- curities bearing different rates of interest which
were then burdening the road. Jay Gould and Russel Sage were then directors of both the Union and the Kansas Pacific roads, and they were made trustees of this mortgage. Among the assets covered by this mortgage were 30,000 shares of the Denver Pacific railroad, then of little value, but which, under the plan of consolidation which Gould was then maturing, would become of great value. Sidney Dillon, who was associated with Gould and Sage in all three roads, asked them to release these stocks from the lien of the mortgage. Gould and Sage sat down at the same desk at which Dillon had written this modest request, and wrote suggesting that an action should be brought against them in the courts for the release of the stock. The action was immediately brought before Judge Donohue, to which Gould and Sage made no defense. Dillon testified that the stock was worth only $200,000 or $300,000. The order was given, the stock released, and the day after the consolidation was effected which made the stock worth its face value, or $3,000,000.
Stoop & Rens, of Amsterdam, claiming to be holders of the bonds, brought the charge against Mr. Gould and Mr. Sage that they had, without consulting with the other bondholders, appropriated to themselves the trust asset of $3,000,000.
This revelation was made October 17, 1877, and an effort was made to secure the indictment of Messrs. Sage and Gould. It was a matter which at once attracted the widest interest. District
