Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1870-05-27

hundred and seventy-hve dollar
each. From the deposition of MI
Jesse f. Brown, who was the Cashier O
| the Trenton Branch of the Bank of Ter
nessee, and who is most likely to be &C
quainted with the detail of the bank fror
various facts furnished the committee
says in his deposition, after stating an i'm
preston that there were three wagons an
twelve mules, that he il positive abou
the bank owning two wagons and eigh
mules; these were not disposed Of to hi
knowledge, and were put In charge O
| 3. Lanier for the purpose of bringing
them through to Nashville. The com
| mittee have left it to the General Assem-
, | bly, TO reconcile, if possible, the testimony
| of these witnesses, and either exOneratl
/ or convict the party concerned by th,
necessary steps to that end.
1t may be proper for the committee Il
| state here, that it was the prevailing opin
ion in the committee that after the State
embarked her school fund in the banking
business In the Bank of Tennessee
l that it necessarily lost its identity as
particular fund, and could not be classed
otherwise than as a general fund and as
part of the assets of the Bank of Tennes-
see. Recognizing this, the committee
knew that it would be a useless under
taking to attempt to identify any particu-
lar portion of the assets of the Bank of
Tennessee as school fund, hence they
have made ageneral investigation into the
entire assets of the Bank of Ten
nessee in this connection, and have to
report that their investigation has laid bare
an enormous fraud, well Conceived, aptly
calculated and promptly executed, to-wit:
The laws in regard to insurance compa-
MES doing business in this State require
that the different companies shall deposit
with the Comptroller bonds of the State
to the amount of $50, 600 to protect those
who insure in the said companies. This
was done by the Insurance Company of
/ the Valley of Virginia, and the bonds de-
posted with the Comptroller were by him
placed in the Bank of Tennessee
for safety, we suppose. These $40, 900
in bonds went with the bank when it
went from the State, being placed to the
credit OF said company on the books of
the bank, said bonds being made payable
on their face to the Insurance Company
of the Valley of Virginia, and numbered
as follows: 5595, 1854, 1O575, 1920,
1885, 5497, 3169, 1912, 1867, 5597, 421,
1896, Sl15, 7722, 1858, 7723, S218,
l05l6, 1926, 457S, and could not get out
of the bank properly without the en-
d5rsement of either the company or the
officers of the bank When the bank
was at Chattanooga, as the Committee
learn, the officers of the Insurance Com
pany of the Valley of Virginia sent for
their $50, 600 IN bonds, and these particu-
lar bonds being boxed up with other as
sets of the bank. and not easily got at,
other bonds to the amount of 500, 900
were given to said company, who left
power of attorney with John A. Fisher,
In order that he might transfer these
bonds to the bank. 80
The Insurance Company of the
Valley of Virginia have written
that they were reimbursed or paid
for their bonds by the bank, consequent
ly the bonds became the property of the
bank. The committee find law passed
Dec. II, 1866, entitled can act for the
relief of bondholders," which said act
% III thO ODiEiOH VI HIO-
cured to be passed as part of the scheme
to defraud the State out of not only these
$50, 900 of bonds, but others that were
obtained under and by foul and unfair
means. The Committee find that
all these bonds issued to the Insurance
Company of the Valley of Virginia have
been renewed under the said act OF 18th
OF December, 1866, and green OF new
bonds issued in their stead. These bonds
are as perfect, with the exception of the
cancellation of the Comptroller, as the day
they were printed. The Committee find
in the offices of the Secretary of State and
Comptroller written notice from Samuel
Watson, Trustee of the Bank of Tennes-
see, stating to both Secretary of State and
Comptroller that these bonds referred to
are improperly out of the Bank of Ten
nessee, nevertheless the same have been
renewed and the State now stands respOn-
sible for the amount. Seventeen of these
bonds were renewed by one John Osment,
who beng put upon oath, says that he
acted as the agent of one Warehouse, of
the firm of Warehouse, Pearl & Co., of
New Gork, that the bonds were
purchased sometime previous to the
passage of the act referred to, and
were purchased of one William II. Tibbs,
of. Dalton, Georgia, and c. L. Hardwick,
of Cleveland, Tennessee, by the witness,
Mr.. Osment, and sent to New York.
After the passage of the bill referred to
they were sent back, renewed and carried
back to New York, by the witness him
self. The witness says that the said
Warehouse knew the bonds were in the
country, for he got some of them at the
same time that Tibbs and Hardwick did
The witness says that the said Waterhouse
urged him to buy these bonds in various
letters, saying that he "could use them
after little trouble" Two of these let
tiers the witness placed upon file, and the
committee have thought proper to copy
them in order to show more fully the
combination of what the committee can
not do otherwise than call UitLaily to de-
fraud the State. go
New YORK, Nov. 2S, 1S65.-JoHN
OsMENT-Dear Sir: Yours of the Goth is
at hand and contents noted. You
say you win buy the bonds as low as you
can, but do not say what will be your
limit You wrote me you could buy
them at $500 each, coupons off till Janu-
airy l, 1858. don't suppose you will
give over that price and as much below
as possible. Do what you do at once
and let US know what to depend on. |
can have all matters arranged by taking
time and some risk.
Yours truly, L. WATERHoUsE.
The Committee would call especial at
tention to the last sentence in this letter.
as also like intimation of making things
all go. K" by time, and some trouble in
the other letter, tO-wit: - -
New YoEK, Nov "a, 1S65.-JonN
OsMENT-Dear Sir: l wrote you some
time ago to buy certain bonds and have
not heard from you as TO what you have
done. l can get them made all o. X. by
little trouble, and insist upon you max
ing the purchase if you can without
delay Let me hear from you at once.
| Yours, Z. WATERHOUsE.
| Here it is evident that WaterhOuse, the
remover of these bonds, was certainly in
| formed as to the exact nature of the
bonds he was purchasing, from the fact
that his language is unequivocal upon the
subject of making them all o. Z. To
make up the full amount of 100000 of
these bonds issued to the Insurance Com
pany of the Valley of Virginia, the COM
1 mittee find that one Sam. Hunt renewed
| two of them numbered 10, 516 and 10, 626,
| and T. 3. Sample s. Sons one, No. 4,57S,
for the banking firm of Waterhouse, Pearl
s. Co., in New York. And as late as
March z, 1870, Mr. Z. G.. Pearl renewed
two bonds whose numbers are 5, l45 and
5,146, and this was done by State officers
right in the face of the written notice