The Topeka state journal., 1897-09-25

and is represented in the management
by president and seven directors, ap-
pointed by the governor, the remaining
five being selected by private stock
holders.
In 1871 the road was leased by Gov.
Smith to the Richmond & DanvilIe for
80 years. Six years before the lease
expired, or in 1895, a new issue for 80
years was made to the Southern Elias
Kerr was now governor of North Car
olina. The people of the state declare
the lease was procured by Morgan &
Co. by fraud, by the suppression of the
bid of the Seaboard Air Line, whose
directors swore they were willing to
pay $400,O0 a year for the lease, while
the Southern, OF Morgan & Co, paid
only $z60,000 1t is claimed by the state
that during the time the North Caro-
lima road was operated by the Rlch-
nond & Danville it paid from $500 900
to $270, ,O00 exclusive of lease money, and
that after Morgan & Co. took charge
they loaded it with obligations proper
ly belonging to the Southern, and re-
duced its receipts above operating ex-
penses to s., ,220, all in one year.
The hearing before Special Master
Craig developed a new phase of the sit
uation in North Carolina. Philip W.
Avirett, counsel for the state of Geor-
gia and the North Carolina railroad,
said J. Pierpont Morgan was determin-
ed to gain control of all the southern
roads by wrecking them, thereby dom
mating the commerce of the south.
Judge w. G. Douglass. counsel for the
same parties, also condemned the pol
icy of Morgan & Co., saying he was
attempting to rob the people or MS
state of their rights.
Attorney Avirett told Commissioner
Craig the state would prove that with
out Morgan the Southern Railroad COM
pany could not remain solvent until the
expiration of the North Carolina lease
and that the state had information
that Morgan contemplated withdraw
ing his support from the Southern as
soon as Morgan & Co. had been rein1-
bursed for the losses they had sustain
ed in the West Point Terminal and
Richmond & Danville. and that Morgan
had knowledge of the great value of
the lease as basis of bonds for the
Southern.
Mr.. Avirett contended that the act
of Morgan in forcing the directors of
the North Carolina to sign away the
property of the state, which was done
in the dead of night at Burlington was
not unlike that of a social highwayman
who presented an empty pistol to
farmer on his way to market and
frightened him into signing away his
farm.
He charged that the contract was
conspiracy on the part of alien bond
holders to control all transportation
lines from the lakes and island centers
to the seaboard, cornering the market
on cotton, wheat and corn. He pictured
Morgan as the arch cOnSplratOr of the
enterprise. He inferred that Morgan
Lake Shore. Lehigh Valley, Delaware,
Lackawanna & Western, and, with the
exception of the Pennsylvania and Erie
Canal, was master of every avenue of
commerce between the Great Lakes
and New York, and that through for
mer President Spencer, of the Balt1-
more & Ohio, he had thrown that road
into the hands of receivers, and that it
would emerge as part of his property;
that the Southern road, when reorgan-
lied, would complete the chain which
would crush the commerce of the
southern states.
He declared that the alien ownership
of the Southern-for Morgan only rep
resented the Rothschilds-was peril
nent to this suit, as it had attacked the
Seaboard Air Line on the ground that
it was owned by non-residents of North
Carolina when it offered to bid for the
North Carolina road.
In closing his statement the attorney
said for the good name of it's citizens
the state had sought to avoid bringing
moral fraud and corruption into the
controversy, but he intimated that if
it became necessary to offer evidence
on these lines, persons in high places
would be affected.