Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1870-05-30
RAILROAD FRAUDS.
Report Of the investigating Committee 10
the knoxville and Kentucky Pa j.
road Case.


From the Nashville Banner Of SATURDAY.
The report of the Investigating
Con. 9ittee in the case Of Knoxville
and kentucky road was submitted to
the Legislature yesterday. 1t shows
that the road. prior TO the war, re-
oeived SlSO,OO0 in the bonds OF the
state. since the war 81, 10000,
making an aggregate of $780, 900.
CM. MCGEE testified to the commit
tee that he thought the road lost
about $40, 900 by the failure of Powell,
Green K Co. The committee report
that 1884 bonds were sold for the net
amount of S733, ,O49, the bonds selling
At an average rate of 671 cents on the
dollar. The statement made by Mr..
Mabry in regard to the 500 bonds
which he received in January ana
FEBRUARY, 1858, while President OF
the road. shows that he sold T75 bonds
for the net sum of $3.50, l20, and at
rates varying from 60 to "A cents on
the dollar. The report shows that
about SIS, 900 was expended by the
President of the road to get additional
State aid.
From the statement of J. A. Mabry
II appears that there has been sub
seribed stock by individuals, Sl02, 500;
bv cities. 500, 900; by counties, S25O,-
100: amount Of capital stock paid IN,
sSTS AII. amount of State bonds IS
sued 10 the road, g, ,3j0, 90; amount
of floating debts, SlOS,6i6; amount
realized frOm sale OF capital stock OF
S87s. .9ll. was $274, 372; amount realized
from sale of &, ,O62, 900 bonds, 81, ,6S9,-
982. cost of construction, Sl,613, s62i
fotaI length OF the road siXty-ksfe
miles: length of road finished in Ten
Dessee. thirty-nine miles; length not
finished, nineteen miles; length not
GRADED. fortY-siX miles. The report
concludes as follows;
The committee, in concluding their
report upon the Knoxville ana Ken
tuckv Railroad, would respectfully
call the attention Of the Legislature
10 the many irregularities in the issu-
auce of the bonds to said road. II
will readily be seen that the law has
not been fully complied with in sin
ole instance. That in regard TO the
bonds issued under the various acts ap-
prspriRting bonds, passed since Janu-
ary Is, 1856, the simple affidavit OF
the President appears To have been
regarded by the Executive as sutfl-
cient. and for the eight hundred bonds
issued under the act of December z,
1867. the committee have not been
able to find any evidence whatever,
except the receipt of the President for
the bonds.
That the bonds have, in every in
stsnte, been sold at less than their par
value. and in violation of plain pro-
vision Of the law.
The committee would also direct
the attention. Of the Legislature to the
very great prepOnderance OF the
States interest over all Others. 1t
will be seen that there hss been paid
in from all sources except from the
State only S37S, 9l1 IS, while the State
hRs issued in bonds &, $50, 900, and
has funded in interest bonds S43, 900.
1t appears that ninety bonds were
lost by the failure of G. Powell Green
Il Co.
That on the lst Of January, 1868,
when thirty-twO miles had been COM
Melted. the road had cost S43, 900 per
mile In State bonds, and that when il
was completed thirty-nine miles, 1t
will readily be seen, the road had
a0st $50 600 per mile la State bonds.
tentiOn to the comparatively worth
less condition Of said road as it at
Dresent is. the earnings Of said road
exceeding the disbursements Tor a
periOd Of over One-half year only
s24l3 OF.
The committee would also respect
fully call attention to the reckless and
extraVagant management OF said road
l. 10 NHFn nHFNa p
Mabry. 1t will readily be seen that
there is unaccOunted for by him Ia
bonds SI62. 900. That he claims a
bogus cnelit of 1900. That he also
claims credit for the note by Q. A.
Nee OF SIS, ,9Oj; making = total OF
S2l7 ,905.
That he received a voucher for 81, :
q. 500 worth of iron in addition, but
whether paid or not, the committee
are not informed. That SIS, 900 OF the
f5Bds of the State were used by him
in au evident attempt to perpetrate a
further outrage if not 9 swindle up
on the State. And the committee are
satisfied that nothing but q search
ing legal investigation will eyer ex-
pose the frauds perpetrated upon the
State by this company and It's
OGscers.
The committee find that si3, $50 in
cash proceeds of the State has 6eep
paid. back TO the State in interest
which, in the opinion of the commit
tee. was not such use of the money
as contemplated by the law.
The committee would also call at
teution to the refusal Of the witness,
Mr.. Mabry, to answer the questions
OF the committee and the grounds
upon which refusal is based. The
committee are of the opinion that nc
valid legal objection exists. The
ssmnittee being charged with an
Investigation as to what disposition
vyss made OF the bonds that the
State had 50 munidceptly loaned
70 her railroads, could pOt
be impeded by every private
quarrel which had assumed tht
shane OF a lawsuit, otherwise the et
forts OF the Legislative branch OF tbC
Government to make such inVestigs-
Eions would be utterly futile and vain
The Committee, however, did no
deem il advisable 10 apply to the
Courts under the act passed by the
Legislature at its previous session
but respectfully refers the matter tC
the Legislature for such action as in
its wisdom may seem appropriate aDo
necessary.
The Committee would respectfully
suggest that it is highly important
that some action of the Legislature
should be taken TO protect or secure
Ehs large interest of the State, the an.
nEal interest alone amounting to $l43,'
$50 on the bonds issued TO said road
The Committee, with the foregoing
observations, beg leave to submit this
s. the report on the said road.
What the Telescope is Doing.