Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1873-07-10

| the road, we see no improperly in his
contracting in this manner with the
foundery company Since his appoint
ment in 1870, we find that this contract
has been continued in force, and that he
has received the royalty the same as be-
FORE It was claimed before us in con-
sequence 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 proper mat
ter to be adjudicated in the settlement
of his accounts as receiver, with the
Court of Chancery.
In respect to the prices paid for cast
ings or wheels, and whether the prices
were greater than they ought to have
been, we found ourselves surrounded
| by considerable conflicting testimony
which it was impossible to entirely re-
cOncile, and although we do not feel
fully assured and certain that there was
not too much paid, still we do not find
affirmatively, taking into consideration
all the advantages derived from this con-
tract,-the saving of freight, the terms
of guarantee, the convenience OF having
the castings delivered to them, and 9th
er considerations of like character, to-
gether with the further fact that this
| matter
of trustees,-that there was too much
paid or that there was any fraud in these
contracts with the fOundery company
in respect to the prices paid.
We ought perhaps to add that an adj
visory committee elected by ballot by
the bondholders approved of this con-
tract and all other contracts made by
the trustees and managers.
SECRET SERVICE FUND.
Considerable testimony was introduced
in reference to a secret service fund set
apart by the trustees and managers. 1t
was charged that such a fund was set
apart and we were requested to make
inquiry into the fact as to whether it
was done for corrupt purposes or not,
and whether any corrupt practices were
cOvertly cOnsummated through the
agency.
That there was a 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 a sum of
money that could be used in such man
ncr as not to disclose the names of the
persons to whom paid, or the service
rendered by them, and that if it was not
necessary it was at least eXpedient that
| such course should be pursued for the
best interests of the trust in the manage
ment of their business We fail to see
any great necessity for such a fund, and
while we do not believe it was set aside
to facilitate the appropriation of any
part of it to the private use Of the trus-
tees aud managers, still we do find that
in some instances it was misapplied.
Tie fol- wing are the material facts
developed in relation to the fund-called
the secret service fund:
We find that the money itself which
| constituted this fund was not kept sep
parate from the funds of the tr Ist-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. Greg
DRY Smith. We find that So, 975 Of this
fund was loaned to Samuel Williams,
the former treasurer of the management.
We find that December %, 1870, 81, 800
was paid to 10 d. Hatch, bit for what
/ purpose we are unable to ascertain. Mr..
.
or disbursing it.
That January .. 1871. $500 Of this
sum was paid to 10 d. Hatch, who has
used part of it for expenses as agent
for the management aud the balance is
in his hands.
We find that July 3, 1871, the sum of
two hundred dollars was paid by w. G.
| Smith to a citizens association in ST.
Adams in aid of the erection of an OBJ
seryatOry. We find that Mr.. Smith con-
tributed 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. Smalley 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 re-
/ fused 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 detective service. The balance
of this sum he declined to testify in re-
| gard to, only to state that he had used it
for the benefit of the trust and none of it
had been used for the purpose of cor
rupting legislation.
In reference to this branch of our in
quiry we have only to add that there is
so much of this fund that we are unable
| to find for what purpose it was appropri-
| ated that we abstain from full EXPIRES
| sion of opinion in regard to it, and while
we do not find that it has been Corruptly
used from any testimony that come
! before us, still from the incompleteness
| of the testimony we do not believe we
| should be warranted in finding it was
or was not coTruptly used without a
! fuller investigation and we are willing to
| leave its further consideration to those
whose duty it will be to examine the
subject more thoroughly than we have
| been able to do.
PRIVATE POPULATIONS.
| We were directed to ascertain whether
| the trustees and managers had in any
way committed fraud and peculations,
| and in pursuance with this direction we
! took some testimony in regard to the
manner the books were kept, and as to
| the opportunity they had of converting
| the property of the trust to their own
use. We find that an account is kept of
all the materials taken from the shops
by any of the trustees, and of the labor
performed by the employees of the rail
road for them but as it would be neces-
sary to go through the whole shop-stock
| account to ascertain the condition of the
accounts, we contented ourselves with
! learning the fact that an account was
kept III the different departments which
could be looked into and definitely set
tied, though it does not appear in a gen
eral account. We heard some testimony
as to the private accounts of the trus-
tees with the trust, but did not 90 far
enough to be able to fix upon the amount
due from or to them. We do not find
that any fraud or peculation has been
| committed by them upon the property
of the trust and as this is a matter that
must be settled elsewhere, we do not
think the subject matter calls for further
comment from the committee.
SULLIVAN RAILROAD