REPORT

- 01>'-

RON. WM. H. MOORE,

COMMISSIONEI~

TO INVESTIGATE AND AUDIT CLAIMS AGAINST· TIIE'"STATE OF ALABAMA, ON ACCOUNT

OF THE ALABAMA AND CHATTA­NOOGA RAIL ROAD.

:MONTGOMERY, ALA. :

ARTHUR BINGHAM, STATE PRINTER. 1873.

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l~EPORT. • --0--

To His Excellency, DAV ID P. L E WIS.

Governor of Alabama :

SIR- Having been appointed by your Excellency, Com­missioner, under the act of the General Assembly oi Alabama, entitled " An Act to authorize the Governor to appoint a Commissioner to investigate and andit certain claims therein mentioned against the State of Alabama, on account of the Alabama and Chattanooga Railroad," ap proved March 28th, 1873, I beg leave to submit, as such Commissione1o, the following report :

As soon as the public notice required by said act could be given, after receiving my commission, I entered upon

I the duties enjoined upon me. From the testimony adduced bE-fore me, and which is

on file in the State Auditm's offi ce, it appeared that Col. .John H. Gindrat did, by authority of Gov. Lindsay, seize the Alabama and Chattanooga Railroad, and take possession and control thereof, or a t least that pOl'tion thereof that was within the State of Alabama, abont the last. of July , 1871 , a nd it continued in the possession of the State. and under its control, or the officers appointed by State authority, and they held and operated it until about the 1st of October, 1872, except from the 25th of

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May to the 25 th of J unP, dnring which pPriod it, or that portion of it that was iu A laba nra , was in t he hands of the assignees in bankruptcy. In the spring of 1872, for a. Yery short time, the Mobile a nd Ohio Railroad Company op<'rated it under a. conhact.

The first s<.>s:sion of the Com mission was held at Liv­ingston, l..wgi nn ing in the lattt>r part of :May last, and from t hat time to the first of N ovember, instant, I have bel'n incessan tly, wit h but a few (la~'S of intermission, l ~tborionsly engagecl in investigat ing and auditing thH claims against the State, on a ccount of th e Alabama and Chattanooga R ailroad, p rovided for by the act above re­fern'd to.

It was eddent from the outset t lmt from the want of order and a proper system, and great apparent irregular ­itic>s. added to the in harmious action of the officers and employet:>s of the road, that great detriment had been done the publi<' ser vice, and mnch pecuniary loss had r£snl ted to the Stat~-> .

Capt. R . C. R andolph, late TrPasnrer of the road, vol­untari ly a'nd cheerfully placed in my possession the pay­rolls a nd books of his office and certain Youchers. J asked fur all t he books and pay rolls, ancl they, together with the certificates m voucherti above referred to, which were l'Pcei\·ed by me: were placed in the custody of t lw clerk, who l1as deposi ted them, together with the dock ets, minutes, &c., of this Commission, with the Auditor of State. The pay-roll s, lJO wever, only embraced the period from the time the State began opera ting the road, or a part of it, which was early in August, 1871, to, and in­d uding, a part ot F ebruary and :Ma.rch, 1872, and from that time forward, so far as any book s or accounts before me from the Treasurel"' s office show, 110 accounts or pay­rolls were entered u pon the book s of the samP, or but few, if any. From the loose and un~atisfactory manner in whic h the book s, pay-rolls and acconnts, to which I had access had been kept, great perplexity followed, and

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laborious investigations had to be made, and often with unsatisfactory results. Assistance was sought from ex­perts, but they could give no a id. In the investigations of the claims presented , I availed mye:elf of a ll the assist­ance that could be derivE>d from them. My duties, as was conceived, did not extend any farther as to them. But few, if any, of the accounts appear to have been elosed or balanced , unless th e issuance of due bills or eertificates for what purported to be s till du P- can be so considered .

Gf'n. \ V . T. W offord, the receiver and superintendent of the Nor thern division of the road, manifested not only a willingness, but an anxiety, to give all the aid and as­sistance in h is power for the proper examination and investigation of a ll transactions undf'r hi s management, or within h is k nowledge, of which I could tak e Ct>gniz­ance ; and. to do so, volunta l"ily left his home at Carters­ville, Georgia, and appeared before the Commission at Attalla. He submitted a s tatemeut u nder oath, which is med in the A uditOI·'s office " ·ith the other papers of this Commission. From the want of harmony and confi­dence between those contl·olling the two d id sions of t he road, and f he officers a lld employees under t hem, many facts could not be ascertaint>cl, which are material to a clear a nd proper understandi ng of the afl'ai1·s conncctt~<l with the uufo ltunate management of the .Alabama and Chattanooga Railroad.

F rom the facts developed, it appeared to me that Gen. \Voff01·d , and the principal officers n ndPr him, WL' r e in­tluenced by an earnest de~ire to prot~ct and promote the interests of Alab:1;ma. Said \ Y offonl held his offi ct-> as supel"intendent of the N orthPrn divi'5ion of said road u nder a~)pointment recei\·ed from J ohn I I. Gind rat, the receiver appointed by GoY. Lindsay, nn<.l was au thorized by said receiver to appoint a nd organizt-> a. sufliric>nt corps of otfieers for the same.

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'l'h is nppoi n tnwnt and th e!:e p owers were never revok ed, HO far as any facts came to rr.y knowledge ; and, indeed, \Vofford testifit>d that they n ever were revoked, and t!Jat he continm•d to act as s uch u n til the receivers appointPd hy th<' U. S. Cour t at 1\Iobih' took possessior1 of sai<l road in f.:.t>p tt'mher, J 872.

Col. II. F. PricP, the treas urer o f the N orthern d ivision, was also b~fort~ m e fo r se,·eral days, a nd to him I a m inclt->hte<l for m uch valuable information a nd eviuence, which wPn ' o f tlw 11 tmost i m porta nee to th e proper in ves- • liga tion or many claims. H e al ::>o lil<,d a statement u nder oath, which is dt>p osited with tl1 e .Aud itor . It appears that h P was em ploy ed by the late GPn. Clanton. to aid him in S('C nring p Msession of the Northern d in sion of said read, <'SJWtin lly tha t p ort ion in t he 8 tates of Gt'Orgia a nd TPn n<':,;st><>, and that h e n ' ncleJ·Nl n \luable a ssistance, and was p romised compensation tlwrefor.

UnclPr my constrnction of tho act u ndt"r which your Excellency appointed me Commi8sioner, I did not con­eei,·e that I had a ny anthod ty to make an allowance or audit h is c lqim for the sa me ; hence, it was no t tho roughly inn~~tigatecl , a nd that 1)ortion of H " ·as rejected . Said Priee ab o fnrni:5heu a sehednle of d Pbts p a id by the N or thr rn di,· i:-;ioll of th e road, and of its oi!t-standing liabi li tiPs, wh ilP in the hands of' said \Vofforcl. The J:>ay­roll ::;, book s ancl acconuts belonging to the administration of tlH' N odhern division of the road under \Vofford aud h is officers, t lw s u peri n tPnclen t and trea surer sta ted, would have been bro ught before m e : b n t wlwn Harralson and Ric8 werP appointed rec~ivers, th ey took cha rge of the same, or th<>y were left in t he offi ce in Chattanooga , which W«'n t into tlwir possPssion, and they had not r ecover ed them, nor h ad acCl'~:-> to t hem.

E fforts wer<' made by me to procure them. but failed . Also a n 'port. of the opera tion s of said division, with the a mou nt o r the receipts a nd di~bursements, was bPfo re th e Commil'::;iont->r , and are all deposited ·with the Auditor of Statt>, with t he books and papers of the Commission.

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I was very anxio us to avail my:;;elf or a ll t lu! ln:·ol'ma­tion that co uld be d erived fro m the l'<'C"<·iVl•r appointLll by G ov. I.Jindsa.y, and mad e rep eated effort:s to do ~o, ' and Hnally h e appeared at my last tPrm at Attalla. a11 t1 l11 · tll:l tl­

ifes ted great willing ness to give any a s::; is tant·o in l! i-; powcl'. A t my request, lte submirted, 1\lllk l' oa th, :-:. g~neraJ statement ; b ut, unfor tu nately , he k Hl gi,·vn bnt l ittle p er :::;onal attc•ntion to the manag<>nwnt o f t h(' J·o~t d, a nd appeared to have exercis(•<ll.>nt littl<! }JI'I':..;nnal ~ iqwr­vision OV<'r i t. Explained by him in l >< ·ing enmpt>llt <l a~ !Such reeeiver t o a t le1rcl many trou b l t•som<~ anll \ < '-·l ' ;\}ll:"')

law snits, n ot only in the Sta tl' <1f ~\.laham.l. lmt ~.',,, , in the States of Tennesse<\ Ge01·gi~1 all'l 1Ii ::;~i :::;s i pp! , <.ltld also upon the bnnklT pt court, by wlti<;h <:onl't it~ · was also appointed a ssignee i n bankntl>tcy, in a ~u i t in wlt i<"h ::;aid roa.<.l was d ecla red bankrnpt. If ht> co u ld itaYP gi\'(•Jl t hat proper and personal attention to the 1ll;l nagt' ment of th e r oad, which was indispensab le to i ts p1·opl'l' a!ttl =:;tw­

ressful operation, many, if n ot aU t1u~ lo:'sc•:; the> Stat!! has sustaineu, by seizing tlw ro.t<l . cnnld ba n •. b~'<'!l a verted.

It seems to have U"en generally UIHl c•rslo:>d tklt t ': 'l'P

was no efficient, acti,·e, r esponsiblc' chit·f. O t' ll!CJtal iz;!-­t ion and g<>neJ·al disorder and rPch:lPs~n"~s J>l'~'''uil c•d to an ala1·ming extent, and notwithstand ing tlt" "' <til t of funds to opt'I·a te the r oad easily , a nd with a ::;·t ti::d',wtOI'ily ::;nccessfnlresult, still if the evilt; a bo \·e r <> !'t•nc•Ll to had not exis ted , a nd reasona ble degree of L'Couomy ~ l:H1 :::;t J·id­lH'SS in all its operations antl Sl:'ttl•· me uh hall b '< n obsel'Ved, I am constrai11ed to b eliPve that i t' tLe po"'"'L'::i­sion and control of the ron.d by t he Statc• had Jlt>t !J• ·pn a ~otuce of profit to th e Sta te, i t certainly wonltl u ot havt• resulted as it din, in a l os:-; of abont ow• hn lHh~·d thou ~.t nd dolla.J·s.

For many week ::-, a portion of the ~outhel'll tliri::-ion of the l'Oad was run by irresp onsible p arties ; largc> :sttJil:5 of mon<>y Wt>l'e eo})('CtNl .from ft·<.>i!!h t:-; a nd pa:-: :·a •n.~"r;-; of

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which no proper returns were ever made, and the rolling «tock, track and other property of the road greatly damaged.

H . F. 'Vheeler, late superintendent of the Southern division of said road, was in the Sta te of Ohio, and was corresponded with, and advised of this investigation, by .parties interested in it, bu t did not appear before the C ommission.

He did hold n. due bill, or certificate, issued by Capt. R a ndolph, late treasurer of said road, for a ba lance still said to ·be due h im of nenrly fi fteen hundred dollars. ,_,his be had transferred to the P irst National Bank of 'rnskaloosa, and that bank presented it, as transferee, and asked that it migh t be audited and allowed. After a laborious investigation of the matter, seeking all tbe lig ht the treasurer' s book s would afford, and all the testi­mony that could be procured, in the limitPd time allowed for the invest igation, with the information in my posseti­f' ion, I was constrained to r eject the whole cla im. I am further satisfied that if hi ::; administra tion as superin­tendent could be properl.r im·estigated, it would be found that, in eqnity and good conscience, he would be in­-debted to the State in a la rge sum. This was a case in ·which ! ·believed the State should bP rcp ri?S('nted, ancl by virtue of said act, I appointed lion. N. II. Brown(;', of 1'uskaloosa, to do so. He gave it that thonght and atten­tion whi ch the amount involved, the character of the claim and the position and relationship wltich t he payee of the dne-bill or cer tificate su f: tained to t1H' road, dP­m anclcd.

Under my consh11ction of the act giving me the only p ower and jurisdiction I could ex t>rri8e, I was forcf'd to r f'jPet the claims of R. C. Randolph, treasnn' r, and H. Harding, superintendent, for a llew•d services p<•rfonned after the rt>ceivPrs appointed by the U. S. Conrt had taken po.ssession and control of the road, " ithou t any examina­t ion in to their mPri ts.

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From my investigations, and all th e evidence which the brief time specified in the act of 28th March, 1873, enabled me to procure, I cannot fail to say that the man­ner in which Col. Harding managed said road during th~ time he controlled the Southern end. as superintendent, deserves commendation.

He was appointed during a time of great demoraliza­tion; when the track was in wretched condition, with but a small amount of rolling stock; without connections; wit11out funds: and meeting with the clisast~r of a most unusual fresh('t, darr.aging much of the track and road­bed badly, which he succeeded in repairing to some extent, at considerable expense. Notwithstanding all this, from the evidence before the Commission, if he could haYe collected all tl1e earnings of the road for the last month it remained under his control, it appeared that there would havr lwPn but a small balance due under his administra­t ion. 'fbe r(>ceipts for the month last refened to, it was stated, went into the bands of the receiver~, who took the posse~:5ion of the road ont of Col. Harding' s hands.

Under tlw provisions of the act of ).farch 28, 187:3. after the notices prescribed in said act had be«:>n gh·en, one:> t<'l'm of the court "·as held at Lidngston, F.1!tnw and Birmingham ead1, two atTuskaloo~a. and tlnt'(' at .Htalla.

Nearly seven hundred case~ haYe been bruugLt before the Commission, im·olving sums to the amount of about one hundred and thhty thousand dollars, requiring Yer.r laborious inYestigations. The testimony in each cause, or the material portions of the ~ame, was reduced to writing, and th~ evidence on which ench case was deter mined can be found in the books and papers in the Audi­tor's office, where the act reqltired it to be placed.

I h a\·e also caused to be deposited in the State _\_ucli­tor's office, with all the other books and pnper.:; belonging to this Commission, a book containing a list of all cer tificates issued by me to claimants under said act. I t shows tlw nnmbPr of each cei t ificate; tl1e party in whosP

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favor it was issned; the amount claimed in <.>ach case7

and the amount rejected, and the amonnt allowed, also the date of the allowance of each aud the date of the i~sning of each ct>rtifirate, It also shows the number or the cause in which each eertifirate was issuPd, thus facili­tatiug any examination that may be d esired to f:how the Pvidence on which the same was g r::tnted, or at.y other facts in any ~pecial case. That hook also contains a sdH·cl n1e of all rejected cases.

I t will be SN'll that the mnount all o·wed and audited, and for which certificates "·ere g rantt.>cl , is eighty-two thou~ancl two hundn·d a nd three d ollars and ninety-thn"'e Ct>nts (~82,20:3 03.)

'J'he nmonnt aeted on and J·ejectcd by tht• Commi~sionel' i~ fo1 ty thou:::and a ncl six:ty-sevc"n dollars and ninety-t wo <"t'nts (~4.0,067 D2) which is neady onP-thi rd o f the who!«:> amoun t presented.

T he wholt' expenses of the Commi::;sion, on which cer­ti ficates to the A uditor were g ran ted: including attorney s' fe<.'s a nd the clerk, amount to t wenty-four hund red and ~eventy d olla rs and fifty cents ($2,470 50.)

This had to be realized on '"arrants issued by the Auditor on thP State Treasurer, and as there were no funds in the n·easnry , and the expenses had to met promptly, the wanan ts had t o be d isposed of on t1H~ best tem1s. As tlwn· was little 01· no demand for the 'vanants, and the stringt>ney of the money market great, they had to be sold at a ruinous sacrifice.

lt is to be exceedingly r egretted that the unfort unate management of the road by the officers of the State, and the ta rdy act of the State in providing a mode for the adj ustment of these claims, f orced mos t of the poorest and most d esening of that Jarge class of persous who toiled hard for said road, on the faith of the State, to dis­p ose of them at a ruinous discount. In many instances, this eaust>d real suffering to d ep endent families. These <'laim::; went into the hands of otlwrR more fo1-tnna. .ely

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situated pecuniarily, who presented them under this act. as transferees, and to them payment has been made.

Appeals were taken in only about six cases, and in these I had appointed counsel to represent the State. By proper attention, and reference to t he books and ev idence on tile in the Auditor' s office, and the assistance that can be r endered by the Commissioner and clerk, at any· time called upon, the interests of the Stat~ can be vrop<>J·ly, and I am sure successfully defended.

In the ex ercise of what I conceived to h<~ sonnd j uclg­meut n.nd p1:oper discretion, a ttorneys for the Slate were appointecl in but few ';ases, thus b urdening the State with but a small amount for cou nsel fees. My own ln bors an<.l responsibilities would have been diminhi1H:cl if I hacl acted otherwise, b ut I did not consciPnciou::;ly think it necPssary to place an additional burdPn on the tax pa.rer::; of the State.

The number of claims which could 1un·e properly come before the Commission, but which did not, probably owing to the .limited t ime allowed, there are no means of knowing, but it is presumed they amount to a con· siderable sum, as the treasurer at Tuskaloosa certifiecl that he had issued due-bills or cer tifica tes to the a mount of eighty-odd thousand dollars, for out·standing debts ascertained by him to be due, and these did not <->mbrace all tl10 debts under the administration of \Vheeler, a.s superintendent, nor the claims due on the N orthern division of the road, nor those under Col. Harding, as superintendent. But quite a number of the d ue-bills issued by Randolph, treasurer, on examination and proof, it will be seen, were rej ected_

There was also a claim presentt>d by II. F. Skaats, assignee of Fr~nch & Co. , for over e' ghty thou~and dol­lars. But it was at so late a period that he d id not haYe the requisite time to prepare the necessary proof, a t least none was offerf'd. The proper investigations of this claim would inv.,lve the f'xamination of an account vf probn bly

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forty thousand d ollars, made up of a va~t n umber of items, running through a period of several months, a lso the settlement of several important points of law.

F rom the testimo ny tiled in tba A ud itor's office, it will bE:' stlen that about the time Col. Gindrat took possession of the Alabama and Chattanooga Railroad, as receiver , u nder order s from Gov. Lindsay, a contract was made with the Alabama Centra l R oad by which it acquired the rig h t to rnn i ts trains o' er that portion of t he A labama and Cha t tanooga Road extending from York to Merid ian . That contract or ag reement was to ex ist for twelve months, and the Centra l R oad was to pay at th e rate of one thousa nd dollars (Sl ,OOO) p er month for the p1·ivilege. Tt>n thousa nd dollars of this sum were p aid in cash at or about the time the contract was made. This amount, it was stated, was expended by the r eceiver in get ting p os­:·wssion of the road. The d nties of my p osition did not r t'qnire an investigation into the application of t his fnnd , and t he t ime allotted within which the absolute duties of the Commission had to be p er formed, being Ro brief, for ­bade it.

It was understood that th e other two thou sand dollars <lu<' under said contract from the Cen tral R oad, have 1wver ue<>n }Xlid. After t he expirat ion of thb contract aboYo 1·o fent~d to, Col. Harding, t he superintenden t who ~nc·ce<>ded \Vheeler, entered into a new contr act with the CPntral R oad , .foe one month, under which it p a id to the A1a l>ama. a nd Chattanooga R oad two thousand dollars fo r th e u se of that portion of the track from Y ork to )Jeridian. This amount, H arding stated , had b een u sed in op Prati ng th~ road.

There is a lso d ny f rom the U. S. P ost-Office Depart­ment, to the Alabama antl Chattanooga. R ailroad, ab out twt>nty thousand d ollars o r more, for carry ing th e United Statl'S m ails after the seizure of the road by the State. Tlli$ claim, fro m some unaccountable ca use, has never lw<>n settled or paicl. \ Vhatevrr th e correct amount may

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be, it is clearly due the StatP, and if tlw p ropc•1· effort<; w <> re mach-', could no dou bt be recoverPd.

I also feel it my dn ty t o br ing to you1· <'Xtt>liPney's at t ent ion the fact that t he bi 1l which was filPcl in tl11• Superior Court of DadP cour.ty, Georgia, in lwhalf of tlw 8tate of Alabama, has been recentlv d ismi~sPd at lwr eost, and I understand an e1fort is being made in thnt eou rt to charge th e State of Alabama with a cons id<>ral>lP snm of money for a lleged damages incntTt>d by virtue of the injunction obtained by Alabama. Tltis b ill was in reference to the Alaba ma and Chattanooga Railroad.

I cannot close this commu nication withont l'P(·ognizing, in a public m anner, my obligations to Mr. \V. H. Clanton. of Montgomery , whom I a ppointed clerk, under thP provisions of said act. I allowed him nine hnn(ht•d an<l thirty d ollar s, pa id in certificates on the Auditor, an amount totally inadequate for the seiTiCPS and labor lWl'­formed. Ile has been most effi cient and at tentive in tlw discharge of his laborious duties, and u niformly court<•ous and polite to all.

The d elicacy and responsibil ity of th e position assigned me, were appreciated. In m any r espect:; the act re­ferred to, conferred on me u nu sua l a nd almost u nlimited power: a nd I brought to the d ischarge of these peculiarly delicate duties an earnest desire to do full justice to al l claimants and to all par t ies, and a t, th e same time to guard the interests and the rights o f the State of Alabama. If mv acts and the results of my labors meet the appro­bation of y our cxcellen ~'.y, the Legislature, and the peoplP of the Statt>, my l1ighest a mbition will have been gratified.

I have the h onor to be Most respectfully,

Your obedient servant,

Huntsville, N ovember 1, 1873.

'\VM. II. ~IooRE, Commissioner.

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ERRATUM.

On page 11, fifth line from bottom of paw'. read eigld instead of eighty.

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