The Grenada sentinel. [volume] (Grenada, Miss.) 1868-1955, 1902-07-12
LOAN OF STATES CASH.
Details of Famous Transaction-LoAnsd
Under Contract to n. q. Jones.

Under Contract to n. G. Jones.
Jackson, Miss, July ga start
ling denouement in the State treas
ury cases occurred this afternoon
during the trial Of Phil A. Rust,
when f. 7. Raiford, cashier of the
treasury under Showers, who is I'M
der indictment for embezzlement of
the funds of the treasury, took the
witness stand for the State and dis
closed the whole matter of the loan
Of 100000 of the treasury funds
last August to John Armistead, pres
ident of the Mercantile Bank of
Memphis, who borrowed it for Frank
G. Jones of the Memphis Street
Railway Company.
Railroads Testimony.
He met Phil A. Rush at the Ed
wards House in March, 1901. He
approached Rush and suggested to
him the feasibility of lending out
some Of the State treasury funds.
They discussed the legal phase Of
the matter as to whether it was a vio-
lation of law to take money out of
the treasury, and came to the conclu-
sion that it was not a violation. Wit
ness told Rush that Treasurer Stow
ers was letting three of the banks in
Jackson have money from the treas
ury on good security. Mr.. Rush told
witness hat he thought he could
make arrangements for placing some
Of the treasury cash. Several weeks
later Mr.. Rush came down to Jack
son accompanied by John Armistead
of Memphis. Raiford, Rush and
Armistead then had a conference
and it was agreed hal Mr.. Armi-
stead was to have 100000 on a loan
at 3 per cent.
Mr.. Armistead produced as secur-
ity for the loan a note for 100000
signed by Frank Jones of Memphis,
of the Memphis Street Railway
Company, and produced as collateral
to secure the note 100000 of the
Memphis Street Railway bonds and
$4,000 Of the Mercantile Bank
stock. Raiford and Armistead then
signed a contract for the loan. Wit
ness did not remember whether Rush
signed the contract or not. 1t was
signed in duplicate, and was to the
effect that 3 per cent interest was to
be paid for the loan. Raiford was to
get $1,000, Rush $500 and the re-
mainder to Armistead. After the
contract was signed in duplicate Raj
ford kept a copy and Armistead took
a copy and Armistead took the
money to Memphis. Showers did not
know anything about this loan to
Armistead, because he had numerous
deals of the same kind on foot with
the banks in Jackson. Under the
contract the money was to be kept by
Armistead for n year, and if it be-
came necessary to return it to jack
son to be counted, the time il was
kept in Jackson was to be deducted.
In July Mr.. Armistead brought the
money down to Jackson and Raiford
placed it in the vault of the treasury,
where it was kept for ten days. Gov.
Longino did not seem to be in a
hurry to make the July count of the
cash and Raiford reminded him that
it was time to do so.
After the governor counted the
money Raiford took it back to Mem
phis himself. He carried the whole
Of the 100000 in his hip pocket on
the train. Raiford then went off on
a vacation. Before he left he placed
the securities in the Jackson Bank
for safe-keeping. The bank knew
nothing about what the package con
tanned. About the 18th of August
Raiford got a telegram from Stow
srs saying that the governor wal
about to count the cash and to come
back and supervise the count. Wit.
ness telegraphed the Jackson Bank
to forward the securities at once tc
Memphis. He went to Memphis and
told Armistead the money must &C
back to Jackson. Armistead tele.
phoned to Rush at Senatobia and
Rush came to Memphis. Armistead
then told Rush and Raiford that he
wanted to declare the deal off, as il
was a nuisance, and they all agreed
to this.
On cross-examinstion Raiford ad-
mitted that District Attorney Grave;
bod told him that IL no would tel'