per cent. it would have been far better than to have formed a loan bank under the sole control of the superintendent, who after using it, as we 'will hereafter show, now offers to the State for the use thereof, the poor compensation of two and a fourth per centum per annum. Your committee have examined the items of expenditure as exhibited in the fourth column. They have obtained information from the Banks of the monies paid therein for stock under the Acts of 1836 and 1838. They have also seen the certificates of stock taken by the superintendent in the Planters Bank; also certificates of stock taken by the County Common School Commissioners in the Union and Planters Bank, under the Acts of 1532 and 1833, and transferred to the superintendent; and also certificates of deposit in the Bank of Tennessee.This information, obtained from the Banks, is set forth in a table hereto annexed, marked C. It sets forth the investment in the Banks, and the month and year of each investment. It also exhibits the monies received by the Superintendent from the Banks, as dividends, and also the bonus from the Planters Bank. From this table it appears that the Superintendent has paid into the Banks the sum of seven hundred and forty-four thousand two hundred and eighty-six dollars and twenty-seven cents. Of this sum, however, there are five hundred and forty-four dollars said by the Superintendent to have been paid by him into the Union Bank as in part payment of stock before that time taken by the County Common School Commissioners of Henderson county. But of this he has no voucher, nor has he charged himself with having received it. The committee can. not therefore allow it as having been paid by him. Perhaps the truth of the matter is, that this amount, said to have been paid in, was only retained from the dividends that had before then arisen on the amount paid in by the Commissioners from Henderson county. Of the above amount paid in, $303,159 51 were of the proceeds of the sales of the Ocoee lands. The certificates of stock shown your committee by the Superintendent, are set forth in table G; which shows the shares taken by the County Commissioners in the Union and Planters Banks, under the Acts above referred to, also those taken by the Superintendent in the Planters Bank; also the monies paid the Bank of Tennessee as capital stock, and as a sinking fund. From which, by comparison with table C, it will appear that he has paid into the Bank of Tennessee, $4,067 46, for which he had not on the 18th November a certificate. It will be further seen that the whole amount of the Common School Fund of Tennessee invested in stocks, up to the 18th ult. is eight hundred and thirty-five thousand thirty-four dollars and fifty-nine cents. It will appear from what has been said, that the Superintendent has certificates of stock purchased by himself, to the amount of 740,218 SI That his disbursements, as shown by his own books, are 761,017 50 Which will leave a balance said to have been by him ex pended, of The Superintendent has exhibited to us his expense account as follows: 1. Paid on account of the old bank, on settle ment with agents, balances due, Attorney's fees, &c. 2,871 97 2. Post Office account, 1,148 17 3. Redemption of old State Bank notes, (which we have counted and burnt,) 1,141 13 4. Counterfeit Change Tickets taken by agents, burnt, IS 50 5. Uncurrent Bank paper, burnt. 6. Printer's account, viz: Banner Office, publishing sale of real estate, Do. Extra newspapers, with School 65 00 63 00 Act, 3.50 7. Books, Stationery, on account of collection of School Fund, and putting the School System in operation, &c. 193 82 380 63 11 00 8 75 S29 45 210 81 8. Agent's salary, Clerk's hire, lawyer's fees, office rent, fees paid at Clerk's offices for searches, &c. Also, amount by which Superintendent is credited for payment on stock of Henderson county school fund, To which must also be added the difference between the interest as per table B, and the amount of interest with which the Superintendent has charged himself for use of public money, Showing a balance of The Superintendent is entitled to some credits, viz: 544 00 116,053 33 11,728 61 127,781 94 Statement, up to 18th Nov. and for which Superintendent has not received any certificate, 4,067 46 123,714 48 From which it will be seen, that if the account is correctly stated, the Superintendent appears to be a defaulter to the amount of one hundred and twenty-three thousand seven hundred and thirty four dollars and forty-eight cents. The Committee have examined the Superintendent, as to this balance. From the answers and statements made by him, the following account will exhibit the claims he offers as a set off-viz: Balance, 1. Uncurrent money, balance on hand not taken into the previous account, 2. Redeemed Bank Notes, 3. Reserved for Carter county, accumulated interest, 20.00 35 43 400 00 do 1,255 00 1,560 00 6. Deposited in Bank of Tennessee over and a- 8. Interest (viz; difference between the inter- 9. Amount of balance said by Superintendent to have been paid by him on Henderson county stock in Union Bank, 10. Balance of expense account which Superintendent says should be allowed him, 11. Notes under discount, 11,728 61 544 00 83 50 107,101 OS 123,714 48 123,714 4S We will examine these items in the order in which they stand: 1. On the 21st November the Committee were shown all the uncurrent money the Superintendent, as he stated, then had on hand: The amount was $65. For this amount they gave him credit-though they did not think at the time it was right for either the Superintendent or his agents to make any such charge. Having admitted this, and with a full understanding that it was all he had received up to 18th November, they could not afterwards admit a new supply. 2. Redeemed Bank Notes. This item should be admitted. 3 and 4. The Superintendent has no right to reserve from the general fund any sums to meet demands for accumulated interest. If the above counties should at any time hereafter have a right to the monies mentioned, the fund is able to pay it. 5. Alabama and Georgia money. As this is all the unbankable money the Superintendent has on hand the committee are willing to admit. it. Though, as a general rule it should not be done. For, the very moment we authorise either the Superintendent or his agents to receive depreciated notes, they will, after that time, receive no other kind, and the school fund, instead of increasing and fulfilling the great ends for which it was set apart, would become wholly worthless-the mere scape-goat to bear the losses of projectors and swindlers. 6. The balance of monies deposited in bank and not before credited are, of course, admitted. 8. The difference of interest has been already explained. 9. And also the amount of $544 of Henderson county school fund. 10. The balance of $53 50 of expense account has been already explained; and if, from the Superintendent's own showing, it has not been expended, of course he should not be credited by it. 11. "Notes under discount." This item requires explanation. The Superintendent says he had a right to lend out the school monies; that this right was given him by that part of the act of 1856, already quoted. He also justifies the lending of this money to individuals, upon the grounds that a large amount was received in uncurrent paper upon different banks. But does not show, when asked, what amount, from whom, or when he received said uncurrent money, not having kept any record thereof. He does not admit the correctness of the interest charge made by the committee over and above what he reports he has received as he states; he had to make frequent and repeated loans on time without interest, of this uncurrent money, mixed frequently with par funds, so as to prevent a sacrifice of the school fund, and that he was advised, and did keep some surplus fund constantly on hand to redeem the old notes and liabilities of the State Bank. On being questioned as to the. general instructions he had given the county agents, touching the kind of money they should receive, he stated that his instructions were to receive no other than bankable or current money. The committee cannot conceive how the Superintendent could have derived from the section quoted (Act 1836, ch. 23, sec. 11) the powers he has exercised. It gives him no power to lend money, to discount notes, or buy and sell bills of exchange. But, if we could for a moment suppose this power were given by the act of 1836, the act passed January 19, 1838, makes a new disposition of the school monies. It provides (chap. 107, sec. 3.) "That the money belonging to the Common School Fund, which may now be in possession of the Superintendent of Public Instruction, or which may hereafter come into his possession, shall be handed over to the President and Directors of the Bank of Tennessee, as capital in said Bank," for which the said President and Directors were to issue to the Superintendent "certificates of debt." Yet it will be seen from the table E, hereto annexed, that after the passage of this act, the Superintendent according to his own showing lent out, or "discounted on," between eighty and ninety thousand dollars of what he calls the School Fund. Your committee required the Superintendent to make them an exhibit of the "notes under discount." Although they consider that the State has no more claim to the notes referred to, than to the carriage or servants of the Superintendent, yet they believed it their duty to enquire, and know what use had been made of the large balance heretofore and at this time in his hands. It will appear from table E, that he has lent this money to, or with it purchdsed notes and bills on various persons and corporations in and out of Tennessee, confined principally however to Nashville, Holly Springs, and Lincoln county; that of the nominal amount of one hundred and thirteen thousand two hundred and ten dollars and three cents, said to be on the Sth of October, due and to become due-$42,194 80, were to come from Lincoln county, Tennessee; the sum of $28,746 33, from about Holly Springs, Mississippi; and a large amount from the firm of M'Ewen, Whiteman & Co. who are carrying on a paper mill in the town of Nashville; the balance from various places. The Holly Springs debts are in some way connected with a bank, formerly in existence in that town and are at best a doubtful investment. This investment at Holly Springs is represented by the Superintendent to have been made as a means to convert ́ monies under par to par funds." There is one debt charged to William B. Robinson & Co.. with S. E. Gilliland and Samuel Rosebro as guarantors. The history of this debt is this; William B. Robinson and Robert H. M'Ewen were in partnership in a mercantile establishment in Lincoln county. They took the money out of the School Fund to enable them to carry on business, and gave their firm note to R. H. M'Ewen as Superintendent.The latter afterwards sold out his interest to Gilliland and Rosebro, and they became bound for the payment of the note. The partners in the firm of M'Ewen, Whiteman & Co. are Robert H. M'Ewen, Oliver B, Hayes, John M. Hill and William S. Whiteman. They are bound as principals and endorsers to a large amount, as may be seen by reference to the table. It will also be seen that one debt of $6,827 76, has been due from Lincoln county for nearly three years. Also due from A. C. M'Ewen and others, relations of the superintendent, for the same length of time. The rate of interest or "discount rates" of the Superintendent will also appear by reference to the table. On seeing this, the question arises, if the Superintendent has been able to realize eight or nine per centum on the monies he has been using for now nearly four years, ought he not to allow the State more than 24 per cent? Yet he has not charged himself with more. The conduct of the individual placed by the Legislature at the head of a system of education, just put into operation, needs no rebuke at our hands-the facts will speak. The committee could not, therefore, allow this item of "notes under discount" to form any part of the school fund. Deducting, then, the items believed to be allowable, viz: |