Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1873-05-04

to save the bank harmless. The bank
was not settled with promptly. 1t
closed up the transaction finally about q
year after the agreement was made.
Mr.. Reid stated to him that
one day he had arranged with Mr..
Johnson to give him a personal dis
count of $1,000 he putting up as collat-
eral judgment held by LOuden against
the city for S3l 900, which he (Johnson)
bought at private sale. The proceeds OF
this discount to Mr.. Johnson were used
by him, believe, in the interest of the
city, he paying a check to Louden for
the city to that amount less the discount.
Examined by Mr.. Jackson-Judg-
ment was obtained against the city in
city court, and an appeal was taken to
the supreme court. Johnson and Green
law were sureties for the city on the ap-
peal bond. The supreme court sustained
the judgment, and Johnson then pur-
chased the judgment from Louden, and
used certificate of judgment as collateral
to raise the money paid to Louden.
Gave the S3l 900 to the bank, and bor-
rowed $4,000. This was on the
third of July, 1872. Had no agree
ment with Mayor johnson to manipu-
late city finances for his profit. Had no
particular agreement with Johnson but
that he should pay his part of the loss in
the transaction with Greenlaw and my
self. Did not propose to him to vary
the financial policy of the city to suit
his speculations. Bonds speculated in
were old bonds. Went into the trans
action wholly with,a view to profit, and
after JOhnson's first message. Believed
his policy would advance the price of
city bonds. In 1870 agreed With the
city to pay January interest. Made no
discrimination. Most of it was paid in
New York by p. NJ. Myers. Taxes
came in as fast as coupons. Had
an arrangement with the Mississippi
and Tennessee railroad, similar to that
with the city, and had a written con-
tract. Mr.. JOhnson's object was to sus-
tain the credit of the city. Do not
recollect how much money the city had
to borrow.
Examined by Committee = Mr..
Johnson had no official connec-
tion with the bank at the time the ten
thousand dollar transaction was effected.
1t was done in the ordinary way.
Colonel lPhelan-Aftert the information
received from the committee am satis-
fed that Mr.. Johnson did not act cor
ruptly, so far as that gold transaction
is concerned. There may be few dol
lars difference one way or the other; but
that is all.
Mr.. Jackson-That being the case L
do not see that thereis anything else for
Mr.. johnson to explain.
COLONEL PHELANiS SPEECH,
Colonel Phelan, in summing up for
himself, said: These are charges against
Mr.. John Johnson, mayor of this city,
of malfeasance in Office. 1t is charged
that in 1870, Mr.. Johnson being then
mayor, entered into an agreement with
Messrs. VIM. B. Greenlaw and VIM.
NJ. Harrington to speculate in city bonds.
That they were 10 furnish the capital
necessary, and Mr.. johnson was to fur
nish information and assistance. That
in persuance of the agreement Mr..
johnson made certain loan on behalf
of the city with the Union and Planters
bank by which the bonds were to be
appreciated in value for the purposes of
this speculation. And that this specula-
ton was perfected, and Mr.. johnson
received as his share of the
profits the sum of about S10,0
The charge added this morning as to
the speculation with Mr.. TObey is hastily
drawn up and may be imperfect, l ask
the committee therefore to fit the charge
to the proof. only knew of it this
morning, but nearly the same argument
will apply to this as the former charge.
The point in both is that Mr.. johnson
has dishonesty used his office to further
his private interests. Before going fur
ther into the question / desire to state
that in this whole matter am not TO be
understood as rejecting in any manner
upon either of the other three gentle
men. | neither defend or attack them.
They are bankers and dealers in money
and securities, whose avowed business
il is to trade, and ] do not feel at liberty
TO invade the privacy of their counting
rooms. ] do avow one of them to be a
man for whom / feel a sincere personal
regard, both now and before this
occurrence. But this has 10
bearing on the matter at hand. There
is an ordinance of the city under which
this act may be prosecuted in Ord. 1867,
p. 23S. This, it must be borne in mind,
is an ordinance of municipal corpora
ton, and not to be construed according
to technical rules. This is more in the
nature of rule of business, such as all
men establish among their employees,
and therefore it is to be construed in
favor of the people whose interests it is
avOwedly to protect. Let US, however,
look at the laws as they exist upon SIM
liar points. The case of the United
States and A. T. Stewart is TOO well
known for more than reference. Mr.
Stewart could not be secretary of the
treasury because he was interested in
United States bonds and exports,
which were under this department.
In the State and county the code in two
sections provides against speculation by
officers in their securities-the one,
section 647d of ThOmpson's code, making
it felony in certain cases, and section
1915 making ii misdemeanOr general
ly; the object of them all being to pre-
vent speculation by officers in the secur-
tiles they are required by law to control.
The general principle being that a SER
want should not be allowed to put his
private interest against his trust.
In pursuance of this principle, and
with these precedents before it, the ordi-
nance of the city was passed. Ord. 1867,
p. 23S.
1t is to be regretted that this ordinance
was not more carefully drawn, for in
certain particulars it is rather confused.
But the spirit of the act which enlivens
it is too plain to be mistaken. 1t is one
of that class of statutes which might be
called preventive, whose object is to pre-
vent crime by forbidding human ma
ture to surround itself with
facilities or inducements to crime,
or to do those things which might result
in injury to Others. Such as the statutes
against carrying concealed weapons,
having burglars tools in possession, fir
ing pistols in a city, taX-collectors, etc,
dealing in State or county securities,
doing business without license, etc.
These laws all say that certain acts shall
be crjminal--the intent to commit fur
ther crime may not exist, but the law in
certain cases has resorted to the ounce
of preventive, and secured its citizens
from temptation by making the first
step a crime. Furthermore, this is no
indictment on which Mr. Johnson's life
or liberty depends. 1t is only such a
charge as any stockholder might bring
against the president of any private cor
pOratiOn. 1t is to determine whether it
is to the interest of the people who
elected him longer to continue him in
charge of their affairs. In its investi-
CATION, therefore, We are not restricted
to the letter of any statute, but it is our
duty to consider his conduct in the light
of morality and official propriety.
This ordinance, therefore, being pre-
ventive, does not allow the intent of an
act to determine its criminality-it is
the act itself which is forbidden. And
the reason of the ordinance of the city
being to forbid its officers from abusing
the powers and trust of their offices, II
therefore think it plain that any specu-
latiOn whatever by the mayor of this
city, in city securities, whether bonds or