKED ON AGHAST at the terrible throes of the financial earthquake that had overtaken them. And now it was clearly to be seen that the interest on the short side of the stock was far greater than had been generally sup- posed, Hitherto the struggle had looked to be mainly A MERE DUEL between a half a dozen of great operators, The smaller fry, who were a hundred or two shares short, had looked on the contest, if not with pleas- ure, at any rate without any very violent alarm. Soon, they thought, the excitement would be over, the battle would be won by one party or the otiier, and the shares would drop down to their normal price, and then they could cover at a profit. No doubt it was disagreeable to have to keep on planking up additional margins, but tie ead must come SOONER OR LATER, and this was only one of the littie inconveniences of “selling what you haven't got” and making money without having anything to make it on ex- cept 4sum of tle most slender and modest dimen- sions. But this class o! operators now discovered that the danger was very greatly more serious than they had apprehended, An advance of fiity or even & TRIFLE OF A THOUSAND shares meant $5,000 loss, and there was no saying 86% | and just aa the gong was about to ring for adjourn- | ing but the impossibility of such extortionate figures was in the, way to 2-4 vent the victorious bulls from pushing up the stock yet another 100 per cent. Such were the fears that now took at crowd that surged to an while som jumped upon the chairs and gazed, PANIC-STRICKEN, at the scene. Madder and madder waxed the at One sanguine individual, who had found courage to sella hundred shares short at 115, dis- covered tn less than five minutes that the market had gone four thousand dollars against him, and in @ transport of terror closed out at that figure. doing so he saved another thirty-five hundred dollars, for less than ten minutes afterwards, a3 the clock struck four, wild bids of 200 were heard flying eagerly around the hall. After that the crowd dispersed, but for the next hour there was anxious consultation in many an oifice, and geome were the prognostications of the morrow. ut it ia to be hoped that these will not be realized. ABREST OF JAY GOULD. A Sulit for the Recovery of Nearly Ten Millions—@Qne Million of Dollars Bail Required and Promptly Given—The Salient Points of the Affidavitse—Clear Proofs of Guilt Alleged to Have Been Secured—How the Arrest Was Made. The most interesting feature of the Northwest corner, and the most momentously important as well, judging from its consequences in the sudden flight skyward of the stock, was the arrest of Mr. Jay Gould. The causes that led to this are suM- clently clear. Speculation in Northwest had reached a point where it was absolutely necessary that something should be done, and Mr, Henry N. Smith, who is currently reported to have recently been a financial antagonist of Jay Gould, seems to have handed over to the inspection of Mr. Peter HH, Watson, the present President of the Erie Rail. way Company, the books of the old firm of Smith, Gould, Martin & Co, The consequence was the ex- traction of DATA AND FACTS from these tell-tale volumes, which are narrated at length in an affidavit by Mr. Peter H. Watson, read ing as tollo ws:— AFFIDAVIT OF PETER H. WATSON. New York Supreme Court.—The Erie Railway Company va day Gout 5 First.—Peter 1. Watson, of the city of New York, being duty sworn, says that he ts the President of the Erie Railway “Company, and by virtue of his office has gcneral control of its ‘books of account and” vouchers, and from such books und vouchers, and from other facts which have come to his knowledge, since he became President of such cor- poration, he is 1 does hereby de- and Railway Compaiy, the _petoreniamed plaintid,, has a food cause of action agai ould, before-named defendant, the sum of $9,726,551, to which — interest fs hereinafter men- isto added, tloned, and that such ‘action arises from the fraudulent detention, embezzlement and misapplication of moneys and property of the company aS him Gould) in the gourse of his employinent as President and Treasurer of the company: that he has been guilty of fraud in incur- ring the obligations for which this action is brought. ‘Second. —The particular circumstances out of which the obligations arose are as follows:—That in 1867 Jay Gould was elected a directoeof the company; that on the lth of July, 1868, ho was elected president, and from thence. forward, during the times hereafter mentioned, he fraudu- lently inisapplied moneys and property ot the company, whereby the company became entitled to recover against him the aforesaid sur of $9,726,531 26, with interest. Third—That during tho times mentloned Jay Gould was acopartner with Henry N. Smith, Henry H. Martin and ames B. Bache,” under the firm’ name of Smith, Gontd, Martin & Co., doing business bankers ‘and brokers, and became the a3 agents and brokers of the company in respect to trangactions herein set forth, and that all the moneys herelnaiter mentioned as having boen at any time to the, credit of the said Erie Railway Company in. the books of guid firm were received for said “company by. Jay time Jay Gould Gould and the firm during the ho'd the official position before stated; that at various times trom the ot August 1963, to the 9h of November, 184% the Erie Railway Company crelited the issue of a large number of shares + of its capital stock, amounting in the aggregate to 407.347 shares or thereab: y, 0 par value of $40,734,700, whereby the total capital stock ot the company, exclu: sive of its preferred capital stock, was the’ sum of in the proceedings of the various boards d_of the Executive Committee which authorized the creation and issuing of this increased capital, Jay Gould taking a prominent and active part as such director and officer as atoresaid, and such increase as allowed by him being logal and necessary for the legit- imate purposes ot the said company: $9 the extent of 407,347 shares of such increased capital stock, the same was co creatod and issued—was issued directly to Jay Gould as such President and Treasurer of the company, or to his firm as such agents and brokers, to be. by and converted into cash for the benefit company; that of these shares of stock he par value of $40,494,709 were his ‘agency and to the firm, and were at various times sold by the firm under his direction, and the same Produced, after deducting, charges and’ commissions, the net’ sum of $12,803,009 23, or thereabouts, which ‘sum was received by ‘the firm from the Runchesees thereof, as appears in the books of the rm, to which the comp: was entitled on the respective dates when such stock was sold, and although the firm, as appears by their books of account as tween the firm and Gould, have accounted to him, and hayo paid to him in cash the whole of the sun of $12,503,059 23, being the net proceeds of the sales of stocks 80 received. That Jay Goutd has fraudulently received in the course of his employment in his official capacity a large amount of the aforesaid net procecds of the sale of said stocks—to wit, the sum of $4,499,131 23, as al {nears by, the said books of the firm—and has converted the samé to his own se, anid Is thereby guilty of fraud in incurring ‘this obll- ation, the amount of which, with interest, this action is in part brought to recover. Fourth—That by reason of the sale of these stocks and other property by the firm while acting in such fiduciary capacity as agents of the company there appears to the credit of the company, in the books of the firm, s 369, as the results of certain sales of stocks and | property belonging to the company, the further sum ot sh ooh 70) , Which sum was then justly due and payable to the company without deduc- fon of offset, and'on that date the firm, as their books, and upon the express of, Jay ould, | a8, deponent is informed and believes, aforesaid sum to the credit, on the books of the firm, of Jay Gould individually, upon the false and fraudulent pretence that the company was then largely indebted to him and that he would account to the company tor the aforesaid sum of $3,051,700 15, when, in point of fact, Jay Gould was then largely indebted to the company. ‘That such last-mentioned transfor of the money of the eompany to the individual credit of Jay Gould on the books of his firm was made for the purpose of repaying to the firm the losses then recently made by Jay Gould in a speculation in gold carried on by him and for his vidual account, and as between himself his firm, as Oy ne 8g books of rm; the appears by Hirection 3 ray whole said sums therefore became payable to Jay Gould in- of dividually, and he thereby iraudulently emberzied and misapplied the moneys of the company for which he was liable a8 a member of that firm, and also as President and Treasurer of the company, ‘thereby committing a fraud in incurring this obligation to the extent aforesaid, for which further sum, with interest added, this action is in part brought. s itk—That on or about the 16th day of November, 1863, Jay Gould commenced a speculation on his own individ: ual vaccount on. the. shares of. the company, ‘and in the course of such speculation he purchased a very large, number of, shares of | suid | stock through his” firm, upon which purchase he had then incurred a’ very heavy loss, arising from the depreciation of the market’ value ‘of stich. shares after their purchase; that in order to relieve himself from this loss he fraudulently and in violation of his duty as officer of the company did throw upon the company the burden of his private speculation and loss; that in orabout the month of July, 1859, Jay Gould, through his rneys collusively, and as deponent a upon the Court ot one of the Judges thereof, procured an order purporting to ‘authorize the company or its officers to repurchase in the market for the purpose of cancellation a large number of | the capital stock of the company theretorore issued by and under the consint and procurement of Jay Gould, but which for the purpose of said obligation were obliged or admitted to have been ilegaily issued or to be of doubtful | validity; and, therefore, on the consummation of such fraud upon the company, Jay Gould caused 121,400 shares of the cancelled stock to be charged against the company ‘on the books of his firm on the sth of Augnst, 1869, as ap- pears by the books of the firm, at the average price of $61 47 per share, amounting in the aggregate to the sum of $7,462,453, and the estimated cost of the said shares were on that date charged to the company on the books of the firm to be debited against the company, paid, tor at the rate aforesaid, as the nominal satisfaction of | applying to sald company in the hands or Jay nd his firm, and which had been so received by them as aforesaid for said company. That at the time of such pretended purchase of sald shares and r thereot to the company, and when the same were so paid for irom the funds of the company by order of Jay Gould, the saine named ; that Jay Gould, by the devices aforesaid, tra ulently misapplied the moneys of the company when In his position as officer of the ‘company, and was ineveby, h were not worth the sum of $6147 per sha but | were worth cis $29 per share, and large sac~ tions were made in the market at the ra Ll | nds | ‘uilty of fraud upon the company to the extent of 33,941,868 in incurring this obligation to the company, fe > Which jurther, sun, with interest added ay he stated, this action isin part brought, SicthR—That Jay Gould, having in the early part of 1869 engaged 1n speculations in the shares of the Readin Railway Company, and, having lost thereon $139.14 0 a of ie i ay appears by the book: firm, on the I7ti day | Of ‘May, 1869" ordered said ‘logs to" be charged “on the ks of the firm to the company, and on the of December, 185%, he caused to y transterred to his own accotnt the further sum of $168,903 69, which was then to the credit of the said railroad company in the books of his firm, and the moneys of the company to that extent thereb: wore converted to his ‘own use, and both the said sums herein referred to were charged and pald against tie debt and funds of the company, then in the possession of the firm re. ceived ‘from sales of stocks as aforesaid, and under the control of Jay Gould as a member thereof and as officer of the company im Is employment as such; that Jay Gould thereby embezzled and mis- applied the moneys of the company to the extent joresaid, and was guilty of in incurring these ees fo, the company of the gums afore. tid, jor : thor sums, wi interest, ag fercinatfor spect hed tte actfon lst portbrong he Seventh—That Jay Gould, on of about the month of Jan- wary, 1860, having on in a spoculation in the stock ot New York Ventral |, throug! having lost in stich speculation $13\58051, sof the firm, on the 2dday of Jandary, I the said loss to be charged on the books of the fi irm to the company in the account kept by the firm of Jay Gould, as (roasurer of the cone i the same Was fo charged and paid against ‘and out of the funds of the compan then in the possession of the firm arising from such sal # stocks aforesaid by them the said con i under the control of Jay Gould as a press reot and as treasurer of the company in the course of nis cena log men se: uch 5 and Jay Gould traudulently misapplicd moneys o: company to the extent aforesaid, and was guilty of fraud in incurring this obligation to the company for the sui aforesaid, for which, with interest, as in hercinaiter men- action isin part brought. at Jay Gould, on or avout the second day of August, 1359, drew out of the reener of the company, then to its eredit in the books cy the firm, receive from such sales. ay aforesaid, paid to James Fisk, Jr, $60,000, and said sum wag charged to the “company ‘by his direction and the same was ald out of {8 funds by his order, it being weil nown to Jay Gould that James Fisk, Jr. had nm Togal glam upod dae cowpauy (gr dy ‘Porgn af. wn re-eleation it company, and ‘without authority nds of Bestia moneys then under member of a ry er of the company, in the course of his employment as such, was a fraud upon the pany for which Jay Gould is liable, with interest as is here! mye mentioned, and for which furthe: ‘ion is in part brongnt, it on or about the 28th day of December, @ further increase of $2,00),000 of the capital of the company was maha through the of January, a stock Jay Gould to be sold by or throug! use and beniedit of the company. ponent fur says that the market value of said stocks, at the — tim en the same were issued, was ‘at the rate or therenbouts, per id deponent says that the same were sold ferred by Jay Gould, or paid and acconnted the rate, whereby he received an aggregate sum Payable to the company by reason thereot of 000, in Violation of his duty as officer of the company, fraudulent- ly embezzied and misapplied thewhole ot said proceeds, and hag not paid or accounted for the same or any portion thereof to said company, and to the extent of said sum of compat began defrauded by Jay Gould, and the company is entitled to this further sum with literest added, as is hereinafter stated, and for this this action is iu part brought, ‘Btevenh—Doponent further says that he has onre- fully, examined the books ana vouchers of the com- pany ‘and that the accounts rendered or caused to. be rendered by Jay Gould, and which purport to show @ true state of ti rious accounts and matters aforesaid, as the same appear in the books of the firm, are not In fact trae correct, nor are they tran. t# of the books of the firm, but are fletitious and made for the purpose Of deoelving and defranding the And deponent charges that by these partially incorrect, fictitious aud fraudulent accounts, and by and trough the same devices, Jay Gould has had, until within a few ditys, all these acts concealed from’ the company and from’ its committees, directors and ofiicers and stock- holders, a true state of his accounts of the moneys of the company, as ofticer thereot. Tueyth--Deponent further says that the books of the company al kent under during the «period embracing months hereinatter retorred to were the general charge of Jay Gould as President and Treasurer, ‘That the books of the firm were, Ag appears from a careful ant thorough ex wiination thereot’ by deponent, (A erly kent; and in. deter- mining the account to (be bompany by reason of afore. gaid frauds misconduct ot fy Gould to the ex- tong stated in the first paragraph of this affidavit, ry nad deponcnt has been gover! the books of the firm and has made allowances and due credit tor all sums that appear by some ot the books of the company to have been paid to the company, or to have been in any manner accounted for by Jay Gould to it, or for which he 43 entitled to credit, and in thus determining the total sun due to the company, arising from the fucrs hereinbefore stated, deponent has been governed by said Jay Gould's books of account; that the true amount of his primary indebiedness, Incjuding all the Items Stated, and a tull allowance of all credits and without any charge for interest from the dates of the accruing of the respective items of such indebtedness, which Interest the said company is entitled to, is the whole aforesaid aggregated sum of $9,726,561 26, as stated in tho first pare: graph of this amdavit, P. H. WATSON, Sworn to before me this 21st day of November, 1372— Witwia A, Duxruy, Notary Public, New York county, WHAT MR, HENRY N. SMITH SWEARS. New Yous Surnsux Court—(Erlo Railway Company ys. Jay Gould.) —City and County of New York, 6.—Henry N, Smith, being duly sworn, deposes and says that he has read the affidavit of Peter H. Watson, President of the Enle Railway Company, the plaintiff in the above entitled cause; that the facts therein stated, touching the ‘organization, existence business — of e firm of Smith, Gould, Martin & Company aro, true, and that'the deponent was a member of the said firm, as therein stated. ‘This deponent further says that the books and accounts of the said firm were intended to be, and, as he believes, were, accurately kept, and that the’ results of the sald accounts, as in the affidavit of Peter Watson, respects are accurate and true, as this’ deponent believes. Deponent further says that the accounts in the books of Smith, Gould, Martin & Co., embracing the transactions in question, were kept unter the orders and supervision of Jay Gould, and the authorized transiers of accounts referred to in the amdavit of sald Peter H. Wat- son were made by the direction of said Gould. HENRY N. SMITH. Sworn before me this 224 day of November, 1872—W. A. Dunrny. Upon these papers AN APPLICATION was yesterday made to Judge E. L. Fancher, of the Supreme Court, for an order of arrest against Jay Gould. This was at once granted and was placed in the hands of Deputy Sheriff John McLaugiiin, at alittle after two o'clock. Mr. McLaughlin suc- ceeded in executing it at 34 Broad street at ten minutes before three, and the prisoner, without delay, came along to the oillce of tue Sheriif, feel- ing, probably, TOLERABLY SECURE as he noticed that in the order of arrest, in spite of the enormous sum stated in the amidavit to have been fraudulently embezzled—nearly ten mil- lions—only a trifling bagatelle of one million of dol- lars’ bail was specified. Who were with Gould at the time of his arrest, the Deputy Sheriff seemed very reluctant to disclose; but it was stated in other quarters that the BLACK-BEARDED EX-CHTEFTAIN of Erie was at the very moment of his capture en- gaged in consultation with his principal partners In his operations in Northwestern, At any rate, he came to the Sheriff's office accompanied by Mr. Horace F, Clark and Augustus Schell, who are re- and ported to have just at present § the most intimate financial relations _with him. He not seom specially agitated or excited, and the entire business of his arrest was transacted withinafew minutes, and passed off as ifit were one of the most common- Place and ordinary incidents of routine official duty. Fiity times as much fuss is made daily over a five dollar fine, with the dreadful alter: tive of “the Island,” in every police court in the city. After Mr. Gould had been FORMALLY SURRENDERED to the Sherif, Mr. Horace I. Clark and Mr. Au- gustus Schell at once avowed their readiness to furnish the required bail, and qualified in haif a million each, thus covering the specified million. Then, long before the wouder-stricken clerks and visitors at the Sheriff's office had recovered from the first raptures of astonishment, the three gentlemen who were the most conspicuous and certainly the most interested elements in the scene quictly wended their way into the outside world again, and, entering a carriage, DROVE BACK to Wall street, arriving there before the startling news of Gould’s arrest had begun to be generally circulated. In all they could not have been absent from the fleld of financial battle for much more than haifan hour, and their return was first gen- erally known to the brokers by the startling ad- vance in Northwest, which at once betrayed symptoms of some extraordinary event having transpired, WHAT HORACE F. CLARK SAYS. The Son-in-Law of Commodore Vander- bilt on the Situation—His Views of the Northwestern “Corner.” Shortly after six o'clock last evening a HERALD reporter ascended the stoop of No. 10 East Twenty-second street. He rang the bell, which summons was answered by a colored gentleman, of whom the reporter inquired, “Is Mr. Clark at home ?”’ and on receiving an afiirmative answer asked, by way of practice for the forthcoming in- terview, “CanIsee him?’ Not having power of attorney the colored individual couldn’t answer to the point, but said, ‘1’ll see." Up the broad stair- case he flew with the alacrity of lubricated electricity, and in a moment, ‘Certainly, show him up,” broke on the ears of the reporter, who was forthwith ushered into the presence of Mr. Horace F. Clark, the reputed partner of Jay Gould in -the Northwestern “corner.” Mr. Clark = was preparing to go out and was in quite a hurry, which, however, did not prevent his being very good-natured and communicative. He excused himself for not see- ing the reporter down stairs by stating that he had an engagement which required his im- | mediate attention, He therefore suggested, “On with the operation. with all the speed you may.” By operation the reporter supposed he meant the interview; but operation being a technical term in Mr. Clark's profession he was excused, notwithstanding the reporter in | question likes tohear a spade spoken of as a spade, According to instructions the operation was proceeded with, and judging from the sprightliness of Mr. Clark’s answer it was by no means a painful one. Mr. Clark wad making his tonsorial toilet when the reporter opened his query batteries. The fire did not seem to interrupt his operations, and between the wipes of the dather brush and the wisps of the razor the following answers were provoked from the man at the glass:— RePoRTER—Mr, Clark, I came to see you in ro- ference to the Northwestern ‘‘corner.”* Mr. CLaRK—Northwestern “corner? { don't know of anything of the kind. Has there beena corner? The HERALD man blushed at Mr. Clark getting ahead of him in _ interviewing but he covered his biu by saying if the President of a neighboring railroad company didn’t know he couldn’t be expected to. Mr. Clark then said that no “corner” existed except in the corner of some one’s brain, which information was duly hairs but not digested. reporter continued :—Well, Mr. Clark, if there is no “corner” how do you account for the extra- ordinary rise in the stock of the company from 75 ‘to 200 per cent? “That could be done without a ‘corner,’ sald Mr. Clark, hon as solemn as the lather on his face would permit. ReporteR—If it was not a “corner,” how do you account for it? There must be a reason, Mr. CLAKK—The only reason I can see is that peo- ple have arrived at a just sparc ton of the value of the stock, (And he smiled blandly.) Rerortra—You are one of Mr. Gould's bonds. men for $1,000,000, are you not? Mp, CLAWK~1 omp; and fo Prqyeat Your asking 1 will state that his arrost was nothing more or lees than a stock-jobt ration, Having thus faished his lists operation the re- thanking Mr. Ouee for bis kiad- porter withdrew, ness. AN INTERESTING NARRATIVE. How Jay Gould’s Afleged Frands Were Detected—Henry Smith’s Action in the Matter—Clear Proofs of Guilt. The following account of the undérlying causes of the present crisis in Walt Street Wére given last evening by a gentleman thoroughly conversant with the affairs of the Erie Ruilroad:— Immediately after Mr, Watson came inte power, in July last, he undertook to make up Mr. Gould’s accounts with the Erie Railroad for the three years preceding -through the books of the Erie Railroad Company, but he soon found that those books were both deficient and fraudulent, and he started new set of books, He continued at that for a num- ber of months, and it was not until about three weeks ago that he discovered it was abso- lutely impozsible to meet with success in that direction, He then applied to Mr. Smith fora statement oi the transactions between his firm and the Erie Company, during the two or three preced- ing years. Mr. Smith said he-was willing to give an account of the Erie Company of everything that was done by his firm, as he felt himself bound to do so as their agent. Then Mr. Watson was able to make a true account of details, show- ingin what manner this money had been abstracted, That examination and comparison were contin- ued until posteria (Thursday), when the facts were sudiciently developed to enable Mr. Watson to make an ailidavit imprisoning, Jay Gold, that would compel him to gorge the $19,000,000 which, as is now charged, he had traudulently acquired by taking advantage of bis position aa President of the foud 2}, : “But,’’ suggestee the reporter, “the current story is that Mr.’ Smith only atforded these facili- ties because Mr. Gould had got him in a tight place and was syucezing him on his transactions in Northwestern.” “ “That is altogether a mistake. It is due to Mr. Smith that he offered this assistance as much as three weeks ago, when Northwest was at low gates, and long before there was any sus- icion of a corner in the stock. He then jook the position that the Erie Company lad hes periect rignt to demand from him a transoript their account while Jay Gould was President. It was his duty to furnish it and he felt it to be so. And it is also due to Mr. Smith to say that so far as. the investigations thus far made have gone they have shown conclusively that whatever business was done by that firm with the Erie Railway Com- pally ae done in a legitimate and proper manner. ay Gould, as President, was practically the Erie Compuny, and they paid over to him every dollar that the company were entitled to.”” “Mr. Gould seems, at any rate, to have had little aiMiculty in getting bau?” “Yes, and his bondsmen are exactly the men who, a few months ago, made great ef- forts to get on the Erie directory by represent- ing to the English stockholders that if they were elected they would at Once secure the brine of Jay Gould’ to summary and exemplary justice. But they are now engaged in a stockjobbing opera- tiou with the very man whom they then de nounced,” JAY GOULD HAS NOTHING TO SAY. Yesterday afternoon a HERALD representative visited the oilice of Messrs. Osborn & Chapin, in Broad street, and inquired for Mr. Jay Gould. A gentleman very politely repliet that Mr. Gould wag notin, Ihe reporter ventured a second inquiry, and sent in his name, whereupon Mr. Gould seat out word that he was too busy to talk, A third request, however, for two minutes’ con- versation elicited the following response from Mr. Gould:—“‘You can say that I was arrested at the imstigation of some of the gentlemen who were short of Northwestern, and things will be all right to-morrow.” Ia the evening the HERALD representative visited Mr. Gould at his residence on Filth avenue, but the latter gentleman declined to be interviewed on the’ question, THE FIFTH AVENUE HOTEL LAST NIGHT. The Fifth Avenue Hotel was crowded last evem ing with buils and bears, who all appeared in a de- cidedly excited condition, In fact there was a general scare, and nobody appeared to have any definite information as to who were shaky or who were solid. Widespread rumors of all kinds were floating around and re- peated by one to the other, the story never losing strength, but gaining in magnitude by constant repetition. Several well known houses, such as Plume & Van Amburgh, Joslyn, Bach & Co. and others, were reported tobe heavy losers. The didiculty with the brokers appeared to be that nobody knew where this panic was going to stop, as, from the appearance of things, JAY GOULD could put the stock to 500 before to-morrow night, There appeared to be a good many present anx- jous to buy Northwestern and an offer to buy at 210 discovered no sellers. Another broker offered to sell 100 shares at 300, but that figure did not suit the shorts. From all accounts Uncle Dan ap- pears to have been caught this time, and, as rumor has it, ig at the tender mercies of Jay to the amount of about five millions, Henry Smith is also said to be short of North- western and his losses are estimated at from twa to three millions. There were rumors flying around last night that one of the large shorts had settled at 125, and that HENRY SMITH would not make any compromise. Quite an inter. esting legal discussion was carried on during the evening relative to Jay Gould. It appears that the latter gentleman is a special partner with the firm of Joslyn, Bach & Co., and the ques- tion was whether as a special partner he would not be liable for their losses. Such an idea natu- rally gave things rather a complicated turn. The opinion of several well-known lawers was taken on the subject, but their decisions were not unani mous. One stated as a special partner he was not liable, and another stated that by the statutes of New {ork State a special partner ina BANK OR INSURANCE company was liable for the debts of said bank or company. The brokers had all different opinions as to what course things would take to-morrow, Some said they were certain Jay Gould meant to squeeze the big = fish = ag close as he could, and in the intervat the small iy would burst pore settle the best way they could. Jay wouldprobably let them oif cheap, and devote Ils entire atiention to the case of Messrs, Daniel Drew and Henry Smith, There was a decided inclination evinced last evening to sell any stock on the list, a3 people were satisfied there would be a little bit of a panic in the morning that would probably shake the mar- ket two or three per cent. It was also rumored that Henry Smith had instigated Jay Gould's arrest in tie afternoon, and that consequently Jay intended to return the compliment to tie best of his endeavors. he crowd did not break up until nearly cleven P. M., and up to that time the intimates of the three leading operators bad not brought any news of a settie- ment of any kind between the longs and shorts. They finally went home to try and sleep or kill time until the opening of the Board this morning, PREVIOUS BIG “CORNERS.” The Great “Prarie Dog” Corner of 1855—0 The Harlem Corners of 1835 and 1864— The Morris Canal Corner of 1835—The Hudson River Corner of 1863—The Twa Rock Island Corners=The Fort Way: and the St. Paul=The Erie of 1367 and the great Gold Black Friday Corners— Their Histories and Incidents. When the stupendous corner had become a uti accomplt in Wali street yesterday, brokers cou- gregated together in familiar resorts and spoke of the corners of yore, when the financial world was upheaved by others equally, and in some cases still more tremendous than that of yesterday. They referred ta the old “corner” of many years ago, when Wail street was yet in its infancy, of the Philadelphia and Raritan Bay Railroad, at the time when the Camden and Amboy Railroad was anxious to bay up the road, And & little later, the corne ia Orange, Worcester and Stonington, when, as wellae memory serves us, Morris Ketchum, the well- known banker, preferred to vacate his seat in the Stock Exchange to buying up the shares at ai U- fated price to meet his “shorts,” It was at a time when stock speculations had not beom mado legal by process of legislative enactments, and there was nothing to prevent Ketchum from adopt ing this course. The famous MORKIS CANAL CORNER * took place In 1835, when a clique in Newark an@ i New York bought up all the stock of the corpor® tion at thirty or forty per cent below par. clique (he went jute the atirect aud made