His unauthorized use of the company's
funds began it is stated in 1881. He in
vested heavily in the Mexican Central
securities at high prices and suc
ceeded until only a few days ago
in concealing his illegal operations from
the other officers of the company. The
discovery of his irregularities was caused
by the election of Charles H. Hersey to
the presidency of the company. That
gentleman and Hon. Benjamin Dean, one
of the directors, began an investigation
about ten days ago which resulted in
an application for a warrant for
his arrest. Soon after his arrest he turn
ed over to the directors all of his prop
erty, worth about $15,000, and securities
worth about SIO,OOO. He also made over
his stock contracts, which he and the di
rectors believe will nearly, if not
quite, make good the full amount of
his embezzlement. Reed was arraign
ed in the municipal court this after
noon. He waived examination and was
held in $50,000 bonds for the grand
jury, in default of which lie was commit
ted to jail. Gentlemen who are familiar
with the inside facts say it will be im
possible for some time yet to stato posi
tively how much the loss will be. An ex
pert has been at work on the books for
a week, and from present appearances,
says this gentlaman, it would seem as if
the company has been practically ruined
by Read's defalcations. Undoubtedly its
capital stock and surplus will be wiped
out antirely. After losing all the money
stolen from the company, Reed
put up over issues of the com
pany’s stock as collateral for margins on
stocks being carried for him. So mach
of the company's paper being offered
without apparently any reason for it. as
it was supposed the company had money
on hand to pay the bills, aroused suspic
ion and the directors were notified and
an investigation resulted. He was of a
quiet, reticent disposition, moderate in
his expenditures and with no bad habits
as far as known. Domestic troubles are
believed to have hastened him in his
downward career.
