Governor Lindsay had paid $834,000 interest on the Alabama and Chattanooga bonds, and in 1874 there were arrears amounting to $1,054,000.[1675] Congress had made a grant of land, six sections per mile, amounting to 1,000,000 acres, for all the roads within the boundaries of Alabama, and the state held a mortgage on this land. Much of it was sold fraudulently by the railroad company, and titles were given where there had been no sales. One railroad agent pocketed $33,447.97 received from fraudulent sales of this land. The state never received a cent.[1676]
Other Indorsed Railroads
The story of the other roads that applied for aid is similar, though shorter and of a meaner nature. The Savannah and Memphis road was the only one that failed to default.[1677] It was indorsed for $640,000, but when the House committee was investigating, in 1871, as there was no record of any indorsement, the president refused to appear or to give any information.[1678] Later it was ascertained that at the time that the road was worth only $263,000 it had been indorsed to the extent of $320,000.[1679]
The South and North Alabama Railroad was a persistent applicant for legislative favors. On December 30, 1868, the available portion of the “two and three per cent fund,” amounting to $691,789.43, was turned over to the South and North road.[1680] The road secured indorsement at the rate of $16,000 a mile along with other roads, but this was not enough, and, on March 3, 1870, the legislature increased its indorsement to $22,000 a mile.[1681] Governor Smith knew so little of what he did in regard to railroads that in his last message he stated that the South and North road was indorsed for $1,440,000, that is, for ninety miles at $16,000 a mile,[1682] while he raised the indorsement of the Selma and Gulf to $22,000 a mile, thus confusing the two roads. The House Railroad Committee declared that by means of bribery the road had secured one hundred miles of indorsement, amounting to $2,200,000.[1683] When Lindsay was asked to indorse more bonds for this road, he made an investigation which convinced him that too many bonds had already been issued, and he refused to sign any more. Under the law the road was entitled to 1900 one-thousand-dollar indorsed bonds, but had received 2200,[1684] an indorsement of $2,200,000, while the road equipped was valued at only $1,625,200.[1685] When it became known that fraudulent issues had been made, the Investigating Committee called before them the ex-treasurer of the state, Arthur Bingham, of Ohio. He claimed and was allowed the constitutional privilege of refusing to testify on the ground that his testimony would tend to incriminate himself.[1686] In 1870 it was estimated that including the “three per cent” fund the road had received from the state $2,000,000 more than the cost of building it.[1687] Governor Lewis, in 1873, reported that the South and North road was indorsed for $4,026,000, including $2,200,000 that was not recorded on the books of the state.[1688]
SOME RECONSTRUCTIONISTS.
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| Governor L. E. Parsons. | Governor William H. Smith. |
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| Governor D. P. Lewis. | |
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| Negro Members of Convention of 1875 are on the left. The white man in the back row is Sam. Rice. | |
The East Alabama and Cincinnati corporation consisted of Governor W. H. Smith, three senators (two of whom were J. J. Hinds and J. L. Pennington), and two members of the lower house. Stanton of the Alabama and Chattanooga was also connected with it; in fact, he was connected in some way with nearly all the schemes to secure state aid. The road was mortgaged to Henry Clews & Company for $500,000. It had no money of its own, but secured state indorsement for $400,000 and a bond issue of $25,000 from the town of Opelika. This indorsement by Governor Smith was not discovered until 1871, when Lindsay was accused of issuing the bonds. This he flatly denied, and he was correct. The Tennessee and Coosa rivers road had $33,513.25, if no more, of the “two per cent fund.” On March 2, 1870, that road was released from its indebtedness to the state (part of the “two and three per cent funds”) on condition that it apply for no further aid. But now, in order to get the indorsement, a part of this road was transferred to the East Alabama and Cincinnati road, to pass as a new road. With an indorsement of $400,000 besides the $25,000 Opelika bonds, the road equipped was valued at only $264,150.[1689]
The Selma and Gulf was another road without resources of its own, and, so far as it was completed, was built with state aid. Governor Smith, in clear violation of the law, the committee reported, indorsed the road for $480,000. Some one, probably Smith, though Lindsay was accused of it, raised this amount to $640,000, $160,000 of which was not recorded. At this time the road was valued at $424,900, and the company threatened to default unless further aid was extended. Smith thought that the road was indorsed for $22,000 a mile and reported $660,000 indorsement.[1690]
The Mobile and Alabama Grand Trunk road, valued at $704,225, was indorsed by the state for $800,000. The city of Mobile also issued $1,000,000 in bonds for this road.[1691] There was no record of an application for aid from the New Orleans and Selma Railroad. Neither Smith nor Lindsay reported it, yet its financial agent had secretly secured an indorsement of $320,000, contrary to law. The road was valued at $255,350. It had no resources except $140,000 in Dallas County bonds, and its president, Colonel William M. Byrd, resigned rather than be a party to the stealing.[1692]
The promoters of the Selma, Marion, and Memphis road placed General N. B. Forrest at the head of the enterprise, and for three years he worked hard to make the road a success. Governor Smith indorsed the road for $720,000, or $18,000 a mile, when only forty miles were completed. In 1873 the road was valued at $738,400. When the company failed, as was intended from the first, General Forrest gave up every dollar he could raise in order to pay debts due on contracts, and he himself was left a poor man.[1693]