The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1872-07-21

Tho Prooeedinss against tho GreenvIIle
ruptcy. 3
We make the following extracts from
the testimony in this interesting case, as
reported in the Charleston News:
The petitioner is Daniel E. Scannell.
OF New York. who is seeking to throw
the road into bankruptcy. Some rich
developments are made, disclosing what
at present appears to be stupendous
fraud perpetrated by the late Board of
Directors. of which Frederick D. Bush
was President, John j. Patterson, Vice
President. and J. L. Neagle, Niles G.
Parker, Joseph Crews, G. w. Waterman,
=. Il. Cardozo aud II. Hurley, among
the members. It would seem that up.
wards of Sl,000,000 of second mortgage
bonds have been fraudulently issued.
PRESIDENT Magrath testified as follows
Ihe President of the GreenviIle and
Columbia Railroad Company at tho close
OF the war was Mr.. Hammett. Mr.. Bush
succeeded him, and [ succeeded Mr..
Bush last January. The earnings of the
road in 1870 were S439. .34I.58; in 1871,
S457 l44.SO; and during the first six
mo-, months Of this year, they have been
S25l, 1852. The aggregate expendi-
lures during those six months have been
$!52, 86l. 80, leaving surplus of $685.
OLA. 81. The earnings for the next six
months may be expected, from the ex-
perlence OF former years, should be
greater than those for the past six
mouths. It is fair to compute the
probable earnings for the whole of 1872
as not less than S500,000. Tne increase
IN business in 1872 is owing to the deve-
iopment of the country, and not to any
accidental cause. With the business of
the road yielding $500, 900 or more, there
should be surplus, after deducting the
expenses OF operating, of at least $780,
200. II the bonded debt of the COM
pany should be increased to 50, 5000
the sum of $l75,000 would be required
to pay the annual interest, and there
would still be surplus of $50, 900. The
total amount of bonded debt of the COM
pany recognized as being valid is 81, $685.
632. ID. Whatever other claims are or
may be made outside of this amount are
disputed by the company. That amount
includes oil the bonds Of the issue Of
which there is any record on the books
OF the company. do not understand
any bond to be issued by the company,
unless it be recorded on the books of the
company. have reason to believe that
other bonds have been issued. I know
the corporation called the Continental
Telegraph Company. It's charter was
obtained by one Hall. of New York, with
two other parties. The charter was then
sold or given to Mr.. II. II. Kimpton.
The books of the railroad company do
not show any issue of bonds for the pur-
chase of the Continental Telegraph Com.
pany, and contain no record of authority
given to any person to purchase it. At
a meeting of the directors, held on the
evening OF January 5, 1872, preamble
and resolutions were introduced by John
y. PATTERSON, reciting that the President
bush) had reported negotiation with
the Continental Telegraph Company,
and authorizing him to perfect the nego-
tlstlon. at that meeting, however, the
road passed out of the hands of Pfeai
dent Bush and his directors, and, at the
next meeting of the board, it Was found
that the President had made no such re-
port, and the resolutions were ignored.
The first act of my administration was
to deny and repudiate any such transac.
tion. By the direction of the board,
caused suits to be brought against the
former officers and directors of the COM
pany, to secure the return of any bonds
that had passed out of the hands of the
company in that transaction. Notices of
those suits were served on Frederick
Bush. j. L. Neaele, J. J. Patterson, Fl.
II. Kimpton. Niles G.. Parker, Joseph
Crews, G. w. Waterman, F. L. Cardozo
and Z. Hurley. There were $500, 900 of
second mortgage bonds issued by the
executive committee, without any consi-
deration being received by the company
That whole amount did not go to the
Continental Telegraph Company. Kimp.
ton himself and half dozen other di-
rectors told me $500, 1000 of bonds was
paid for that charter. Then there is
found on the minutes Of the boart, au-
thority to b,rrow 100000 from J. L.
Neagle, and give him $3.50, 600 of bonds
for it at 331s cents. Those bonds went
to Neagle. but the money never came
into the treasury. I do not know of my
own knowledge how much money was
used to bribe the Legislature, but have
been told by various directors. AS to
the $500. 600 of bonds held by the Com
morcial Warehouse Company, there is no
record on the books of any direct COM
munication between that company and
the railroad company for any loan of