Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1870-05-20
RAILROAD INVESTIGATION.
One Hundred Thousand Dot
lars in Bonds to q "Wild
- 90 Cat Concern. I'D /
Report of the Special Committee
on the Mineral Home
Railroad.

issued to said railroad company, on the 9
day of October, 1869, one hundred thol
sand dollars in the bonds of the State
that said bonds were drawn under the a.
of Dec. 10, 1866, appropriating to h
Atlantic, Tennessee and Ohio Railroa
one hundred bonds, and the act passe
Dec. IA, 1867, entitled an act TO amen
the charter of the Atlantic, Tennessee an
Ohio Railroad Company, and for othe
purposes, the 18th section of which pre-
vides that all the privileges and all III
State aid heretofore granted to the Allan
tic, Tennessee and OHIO Railroad Com
pany are hereby given and granted to tn
Mineral Home Railroad Company. Th
4th section of the act of Dec. 10, 1866
provides that bonds of the State to thu
amount OF one hundred thousand dollar
be issued 10 the Atlantic, Tennessee an(
Ohio Railroad Company, for the construc
ton and the completion of their road as
far as the same is situated in the county
of johnson and State of Tennessee.
The first section of said act provides
that the bonds issued under it are to be
upon the same condition and penalties as
the act which it is intended to amend, and
the caption declares such act to be amend
atOry of the act passed JAN, Is, 1866.
The second section of said act, passed
January, 1866, provides that the said
bonds shall in no event be sold or ex.
changed at less than their par value; and
the third section provides that the pro-
ceeds of said bonds shall alone be used in
building the bridges and repairing said
road and putting it in running order. The
fourth section declares said act 10 be
amendatory of the internal improvement
act of the State. The eighth section of
the act passed Feb, %, 1868,
entitled "An act to define the powers and
duties of State Directors in the railroad
companies of this State, provides that it
shall be the duty of the State Director in
every railroad company which is IN course
of construction, before any bonds shall
be issued to said company, to make and
file with the Secretary of State a sworn
statement that the company has complied
with the provisions of the general i'm
provement laws of the State, and the
Governor shall not Issue any bonds to any
railroad company until such sworn state
ment is filed a
The foregoing rccited provisions are the
law that, in the opinion of the committee,
applied to the bonds issued to the road.
The committee find from the testimony of
J. II. NJ Grayson that he has been Presi-
dent of said road from the 10th of Octo-
Der, 1869; that he entered upon his official
duties about the first of November, 1869;
that none of said road is under construc-
ton, nor has there been an experimental
survey made of the route; that the road is
contemplated to be about twenty eight
miles long; that about S14, 900 of solvent
subscriptions has been banked, and paid
together; that $42, 800 came into his hands
when he was made President, being the
proceeds of sale of ninety nine bonds of
one thousand dollars each; one bond was
returned to the Comptroller, it being i'm
properly signed; that none of the private
subscriptions came into his hands;
that H P. Murphy refuses to
give up the books and proceeds of sub
scriptiOn; that he has drawn from the
Exchange and Deposit Bank of Knox
vile, $l2,370, and turned over to the
of his receipts; that $3.50 of this amount
is in the hands of Mr. Wagner, and files
copies of his receipts with the committed;
that the balance of the funds is in the
Exchange and Deposit Bank, of Knox
vile, and subject to his orders; that the
bonds were sold by resolution of the Di-
reCtOrs that the road, under the original
charter, would not connect with any
other road, but under the amended char
ter, should connect with the East Tennes
see & Western North Carolina Railroad,
at Doe River Cove, and run by way of
Taylorsville, to the North Carolina line at
Paine's Lancer Gap, and upon the location
of the Norfolk and Great Western railroad;
that he does not know whether he used
any of the money for his private use or
not; he borrowed some money from Mr..
Butler and the Treasurer; had money de-
posted with him, but could not say
whether it was the sale money that the
bonds were sold by the bank, in its dis
erection, and without special order from
him; the bank had general authority to
sell the bonds at the best market price;
that copies of the receipts of r. w. Don
nelly, the Treasurer, and of NJ. M.
Wagner & Sons, and statement of the
bank amount, is attached to his depo-
sitiGn. The Committee find from the
testimony of Thomas S. Smythe, that he
was President of the Company from its
organization, in the early part of 1868,
until the last of September or October,
1869; that he has been d director since,
and has also acted as attorney for the
road; that, when the company was or
ganized, the amount of capital stock
subscribed was something over five
hundred shares of twenty-five dol
lars per share; thai hc was elected
President, and II. p. Murphy was elected
Secretary and Treasurer; that he was the
first President, and j II NJ GraysOn and Ii.
p. Murphy, both, claim to be his success
soIs; that, an election was held the last of
September or the first of October, 1869,
and both claim to have been elected Presi-
dent; that he had no books in his posses
sion, and that he delivered the receipts,
for the bonds, to j. Ii. NJ. GraysOn; that
he has no other assets than those he drew
from the State, one hundred bonds, for
said road, Oct 2, 1869, and drew them as
President of the road; that he deposited
said bonds in the Exchange and Deposit
Bank of Knoxville; that he paid one hun
bred dollars to the Comptroller, G. w.
Blackburn, and one hundred dol
lars to A. J. Fletcher, Secretary Of
State, for the issuance of said bonds, and
that he borrowed the money to Go SO
from the Exchange and Deposit Bank of
Knoxville, on the day that he deposited
the bonds with them; that he drew five
hundred dollars from said bank on the
faith and credit of said bonds; that he
paid two hundred dollars, as above stated,
and the balance is in hands or has been
expended in the payment of an allowance
made to him by the board; that he drew
five hundred dollars from the board at
different times, two hundred and fifty on
the 1st of October, 1869, and two hun
bred and fifty dollars on the 18th of De
cember, 1869.
The committee find from the testimo-
ny of II. p Murphy, that he was one of
the first directors, and also Secretary and
Treasurer of the first board; that Thos. S.
Smythe was the first President, and that
there are two rival boards of directors on
said road; that according to a lien the
State Directors can call a meeting of the
stockholders at any time and change the
company directors. They called meet
ing on the 2Sth of September, 1869. The
stockholders met and elected new board
of Company Directors, and the directors
subsequently met and elected him Presi-
dent, and gave him a certificate to that
effect. A few days subsequent TO this
the Judges and clerks of the election met
and decided that some of the votes cast
NV himself were illcCal. They nroceeded