The Caucasian. (Clinton, N.C.) 188?-1913, 1896-08-13


State It also proved to be. uniaek-
lily for the State and stockholders, .
valuable fund to be managed and
manipulated ny inscriptions poll
tieians.
The following were the officers OF
the Company appointed by Governor
Holden: William A. Smith, OF
Johnson county, President; Major
General Willie D. Jons.s and John X.
Harrison OF Wake county; Rev. g.
W. Walker and W. Il. Albright, OF
Guslford; aud William II. Hender-
son. of Davidson county, Directors.
The road was leased for thirty
years by Smith and the Directors
to the Richmond and Danville Rail-
road Company on the 18th OF SEP
TENDER, 1871. The terms were that
the latter Company should pay the
North Carolina Railroad Company
S260, 900 per &nnum. The First pay
ment, for the remainder Of the year,
1871, was TO be made January /,
1877, in the amount, of SIS, 200; and
$50, 900 every six months thereaf-
ter, during the thirty years.
To secure payment, the Richmond
and Danville Company put up its
own bonds and those of two other
companies amounting to two hun
dred thousand sdollars, in the First
National Bank of Charlotte; and the
Company also entered into a bond of
$3.50. 900 to keep the road and other
property leased in repair. The
Company also agreed to pay not ex
ceeding 100000 as damages, if the
whole of the property leased were
not delivered up at the end of thirty
years, or when the lease should
be terminated. The Richmond and
Danville agreed to pay all taxes,
not exceeding 5000; and the North
Carolina road all above that sum.
This lease was prepared by the
attorneys of the Richmond and Dan
vile railr DAD, Ga fact proven by the
testimony of Smith himself) and
brought to the meeting of the Di-
rectors of the North Carolina road.
Four Directors, Messrs. Holt, Davis,
Shaver and Haywood, represented
the private stockholders; and Smith
G. W. Walker, John Mcdonald, w.
r. Albright, and W. F. Henderson,
represented the interest of the State
of North Carolina. No counsel was
employed by the Board, to give an
opinion as to the power of the Board
to lease; nor was the lease submit
ted to any counsel employed by the
Board, to examine and report upon
its validity. Ex-Governor Bragg
was counsel for the Richmond and
Danville Company; and the sage
Guardians of the interests of the
North Carolina road, the Board of
Directors, did request the opinion of
Mr.. Bragg upon the point, whether
they had the right to make the lease.
And, strange to say, that gentleman
decided in favor of the rig ht of his
clients. and of the power and duty
Of the Board to do what his clients
sent him there to ask.
Smith and Mcdonald were among
the members appointed by Gov.
Caldwell. Welker was State proxy,
and intl oduced the resolution IN FA-
voR OF THE LEASE. But Smith
stated that the lease was prepared
by Col. Buford, high officer Of the
Richmond and Danville road. No
notice of the particular object of the
meeting Of the board was given.
No advertisement of the matter was
published. Smith frankly assigned
as his reason for secrecy that it was
to avoid an Injunction. 1t is not the
usual course for breakers tc
give notice to the owners and occu
pants Of the purpose, and the time
when.
The receipts of the North Carolins
Railroad, from all sources, for the
year ending May 31st, 1871, as sta
ted by Smith in his annual report
amounted to $744, 761.16. The ex
penditures were $4O4, O42. S3; leaving
as net profits, over all expenses
$40, 1883. But the ordinary oper
ating expenses were only $279, 965. AS
The net income over operating ex
Ipenses was therefore $464. 1860.
! The committee called attention tt
the following statement of Presi
dent Smith in his last report which
preceded the lease: 1.-The net earn
ings of your road for the last thre,
years." said Smith, cover all ex
penses, have been 1924 43. Thi
was an average of $30S, 266.1?; ant
, as will have been seen above, tn,
net earnings for the year imme
diately preceding the lease, amount
ed to $464, 1868. Yet, in the fac,
Of these admitted facts, Smith, tn,
president of the road, and the boar,
of directors-those at least who rep
resented the State stock, with til,
7 Governors proxy at their back
, transferred the road to the Rich
mond & Danville Company for thirt,
years, at $3.50, 900 per year.
Smith offered as an excuse 70
this transaction, the statement tina
the Richmond and Danvllle an,
other roads were prepared to bull,
parallel road or roads running il
the same general direction, whici
would take away the trade of tn
North Carolina Road; and, sal,
/ Smith, ''as every one can plainl,
see, it would totally destroy our rev
enue," and therefore, the lease wa
7 an imperative necessity"
Smith failed to state that the Rich
mond and Danville could not hav,
built the competing road except at
great outlay of capital; and that tn,
company would have found it ia
more to its interest to have agree,
to pay as much, annually, for tn,
lease as the net receipts which tn
North Carolina company derive,
from it the last preceding year.
was morally certain that the Stat
would have something like dupli
: cation of its population during tn