Defalcations seem to be comin’ to the front lately. A kind of epidemic of ‘em is threatened, just as every now and then we have regular seasons of forgeries, arson, murder and suicide. And this reminds me of several noted forgery cases which made at the time of their occurrence a big stir in New York.
I well recollect the case of “Young Gray,” as he was called, of 44 Broad street.
Gray wasn’t at all gray in appearance; he had blond hair and a light mustache, and was very youthful in face. He really ought to have been called Green, for he had a “green” and rather sheepish look, and didn’t seem to be a bit the keen chap he was, for he was as keen as a razor.
He bounced from a little office on Exchange place to a splendid office on Broad street, fitted up in what they call “palatial style.” And pretty soon everybody got to be talkin’ of Gray.
It was Gray this and Gray that; everythin’ was Gray. He was more talked about than Drew or Vanderbilt for awhile, though he always kept up in air of mystery, and never made himself “common.” It is the “mystery” about a man or woman, that takes in real life, just as much as in a play.
He did a tremendous business for awhile, then he was “found out.” His “racket” was forgin’ government bonds, that is foreign’ or alterin’ the amounts on ‘em. The bonds he dealt in were always genuine, so were the signatures on ‘em. He was no fool, and if he had tried to forge bonds or signatures he would have been caught right off. But he merely altered the amounts, and that gave him lee-way for awhile. He altered bonds of one thousand to ten thousand. He “raised” bonds of five thousand to fifty thousand, and so on. Altogether he obtained by the simple and easy means about a quarter of a million dollars, then the crash came, and the iron shutters on 44 Broad street were down, and–Young Gray was a goner.
But the forgeries of young Ketchum made more of a stir than even Gray’s, because he was better known. The Ketchums were a big bugs in society and on the street, and everybody thought ‘em as good as gold.
This young Ketchum was the smartest of the whole lot of the Ketchums, and by sheer brains soon got control of the business of the house. Everybody envied him, everybody trusted him. Fathers pointed him out to their sons as a bright example. He didn’t seem to have any vices, and was all “business.”
But his real business was forgin’ gold certificates. These gold certificates, certified at the gold bank, passed like gold, in fact they were gold, for they represented it. Ketchum drew up any quantity of these, forged the certifications capitally, and scattered ‘em right and left–especially “left,” for all who took ‘em found themselves “left.” For a while all went along swimmin’ly, and Ketchum handled hundreds of thousands of dollars of forged money, though he didn’t seem to spend any more money than he did before.
One day a rich German Banker loaned Ketchum a lot of money on one of these forged checks. After he had loaned the money he examined the check. That’s a curious way they have of doin’ things in Wall Street, which is the most careless street in the world.
On examination he didn’t like the looks of the check at all. Among other things the very name of the house on the check was spelled wrong. You see Ketchum had done so much forgin’ by this time he had got kind of careless himself, and didn’t take as much trouble with his checks as he had at first.
It’s the way that all rogues have, and it generally trips ‘em up sooner or later. The rich German made up his mind that there was somethin’ queer about the check and went and called on young Ketchum. Ketchum at once paid him back his money and got the check back. But the matter didn’t stop there. The rich German put some of his friends on their guard. These friends got to talkin’, and when Ketchum presented one of his biggest and best checks at one of the biggest and best bankin’ houses it was refused. Ketchum didn’t say a word, made no fuss, but knew his time had come.
Next day the fact of his forgeries came out, and there was a howl from one end of the street to the other. Everybody had been “bit” and everybody wanted to get even. The Ketchums were rich, and the victims of young Ketchum went for the old house, and pulled it down. Nobody had any mercy on ‘em, for they had had in their time no mercy on anybody. It was tit for tat.
Ketchum disappeared, though he stayed where a great many “disappear,” right in New York–never so much alone as in a crowd. He hid in cheap hash houses all day, and then roamed through the streets at night, hearin’ himself talked about and cursed.
Meanwhile, arrangements were bein’ made to pay up the amount of his forgeries, and to save him from State’s prison. The parties he had victimized were seen and agreed not to appear against him if they got their money. But one day he ventured out, for the first time in the sunlight, was seen, recognized, and got into prison.
But the wildest, strangest fraud of the lot was what has been known as the Schuyler fraud. The fraud itself wasn’t so very strange, bein’ only a gigantic railroad swindle, but some of the circumstances about the swindler and his family were very peculiar, and show what a strange thing New York life is.
The man himself kept two establishments a goin’ for years, right here in New York city, without the one interferin’ with the other in the slightest. At one of the swell hotels he had his rooms as a bachelor, and here he entertained all the big bugs of his day–all the money kings, as they call ‘em. He didn’t associate with ladies much, and wasn’t regarded as a marryin’ man.
Uptown he had a snug little house of his own, a perfect little nest of a house. French flats weren’t known in New York then or it would have been a French flat. Here he went under an assumed name, and here in this nest of a house, under this assumed name, he had a beautiful woman who passed as his wife, and who was his wife in all but the marriage ceremony. By this lady he had in the course of years a family, and yet nobody in this big, and constantly gettin’ bigger, city of New York ever dropped upon his secret. He managed his double life just as splendidly as he did his railroad swindles. He left nothin’ to chance. He believed in detail, and saw to all the little things of life, knowin’, like the smart man that he was, that the big things would see to ‘emselves.
He always left his uptown house at an early hour. The lady paid all the bills of the house personally, and saw all the people who called, he himself seein’ nobody uptown. Then he would go to his office, transact his business, and probably wind up the day at his rooms at the hotel. Then he would either pass the night at his hotel, or tellin’ the clerk that he was called out of town, would jump into a hack, and go uptown. But he would never go or drive, at any time, direct from his hotel to his uptown house. He would always double on his tracks, and go from one of his homes to the other “by installments.” This was one of his cast-iron rules, which he stuck to for years. Another of his cast-iron rules was always to change his clothes, as soon as he entered his uptown house, and change ‘em back again just before he left it. He never carried any papers or keys or things belongin’ to one life into the other life–he kept his hotel and his house as distinct as if they belonged to two different men. Everythin’ got for the uptown house was purchased, if possible, uptown. The lady herself made it a cast-iron rule never to go downtown. And on no account did the gentleman with two establishments go out with the lady in public. They never rode out together or walked out together, or traveled anywhere together. They both went to the races sometimes, but in different carriages, and whenever they met in public, which was very seldom, why they didn’t know each other–were perfect strangers–that was all. With most women it would have been impossible to carry out those rules. The cast-iron in ‘em would have soon been castaway; but this particular woman was a quiet stay-at-home body, and knew when she was well off.
So the railroad man had no trouble with her, and thus for nearly thirteen years this leadin’ man in this great city was a non-marryin’, gay bachelor, at one end of it, and a sober, married man with a family (among whom was a beautiful daughter, the child of the lady, who passed of course for their own child), at the other end. In a play they would say this sort of a thing was impossible, but it really happened, and things like it are really happenin’ every day in this big, queer town.
The daughter just mentioned went to the very best boardin’ school, and while there a young clergyman saw her and fell in love with her. She was a very good girl, as well as a pretty one, and, of course, believed the gentleman with two establishments to be her father, and when the young clergyman, who, of course, believed the young lady to be the daughter of very respectable parents, got interested in her, she referred him to the gentleman with two establishments as her father. Then, of course, the young clergyman waited upon the gentleman with two establishments, under his assumed name, at his uptown house, bein’ the first gentleman that had ever called upon him at his uptown establishment. Of course, the young clergyman called upon the gentleman durin’ the evenin’, when he was “at home.” The servin’ girl, hearin’ his ring, went to the door, and although surprised at seein’ a visitor, of course ushered the clergyman into the parlor where the gentleman with two establishments and his lady were seated together. The gentleman was surprised at seein’ the clergyman, but the clergyman was still more surprised at seein’ the gentleman, for, as luck had it, the young clergyman had once received quite a large subscription to some fashionable charity from the gentleman under his real name at his hotel, and recognized him here under his false name at once. Spite of one of the men bein’ a clergyman, there would have been the devil to pay, hadn’t the clergyman, of course been naturally anxious, for the sake of the pretty girl he loved, to make the best of the situation.
To make what might otherwise be a long story short the clergyman became possessed in confidence of the secret, and fixed it up after an odd fashion. He did what I never heard of any other minister doin’ before or since. He first married the supposed father and the real mother of the girl he loved, and then a week or so after he himself got married to their daughter.
The secret was kept for awhile, but it leaked out at last, Then another odd thing took place, showin’ what New York society, as they call it, is. The gentleman with two establishments gave up his hotel and came right forward as havin’ been a married man in secret all the time, and because he had money “society” didn’t care, and made a great deal of his family, although everybody knew or suspected that he hadn’t been married till the last moment.
But when one day the gentleman, havin’ become a railroad king, became a railroad defaulter, and took leg bail, then and not till then New York society got a fit of indignant virtue, and wouldn’t have anythin’ to do with his family, although his family didn’t have anything to do with the defalcations.
Such is life in New York, and such is New York’s indignant virtue and sense of justice. And as it was twenty years ago, it is to-day. New York hasn’t changed much the last thirty years, except in size.
[Editor’s notes: Though all three of these cases of forgery shocked Wall Street, the treachery of Ketchum and Schuyler represented betrayals of a long-time family brokerage house and a long-time railroad magnate, respectively.
Ketchum was sentenced to Sing Sing for four and a half years; he served a little less than four, and his rights were restored. Schuyler fled first to Canada, and then to Europe, where he died a few years later.
Willian E. Gray was a more curious character, who apparently embraced the life of a professional criminal. Though not profiled with a “rogue’s gallery” portrait, he was mentioned in a lengthy profile in NYPD Superintendent Thomas Byrne’s landmark book, Professional Criminals of America (1886). The entry:
William E. Gray was the son of a gentleman who for many years was Chaplain of the United States Senate. This honorable position held by the father gained for the son an entre to the best circles of society, but which he sadly abused by his misconduct. He was extradited from England in July, 1878, for forging certificates to the amount of $30,000, issued by the State of New York for the payment of bounties of
volunteers during the late war. Gray was tried and convicted, and sentenced to ten years in Sing Sing on May 29, 1879. During the trial his counsel took a great many exceptions, and carried the case to the Court of Appeals, which took some years, during which time he was locked up in the Tombs. He was finally set free in May, 1881, and is now living In this city.
The following very interesting account of Gray was published in one of the New York papers in May, 1880:
“Gray is a young man of pleasant address and agreeable manners, and while operating in Wall Street many years ago, was regarded as a shrewd speculator and an intelligent observer of financial events. Born of respectable parents, well educated, and given a good start in life, he chose a career of crime in preference to respectability with a more gradual fortune. His father, Rev. E. H. Gray, of Shelburne Falls, Mass., was Chaplain of the United States Senate from 1861 to 1869. After leaving college William E. Gray was appointed to a clerkship in the Fourth Auditor’s office of the United States Treasury Department, and served with credit and fidelity until 1866, when he resigned. The following year he came to New York, bringing letters of recommendation from Gen. Butler, Senator Morrill, Acting Vice-President Foster,
National Bank Examiner Callander, Senators Pomeroy and Fessenden and others, upon whom he always called when they visited this city. He was then twenty-three years of age, and extremely youthful In appearance. He was abstemious in his habits, refraining from liquors and tobacco, which gained for him the reputation of a model young man.
“His first employment in this city was as clerk for A. W. Dimock & Co., of No. 26 Pine Street, to whom he represented that he desired to learn the secrets of stock brokerage so as to enter the street on his account. In May, 1869, he left Dimock & Co., and began business on his own account in a small way at the office of Mr. J. G. Sands, No. 36 New Street. Among others, Mr. J. G. Eastman gave him power of attorney to act In the Gold Room, and the young Washingtonian was launched on the rough sea of Wall Street speculation under the most favorable auspices. It was here, as far as can be learned, that Gray began the sharp practices which subsequently made him a fugitive from justice, dodging the officers of the law, and finally landed him in the Tombs, awaiting a decision that may consign him to State prison for a long term of years. His first act was to borrow $1,600 on three Government bonds from George H. Lewis, who in turn re-hypothecated them to L. W. Morse for $3,000. Something he had learned awakened Mr. Morse’s suspicions, and he called in the loan. Neither Lewis nor Gray responded, and the securities were sold at a loss to Mr. Morse. The purchaser afterwards discovered that the bonds had been stolen from the Common Prayer-Book Society of New York several months previously. Gray refused to make good Mr. Morse’s loss, and he was arrested and thrown into Ludlow Street jail. His father intervened, paid the money, and young Gray was released. He next victimized William H. Chapman, a South Street merchant, and kept up a system of ‘kiting’ on Mr. Eastman’s credit, but his little game was discovered in time to prevent any serious losses.
“In the autumn of the same year. Gray gave out that he expected a legacy of $50,000 from a wealthy aunt, who had accommodatingly died, which, with $10,000 ready cash which he claimed to own, he proposed to enlarge his business operations. He purchased from G. H. Stebbins’ Son the lease of the offices No. 44 Broad Street, which were afterward occupied by Victoria Woodhull and Tenny Claflin. He furnished
the rooms in elaborate style, and over the door a sign was hung with the name of W. E. Gray & Co. Who the company was became a standing conundrum on the street, but it afterwards leaked out that it was composed of T. H. Pratt, William J. Sharkey, William S. Ree, George Larabee, and one or two others. All the firm afterwards came to grief. Sharkey is a refugee, having murdered Dunne ; Glover was convicted as an accomplice in the Boylston Bank robbery ; Leighton was arrested in California for being connected with a mining swindle, and Ree and Larrabee have been frequently before the public in connection with heavy forgeries. While operating in a pool on Quartz Hill mining stock. Gray and his associates came into possession of sixteen New York State Bounty Loan certificates of $1,000 each, which had been stolen a year previous from C. W. Woolsey, a Pine Street broker ; two similar bonds for $15,000 originally issued to Elizabeth F. Taylor, and other stolen Government and miscellaneous securities. The bounty loan certificates were raised by means of chemicals from $1,000 to $10,000 each, and the registers were changed to W. E. Gray & Co. Pratt was supposed to have done the forging, and that Gray aided in floating the bonds. This worked so well that the system was kept up for a long time. In December, 1879, the forgeries were discovered, and Gray was sharply catechised by bank officers and detectives. Gathering together all his available funds, some $50,000, he left his office in a carriage, in company with a veiled woman, and disappeared from view, and for two years all trace of him was lost. His total debts were $310,000, and the assets he left behind consisted of $20,000, leaving him a net profit of $280,000.
“After Gray’s departure a letter was found in his office addressed to a female clerk in the Treasury Department, whom he designated as ‘Dear Birdie.’ He told her that he had insured his life for $5,000 in her favor. The Mining Board expelled Gray, and the Stock Exchange gave Detective Tom Sampson instructions to find where he was and to follow him up and arrest him. Sampson, after following numerous clues, learned that Gray was luxuriating in London under the name of James Peabody
Morgan, a pretended nephew of George Peabody, the great philanthropist. Being introduced one day to a genuine relative of Mr. Peabody, and being sharply cornered, he laughed the matter off as a joke, and was afterwards known as James Payson Morgan. He dressed like a noble, courted the society of snobs, and rejoiced in the ownership of a finer tandem team than the Prince of Wales drove. At a dinner given by the niece of Baron Rothschild, when only twenty-eight years of age, he made an after-dinner speech on finances which astonished all his hearers. He became acquainted with Mr. Chatteris, a London banker, and he placed his son in business with Gray, handing him 10,000 pounds, and accepting as security $50,000 in spurious United States bonds. The venture was not a success, but Gray secured 5000 more pounds from old Mr. Chatteris by showing him an order, believed to have been forged, stating that $30,000 had been
placed to his credit in New York. Young Chatteris quarreled with Gray, and accused him of swindling, when he drew a pistol and was arrested. The bonds deposited with Mr. Chatteris turned out to be stolen and caveated bonds, and Detective Sampson immediately, on learning the facts, had Gray indicted, and, having secured extradition papers, sailed for London on November 18, 1871. Gray, alias Morgan, cunningly made his escape and crossed over to Paris. Captain Sampson chased him all over the
Continent, and, failing to catch him, returned to New York.
“Gray next turned up on the Hague as Dr. Georgius Colletso, oculist, and graduate of the Royal College of Surgeons of London, and possessor of diplomas which were never legally issued. Here he attempted to sell to the wealthy capitalists of the Hague a mythical silver mine in Colorado. Gray next appeared in Texas under the name of Colletso, where he inaugurated the Bastrop Coal Mining Company — another mythical
concern. Here he formed an alliance with Colonel William Fitzcharles McCarty, and together they returned to England and flooded the market with the stock of the Wichita Copper Company, limited. They raised $20,000 to start the thing, and would have secured more had not the Englishmen learned that the entire thing was an arrant swindle. This led to his identity, and again Captain Sampson started out after him.
Upon his arrival he found Gray in custody, and apparently anxious to return to America. Again the persevering veteran detective was doomed to disappointment. Secretary Fish declined to give a promise that Gray should not be tried on any other charge than was contained in the extradition papers, and he was released by the British authorities. This position was subsequently receded from, and George B. Mickle, a son of ex-Mayor Mickle, meeting Gray in Edinburgh, gave Captain Sampson information, and Gray was arrested in London. Captain Sampson was again deputized by the Stock Exchange to go after the long absent prisoner, but being detained here on important Government business, the late Captain Kealy was selected in his stead. Gray was brought back, followed by a niece of Balfe, the great composer, who is his wife. She still resides in this city. As a matter of historic equity, it may be mentioned that Seth Johnson, who was Gray’s most intimate friend when in the Treasury Department, was convicted in 1872 of embezzling $50,000.”]
