Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1870-05-28
RAILROAD INVESTIGATION

road
The Committee on the Knoxville and
Ksntucky railroad reported to the General
Assembly yesterday. We make the fol-
lowing synopsis, which contains the gist OF
| the matter.
There was issued to the Knoxville and
Kentucky railroad prior to the war $780,
coo. 90 in the bonds of the State, and since
the war ., 10000 90, making an aggregate
| Of :, $50, 000.0o. Of the bonds issued since
the war, go Of 10000 each were issued
on the 27th day of April, 1866.
The second lot, issued since the war,
was, $3.50, 600 90, or. the 23d day of July,
| 1866. In 1867 there was issued $50, 600 90,
and on the Sth of Oct. 102, 600 90. On the
| 14th day Of Feb. there was issued &c.,
| 600 90 in bonds, and on the I'd day of
| March, 1867, 100, 10000 more, and on the
LIST day Of April, 1867, 800, 900 90. All Of
which 500 bonds were issued under the act
passed Dec. 10, 1866, entitled San act to
amend an act passed jan, 1851"
On the 9Th Of January, 1868, there was
issued the road fifteen bonds, and on the
| 18th day of the same month three hundred
and fifty bonds. and on the goth Of Febu-
ruary 1868, three hundred bonds, on the
9th day of March 1869, one hundred and
| thirty bonds.
The Committee find from the testimony
| of C MMcGhee that he drew from the State
wk.s President of said Railroad ,240, 0O0.-
| 90 in bonds. He thinks that by the fall
ure of the firm of Powell, Green 4 Co.,
| the road lost about 20, 00O.0 or so, 600. 90.
This witness submits that on the 1st of
january, 1868, the road was indebted to
Il ST. ol,,Ii
| 43, 900 funded interest in the sum of l, 463,-
| 200; that there was running, and equipped 81
miles of road, all damages of the war hav-
l ing been repaired; that the completed road
| cost As, 900 per mile in State bonds, and in
| his opinion was worth the State debt. Gen.
Mabry was the successor Of MCGEE VS.. the
| President of the road. The committee
| find that 1854 bonds were sold for the net
amount of $733,049. From the state
ment of r. H. Campbell it appears
that the bonds were sold at the average
rate of 671c on the dollar. The Com
mittee find that Gen. j. A. Mabry was
| President of the road from 1853 to March,
| 1864, when he was succeeded by David
| Richardson; that he was again elected
| and assumed the duties of President on the
| LIST of January, 1868, and continued as such
until he was appointed as Receiver by Gov.
| Senter. He testifes that he received no
| funds when he was elected President and
assumed duties on. the 1st Of January,
| 1868. The statement made by Mr.. Msbry
| in regard to the 800 bonds that he received
in January and February, 1868, while
| President of the road, shows that
he sold us bonds for 2 the net
sum of 4S0, 120, and at rates va
| rying from 80 to "a cents on the dollar.
| 1t was testified to the committee that the
salary Of the President before and since his
| appointment as Receiver has been So, 900
| per annum, while the salary OF the last
regular Superintendent was 81 800. Thos.
Steers, contractor, testified that he sold to
the President of the road, ]. A. Msbry, a
claim Of $4,000 against the road for
$40, 900 and gave the President his receipt
for $50, 900, that the company owe him
now $40, 900 for which he has no security.
Mr.. Steers testifes that there are nine
teen miles of grading yet to be done and
twenty five miles of track to be laid to
complete the road to the State line; that
the work done upon the road would be
worth 81, 900, 900 if the connections were
completed.
The committee find from the testimony
of E. J. Sanford that he was a State Di-
rector in the road for the years 1861 and
| 1868, and is now a company director. The
said Sanford testified that he had reasons
to believe that all the money appropriated
by the State had not been used
in building the road; that some Of
it was used in attempting 10
get additional State aid that no report had
been made of the amount so expended, but
that Mr.. Mabry told him the amount was
28, 900. The committee find from the gen.
eral statement of the condition of the COM
pany fled by j. A. Mabry that there has
been subscribed, sotck by individuals, 1922
$50; by cities, 100, 900; by counties, 80, 900.
amount paid in by individuals, 7S.9I1.00;
by cities, 100, 100000; by counties, 2OO,-
10000; amount of capital stock paid in,
| S78, 81. 90; amount of bonds issued to said
road, 1850, 10000 amount Of floating
debt, los, CSC 90; amount realized from
sale of capital stock of 37S,9lLOO
is 274,372.OO; amount realized from
,O62, 10000 bonds sold 1859, 332 90;
cost of construction, 1918, 1863; totallength
of road, 90 miles, length of road finished
in January, 80 miles; length not finished,
10 miles; length not graded, 4G miles.
Said road has locomotives, passenger
car, l baggage and express car, box cars,
| ) platform cars, 10 coal cars, IL road cars
The report concludes as follows
The committee, in concluding their re
port upon the Knoxville and Kentucky
railroad, would respectfully call the atten-
ton of the Legislature to the many ir-
regularities in the issuance of the bonds
| to said road. 1t will readily be seen that
the Law mas not been fully complied with
IL single instance. That in regard tC
| the bonds issued under the various acts
appropriating bonds, passed since Jan
IS, 1866, the simple affidavit of the Presi
dent appears to have been regarded by
the Executive as sufficient; and for Thu
| 500 bonds issued under the act of Dec. Z,
| 1867, the committee have not been abl'
| to find any evidence whatever, except thu
I receipt of the President for the bonds.
, That the bonds have, in every instance,
{ | been sold at less than their par value
and in violation of plain provision o
| the law.
! The committee would also direct il
} | attention of the Legislature to the Tar..
/ | great prcponderance of the States inteT
, | est over all others. 1t will be seen tha
there has been paid in from all source
except from the State only 1878, gil. 90
while the State has issued in bcpd
, 81, $50. 900, and has funded in interes
, bonds S43, goo.
1t appears that 80 bonds were lost b
/ the failure of G. Powell, Green q Co.
. That on the LIST January, 1868, whe
a thirty-tWo miles had been completed, tn
r road had cost $43, 900 per mile in Stat
e bonds, and when it was completed thirty
e nine miles, it will readily be seen, the roa
= had cost $50, 900 per mile IN State bond
The committee would also call attentio
L to the comparatively worthless cOndiuo
; of said road as it at present is, the earl
% ings of said road exceeding the disburs'
:. mcnts for a period of over one half yea
a only 81, 413,07.
: The committee would also respectful
, call attention TO the reckless and extTay
: CANT management of said road and its fun
= by the President, Mr.. Mabry. 1t W
- readily be seen that there is uDaccount'
:, for by him in bonds $l62, 900. That
claims bogus credit of $50, 600. That
10 | also claims credit for the note by g.
a. Nee of $25, 9O5, making total of S2l7, 90
That he received voucher f.r 49,
worth of iron in addition, but wheth
paid or not, the committee are not i
a formed. That $2S, 900 Of the fands of I
lie State we're used by him in an evident |
IL tempt to perpetrate further outrage
!, not swindle upon the State. And t
ne committee are satisfied that nothing but
tie searching legal Investigation will ever
ng pose the frauds perpetrated upon the Sti