708 



TENNESSEE. 



trade * * * the sum of twenty cents on every 

 hundred dollars of said property and capital." 



This act was subsequently repealed, or modi- 

 fied, chiefly in regard to the rate of taxation. 

 During the summer session of May and the fol- 

 lowing months a tax bill was introduced, vari- 

 ously amended and finally concurred in by 

 both Houses on July 6th, "making the tax 

 forty instead of twenty cents on every hundred 

 dollars' worth of taxable property, and increas- 

 ing the tax on privileges." At the following 

 session, which began on the first Monday of De- 

 cember, that rate was still further increased, a 

 new revenue law having then been enacted 

 which provides "that the State tax on every 

 hundred dollars' worth of property upon which 

 taxes are by law allowed for State purposes, 

 shall be sixty cents ; " that is, thirty cents, if 

 not paid in depreciated State money. Other 

 less material alterations were made by this act, 

 slightly increasing the tax on merchants, rail- 

 road and insurance companies. 



The Legislature deliberated at this session on 

 a great variety of subjects of general and local 

 importance relating to State and county finan- 

 cial affairs, internal improvements, delinquent 

 railroads, charitable institutions, the education 

 of youth in various branches of instruction, and 

 other matters. What most excited the people's 

 interest, however, was the report presented to 

 the General Assembly joint committee of six 

 appointed to investigate the frauds alleged to 

 have been perpetrated on the school-fund of 

 the State. This committee had been appointed 

 on November 11, 1869, and on February 28, 

 1870, authorized to prosecute the work of 

 their investigation during the recess of the 

 General Assembly. The Bank of Tennessee 

 was the custodian of this fund, which, from the 

 statement last made by the bank in 1863, ap- 

 pears to have consisted of $663,752.65, gold 

 and silver, "put np in kegs and boxes, and 

 sealed." These were removed from the State 

 in 1863 and deposited in the vaults of the dif- 

 ferent banks of Augusta, Georgia, except one 

 bag containing $50,000, which was placed in 

 the counting-room of a firm doing business in 

 that city, under the direction of the cashier of 

 the bank. Subsequently he kept this keg by 

 him at his lodgings, and finally removed it to 

 the house of an Italian, a short distance from 

 Augusta. Soon after the surrender, the Italian 

 returned to his country, and since that time 

 nothing more has been known in reference to 

 the keg ; whereupon the report says : " From 

 impressions derive dfrorn various sources, and 

 the inferences and circumstantial evidence af- 

 forded the commission by the various witness- 

 es, they cannot come to any other conclusion 

 than that through the Italian and the cashier 

 the State has ultimately become loser to the 

 amount of $50,000 in gold * * * The com-' 

 mittee are of the opinion that, considering all 

 things, it would be wisest to allow this to go 

 into the general account of losses that have so 

 long burdened the State/' The report further 



shows that in I860 the sum of $612,250, in 

 United States 7-30 bonds, was deposited as 

 school-fund in the Tennessee National Bank 

 which was established at Memphis in 1865, 

 and afterward failed, whereby the State lost 

 above $200,000 on that deposit. The president 

 of the bank testified before the investigating 

 committee, and filed a written, statement as 

 part of his testimony, revealing the fact that 

 his bank was appointed fiscal agent of the 

 State, and became the depository of her funds, 

 including the school-fund, through the political 

 influence brought to bear in its favor by the 

 leading Eepublicans in the Legislature, and out 

 of it, in the State, "with the understanding 

 that this bank was to support the Republican 

 party and be their financial agent, and furnish 

 money to ' run the machine ' whenever they 

 wanted it." He mentions a number of them by 

 name, and also several sums paid them by him- 

 self and his agents on different occasions. In 

 his written statement, dated April, 1870, he 

 says : " Twenty thousand dollars was advanced 

 to them by which to perpetuate their power 

 in Memphis, through the metropolitan police 

 of that city. Constant applications and assess- 

 ments were made upon mo for money to sup- 

 port the party in its manipulation of State and 

 local politics. A good deal of money was used 

 by the agents of the bank and myself among 

 the leading and prominent members of the 

 Legislature of 1866-'67, as also among leading 

 and prominent Eepublican politicians in other 

 sections of the State, in the appointment of 

 this bank as fiscal agent." As to what money 

 was used in these transactions, which the pres- 

 ident seems to regard as the chief cause of the 

 bank's failure, he stated : " The capital was but 

 $100,000 ; and to discharge all the indebted- 

 ness of the bank occasioned by the draws made 

 to meet the obligations to pay members of the 

 Legislature and others mentioned in this depo- 

 sition, the funds of the bank were used indis- 

 criminately, also my personal funds." 



For several days during this session the two 

 Houses met in joint convention for the purpose 

 of choosing the State Secretary, the Comp- 

 troller, and the Treasurer, whom the new con- 

 stitution empowers them to elect. The candi- 

 dates for each office were numerous, and the 

 ballotings more so. The final result was ob- 

 tained on May 22d, the officers elected being 

 Thomas II. Butler for Secretary of State, Ed- 

 win E. Pennebaker for Comptroller, and Wil- 

 liam Morrow for Treasurer. 



The general election for the purpose of 

 choosing the judges of the Supreme Court was 

 held in August, as ordained by the constitu- 

 tion, and the following are the names of the 

 judges elected : P. Turney, I. L. T. Sneed, A. 

 O. P. Nicholson, T. A. B. Nelson, James W. 

 Deaderick, and Thomas I. Freeman. They 

 received a majority of 90,000 votes over the 

 Eepublican candidates, who received less than 

 19,000. Six of them were now elected in or- 

 der that they might hold two different courts 





