The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-09-25
'FAX'S FOREKNOWLEDGE
KNEW SIMoNToN WAS SOLID BE
FORE FINAL DECISION.
HEARING CONTINUED IN WASHINGTON
Southern Officials Refuse to Put in Appear
ance--Next Hearing in Raleigh
Fairfax Harrison Airs His James
River Laugh.

Washington, Sept. 24.-The hearing
before Hon. Kerr Craige, the special
master appointed by Judge S:monton, or
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-day.
Several officers of the Southern Railroad
and former auditor of the Richmond
and Danville were subpoenaed by counse2
for the State to produce books and
vouchers which the latter claim contain
entries to sustain their contention or
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
'Simonton's court, where ruling VIII be
asked. The hearings will be resumed az
Raleigh, N. c., on the 2Sth instant
p. w. Averitt, of Raleigh, one Of the
counsel for the State in speaking Of the
case tonight expressed the opinion, thar
the charges alleged against the Southern
Railroad had been proven. I'm the hear
ings in New York before Mr.. Cra:ge, he
said, witnesses for the State were pro-
duced TO prove that the Southern Rail
way Company falsely threatened the old
directors of the North Carolina Railroad
with the stripping of that road OF all inn
provements placed on it by the Richmond
and Danville Railroad during its 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 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 rs matter of fact it was earning
form 100000 to 100000 in excess OF
its expenses, and the amount paid by the
lessee for the rent. The State also of
fered to prove that the Central Trust
Company of New York, to which the
Southern had given a mortgage had no
standing in court in this case as the as
signment of the lease of the North Caro-
lima road made in 1895 to it as trustee
of the Southern bondhOlders was not
made until four months after the begin
ming of this suit At the Baltimore hear
ing President Hoffman, of the various
railroads comprising the S. A. H. system.
testified that his roads had protested
against the North Carolina roads max
ing the lease of 1895. six years before
the lease of 1871 had expired and his
company was ready to pay 100000 per
year for a thirty V, as lease At the
meeting at Raleigh In~ Ill offer
witnesses to sustain the .narges that
money was improperly spent by the old
old directors of the North Carolina road
to prevent an investigation by the Legis-
lature into the making of this lease"
Mr.. Fairfax Harrison, general Solci-
tor for the Southern Railroad and who
appears i'm 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 Car
olina is amused at the testimony that
has been brought out by the other side.
The proceedings have now got to the
stage of acute absurdity. After the
other side have finished their testimony.
we will submit to the court complete
and elaborate 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 ordin-
ary business nature. Our case is al
ready won, it was won when Judge ST.
monitor granted the preliminary iniunc-
tion restraining any interference with the
operations of the lease and we have
nothing to do fear
The other side have not produced any
evidence or suggested any line of testi-
mony showing in any manner the inn
proper use of money in the whole trans
action. Concerning the assignment of the
lease of 1898 to the Central Trust Com
pany 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
hastened by this proceeding. There is
nothing in the charges of fraud. The
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"