Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1873-05-04
Report of His Trial Before the
Joint Finance Committee Of
the Board of Aldermen
and COuncilmen.
Testimony of Hessrs. Harrington,
Tobey and Hays-Speeches Of
Messrs. Howell Z. Jackson
and Geo. r. Phelan.
Two Distinct Charges Made-The
Trade in Bonds with Earring
ton ard Greenlaw, and the
City Bank TranSac-
tion.
The Committee TO RepOrt-Aa-
jority for Not Guilty .
HiaOrity Think the Mayor
Did Wrong.

It viii be remembered by all readers
of the APPEAL that on the ninth
of April last, at q meeting of the gen.
eraI council, Colonel George r. Phelan
presented the following letter containing
charges against Mayor Johnson:
MEMPHIS, April 9, 1873.
DEAR SIR-Iu the present perplexed and
dfSordered condition Of our city nnances, II Is
the duty f-eVery citizen 10 make puoilc any
facts he may know affecting the good Ialth
and honesty in Office Of any mernber OF our
CITY government. ] therefore inform YOU as
a member Of the general council, ana that YOU
may communicate the Statement NJ 70 ,' tLlelll'
that in the spring OF lo8O MI JOun JolIlsJh
entered into "a combination Win MessEs
william NJ Harrington ana " b. IIeehleN y
ff-- rle purpose OF specializing IN city DOIQs;
that these gentlemen were 10 lurhisu IHe
money for such speculation ana Nj Johnson q
-v-sS TO furnish the information ana
other assistance: that IN pursuance OF
such an agreement these parties pur-
chased and neld large 4Ilount 4. III, oI .i.e 1
bonds u the city; that Mr.. Johnson then ar
ranged Tor The city with the mon anu ian =
crs' bank n certain loan, by when the Dank
was 20 pay the coupons lalllng que ~ N ) Jul ny >
ls7I. and The city was 10 pay interest on such
loan tin settled by the city; that TINS was
5oDa fTr ne purpose of approaching the
bonds held by Mr.. Johnson and his partners,
and that they were appreclatedi that Jhese
T5arfirs then sold the bonds, and realized a
amount. WHICH tut-A NAF4ACA Win VI o
John johnson, as his share, over nine thou-
lam prepared TO furnish the names OF the
~ -tneSsaS 20 these facts, should the genera
.-17rltf1 desire to investigate the facts fully.
GEORGE r. PHELAN.
This letter was very thoroughly de-
hated by both the aldermen and the
c8Uneilmeu, and upon motion in the
former body, confirmed afterward in
the latter, was referred to committee OF
citizens, consisting of MessTs. John q.
Lgndsdale, w. 5. Bruce and james
Elder. These gentlemen, ascArtaining
how impossible il was for them to act IN
2 case that devOlved upon the general
.c-auEcil itself, by reason of the pro-
Visions Of its charter, as stated in the
-AP2EAI., refused TO act. Mayor john
Sol. therefore, convened the council and
Iaving the matter before both boards,
requested that it be given in charge of a
io;ut committee Of aldermen and coun-
cllmen. The two boards met on the
twenty-fifth, when the following mes
sage was read:
MAYORS OFFICE, CITY HALL,
MEMPHIS, April Is, 1873. !
Honorable General Council Of the City Of
Memphis:
H.---TF,rEN-A your meeting On the ninth
instant, no q communication addressed 70 va va
-ur j. j. Busby, a member OF the board OF AID
q. sleu. bv George Z. PhelaD, a charge Is made
7s,7 srst me which certainly demands inyesu-
g5ff0.s. The matter was improperly, thlnkl
7sferrg1 by the board OF aldermen 10 com
rnfftee of 5itiZens, outside OF your own mem
ilershfn fc- investigation and report. ] hat
cou8uIittes am informed, declined TO act IN
fFts rYerlists a. d as the subject was not denn-
itely acted on by the common council, l nave
called you together lhis evening 70 ask Ihat
--0u refer the invesu cation to joint commit
fse IN your honorable body, desiring that the
-111fter be promptly and thoroughly inquired
itIa, and reported back TO you Tor such iurther
.cf0u as YOU may deem req ulslte ard proper.
JOHN JOHNSON, Mayor.
The message having been read IN the
board Of aldermen, the following pro-
ceedings were had:
Alderman Busbv presented resolution to
the effect that the charges preierred py george
r. Phean. Esq, against Mayor Johnson, De
referred 20 the committee en- hnahc Win iun m
4oyyer to make necessary vestigatloni iwhich
was adopted by the board. -,--.,-.. =,
resrIng the committee on finance 10 have Re-
corder Winters present al their slillngs IN IN
vestigation Of The charges against the mayor
i'm order that the testimony in the case may
re taken under oath, and that subp@nas be
issued and compulsory process mao, as proEl-
Ead in the sixty-ninth section Of the city
hlrter. which was referred 10 the comfnlttee
g. Enance- ways and means.
n his matter having been referred to
81, qmmon council, it was adopted, and
~. utter thus referred to the joint
ti.,a-no committee, was set for hearing
~ ia. v, but, owing TO the absence
-, ,.- r.. ity Of important witnesses,
,.-- ,,-stv,o, 'ed to yesterday, when, about
/" - ~ to-t -, the committee assembled
Ia ~. Cl-.,,,I. Tofthe board Of aldermen.
~ ~ .-- - No. u, White. Busby, Nor
-, - 'TCa,,is Sha,V v (cOlored), DIR. Hewitt
.D--i PCS les these, there were
-,.,,,, -. r., the cha VI Der the mayor, City
I, ',-5,,--, tt,,-I,aI- Randolph, AIT. Howell jack
-, eoIIrsel fer the mayor, Colonel
.,a5'-,a 80 p pbeIau. counsel for himself,
Mr. Harrington, Mr.. Addison Hays,
Nr. Tobev. Recorder Winters and others.
CALLED To ORDER.
Mr.. Norton called the joint committee
40 order, declaring they were reaoy lor
flEsiuess.
,r.r There 10 sustain certain charges
made bv him against Mayor Johnson IN
a formal document presented TO the gen
crsI council, but before entering upon
their investigation, he would, with the
oermi-siOn Of the committee, make an
additional charge, which had been
br0uglt to his notice this morning,
which he would like TO have entertained
first as his witness was anxious to get
Gacl 10 tae bank of which he was
cashier. Col. Phelan then made the
charge which after some debate was ad-
,nitted and ordered reduced to writing,
as follows:
That Mr.. Johnson entered into an agree
lueut witn Er. pobey- OF the Clty Dahh, o.
which he was president, 10 speculale IN @ clly
-eruriies. That in pursuance o. sag sg.ee- re,
uflut SIR johnson furnished Mr. IoDey the
.1aiG bonds OF the city before Mr.. Iobey gave
Hlu the past due Indebtedness 10 lund Wnlch
..fr Johnson was authorized 20 issue these
fuuds. That this occurred before Lle Nlly
l1ll, broke, and one Of the transactions was
s. a occurrence when the bank closed, theIeDy
e. sing - large amount 70 the city.
-, NuNhTIoN OF WITNESSES on SECOND
CHARGE.
Mr. Ado 'son Hays, former cashier OF
tbe Citv bans, at present cashier OF the
Merchants anc Iraders' bank, was
the first witn> caAedi auH III
answered Colonel heian as Ol-
lows: ] reside in Mem ms anu & Mss
cashier of the City bank Up 10 .he .IIile
ID closed. Had a great many trshssc- n
lions with the city, involving COLO. 'OFaI- 4
ing bonds during the time thegold-bol,.tss ,ts
were issued, and up to the failure OF tne
bank. Does not know the particular
nature OF the udUHdGllOlnf Jul NhAihS
fbev did not difer from others of Ike
cbsracter, with other banks. They
nIaeed coupons on deposit with the city,
and drew against them as ledger bal
ance for gold-bonds. Generally had
COUPONS ia their favor; sometimes the
transaction would be the other way,
perhaps TO the amount Of few hundred
dolIars-never more. In some instances
the bank was allowed to overdraw by
the CITY in such transactions, always
making Ifp for coupon deficit by check,
and would nav up when coupons arrived
from New York. Mr.. TObey made alarge
transaction Just before the bank broke
does not know the amount Mr.: Iooey
told Mr.. Johnson that be had sold gold
bonds, to be delivered, and did not have
them, but needed them-but had cou-
p0ns, some hypotheeated, and some III
New York or on the way here,
enough TO cover the transaction.
Mr.. johnson then allowed him TO have
4, nds on this statement. Mr. Tobey told
~, this; does not know il of his own
I--n,vl. .i-.p ige, and never had conversa-
.i.,o -. ,-ifb he mayor about it. The cou-
.-on ..,,ls ~ not ~et here in time before the
bank broke, owl.1g the city, as stated,
SI5.0)0. mn -,
Examined by Dir. HosSel T. Jackson