The Rutland weekly globe. [volume] (Rutland, Vt.) 1873-1877, 1873-07-11

ings, and car wheels for the roads under
the trustees and managers since the COM
mencement of the trust.
Prior to the appointment of j. G.. Smith,
as one of the trustees of the first mortgage
bonds of the Vermont Central Railroad, in
1868, and sometime in the year 1854,
contract was entered into by and between
the trustees of the first mortgage bonds
and the St. Adams Foundry Company,
which company was composed of j. g.
and w. G. Smith, by which contract the
Foundry Company furnished the car
wheels and castings to the Trust. Upon
the appointment of J. G. Smith as one of
the trustees, he sold and assigned
his interest in and to said contract
to w. G.. Smith in accordance with
the terms of his assignment, as
shown by exhibit IN" that after that
time the trust continued to receive their
car wheels and castings of the st. Adams
Foundry Company, down to the present
time. After j. G.. Smith retired from the
firm, w. G. Smith owned the foundry
business and prosecuted II until September
/, 1860, TT which time he leased the prop
erty to Geo. j. Stannard and Edward a.
Smith, according to the terms of their con-
tract at that date, which contract was as set
forth in the Appendix, page 20. 1t was
claimed, and we find the fact to be that j.
G. Smith was made party to that con
tract for the reason that he was onc-half
owner of the real estate that at the eX-
piration of this lease John w. Newton
took the place of Gen Stannard, and that
from that time to the present time the
Foundry Company has consisted of Ed
ward A. Smith and John w. Newton, and
has been doing business since then under
the terms of the lease as made with Smith
and Stannard, except as to the price of
castings furnished.
BY the terms of this contract it will bc
seen that "royalty" was reserved on all
the castings furnished the railroad, and
for all car wheels manufactured for the
railroad, which "rOyalty" amounting in
all to more than St35 900, has been paid to
and received by w. c. Smith. Prior to
the time of his becoming one of the trus-
tees and managers of the road, we sec no
improperly in his contracting in this man
ner with the Foundry Company. Since
his appointment in 1870, we find that this
contract has been continued in force, and
that he has received the royalty the same
as before 1t was claimed before us in
consequence of his relation to the trust
he had no right to retain this sum so re-
ceived. Upon this subject we have no
opinion to express, as it is a proper mat
ter to he adjudicated in the settlement of
| his accounts as receiver with the Court of
Chancery.
In respect to the prices paid for castings
or wheels, and whether the prices were
greater than they ought to have been. we
found ourselves surrounded by consider
able conflicting testimony which ii was
| impossible to entirely reconcile, and al
though we do not feel fully assured and
/ nj la, l,at thorn npt nNtiph npi1
| still we do not find aillrmativcly, taking
| into consideration all the advantages de-
rived from this contract, the saving of
freight, the terms of guarantee. the con-
veniencc of having the castings delivered
! to Them and other considerations of like
character, together with the further fact
| that this matter was submitted to the en-
tire board of trustees, that there was too
much paid or that there was any fraud in
these contracts with the Foundry Com
pany in respect to the prices paid.
We ought perhaps to add that an al
visory committee elected by ballot by the
bondholdcrs approved of this contract and
all other contracts made by the trustees
and managers.
SECRET SERVICE FUND.
Considerable testimony was introduced
| Ill reference 10 IL SECRET StTNltt lulll SCI
apart bv the trustees and managers. 1t
was charged that such fund was set
apart. and we were requested to make
inquiry into the fact rs to whether it
was done for corrupt purposes or not
and whether any corrupt practices were
cOvertly cOnsummatcd through the
agency.
That there was fund set apart under
the direction of one of the trustees,
j. Gregory Smith, and was chiefly under
his supervision and control. there is no
question. 1t was stated by him that it
was set apart for detective purposes.
in order that there might be Il sum of
money that could be used in such man
ner as not to disclose the names of the per-
sons to whom paid, or the service rendered
by them, and that if it was not necessary
it was at least eXpedient that such a course
should be pursued for the best interests of
the trust in the management of their bust
ness. We fail to see any great necessity
for such fund, and willie we do not be-
lieye it was set aside to facilitate the ap-
preparation of any part of it to the private
use of the trustees and managers still we
do find that in some instances it was mis-
applied:
The following are the material facts de-
veloped in relation to this fund-called the
secret service fund.
We find that the money itself which
constituted this fund was not kept separate
from the funds of the trust-but that a
special account of it was kept in a book by
itself by the treasurer of the management.
We also find there was another book
kept upon which the final disposition of
the funds more fully appeared. This was
a private book belonging to J. Gregory
Smith. We find that $3975 of this fund
was loaned to Samuel Williams, the former
treasurer of the management. We find
that December %, 1870, $500 was paid to
10 ID. Hatch, but for what purpose we are
unable to ascertain. Mr.. Hatch does not
recollect of receiving il or disbursing it.
That January 5, 1871, $500 of this sum
was paid to 10 ID. Hatch, who has used a
part of 1t for expenses as agent for the
management and the balance is in his
hands.
We find that July 1871, the sum of two
hundred dollars was paid by w. c. Smith
to citizens association ia St. Adams in
aid of the erection of an observatory. We
find that Mr.. Smith contributed of his own
funds for this object and paid this sum of
5000 ON the ground that this appropriation
would add to the attractions of St. Adams,
and necessarily tend to increase railroad
travel.
That the sum of six hundred dollars was
paid to b. Ii. Smallcy by j. Gregory
Smith for counsel and in the interest of
the trust but as to the subject matter he
was advised with about Mr.. Smith refused
to disclose to the committee. We find that
some twelve thousand dollars stands
charged to j. Gregory Smith, which sum
he stated in part had been paid for detect
i've service. The balance of this sum he
declined to testify in regard to, only to
state that he had used it for the benefit of
the trust and none of il had been used for
the purpose of corrupting legislation.
In reference to this branch of our inqui-
ry we have only to add that there is so
much of this fund that we are unable to
find for what purpose it was appropriated,
that we abstain from full expression of
opinion in regard to it, and while we do