Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1869-07-24
NEW SERIES. NO. 282

II. That the city charter requires that h
Mayor and each officer of the City Counc
shall be the owner of real estate. and declare
the Office vacant when they shall cease to OR
realty.
Y That horses belonging to the city haVt
recently been sold under executions. an
bought in by defendants. as persons are pledges
By them. a1d that the fire engines and Othe
property will soon have to be sold.
IL. That defendants in q published report o
the Finance Committee admitted their inability
to meet the debts or raise any money.
| IL That the checks issued as collateral AID
Ior all other purposes, are now on the market,
ana persons owing taxes buy these at large
| discount, and pay their taxes with them, and
| tnus the corporation is getting no money with
when 70 pay the debts or expenses.
10. mat By their course of conduct they have
destroyed the credit of the city
=, 10. That they have kept no books showing
| these Transactions. or kept them concealed
| IRON the public. until matters had rea he'd
Sucn depiorabie condition that IL became a
matter ofpublic notoriety.
| IL. That one transaction is about rs follow
/ The corporation issued its note for SfO0O
dated March, 9. 1863. and due at three
bonds were deposited as eollaterals with
| the loans. to the amount Of 81, 600 with power
to sell them at anv time after the note fell due
and at any place, publicly Orprivately, without
giving the city notice. and without advertising;
ana If sold at public sale, the payee was au-
thOrized to buy the same and is not to be held
responsible for more than the net proceeds af-
| ter d2ducting the costs of the sale; and that
Sozz-OO notes had on issued on these terms,
anu TO secure which SSO0.OOO worth OF city
checks or bonds had been deposited with the
party and that many of these transactions
pave been made with unknOwR and ifrespOnsi
pie parties. and with the express stipulation in
some cases that the eOliaterals might be used
before the maturity Of the principal debt.
20. 1nat no books OF these transactions we're
Kept and nothing to show what had been done
Win the money received.
10. That Ogden is an officer Of the Peoples
Bang and was. during the municipal year end
ing October l. 1865. chairman of the municipal
Finance Committee. and as such desired to raise
S46.OOO, and gave q note payable to said bank,
secured by $4,000 collaterals in city checks.
worth from eighty to eighty FIVE cents on the
dollar; and that there had been no return of
these collaterals or their proceeds and that Og-
den now refuses to disclose the transaction to
anybody.
%. That the defendants have ceased to make
al efforts TO raise money to meet demands.
and the whole property must be sold unless
something Il done; that they admit that they
cannot save the fire engines and Waterworks
from sale by execution.
81. That since October /, 1868. they have is
sued In checks, 81. sos of which S75S.0O0 are
known to DO issued without authority Of law.
and many of the others were issued for illegal
and unlawful purposes.
p That many of these checks issued as col
laterals, have been put into the market with
the assent Of defendants. and subsequently
lahOu w " tue CITY IN payment OF Sh1ess anu
thereby the city has lost several hundred thou
sand dollars; that a clear majority Of defend
ants have aided in these transactions. and
aided IN keeping them secret, and purpOsely
permitted them to go on. without making any
report.
q. That the assessment for the present year
Tor taxes IL tWenty-One mills on the dollar. and
this Is made TO q large extent, to meet unlaw
fuI and illegal engagements.
"A. The bill prsys that defendants be declared
no longer officers, and that they be enjOined
from all disposition of the property of the city.
and be held accountable for all losses; and that
receiver be appointed to take charge Of all
taxes and other property of the city, and for
general relief.
ANSWER,
The defendants, In ans wer to the 6rst allega.
ton. say that the amount of the bonds Of the
Collector and Treasurer Is O matter within
their pOvinee exclusively, and that in their dis
erection they have adopted as a penalty $4,000.
because that had heretofore and for many years
been the amount of said bonds. and besides the
collector is required to make semi-mORthly set
Elements with the Treasurer. and therefore no
risk was ever run; that as to the sureties on the
bonds. this, 90. was q matter for them to deter
mine, and that no court has a supervisory
power over them. and besides the bonds are
good for double the amount of the penalties;
that in the period OF seven months the Teas
urer received only s772. 622.02 all of which was
reeeiy ed in checks aud not dime in money,
and for all of which be holds proper vouchers,
and that he has made regular monthly state
ments as required BY law. and has cancelled
checks as soon as they were paid over to him
by the Collector. that the W ater tax Collector
bond is for 5000, but he is also required TO
make semi-monthly settlements, and the
amount in his hands seldom exceeds 81 900.
Respondents say that the judgments against
the city are moro than S275. 600, AS charged and
that none have been rendered in the last two or
three weeks.
In answer to the sixth allegation Of the bill.
respondents refer to and adopt statement
made lin print by the chairman OF the Finance
~, 20 fha aff.
I that the statement made in the chairman's re-
port is too large by SIS, 500. With this excep-
ton they adopt and file said statement. denying
all fraud or dishonest purpose; that checks were
not issued for saIe but for the purpose specified
in said statement; that all said checks were Is
sued by virtue of the following act: That the
1 Mayor be. and he is hereby authorized TO Dor
row money, under the direction OF the Finance
L Committee. in sums sufficient to discharge the
| obligations against the corporation Of Nash
i vile, due and unpaid. with such securities a:
| said Mayor aud Finance Committee may be
able to give. and upon the best terms for the
Il corporation that they can obtain, and that the
Il Mayor and Finance Committee report theiI
| transactions to the next meeting thereafter.
/ approved October IS, 1868; that it was not in
tended to allow the collaterais to be forfeited
l and they believe that but lew have been used
that these were the best terms upon which theJ
could borrow money; that none of the CHECKS
to redeem all; that they were issued y the
L Finance Committee TO be used under said reso-
L luton, and were made payable to 1t o. bearer;
that II Is possible that some were maze payable
to fictitious payeoS aud that this is Dot material;
but that in all cases but one receipSs were taken
from the parties to return the c0llaierals. SAID
i parties being responsible persons. mat none OF
4 the transactions are usuriOus as they are ad-
Il vised: that the intent of the scheme was to
| Bvoid usury. and yet offer tae lender such profit
and security IS to induce the loan. and they
refer TO the specimen transactions, as set out n
the chairman's report: they deny that a large
L portion of the cOllaterals have Deen used. Per-
mission was given Sax to use his, us be Wsuld
,Psh Vh n otbsr coIaer.is are siII held
/ BY the originaJ parties, Respondents further
say that il WSs not expressly stipulated IN the
l written agreement with the parties that the
colIaterals should not be used. but it was so
/ understood; that the city when suel upon its
checks mas never made the defense that they
i were void but once, and that WAS whei aided by
the Tax Payers Association and their counsel,
pad were then defeated; that the city has never
put in the plea of usury, because If successful it
would have defeated all future loans. Respond
ents file Sax's deposition. showing his transae-
| tons. Respondents deny that they are reckless
| in their expenditures. and say that the two last
administrations have spent less by $5cO. GOO than
| the two preceding. Respondents say that zach
l and all of them have the necessary pro
/ say that the CITY is not bankrupt /;
l that it owns 100000 worth Of property,
| and has taxes due it TO upwards Of 10000.
1 They admit that some horses and mules belong
1 ing to the city have been sold under execution,
| but they were bought in by officials that the
city might redeem them, and 1t IS understood
that the city shall suffer no harm by reason Of
Ievies on the fire engines. if it can be avoided
That they cannot raise money upon checks. as
| heretofore, because Of an Injunction granted in
| another suit. Respondents do not know that
l apy executions are at present pressing upon
1 city property; that they offered to put the
| finances Of the city in the hands Of wealthy and
1 financial men, but the offer was refused; that
thew have reissued checks taken up only for the
1 purpOses of ehan1e. They deny all fraud in the
| BrOckway transaction, dnd say they borrowed
| the money at per cent. and took his Obliga
i tions to return the cOllaterals in the usual
form common to all the banks OF the city;
/ that the transaction with the Peoples Bank
/ was honest, that the bank loaned the
city SIC 900, and took S12,O OF the checks AS
eollaterals, sold the checks; ana after paying
/ the debt and interest placed the balance to the
i credit of the city. Respondents deny that they
| knew of the details Of the dOings Of the Finance
| Committee, but hsd full confidence in that com
| mittee and its transactions were kept secret for
| reasons set forth in exhibit A. This exhibit is
| publishe9 statement, made by the chairman
| of the FiAanee Committee. This statement. in
| addition to much other matter, disclOses much
| that relates to the allegations Of the bill. II
| ststss that the administration commencing IN
| october, 1867, Inherited from the preeeding
I administration $2l25l0 Of floating debt. besides
| the regular funded debt of the city. anu the
| debt was increased by the administration ending
October 1868, to $278. 81, and tEis augmented
debt came to the present adptnis tratlon: that
the success of persons dealDf IN NEE; seiau
became appalling thai t5sy have tb paid of judg
| ntL. ;ndg1anfs Hlling for S2SI 1872 o.;
tbae the Chairman lie has borrowed S56S.66l.-
81, and has deposissd checks as eollaterals 70
!ne =; ~ ocLsIiuce Oct /, 1868, 81, 555, rs So
rs tbese there J5w remains outstanding. So.
9a5 IS that tbs Increase of debt in eight months
! 80 iean sSSS 1858 50, to which should be
.G al 5lg debt sos, $50 50, which. added TO
w LTD debt of 81 81 ". make total debt
~ c;fy 81 us, 125. AZ; admits that the cheek
OF 49,, Wv. Of raising money is bad one. but wss
syI5ested. This officer. after setting out the
IN IluIs,rrassmenIs which have surrounded him,
savs: Il cannot raise any more money IN the
| "a of the opposition now against me; mean
| 1,'s exeeutions continue constantly to threaten