Civil War and Reconstruction in Alabama

by Walter L. Fleming

[1661] Ku Klux Rept., p. 319; House Journal, 1870-1871, p. 236; Report of the House Railroad Investigating Committee, 1871; Ku Klux Rept., Ala. Test., p. 232; J. P. Stow, Radical senator from Montgomery, said that when Hardy left at the end of the session, he carried away $150,000. Not all of it was his own; some of it he had collected for others. One senator is said to have held his vote at $1000 regularly.

[1662] Senate Journal, 1873; Appendix containing Journal of the Capitol Senate, 1872, pp. 19-34; Lindsay’s Message, 1872, to the Capitol Legislature. Lindsay said that all the Democrats worked hard to prevent the passage of the $2,000,000 bill; that he himself worked in the lobby until three o’clock in the morning trying to defeat the thieves. Ku Klux Rept., Ala. Test., p. 199.

[1663] Ku Klux Rept., p. 318; Ku Klux Rept., Ala. Test., p. 196; Report of the House Investigation Committee, p. 1871. Ex-Governor Patton testified that though president of the Alabama and Chattanooga road, he had opposed the bill and in consequence had been displaced, D. N. Stanton of Boston being elected. Patton stated that none of the capital stock had at this time been paid in by the stockholders.

In 1870-1871 “another set of financiers had made up their minds to come down South and help Alabama. Their demand was for $5,000,000 with which to set furnaces and factories going. They were too late. If they had only come the session before, there was no chance for a bill containing $5,000,000, properly pressed, to have failed.” But the lower house now had a Democratic majority. Herbert, “Solid South,” p. 57.

[1664] Senate Journal, 1870-1871, p. 78; Lindsay’s Message, Nov. 21, 1871; Senate Journal, 1870-1871.

[1665] Ku Klux Rept., Ala. Test., pp. 195, 196; Lindsay’s Messages, 1871-1872; Lindsay’s Statement of Facts, April 22, 1871; Report of Commissioners of the Public Debt, Jan. 24, 1876.

[1666] Act of Feb. 25, 1871.

[1667] Statement of Facts which influenced Governor Robert B. Lindsay in his Action in regard to the Bonds of the Alabama and Chattanooga Railroad Company, April 22, 1871; Lindsay’s Message, Nov. 21, 1871. While Lindsay was in New York, Ex-Governor Smith called on him and half acknowledged the whole affair. Ala. Test., p. 199. Afterwards in a letter Smith strongly protested that some of the bonds signed and sealed by himself were fraudulent, and blamed Governor Lindsay and the legislature for recognizing them. He acknowledged that his carelessness had resulted in the present state of affairs. Somers, “Southern States,” p. 158. April 3, 1871, Smith wrote, “I admit that if I had attended strictly to the indorsement and issue of these bonds, that all this never would have occurred.” Herbert, “Solid South,” p. 53.

[1668] Statement of Facts, April 22, 1871; Ku Klux Rept., Ala. Test., pp. 198, 199. Lindsay said that since the Alabama and Chattanooga road was indorsed under the laws of 1867 and 1868, it did not come under the laws of 1870. Consequently, when the Alabama and Chattanooga defaulted, the state was not bound to pay interest on the $2,000,000 state bonds until the legislature acted in March, 1871.

In his Statement of Facts, Lindsay relates a suggestive and illuminating incident: On Dec. 13, 1870, John Demerett, an Alabama and Chattanooga bondholder, brought suit in the Superior Court of King’s County, New York, against the Alabama and Chattanooga Railroad Company, the state of Alabama, and one F. B. Loomis (of the Alabama and Chattanooga Company), alleging that the said railway company was about to place on the market 500 first mortgage bonds numbered from 4800 to 5300, indorsed by the governor of Alabama in violation of the law. Demerett prayed for an injunction to restrain the company from selling the bonds. The records showed that the state of Alabama appeared by her attorney, one William D. Vieder, who declared on affidavit that he was employed by Henry Clews & Company, financial agents of Alabama. Vieder filed an answer in behalf of Alabama, stating that the bonds numbered 4801 to 5300 were properly indorsed, and were of the same class as others issued by the company, that the indorsement was in conformity to law, and that in no case would the bonds be repudiated. The injunction was dissolved and the company permitted to sell. To the Ku Klux Committee Lindsay suggested that Smith might have signed the illegal bonds after he went out of office, as they were not placed on the market until January, 1871. (See Ala. Test., p. 197.) But the Demerett case seems to disprove this and to show that the bonds were issued while Smith was governor. The House Railroad Investigation Committee, in 1871, reported that Smith asserted that the fraudulent indorsements were secured by the active coöperation of Henry Clews & Company, Souter & Company, and Braunfels of Émile Erlanger et Cie., with the Stantons. Southern Argus, Feb. 2, 1875. Lindsay further stated that there were evidences of collusion between Stanton and Smith to secure the election of the latter in 1870 at all hazards. They wanted to gain time in order to conceal the irregularity in the issue of bonds. Stanton furnished much money to the campaign fund, and on election day marched to the registration office at the head of 900 railroad employees, who came from the entire length of the road, had them registered, gave each of them a Radical ticket, and then voted them in a body. Ala. Test., pp. 193, 197.