The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1872-07-18
A RAILROAD IN COURT.

A RAILROAD IN COURT.
THE sWINDLEs OF ERIE OUTDONE IN
SOUTH CAROLINA.
a Network Of Systematic Fraud-fhe
Earnings OF the Greenvil1e and CO.
lumbia Railroad Seized and Squan-
dered-Asronishing Exposures by the
New Administration.
The case of Daniel E. Scanned, OF New York,
against the Greenville and Columbia Railroad
Company, In which the petitioner seeks to OBJ
tain Judgment of involuntary bankruptcy
against the company, was continued yester-
day, In the United States District Court, before
Judge Bryan. The case Is attracting much at
tention in legal and financial circles, as is not
surprising, considering the startling ma
ture of the revelations that have been
made and are expected to be made
of the past financial management of
the company. 1t appears that 1t has
long been suspected or vaguely known
that there had been some remarkable irregu-
larities, to use mild term, In connection
with the affairs of this company, as has been
the case with all the financial corporations
upon which the political buccaneers who gov
ern this State have fastened their itcGtng and
tenacious fingers; that It was pretty generally
understood that there had been large over
Issues of Lands, and that since the control Of
the road has been obtained by the South Caro-
lima Railroad Company number OF !itigations,
more or less amlcable, have been Instituted In
the State courts to find out which bonds are
legal and which illegal, and eventually to fur
nlsh q basis for criminal proceeding against the
guilty parties. In the course ofthese lltgations,
which are taking place in Columbia, ex-Judge
John 8. Green has been appointed referee
to take testimony, and large number OF
curious facts relative to the Bush-P Patterson
management of the road are being slowly un-
earthed. Now, however, Mr.. Scanned, of New
York, has brought the present proceeding to
torce the road into bankruptcy and an as.
signee's sale, by the success Of which pro-
ceeding 1t is evident that the creditors of the
company, both real and pretended. could only
realize percentage of their claims upon the
company. This prospect has had the imme-
dlate effect Of postponing, for the time being,
all pending liigatIons, and uniting all the
honest creditors with the officers of the com.
pany in opposition to the bankruptcy pro-
ceedings. They reason that the road Is still
q good road, Its late managers not
having had the ability, although doubtless
they would have had the audacity, to
carry of the track or pocket the rolling
stock, and that if properly managed hereafter
it can be proatably operated and made to
meet promptly all its legitimate liabilities. As
to the New York holders Of Its fraudulent
paper, they have very little solicitude or pity
to waste on them, believing that their &C
quaintance with the similar devices OF the
Eete Ring, and their knowledge of the previous
wiles of the carpet-bag railroad politicians OF
South Carolina should have warned them, by
this time, even If they are themselves free
from collusion with the frauds, against burn
ilgtheir fingers, as they appear to have done.
Soon after the opening OF the court yester-
day morning, Mr.. ". J. Magrath: the present
president OF the company, was again called TO
the stand, and testified as follows: The presl-
dent Of the Greenville and Columbia Railroad
Company at the close of the war was Mr.
Hammet. Mr.. Bush succeeded him, and
succeeded Mr.. Bush last January. The earn
ings of the road In 1870 were $439, ,34l 6S; IN
1877 s457,l4 80, and during the first six
months of this year they have been s25l ,576 62.
The aggregate expenditures during those six
months have been sl52,S6l 80, leaving a sur
plus of $S8,5l4 50. The earnings for the next
six months may be expected, from the ex-
perience of former years, should be greater
than those for the past six months. 1t is fair
to compute the probable earnings for the
whole of 1872 as not less than 100000. The
increase in business in 1872 is owing to the
development Of the country, and not to any
accidental cause. With ths business OF the
road Yielding $500, 900 or more, there should
be surplus, after deducling the expenses OF
operating, of at least 100000 If the bonded
debt of the company should be increased to
s2,600, 900 the sum Of sl76,O00 would be re-
Qsllred to pay the annual Interest, and there
would slin be surplus of $4,000. The total
amount of bonded debt of the company recog-
nized as being valid is sl,s5s.6s2 l3. What
ever other claims are or may be made outside
of this amount are disputed by the company.
Tha. amount includes all 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. know the corporation called
the Continental Telegraph Company. Its
charter was obtained by one Hall, OF New
York, with two other parties. The charter
was then sold or given to Mr.. q. h. Kimpton.
Mr. Corbin objected to the admission OF this
testimony because 1t was not given by the
witness from his own knowledge.
Judge Msgrath said that In an examination
before Q Judge the same rules need not be en-
forced that applied 10 a trial before jury.
The Judge might hear all the testimony that
might be presented, but would only allow
himsel to be governed by such portions of 1t
as was legal evidence. They were on the
track of stupendous fraud, fraud as bold
and daring ss had ever been perpetrated on
ann oornorotion or anv indridnal and thew