The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1897-09-28
The FRAUD INVESTIGATION
INTO THE LEASE OF THE NORTH
CAROLINA RAILROAD

Witnesses Examined Before Commissioned
Craig In Washington City-OmcerS Of the
Southern Who are Ordered to Produce
Books snd Vouchers Refuse ito do 20.
Statement From Both Sides Regarding
the Results VI the Investigation SO Gar
Made
Washington, September 24--The hear
ing before Hon. Kerr Craig the special
master appointed by Judge Simonton,
to AXE 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 rail-
road and a former auditor OF the Rich
mond and Danville were subpoenaed by
counsel for the state to produce books
and vouchers which the latter claim
contain entries to sustain their conten-
ton Of manipulation Of the Southern
railway books, but on the advice Of
counsel for the Southern, the witnesses
refused to produce the books and
vouchers called for. The matter was
certified to Judge court,
where a ruling will be asked. The
hearing will be resumed at Raleigh, n.
c., on the 2Sth instant.
P, w. Averett 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. I'm the
hearings in New York, before Mr..
Craig" he said, witnesses for the state
were produced to prove that the South
ern Railway Company falsely threaten
ed the old directors of the North Caro-
lima with the stripping of that road of
all improvements placed on it by the
Richmond and Danville railroad during
it's term as lessee, which the Southern
railroad had no power to do. The state
also claimed that the books of the
Southern railroad had been manipulate
ed for the purpose Of inducing the di-
rectors of the North Carolina road to
regard the later as having little or no
earning capacity when, as a matter of
fact, it was earning from $500, 900 to
$500, 900 in excess of it's and
the amount paid by the lessee for rent.
The state also offered to prove that the
Central Trust Company, of New York,
to which the Southern a given a
mortgage had no standing in the court
in this case a the assignment OF the
lease of the North Carolina made in
1895 to it as trustee of the
bond-holders was not made until four
months after the beginning Of this suit.
At the Baltimore hearing President
Hoffman of the various railroads CON-
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
company was ready to pay $500, 900 per
year for a thirty years lease.
Eat the meeting at Raleigh the state
will offer witnesses to sustain the
charges that money was improperly
spent by the Did directors Of the North
Carolina to prevent an investigation by
the legislature into the making of this
lease"
Mr.. Fairfax Harrison, general solicit
tor for the Southern and who appears
in the present controversy, is disposed
to regard the whole proceedings that
are now going on as absurd. He says:
cit is the laughing stock Of the people
and the whole state of North Carolina
is amused at the testimony that ha
been brought out by the other side.
The proceedings have now got to the
stage Of acute absurdity. After the
Otncr sue nave IIllSuoO luclT IcSIlIIlOuy
we will submit to the court a complete
and elaborte discussion of the whole
question so as to finally dispose of the
entire charge Of fraud, telling the whole
story of the transactions leading up to
the lease which were those of an ordi-
nary business nature. Our case is al
ready won, it was won when Judge ST.
monton granted the preliminary in
junction restraining any interference
with the operations Of the lease and
we have nothing to fear. The other
side have not produced any evidence or
suggested any line Of testimony show
ing in any manner the improper use of
money in the whole transaction. Con-
corning the assignment of the lease of
1895 to the Central Trust Company, it
was made entirely independent of this
suit and had nothing whatever to do
with it. The assignment was made in
the usual course of business and was not
fastened by this proceeding. There is
nothing in the charges Of fraud. The
counsel for the state have abandoned
the theory on which they started out
that there was any actual fraud in
fact, and are trying to build up a theory
of fraud in law"