The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1897-09-25
CHARGES OF FRAUD.
Hearing i'm Connection with the
Railroad Lease.

Washington, September 24.The hearing
before Hon. Kerr Craige, the special mas
ter appointed by Judge Simonton OF North
Carolina to take testimony on the charges
of fraud in connection with the lease OF the
! North Carolina railroad BY the Southern.
was continued here today. Several officers
| of the Southern railroad and a former au-
| ditos of the Richmond and Danville were
subpoenaed by counsel for the state to
produce books and vouchers which the
latter claim contain entries to sustain their
contention of manipulation OF the Southern
railroad books. but on the advice OF coun-
sci for the Southern the witnesses re-
fused to produce the books ana vouchers
called for. The matter was referred TO
Judge Simontons court, where n ruling
will DO asked. The hearings will be re-
sumed at Raleigh, n. c., on the 2Sth in
slant. p W. Everitt OF Raleigh, one of
the counsel for the State, in speaking OF
the case tonight, expressed the opinion
that the charges alleged against the South
ern railroad had been proven.
In the hearings In New York before DR..
Craige, he said, witnesses were produced
to prove that the Southern Railro IA COM
pany falsely threatened the old directors
Of the North Carolina with the stripping OF
that road of all improvements placed on
its term of lessee, which the Southern
railway had no power TO do. The STATE
claimed that the books Of the Southern
railway had been manipulated for The pun
pose of inducing the directors Of the North
Carolina road to regard the latter az having
little or no earning capacity, When as
matter of fact 1t was earning from s!tu.cC0
to 5000 900 in excess Of its expenses and the
amount paid by the lessee .or the rent.
The State also offered to prove that the
Central Trust company OF New York. 20
which the Southern had given mortgage.
had no standing In court in this case as the
assignment of the lease OF The North Caro-
lima road, made In 1895. TO 1t os trustee
Of the Southern bondholders was not made
until four months after the oegilninS OF
the suit At the Baltimore hearing, Fiesi-
dent Hoffman CT the various railroads cjnl-
prising the Seaboard Air Line. testified
that his roads had protested against the
North Carolina road making the lease cf
1896, six years before the lease Of 1871 lad
expired. and his company was READY 10
pay 100000 per year for a thirty. ear
lease.
At the meeting at Raleigh the State will
offer witnesses 10 sustain the CHARGES that
money was improperly spent ny the old
directors of the North Carolina roa % pre-
vent an investigation b. tho Legislature
into the making Of their lease.
Mr.. Fairfax Harrison. general solicitor
for the Southern railway and who appears
In the present controversy, is disposed to
regard the whole proceedings that are
now going ON as absurd.
He says: ut is the laughing stock OF the
people and the whole State OF North Caro-
lima is amused at the testimony that has
been brought out by the other side. The
proceedings have not got TO the stage Of
acute absurdity. After the other side have
finished their testimony we will submit TO
the courts complete and elaborate discus
sion Of the whole question so as TO finally
dispose Of the entire charge OF fraud, tell
ing the whole story OF the transactions
leading up TO the lease which were these
Of an ordinary business nature. Our case
is already won. II was won when Judge
Simcnton granted the preliminary injunc-
ton restraining any interference with the
operations of the lease and we have moth
ing 10 fear The other side have not pro-
duced any evidence Or suggested any line
Of testimany showing in any manner the
Improper use of money In the whole tran
saction. Concerning the assignment of the
lease Of 1895 to the Central Trust company,
Il was made entirely independent Of this
suit and had nothing whatever 10 do with
n The assignment was made In the usual
course Of business and was not fastened by
this proceeding.
There isl concluded Mr.. Harrison.
"notbing in the charges OF fraud. The
counsel OF the State have abandoned the
theory ON which they started out that there
was any actual fraud In fact, and they are
trying TO build up theory OF fraud in
law"