The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1909-07-20
ADMISSION MADE
BY M'LENDON
Railroad Commissioner Says
He Sod the Bonds
NO CRITICISM OFFERED
Other Railroad Commissioners Have
Not Been Brought Into the In
Vestigation and McLendon
Bears All Blame.

Atlanta, July 19.-S- 9. McGendon, sus-
pended railroad commissioner, admitted
this afternoon before the legislative COM
mittive which is trying him that he had
sold $4,000 worth of bonds of the Ath-
ems street railroad making profit OF
about $3.50 the transaction. When
McLendon was suspended this charge
was not made. He was suspended by
Governor Smith for refusing to vote with
the other commissioners in an effort to
lower freight rates. Later 1t was charged
that he had sold the Athens bonds He
claims he acted in the interests of the
people of the state in his efforts to
find buyers for the bonds in order that
the road might be a success. He claimed
that his action was legal and not sub
ject to criticism.
All that the testimony so far has de-
veloped is that Chairman McLendon, in
pursuance of desire to bring outside
capital into Georgia at a time when 1t
was charged foreign capital was being
driven from the state by administration
policies, sought to find a market for the
bonds of the wrightsville and Tonnille
Railroad company and the Athens Street
mer he was unsuccessful. but as to the
latter he succeeded in placing $4,000 of
the bonds of the street railway COM
pany, $4,000 in May before the state
primary and $4,000 in July, after the
primary 1t was shown that this trade
was negotiated through the Central Bank
and Trust corporation of Atlanta, which
advanced par and interest on the bonds;
that Chairman McLendon never saw
them; that in case of the latter batch
he gave the bank his note for the amount
represented by the transaction as security
to 1t.
Relative to this aspect of the case,
one Of the most interesting developments
yet brought out was that in the testi-
mony of President A. F. Daley of the
Wrightsville and Tennille Railroad COM
pany to the effect that Judge James K.
Hines, special attorney for the railroad
commission, had offered to sell the
Wrightsville and Tennille bonds for a
commission of $1,000. So far as the evil
dence discloses Judge Hines is the only
one who has ever suggested the mat
ter of a commission in connection with
these bond transactions.
Not least among the interesting disclos-
ures of the investigation is the fact that
Representative Hooper Alexander of De-
Kalb was employed by Governor Smith
as a special attorney for the state in
connection with the Western and Atlantic
railroad and other matters and paid
something like $500 out of the state
treasury, although he was at the tine
y, Ar-o1 lV In
his petition addressed to the Legislature,
Chairman McLendon alleged that this
appointment was in violation of the con-
stitution OF the state which prohibited
the governor or the general assembly
from appointing any member of the leg
islature to any office or appointment
with any emolument annexed thereto dur
ing the term for which he shall have been
elected.
Curiously enough attention has been
directed to the fact that during the en-
tire investigation not question has been
asked nor a statement made which can
be construed into criticism Of the con-
duct of the two members Of the old
railroad commission to overcome whose
votes the commission was increased from
members were appointed to carry out the
policies of Governor Smith. All of the
storm appears to have conferred about
the reform element which came upon the
commission when it was reorganized I'M
der the Gambler law.
One interesting fact brought out In
Commissioner Hillyer's testimony in con-
nection with his statement that he did
not carry In his mind the numerous facts
and figures relating to matters coming
before the commission. but always sought
out such information when he had need
of it, was that Chairman McLendon was
one of his dependable sources Of informa-
ton. When Commissioner Hillyer want
ed certain facts or figures in connection
with any investigation which he had to
make, he went either to the secretary
of the commission or to CHAIRMAN Nc 1
Tendon for them and he always put de-
pendence, he said, in any information
which he secured from the chairman.
Then there is the dear old Macon plat
FORM" which has been brought promi-
nently into the investigation. The port
rate plank called first on the commits
sion for the immediate enactment of re-
duced rates from the ports to the in
terror and In the event the commission
did not Immediately come to time, then
1t was demanded that the governor and
the legislature should take steps look
ing to port rate reductions.
That platform was adopted in Septem-
ber 1906 The new governor and new
railroad commission went into office in
the summer of 1907 and the evidence
shows that not one word was said about
port rates either by the commission,
Governor Smith or the legislature until
Governor Smith wrote his letter to the
commission in February, 1909,-a letter
which was referred to committee and
upon which no report has been made
to this day. Al lof which, in connection
with the Macon platform demand, makes
quite an interesting bit Of history