Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1869-02-03
Bargain, Intrigue and C0rFup-
- ton.

Inc following Is q brief synopsis OF tht
report of the Special Committee of thu
House of Representatives, appointed t.
examine the School Fund corruption
submitted on yesterday: ~,
! Mr.. Rutter being Intercepted by the
committee, said that he was President Of
the National Bank Of Memphis, and a
stakeholder in it to the amount of s..
j. B. Hutchinson was stakeholder to the
amount of 5000, and was Vice President.
Jno. L. Eichburg was also astockholder OF
| 81, 900. Charles Collum was also stock
holder Of $4,000, (and others whose
names l will furnish.) 1 was President
all the time. Hutchinson was Vice Presi-
dent for about two thirds ofthe time gifts
existence, and z. II. Whitesmore was
acting Vice President for the balance of
the time. j. l.. Taylor was cashier for the
purpose Of organization after that w. b.
Brisburn was cashier; after him Walter
S. Morgan was cashier. He was recom>
mended US by Hutchinson. Alter him
the present cashier, w. A. Hill, who
claims to be receiver under the banking
law. The bank was organized, | think,
in June, 1865, and went into the hands
the receiver June, 1867.
Question. What was the actual cash
capital paid by stockholders?
A. The law requires subscription Of
100000, with $4,000 paid in before
the franchise would be granted. We
got the subscription of the requisite
amount; and as $4,000 had to be paid
in, Mr.. J. B. Hutchinson, formerly of
the National Bank of the Metropolis, of
Washington, furnished the $4,000, and
the requisite oath was made. After this
Hutchinson requested me to call in the
stock, to replace the money to his bank
or to him. l called in all l could
think about s. (see books. / never
could call in any more.
Q. Were the 100000 of bonds ever
deposited, and if so, how and where?
A. The 100000 Of bonds were de-
posted by Hutchinson, and the 100000
Of circulation were obtained by him and
sent to the bank at Memphis, and was
entered on the books of the bank. This
circulation was sent out to Memphis in
bundles of $4,000 or $4,000 at time,
after the circulation was signed. Part
was issued by the bank, and part by
dividends. The whole $4,000 was put
into circulation. Hutchinson was repaid
for the bonds he had deposited by his
drafts on the Tennessee National Bank of
Memphis. Before we procured the de-
post of the funds, known as the school
fund, we had not paid Hutchinson fully,
and we sent the $6lS,250 of bonds, as
we obtained them, to the National
Bank of the Metropolis at Washing
ton. The funds had only been in
Memphis short time when
sent them. They were sent TO Hutchin>
son with instructions not to sell them,
and We took receipt for them as . "spe~
cial deposit" He did not, however, dis
pose Of them. lie went TO the First
National Bank Of New York, and other
banks OF that city, and hypothetical
nearly all of said bonds for loan. Hutch
inSon was largely indebted to the United
States government for deposits, and aps
piled some of the proceeds for the liqui-
datiOn of his Indebtedness.
Q. How was Hutchinson repaid for
the 100000 he deposited in bonds.
A. The 100000 that he first put up
under the law went to buy proportional
amount Of the bonds. lie advanced the
balance, and was repaid by drafts on the
bank at Memphis; and not having been
fully repaid at the time, the school fund
was sent to him. We had drawn our
account down to the point that he was
indebted to US some 100000 or more,
aud he then refused to honor our drafts
Our cashier (MOrgan) telegraphed Hutch
inson in regard TO our drawing upon him
as follows: "Rutter ordered the drafts
drawn; it was not my tault. There are
no more out" This was my first in
formation that Hutchinson intended to
deny our right to draw upon him to the
full extent of our deposit. Hutchinson
had increased his stock to $4,000, and
after the trouble with the State was
made public, he desired to have his
stock credited up TO him, so that it would
appear that he had settled upi in full with
the bank. November 10 / telegraphed
to Sherman TO remove our collaterals
from the hands of Hutchinson, | having
heard that they were hypothetical in
New York. Mr.. Hill and went to see
him, and | urged him to secure their re-
turn. also consulted lawyer TO find if /
could have him arrested for converting a
special deposit. He made promises,
which he broke. We negotiated with
jay Cooke in order to secure the bonds
and pay the amounts for which they were
hypothetical. By the use of checks and
money | succeeded in getting $550,000,
and had to deposit it with Jay Cooke &
Co. as collateral. October q, 1866,
telegraphed Jay Cooke & Co. to sell the
$j50000 in bonds and report the bal
ance, taking out his charges and the inter
est due him, holding balance subject to
draft.
Here followed long correspondence,
principally on the side of Hutchinson.
A telegram from Washington, on June
IA, 1866, from Hutchinson to Rutter,
says: 81 propose to make you a govern
nent depository to morrow. The mo-
mont you receive the certificate publish
it, and commence business at once"
The certificate was procured accOrd-
ingly, through the agency, perhaps, of
Hutchinson, who was afterward rewarded
by the deposit of the school fund, which
he used as witness stated above.
In the second letter, dated Washington,
June %, 1865, he says: my brother
takes out blank draft, which | have in
structed him to use in tho purchase Of
ouartermasters' certificates.
You must bear in mind your first quarters
ly report must be made before the 10th
OF July. In making it advise you to put
under the head of capital stock paid it,
$4,000, which is all you are required to
do. Tho Internal Revenue
Commissioner has not yet decided to
give us the internal revenue deposits,
but will, think, give us part OF them.
Be very vigilaBt in procuring
deposits, in order TO got as many as
possible before your competition in.
Creases. Our surplus account is being
pretty well drawn upon, and l am con-
tracing liabilities somewhat"
Under date Of February Z, 1866, he
writes Rutter: In addition to state ment
furnished you, the B. P. and w. Va. Pc
troleum Company have two other valua,
BILE leases to dispose Of, in good bearing
territory. The company have already
engines, and are preparing to boar"
He urges Rutter to go into the bOdring
business. Hutchinson, himself, appears
to have been a trihe of boar, and q
pretty wild one at that.
Under date of March II, 1866, from
Washington, he writes Rutter: 1.-THE oil
stocks bid fair to be an extraordinary in
vestmentyS Don't want to Influence any