Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1879-03-01
NASHVILLE.
Report of the Committee to Investi-
gate the State Debt Question.
The Law with Respsctt to Railroad Bonds
Rarely Complied with, Either
HStOre or Since the War.

" iioohi va RuAhuSl NohhtgS ShdAl hidhf
and Representative. Smith, Of Shelby
county, secretary-reported at ten
o'clock this morning. Evidence was
taken by subcommittee in the three
grand divisions Of the State. This
amounts TO three hundred pages. The
report is very elaborate, and yet does
not go fully to the bottom of the facts.
The origin of the State debt is very
fully set forth, and it is shown that
the law was rarely complied with,
either before or since the war The
railroads were privately liable for the
bonds issued to them and the State
only secondarily liable, if at ALL I'm
der the act of 1868 the comptroller
issued thirty-two hundred bonds to
fund matured bonds and pay interest,
and the State has suffered at various
times by such management. 1t is well
within the limits of established facts
to say that in nearly every instance
the conditions of the law, either pre-
cedent or subsequent, with respect to
the railroad bonds, were not observed.
The greater part of the present debt
lis the result of vicious policy and
corrupt legislation, superinduced by
the various corporate bodies interested
i'll securing the bill from the State.
The immediate law under which out
standing bonds were issued was the
funding act of 1873 and previous act.
There was loan Of 81, ,95O,0OO on rail-
road bonds, independent of interest
and funded bonds. The committee
takes no sides between the railroads
or bondholders, which is a judicial
contest, and was, bya premature and
forced sale Of the railroads, at a heavy
sacrifice Of the property, bound
for the debt that it was thrown upon
the people. Eleven millions of out
standing bonds were issued before and
after the war to railroads under yio-
,atcd conditions hence their payment
or adjustment rests neither upon the
validity nor ethical sanction, but upon
the conclusion of wise State policy.
| The amount of compounded aud re-
compounded interest would be difficult
to ascertain, as the books have been
kept SO that it is almost impossible to
trace the bonds of this kind. Two
hundred aud twenty-six thousand dol
lars, issued to the Hiawassa railroad,
remains uuaccounted for The legis-
lation and action of many corporations
since the war and prior to the new
constitution, presents carnival OF
revelry and corruption. Evidence
not before known has been dis
covered, and yet the field is
unexhausted. All known Influences
were used by the agents Of corpora
tions upon the supposed representa-
tives Of the people. From the pulpit
to the bagnio recruits were gathered
for an assault upon the treasury. Fine
brandy by the barrel was on hand to
| fire the thirst and muddle the brain,
and frst-class suits of clothing ia
capture the vanity or avarice oI
the gay and needy. The State $ money
was freely used tobuy its own legisla.
tors. The receiver Of the Winchester
and Alabama and the Manchester and
McMinyilIo railroads came to the
Estate to plunder it, and in connection
| with senator and representative
conspired against the State, made a
fortune and left. The president Of
a railroad sold bonds and used
the proceeds in corrupt efforts
to get more bonds. They got bonds
for roads that had never been surveyed
or located. One railroad president
says that he had great influence with
a certain governor. He procured
through his influence S85 bonds
without warrant or sanction of law.
He and another railroad president used
most of these bonds in stock specu-
lations in New York. This man re-
fused to answer various other Ques-
tions.s A distinguished State official,
since dead, was enriched several thou
sand dollars. Another big lobbyist
refused to answer because it would
criminatc himself, No names are
given, but all will come ont, The re-
port is very able, mild aud dignifed,
and will make a marked impression on
the public mind. 1t more than sus-
taius Governor Marks message, and
will have much bearing upon any at
tempted adjustment of the State debt,
The bondholders and their represent
ativcs here are greatly exercised at the
exposures made. Nj.
Indications.
WASHINGTON, March For Ten