The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1897-09-30
CHARGES OF FRAUD
In Connection With the Lease of the
North Carolina Railroad.

North Carolina Railroad.
Washington, Sept. A.-The hearing
before Hon. Kerr Craige, the special
master 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 to-
I day. Several officers of the Southern
Railroad and former auditor of the
Richmond and Danville were subpoenae ed
by counsel for the state to produce
books and vouchers, which the latter
| claim contain entries to sustain their
contention of manipulation of the South.
of counsel for the Southern the wit
nesses refused to produce the books and
vouchers called for. The matter was
certified to Judge Simonton's court
| where a ruling will be asked. The hear
| ings will be resumed at Raleigh, N. O.,
on the 2Sth inst. p. w. Averill OF
Raleigh, one of the counsel for the state,
ed the opinion that the charges alleged
against the Southern Railroad had been
proven.
"In the hearings In New York before
DR.. Craige," he said, witnesses for the
state were produced to prove that the
Southern Railway company falsely
threatened the old directors of the
North Carolina with the stripping of
that road of all improvements placed
on it by the Richmond and Danville
road during it's term as lessee, which
the Southern Railway had no power to
do. The state also claimed that the
books of the Southern Railway had been
manipulated for the purpose of inducing
the directors of the North Carolina road
to regard the latter as having little or
no earning capacity, when, as a matter
of fact, 1t was earning from $2OO,oOU 70
100000 in excess Of It's expenses ana
the amount paid by the Jesse for the
rent. The state also offered to prove
that the Central Trust company Of New
York, to which the Southern had given
mortgage, had no standing In court IN
this case, as the assignment OF the lease
of the North Carolina road. made In
1888 to it as trustee of the Southern
bondholders was not made until four
months after the beginning OF this suit.
At the Baltimore hearing President
Hoffman of the various railroads conf
prising the Seaboard Air Line system.
testified that his roads had protested
against the North Carolina road max
ing the lease of 1895 six years before the
lease of 1871 had expired and his COM
pany was ready to pay $4OOOOc every
year for thirty years lease. AZ the
meeting at Raleigh the state Will offer
witnesses to sustain the charges that
money was improperly spent by the old
director of the North Carolina road to
prevent an investigation by the legisla-
ture into the making of heir lease,
Mr. Fairfax Harrison, general solicitor
for the Southern Railway, and who aap-
pears in the present controversy. 10 diS-
posed to regard the whole proceedings that
are now going on as absurd. lie says;
at is the laughing stock Of the people, and
the whole state of North Carolina IL
amused at the testimony that has been
brought out by the other side. The pro-
ceedings have not got to the stage OF acute
absurdity. After the other side have nm
ishcd their testimony we will submit 10
the courts n complete and elaborate dis
cussion of the whole question 40 as 20
finally dispose of the entire charge OF
fraud, telling the whole story OF the
transactions leading up to the lease, wnieh
were those Of an ordinary business nature.
Our case is already won. 1t was won when
Judge Simonton granted the preliminary
Injunction restraining any interference
with the operations of the lease: ana We
have nothing to fear. The other side
have not produced any evidence or sug-
pested any line of testimony showing ~
any manner the improper use OF money "
the whole transaction. Concerning tne
assignment of the lease of 1879 to tne
Central Trust company it was MADE en-,
tirely independent Of this suit ana nhu
nothing whatever to do with ~; me 40 70.
sipnment was made in the usual course "
bnsiness. and was not fastened by TINS
proceeding. ,, u..r;son
"nothing in the charges OF fraud. i h
counsel of the state have abandoned In.
| theory on which they started OUT. ina ml
there was any actual fraud in tact. ana
they are trying to build up theory u
| fraud in law"