University of Tennessee, Knoxville
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Exchange
Masters Theses
Graduate School
8-1969
A History of the Smoky Mountain Railroad
William Robert Rogers
University of Tennessee - Knoxville
Recommended Citation
Rogers, William Robert, "A History of the Smoky Mountain Railroad. " Master's Thesis, University of Tennessee, 1969.
http://trace.tennessee.edu/utk_gradthes/2912
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To the Graduate Council:
I am submitting herewith a thesis written by William Robert Rogers entitled "A History of the Smoky
Mountain Railroad." I have examined the final electronic copy of this thesis for form and content and
recommend that it be accepted in partial fulfillment of the requirements for the degree of Master of Arts,
with a major in History.
S. J. Folmsbee, Major Professor
We have read this thesis and recommend its acceptance:
Charles W. Johnson, William N. Cherry
Accepted for the Council:
Dixie L. Thompson
Vice Provost and Dean of the Graduate School
(Original signatures are on file with official student records.)
May 15 , 19 69
To t h e Grad uat e Council:
I am sub mit t i ng herewi th a thesi s wri t t e n by Wi lli am Rob ert Rogers
e nt i t led "A Hist o ry of the S mo ky Mo unt ai n Rai lro ad . " I recomme nd t h at i t
b e acce p t e d fo r nine quart e r hours o f cre d i t i n p art i al fulfillment o f t h e
requireme nt s fo r the d e gre e o f Mast er o f Art s , w i t h a major i n Hi st o ry.
/
'.,/
Majo r Pro fe s so r
We hav e re ad t h i s thesi s and
recomme nd i t s accept ance :
Accepted for t h e Co unci l:
Vi ce Ch ancello r for
Grad uat e S t ud ies and Research
A HI STORY OF T HE SMOKY MOUNT AIN RAILR OAD
A The s is
Pr esented to
t he Gradua t e Counc i l of
T he Univ er s it y of Tenne s s ee
In P a rt ia l Fulf illment
of t he Requ irement s f o r t he Degre e
Ma st er of Art s
by
Wi l l �am R ob er t Rog e r s
Augus t 1 9 6 9
PREFACE AND ACKNOWLEDGMENTS
Railr oading h as a d is t inct p lace in Amer ic an lif e .
One c ou ld almos t
s ay Americ an pros p e r it y in the lat e 19 t h c entury r e s t ed on r ailr oad
d eve lop ment , n at ion ally and r egionally .
In the geographical are a c overed
b y t his p aper , r ailr oad ing w as f air ly we ll entr enched.
s cheme s of pr omoters to b uild r ailr oad s in the are a.
M any h ad b e en the
There f or e , it was
not unu sual f or a new r ailr oad t o b e p r op os e d in the Knoxville r e gion .
The s ources of mat e rial f or this s tudy h ave b e en very limit ed .
L ar ge gaps in mat e r ial ( av ailab le and u s ab le ) h ave r e sulted in unav oid ab le gaps in this presentat ion.
Newsp apers h ave in mos t c as es b e en les s
t h an lib er al in their repor t s , and Int er s t at e Comme r c e Commiss ion f ind ings
h ave b een limit e d b e c au s e of the lac k of per t inent f ac t s even when the
rep or t s were mad e .
T he of f ic ial r e c or d s which were in the old r ailr oad
off ice in S evierville , T enne s s e e , were ava ilab le only f or the y e ars af t er
19 3 8 and even t h e s e were limited b e c au s e vand als h ad d e s t r oy ed or
s c at tered the m.
E ach are a of the Unit ed S t at e s h as h ad it s own p art icu lar kind of
r ailr oad , and the r e as ons f or b u il d ing them h ave b e en many and v ar i e d .
M any o f t h e s e r e as on s h av e b e en un ique and c an on ly b e und e rs t ood in t h e
light of t h e t imes and are a in which t h e y were bu ilt .
Even s mall r ail-
r oads t h at made lit t le p r of it h ad a gre at e f f e c t on the h is t ory of a
r egion and are , henc e , wor t h s tudy .
ii
iii
Ra ilroad b u ild ing r eached its zenith about the turn o f the present
centur y ; promo ters were sp end ing vas t sums of mone y to p la ce r a il con­
nec t ions int o any area where they f e l t that they c ould make a pro f it .
The
Smoky Mountain Ra ilroad prov ides one example .
The Ea s t Tennes s ee area , especia l l y that part adj a c ent to No r th
Car o l ina , was r ich in t imb er r esour c e s .
A g ood market exis t ed f o r th is
lumber and man y people were int eres t ed in an y s cheme that would enabl e
them t o g e t it out .
Some men , such as Co lone l W . B. Townsend , were abl e
t o build their own lumber companies and railroads in ord e r to accomp l ish
this .
S ince this was before the crea t ion o f the Gr eat Smoky Mountain
Nat iona l Park , ther e were no gov e rnmental re s tr ic t ions on the exp l o it a t ion
of these na tural resourc e s .
Wher e it was pos s ib le , men of enterpr is e and ab il it y purchased t im­
ber r ight s and then sought economical means of transpo r t ing the lumb er t o
market .
In Sev ier Count y , where an abundance of t imb er provided man y
"mountain men" with a meager l iv ing , such peop l e , a long w ith the inves tors
Ther e was no
in the t imb er resources , b egan to ag ita te f o r a r a ilroad .
rush , however , to b uild , b e c a us e exper t s saw that any railroad bu ilt int o
Sev ier Count y would e ven tua l ly f a il ,
Becau se o f the natur e of the land ,
it was almo s t impo s s ible to b u ild a l ine across the area which was t o
b ecome the Great Smoky Mountains Na t ional Park .
Will iam
J.
Oliver , owner
and operator of a Knoxvil le manufac tur ing c ompany which mad e s teel ra il­
road cars , was c onc erned with h is immed ia t e prof it , and was w il l ing t o make
such an e f f or t .
No t surpr is ing l y , he f o und it very d if f icul t t o gain o u t ­
s id e backing f or such a n enterpris e .
Never thele ss , s inc e he had buil t s ome
iv
succes s f u l railroads , he p erhaps f e l t that he would succ eed , but such wa s
not t o be the cas e .
The later owners o f the Smoky Mountain Railroad , in
mos t cases , were men int er e s t ed in personal gain r a ther than proper main­
tenance and op eration o f the line .
Mor eover , they were involv ed in numero u s
uns u c c e s s f u l a t t empt s t o abandon t h e road , b e fore they finally suc c e ed ed in
obt aining p ermis sion for abandonment .
This p ap er is an a t t empt t o t e l l the
s t o ry of the Smoky Mount ain Railroad , a shortline railro a d , unique in that
it seemingly c o uld not die , even though t he blood had been s l owly but
steadily dr ained f r om its vein s .
There a r e many p eople to whom I owe a great debt o f gratit ude .
am deeply indeb t ed t o my advisor , D r . S .
J.
I
F o lmsb ee o f the His t ory Depart ­
ment o f The Univer sity o f Tennessee , without who s e kind help and
und er s t anding t his thesis would not have been p o s sib l e .
Mr .
Sr . has b een mo st helpful in supplying ne eded info rma tion .
J.
B . Wa ter s ,
I am
app r e ciative o f the help given to me by the emp loyees of the Knox and
Sevi.er C oun t y cour thouses who gave inva luab le aid in finding needed
materials .
Thanks mu st be ext end ed to the readers of my the sis , Dr .
Charles W . J ohnson and Pro f e s sor Wil liam
N.
Cherry , who have t aken time
from their busy s chedules to perf orm this task .
To the t ypist s o f the
pre liminary copies o f this the sis , Gale Walker and Br enda Green , f ormer
s t udents o f mine , I s ay a hear t f e l t thank you .
Las t , but not leas t , I
mention my wif e , Martha , who mad e many sacrific e s willingly in order t o
enable me t o write this paper .
ABS T RACT
This t he s is is c oncerned with t he his t ory of a local ent erpris e ,
t h e S moky Mount ain Railroad .
The wr it er h as h ad t o r e ly on limited s our ces of inf or mat ion .
Ext en s ive u s e has b e en made of the newsp apers with add it ion al inf or mat ion
c oming f r om government d ocument s , c ourt r e c ord s , int er views, and s ome
r e c ords of the lat er years of the r ailr oad .
The wr it er h as s p ent many
lon g , h ard h ours r e ad ing and t aking n ot e s on this mat er ial.
Much of the
inf or mat ion availab le was of litt le u s e in writ in g a thes is and the
writer h as h ad to as sume many things .
The writ er f ound t h at the r ailr oad b egan in 1907 as an undert aking
of p r ominent loc al Knoxvillians .
I t was owned and oper at ed by s e ve r al men
and f ir ms over t h e years and h ad s e ve r al d if f erent c orpor at e name s .
Mos t
of it s owners were int ere s t ed only in pers on al gain and t h er e f or e the
r ailr oad was negle c t ed un t il it f inally r e ached the p oint of no r e turn and
was ab and oned in the mid -1960 ' s .
v
TABLE OF C ONTENTS
PAGE
CHAPTER
THE KNOXVILLE , S EVIERVILLE AND EASTERN P ERIOD OF THE SMOKY
I.
MOUNTAIN RA ILROAD
.
.
•
.
•
.
•
.
.
.
.
.
.
•
.
.
•
.
•
•
•
1
THE KNOXVILLE AND CAROLINA AND TENNE S S EE AND NORTH CAROLINA
II .
PERIODS OF THE SMOKY MOUNTAIN RAILROAD
38
THE SMOKY MOUNTAIN AS OWNED AND OPERATED BY MIDWEST STEEL ,
III .
1 9 3 8-1957 .
IV .
. .
.
. .
.
. .
.
. .
.
.
.
.
. .
THE SMOKY MOUNTAIN UNDER SEVIERVILLE BUSINE S SMEN
.
58
89
B IBLIOGRAPHY
1 08
VITA
112
.
•
•
•
vi
CHAPTER I
THE KNOXVILLE , SEVIERVILLE AND EASTERN PERIOD
OF THE SMOKY MOUNTAIN RAILROAD
Unique in the annals o f Ame rican railro adjng is the h i s tory of wha t
is us ually c alled the Smoky Mountain Railroad.
Operated under various
corporate name s and fr equently lea s ed by o ther railroad c ompanies , i t ran
f rom Knoxville t o the small town of S evierville , Tenne s s ee , a di s tanc e o f
s ome twenty-six mile s , and f o r a time was extended f o r s ome dis tance i n t o
the G r e a t Smoky Mountains .
I t s inter s t a te desi gns f o r c onnec t ions with
other r ailr oad s y s t ems wer e , however , unfulfilled and it wa s eventually
abandoned ( s e e Figure 1 ) .
Although the first c ompany a c t ually t o build and opera te any par t
o f the line was the Knoxville , S evierville and East ern Railro ad ( usually
noted hereaf t er as KS&E ) , chart e r ed by the s t a t e of Tennes s ee in 19 0 7 , i t
was preceded b y several a t t empt s t o pr ovide a railroad link b e tween
Knoxville and Sevierville , which usually included op timi s t i c hopes f o r
inter s t a t e connections .
1
T h e Louisville , Cincinna ti and Charle s t on Rail-
r oad Company , primarily the dream of ex-Senator Robert Y. Hayne o f
Charle s t on , South Carolina , was created wi th this aim i n mind i n 18 36,
but failed, as f a r as Tennes s ee was c onc erned , bec aus e o f the Panic o f
1
char t e r of Knoxville , S evie rville and Eas tern Railroad ( copy
ob tained by the wri t er from Rec o rds Divi s i on, D ep ar tment of S t at e , Nash­
ville , Tenne s s e e ) .
1
KNOX COUNTY
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SEVIERVILLE
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BLOUNT COUNTY
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Lo cat ion map --Smoky Mou nt a in Ra ilroad .
RAILROAD
N
3
18 3 7 .
The idea for such a ro ad r ema i ned a per s i s t en t f o r c e , however , for
2
many years .
I n 18 8 7 , the Carol i na , Knoxville and Wes tern Ra ilroad put a
c o ns t ru c t io n f o r c e to work to build a l i ne b e tween Knoxville , Tennes s e e ,
and Greenville , South Caro l i na , which was to pass thr ough S evierv i ll e .
A
f ew miles were built , beg i nni ng a t Gr e enville , bu t noth i ng f ur ther was
ac compl ished exc e p t tha t s everal m i les of grad i ng , inc lud i ng a heavy cu t
at Bays Mou nta i n, were d o ne b e twee n Knoxville and Seviervi l le , a nd the
compa ny we nt b a nkrup t i n a f ew years .
3
This grad i ng and cu t at Bays
Mou nta i n was a d e c i s ive f actor in the later route of the Smoky Moun t a in
Rai lroad .
The Knoxville , S evierville a nd Eas ter n Railway , chart ered i n
18 9 8 , al s o came t o naug ht .
4
they al s o were not r ealized .
S t ill proposals c o nt inued t o b e mad e , but
5
The Knoxvill e , Sevierville a nd Newport Railway C ompany put f o r th
a n appare nt ly c o nc re t e proposal i n 190 5 , and i n J a nuary , 1 9 0 6 , the S evier
Cou nty quarterly cour t vo ted to issue $ 5 0 , 000 in bonds when the road company shou ld be org ani zed with the road comple ted a nd in operatio n, a nd i t
provid ed f or a n elec t io n i n February t o s eek pub l ic approva l o f the bond
2
Riley Oakley Biggs , D evelopme nt o f Rai lroad Transpor tat i o n in Eas t
Tennessee dur i ng the Reco ns tr u c t i o n Per iod (Mas ter's the sis , The U nivers i ty
of Tennessee , 19 3 4 ) , 5 - 6. See also S t a nley John Fo lmsb e e , S ect io na l i sm
a nd I nt er na l Improvement s i n T e nne sse e , 1 7 9 6- 18 4 5 ( The Eas t Tennes s ee
His tor ial Society, Knoxville , 1 9 3 9 ) , 1 1 2-14 7 .
3
Knoxv i l le Jour na l a nd Tr ibu ne , June 8 , 1 908 . Hereaf t er c i t ed
as Jour nal a nd T r ibune.
S evier Count i a ns had v o t ed 2227 t o 1 3 9 to sub s cribe
$ 7 5 , 00 0 to its capi tal s to ck. Ibid., Sep tember 21, 18 8 7 .
4
Char t er of Knoxvi lle , S evierville a nd Eas tern Ra i lway of 18 9 8 ( copy
o bt a i ned by the wr i t er f r om Records D iv i s i o n , Department of Sta te , Nashvill e ,
Tenness ee ) .
5
Jour na l a nd Tr ibu ne , J a nuary 3 , 19 0 6 .
4
issu e .
6
Af t er a vigorous campaign , the bond issue carr ied by a vo t e o f
2, 3 1 1 t o 3 5 6 .
7
The company was rap idly acqu i r ing t h e r i ghts-of -way ,
( i ts
working c ap i t a l b ased on the p lanned sale o f the b onds), when the stric t
cond i t ions conc erning the bonds made it impossible t o sell them .
8
S ince
apparent ly a l l sourc es o f money had dr ied up , the work came to a stands t i l l and the franch ise and r i ghts-o f-way were sold to the Knoxvi l l e ,
Sevierv i l l e and East ern Ra ilr oad in 190 7 .
9
In June, 190 7 , a group of Knoxville businessmen had app l ied t o the
sta t e of Tennessee for a charter of inc orporat ion for the Knoxv i l l e,
Sevierv i l l e and East ern Ra i lway Comp any , which was cer t i f ied.
The char t e r
provided for the construc t i on and operat ion o f a r a i lr oad f rom a p o int
near Knoxv i l l e t o Seviervi l l e .
It further p r ovided that the railr oad c ould
ex t end through Ga t linburg int o No rth Carol ina o r c onnect with the South ern
Rai lway near Newp o r t , Tennesse e , wh ile at the same t ime construct ing
branch l ines to sour c es of revenu e in the nearby moun ta ins .
s t o c k o f the new r o a d was s e t a t $ 500 , 000.
The c apita l
10
6
ch arter o f Knoxv i l l e , S evierv i l lE. c: and Newpor t Rai lway (copy
ob t a ined by the wr i t e r from Reco rds Div is'ion, Department of Sta te , J::\ ash­
ville, T ennessee). Journal and Tribune , January 3, 1906. Montgomery 's
Vindicator (Sevierv i l le , T enness�January 1 7 , 190 7 . Hereafter c i t ed as
Vindicator .
7
8
Ib id. , January-February, 1906, ��si1n , and Apr i l 1 1 , 1906.
Journal and Tr ibune
9
10
June 8, 1906, Au gust 1 7 , 190 6.
Ib id . , June 8 , 1908 , June 29, 1907 .
char t e r o f Knoxvil l e , S eviervi lle and East ern Railway (copy
ob t ained by the wr i t er from Records Div ision, Department of S t a t e , Nash­
vil l e , T ennesse e ) . The corr e c t name of the ra ilr o ad was the Knoxv i l l e,
5
The company was organi z ed on July 20 , 1 9 0 7) wi th Wil li am J . O liver
as the c entra l figur e .
O liver , a noted Knoxvil l e industria list wi th
nat ion-wide con t a c ts , owned the Wil liam J . O liver Manu f acturing Company
of Knoxvi l l e , a heavy equipment c oncern , which was instrumen tal in b uilding several rai lr oads .
At one time he was conside r ed as a possib l e
builder for the Panama Cana l , but in his later y ears , he suff ered severe
financia l r eve rses .
As the c entral figure in the KS&E , Oliver named the
'
11
.
t ors a f t e r t h e c ha r t e r h ad b een a c c ep t e d and t he c ompany organl z ed .
d lrec
The group b ehind the c ompany , acc ording t o the newspap ers , c onsist ed of
local men o f ent er prise , abi li ty and money .
12
Oliver subscribed $5 , 000
of the s t o ck o f the company , and $ 1 0 0 subscri p ti ons we re made b y S . B .
Lu t t r e ll , E . G. O a t es , D . M . Rose , A lex McMi l lan , W . P. Chambe r lain , C . S .
McManus , Jerome T emplet on and L . C. Gunt e r .
These men , with t h e exc ept i on
of Wi l liam J . O liver , wer e e lect ed as direct ors .
elec ted the f o l l owing o f ficials for the rai l r oad:
dent ; S . B . Lu t t r e l l as vi c e president;
E.
The di rec tors then
C . S . McManus as presi-
G. Oat es as secre tary and
treasurer and Jerome Temp l e t o n as g eneral counse l .
13
Templeton was
primarily responsible for the new c ompany acqui ring the Knoxville ,
Seviervi l l e and Eas tern Rai lway Comp any.
Some referenc es , especially
cour t records , vary as t o the name . The inc orpora t ors of the road were
S . B. Lu t tr e l l , William P . Chamb er lain , D. M. Rose , A l ex McMil lan and
E . G . Oates .
11
Dep osi tion of Jerome Temp l e t on , in Bank of Sevie �vi l l ��·
Knoxvi l l e , Seviervil l e and Eas tern Railway , e t
. , Chanc ery Cou r t o f
Knox Coun ty (Knox County Cour thouse , Knoxvil l e) , Case No . 1 0 1 77 . Here­
aft er c i t ed as T empl e t on deposi t ion . O liver 's biographical ske tch is
c ompi led f rom Journal and Trib�n � , 1 9 00 - 1 9 26 .
__
July 1 7 , 1 9 0 7 .
13
T emp 1 e ton d epos l. t l on.
'
6
1ewport franc h'1 s e an d r1g ht s-of -way .
S ev 1e
' rv1' 1 1 e a nd N
·
14
A t a specia l s t o c k-
holders meet ing h e ld a t Ol iver's offic e , three a d d i t ional d i rec t o r s were
selected , making a t o tal of e l even .
15
At t empt ing t o as sure ad equat e l o cal suppor t , O l iver emphas i z ed from
the beginn ing that he would be able t o bu ild the railr oad becau s e he had
assurances of financial a s s i s t ance from a New York banker , Freder ick
was h"1ng t on .
S tevens , a nd f rom R . A . Ch est er o f T.1
16
T emp l e t on ap p l i ed t o the
Sevier County qua r t e r ly court for a $ 1 5 0 , 000 subs c r i p t ion t o the s to c k of
the KS&E , and Oliv er agreed t o defray all exp ens es involved in an e l e c t ion
t o author i z e the subs cript ion and t h e i s s uance o f the bond s .
The p r op o s ed
line of the railro ad from Knoxv i l l e to S eviervi l l e was t o be c omp l e t ed by
November 1 , 1 9 10 , and it was es t ima t ed that the c o s t wou l d b e $ 1 , 000 , 000 .
17
Ther e was a g reat deal of speculat ion by those who want e d a qu ick
profit as to j u s t how far the KS&E would ext end and whether or not i t was
t o be a part o f a larger and s t r onger l ine such as the S o uthern Ra ilway
or the S eaboar d Air L ine.
Knoxv i l l e had at least two maj or railroads w i th
int e r s t a t e c onnec t ions , the S o uthern Railway and the Lou i sville and Nashv i l l e Railr oad.
The s e two rai lroads express ed no int e r e s t in the KS&E
S ince the Seaboard Air Line was eas t of the Ap palachian
propo sal .
Mount a ins , i t did no t s eem feas ibl e t o many p eop le that the new r o ad
1 4 \1 ' '
1nd 1 c a t or, J u 1 y 1 7 , 1907
16
15
.
Templ e t on d epo s i t i on .
o r , J u 1 y 2 4 , 1 907 .
v 1nd 1cat
·
·
17
Temp 1 e t on d ep o s i t ion ; Vind i c a t o r , November 1 3 , 1 9 0 7 ; Minu t e s of
S evier Count y Quar t e r ly Cour t (Sevier County Cour thou s e , Sevierv i l l e ) ,
October 2 9 , 1907 , Minute Book 1 3 , p p . 306-308 .
7
would c onnec t with i t ; h owever , thos e f avor ing the b ond i s s ue s t at ed that
the KS&E would creat e new j ob s and inc r e as e p r op e r t y value s , hop ing that
this argument w ould otfs et the lac k of inte r e s t by th e l arge rail lines .
18
For mal oppos i t i on w as limi t ed l ar gely t o t h at of a Jud ge Lind s ey of the
Tran s c ont inen t al Railr oad and the B ank of Sevie r ville , who f e ared t h at
the new ent e r pr i s e would s t art a c omp e t ing b an k in Se vi e r vi l le .
19
I n t h e b ond e lec t i on , 27 0 d is p ut ed vot e s were thr own out , making
the final offi c i al vote 2 , 0 0 8 for and 555 against .
20
Al th ough t h i s vote
was le s s than the r e quired 3/4 major i t y , the Tennes s e e s up reme c our t in
June , 19 0 8 , upheld a twent y- s e ven to six d e c i s i on of the Sevier c ount y
c ourt on D e c e mb er 25, 19 0 7 , t o aut h or i z e the i s s uance of the b ond s .
21
D ur ing the c amp ai gn on the b on d i s s ue Ol i ver b ec ame d i s s at i s f ied
with the old r out e of the Knox vi lle, Se vi e r vi l l e and Newp or t Railway and
s ought a more dir e c t one .
He admi t t ed that the mor e d ir e c t rout e p r ob ab l y
would incr e as e i t s c os t b y ne ar ly $20 0 , 0 0 0 , b ut c l aimed that i t w ould b e
w orth it t o S e vi er County b e c aus e of the amount of t i me that would b e
s aved in t r ans p or t ing car go and p as s engers over th e l ine .
H e d e c id ed t o
build dire ct ly f r om Knox ville thr ough t h e he avy cut made s e ve r al y e ars
18
vind i c at or , July-Decemb e r, 19 0 7.
19
Temp l e t on d ep osit i on .
20
vind ic at or , December 18, 19 0 7.
See als o W . R . Cat le t t et al . v .
Knox ville , Sevi er vil le and Eas t ern Railr oad Comp any , Se vi er County Ch an c e ry
Cour t ( S e vi e r County Cour th ous e , Se vi e r ville ) .
21
Journal and Trib une , May 8, June 6, 19 0 8 .
Vind i c at or , D e cemb er
In a vote to s ub s cr ib e t o s uch a b ond i s s ue , the s t at e law
25, 19 0 7 .
r equi r e d a 3/4 major i t y in favor .
8
bef o r e in wha t wa s called Shook ' s Gap and on t o S eviervi l l e , a s ound
judgment in l ight o f the subs e quent h i s t o ry of the l ine .
22
Wi th the money s e cured , act u a l wor k o n the KS&E began in June ,
1908 , und er the d irec t i on of W . A . S eymour , who was a s s o c iate d w i th Will iam
J . Oliver in O l iver ' s r a i l r o ad c on t rac t ing f irm , the Rev i l o Cons truct ion
Company .
23
I n Januar y , 1909 , the KS&E s i gned a c ont r a c t with the c ompany
to construct and e qu i p a l in e of r a i lr oad fr om Vestal , acr o s s the T enne s s ee
River f r om Knoxv i l l e , to within one m i l e of S evierv i l l e .
In r e turn , the
Revilo Cons truct ion Company was t o r e c e ive cer t a in s t ocks and bonds o f the
KS&E valued a t $ 1 , 048 , 7 0 0 a long with the r ight t o c o l lect the $150 , 0 0 0 in
bonds in payment o f the s t o ck subs c r i p t ion in the KS&E by S evier Count y .
24
The Revilo Cons truct ion Company obtained fr om the Mechanics' Bank
and Trust Company and the Knoxv i l le Banking and Tru s t Company a l o an of
app roxima t e ly $ 308 , 0 00 , o s t ens ibly to c on s t r u c t the r a i l r oad , and p l edged
as s ecur ity the s e s t ocks and bond s .
25
The KS&E bonds u s ed as c o l la t er al
wer e a p a r t of a $ 7 0 0 , 000 g o ld mor t gage bond i s sue author ized by the
d i r ec t o r s and o f f ic e r s of the Knoxv i l l e , S evie rv i l l e and Ea s t ern Rai lway
22
vind ic a t o r , Augu s t 7 , Au gus t 21 , 19 07.
23
rbid . , June 1 0 , 1 9 08 ; J ourna l
Tribune , June 8, 1 9 08 .
24
Revilo Cons t ruct ion Company v . Knoxv i l l e , S evierv i l l e and
Knox County M inu t e
Eas tern Rai l r oad Company , Case 11 4 5 0 , a s repor ted
B o o k 5 2 (September 1 2 , 1 9 1 1 ) , 4 28-4 3 4 , Knox County Chancery Cour t (Knox
Count y Courthou s e , Knoxv i l l e ) . Hereaft er cit ed as Rev i l o v . KS&E with
date and number o f Minu t e Book . Rec o r d s in supp or t of this cas e are
miss ing , bu t f o r tuna tely there a r e nume rous r e f e r ences t o the records in
the Minute Books .
See also co py of cont rac t in S evier Count y�·
Knoxv i ll e , S evierv i l l e and Eas t er n Rai l r oad Company , Cas e No . 1118 ,
Sev i er County Chancery Cou r t (Sevier County Cour thous e , S evierv i l l e) .
He reaf t er c i t ed as S evier County v . KS&E .
25
Rev i l o v . KS&E , Minu t e Book 52 (Sep t ember 12 , 1 9 1 1) , 408 .
9
on J anuary 1 , 1 9 0 9 , to c over the c o s t of cons t ruc t ing the r a i lroad .
A
trus t d e ed was ent er ed into on tha t d a t e be tween the railroad and the
Mechani c s ' Bank and Trus t C ompany and the Kn oxv i l l e Banking and Tru s t C ompany as trus t ees , w i th the a s s e t s , liq uid and o therwi s e , o f the rail road
being a s s igned a s s e cur ity f o r the mo r t gage.
If the c ompany should be
delinqu ent for s ix months in the payment of int er e s t or taxes , then , at
the opt ion of 7 5 percent o f the bondholders , the pr inc ipal and int e r e s t
would be a t o n c e d u e and t h e banks c ou ld f o r e c l o s e.
If this s i tuat ion
cont inued f o r one y ear , any ind ividual bondholder could ask f o r forec l osur e .
26
I t i s int eres t ing t o no t e that the pr inc ipal owner of the
c ons truc t ion company , as well as o f the r ailr oad , was Will iam J . O l iver ,
wh ich ind ic a t e s a pr obabl e c onf l i c t o f interes t .
himself of a prof it.
O l iver was assur ing
27
Work progr e s s ed rapid ly o n the r a i lroad , and s ix t e en miles o f
grad ing were c omple t ed by the end o f Augus t , 1 9 0 9 .
By O c t ober , tracks
had been laid on t en miles of road and t r a ins were running over that
s e c t i on .
28
By the f ir s t o f December, track lay ing had been c o mp l e t ed t o
with in one mile o f Sevierv ille , and the work o f r epair ing the old d e p o t
26
copy o f t rust deed between Knoxville , S evierville and Ea s t ern
Ra ilway Company and Mechani c s ' Bank and Tru s t C ompany and Knoxville Bank­
ing and Trus t Company as rec orded in Trust Book No. 1 0 ( Re g i s ter of Deeds
O f f i c e , Sevier County Courthous e , Seviervi l l e) , 3 6-4 9 .
27
Knoxv i l l e , Sevierv i l le and Ea s t ern Rai lway Company , Valu at ion
Docket No. 3 0 6 , I n t er s t a t e Commer c e C omm i s s i on Repor t s , Vol . 84 ( Govern­
ment Pr int ing Of f i c e , Wash ing t on , 1 9 2 5 ) , 3 3 8 . Her eaf t er c i t ed a s KS&E
Valua t ion .
28
1909 .
J ournal and Tribune , Mar ch 1 8 , 2 7 , 1 9 0 9 ; Vind i c a t o r , Oc t ober 2 0 ,
10
of the Atlanta , Knoxville a nd No rthern Rai lroad o n Main Avenue i n Knoxvi lle
29
nea red c omp le t i o n.
The f i rs t pas s e ng e r t ra i n le f t Knoxv i lle f o r Rev i le,
s ix miles out of Sevierv i l le , on Decembe r 18 , 19 0 9 , w i th a g roup of p ro ­
mo t e rs ab o a rd , a nd regular t raf f i c began the f o llowing day.
30
By D ec emb e r
2 9 , d a i ly t i cket s a les had ris e n f rom 12 o n t h e f i rs t tra i n to 9 3 .
31
The
f i rs t t ra i n to ru n wi thi n o ne mile of S eviervi lle mad e i ts t rip on S u nday ,
January 9 , 19 10 .
32
Acco rd i ng to t h e t e rms laid down i n the b o nd issue ,
the rai lroad c ompa ny had f u lf i lled i t s c o nt ract wi th Sev i e r County , eve n
though a f ew d ays earlier s omeo ne had wrecked t h e t ra i n .
33
The work o f pu t t i ng i n a turn t ab le o ne mile out of Sevierville was
u naccou nt ab ly s t opped about J a nuary 15 , 19 10 , a nd tho s e connec ted wi th the
rai l road began surveying f o r lo c a t i o ns f o r a d ep o t a nd a b ridge ove r the
L.1t t 1e
1geon
p·
34
R"1ve r.
The las t mile of t rack necessary t o reach
29
J ou rna l a nd Tribune , D ecemb er 2 , 19 0 9 . At ab o u t the same t ime ,
arrangeme nt s we re mad e with the S o uthe rn Rai lway f o r j oi nt us e of the
t ra cks f rom Ves ta l a c ro s s to Ma i n S t re e t whe re the o ld d ep o t was loc a ted .
Track re ntal f rom the So uthern amou nted to $ 2 , 17 2 p e r yea r , whi le d ep o t
re ntal was $ 60 0 a year.
30
rbid . , D e cember 18- 2 1 , 19 09 .
f reight was a ls o s e nt to S evierv i l le .
and t h e p lace was named i n h i s ho no r .
31
rb id . , D e cember 24 , 19 09 .
33
It s e ems tha t a s iz eab le amount o f
Revile is O live r s p e lled b a ckwa rd
32
rb id . , J anua ry 9 , 19 10 .
vi nd i cato r , Decemb er 2 8 , 19 09 . This wre ck result ed i n the rai l­
road pos t i ng a $ 5 00 reward f o r the a rres t a nd c o nv i c t i o n of a nyone f o r
p lac i ng a ny ob s t ru c t io n o n the ra i l road right-of -way .
34
rbid . , January 19 , 1 9 1 0.
11
Sevierv i l l e saw i t s comp let ion b y e ar ly March , 1 9 1 0 , but the bridge over
the r iver was no t c ompleted unt i l s ome t ime in l a t e 1 9 16 or early 1 9 1 7 .
35
Lit igat ion ag a ins t the KS&E c ame early i n i t s his tory and served
to weaken the l ine as one su i t f o llowed ano ther .
In March , 1 91 0 , Jerome
Templ e t on ins t i tu t ed a suit aga ins t the KS&E f or f ees that he s a id were
due h im for his successful d e f ens e before the Tenne s s ee s up r eme c our t o f
the legal ity o f the b ond elect ion in S ev i er C ounty .
36
In the c omp r omis e
s e t t l ing the su i t , the Revilo C ons t ruc t ion C ompany agr e ed t o pay Jerome
Temp l e t on $ 8 , 0 0 0 "in fu l l payment , s a t i s f a c t ion and d i s charge" of h i s
c la ims o n the Knoxv i l le , S evierv i l l e and Eas t ern Rai lway .
37
During t h e f ir s t f ew years of i t s oper a t ing h i s t ory , the KS&E mad e
money , but t h e huge b ond ed d e b t l imited pro f i t and O l iver d id noth ing t o
p ay o f f the debt .
In Ma rch , 1 9 1 0 , twi c e-daily serv i c e was inaugura t ed and
the railr oad announced that the KS&E wou ld b egin tr ansp o r ting the ma i l
between Knoxvi l l e and S ev i e rvi l l e .
38
Mai l s ervice was ins t i t ut ed on May
9 t o Knoxv i l l e , Shook's Gap , Trund les' C r o s s Roads and Boyd s Cr eek .
Ma i l
s e rvi c e was much fas ter than before , bu t all ma i l was o f the " expr ess "
35
J ournal and Tr ibune , March 7 , 1 9 1 0 ; Vind ic a t o r , July 2 8 , 1 9 1 4 ,
Septemb er 1 6 , 1 9 l�May 2 3 , 1 9 1 7 .
36
37
38
J ourna l and Tribune , Mar ch 15 , 1 9 10 .
Rev i l o �· KS&E , Minu t e Book 5 2 ( S ep t emb er 12 , 1 9 1 1) , 4 2 9 .
Journal and Tr ibune , March 2 6 , 1 9 10 . This meant the end of the
fast hack s erv ice b e tween Knoxv i l l e and S evierville wh ich had carried b o th
passenge r s and ma i l; with the hand l ing of ma i l go ing t o the KS&E ( p a s s enger
s ervices had gone t o the r a i l r oad) , the hack had g iven away t o p r o gr e s s .
Ibid . , Apr i l 2 9 , 1 9 1 0 .
12
var iety , wh ich meant that no ma il c l erks were ever u s ed on the t r a in.
39
This may have caused the mix-up i n ma il s ervi c e wh ich l a t er c o s t the r a i l road i t s ma il c ontract .
Excur sion t r ips , s p onsored by the Knoxv i l l e , Sevierville and
East ern Railway , s erved a s a source o f r evenue as wel l .
40
From 1910
through 1916 the r evenues were mor e than suf f i c i ent t o meet the operat ing
expenses , but there was a net l o s s a f t er payment of in t er e s t on the
f und ed deb t .
41
Dur ing t h i s period , ther e we re s everal rumors concerning
the ext ens ion of the KS&E , but noth ing c ame o f this unt i l 1 9 1 6 .
42
A c ont r over sy be tween Sevier C ounty and the KS&E ove r the c ounty ' s
sub s c r i p t ion to the cap i t a l s t ock o f the railr oad end ed in c our t .
In a
l e tt er t o the people of Sev i er C ounty , Jerome Temp l e t on , no ting that h i s
c onnect ion wi th t h e railroad had ended when i t was c omp l e t ed t o Seviervill e , urged the people t o s ee to i t tha t the s tock o f Sevier C ounty
was f ormally i ssued.
43
The c ounty court voted to is sue the b ond s in pay-
ment of Sevier C ounty ' s sub s c r i p ti on t o the capital stock of the KS&E .
P r evious ly , the c ounty court had v o t ed t o issue 1 5 0 twenty-year b ond s o f
39
331 .
Ib id . , May 9 - 1 0 , 1 9 10 .
4 0 Ib id . , May 9-10 , 1 9 1 0 ; Vind ic ator, 19 10-19 2 1 ; KS&E Valuat ion ,
41
Ib id .
4 2 Journal and Tribune , January 2 7 , 1 9 1 1 , Augu s t 1 3 , 1 9 1 6 .
43
v ind icator , March 1 6 , 1 9 1 0 . Acc ord ing t o the V ind icato r , Mar ch
1 , 1 9 1 1 , Temp l e t on had b e en f ired as Knoxv i l l e , Sevierv i l l e and Eas t ern
Ra ilroad c ouns el as well as O l iver ' s l awyer on January 9 , 1 9 0 9 .
13
$ 1 , 0 0 0 each , and at the July meet ing , t h e court app r oved t h e s e b ond s , with
the provision that the int erest rate was to be 5 p er c en t ins t ead of 6 percent . 44
At a s p ecial s e s sion held on January 2 8 , 1 9 1 1 , the S ev i er County
court elec t ed three men to represent Sevier C ounty a s a s tockholder in the
KS&E and to inst igat e legal proc eed ings against t h e railroad on the ground s
that the company had is sued mor e s t o ck than it could j us ti f y f inanc ia l ly . 4
5
The c ommi t t ee , c omp o s ed o f George Blalock , J . H . Hickman and Joe Williams ,
hired the f i rm o f Zirle and McMahan o f S evier C ounty and Jerome T emp l e t on
o f Knoxv il le.
H . D. Bailey , I . L . Map les and A . J . T emp l e were e le c t ed t o
6
represent S evier County's stock in the railroad . 4
On January 3 1 , 1 9 1 1 , S evier C ounty ins t iga t ed l egal proceed ings
agains t the KS&E .
In the s u i t , Sevier C ounty s ta t ed tha t , when the Revilo
C ons truction C ompany was organi z ed ( in e i ther 1 9 0 8 o r 1 9 09) , Wil l iam J .
O l iver was the owner and cont r o l l ing f ac t or in it .
Although the agree-
ment b etween the construct ion c ompany and the railroad had s t ipulat ed
that the c o s t of cons truc t ion was not t o exc e ed $ 5 0 0 , 00 0 , the cons t ruct ion
c ompany , actually O l iver , had r e c e ived s t ocks and b ond s , a l ong with some
c ash , t o tal ing $ 1 , 2 0 0 , 000 .
The ac tual cost o f c on s t ruc t ion , acc ord ing to
the suit , was ab out $ 3 5 0 , 00 0 , wh ich a c cording t o all r ecords ava ilable is
44
Minu t e s o f S evier C ounty Quar t e r ly Cour t , Ap ril 4 , July 20 , 1 9 1 0 ,
Minu t e Book 1 4 , pp . 21-22 , 6 1- 6 4 .
45
J ournal and T r ibune , J anuary 2 9 , 1 9 1 1 .
4 6M inu t e s of Sevier C ounty Quar t e r ly Court , J anuary 28 , 1 9 1 1 , Minu t e
Book 1 4 , p p . 1 1 7 - 1 1 9 .
14
fairly c l o s e t o the c o s t of the cons truct ion of the r a i l r oad .
The suit
als o p o inted o u t that there was a d eb t of $ 6 0 , 0 0 0 agains t the KS&E , and
that the railroad was n o t proper ly equipped and that the equ ipment u s ed
was not even owned by the railr oad in i t s own r i ght . 47
The county then
asked for a receiver (a person who operates a c ompany which is bankrupt
or involved in a lawsuit) , but this was d enied p end ing the resu l t s of a
hearing which was to be held on February 11 , 1 9 1 1 .
I f the above alle-
gat ions were true , and they p r obab ly wer e , O l iver would make a p r o f i t o f
over $ 8 5 0 , 00 0 i f h e c ou ld c o l l e c t i t .
The Rev i lo C on struc t ion C ompany on January 3 1 , 1 9 11 , however, asked
f or and obtained f r om the chancery c ou r t of Knox C ounty a receiver in the
person o f William J . Oliver , p r obably b ecaus e o f h i s pos i ti on in the commun i ty and his connection with the railroad .
The court p laced the r oad
in receivership in an a t temp t to straighten out the l ega l quest ions c oncerning i t s f inancial b acking .
of b ankrupt cy .
In reality , the r oad was then on the verge
I t s e ems that the reas on for the ear ly f il ing o f this b i l l
by construc t ion company off icials was the rumor that t h e S evier c ounty
c our t was going to ask for an inj unc t ion to r e s t ra in the s t ockholders o f
the KS&E from dispos ing o f any s t ocks or b onds o f the railr oad .
The railroad s tockholder s , with the excep t i on of Oliver, who met
a t the Knoxville Banking and Tru s t C ompany on J anuary 3 1 hoped that the
Knox and S ev ier c ount y cour t s would have reconc iled themselve s , and they
ins tructed Temp l e t on to pr epar e their case for the court .
47s ev�er C ounty �· KS&E .
'
Jud ge Bai l ey
15
of the Sevier c ounty cour t , who s erved as chairman , I . 1. Maples , A . J .
Temp le , T . C . Dr innen , George Zir le , Jerome Temp leton and Dan M . Ro s e c ont ended that only $ 1 5 2 , 0 0 0 of the $ 5 0 0 , 000 in capital s t ock had b een lega l ly
issued and disposed o f .
48
A mas s meet ing of S ev ier c ounty c i t iz ens held a t the c ou r thouse on
F eb r uary 6 adop t ed a resolu t i on asking Sevie r C ounty to drop i t s suit
agains t the KS&E f o r fear that i t would harm the c ounty .
Ol iver was
commended by the Sev ier C ounty court f o r his work on the r a i lr oad and the
4
group p l edged support to his ef f or t s to ex tend i t t o the county l ine .
9
In an edi torial in the Vindicator , W . A . Mont gome ry , a v i gorous
def ender of the r a ilr oad , po inted ou t that he f e l t Jerome Templeton was
up t o no good .
A f ew months ear lier the lawy er had adv i s ed the c ounty to
turn over its bond s f or a l ike amount o f stoc k , which Templeton later
declared t o b e worthles s .
Temp l e t on had mi s l ed them .
Ev en the c ounty c our t had openly admit ted that
50
If the t rans f er had t aken p lace the c ounty
wou ld have l o s t ev eryth ing inves t ed in the r a i lroad s inc e the s t o c k was
wor thl ess .
Knox C ounty Chancellor Wi ll D . Wr igh t denied a p e t i t ion to transfer
the s u i t of the Rev i l o Construct i on Company e t aL�. Knoxville , S evierville
4 8 Journal and Tribune , January 3 1 , 1 9 1 1 . Sevier C ounty as ked f or
and was granted an inj unc t ion t o prohibit the t rans f er o f the s t ocks and
bonds of the Knoxville , Sevierville and Eas t ern Ra ilway . Ib id . The c a s e
was s tyled as t h e Revilo Cons truct i on Company , � a l . �· Knoxvi lle, Sev i er­
ville and Eas t ern Railroad Company .
49
50
rb id . , F ebruary 7 , 1 9 11.
Vindicator , February 7 , 1911.
16
and E as t e rn Railr oad from t he Kno x C ount y c hanc er y court t o S ev i er C ount y.
He als o enj oined any fur t her proc ee d ings in S evier Count y ' s c as e agains t
t he KS & E unl e s s t he y wer e b r ought int o hi s court .
51
C hanc e llor Wr i ght
emp owered O l iver t o b or r o w mone y t o op e r ate t he r ai l r o ad and t o mee t
expens e s and t o hir e any ex t r a people needed t o operat e t he r ailr oad as
wel l as any at t orne ys needed t o maint ain t he int e r e s t s of t he r ai l r o ad ,
report ing his ac t ions t o t he c our t .
52
O l iver was als o e mp o wered t o r ene w
c ont r ac t s wit h t he S ou t hern Rail way C o mp any for j oint u s e of t r ac ks f r om
Ves t al t o Knoxville and of o t her f ac il i t i e s , incl uding t he d epot on Main
S t r e e t , and al s o c er t ain t ar i f f agreement s b e t we en t he t wo r ailroad s
d at ing b ac k t o 1 9 0 9 .
53
S ev ie r C ount y , app arent l y unaffe c t ed b y mas s mee t in gs , f i led a
c r os s b il l in t he c hance r y c ou r t of Knox Count y in t he suit of t he Rev i l e
C ons t ru c t ion C o mp an y agains t t he Knoxv i l l e , S ev i erv i l l e and E as t ern Railway whi c h asked for a d e c r e e agains t t he KS &E f or t he amount due t he
c o un t y on i t s KS & E s t oc k and t o f o r c e O l iver t o p ay of f all d eb t s on t he
r ailroad , whi c h he had agr eed t o d o when he cons t ruct e d t he r oad .
The
cross b i l l als o as ked t hat t he Mechanic s ' Bank and Tru s t C o mp any and t he
Knoxv ille B an king and Tru s t C o mp any b e made t o r e s t or e t he $ 78, 00 0 o f
51
Journa1 and Tr ibune, Februar y 1 0 -1 1 , 1 9 11 .
S e e als o Rev i1o C on­
s t ru c t i on C ompany �· KS& E , C as e No. 1 1 450 , as rep or t ed in Knox Coun t y
Minu t e B o ok 41 ( Februar y 3, 1 9 1 1 ) , 280 -281 .
The r e as on f or as king f o r a
c hange of venue was t hat Wr i ght was a b r o t he r of T. Asbur y Wr i ght , a s t oc k­
hold er in t he Me c han i c s ' B an k and Tru s t C o mp any, a s t o c kho lder in KS &E .
--­
52
R�1'10
53
KS & E, Minu t e B o ok 51 ( 1 91 1 ) , 320 -321 .
rbid . , 386-387 .
17
r ai l way s t ock whi c h had mys t er io u s l y vani shed f r om t he t r e asury and t hat
it be c ancelled .
At t he s ame t ime, n o t surpri singly, t he c oun t y t hen
s ou ght a new r e c e iver for t he r o ad , but t he p e i t i on t o r e move O l iver as
r e c e iver was d enied b y t he c our t .
54
On Augu st 2 4, 1 9 1 1 , t he Rev i l e C ons t ru c t ion C o mp any, Wil l i am J.
O l iver , S evier Coun t y, Mec hani cs ' B ank and Trust C o mp any, Knoxv i l l e B anking and Tru s t C o mp an y, t he Kno xv i l l e , S evierv i l l e and East ern Rail way
C o mp any and Jerome Te mp l eton r e ac hed an agr e e ment .
In gener al all c on-
t r ac t s f or bu i ld ing and maint aining t he r ai lr o ad wer e ac c e p t ed b y t ho s e
c oncerned .
Jer o me Temp l e t on r e c e ived c o mpen sat ion f o r his l e gal serv i c e s
and Wil l i am J . O l iver agr eed t o purc has e S evier C ounty ' s st ock in t he
KS& E Rail way f or $ 25,0 0 0 in b ond s to b e p aid l at e r in c as h.
The Kno x
C ount y c hancery court as ses s ed O l iver and t he Rev i l e C ons tru c t ion C o mp any
all t he c os t s ar is ing in t he c as e of Revilo C onstru c t ion C o mp any, et al .
�·
Kno xv i l l e , S ev i erv ille and Eas t ern Rai l ro ad C o mp an y .
r at if ied b y S ev ier C ount y four d ays l ater .
The agr e e ment was
55
Ev id ent l y, O l iver had d e c id ed t o buy t he KS &E out r i ght s o he c ould
r e ce iv e al l t he r evenue f r o m i t s operat i on, b ec au s e dur ing t he summer of
1 9 1 1 , t he r ailroad had p r o s p er ed , as had t he owners.
56
Af t er he had pur -
c has ed t he s tock owned b y S evier C oun t y , Oliver b e c ame t he s o l e o wner of
54
The $ 78,0 0 0 r e f e r r ed
Journal and Tr ibune , Apr i l 8, June 29 , 1 9 1 1 .
t o was kep t out o f t he $ 700,0 0 0 b ond is sue of Janu ar y, 1 9 0 9 , f or gener al
purpos e s .
S evier C ount y�· KS&E.
55
Revi l o �· KS &E, Minu t e Book 5 2 (Sep t e mb er 1 2, 1 9 1 1 ), 428- 434.
It
is a mys te r y why S evier Coun t y would s e l l $ 1 50 ,0 0 0 o f s to c k f or $ 25,0 0 0 .
56
vind i c at or , May-Augu st , 1 9 1 1 .
18
t he r a i lr oad e xcep t f or t hose share s of stock owned b y t he old b oard of
d ir e ct or s.
O liver ' s pur cha se n ot e f or S evier C ount y's b ond s was due b y
January 1 , 1 91 3 , and unt il t ha t d a t e , S evier C ount y was t o retain t he
r i ght t o v ot e a s a st ockholder , alt hou gh t he b on d s t he mselve s wer e t o b e
d ep osi t ed wit h t he Mechan ics' Ban k and Trust C ompany and t he Knoxville
Banking and Tru st C ompan y, w hi ch were t o se rve as t ru st ee s.
On S ep t e mber
8, 1 91 1 , t he Knox C ount y court , noting t hat a compromi se had b e en r ea ched
concerning t he f inancial b a cking of t he KS& E , d i smi ssed O l iver as r e ceiver
and put t he r a i l r oad b ack und er its elected of f icial s.
57
The S evier
count y court on O ct ob er 2 , 1 91 1 , ordered O l iv e r 's $2 5 , 000 not e sold f or
f a ce value less t he a ccrued int e r e st , on t he cond i t i on t ha t t he note b e
sold wit hin 30 d a ys.
58
A great d eal of wor k was d one on t he p r oper t y of t he KS&E a f t e r
Oliver a cquired t he rest of i t s st ock, and lar ge a mount s of t an b a r k and
lumb er were shipped ou t , which a ccount s f or t he cont inue d int erest in
59
.
e xtend 1ng
t he r oa d t owar d t he mounta 1ns.
.
On Apr i l 1 , 1 91 2 , Oliver p r e sented t o t he S e vier coun t y court a
p r op osi t i on t o e xt end t he r a i l r oad t o t he eastern e d ge of Sev ier County
w i t hin t he n e xt e i ght een mon t hs if t he count y would surrend e r t he $25 , 00 0
57
Minu t e s of S evier C oun t y Quarte r l y Cour t , August 28, 1 91 1 , Minu t e
Book 1 4, p p . 1 89-193. The vote t o a ccep t t he comp r omise was 29 t o 3.
Te mp l e t on wa s given a $2 , 00 0 not e , which mad e hi s t otal comp ensa t i on a s
a t t orne y a mount t o $ 10 , 0 0 0 .
58
rb id . , 20 8.
59
vind i ca t or , S ept e mb er 1 1 , 1 91 1 .
19
not e w hi c h he had given t o it t o gua rantee hi s pur c ha se o f S evier Count y' s
$150 , 000 b ond sub sc r ipt ion .
The cou r t a greed to surrender t he no t e when
the road was c o mp l e t e d , l e ss t he amount of t he a t t orney's f ee s in t he
count y ' s l i t i ga t ion a ga inst t he KS&E Railroad.
60
Al t hough Oliver had no t b egun any wo r k on t he e xt ension o f t he road ,
he had p a i d t he inter est of $1 , 410 . 10 on t he not e , and , on April 7, b o t h
t he no t e and t he d a t e t o b e gin wor k wer e ext end e d si x mon t hs .
61
O l iver
s eems t o have b een st alling in an e f f o r t to get ou t of e xt ending t he l ine.
Finally, he a gr e ed t o build f i f t een mi les o f new railroad in S evier Count y
wit hin f ive years f r o m Januar y 5 , 19 15 .
S evier C ount y sur rendered t he o l d
$2 5 , 00 0 no t e t o O l iver and h e si gned a new $10 , 00 0 b ond guarant eeing t hat
he would s p end $2 5, 000 in S evier C ount y in e xt end ing t he Kno xvi lle,
ville and East ern in t he n e xt two and one -half yea r s.
Sevier-
62
The b onded deb t of t he railroad cont inued t o p l a gue i t s operat ion
and r e sul t e d in fur t her c ou r t ac t ion .
The d eb t s f inal l y f o r ced t he KS&E
t o i ssue a second mor t ga ge when one o f t he t rust e e s o f t he f i rst mor t gage
i ssue b ec a me inso lvent .
Provisions in t he f i r st t rust deed e xe cu t ed b y
t he KS&E t o t he Mec han ic s' Bank and Trust Co mpany and t he Kno xville Ban king and Trust C o mpany as t ru st ee s had provided t hat if eit he r of t he
t r ust e e s were t o b e c o me insolvent , a ma jo r i t y of t he st o ckho l d e r s of t he
60
Minu t e s o f S evier Count y Quart erl y Cour t , Apr i l 1 , 19 12, Minu t e
Boo k 14, pp . 347- 348.
61
62
rb id . , January 7 , 19 13 , pp . 347-348; Ap r i l 7, 1913, pp.
rb id . , Januar y 5 , 19 15 , p p . 55 1-552.
371-372.
20
r a i lr oad c ould apply t o t he c hanc ery c ourt of Knox or Se vie r coun t i e s f or
t he app ointment of a new t r ust e e .
63
On July 1, 1 9 1 4, Wa lt e r Mc C oy , a
st oc khold e r and t r ust e e , and owner of a ll of t he b ond s se c ured by t he ab ovemen t i oned t ru st d e ed , p e t i t i oned f or t he app ointment of a new t r ust e e t o
rep la c e t he in solvent Knoxvi lle Banking and Trust C ompany, and t he Mec hanic s'
Bank and Trust C ompany wa s app oint e d as t he sole t r ust e e of t he mor t ga ge
b ond s .
64
Regard ing t he c omp r omise r ea c hed concerning t he d eb t s of t he Revile
C onst r uc t i on C ompany , t he court inst r uc t ed John W . Green, r ec e i ve r f or t he
insolvent Knoxvi lle Banking and Tr ust C ompany , t o t a ke up and c ance l 400
of t he KS& E mor t ga ge b onds of January 1, 1 9 0 9 , w hi c h he p r oc eed ed t o d o .
The Sout h-West ern Surety Insuranc e C ompany of Okla homa arranged a b ond t o
guaran t e e t he p r omp t payment of t he int erest on t he rema ining $30 0 ,0 0 0 of
t he f ir st mor t ga ge b ond s .
An other b ond was a lso i ssued b y t he same insurance
c ompany t o t he Mec hanics ' Bank and Tr ust C ompany t o guaran t e e t hat f or a
period of f i f t e en years t he Kn oxvi lle ,
Se vier vi lle and East ern Ra i lway
and it s e quipment would b e kep t in good op er a t ing c ond it i on and t hat n o
63
copy of t r ust d e ed b etween Knoxvi lle , Sevier vi lle and E a st e rn
Ra ilr oad and t he Mec hanic s' Bank and Tr ust C ompany and t he Knoxvi lle Bank­
ing and Tr ust C ompany as r e c orded in Sevier C oun ty Trust B ook 10
(Regi st e r of Deed s O f f ic e , Se vi er C oun ty C our t house , Sevi e r ville , Tenne sse e ) ,
36-49 .
64
Pe t i t i on of Knoxvi lle , Sevi e r vi lle and East e rn Ra i lway C ompany ,
C a se No. 1 3533, b e f or e C hance llor Will D . Wr i ght on July 1 , 1 9 1 4, a s
r e corded i n Knox C ounty Minute B ook 59 (Knox C ount y C hancery C our t , Knox
C ounty C our t house , Knoxvi lle , Tennesse e ) , 337- 338; Mec hani c s' Bank and
Trust C ompany, Tr ust ee v . Knoxvi lle , Se vie r vi lle and East e rn Ra i lwa y C om­
� · C a se No. 1 80 39 , a s rep or t e d in Knox C ount y C hancery C ourt Minut e
B ook 77 (July 2 1 , 1 9 2 1) , 40 2 .
Her ea f t er c i t ed as Mec hani c s ' Ban k and
KS& E wit h numb er and d a t e of Minut e B ook .
Record s in
Trust C ompany
suppor t of t hi s c a se are mi ssing, b ut f or t una t e ly t here are numer ous
r e f er enc e s t o t he rec ords in t he Minut e B ooks .
21
d eb t s w ould b e p e r mi t ted t o acc umula t e b ey ond t he $30 0 , 0 0 0 of f ir st mor t ga ge
b ond s.
Fr om t he se b ond s Gr e en wa s t o pay t he d eb t owed t o t he Re vilo C on-
st r uc t i on C ompany by t he r a i lr oad .
65
Of t he t ot a l d eb t of $130 , 530 . 58 ,
$530 . 58 w a s p a i d i n cash , t he r e ma inde r in b ond s .
66
At ab out t he same
t ime , a sec ond mor t ga ge b ond of $20 0 , 0 0 0 wa s i ssued by t he KS& E , wi t h t he
Mec hanic s ' Bank and T r ust C ompany a s t rustee.
67
T hi s sec ond mor t ga ge
b ond issue wa s t o pay of f t he r e ma ining d eb t s owe d b y t he KS& E t o Willia m
J . Olive r and t he William J . O li ve r Manuf ac t ur ing C ompany f or wor k d one
t o ra i lr oad e quip ment , as well as t o p ur c hase t he loc omot i ves and ot her
e quip ment used by t he railr oad in ord e r t o p r ot e c t i t s c r ed i t or s.
68
Oli ve r ga ve a p e r sonal note gua rant eeing t ha t i f t he $130 , 0 0 0 in f i r st
mor t gage b ond s in set t le ment of t he d eb t owed t he Revi lo C onst r uc t i on C ompany by t he KS& E d id not sell at par value , if held b y Green f or twelve
mon t hs , he would ma ke up t he d e f i c it .
69
Although Olive r was una b le or unw i lling t o b e gin ext end ing t he
railr oad , on O c t ob er 4, 19 15, t he Sevier C ounty qua r t e r ly c our t gave him
unt i l July 1, 19 16, t o pay t he $10 , 00 0 note and sixty days t o pay t he
65
Joseph Kna f f l, et a l . v . Knoxvi lle Banking and T r ust C ompan y ,
Case N o . 12 465 , a s r e p or t ed i n Knox C ount y C hancery C our t Minut e B ook 59
(July 15, 19 14), 336- 337 (Kn ox C oun ty C our t house , Knoxville) .
Her ea f t e r
ref e r r ed t o a s Kna f f l �· KB &T wit h numb er and d a t e o f Minute B ook.
66
rb id . ,
(August 1 , 19 14), 419 - 421.
67
copy of t r ust d eed b etween t he Knoxvi lle , Se vier ville and Eastern
Rai lway C ompany and t he Mec hanic s' Bank and Tr ust C ompany a s t r ust ee , as
r e c or d ed in Se vie r C ount y Tr ust B ook 10 , p p . 556- 569 .
68
Kna f f l v . KB&T, Minute B ook 59 (July 15, 19 14), 33 6- 337.
69
rb id . ,
(August 1, 19 14), 419- 421.
22
int e r e st d ue .
I f this was not d one , the c our t said t h e c h ai r man was t o
c olle c t the not e .
70
not e f or si x months.
But on July 3, 1916, the c our t again e xt end ed Oli ve r ' s
71
A t ent at i ve valuat i on by the Int er st at e C ommerc e C ommi ssi on as of
June 30 , 1916 sh owed the or i g inal c ost of r igh t s- of -w ay and other c omp any
land s t o b e $37, 780 .93.
N o p art of this c ost was sup p or t ed by rec ord s ,
h oweve r , which sh ows lax b ookke ep ing , or worse , b y of f ic ials .
The I C C
set t h e f i nal valuat i on o f the p r op e r ty used b y t h e c arrier at $40 0 , 00 0
and the value of t h e prop e r t y used b ut n ot owned at $10 , 650 .
The KS&E h ad
i ssued $1, 40 0 , 0 0 0 in c ap i t al st ock and mor tgag e b ond s , of which $1, 0 0 0 ,0 0 0
was out st and ing i n 1916 .
W i lliam J . Oliver c on t r olled t h e r ai lr oad
thr ough owne r ship of a major i t y of the out st and ing c ap i t al st ock .
72
At the t i me of valuat i on , in add i t i on t o the t r acks and r oadb e d
f r om Vest al t o Se vie r vi lle , the r ailr oad used two loc omot i ve s , twentytwo f re ight c ar s and three p assenger- t r ain c ar s .
73
B etween Ve st al and
Knoxville , the r ai lr oad ope r ated 2 . 3 mile s of r oad at a y e ar ly rent al t o
the Southern Rai lw ay of $2 , 172 .
Dep ot , st at i on f ac i li t i e s and sid e t r acks
of 0 .16 miles in Knoxville were also und e r le ase f r om Southern Rai lway for
a y e ar ly r ent al of $60 o .
74
Alth ough the f inanc ial st at us of the KS&E was anything but r osy
by 1916, the d r e am of an interst ate c onne c ti on r e mained a p e r si st ent
70
Minutes of Sevie r C ounty Quar t e r ly C our t , Oc t ob er 4, 1915 , Min ut e
B ook 15 , p . 62 .
71
Ib 1'd . , July 3 ' 1916 ' p . 141 .
72
73
Ib id . , 337.
74
KS&E Valuat i on , 32 9- 333.
Ib id . , 341.
23
f or c e and r e s u lt e d i n O li ver ' s announc ement on August 1 2 , 1 9 1 6 t hat t he
KS&E wou ld b e e xt e nd ed twe nt y -s i x miles by way of Gat linburg t o t he s t at e
line .
75
Wor k was s c heduled t o b e gi n i n t hi r t y d ays .
The Pigeon River
Rai lway C ompany w as c har t ered at $50 ,00 0 wi t h L . S . Hall, Fr ank J . C ar penter , R . H . Si mmond s , John P . M of f e t t and Frank P . Gaut as c har t er
memb e r s .
Anot her c har t e r had b e e n is sued f or t he Pigeon River C ons t ruct i on
C omp any, c ap i t alized at $10 , 0 0 0 and havi ng as c hart e r members , D avid G .
M ad d e n, Walt e r McC oy , I r vi n S . Saxt on, C har les E . Gent ry and W . A . Mont gomery .
Sur vey i ng had b ee n u nd er w ay f or months and muc h of t he
r i ght - of -way had b e e n s e cur ed .
76
The Pi geon River C ons t ruc t i on C omp any planned t o c ons t ruc t t he
r oad f r om Se vi e r vi lle, c r os s i ng t he Pigeon River ab ove Se vier vi lle, and
goi ng t hr ou gh t he mou nt ai ns by w ay of Pigeon Forge and Gat li nburg t o t he
s t at e line .
The ant ic ipat ed c os t of t he road r an int o hund r e d s of
t hous and s of d ollars ; t he t r ac k was t o b e of s t and ard gauge and he avy
r ails were t o b e u s ed .
L. E . Woot e n, ge neral m anager of t he KS& E , who
w as als o an of f ic i al of t he c ons t ruc t i on c omp any , w as t o d ir e c t t he w or k
and Ge ner al Fr ank Maloney was t he c hief e ngineer .
Af t e r c omp le t i on of
t he r oad , t he p lans c alled f or t he Pigeon Rive r Rai lr oad t o b e ope r ated
und er a lease arr angement by t he KS& E Rai lway .
The vas t t r ac ts of t imb er
75
vi nd i c at or , August 1 6, 1 91 6 .
76
Jour nal and Tr ibune, Au gu s t 1 3, 1 91 6.
The Vind ic at or f or
Au gus t 1 6, 1 91 6 d i f f ered as t o c har t er members i n t he Pigeon River C on­
s t ruc t i on C omp any , list i ng C . A . Mur p hy and R . L. C at es in p lace of I r vi n
S . Saxt on and C har les E. Gentry . Among t he c har ter memb er s o f t he r ai lway
c ompany, Mof f e t t was lis t ed as John T. M of f e t t , r at her t han John P.
Mof f et t .
24
and va luab le ir on or e dep osi t s in t he vic inity were c learly inf luen t ia l in
b ui ld ing t he r oad .
At t he t i me of t he se announcement s, Oliver was r e f erred
t o in t he p r e ss as t he owner of b ot h r a i lr oad s.
The Pi ge on River Ra i lr oad
and t he KS&E were t hus, in e f f ec t , t he same a lt hough t hey op e ra t ed und er
d if f e r ent c or p or a t e name s .
77
I n ord e r t o p r e vent any f ur t her c omp li c a t i ons, Oliver ob t a ined p e r mi ssi on t o b ui ld and t o opera t e a stand ard gauge r a i lr oad t hr ough Se vi e r ville
and a lso t o c onst r uc t a d ep ot in t he t own wit hin one - ha lf mile of t he c our t house.
78
The r a i lr oad wa s c omp let ed t hr ough t he t own and t he d ep ot b ui lt ,
b ut not b e f or e Oliver aga in had t r oub le wit h Sevi e r C ount y , whi c h ca lled
in hi s $25, 0 0 0 not e on January 2 , 1 917 .
79
By unanimous vot e on Apr i l 2 ,
191 7, t he Sevier C ount y qua r t er ly c our t ord e r ed t ha t up on c omp le t i on of
t en mi le s of t he Pigeon River Rai lr oad f r om t he end of t he KS&E at Seviervi lle , t hat t he c ha ir man of t he c our t should sur r end e r t he $25 , 0 0 0 not e t o
Oliver and r e lease t he lien he ld by Se vie r C ount y on Oliver ' s st oc k or
e qui t y in t he KS& E .
80
Und er t he leader ship of L . E . W oot en , who had b e en
77
Journa l and Tr ib une , August 13, 1916; Vind i c a t or , August 16 ,
1916.
Woody C onst r uc t i on C ompany gra d ed t he r i ght - of -way.
Ib id . , January
10 , 1 917 .
The wri t er wa s unab le t o f ind any e vid ence t ha t suc h a lea se
was f or ma lly mad e .
78
ord inance No. 85 of t he t own of Sevie r vi lle , pa ssed Sep t e mb e r 9,
1 91 6 , in Smoky Mountain Ra i lr oad Rec ord s (Sp e c i a l C olle c t i ons, The Uni ­
ve r si t y of Tenne ssee Library , Knoxvi lle) .
79
vind i c a t or , May 1 5 , 1 920 , August 29 , 1917 , Marc h 14, 191 7.
Sevier vi lle wa s slow in extending B r uc e St r e et t o t he new d ep ot .
Ib id . ,
E vid ently t he dep ot was used by b ot h t he KS&E and t he
Dec emb er 18 , 1 918.
Pigeon River Rai lr oad as c ommon p r op er t y . Minut e s of Sevi e r C oun ty
Quar t e r ly C ourt , January 2, 1917 , Minut e B ook 15, p. 1 86.
80
Ib id . , Apr i l 2 , 1917, p.
20 2 .
25
e le c t ed p r e si d e nt of t he Pigeon River Rai lr oad C ompa ny in August , 19 19 , t he
t en mi le s of r a i lr oad were f i na lly c ompleted t o McC ookvi lle , just east of
Pigeon For ge , b y t he end of Marc h, 19 20 .
81
Mea nw hi le, a ll of t he r a i lr oads
in t he c ountry had c ome und er f ed eral c ontr ol b e c a use of Wor ld War I .
T he p e r i od of federal c ontr ol p ostp oned t he i ne vi t ab le e nd f or t he
KS& E .
T he r a i lr oad was und er f ed eral sup er vision f r om January 1 , 19 18,
June 30, 19 18.
82
to
D ur i ng t hi s p er i od of na t i ona l c r i si s t he railr oad had
t o op era te, r e gar d le ss of t he Pr of;t
or loss .
•
83
T hi s p er i od was t o pr ovi d e
a sour c e o f appar ent p r osper i ty f or t he KS&E a f t er the r a i lr oad wa s
r et ur ned t o p r i va t e c ontr ol, b ut wa s not , howe ve r , t he new b lood t ha t t he
c ompa ny need ed .
84
T he appar e nt p r osp er i ty never b ec a me a r ea lity.
T he owner s of the KS&E wer e not a b le to opera t e t he r a ilr oad
p r of i t ab ly a nd p r ob le ms soon ar ose , which t hr ew t he r a i lr oad i nt o c our t
f or t he f i na l t i me .
I n t he c our se of t he li t i ga t i on, some of t he f i na nc ia l
ma nip ula t i ons of t he ow ner s of t he KS&E, e sp ec ia lly Oli ver , c a me t o light .
Such ma neuver s as t hose mad e by Oliver had cr ea t ed d eb t s, a nd t he i nab i li t y
t o p a y t he se d eb t s r e sulted i n t he ord er t o sell t he line t o sa t i sf y t he
c r ed i tor s.
Ref er e nc e ha s b ee n mad e pre vi ously to $130 , 0 0 0 i n f ir st
mortga ge b ond s used t o pay t he d eb t owed b y t he KS&E t o t he Revilo
81
vi nd ic a t or , Mar c h 24, 19 20 , August 20 , 19 19 .
82
Def ic i t Se t t lement wi t h Knoxville, Se vi e r vi lle a nd Ea ster n,
Fi na nc e D ocket N o . 159 , I nt erstate C ommerce C ommissi on Re por t s, Vol. 72
(Gover nment Pr i nt i ng Of f ic e , Washi ngt on , 19 23), 165. Her ea f t er c i t ed a s
Ra i lr oad s
D e f i c it Se t t le me nt w i t h KS& E , I C C Re por t s , D ocket N o. 159 .
wer e t aken over d ur i ng t he war i n ord er t o op era t e t he m t o help t he war
e f f or t .
83
vi nd ic a t or , February 4, 19 20 .
84
rb id . , Mar c h 10 , 19 20 .
\
26
C onstr uc t i on C ompany .
John W . Gr e en, r e c e i ver of t he Knoxvi lle Banking
and Tr ust C ompany, had b een ord er ed to sell t he se b ond s , b ut he wa s unab le
t o d o t his a t any t hing r e semb ling t heir f ac e value b ecause t he KS&E had
d ef aulted on t he semi -annua l i n t er e st payments on b ot h t he se f ir st m or t ga ge
b ond s and t he $200 , 0 0 0 sec ond mor t ga ge b ond s .
d ue was over $9 , 0 0 0 .
The t ot a l amoun t of int e r e st
On N ovemb er 6, 19 2 0 , C hanc e llor C ha r le s Hay s Br own of
the Knox C ounty c hancery c our t d ir e c ted t ha t in t he b e st interest s of t he
c r ed it or s of the K S&E, t he c ompany b e t a ken out of t he hand s of i t s c ur r ent
management and t ha t t he r a i lr oad be sold at t he ea r li e st d a t e p ossib le .
Gre en wa s ord e r ed t o not ify t he c ompany t ha t t he KS&E b ond s he ld by t he
Knoxvi lle Banking and Tr ust C ompany whi c h had ma tur ed should b e paid
w i t hin t hir ty days f r om Novemb er 6, 1 9 2 0 , a long w i t h t he i n t er e st d ue , or
t ha t a c c or d ing t o t he t erms of t he b ond s and mor tgages, he would b e
ob liged t o a sk for f orec losur e .
85
On January 2 1 , 1 9 2 1 , t he Mec hanic s' Bank and Tr ust C ompany , a s
trust ee, f iled suit a gainst t he KS&E i n Knox C ounty c hancery c our t f or
t he a ?p ointment of a r e c e i ver t o op era t e t he r oad, and t he r a i lr oad wa s
or der ed t o app ear b ef or e t he c our t on January 2 4, 1 9 2 1 , t o show c a use why
.
a r e c e lver
should not b e app oln t ed .
.
86
In ord e r t o p r ot ec t t he i r interest s,
a major i ty of t he f i r st mor t gage b ond hold ers nom ina ted Sam E . Clea ge f or
r ec e i ver and he wa s appoi n t e d on January 27, 19 2 1 , by C hanc e llor Br own .
85
Kna f f l �· KS&T, M i nute B ook 75 (November 6, 1 9 20), 379 .
86
Mec ha nic s' Bank and Tr ust C ompany�· KS& E , Minut e B ook 76
(Ja nuary 2 1 , 1 9 2 1 ) , 71 .
27
He wa s t o op era t e t he road and , a s soon a s p o ssib le , f i le a r epor t on i t s
cond 1. t 1 on .
.
87
C leage wa s inst r uc t ed no t to pay any d eb t s owed t he Pigeon
River Ra i lroad , e vid ent ly in ord er to gi ve t ime to separa t e t he a c c o un t s
88
.
o f t he two 1 1ne s .
The d ir e c to r s , o f f i c er s, and b ond hold er s of t he K S & E had appar ent ly
mad e an a gr eement wi t h t he d ir ec t o r s and off i c e r s o f t he Pigeon River
Ra i lr oad , some of whom wer e c onnec ted o f f ic ia lly wi t h b o t h r a i lroad s , t o
r ent two o ld , worn-out , d e f e c t i ve engines to t he Pigeon River Rai lroad
f or $750 p e r mon t h .
At t he same t ime , t he K S & E ha d a gr eed to maintain
t he se two engine s and f ur n i sh a ll c oa l and lab o r nec e ssary t o o p e r a t e
t hem o ve r the line of t he Pi geon River Ra i lr o ad .
Thus , lar ge sums o f
money , w hi c h c ould ha ve b een used to keep t he K S & E r o adb ed and e quipment
in good c ond i t i on wer e sp ent on t he Pigeon River Rai lr oa d , e vid en t ly j ust
f r 1. end s.
to p 1 ease 01 1.. ver and h1.s
'
89
I t app ears t ha t t he KS & E was b eing
mi lked b y i t s owners of a ll i t s a sse t s .
87
Ib id . , 1 0 0 .
C leage a sked t he c o ur t a t var io us t im e s f o r p er ­
missi on t o b o rrow money t o pay t a xe s , t o mee t payro lls, e t c . , a s i s no ted
t hroughou t t he c a se o f Mec hanic s ' Bank and T r ust Company �· KS&E .
He had
b een p la c ed in c ha r ge o f t he c ompany ' s a f fa i r s by t he b ond ho lders on
D e c emb er 4 , 1 9 20 , in an e f fo r t t o fre e t he company f rom i t s f inanc ial c on­
d i tion and to ma ke it a go ing concern . Mec hanic s ' Bank and Tr ust Company
v . KS&E, Minute B o o k 83 (No vemb er 7 , 1 9 2 3), 9 7 .
.
88
He wa s instru c ted b y t he cour t to p ay $2 , 00 0 to
Ib id . , 1 1 7 , 1 33.
t he Pigeon River Rai lroad f o r f r e ight c o llec t ed on Febr uary 1 7, 1 9 2 1 .
Ibid . , 1 84 .
89
S ep a r a t e answer o f S o u t h-We stern Insuranc e Company and S o ut hern
S ur ety Company , t o t he b i ll f i led b y t hem and o t he r s in Mec hani c s ' Bank
and Trust Com pany �· KS&E , Minute Book 76 (Kno x C o unty C our t ho use ,
Her ea ft er ci ted a s Answer o f S o ut h-We stern
Knoxvi lle) , C a se No . 1 79 81 .
Insuranc e Company .
28
On Mar c h 15, 19 2 1 , Rec e iver C leage f iled his r ep or t and inven t ory .
The receiver ' s r ep or t s howed consi d er ab le e qui p ment in p os s es s ion of t he
company , b ut t he eng ine us ed by t he KS &E was a r ented one.
S everal p i ec e s
of equipment i n us e were t he prop e r ty o f the Pigeon River Ra i lr oa d .
of t he ma t er ia l on hand was a lmos t worn out .
Muc h
There was a great d eal of
s c rap iron and s t e e l a long t he t r a c ks whi c h t he r ec e iver p lanned to s e ll,
b ut no total value was g iv en .
90
Acc or ding to t he Transp or ta t ion Ac t of 19 2 0 , t he KS & E was ent i t le d
t o cer tain g overnment f und s as a r e s ult of los s es incur r ed w hile under
91
federal c ontrol d ur ing Wor ld War I .
I n Mar c h , 19 2 1 , C leage received
permi s s i on f r om t he c our t t o seek f ur ther f und s whi c h mig ht be f or t hc o ming
from t he f ed er a l government , and d ur ing t he suc c e ed ing years the r ec e iver
was ab le t o c ollec t s everal t housand s of dollars from t hi s s our c e .
92
O t her events , h owever � took p r e c ed enc e .
On July 2 2 , 19 2 1 , a momentous day in t he li f e of t he Knoxvi lle ,
S ev i e rvi lle and Eas t ern Ra i lway , C hance llor B r own , b e c a us e of t he deed of
t r us t c over ing t he $300 , 00 0 in f ir s t mor tgage b onds , ord er ed t he s a le of
the p r operties and e quipment of the r oad to s a t i s fy that d eb t .
Includ ing
the interes t ac c r ued on t he s e mor tgage b onds , a total a moun t of $347, 670
90
Mec hani c s ' Bank and Tr us t C ompany � · KS& E , Minute Book 76 (Mar c h
15, 19 2 1) , 30 2- 30 8 .
91
n e f i c i t S e t t lement w i t h KS & E , I C C Repor t s , Docke t N o . 159 .
92
Mec hanic s ' Bank and Tr us t Company � · KS & E , Minute Book 76 (Ma r c h
18, 19 2 1) , 32 4 .
29
was d ue t he Me c hanic s ' Bank and Trust C ompany .
93
Unless t he ab ove amoun t
wa s paid by August 2 2 , t he p r op e r ty and e q uip ment wer e t o b e sold .
T he
p ur c ha ser wa s r e quir e d t o p ay $2 0 , 00 0 in cash and two not e s, c overing t he
remainder of t he b i d , one d ue in six mon ths, t he ot her in twelve mon t hs .
None of t he c r ed i t or s or st ockhold e r s of the Knox vi lle , S e vi e r vi lle and
East ern Rai lway were to be allowed t he r i ght of r ed e mp t i on .
T he a c c oun t s
of t he r ai lr oad were not t o b ec ome t he p r op er ty of t he new owner b ut were
to be used to p ay t he c r ed i t or s of t he KS&E .
Fr om t he p r oc eed s of t he sale , t he f und s would b e d i stribu ted
a c c ord ing to c our t orders.
T he old e st and most p r e ssing ob ligat i on s were
to be pa id f i r st , if enough money was realized f r om t he sale .
I f enough
was not f or thc oming, t hen t he d eb t s were to b e paid ac c ord ing t o t he
93
As outlined in Mec hanic s ' B ank and Tr ust C ompany v. KS & E , Minute
B ook 7 7 ( July , 19 21) , 4 0 4 - 4 0 5, t he line t o b e sold wa s a s follows:
"T he sai d r ight of way and tr ack b eginning a t or ne ar Vestal in
Knox C ounty , T ennesse e , t henc e in a southeaste r ly d ir ec t i on to King ' s Gap
in Brown' s Moun t a in , a d i st ance of f i ve and one- ha lf mi le s ; t hence in a
southeast e r ly d i r ec t i on up t he valley of S t ock C r e ek and p assing N e ub er t ' s
Mill near t he end of t he seven t h mile f r om Ve st al t o Mud Fla t S c hool House ,
whic h i s e i ght and one-half miles f r om Vesta l ; t henc e in a n or thea st er ly
direc t i on t oward the head wa ters of S t ock Creek t o t he p r op e r ty of Rob er t
C r uz e ; t henc e a nor t heast e r ly d ir e c t i on t o t he line b e tween Knox and S e vi er
C oun ty , t his line b e ing a t S hook ' s Gap in Bays Moun t a in ; t henc e in a south­
e ast er ly d ir e c t i on t o P i tner' s Gap , t he sa me b e ing a d i vi d e of the w a t er s
f lowing nor thwestward ly and southeastwardly ; t hence d own t he valley lead i n g t o B oyd ' s C r e ek t o a p oint ne ar Fox' s S t or e on t he sevent e en t h mile ;
t henc e in a n or t he astwardly d i r e c t i on cr ossing B oyd ' s C r e ek near t he st one
b r i d ge on t he S e vi er ville Pike on t he 2 0 t h mile; t henc e in a southeastwar d ly
d ire cti on t o t he land s of Rob er t C a t le t t a t t he mout h of C annon Hollow , whic h
is on t he 2 3rd mile f r om Ve st al--in a sout hea stward ly direc t i on t o t he f oo t ­
hi lls south of Pige on Ri ver ; t hence southwest and p ar a llel t o t he r i ver t o
a p oin t one-half mile nor t hwest of S e vi er vi lle , and b eing twen ty- six and
one- t hird mi les f r om Ve st al and t he end ing of t he line a s located . "
30
a mo unt t he r a i lroad owed t o e a c h c re d i t o r .
T hus , t he c o ur t was ma king
s o me a t t e mp t t o p ay all o r p ar t o f a ll d eb t s and to c lear t hos e w ho wer e
b ur d ened wi t h t he unwant ed d eb t s inc ur r e d b y Oliver and hi s a s s o c i a t e s in
oper a t ing t he KS & E .
It
94
was eas i er to o r d er t he s a le o f t he KS & E t han it was to f ind a
b uyer willing t o pay a r eas onab le p ur c ha s e pri c e .
C le r k and Mas t er J . C .
Ford o f t he Knox C o unty c hancer y c o ur t, on O c tob e r 5 , 1 92 1, s old , s ub j e c t
t o c onf ir ma tion b y t he c o ur t , t he Kno x vi lle , S e vier ville and Ea s t ern Ra i lway t o C o lonel W . B . Town s end f o r $ 3 0 , 0 0 0 .
Townsend was connec t e d wi t h
t he L i t t le River Rai lroad and L umb er C o mp any o f Towns end , T ennes s e e , and
he was b e li e ved by t he Journal and T r ib une to r ep r e s ent a gro up o f t he
f ir s t mor tga ge b ond hold er s .
95
T ownsend had a considerab le t imb er int er e s t
in t he S mo kies and was probab ly in t er e s t ed i n ha ving a n o utlet f o r his
lumb er , o t he r t han t he L i t t le River Ra ilro ad .
Jo hn W . Green a s ked t he c o ur t f o r a s tay on t he c onf ir ma tion o f
t he s a le t o Towns end , and t he C ler k and Mas t er was ins t r uc te d by t he c o ur t
to r e ce i ve b ind s on t he KS & E unt i l O c tob er 21, 1921 .
T he c o ur t r e s e r ved
the r i ght t o r e je c t a ll b id s i f t hey were no t hi gh eno ugh.
96
Again, on
Oc tob e r 24, T ownsend as ked t ha t hi s $ 30 , 0 0 0 b i d b e conf i r med , b ut t he
cou r t ordered tha t b ids b e kep t o p ened until noo n on No ve mb er 1, 19 21 .
94
rb i d . , 401-40 6.
95
Jo urnal and Tr ib une, Oc tob er 6 , 1 92 1 .
96
Mec hani cs ' B ank and T r us t C o mpany y . KS &E , Minute Book 78
( O c to b e r 14, 1921) , 36 .
97
rb i d . ,
( O ctober 24, 1921) , 71.
97
31
Several b id d er s off er ed b i d s on N ove mb er 1, 19 2 1.
T ownsend r enewed
hi s $30 , 0 0 0 b id ; S . R. Ramb o, repr e senting another synd i c a t e seeking t he
r oad , b id $3 3 , 0 0 0 , and later r ai sed it t o $44, 0 0 0 .
L . C . G un t er , p r e si d ent
of the St ony F or k C olli er i e s and the Southern C oal Oper ator s Assoc i at i on,
who repr e sented a syndi c at e of b ondhold e r s and loc al men, b i d $45 , 0 0 0 .
98
T he c our t , not sat i sf ied w i t h t he b id s, held a c onsul tat i on wit h t he
b id d er s, and G unter r ai se d his b i d t o $50 , 0 0 0 .
T he sale at t ha t p r i c e was
c onf i r me d by t he c our t .
T he r e c e i ver ship of t he p hysi c al p r op er ties of the r ai lr oad, under
inst r uc t i on b y t he c our t, ende d at midnight , Oc t ob er 3 1, 19 2 1, b ut C leage
was r e t ained by t he c our t as r e c e i ver of the b onds and other non-phy si c a l
acc ount s o f the c omp any .
T hi s meant t ha t he would d e f end i t against all
sui t s ar i sing b e f ore Oc t ob er 3 1, 19 2 1 .
99
T he sale of t he r oad , how e ver ,
d id not end the sui t against t he KS& E , whic h r e quir e d several y e ar s t o
c omple t e .
C le age ser ved as a r e c e i ver of all ac c oun t s and monies of the
Knoxvi lle , Sevier vi lle and E astern Railway unt i l 19 2 6 , and d ur ing t hi s
per i od of ti me ser ved ab ly .
In the process of se t tling t he c laims against t he KS& E , C le age was
f or c ed to c o me b e f or e t he c our t many t ime s to repor t on hi s ac t i on s and
t o r e quest per mi ssi on t o c arry out hi s p lan s, e sp e c ially i n r e gard to t he
98
J ournal and Trib une, Nove mb er 2 , 19 2 1 .
W . B . T ownsend .
Inc luded in t h e gr oup was
99
Mechanic s' B ank and Tr ust C ompany �· KS&E , Minute B ook 78
(Nove mb e r 1, 19 2 1) , 103 - 10 6 .
32
co l le c tion o f money due the KS&E by the f ed eral gov ernment .
On December 2 ,
1 9 2 1 , C l eage r epor ted that he had s e t t led a l l c l a ims whi ch he , as r e c eiver ,
might ever have against the Uni t ed S t a t es under the Federal Contr o l A c t o f
March 21 , 1 9 1 8 and the Tr anspor ta tion Ac t o f Feb ruary 2 8 , 1 9 2 0 f o r $ 2 , 5 00 .
Al though the cour t approved th is s e t t l ement , ano ther s e t t l ement was mad e
.
100
l a ter between C l eage and the Uni ted States f o r $ 5 , 0 09 . 2 5 .
A f ew d ay s
l ater , C l eage p e t i tioned the c our t tha t the c lerk and mas t er s e l l the purc ha s e money no tes whi ch had b een g iven by L . C . Gunt er when h e p u r chas ed
The c our t agreed .
the road .
101
Fur ther probl ems comp l i c a t ed the s e t t l ement of the s u i t by the
Mechanics ' Bank and Trus t C ompany agains t the KS&E .
S omet ime in 1 9 2 0 the
railroad had submi t t ed a c l a im t o the United S ta t es government f o r
$52 , 8 7 4 . 18 .
Fur ther , the Mechanics' Bank and Tru s t C ompany held bond s
o f the KS&E amoun t ing t o $ 1 2 , 2 50 .
Therefore , the Knoxvi l l e , S eviervi l l e
and Eas t ern Rai lway trans f erred $ 1 2 , 2 5 0 o f i t s c laim against the Uni t ed
S ta tes government to the Bank and Trus t C ompany in exchange for the bond s .
Likewi s e , the board o f direc tors o f the KS&E order ed tha t a part o f the
$ 6 5 , 5 7 3 . 7 7 owed by the r ailroad to the Wm . J . O l iver Manu f ac tur ing Company
be p a id by trans f err ing at l ea s t $ 2 0 , 0 00 of the railro ad's c laim aga ins t
the Uni t ed S t a t es government to the O l iver Manufac tur ing Company .
All
au thor i ty t o tr ans f er thes e c l aims c ame f rom a s p e c i a l me e t ing o f the board
100
101
rb id . ( D ec emb er 2 , 1 9 2 1) , 1 9 7 .
rb id . (Decemb er 6 , 1 9 2 D , 2 11 - 2 1 4 .
33
o f d irectors o n Sep t emb er 2 , 1 9 2 0 , when the p r e s i d ent o f the KS &E wa s
empowered to c o l l ec t any money owed the r a i lr o a d by the government and tha t
when the money was coll e c t ed tha t i t b e used a s d ir e c ted by the b o ar d to
p ay the p r e s s ing o b l iga tions of the r o a d .
Dur ing 1 9 2 0 , the \� . J . O liver Manufac tur ing C ompany had g iv en a
f ir s t mor tgage o f $ 1 0 0 , 0 0 0 on i t s proper ty for a loan of tha t amoun t from
the Che l s ea Exchange Bank o f New York C i ty , wi th the repayment to b e
accomp l ished b y pay ing into a s inking fund the amoun t o f $ 1 0 , 0 0 0 p er
month , b eg inning on Augus t 1 , 1 9 2 0 .
fund ,
In ord er to s a t i s fy this s inking
the Wm . J . Oliver Manufac turing Company t rans f er r ed the above no t ed
$ 20 , 0 0 0 c l a im a g a ins t t h e government in the form o f a no t e t o t h e b ank .
102
On May 1 , 1 9 2 2 , the val i d i ty of th ese maneuvers c ame b efore the
chanc ery cour t o f Knox C ounty , which d eclared nul l and v o id the trans f er
o f the c l a ims to the Mechani c s ' Bank and Trus t Company and the Wm . J .
Oliver Manuf ac tur ing C ompany , but s ta t ed tha t the $ 2 0 , 00 0 no t e to the
Che l s ea B ank was good and should be p ai d pro ra ta along with o ther c la ims
upon the KS&E .
At the s ame t ime , cer tain a s s i gnment s made by the r a i l -
road on Novemb e r 27 , 1 9 21 , and Dec emb er 1 6 , 1 9 21 , w e r e a l s o d e c l a r ed nul l
and void b ec aus e the KS &E was ins olvent and no longer i n o p e r a t ion at
t ha t
'
103
t 1m e .
10 2
103
Answer o f S outh-We s tern Insuranc e C ompany .
Mechanic s ' Bank and Trus t Company �· KS& E , Minu t e Book 79 (May
Jus t what t h e s e a s s i gnments were c ould not be a s c er t a ined .
1 , 1 9 2 2 ) , 86- 88 .
34
In J u ly o f 19 2 2 , an a g reement was reached b e tween C leage and the
Uni t ed S t a t es government .
By this a g r e ement all c la ims of the KS&E against
the Uni t ed S t a t es were f inal ly s e t t l ed for $ 5 , 00 9 . 2 5 , a l though a f ina l
s e t t l ement had been prev ious ly announ c e d .
Ac c or d ing to the I C C Repo r t s ,
the t o tal amount c o l l ec t ed by the KS&E f r om the government under the
Fed eral C on t r o l Ac t of 1 9 18 and the T ranspo r t a t ion Ac t of 1 9 2 0 amoun t ed
t o $ 3 6 , 00 9 . 2 5 .
104
Yet ,
on March 1 2 ,
1923 ,
t h e r e c e iver r ep o r ted tha t
s ince b e c oming r e ceiver he had c o l l e c t ed a t o t a l o f $ 5 1 , 03 9 . 4 4 f r om the
Uni t ed S t a t e s and had s p ent $ 7 , 1 6 9 . 01 ,
l eaving a b a lanc e o f $ 43 , 8 7 0 . 4 3 .
Evi d en t ly t h er e had b een o ther c l a ims o f some s o r t o n t h e government .
A r e p o r t by
the c l erk and mas t e r o f the chan c e ry c our t of Knox
County on Oc t ob er 9 ,
many r a i l r o ad s .
105
1923 ,
showed a large numb e r of d eb t o r s ,
includ ing
A t o tal o f $ 5 0 0 , 0 0 0 in f irs t and s e c ond mor tgag e b ond s
r emained ou t s t and ing .
The d eb t s against the r e c eiver wer e numerous and
the c l erk and mas t et reques ted they be g iven p r i or i t y .
The mor t ga g e b ond
h o l d ers wer e t o b e p a i d p r o r a t a , b u t the b onds were to be turned over t o
C l eage and c ancel l ed when p a i d .
R. A.
7,
106
Brown , C lerk and Mas t e r , i n a r e p o r t t o t h e c o u r t on Novemb e r
1 9 2 3 , no t ed tha t s everal c red i t o r s should b e paid in f u l l b e cause their
104
n e f ic i t S e t t l ement w i t h KS&E ,
I CC Repor t s , Docket No .
thes e c l a ims wer e c ould no t b e a s c e r t a ined unless
159 .
Wha t
they r e f er r ed t o c l a ims
a r i s ing from the per iod o f f ed e r a l cont ro l .
105
J ournal and T r ibune , Mar ch 3 1 ,
1923 .
106
Mechan i c s ' Bank and Trus t Company v . KS&E , Minut e Book 8 2
( O c t ob e r 9 . 1 9 2 3 ) , 5 3 6 - 54 3 .
F i r s t mor t ga g e b ond s were c ompr om i s e d a t ten
c ents on the d o l la r ,
ex clusive of int er es t ,
and the a r rangement was
35
claims were b as ed upon c e rt a i n ma t e rial a nd suppli e s tha t were ab solutely
nec essary to opera t e the road .
B rown also repo rt ed that the f ew b ox cars
owned by the road we re too l ight exc ept f o r local u se a nd that f o r f o reig n
l i ne s e rvice the rai l road had t o rely o n cars f rom o ther l i nes , espec ially
the Southe rn Rai lway which had a larg e l i en on the ro ad.
This lien, the
re ceiver said , should b e give n p rio ri ty , but the court said the lien of
Sou thern Ra i lway should be paid pro ra ta .
107
S . E . C leag e f iled his f i nal rep o rt as rece iver o n Ap ril 2 0 , 1 9 2 6 .
I n the repo rt he lis ted $ 23 6 . 0 9 as all the mo ney rema ining i n his ha nd s ,
which the court award ed C leag e .
deb t s .
C l eage not ed that h e owed no re ce iver ' s
The court d i s charged him f rom his p o s i ti o n as rec eive r a nd a l s o
nul l if i ed any further l iabilities o f the Knoxville , S ev i e rville a nd
Eas t e rn Rai lway Company .
108
Thus , i n 1 9 26 , th e f i rs t phas e o f the h i s t o ry o f the Smoky Mou nt a i n
Rai l road e nded .
The l i ne had been p romo ted u nd e r the guise o f a n i nt e r-
s t a t e b ranch of a maj or ra i l road , but this hope could neve r be rea l i z ed ,
accep t ed by the court . These were b o nds held by Mecha ni c s ' Bank a nd Tru s t
Company . The s e c o nd mo rt gage b o nd s held by the s ame f i rm were comp romis ed
In
at 7 1 / 2 p e rc e nt of par value and this was also a ccep t ed by the court .
Mechanics ' Bank a nd Trust Compa ny � · South-Wes t e rn Su re ty I nsurance Compa ny ,
Southern Surety Compa ny a nd Knoxville , S evierville a nd Eas tern Railway
Company , Cas e No . 1 7 5 6 8 , a nd Ca se No . 1 5 7 69 i n Knox C o u nty Chanc e ry C ou rt
(Knox C ou nty C ou rthous e , Knoxv i l l e ) .
10 7
Mechanics ' Ba nk a nd Tru s t Company v . KS &E , Mi nu t e Book 8 3
--(Novembe r 7 , 1 9 2 3 ) , 96 -102 .
108
Ib id .
(Ap ril 2 0 , 1 9 2 6 ) , 504 .
36
s inc e t h e r o u t e o f t h e r o ad was
An abundance o f
Smoky Mountains .
r es pons ib l e f o r
toward a n ina c c e s s ib l e par t o f t h e G r e a t
the p r o p o s a l
not enough availab l e c ap i tal
gul l i b l e pub l i c swallowed
t imb e r r e s ou r c e s had b e e n p r ima r i ly
to c o n s t ru c t s u ch a l i n e ,
to built i t .
It
s e ems ,
t h e i d e a s o f Wi l l i am J .
but
there was
howev e r ,
s imply
that a
O l iv e r wi thout s t udy ing
the s i tuat ion .
Such an e n t e r p r i s e was d o omed
f r om the f i r s t .
mob i l e mad e t h e e r a o f f ab u l ou s earnings
p as t ,
the turn of
the au t o ­
from r a i l r o a d s a th ing o f t h e
a l though a gr e a t numb er o f r a i lr o ad s ,
cons t ru c t i on around
The a g e o f
b o th s ho r t and long , wer e und er
the twen t i e th c en t ury .
w a s one o f many whi c h would f a i l in the a g e o f
The Smo ky Mou n t a i n
t h e aut omob i l e whi c h was
j u s t b e g inning .
The r a i l r o a d was
amb i t i ons .
inter e s t ed
Wi l l iam J .
the r es ul t ,
O l iv e r was
p r imar i ly ,
o f o n e man ' s p e r s ona l
a p r omo t o r and b u i l d er o f r ai lr o a d s ,
in h i s own pers onal g a in .
H i s or i g ina l a im in b u i l d ing
the
r oad w a s
t o make a f o r tune f o r himse l f , which was n o t ava i lab l e in S ev i er
County .
Ins t ead ,
The Knoxv i l l e ,
the KS&E p robably s e rved
to b r eak O l iv e r f inanc i a l l y .
S ev i erville and Eas t ern Ra ilway p e r i o d o f
the Smoky Moun t a i n
Ra i l r o ad was b es e t w i th l i t i ga t ion b e tween O l iv e r a n d tho s e t o whom t h e
KS & E b ecame ind eb t e d .
of
the c r ed i t o r s o f
r e sul t ed
The s e c our t p r o c e ed i ngs c r e a t ed doub t s
the r a i l r o ad and the f a i lu r e t o pay r e turns eventua l ly
in the o r d e r
to s e l l the r o ad .
shown i n th e f a c t tha t the willingness o f
was
l imi t ed
to
in the mind s
The lack o f
f inanc i e r s
local p e o p l e who s e e s t ima t ion of
f a i th
in the l i n e i s
t o purchas e t h e l ine
the va lue o f
the KS&E was
37
ex tremely low .
The men who f inally purcha s ed the road were not a t a l l
cer tain tha t their decis ion was wis e , even though they pub l i c ly vo i c ed
the ir b e l i e f that the KS&E wou ld be pro f i tab le .
true .
Exa c tly the r evers e was
CHAPTER I I
THE KNOXV ILLE AND CAROLINA AND TENNE S S E E AND NORTH
CAROLINA PERIODS OF THE SMOKY MOUNTAI N RAILROAD
By ord er o f the chancery c ou r t o f Knox C ounty ,
the Knoxv i l l e ,
S ev i ervi l l e and Eas t ern Railway was s o l d on Novemb e r 1 ,
the c r ed i t ors and unsecur ed b ondh o ld e r s o f the r oad .
$ 5 0 , 0 0 0 and the new owners t o ok over
S ev i erv i l l e .
2
1
1921 ,
L.
C.
t o s a t i s fy
Gun t er b id
the line o f t h e KS &E f r om V e s t a l t o
Char t ered as the Knoxv i l l e and C ar o l ina Railr oad ,
company had as i t s char t er memb er s L .
C.
Gun t er , W .
B.
the new
T ownsend ,
S.
Lut tr e l l , T . A . Wr igh t and J . A . Wa lla c e , a l l l o c a l bus ines smen .
d r e ams ,
B.
D r eaming
the company res erved the r i gh t to ext end the l ine to Cant on , N o r t h
Caro l ina .
The author i z ed c ap i t a l s t o c k o f the road w a s s e t a t $ 4 0 0 , 0 0 0 by
the char ter memb er s and the cha r t er was approved by the s t a t e o f Tenne s s e e
on November 4 ,
19 2 1 .
3
Again the p romo t ional i d ea o f an inter s t a t e r a i l -
r o ad was r e t a ined i n an a t t emp t t o s ec u r e l o c a l suppor t .
In a c c o rdanc e wi th an o r d er f r om the chancery c our t o f Knox County ,
the c lerk and mas t er made a d eed whi c h c onveyed t o L .
21 ,
�
C . Gun ter a l l the
KS&E , Minu t e B o o k 7 7
e chanic s ' Bank and Tru s t C ompany
-1 9 2 1 ) ' 4 0 1- 4 0 6 .
( Ju ly
--
2
Journal and Tribune , Novemb e r 2 ,
C ompany �·
1921 .
KS &E , Minu t e Book 7 8 (November 1 ,
3
Mechanic s ' Bank and T rus
---1921) , 103-106 .
---
char ter o f Knoxv i l l e and Carol ina Ra i l r o ad ( c opy ob t a ined by t h e
wr i t e r f r om Rec o r d s D iv i s i on , Depar tment of S t a t e , Nashvi l l e ) .
38
39
property s o l d , wh ich , i t w i l l b e rememb ered , d i d no t apply t o the accounts
o f the KS&E .
4
On November 1 2 , 1 9 2 1 , L . C . Gunt er t r ansf er re d the rai lroad
to the char t er memb er s o f the company for a "valuab l e cons idera tion . "
5
Th e
Knoxv i l l e and C ar o l ina Railroad C ompany appar ent ly gave Gun t er and h i s
associates who r ep r e s en t ed $ 1 6 4 , 0 00 or appro x ima tely 5 8 p er c ent o f the o u t s tanding f ir s t mo r t gage bonds o f the KS&E , $ 3 0 0 , 000 in the s to c k o f t h e new
company and $ 3 2 , 00 0 in bond s f or their s t ock in the KS&E Ra i lroad .
S inc e
this was consid ered to b e the equ ivalen t o f the $ 5 0 , 0 0 0 p ur chase p r i c e , i t
i s a n ind i c a t i on o f the low e s t eem in whi ch the Knoxville and C ar o l ina
Rai lroad Company was held by local f inanc i ers .
Never thele s s , the new inc orporators s ta r t ed out bravely to o p er a t e
the railroad .
S cheduling on the Knoxv i l l e and Carol ina was basic a l ly the
same a s that o f the KS&E .
6
The r a i lroad mainta ined o f f i ces a t Knoxvi l l e
and S evierv i l l e w i t h s ta tions a t V e s ta l , Neub er ts ' , Burnet t ' s , P i tner ,
Seymour , Oak C i ty , McMahan , Boyd ' s Creek , Rev i lo and Ewin g .
p any was , however , hard pr e s s ed from the beg inning .
7
The new c om-
The wea ther m i l i t a t ed
agains t the proper op er a ti on o f the road , for the tres t l e a t Boyd ' s Cr e ek ,
along with s ome o ther smaller tres t les in Knox County , were damaged by
4Mechani cs' Bank and Tru s t Company v . KS&E , Minu t e Book 7 7 ( July
21 , 1 9 2 1 ) , 4 04 -4 0 5 .
5
6
7
Rul e Docket 4 2 , Mechanics ' Bank and Trus t C ompany �· KS&E .
vind ic a t or , December 2 1 , 1 9 2 1 .
E . E . Conner v . Knoxv i l l e and C arolina Railroad and �· !· Wa l lac e ,
Trus t e e ,-in-the Chancery Cour t of Sevier County ( S ev i er C oun ty C ou rthous e ,
S ev i erv i l l e) , Case No . 1 7 4 0 .
40
f lood wa t er s in January and December , 1 9 2 2 , nec e s s i t a t ing expensive repair
work .
8
In an a t t empt to se cure s up por t for thems e lves and the r a i l road ,
the new owners sought f ederal approva l o f a new mor tgage bond i s s u e .
T. A.
Wr i ght , ac t ing for the or i g inal owners of the Knoxv i l l e and Carol ina , sub­
mi t ted on June 17 , 1 9 2 2 , an appl icat ion to the Int er s t a t e Commerce Commi s s ion
for a u thori ty to i s su e mor tgage bond s as a means o f r a i s ing nec e s s ary f und s .
They proposed to s el l the road to the Knoxv i l l e and Carol ina Ra i lroad Com­
pany , wh i ch was organized for the purpos e of acqu ir ing and oper a t ing the
road , and us ing f o r p ayment the s ec ur i t ies sou gh t in the applic a t ion .
Sinc e
i t was capi ta l i zed a t $ 4 0 0 , 00 0 the company hoped to i s s u e 4 , 00 0 shares o f
common s tock valu e d a t $ 1 0 0 each and t o g ive L . C . Gunter and h i s nominees
3 , 000 sha r es in par t ial payment o f the $ 5 0 , 0 0 0 p ur cha s e p r i c e .
The Knox­
v ille and C arol ina also p roposed to issue $ 3 0 0 , 0 0 0 in firs t mor tgage bonds
to be se cured by a mort g ag e , to be dated January 1 , 1 9 2 2 .
The amount o f
$3 2 , 00 0 of the bonds was t o be u s e d immed ia tely , i f con f i rmed b y the ICC ,
to compl e t e the payment to L . C . Gun ter for the road .
In i t s e f forts to ob tain ICC approval , the company p r e s ented an
unj us t i f iably rosy p i cture of i t s prospec t s .
The app l i c a t ion s ta t e d tha t
the road passed through a prosperous agricul tural r eg ion and had a good
pros p e c t of handl ing a cons i d er ab le amount of t imb er produc t s .
The rail­
road c la imed to b e in the p roc es s o f making arrangements for improving
8
Journal and Tribune , January 2 5 , 1 92 2 .
41
the r o adb ed and f i l l ing mos t o f the tr es t les .
The owners hoped that , by
imp rov ing the proper ty , they might b e abl e t o r e al i z e an eventual p r o fi t .
The ICC was no t impr e s s ed .
I t found the total c ap i t a l i z ab l e valu e
of the prop er ty to b e $ 3 9 2 , 21 4 and i t autho r i z ed the $ 3 00 , 0 0 0 mor t ga g e ,
but p er mi t t ed the immed iat e i s suance o f only $ 13 2 , 0 0 0 in b onds and only
2 , 6 02 shares of c ommon s tock valued at $ 10 0 a s h ar e .
bonds were to be paid t o Gunter .
The s e s tocks and
Under this p l an f o r r e organizat ion o f
the c ompany , the t o t al f ixed charges o r inter e s t d u e on the s t o cks and
bonds would b e $ 7 , 9 2 0 annua l ly .
9
The c ompany hoped to obtain inc r ea s ed r ev enu e from the pas s enger
s ervi c e , but s inc e the fund s went t o Gun t er ins t ead of the railroad , the
company had to borrow money on the c r e d i t of its o f fi c ia l s to make
nec e s s ary improvemen t s .
The maj o r improvement was a gas-pro pelled mo tor
car ins talled by the railroad in Oc tober , 1 9 2 2 .
On O c tober 1 8 , Pres ident
L . C . Gun t er and o ther o f f ic ials r o d e the c ar t o Sevierv i l l e and , no t
surpr i s ingly , v o i c ed hear ty appr ova l o f the innova t ion .
The c a r , bu i l t by
the J . G . B r i l l Comp any , of Philadelphia, at a c o s t of $ 1 6 , 00 0 was over 60
f e e t long and had r o om for 4 2 pas s engers .
I t was e l e c t r ica l ly l i gh t ed and
had b o th front and rear head lights with c urrent genera t ed by a sma ll mo tor
in the operat ing end o f the car .
C omp o s ed o f s t e e l s t ructure thr oughou t ,
the c a r was capab l e o f making f i f ty miles an hour , b u t was scheduled to
9
Knoxvi l le and Carolina Reorgani za tion , F inance Docket No . 2 2 0 7 ,
In t e r s t a t e C ommer c e Commiss ion Repo r t s , V o l . 7 2 (Government Printing O f f ic e ,
Wash ington , 1 9 2 3 ) , 2 2 1 -2 2 3 . No men t ion was made o f the Pigeon River Rail­
road .
42
run a t 2 5 m i les an hour .
10
The gas o l ine c a r mad e thr e e t r i p s a day t o
S ev i erv i l l e , c arry ing p a s s eng ers .
hand l e d by t h e s team locmo t ive .
T h e o ther s er vi c e c o n t inued t o b e
11
Dur ing this p e r i o d the P i geon River Rai l r o a d was a l s o in o p e r a t ion
and the Knoxv i l l e and Carolina was interes t ed i n p l ans f or the ext ens ion
o f the P igeon River l ine t o Ga t linbur g , s inc e this would increase the
amount of lumb er b e ing s h i p p ed out t o Knoxv i l l e and e l s ewhere over the
.
12
two 1 �nes .
Rumor b e c ame c ur r ent in Marc h, 1 9 2 3 tha t the Knoxv i l l e and Caro lina
would b e c ome a par t o f a trunk l ine f r om the Mis s i s s ip p i River t o the
A t l an t i c O c ean ,
and in Augus t ,
a new e l e c tr i c r o ad was p r o p o s ed f r o m Knox-
v i l l e b y way o f Rev i l o t o B r i s t o l .
13
The rumor s evapo r a t ed , however , and
pass enger t r a f f i c on the Knoxv i l l e and Caro l ina was s e r iously r educed in
S ep t emb er ,
1923 ,
a f t er Wi l l iam J .
v i l l e t o S ev i erv i l l e .
O l iver b e gan o p e r a t ing a bus from Knox­
14
S inc e the Knoxv i l l e and Carol ina cont inued t o o p era t e a t a l os s ,
the owner s mad e ano ther inqu iry to the I C C f o r a new mor t ga g e b ond i s sue .
10
v ind i ca t or , Oc tober 1 8 , 1 9 2 2 .
The s ame g as o l ine eng ine h i t a c ar
and k i l l ed thr ee o r four p e o p l e a t E l l i s C r o s s ing near Boyd ' s Cr eek in the
f a l l of 1 9 2 5 .
11
Interview w i t h Raymond Nor ton in Seymour , Augus t ,
vin di c a t o r , D e c ember 2 0 ,
in S ev ierv i l l e , Novemb er 19 ,
12
18 ,
interview w i th J .
Journal and Tribune , D e c ember 1 7 ,
Journal and Tr ibune , March 2 5 ,
v ind i ca to r ,
Sr . ,
Sep t emb er 1 2 ,
1922 ;
Knoxv i l l e News , D ec emb er
1922 .
1 9 2 3 , Augus t 1 9 ,
could no t a s c er t ain who mad e the p r o p os a l .
14
B . Wa t er s ,
1966 .
19 2 2 ; Vin d icator , December 2 0 ,
13
1 92 2 ;
1967 .
1923 .
1923 .
The wr i t er
43
Although i t was g ran t ed ,
i t d i d no t help t h e r a i lr o a d b e c au s e t h e money
thus a c quired was evi dent ly u s e d to help pay o f f old d eb t s wh i l e new d eb t s
p iled up and t h e r o a d cont inued t o o p e r a t e i n t h e r e d .
In t h i s appl i c a t i on
the o f f i c ia ls s a i d that it had b een n e c e s s ary t o purchase add i t ional
equipment
and make some improvement s and that in t h e near f u t ur e ,
woul d need to make mor e .
the r oad
The es t imat e d expend i t ures amoun t ed t o $ 1 2 1 , 3 2 4 . 2 0 .
The r a i lroad had already s pent $ 6 1 , 2 7 7 . 5 5 t o a c qu i r e equipment and
impr ove it s p ro p e r t y .
Part of t h e s e f unds were ob t a ined t h r ough advan c e s
of $ 1 6 , 000 a n d $ 9 , 00 0 mad e b y S .
more ,
in O c t ober and Novemb e r ,
B.
Lut t re l l and T . A . Wrigh t .
1 9 2 2 , and March ,
1923 ,
Further­
t h e Knoxv i l l e and
Caro l ina Railroad b o rr owed the s um of $ 2 4 , 00 0 f r om t he Uni on Nat i onal Bank
in Knoxv i l l e on p r omissory not es s igned by f ou r s t ockho l d e r s of t h e r o a d ,
S . B . Lut t r e l l , T . A . W r i ght , L . C . Gun t er and W . B . Townsend .
Through a verbal a g r e ement ,
t o issue t o T . A . Wright and S .
B.
the Knoxvi l le and Car o l ina had a g r e ed
Lut t r e l l f i r s t -mo r t g a g e b ond s equal t o
t he advances made b y b o th men t o t h e road , and , i n regard t o the b ank
loan s , Lut t r el l , Wr i ght , Gunt e r and T owns end ,
t hr ough a s im i lar verb a l
agreement w i t h t h e Knoxvi l l e and C a r o l ina , a l s o a g r e ed t o a c c e p t f i r s t ­
mort ga g e b ond s equal t o t h e loans mad e .
The app l i c a t i on p o i n t ed out
that none of t h e s e expendi t u r e s had b een cap i t al i z e d p r i o r to May ,
1923 ,
and that no p ar t o f t he loans or advances had b een r e-p a i d e i t her t o
Lut t r e l l and Wr ight o r t o t h e Union Nat iona l Bank .
In order t o s a t i s fy t h e above loans and advan c e s and make pro­
p o s ed impr ovemen t s ,
the railroad r e ques t ed p ermis s ion f rom t h e ICC t o
i s sue $ 1 0 0 , 0 0 0 o f f i r s t -mor t g a g e b ond s und er t he f i r s t mor t gage d a t ed
44
January 1 ,
Trust C ompany of Knoxv i l l e , as
This mor t gage had p r ov id e d f o r the i s suanc e of up t o $ 3 0 0 , 0 0 0 in
t ru s t ee .
b onds ,
1 9 2 2 mad e with t h e Banker s '
of wh i c h $ 13 2 , 0 00 , as n o t ed above , had b een i s sued , whi c h l e f t a
t o t a l of
$ 1 6 8 , 0 00 ,
s t ill ava ilab le .
O f t he $ 100 , 00 0 in b ond s r e que s t ed ,
the Knoxvi l l e and Carol ina p r o p o s ed t o g ive $ 2 5 , 000 of
value to S .
B.
t h e s e b onds at par
Lut t re l l and T . A. Wright in s a t i s f a c t i on of t he i r advan c e s
and $ 2 4 , 000 t o S .
B.
Lut t r el l , T . A. Wr ight , W .
Gun t er t o c over their bank loans ;
B.
Townsend and L .
C.
the r emaining $ 5 1 , 0 0 0 in bond s were t o
b e s o ld a t p ar value t o imp r ove the road .
The app l i c a t ion s t a t e d that as of Mar c h 3 1 ,
1923 ,
the Knoxvi l l e
and C a r o l ina had a n inves tment i n t h e r oad and in e qu ipment , minus
deprec iat ion ,
b onds .
of $ 4 5 0 , 69 9 . 5 1 ,
and $ 3 9 2 , 2 00 out s t and ing in st ocks and
The owners admi t t ed , however ,
road h ad b een o p e ra t ed at a l o s s .
that , exc ept f o r Mar c h , 1 9 2 3 ,
N ev e r t h el e s s ,
the
they h o p e d tha t through
the impr ov emen t s whi c h would be made p o s s ib l e by the p r o p o s e d b ond i s sue
of $ 100 , 000 the c ompany would be able to g a in s uf f ic i ent amount s o f
t onnage and new b u s iness t o make t he road a g o ing c oncern , b e c ause p e o p l e
might have ad d e d c onf idence in the road if t h e I C C g r an t ed t h e r e qu es t .
The b ond i s sue was approved , w i t h t he s t ipulat i on that not over $ 10 0 , 000
in b onds b e i s sued , but there i s no evi dence t h a t the b onds were ever
of f er e d f o r sale ,
p r obab ly b ecause t he owner s of
that the s i tuat ion was h o p e les s .
15
15
Knoxvi l l e and C a r o l ina R . R .
Bond s , F inance D o cket No .
I n t ers t a t e C ommer ce C omm i s s ion Rep or t s , Vol .
O f f i c e , Washingt on ,
1 9 24 ) ,
the r a i l r oa d r e a l i z ed
542-546 .
79
2509 ,
(Government P r int ing
45
The r o sy exp ectat ions d id no t ma t er ia l i z e and the company continu ed
to lose money , l ead ing the V ind icator to ask i t s reader s , "What is the
Knoxv ille and Carolina Railroad wor th t o Sev ie r County? "
16
S inc e Chapman
Highway had no t b een bu i l t at th is t ime , the railr o ad was the only p r imary
means of g e t t ing bulk commo d i t ies into the coun ty , and was in a larger
s ense , extremely impor tant to the people of the are a ; however , mo s t o f the
people d id no t seem to r ea l i ze this b ecaus e at abo u t this t ime , the county
cour t o f S ev i er C ounty had v o t ed $ 50 , 0 00 in int e r e s t bear ing war r ants for
the purcha s e of the road a t a p r i c e o f $ 100 , 0 0 0 , w i th the r ema ining $ 5 0 , 00 0
to have b e en r a i s ed through p r ivate s ub s c r i p t i ons , but t h e prop o s a l had
fallen through .
17
The r oad r educed the r a t e on pa s s enger f a r e s to $ 1 . 00 per r o und
t r i p in an ine f f e c tual a t t emp t t o mee t the c ompet i t ion o f the bus l in e
s tar t ed by t h e f o rmer owner o f the r ailr oad , Wil l iam J . Ol iver .
18
S inc e
the r o ad c ont inued to l o s e money and s inc e there was no r eal hope o f
prof i t s , the s to ckholder s , mee t i ng i n Augu s t , 1 9 2 6 , d ec id e d t o s el l the
.
l9
. h er f or J. Unk o r f o r operat�ng purpo s e s .
road , e�t
bankrup t .
The c or porat ion was
20
The same month , however , the Smoky Mountain Ra i l ro ad , with Irv in
S . Saxton , J , A. Wallace , S . B . Luttrell , J o s ephine Conway and T . A .
16
17
18
20
v ind icator , Decemb e r 1 0 , 1 9 2 4 .
Knoxv i l l e Journa l , September 18 , 1 9 2 6 .
v ind icato r , Decemb er 1 0 , 1 9 2 4 .
19
Her ea f t e r c i ted as Journal .
Journa l , Augus t 4 , 1 9 2 6 .
J o e C . C a r r t o Will iam Rob e r t Roger s , July 1 0 , 1 9 6 7 ( in
p o s s e s s ion of the au tho r ) .
46
Wri ght , J r. , as chart er memb e rs , re ceived a cha rt e r o f i nc o rpo ra t i o n with
a capi tal s t o ck o f $ 100 , 000.
The chart er p rovided for the co ns t ru c t io n
and opera t io n , leasi ng o r ab and o nment , o f a l i ne o f rai l road co i nc id i ng
with the Knoxville a nd Caro l i na l i ne , and f o r the ext e ns io n of i t to C a nt o n ,
No rth Caro l i na , with the ri ght to c o ns t ru ct a nd b u i l d t h e road i n who l e o r
part .
I t is not eworthy that s ome o f thes e cha rt e r memb ers were s tock­
21
holders i n the Knoxville a nd Caro l i na .
Evident ly , the s e chart e r memb e rs
s t i l l had v i s i o ns o f making mo ney out of thei r i nves tment ; on Augu s t 25 ,
T. A. Wri ght s t a ted tha t the reaso n f o r the cha rt e r u nd e r name o f Smoky
Mountai n Ra i l road was to e nable the owners of the Knoxville a nd C a ro l i na
t o have $ 1 0 0 , 000 i n opera t i ng s tock.
The will i ngness t o sell the Knoxville a nd Caro l i na t o the new
corpora t i o n d emo ns t rated the fac t that the owners wa nt ed t o ge t out wh i l e
they c ou l d s t ill ge t something for their i nves tment ; b u t they had d if f iculty s e l l i ng the l i ne.
Sale o f the ro ad was s e t f o r Sept emb er 1 , e i ther
as j u nk o r as a goi ng c o nc e rn.
The owners o f the Knoxville and C a ro l i na
22
had no plans to operate t h e road u nd e r t h e new name .
The cha rt e r f o r
the Smoky Mount a i n Ra ilroad was t o b e surre nd e red t o t h e purchaser o f the
23
road on the d a t e of sale .
At auc t io n t ime , howeve r , T. A. Wri ght a nnounced that a b il l f o r
a n i nj unc t io n had b e e n f iled i n t h e cha ncery court of S evier County b y a
21
Cha rter of Smoky Mou nt a i n Railroad ( copy ob t a i ned by the wri t e r
f rom Record s D ivis i o n , D epa rtme nt of Sta te , Nashville , T e nnes see ) .
22
J ou rnal , Au gu s t 2 5 , 1 9 2 6 .
23
rbid., Sep t ember 1 , 1 9 2 6 .
47
representat ive o f S t okely Brothers C anning Company of Sevierville t o halt
the sale of the Knoxv i l l e and Carolina f or j unking purpos e s b ecau s e the
canning fac t ory shipped prod u c t s ou t ove r the line and was int e re s t ed in
24
.
t h e roa d as a go1ng conc ern .
b uy1ng
.
A t emp orary inj unct ion had b e en
given , await ing a f inal h ear ing on S e p t ember 3 0 .
Wr ight s t a t ed that the
owners of the road could not af ford to offer i t f or sale only as a going
concern , and that they woul d cont est the inj unc t ion .
25
Argument s on the mot ion t o d i s solve t h e inj unc t ion of S t okely
Brother s t o pr event the sale of the road as j unk were heard before Chanc e llor Ben Robert s on of the Sevier County chancery cour t on September 1 8 .
T . A . Wr ight , r epresent ing the railroad , argued that the f i l ing of the
inj unct ion was p rema ture , because S t okely Brothers wou ld not be hur t unt i l
the s a l e had b e en f inished .
H . T . S t okely of Birmingham , Al abama , and
W . D . Mc Swain of Newport , who r epre sented Stokely Brother s , argued that
the proposed sale was an a t t emp t t o cir cumvent the s p i r i t of the interstate comme r c e a c t s , and that the propos ed sale would push the r a i lr oad
beyond the control o f the ICC .
26
Chancellor Robert son al lowed the owner s
o f the railr oad thirty days t o ob t a in p ermis s ion from the I C C t o s e l l the
road and its equ ipment a s j unk , with the t emporary inj unc t ion to r emain
in e f f e c t f or that t ime .
reques t .
Wr ight announced that he wou ld f i le such a
27
24
26
27
rb id . , Septembe r 2 , 1 9 2 6 .
25
Knoxv i l l e News , September 1 , 1 9 2 6 .
Journal , S e p t ember 19 , 1 9 2 6 .
Knoxv1' 1 1 e �
N
· S ep t emb er 18 , 1 9 2 6
.
48
On S e p t emb er 2 8 , Wr igh t announced that an unqua l i f i ed sale o f the
Knoxv i l l e and Car o l ina would t ake p l ace on October 1 1 , with the d e c i s ion
to opera t e o r j unk l e f t t o the p u rchas er .
28
Evident ly , t he ICC had agreed
t o this t yp e o f s al e .
At t h e s a l e on Monday , Oc t ob er 1 8 , 19 2 6 , the purcha s ers were W. J .
Parks , C . B o i c e and J . W . Bel l , who b id the sum o f $ 7 5 , 0 00 and were the
only b id d er s .
29
The new owner s o f the Smoky Mounta in Rai lr o a d wer e int er ested in
operat ing the r a i l r oad as a g o ing c oncern .
W . J . Parks o f Newp ort was
presid ent of the Tennessee and No rth Car o l ina Ra i lr oad .
3°
C . Boice o f
Har t f o r d , p r e s ident o f a large l umb er c ompany , was a maj or d eve loper o f
the region a long the ro adbed o f the Tenne ssee and Nor t h Carolina Ra i l r oad ,
which gave s ome a s surance that this 3 0-mi le road o p erat ing f rom Newp ort
by way o f Hart f ord into North C aro l ina wou ld b e c onnected with the old
Knoxv i l l e and Caro l ina .
Company o f Newp o r t .
31
J . W . Be l l was conne cted with B e l l Hardwoo d
32
At the t ime o f the purcha s e o f the Knoxvi l l e and C a r o l ina the new
owners a l s o r e c e ived the char ter o f incor p or a t i on und er the name Smoky
28
rb id . , September 2 8 , 19 2 6 ; J ourna l , September 2 9 , 1 9 2 6 .
29
Knoxv i l le News , Oc tob er 1 9 , 1 9 2 6 ; Journa l , Oc tober 1 9 , 1 9 2 6 . The
auct ion of the road set f o r Oc t ob er 11 was p o s t p oned unt i l October 1 8 a t
the r e q u e s t o f t h e owner s . Ac co rd ing t o C . A . Murphy, super int endent o f
t h e r o ad , b u s ines s h a d n o t lagged . Both pas s engers and f r e ight had b een
hau led and the ga s o l ine eng ine had mad e three r o und t r ip s p e r day s ince
the propo sed sale had b e en und er di scus s ion . J ourna l , Oct ober 1 7 , 1 9 2 6 ;
Knoxvi ll e S en t ine l , October 1 1 , 1 9 2 6 .
30
32
1966 .
Journa l , Oc t ob e r 1 9 , 1 9 2 6 .
31
rbid . , Oct ober 2 4 , 1 9 2 6 .
rnt erview with J . B . \.Jat ers , S r . in Seviervi l l e , November 1 9 ,
49
Mountain Ra i l r o ad .
Among o ther things , the Smoky Moun tain char t e r had been
secured to enable the new owners to opera te .
with
W . B e l l e le c t ed p r e s id en t and
J.
t enden t .
H.
S.
This new company wa s or ganiz ed
Man t o o t h of Newport , a s super in-
He s erved in that c apacity un t i l the T ennes s ee and No r t h Car o l ina
Company surrendered all int e r e s t s in the road in 1 9 3 8 .
33
of c a p i t a l s t o c k were d ivi ded among Bo ice , Bell and Parks .
The 1 , 0 0 0 shares
La t er , a
modifica t i on was made in the c ap i t a l s t ock by o r d er of the Inter s t a t e
Comme rce Commi s s i on ; acc ord ing t o another source only 7 5 0 shar es were
issued , g iving the date o f is suance a s Au gus t 1 9 , 1 926 .
34
The new owners of t h e l ine sought ICC approval of their purchase
and proposed is sue o f capital st ock and lease o f t h e Smoky Mountain by the
Tenne s s e e and Nor t h Car o l ina Rai l r o ad .
In D e c ember , 1 92 6 , the Smoky
Nount a in Rai l r oad und er i t s new owners filed , w i th the ICC , an app l i cat ion
reque s t ing that the c ompany acquire the l ine of r o ad running from Ve s t a l
i n Knox Count y to Seviervi l l e , fo rmerly known as t h e KS&E .
cat ion wa s approved on May 12 , 1927 .
Thi s app l i-
A s e cond app l i c at ion asked f o r the
autho r i t y to i s sue $ 1 00 , 00 0 of c ap i t a l s t ock t o pay for the road and a l l
o t her ra i lroad proper t ie s a c quired with i t .
C oncu r r ently , the Tennes s e e
and North Caro l ina Ra ilroad r e que s t e d p ermis s ion t o acquire contr o l ,
under lea s e , of the Smoky Mount a i n Railroad .
33
34
Int erview with Hr s .
J.
R.
Wha ley in Knoxv i l l e , August 1 1 , 1 9 6 7 .
Bankrupt cy Case No . 1 4122 , Smoky Mount a in Ra i lr o ad ( c opy obt ained
by the wr i t e r from Gener al Services Admini s t r a t ion , F ederal Re cords
Divi s i on , Eas t Point , Geor g i a ) . Her e a f t er c i ted as Smoky Moun t a in B ank­
r up t cy .
50
The salvage v a lue o f t h e road was es t imated b y the Smoky Moun t a in
at no t more than $ 60 , 00 0 , with o ther prop ert i es purchased b e ing valued at
not over $ 2 5 , 0 0 0 .
According t o the t e s timony given , the ma intenance of
the r oad had b e en "gros s ly neg lec t ed , " with new t i es and surfac ing badly
needed .
The T enne s s ee and No r t h C a r o l ina Railr oad as no t ed above , was
int ere s t ed in lumb er ing and was owned by lumb er ing int er e s t s wh ich owned
a l ine running f r om Newpor t , T ennes s e e to C r e stmon t , Nor t h Carolina , a
d i s t ance of 2 1 miles .
The r oad had earned a net p r o f i t in 1 9 2 1 , 1 9 2 2 , 1 9 2 3
and 1 9 2 5 , a l though i t had suf f er e d sma l l d e f i c i t s i n 1 9 2 4 and 1 92 6 .
The
owner s of the two roads p l anned to coord inat e s e rv i c e on them through the
use o f trucks for the 2 4 -mile br eak be tween S evierv i l le and Newpor t .
Bell , Boice and Parks exp r e s s e d hope o f an eventual railroad connec t i on
between the two p o in t s , wh ich probably ac coun t s f or their purchase of the
Knoxvi lle and Car olina .
In the presentat ions t o the ICC , the new owner s had p l ac ed great
emphas is on the fact that S evier C ounty had no o ther r a i l service and
was
dependent upon the Smoky Moun tain Ra i l road f or sh ipp ing out i t s maj or
produc t , lumber , and i t s by-produc t s .
devel op ing the area .
The lumber indus t ry wa s rapid ly
The presentat ion no L ed , however , that the Smoky
Moun t a in Ra i lr o ad was c l o s e ly par allel e d by a s t a t e h ighway for i t s ent ire
lengt h and that b e cau se of th i s , both pas senger business and l e s s - than­
carload fre ight traf f i c had been ser ious ly af f ec t ed by the c ompet i t i on
o f p r ivate au tomobiles and t rucks .
But , the new owner s p o inted out , the
railr oad was needed for such heavy good s a s c oa l , f er t ilizer , build ing
51
ma t er i als , and gas o l ine in tank- car quan t it i es , a s we l l a s t imber and
The numb er of carload s brought in per year was e s t imated at 300 ,
lumber .
and the numb er go ing out was p laced at from 1 2 5 t o 1 5 0 per year .
In 1 9 2 5 ,
however , the exp en ses of the Knoxvi l l e and Carol ina Ra ilr oad had b een c ons id er abl y more than its income .
Accord ing t o the lease proposed by the T enne s s e e and Nor th Carol ina ,
the yearly r ent al would b e set at 6 perc ent of the $ 1 0 0 , 000 of proposed
c ap i t a l s tock of the Smoky Mountain Ra i lroad , but the ICC decided that the
c a p i t a l s t ock was to be limi t ed to $ 7 5 , 000 ( t he o r i g inal purcha s e p r i c e )
and t h e y e a r l y rent al w a s s e t at $ 4 , 5 00 .
The l e a s e w a s l imi t ed t o one
year ' s durat ion ; thereaf t er , eit her party was permi t t ed t o termina t e the
lease on thr ee months wr i t t en no t ice .
Under the t erms of the lea s e , the
Tennessee and Nor t h Car o l ina agreed "to ma intain the proper t ies , to pay
all t axes and a s s e s sment s levied thereon , and to indemn i fy the les s or
again s t a l l liab i l i t ies for loss and damage a r i s ing out of operat ion o f
t h e leased premi s es by t h e lessee . "
35
In making t he d e c i s i on , the commi s s i on d e c l a r ed that their granting o f the reque s t s was based on public demand and was there f o r e
exp er iment a l , but t h a t i t hoped tha t the p r oposal as draf t ed woul d work .
Sevier C ounty was at that t ime s t i l l pay ing int e r e s t on i t s original
$ 1 5 0 , 0 0 0 b ond issue t o the Knoxv i l l e , S evi ervi l l e and Eas t ern Rai lway .
35
Acqu i s i t ion of Line by Smoky Mountain Rai l road , F inance Docket
No . 5 9 5 6 , Int er s t a t e C ommerce C ommis s i on Repor t s , Vol . 1 2 4 ( Government
Print ing O f f i c e , Washing t on , 1 9 2 7 ) , 5 2 3 - 5 2 6 .
52
The c ounty had agreed t o waive taxes f o r f ive years and many merchan t s in
the area had s i gned an agreement t o r e f r a in from u s ing t rucks for shipp ing
purpos es .
In i t s order , the c ommiss ion approved the i s suance o f no t over 7 5 0
shares o f c ap i t a l s t ock o f $ 1 00 denominat ion each , t o b e tur ned ov er at
par t o B o i c e , B e l l and Parks t o pay them for their inves tmen t in the road ,
but these three men could not d i s p o s e o f the s t ock in any manner , un less
s o d i r e c t ed by the c ommi s s ion .
The lease of the Smoky Moun tain Rai lroad
to the T enne s s ee and No rth Carol ina Ra ilroad was approved , subj ec t t o the
36
.
. . t a t 1ons
1 1m1
as s e t f o r t h p r ev 1. ous 1 y .
19 2 7 .
37
The lease t ook e f f e c t on June 1 ,
Opera t ion o f t he r oad was und er the name Knoxv i l l e Branch o f the
T enne s s e e and Nor th C ar o l ina Rai lr oad , but it was to operat e under the
chart er of the Smoky Mount a in Railroad C ompany , wh ich mad e the opera t i ons
of the l ine subj e c t to the chart er reg u l a t i on s of the Smoky Mount ain .
38
S ince t h e Smoky Mountai n owners were int ere s t ed in S evier C ounty ,
they acquired 1 . 17 mi les o f r a il r oad in S ev i er C ount y , the unab andoned
par t o f the P ig eon River Ra i lr oad that was t hen operat ing s epara t e l y and
s erving nine indus t r ies .
Upon acquiring the l ine the Smoky Mount a in Ra i l-
road propo s ed t o lease i t t o the T enne s s e e and North C ar o l ina Ra i lroad ,
which would e l iminat e t he $ 6 . 0 0 swi t ch ing f e e b e tween the two l ines .
36
r b id . , 5 2 6- 5 2 8 .
37
h
, S t a t 1. s t 1' c s o f R a 1' 1ways 1n �
'
r nter s t a t e C ornmer c e C omm l. S S lon
Uni t ed S t a t e s (Government P r inting O f f i c e , Wa shing t on , 1 9 2 8 ) , 184 .
'
38
Smoky Mount a in Railroad to W . C . Kenda l l , December 6 , 1 9 3 8 ,
Smoky Mount ain Rai lr oad Re cord s .
53
S inc e t h e owner of t h e P ig e on River Railr oad had p a i d $ 2 , 8 2 9 . 8 6 f o r the
r oad ,
the Smoky Moun t ain Rai l r o ad agreed to p ay t h e d i f f erence b e tween that
amount and such d onat ions a s t he owner was a b l e t o c ol l e c t f r om t he indust ries a f f e c t e d .
These d ona t i ons amount ed to a p p r o x imat ely $ 1 , 40 0 .
S ince
the aband onment of t h i s s e c t ion o f line woul d b e d e t r imen t a l t o t h e p e o p l e
of S ev iervil l e ,
I n May ,
1931 ,
the ICC app r oved the a c q u is i t ion reques t i n May , 1 9 3 o .
39
t h e I C C approved a r e qu e s t b y t h e T enn e s s e e and Nor t h C ar o l ina
Rai l road to a c qu i r e c ont r o l , und e r t he lease of 1 9 2 7 ,
of t h e short line .
40
T h e g o o d intentions v o i c ed by t h e b u s inessmen o f S ev i e r C ounty t o
help t h e r a i l r o ad b y us ing i t s
fac i l i t ies in s h i p p ing t he i r produce s e ems
only to have b een g iven in order to keep the r ai l r o ad o p er a t ing and to
gain ICC appr oval of the new owner s .
W i t hin two years the b u s ines s c on-
c erns had rever t ed t o the u s e o f trucks and any hope f o r p r osper i t y f o r
the r a i lr o a d d i sappeared .
In add i t i on t o t h e aut omobi les on the s t a t e
two m ot or -carriers o p e r a t ed b etween Knoxv i l l e and S ev i e rv i l l e .
highway ,
The d e pr e s s i on r e s u l t e d in l i t t l e p a s s enger serv ic e ;
inc ome for the years 1 9 3 3 - 3 7 was $ 1 9 , 5 6 2 .
ac c ount
t ot a l net
The trans p o r t a t i on of f r e i g h t
f o r o v e r 8 9 p er cent o f t h e operat ing r evenues .
Fr e ight r evenue
was r a t her large in 1 9 3 4 , amount ing t o $ 6 2 , 7 4 2 , b ecause of
t he heavy
movement of road-building mat er i a l s c ar r i ed over the l in e .
39
smoky Mount a in R a i l r o ad Ac qu i s i t ion ,
Int er s t a t e C ommer c e C omm i s s ion Repo r t s , Vol .
O f f i c e , Washing t on ,
40
Vol .
193 0 ) ,
6 9 2 - 69 8 .
During t hi s
F inance Do cket No .
162
8129 ,
( Government P r int ing
H . S. Man t o o t h made the app l i c a t ion .
smoky Moun t a in Railroad C ont r o l ,
F inance Docket No .
1 7 0 ( Government Print ing O f f i c e , Washingt on ,
1931) ,
5957 ,
7 16-7 1 7 .
ib id . ,
54
period the owners spent approx ima t e ly $ 1 2 , 00 0 f o r imp r ovemen ts , but l i t t le
maint enance work was done , wh i ch resulted in the ex treme d e t er i orat ion o f
the r oad .
The records f or t he period show that t he T enne ssee and Nor th Carolina Rai l r o ad never paid t he $ 4 , 500 rent due the Smoky Mountain Ra i lr oad ,
wh ich on D e c ember 3 1 , 1 9 3 7 , amount e d t o $ 4 0 , 1 4 8 . 62 .
The Smoky Mountain
Ra ilr o ad C ompany f il e d a suit agains t the Tenne s s ee and Nor th Caro l ina
Ra i l r o ad and ob t a ined a j ud gment for over $ 5 7 , 0 0 0 , in cluding the unp aid
int ere s t .
There are no records t o show tha t t he Smoky Moun t a in ever
c o l le c t e d i t .
The T ennes s e e and Nor t h C ar o l ina s imp ly never had suf f i c i ent fun d s
ava ilab l e .
In ad d i t i on , the f unds f rom a l l the oper a t i ons o f the Tennes see
and No r th C ar o l ina were poo led f or u s e by the c ompany , r egard le s s of whi ch
part o f the company t hey c ame f r om .
Ev ident ly , much o f the revenue f r om
the Knoxv i l l e Branch of the T enne s s e e and Nor th Carol ina was expended on
the Newp ort Branch , which s u f f ered s er i ous l o s s in the period 1 9 3 2 - 1 93 6 .
41
The d e pr e s s ion of the 1 9 3 0 ' s i s t o a large extent respons ib l e f o r the
ab s ence o f a p r of it .
B o ic e , Parks and B e l l s u f f ered such heavy lo s s e s that they wer e
f orced t o s e l l their stock and i n December , 1 9 3 7 , t he en t i r e s t o c k o f the
41
smoky Mountain Rai lroad � al . , Prop o s ed Abandonment , F inan c e
Docket No . 120 0 6 , Int er s t a t e C ommer c e C ommis s ion Repor t s , V o l . 2 3 0
(Government Print ing Of f ice , Washing t on , 1 9 3 9 ) , 3 6 7 - 3 7 5 . llerea f t er c i t ed
as Smoky Hount ain Aband onment .
55
Smoky Moun t a in Ra ilr oad w a s sold t o the Midwe s t S t eel Corporat ion o f
Char les t on , We s t Virginia f o r p erhap s $ 4 4 , 100 , a sale wh ich was not
approved by t h e ICC , since i t s e ems t o have b een carr ied out i n s e cret .
Midwe s t Steel Corporation dealt , among o t her thing s , with s c r ap iron .
42
43
S ince the Tennessee and North Carolina had not c omp l i ed wi th the
leas e , the Smoky Mount a in Ra ilroad owner s (pre sumably Midwe st St eel Corporat ion) , c ance l l ed the l eas e , e f f ect iv e Marc h 3 1 , 1 9 3 8 .
Becau s e the
Smoky Mountain Ra ilr oad was no t in a p o s i tion t o operate the line , the
owner s mad e ano ther working agreement whi ch a l l owed the Tennessee and
Nor th C a r o l ina to c ont inue t o operate the r oad , p ending f inal det ermina t ion
o f i t s future b y t h e I C C .
44
On March 1 , 1 9 3 8 , t h e Tennessee and Nor th
C ar o l ina , however , had begun a program of impr oving i t s Knoxv ille o p er a t i on ,
' 1. t e d b a s 1. s . 4 5
b ut ev1' d ent 1 y o n a 1 1m
On June 9 , 1 9 3 8 , the Tennes s ee and Nor t h C a r o l ina f i led an app l ic a tion with t he ICC t o aband on operat ion of i t s Knoxv i l l e Branch , wh i ch
the commis s i on approved on November 3 0 , 1 9 3 8 .
46
In the meant ime , however ,
the working agreement between the Smoky Moun tain Railroad and Tenne s s e e and
42
Smoky Hountain Bankrup t cy .
43
smoky Moun t a in Abandonmen t , 3 6 7 -3 6 8 .
The probable sale pr i c e
was l i s ted i n a f inanc ial s t a t ement o f Midwes t St eel Co rporat ion as o f
March 3 1 , 1 93 9 , but was n o t ident i f ied as such .
44
Ibid .
45
Smoky Moun t a in Ra ilr oad t o W . C . Kend a l l , December 6 , 1 9 3 8 ,
Smoky Moun t ain Ra ilr oad Re cord s .
46
Smoky Mountain Aband onment , 3 6 7 - 3 6 8 .
56
North Carol ina had b e en abr ograted on Oc t ober 1 4 , 1 9 3 8 , and the Smoky
Mount a in had taken over operat ion of the road , under i t s o r ig ina l char t er .
The inab i l ity of a shor t l ine rai lroad , even with t he b e s t o f owner
int ent ions , to make a p r o f i t was demons t r a t ed by the Smoky Mount ain as i t
oper a t ed under the name Knoxv i l l e and Carolina and und er lease t o the
Tenne s s e e and No r t h C ar o l ina .
Both operators of the r oad a t t emp t ed t o
g ain pub l i c support b y p r omis ing a n eventual c onnec t ion with a larger
railroad , but no l ar g er c ompany was in t eres t ed in acquir ing an int erest
in the Smoky Mount ain .
The p o s s ib il ity of such a c onne ct ion became even
more remo t e f o l lowing the creat ion of the Great Smoky Moun t a ins Nat iona l
P ark in the early 1 9 3 0 ' s , which r emoved f r om p r ivat e ownership an immen s e
acreage o f t imb er lands .
S ince the chief source of f r e ight rev enue o f
the Smoky Mount ain r oad w a s t h e tran sportat ion o f lumber , the int e r s t a t e
dr eams o f i t s promo ters came t o a n end .
T h i s b r ought t o t h e foref ront t h e
quest ion o f how the r oad could r ema in i n exi s t ence .
The bui l d ing o f an imp r oved h ighway had meant an end t o a prof i t able pas s enger servi ce .
Ther e f ore , with decl ining r evenue f r om b o t h
passengers and f r e ight , there wa s no h o p e o f making a p r o f i t ; but then ,
no one had been able t o make a p r o f i t on the short l ine .
S ince the only
ot her maj or indu s t ry in the c ounty , b es ides lumber , was a smal l c anning
f ac t ory owned by St okely B r others , whi ch had no immed i a t e p lans to expand ,
there s e emed no reason for the Tenne ssee and No rth C a r o l ina t o ma int a in
47
Smoky Mount a in Railroad t o W . C . Kend a l l , Decemb er 6 , 1 9 3 8 ,
Smoky Mount ain Ra ilr oad Record s .
47
57
t h e l ine .
The new corp o r a t e owner , Midwest
S t e e l C o r p orat ion , purchas ed
the road in 1 9 3 7 w i t h the avowed pur p o s e of s cr a p p ing it , but even t h i s
proved t o b e a d i f f icult oper a t i on .
CHAPTER I I I
THE SMOKY MOUNTAIN A S OWNED AND OPERATED BY
MIDWEST STEEL , 1 9 3 8 - 1 9 5 7
I n s p i t e o f the d i smal prospect s f or a prof i t able op erat ion ,
abandonment o f t he Smoky Mount a in was hard t o j us t i f y .
1
In order t o
aband on , i t w a s neces sary t o s how t h e ICC t h a t every e f f o r t to oper a t e
had b een t r i ed and t hat t h e railr oad j u s t could n o t o f f er t h e service
that i t s compet itors could .
On Apr i l 1 1 , 1 9 3 8 , the Midwe s t S t eel C ompany ,
the new owner o f the Smoky Mount a in Rai l r oad , appl i ed t o the I C C f or p er miss i on t o abandon the l ine , on t h e gr ounds t h a t t h e r evenue wa s not
adequa t e and p o int ing out t ha t the t ra cks and equipment wer e in such p o or
cond i t ion that i t was ext r emely d angerous t o con t inue opera t i on .
2
F o llow-
ing a hear ing in S evierv i l l e on June 2 5 , the ICC , however , decided that
pub l i c necessity r equired t ha t the request be d enied , add ing that the
road had b een p r o f itable and would , in all p r obab il it y , b e so again .
3
Thus the f i r s t of many a t t emp t s t o abandon t h e r oad was rej e c ted .
The Smoky Mountain Railroad a t t empted t o oper a t e and improv e the
l ine , a t leas t to the point wh ich it would b e operated s a f e ly , but the
1
smoky Mountain Bankrup t c y .
Knoxv i lle , Augus t 1 1 , 1 9 6 7 .
2
3
Interview with Mrs . J . R . Whaley in
Smoky Moun t ain Abandonment , 3 6 7 -3 7 3 .
Smoky Mountain Bankrup t cy ; Smoky Smount ain Aband onment , 3 6 7 - 3 7 3 .
58
I
59
c o s t was ext r emely h igh .
4
S ince the I C C refused the ab andonment request ,
the Smoky Mountain , unab l e to borrow money f r om other s ources , applied t o
the Reconstruct i on F inance C orporat ion through the I C C f o r a f ive-year
loan o f $ 4 0 , 000 t o replace c r o s s - t i e s ( $ 1 0 , 00 0 ) , worn- ou t r a i l s ( $ 2 4 , 0 0 0 )
and t o a d d ballast where i t was neces s ary ( $ 6 , 0 0 0 ) .
The r oad proposed t o
repay the l oan from oper a t ing revenue and o f f er e d c o l lateral valued a t
$ 95 , 4 0 0 .
5
The ICC , whi ch had to approve all l oans reque s t e d by railroad s ,
denied the app l ic a t ion t o the RFC in January , 1 9 3 9 , on the g round s that
the earning power o f the road wou ld not a f f ord the neces sary s e cur i t y .
6
Ev iden t ly , the ICC p l aced l i t t le value on the c o l lateral o f fered .
At the t ime o f the app licat ion f or the l oan , the o f f icers and
s t ockholders in the Smoky Moun tain Railroad C ompany , a l l of whom wer e c onnec t ed with or had an interest in the Midwest S t e e l C orpor a t i on , were
des ignated as f o l lows :
Joe L . S i lvers t ein , pres ident , ? 1 / 2 share s ; C . S .
Bad get t , Jr . , v i c e-presi dent , one share ; Fred Burnet t , s e c r etary-tre asurer ,
one share ; Max Kes se lman , manager , 7 1 / 2 sha res ; Midwest St eel C o rporat i on ,
4
Let t er t o W . C . Kend a l l , Decemb er 6 , 19 3 8 , Smoky Mountain Rail­
road Rec ords . The phys ical charac t er i s t i c s of the road c on t r ibuted t o the
high cost o f oper at i on and wou ld c ontinue to do so .
5
Pre liminary App l icat ion F orm , ibi d . The c o l lateral con s i s t e d o f
. r a i l s and f a s t ening s ;
the f o ll owing : 2 9 . 1 5 mi les o f 5 6 and
switches ; c r o s s- t i es ; 1 . 65 miles of s i de track ; two box c ar s , s t andard
gaug e ; one passenger car , s t andard gaug e ; real e s t a t e and f r e ight hou s e ;
furniture and f ixtures .
6
smoky Moun t a in Rai lro ad Recons truct i on Loan , F inance Docket , No .
1 2 2 4 5 , Inter s t a t e C ommerce Comm i s s ion Rep ort s , Vol . 2 3 0 (Government Print­
ing Of f i ce , Washing t on , 1 9 3 9 ) , 6 1 2 - 61 6 .
60
7 3 3 shares , making a t o t a l o f 7 5 0 share s .
J o e L . S i lver s t e in received a
yearly salary of $ 4 , 2 00 and Max Kes s e lman r e c e ived $ 3 , 600 .
7
Midwe st S t e e l inherited the o l d prob l ems o f the rai lr oad .
A great
deal o f repair work was required in order t o keep t he o l d st eam engines
in operat ing cond it ion and the company also b egan the pract i c e o f u s ing
o ld or "rej e c t " t ies to r e p l a c e r o t t en ones , wh i ch , of cours e , resul t ed
in further and repeated r e p l a c emen t s .
the road ' s operat ion .
8
Mail d e l ivery further comp l i c a t ed
When Midwe s t S t eel a c quired the Smoky Mountain in
1938 , the r a il road had a working agreement with the bus c ompany which
oper ated through S ev i erville t o carry t he late mai l b ack to Knoxv i l l e .
Smoky Mountain Trailways acquired this bus l ine , whi ch imp roved s erv i c e .
9
Throughout t he ear ly 1 9 4 0 ' s , however , l e t t e r a f ter let ter f r om the Rai lway
Mail Serv i c e c omplained of many d e lays in ma i l s erv ice and s tated that
mail service in general was unsat i s f a c t or y .
F . 1 . P arks , s uper int end ent
o f the rai lroad , a t t empted to remedy this s i tuat ion , but bec ause of the
c ond i t ion of the tracks and the var iat ion in bus s chedule , he was unabl e
t o make much imp rovement .
The s i tuat i on became s o s er ious by O c t ober ,
19 4 2 , that J . W . O l iv er o f Ra i lway Mai l Serv i c e gav e S i lver s t ein two
weeks t o make a sat is fac tory arrangement f o r ma i l s erv i c e to S ev i erv i l l e
7
Preliminary App l icat ion Fo rm f o r R . F . C . Loan , Smoky Mountain
Railroad Record s . A . R . Yarbor ough b ecame tra f f ic manager o f the Smoky
Mountain , a p o s i t ion he held for s everal years .
Somet ime in late 1 9 3 7
o r ear ly 1 9 3 8 , Sam Pot ter b e c ame secret ary of the road .
Ib id .
8
Correspondenc e between Super int endent F . 1 . Parks and Pr e s id ent
S i lve r s t e in , 1 9 3 8 - 19 3 9 , ib id .
9
Joe
1.
S i lver s t e in to J . W . O l iver , Oc tober 2 8 , 1 94 2 , ibid .
61
or Ol iver would recommend a s t ar r ou t e serv i c e .
In h i s r e p ly , S i lver s t e in
no t ed that mai l service had near ly treb led in the previous f ew years with
no added comp ensat ion for t he r a ilroad .
Every ef f or t , he said , had b e en
mad e t o imp r ove ma i l serv i c e , short o f purchasing or leas ing trucks t o
carry the ma i l .
S i lver s t ein requ e s t ed the bus c ompany t o hold i t s 5 : 2 5
P . M . bus in order t o carry the late ma i l t o Knoxvi l l e .
Midwest S t eel
would also check the vo lume of ma i l as a means o f det ermining whet her t h e
Smoky Mountain Railr o ad was ad equa t e ly compensa t ed .
10
Local bu s iness s e emed to b e p icking up and this gave new hope f or
some add i t i onal revenue f or the r ai lr oad .
The b iggest s our c e o f exp e c t ed
revenue was St okely Bro thers whi ch evi d ently had d eveloped p lans for
increas ing their canning oper a t i ons in Sevier C ounty .
11
In ant i c ipat ion
o f this increased amount o f cargo , the Smoky Mountain Rai lroad pur chased
an engine f r om t he Little River Rai l r oad Company in May , 1 9 4 0 , and
acquired a large numb er of good t ies f r om an ab andoned s e c t ion o f the
Southern Rai lway .
12
Neverthe le s s , with no advanc e warning , the Smoky Mountain Railro ad
f i led an applicat i on with the I C C in 1 9 4 0 to aband on the line .
To s u pp o r t
the p e t i t i on Pres ident S i lv e r s t ein obtained f rom C . K . Munson a n e s t ima t e
10
J . W . Oliver to Pres ident S i lver s t e in , Oc t ober 1 2 , 1 9 , 2 8 , 1 9 4 2 ;
F . L . Parks t o J . W . O l iver , Oct ober 3 1 , 1 9 4 2 , ibid .
11
12
F . L . P arks to J . L . S ilve r s t e in , Apr i l 1 3 , 1 9 4 0 , ib id .
F . L . Parks to John M . Hal l , D ir e c t o r o f Locomo t ive Inspect i on ,
ICC , Wash ingt on , December 18 , 1 9 4 0 ; F . L . Parks t o Car l Smi t h , October
1 9 , 1 9 4 0 , ib id . This was eng ine number 1 1 0 .
62
ind i c at ing a n ant ic ipat ed d e c l ine i n r evenue for 1 9 4 1 i f local cond i t ions
. d t h e s ame . 1 3
remalne
Meanwh i l e , when the news became publi c , s everal
int er e s t ed per sons s ought inf orma t ion about acqu i s i t ion o f the l ine .
They
were r e f er r e d t o Midwes t St eel by R . F . Bu rnet t , who had b e c ome aud i t o r o f
the road .
14
T h e alt ernat ive t o abandonment w a s t h e expenditure o f considerab le
sums for repair , p lus a great expans ion o f business and r evenue .
On May
5 , 1 9 4 1 , S . B . Jack , who evid ent ly had b e en emp l oyed f or the purp o s e ,
e s t imat e d the c o s t o f r epairing the tr ack f r om Knoxv i l l e t o Sev ierv i l le a t
$59 , 019 . 7 3 .
In h i s report he noted that 2 7 , 3 6 2 c r o s s t i e s were needed , and
many kinked r a i l s needed replacing with 5 6-p ound r a i l s .
He po int ed out
that the amount of one hund red d o l lars per mile was needed f o r banking and
d i t ching , wi thout wh i ch operat i on o f t h e road would s o on be impo s s ib l e .
All t r es t le and br idge s t ee l was in d i r e need o f s c rapping and paint ing ,
and 1 , 20 0 cubi c yards o f ballast wer e needed immed iately , with a l ike
amount the next year .
Jack proposed to r ep lace every third tie in the
main t r ack and use the o ld t i e s in the s id e tracks .
If c heaper t i es
wer e used , he said , t he p r i c e of repair wou ld b e $ 5 2 , 1 7 9 . 2 3 .
15
When aband onment appeared to b e inev i t ab l e , an oppor tuni ty to
operate a t a p r o f i t
suddenly p r e s ented i t s e l f .
The T ennessee Valley
13
Rep ort o f W . N . Garrett f i led on May 8 , 1 9 4 8 in Smoky Mountain
Bankrupt cy ; C . K . Mun son to J . L . S i lver s t e in , May 2 6 , 1 94 1 , Smoky
Moun t a in Ra i lroad Record s .
14
R . F . Burnet t t o Vernon Wi l li ams , Atglen , Pennsylvania , March
14 , 1 9 4 1 ; R . F . Burnett t o F . C . Cu l ler o f Mo r r i s on Ra i lway Supp l y Corp . ,
Bu f f a l o , New York , January 1 0 , 1 9 4 1 , ibid .
15
S . B . J ack t o F . L . Parks , May 2 , 1 94 1 , ibid .
63
Au tho r i t y w a s author ized , b ecause o f the na t i on ' s war t ime need s , t o bui ld
Douglas Dam on the French Broad R iver as a means o f supplying e l e c t r i c
p ower .
16
TVA was in t er e s t ed in the rai lroad as a means o f g e t t ing ma t e r i a l s
to the p r oj e c t , and int ervened t o p revent the aband onment o f the l ine .
17
On
February 12 , 1 9 4 2 , the Smoky Mountain Rai lroad reque s t ed that it be p ermit ted
to withd r aw i t s applicat ion for aband onment , wh ich wa s g r an t ed .
18
On the s ame day , the Tenne s s ee Valley Au tho r i t y en t ered int o an
agreement with the Smoky Mo un tain under which TVA agreed t o bui l d at i t s
own expens e an a c c e s s rai lroad f r om t h e dam s i t e t h a t would connect with
the Smoky Mount a in Railr oad at Ewing .
The Smoky Moun tain agreed t o r ehab i l i-
t a t e i t s own l ine , replacing old and worn-out t ie s , r a i l s and equ ipment .
In order t o repair the tra ck , the TVA mad e avai lab le t o the railroad the
sum of $ 4 2 , 5 0 0 .
The Smoky Moun t a in was t o haul a l l mat er i a l s t o the d am
s i t e , exc ept sand , gravel , and crushed rock , which wer e ava ilab le at the
con s t ru c t i on s i t e .
In add i t ion , the T ennes s e e Val ley Au tho r i ty agr eed t o
loan one o f i t s lo como t ives t o the rai l road , f r ee o f c o s t , with the
prov i s ion that the engine b e r e turned in the same cond i t i on .
19
Thus the
16
Repor t o f W . N . Gar r e t t , f i led May 8 , 1 9 4 8 i n Smoky Moun t ain
Bankrup t cy C a s e .
17
Tenne s s ee Valley Au thor i t y , T echnical Repor t No . 1 0 , The Dougl a s
Proj e c t (United S t a t es Government Printing O f f i c e , Washington , 1 9 4 9 ) ,
123 . Hereaf t er c i ted as D ouglas
ect .
18
Rep ort of W. N. Garr e t t , f i led May 8 , 1 9 4 8 in Smoky Moun t a in
Bankrupt cy Case ; Mou l t r i e Hi t t t o J . L . S i lver s t e in , Mar c h 3 , 1 9 4 2 , Smoky
Moun t a in Railr oad Recor d s .
19
Cop y of cont r a c t ( TV-7 0 1 4 7 ) in f i les of TVA , Knoxv i l l e . The
a c c e s s road was 5 . 6 miles long . Douglas Proj ec t , 134 . When the pos s i­
b i l i t y of a luc r a t ive agreement with TVA became apparent , the Smoky
.
64
railroad had a r e a l opp ortunity t o make a p r o f i t .
It rema ined to be s een ,
however , whether t h i s would b ene f i t the company or only a few of i t s
o f f icials .
The f inan c ial manipulat ions of Max Ke s s e lman and Joe L . S i lver s t e in
b egan t o o c cur a t about this t ime , espec ially regar d ing the s al e of
ma ter ia l s from o t her comp anies owned by the Ke s s elman and S i lver s t ein
f ami l i e s to the Smoky Mountain Ra ilr oad at ext r emely high p r i c e s .
ever , these underhanded prac t i ces were no t gener a l ly known .
How-
T i e s were
purchased from the Louisville and Nashv i l le Ra ilroad , b ut Ke s selman
caut ioned that t hey be only tho s e " su i t able for our pur p o s e . "
those " s u i t ab l e " meant "rej e c t 1 1 t ies .
20
Evidently
In Hay , 1 9 4 2 , the r a i lroad pur chased
a locomot ive for $ 1 2 , 000 from t he Railway Cons t ruct i on Company , whi ch Max
South ern Railway had p r ev i ously sold this
Ke sselman owned and opera t ed .
s ame eng ine for $ 8 , 5 0 0 .
21
Ra i lway C onstruct ion Company s o ld t ie s t o the
Moun t a in took p a in s t o make i t s e lf a s a t t ra c t ive as p o s s ib l e to TVA .
Sho r t ly a f t er the above agr e ement was s igned , Sam S i lverstein noted that
he had prepared an app l i cat ion to the Recons truct ion F inance Corporat ion
f o r a loan , but that this app l i c at ion was la ter d e s t royed on the ord ers
of Max Kes s e lman and J . L . S i lver s t ein . This was pr obab l y d one in order
Sam S i lver­
to avo id reveal ing the cond i t i on o f the rail road ' s f inanc es .
s t e in to Smoky Moun� a in Ra ilroad Company , D e c ember 7 , 1 9 4 2 , Smoky Mountain
Railroad Record s .
20
21
Max Kes s elman t o F .
L.
Parks , Feb ruar y 2 5 , 1 9 4 2 , ibid .
Report of Frank Ma loney f or Januar y , 1 9 4 8 in Smoky Mount a in
Bankrup tcy Case .
65
Smoky Moun t a in a t $ 1 . 00 per t i e , wh ich was ab ove t h e s t andard p r i c e for
rej ec t t i e s .
Company .
22
J . L . S i lver s t ein wa s att orney f o r the Ra ilway C ons truc t ion
23
Whil e working behind the s cenes to milk t he Smoky Mount ain , S i lvers t e in began to c ompl y with the contract made with TVA .
He ins t ruc t ed
Sup er int endent Pa rks to app o int Bruce Lynn as superv i s o r of the track
repair and t o employ a large work f o r c e t o begin work a t Vestal immed i a t e ly .
S ilver s t e in demand ed a d a i ly progr e s s repor t .
Because o f the shor t a g e o f
t ires caused b y t h e war , S i lver s t ein b el i eved that it might b ec ome neces sary
very s oon t o opera t e a pas s enger t r a in between Knoxvi l l e and the dam s i t e ,
and , there f o r e , he ordered Parks t o check p er s onally t o see that the repair
work was done .
He also made the f o l l owing adm i s s i on :
Here t o f or e we have not had much business and we have not insi s t ed
on good bus ines s prin c i p l e s b eing carried out but a s you we l l r e c ogn i z e
now w e have an impor tant j ob t o perform a s a par t o f the war e f f o r t and
it shall be the purpose of Mr . Kes selman and my s e l f t o ins i s t that each
and every ins t ru c tion g iven be carr ied out exp l i c i t ly . 2 4
Wh ether p a t r i o t i sm o r the d e s i r e f or p er s onal gain promp t ed this s ud d en
change is not c lear .
Work on the rehab i l i tat ion o f the road was d ivided int o thr ee
s e c t i ons and a large number o f men were empl oyed .
The r ep l a c ement o f a
g r eat number of t i es and r a i l s indi ca t e d the run-down condi t i on o f the
22
F . L . Parks t o J . L . S i lver s t e in , S ep t emb e r 3 , 1 9 4 2 , Smoky
Moun t a in Ra ilr oad Rec or d s .
23
24
F . L . P arks t o J . L . S i lver s t e in , Oc tober 9 , 19 4 2 ,
Joe L . S i lverst ein t o Frank Parks , May 1 4 , 1 9 4 2 , ib id .
66
road .
25
Wor k a l s o p r o g r e s s e d r ap i d ly o n the a c c e s s r oad and b r id g e a c r o s s
the Lit t l e P ig eon Riv e r , b eing b u i l t b y TVA .
b eg inning o f work on the b r i d g e , and Apr i l ,
the a c c e s s r o a d i n s ervi c e on May 1 0 ,
1942 .
F ebruary 9 ,
1 94 2 ,
26
1 9 4 2 marked the
saw i t s c omple t io n , w i t h
T h e f ir s t t r ip t o t h e
D ou g las Dam s it e by the Smoky Moun t a in w a s mad e on J u n e 2 ,
1942 .
27
The Smoky Mount a in now ent ered t h e only p e r i od in i t s hist ory in
which i t mad e a huge p r o f i t , mo s t of whi c h went int o t h e p o c ke t s o f
Kes s e lman a n d S i lvers t ein .
T h e r a i lroad owners mad e t h e m o s t of i t s
g o l d en o p p o r t u n i t y b y t r ying t o b l e ed a l l s ou r c es o f r evenue t o d ea t h .
Thr e e m i l l s furnished b u lk c ement f o r t h e d am ,
d e l ivered t h i s f r e ight t o the d a m s it e .
a t 6 2 8 , 97 0 barrels .
28
and t h e Smoky Moun t a i n
The t o t al amount was e s t ima t ed
The r a t e s char g e d b y Smoky Mount a in f or haul ing
mat er ia l t o t h e dam s it e were ext r emely high , and t h e T enne s s ee Val ley
Au thor i t y c on t end ed that t hey were unreas onab l e .
29
however , were ev ident ly not shared w i t h t he worker s .
b egan on June 1 4 ,
The l a r g e p r o f it s ,
A s t r ike over wag e s
1 9 4 2 , whi c h las t ed f o r four d ay s a n d r e s ul t ed in a l o s s
of 1 , 6 0 0 man hour s s inc e a b o u t f i f t y men wer e involved .
25
1942 '
F.
L.
Parks t o J . L .
30
T h e r a i lr o ad
S ilver s t ein and Max Kes s e lman , May 2 5 ,
ibid .
26
27
Doug l a s Proj ec t ,
R.
128 .
F . Burne t t t o Max Kes selman , August 2 9 ,
1942 ,
Smoky Mountain
Railro ad Rec o r d s .
28
Aake F . Hedman ,
"Con s t ru c t ion P lant at Douglas Dam , " T enne s s ee
Valley Aut hor i ty Eng ine e r ing and Construct ion Depar tmen t s , Knoxv i l l e , May ,
1945 ,
P r in t ed Repo r t No .
29
J.
2 0 - 3 00-5 - 2 , p p .
E . Daugherty t o A .
R.
7 4- 7 5 .
Yar b r ough , J u ly 3 ,
1942 ,
Smoky Mount a in
30
F r e d Burne t t t o Max Kes s e lman , December 1 1 ,
1942 ,
ibid .
Ra i lr o a d Rec o r d s .
67
c ompl i ed with the f ederal s t a t u t e s concerning minimum wag es o f f o r t y cents
an hour , with all emp loyees except o::1e receiving a t least that amount .
31
The rent p aid by the Smoky Moun tain to the S ou thern Railway f or
j o int u s e of i t s t racks from Ves t al to Knoxv ille and o ther f ac i l i t ies
became $ 1 5 0 . 00 p er month in Apr i l , 1 9 4 2 .
was increased t o $ 2 5 0 . 00 a mon th .
33
32
In S ep t ember , this rental f e e
Although t h e Smoky Mountain s eemed
to be ab l e t o hold i t s own , the future of the road a f t er the end of c onstruc t ion at Doug las Dam was unc e rt a in , because no adequa te s ourc e o f
r evenue was ava ilable .
34
There i s evidence of a lack o f int erest in the future g r owth o f
the railroad in the failure o f the r a i l road o f f i c ia l s t o maintain
nec e s s ary sup p l ies .
They a l s o showed no d e s ire t o establish r app ort
between t hems elv e s and the r a i l r o ad ••orkmen .
F ew maintenance sup p l i e s
were r e t a ined by t h e railroad , which s e emed a lways t o r e l y on the Southern
Railway to supply i t s need s .
Southern Railway , in order t o avo id t he
nu i s ance caused by the request s , had mad e a t t emp t s to get t h e Smoky
Hount a in to carry i t s own supp l ie s , but with apparently no succes s ,
because the Smoky Mount a in cou ld get the p ar t s cheaper f r om Southern t han
from t h e manuf a c turer .
31
35
R . F . Burne t t t o Mr s . J . R . Whal ey , September 2 1 , 1 9 42 , ibid .
32
Agreement f or Apr il , 1 9 4 2 , ib id . Thi s includ ed u s e of t he tracks
and the o f f ice on Ma in S treet . The previous rental could no t b e a s c e r t a ined .
33
Gener a l Hanager o f Southern Railway t o J . L . S i lver s t ein , Augu s t
4 , 1 9 4 2 , ibid .
34
35
Fr ank G . Wil liams to J . L . S i lver s t e in , O c tober 2 9 , 1 9 4 2 , ibid .
L . C . Shu l t s to 0 . B . Ke i s t E!r , December 1 4 , 1 94 2 , ibid . The
reason f or the c heaper p r i c e was probably due t o the f a c t that the Southern
68
Becau s e o f t h e Tenne ssee Valley Authority contract , income for 1 9 4 2
36
.
was u p great 1 y over prev1ous year s .
the hiring o f mor e employees .
37
The increase in t r a f f i c nec e s s i t at ed
The payment o f higher salaries , especia l ly
for management was made p o s s ible by the increased r evenue .
Joe
1.
S ilver-
s t e in's salary as presid ent was $12 , 000 in 1 9 4 2 , and Max Kes s elman r e c e ived
a l ike amount as g eneral manager .
amounted t o $ 6 1 , 65 6 . 6 1 .
38
Total salaries plus bonuses paid in 1 9 4 2
Salaries for the pres ident and v i c e p r e sident had
b een $ 3 , 900 a y ear , but , ef fe ct ive January 1 , 1 9 4 2 , they were increased t o
$12 , 000 a y ear .
39
Prosper ity had n o t ended the railroad's problems .
Lawyers spent
a great deal of t ime inves t igat ing t it les to r ight s-of-way and other
property owned by the railway .
Taxes cont inued to b e a po int of c ont ra-
versy , a s were the neg o t iat ions with the C . I .
0.
over a contrac t , and
the law f i rm o f Test erman , Amb r o s e and Badget t , which had inves t ig ated ,
r eques t e d payment of legal f e e s .
T he request was granted by Ke sse lman .
c ould purcha s e in larger quantit ies than could the Smoky Mountain .
S ilver st ein t o R . F . Burnet t , December 18 , 1942 .
J.
40
1.
36
Accoun t s o f Mr s . J . R . Whaley for 1 9 4 2 , ibid . Because o f the
absence of comp lete r ecords , it was imp o s s ib le to d e t ermine exa c t ly the
amount of income f or 1 94 2 ; it has been e s t imate d , however , at b e tween
$2 00 , 000 and $ 30 0 , 000 .
37
Repor t o f R . F . Burne tt , February 16 , 1 9 4 2 , ib id .
emp loyees was 9 2 .
38
The number o f
Annual Inf orma t ion Re turn to Internal Revenue Service f o r 1 9 4 2 ,
ibid .
39
Report o f Frank Maloney f o r January , 1 9 4 8 in Smoky Mountain
Bankruptcy Case .
40
w . 1 . Ambrose , Jr . to Smoky Mountain Ra ilway , December 2 2 , 1942 ,
Smoky Mountain Ra ilroad Record s .
69
Joe
L.
S i lver s t e in and Max Kes s e lman wan t ed to make money from the
Smoky Mount ain , wh ich they d id .
S ince good mat er i als were not u se d in the
41
.
ma1nt enance o f t h e road , 1. t cont 1nue
ate .
.
d to d e t er 1or
.
Joe
L.
In January , 1 9 4 3
S ilver s t e in r eque s t ed his ent ire salary f or 194 3 f r om t h e Smoky
Mounta in Railroad Company .
His s t at ed r eason was that he needed his
salary t o p ay some rather heavy t axes in the near fu tur e ; fur thermore , he
cont ended that this was legal because he was employed on an a nnual bas i s .
Although this type o f p ayment was unusual , on January 2 9 , R . F . Burnet t
issued one check f o r $ 1 1 , 314 . 2 0 to the president and another for $ 5 , 6 15 . 2 0
. .
to H arry S 1' 1ver s t e 1n
42
I t seems that these two fami l ies received mos t ,
if not a l l , o f the pro f i t s f r om the operat ion o f the Smoky Mount ain .
of the exc e s s ive s a laries paid in 1 9 4 3 were to ab s entee o f f icials .
S ome
The
total paid in 1 9 4 3 was $ 1 2 3 , 1 6 9 , o f wh ich $10 1 , 02 5 was in cash and the r e s t
i n credit .
All d ividend s o f record were declared i n 1 9 4 3 , at which t ime
the d ividend s were 6 percent per annum , cover ing a period of 6 and 1 / 3
year s .
The en t ir e d ivid end o f $ 3 7 , 5 00 was paid t o s t ockho lders o f r ecord
on J anuary 1 , 1 9 4 3 a l l o f whom were members o f the S ilverst ein and Kes s elman families .
In many cases , exce s s ive and s ome t imes dup l i c a t e charges were mad e
by Midwes t S t eel agains t Smoky Mount ain f or supplies .
Recor d s show the
41
Interview with Mr s . J . R. Whaley in Knoxville , August 11 , 1 9 6 7 .
It was later brought to l ight by Frank Maloney that good mat erials were
purchased for the railroad , but so ld to other people with the pr o f it s f r om
the sale eviden t ly go ing to Ke sse lman and S i lver st ein .
Smoky Mountain
Bankrupt cy Cas e .
42
J . L . S i lver st ein to R . F . Burne tt , January 2 5 , 1 9 4 3 ; R . F .
Burn e t t t o J . L . S i lvers t e in , J anuary 2 9 , 1 9 4 3 , Smoky Mountain Railroad
Record s .
70
purchase o f fuel , s upposedly for railr oad operations , which was t hen s o ld
to third per sons .
At t ime s , s i d e t racks wer e r emoved and s o l d for j unk ,
but on whos e orders is not a ma tter o f record .
43
I t i s apparent that
S ilver s t e in and Kes s e lman (who a l s o received $ 1 2 , 0 0 0 in Januar y , 1 9 4 3 )
realized that a f ter Doug las Dam was comp l e t ed , t h e fu ture wa s no t br ight
f or the Smoky Mountain Railr oad and there fore they wan ted to make all they
could , when they c ould .
As const ruc t ion of the dam neared comp l e t i on , the Smoky Mountain
began t o l ay off emp loyees , and nego t ia t ed a new agr eement for j oin t
f a c i l i t ie s r ent w i t h the Sout hern Rai lway , r educ ing the amount t o $ 10 0 p er
month , e f f e c t ive S ep t ember 1 , 1 9 4 3 .
44
As business b egan t o fail , Kes s el-
man s t i l l managed to make money f r om the Smoky Moun t a in , however , by
sel l ing t ies to i t a t exc e s s ive prices t hrough h i s c ompany , Rai lway C ons t ru c t i on C ompany .
45
The net income o f the r a i lr o ad f o r 1 9 4 3 was
$ 4 7 , 4 2 9 . 9 2 , a great reduc t ion from 1 9 4 2 .
46
When t hey had made a l l they c ould , Kes s e lman and S i lver s t ein again
attemp t ed to aband on the Smoky Moun t a in .
The War Prod uct ion Board
adv i sed S i lver st ein that the Board , t o whom the Smoky Mount ain o f f i c i a l
43
Aud i t of books o f Smoky Mount a in b y Railroad and Public Ut i l i t i e s
Commis s ion of Tennessee , Smoky Mountain Bankrup t cy C as e .
44
No t i c e by Super int endent P arks , Mar ch 6 , 1 9 43 , Smoky Moun tain
Ra ilr oad Rec ords ; Agr eement d a t ed June 6 , 1 9 4 4 , ibid .
45
Max Kes s e lman to R . F . Burnet t , December 2 9 , 1 9 4 3 ; Bill f r om
Rai lway Cons truct ion Company , F ebruary 1 4 , 1 9 4 4 , ibid .
46
Phil ip Angel to John E . Temp l e , June 2 7 , 1 9 4 9 ,
71
had appl ied , had t aken up the matt er with the Ra i lroad Unit in Washing t on ,
which sugges t ed that the Smoky Mountain submit an ap p l icat ion f or abandonment in the normal manner through the Inters t a t e C ommerce Commi s s ion.
'
S ince it was in t e re s t ed in the availab i l i ty o f s crap ion , the Boa rd asked
to be inf o rmed if a c t ion we re taken .
Becau se there was such a p re s s in g
need f o r s c rap i ron , English S . Des Champs , J r . o f t h e War Produc t ion Board
f elt that the chances of s ecuring approval f o r abandonment we re good .
47
F o r reasons not c l ear f rom the r ecord , the Smoky Mountain dec lined t o push
a c t ive ly for abandonment o f the road at that t ime .
48
The ra ilroad again
faced p o s s ib le d i scontinuance in S ep t ember, 1 9 4 4 , when S i lvers t e in , for no
appa rent reason , inf o rmed Bu rnet t that it might b e nece s s a ry to f i le f o r
abandonment and s t a t ed that h e wanted to get the house i n ord e r .
Burnet t
responded that no out s t and ing b i l l s we re due the Smoky Mount ain Rai l ro ad
by Midwes t S t e e l , S t anda rd I ron and St eel ( owned by Max Ke ss elman ) , o r
Rai lway Cons t ru c t ion Company .
49
In o rd e r to p revent a s t rike , a l l r a i l roads in the United S t a t e s
were t aken over on Decembe r 2 7 , 1943 , by Pres ident F ranklin D . Ro oseve l t
in his capacity as c ommand er-in-chief o f the United S t at es and opera t ed
by the government .
47
When the threat of the st rike end ed on Janua ry 10 ,
Eng lish S . DesChamps , J r . t o J . L . S i lver s t e in , Ap ril 17 , 1 9 4 4 .
ib id .
48
Eng lish S . DesChamps , J r . t o J . L . S i lv e rs t e in , June 14 , 1 9 4 4 ( in
r ep ly t o l e t t e r f rom Smoky Mountain on June 12 , 1 9 4 4 ) , ib id . The wr it er
could not a s c e rt ain f rom ava i lab le re c o rd s as t o why the abandonment
proceed ing s were not ca rried out .
49
J . L . S i lve rs t ein t o R . F . Burnet t , Septemb e r 1 , 1944 ; R . F .
Burnet t t o J . L . S i lver s t ein , Septemb er 6 , 1944 , ibid .
72
1944 , the r ai lroads wer e r e t urned t o their private owners .
50
This t ake-
over seeming ly had l i t t le e f fe c t on the operat ions of the Smoky Mountain .
In further at t emp t s t o inc rease r evenue , the Smoky Mountain mad e
several changes i n i t s contrac t s and operat ing procedures .
In March ,
1944 , the railroad s igned a new mai l contract with a bus l ine , the Smoky
Mount ain S t ages , by which the la t ter ag reed t o t ranspo r t ma i l b etween
Seviervi lle and Knoxville for $ 100 a mont h .
The contrac t , which t ook
effect on Apr i l 1 , 1944 , wa s c l early a help to the r a i lroad s ince the
f ederal g overnment paid the railroad $ 5 , 0 00 a year to c arry the mai 1 .
51
The ICC p o s t p oned fr om mid-1944 t o January 1 , 1 94 5 , a n a t t empt b y
the Smoky Mount ain t o raise passenger rates and f r eight char ges on cargo .
The p e t it i on d emons trated the bad f inanc ial c ond i t i on o f the road .
52
It
was operat ing only one mixed train daily , except Sunday , b e tween Knoxv i l l e
and Sevierv i l l e w i t h a passenger f ar e of $ l . Oo .
53
At t emp t s t o increase r evenue af t er the cons t ru c t ion o f Doug las Dam
fa iled .
This was probab ly due to the d e sir e of the o f f i cials o f the Smoky
50
R . F . Burne t t to J . L . S ilver s t e in , January 2 0 , 1 9 4 4 ; t elegram
f rom J . M . Hood t o Smoky Mountain Railroad , January 18 , 1 9 4 4 , ibid . New
Encyc lopedia Internat ional Yearbook (Grol ier Inc . , New York , 1 9 4 4 ) , 5 3 4535 .
51
Copy of c on t ract i n Smoky Mountain Railroad Recor d s ; int ervi ew
wi th Mrs . J . R . Whaley in Knoxvi lle , August 1 1 , 1 9 6 7 .
52
special supplement is sued by A . R . Yarbrough , May 1 5 , 1944 , Smoky
Mount a in Railroad Re cords .
53
R . F . Burnet t t o J . T . S t a l lings , July 18 , 1944 ; R . F . Burnet t
t o J . H . S c o t t , Aud i t or o f Passeng er Account s , Sou thern Rai lway , January
3 1 , 1 9 4 4 , ibid .
73
Mount a in t o show a l o s s in order t o abandon the l ine .
According t o
o f f i c ials o f t h e r a i lr oad , the y ear 1 9 4 4 showed a l o s s o f $ 2 0 , 6 5 6 .
It was
later repor ted , however , by W . N . Gar r e tt , who became a co-tru s t ee und er
the bankrupt cy proc eedings in 1 9 4 7 , that this l o s s should not ac tually have
occur r ed .
The company , he contended , should have made a profit o f $ 2 , 00 0 .
Gar r e t t c l a imed that the owners cau s ed the r a i lr o ad to l o s e $8 , 00 0 in a t ie
deal with the Rai lway C ons t ru c t i on Company , along with a $ 2 , 000 l o s s in
buying and s e l l ing coal .
In add it ion , Ke s s elman and S i lver s t ein were each
paid $ 6 , 00 0 dur ing 1 9 4 4 .
Ther e f o r e , the road d id no t have to l o s e money .
Rather , those who control led it c au s ed this l o s s .
54
Dur ing 1 9 4 5 the r oad cont inued t o oper a t e a t a l o s s .
Bus iness
prospec t s were poor and the manag ers had to bo rrow money f r om the Bank of
Sevierv i l l e in order to opera t e .
F ederal ins p e c t o r s on a regular monthly
ins p e c t ion t r ip f ound that one locomot ive , one p a s s enger car , and 2 7
f r eight c ar s cons t i tuted the ent ire r o l l ing s t o c k o f the rai lroad .
S i lver-
s t e in wan ted to d r o p cargo d e liv ery service at Sevierv i l l e becau s e there
was very l i t t l e cargo and very l i t t l e compensat ion f rom Railway Expr e s s
Agency ( $ 1 2 . 5 0 a month) .
Both Joe L . S i lver s t ein and Max Ke s s e lman
received a sa lary o f $ 2 , 2 5 0 dur ing 1 9 4 5 , but t he rai lr oad ' s t axes wer e
not paid for the year , e ither in Knox o r Sev i er count ies .
55
54
Rep or t o f W . N . Gar r e t t f i led May 8 , 1 9 4 8 i n Smoky Mountain
Bankruptcy Case .
F . Burnett to Mr s . W . D . C armichael , October 1 3 , 1 9 4 5 ; R . F .
Burnett to J . L . S i lver s t e in , June 15 , 1945 ; Max Ke s s e lman to R . F .
Burne t t , July 2 7 , 1 94 5 , r eply dated July 2 8 , 1 9 4 5 ; J . L . S i lver s t e in t o
R . F . Burne t t , June 1 8 , 1 9 4 5 , ICC ins pec t ion r epor t , June 2 3 , 1 94 5 ; J . L .
S ilver s t e in t o John Wes t , Super int endent o f REA , May 2 9 , 1 9 4 5 , Smoky
Mountain Ra i lroad Record s ; Smoky Mountain Bankr up t cy C as e .
•
74
The abandonment is sue was ra ised again in Mar c h , 1 9 4 6 .
Max Ke s s e l-
man explained to a r epresentat ive o f the Tennessee S t a t e Planning
Commiss i on that the alignment of the rails was bad , g r ad es were s t eep ,
rails were t o o l ight and too o ld and that 1 2 , 000 t i es need ed to be replaced .
He said he was operat ing at a l o s s wi th a borrowed locomo t ive and had
ab solu t ely no s ource from wh ich he could acqu ire the $ 3 0 0 , 000 or more which
was needed to r ehab i l it at e the l ine and that he def init ely wanted to abandon i t .
Noth ing except coal moved regularly over the line to S evierv i l l e ,
and outbound t r a f f ic cons i s t ed only o f s ome lumber and one car o f canned
goods per week .
56
The deplorab l e c ond i t ion o f the tracks brought a reques t
from Smoky Mountain o f f i c ials that the t onnage per car o f aspha l t b e
r educed b y 100 , 000 pound s i n order t o make t ravel sa fe over the line .
The t o t al payrol l f or 1 9 4 6 amounted
were salar ies .
to
57
$ 1 3 , 4 8 3 . 5 2 , $ 9 , 240 o f which
The road operat ed a t a loss o f $ 2 5 , 15 1 . 10 dur ing 19 4 6 .
A
$5 , 000 no t e was due Park Nat ional Bank on F ebruary 1 , 1 9 4 7 , and the railroad had s everal ot her ou t s t and ing b i l l s .
The ra il road owed Midwes t
S teel , $ 9 , 3 2 6 , and Max Kes s elman and J o e L . S i lver s t e in , each $ 9 , 7 5 0 .
58
By early 1 9 4 7 , the f inances of the road wer e in such poor c oncl i t ion that when it suf f ered a washout on J anuary 2 0 , o f f i c i als claimed
56
F old er 5 , Sevier County File , Tenne sse e S t a t e P lanning Commiss ion F i le , Eas t Tennessee D iv i s i on , Knoxville .
57
F . L . Parks t o Kentucky Rock Aspha l t Company of Bowl ing Green ,
Sep t ember 1 1 , 1 94 6 , Smoky Mountain Railroad Reco r d s .
58
T immons Aud it Company , aud i t o f Smoky Mountain Rai lroad Books ,
Smoky Moun tain Bankrup t cy Case . These latter b i l l s were no t iden t i f ied .
75
that the railro ad d id n o t have the $ 6 , 00 0 they d e c lared necessary t o repair
the d amage .
59
It i s far ily evident that this wa s j us t another excus e t o
In the end , however , t he f ederal c our ts at t he requ e s t
abandon the line .
of Ray C . Sharp and o ther intere s t ed Sevier County c i t i z ens , ordered t h e
washout repaired .
60
At the t ime o f t h e washou t , t h e r e were s even cars o f
other c ompan ies s tr anded on the line , which increased the c o s t t o the r a i lroad , s i nee t h e d a1' 1 y c o s t per ca r was l1 1 gh
'
61
•
Local int ere s t , sur pris ingly enough , was ext remely high .
On F ebruary
11 , 1 9 4 7 , a mas s mee t ing wa s held a t the Sevier County Cour thous e in an
a t t empt to put the railroad back int o oper a t i on .
Mayor J . R . Wad e o f
Sev i erv i ll e appointed a c ommit t e e which conf erred with Max Kes s e lman , who
o f fered t o s e l l the road f or $ 7 5 , 000 .
It was rumo red that the pe op le of
S ev ier C ount y would purchase the line by pub l i c subsc r ip t i ons , but no pur. s . 62
. 1e
.
cha s e was consumma t e d a s a r esu l t o f t h e 1nqu1r
Max Kes s e lman f i led an app l i ca t ion for abandonment o f the line with
the ICC on Mar ch 14 , and on March 2 0 , f iled a pet i t i on before the Uni t ed
59
Knoxv i l l e News-Sent ine l , February 8 , 1 9 4 7 .
60
Ray f· Sharp , J ohn !· �emp le , -�?n Hicks , �nd James McAf ee v .
Smoky Mountain Railroad and Max Ke sse lman in Chancery Court
County , Cas e No . 3 7 09 , f i led July 20 , 1 948 . Her eaf ter c i t ed as
� a l . � · Smoky Mountain , � a l . Also see Smoky Mountain Bankrupt cy Cas e .
I t was rumored that s ome f o r c e o ther than nature might have cau s ed the
washou t , s ince a drain , wh ich d r ained some 300 acres b ecame c logged
a lmos t over nigh t .
61
Int erview with Mr s . J . R . Whaley i n Knoxville , August 1 1 , 1 9 6 7 .
62
Knoxville News - Sent inel , F ebruary 8 , 1 2 , 13 , 1 9 4 7 .
Smoky
Mountain Rai l road v . Paine Oil Company , et al . in Chancery Court of
Sev ier C ounty , 1 9 64 , Case N� 6 4 2 9 .
t er c i t ed a s Smoky �ountain � ·
et
��� O i l Company ,
-­
76
States D i s t r i c t Court a t Knoxville for r eorgani z a t i on o f the company und e r
s ect ion 7 7 o f the Federal Bankrup t cy Ac t .
63
Ac cord ing t o Ke s s e lman , h i s
a c t i on w a s author i z ed at a s t o ckhol d ers ' meet ing on Mar ch 3 , b u t f r om the
informa t i on ava ilable , it is very doubt ful tha t such a meet ing was held ,
and a lmo s t a cer t ainty that no such resolu t i ons were pas s ed .
Joe
L.
S i lver-
s t e in opposed the f i ling o f these p e t i t ions and he mad e h i s opp o s i t ion known
to Ke s s e lman , W . L . Ambrose ( S ilver s t ein ' s and Smoky Mountain Ra i lroad ' s
l awy er ) , and the other pers ons c onne c t ed with the organiz a t ion .
64
On Mar ch
2 5 , Fr ank G . C l ement , g eneral c ouns el for the T enne s see Ra ilroad and Publ ie U t i l i t ies Commis s ion , announ ced t hat the Commi s s ion would f i le a
forma l p r o t e s t with the Inter s t a t e Commer ce Comm i s s ion oppos ing the app licat ion hearing on the proposed aband onment .
65
Some Sevierv i l le bu s ines smen in s t igated r e c e iv er ship p roceedings
in the chancery court o f S ev ier County , and on Mar ch 2 7 , 1 9 4 7 , the court
ap p o inted J . B . Wa t er s , Sr . a s receiver and ord e r ed h im t o borrow a
su f f i c ient amount o f money to r epair the l ine and put it back into
operat ion .
66
The men who reques t ed the r e c e iv e rship went s o far a s t o
63
F inan�e Do cket No . 15 64 6. , e t c . in Sharp et al . �· Smoky Mount ain ,
� al . Ac cording to the Knoxv ille News - S ent inel of March 1 9 , 1 9 4 7 , the
app l i c a t ion was f i led Mar ch 1 9 .
In
to abandon the r a i l road ,
Ke s s e lman f i le d a r eorgani z a t ion p e t i t ion in federal cou r t . He d id this
in order to get the cour t s t o order the r a i l r oa d s o l d , but he did not
r ea l i z e his a im .
64
66
I b id .
65
Journa l , Mar ch 2 5 , 1 9 4 7 .
smoky Mount ain � · Pa ine O i l C ompany , et a l . Accor d ing t o J ames
B . Wr ight to J . P . Tyner , March 2 1 , 1 9 4 9 , the beg inning date o f r e c e iver­
ship proceeding s was Mar ch 1 4 , 1 9 4 7 , Smoky Moun ta in Ra ilroad Rec or d s .
The f orma l order of r e c e ivership was g iven on Mar ch 2 2 , 1 9 4 7 , ib id .
77
o f f er t o advanc e the money t o r e s t ore the ro ad t o operat ing cond i t ion , bu t
Ke sselman ob tained an inj uct ion against them wh ich held up the proceeding s .
Wat ers did not act as receiver until m i d - 1 948 .
67
Als o , on March 2 7 , James
B . Wr ight , a lawyer , ins t i tuted a suit in the chancery court of S evier
County f o r the state of Tennessee against the Smoky Mountain Ra i lr oad asking
tha t i t s char t er be f o r f e i t ed and that it turn over i t s propert y to the
sta te .
68
In the case r e sul t ing f r om the reorgan i z a t i on p e t i t i on bef ore
George C . Taylor o f the f ederal court in Knoxv i ll e , the c ou r t appointed
John W . Bush as t emporary trustee on �1arch 2 0 , 1 9 4 7 , and ins t ru c t ed him
to inve s t ig a t e the Smoky Mountain Ra i lr oad .
The T immons Aud it Company
inspected the r a i l r oad ' s bo oks and con c luded that the book value of the
r ailr oad at t he end of 1 9 4 6 was $ 6 0 , 2 7 6 . 9 5 .
A c o -trus t e e , W . N . Gar r e t t , was appoin t ed by Judge Taylor on
Apr i l 1 1 , 1 9 4 7 .
In his repor t , whi ch was f i l ed in May , 1 9 4 8 , Gar r e t t was
extremely c r i t ical of Midwest S t e e l ' s operat ion of the r oad , par t i cu­
larly of the man ipu l a t ions of the S ilver s t ein and Ke s s e lman f amilie s .
69
As early as Apr i l 2 0 , there were rumo rs that a permanent
operat ing tru s t ee would be appointed to opera te the r oad f o r one year
a f ter having res t ored it to oper a t ing cond it i on .
At a c r e d i t o r s ' hear-
ing in Apr i l b e fore Judge Taylor , the court ind i ca t ed that it wou ld
67
Sharp , � a l . y. Smoky Mountain , � al .
68
James B . Wr ight t o J . P . Tyner , March 2 1 , 1 9 4 9 , Smo ky Moun t a in
Railr oad Record s . This never o c curred because the c a s e never came to t r ia l .
69
Smcky Mount ain Bankruptcy C a s e .
78
app oint a t ru s t e e t o see i f t he road could oper a t e a t a pro f i t .
70
On
Ap r i l 2 3 , G eneral Frank Mal oney , a noted Knoxv i l l ian inter e s t ed in the cont inued operat ion of the Smoky Mount a in , was app o inted p ermanent t rus t ee
and author i z e d by the court to r a i s e funds o f not over $ 1 0 , 000 t o operat e
the railroad and t o emp l oy enough people for that purpos e .
On May 9 ,
Jud g e Tay lor o rdered Ma loney t o bor row $3 , 7 5 0 t o repair the was hou t .
The
contract wa s awarded t o Gat linburg Con s t ruct i on C ompany a t i t s low b id o f
$ 1 , 40 0 , and the train mad e i t s f i rs t t r i p on May 1 7 , bringing with i t the
fore ign cars s t r anded on the l ine .
71
Ma loney repor t ed that h e was replacing t i es at the rate o f 1 , 000 a
mon th in order to make the road sa f e .
He a l s o said that h e had t r i ed t o
e,
purchas e or leasJ two l i gh t -weight d iesel locom o t ives from the War As s e t s
Adm ini s t r a t i on , but the p r i c e was t o o high , even though t h e W . A . A . was
sympathe t ic .
He felt the eng ines might be obt a ined l a t er .
Reduct i on in
state t axes was needed , and Maloney proposed t o ask the T ennes s e e Ra il­
road and Pub l i c Ut i l i ti e s C ommiss ion to redu c e them .
7°
Knoxv i l l e News - S entinel ,
20,
72
2 1 , 1947 .
71
Smoky Moun tain Bankrupt cy Cas e . A monthly t ru s t e e ' s report was
requi red . The money was borrowed by court order f r om the Bank of S ev i er­
ville by virtue of a pr omi s sory note to pay in 90 days with an in terest
limit s e t at not over 5 percent a y ear . Maloney in his report for May 1July 1 , 1 9 4 7 , po inted out that he obtained the loan on May 10 , but at 6
percent int erest a year . He g ave no reason why the cour t o rder was
v iola ted ; probably i t was the only way he could ob t a in the loan . Maloney
was approved as tru s t ee by the I C C on May 8 , 1 9 4 7 .
72
F inance Docket No . 1 5 65 7 , e tc . , ibid . A c ompromise was reached
in 1 9 5 2 t o s cale down the tax e s owed by the ra i lroad to the s ta t e of
T enne s s e e as we l l as t o Knox and Sevier c oun t i e s . Smoky Mountain Ra il­
road Rec ord s , March 1 8 , 1 9 5 2 .
79
Th e ICC gran t ed authority on June 2 0 , 1 9 4 7 , t o the Smoky Mount ain
Ra i lroad to i s sue promi s sory notes not t o ex ceed $ 1 0 , 000 t o provide f und s
f or op ening , r ehab i l i tat ing and operat ing the railroad .
73
In his July
report , Mal oney no ted that he could not borrow the money anywhere .
He had
had to operat e the road on cred i t .
In h i s Sep t ember repor t , Mal oney stated that b e cau s e of a lack o f
revenue and f or o ther causes he had rel eased R . F . Burne t t , the aud i t or ,
and F . L . Parks , the super int endent .
L . A . Tay l or , agent at S evi ervi lle ,
replaced Parks , and Burnet t was replac ed by W . B . Whi t l ow at $ 1 5 0 a month ,
$ 2 5 . 00 l e s s than paid to Burnet t .
Smoky Mountain o f fic ials f iled a new p lan o f reorgani z at i on w i th
Judge Tay lor on September 2 0 , that cal led f or an increase in the cap i t a l
s t o c k from $ 7 5 , 000 t o $ 1 0 0 , 000 within thirty days .
S inc e that c ou ld n o t
b e a c c omp li shed , the ICC , o n Decemb er 1 , h e l d that t h e p l an of reorgani74
.
.
' bl e .
z at lon
was lmpract
lca
The trustee ' s Sep t emb er r eport noted an increase in r evenue as a
result of c onc ent rated e f f o r t by the r a ilroad t o operate e f f i c i ent ly , and
t o the sh ipments o f r oad bu i ld ing mat e r i a l s t o S evier C ounty .
t h e le s s ,
75
Never-
the s t o c kho lders , on Dec ember 2 3 , p e t i t i oned the f ederal c our t
73
Smoky Mountain Ra ilr oad Tru s t e e N o t e s , F inance D o cket No . 1 5 7 3 2 ,
Inter s t a t e C ommerc e Commis s i on Repor t s , Vol . 2 6 7 ( Government Printing
O f f i c e , Washing t on , 194 7 ) , 84 1 .
74
Smoky Mountain Bankrupt cy Case .
The loans were t o be acquired
in Knox and Sevier c ount ies and were not to exceed 4 per c ent int er e s t per
year . Maximum compensat ion allowed Mal oney by the I C C at a meet ing on
July 20 was set at $ 4 00 a month .
75
G a t linburg Pre s s , Oc t ober 1 6 , 19 4 7 .
80
for an order t o pros ecut e the abandonment app l i c a t ion b e f o r e the Inters t a t e
Commerce Commi s s ion .
O n F ebru ary 2 1 , Judge Taylor denied t h i s p e t i t i on ,
probably b e cau s e Maloney had no t had s u f f ic ient t ime t o s e e i f he could
opera t e th e road in a prof i t ab l e manner .
A f ew days earl ier , on F eb ruary
12 , 1 9 4 8 , Judge Taylor had denied Ma l oney permis s ion t o int e rvene in the
abandonment p r o ceed ings .
Maloney ' s purpose in t ry ing to int ervene i s not
known .
The s t a t e o f T enne s s e e f i led an int ervening pet it i on which c l a imed
that there were irregulari t i e s in the operat i on of the Smoky Moun t a in .
In
response to this act i on , Maloney , a t t empt ing to p rove that he could o p erat e
the road p r o f i t a b ly , s t a t ed that he d i d f ind c er tain irregularit i e s in h i s
examinat ion o f the railroad ' s past f inancial c ond i t ions .
One o f these
irregular i t i e s invo lved the a c t iv i t ies o f Max Ke s s e lman .
In order t o ful­
f il l a contract f o r t ies b e tween TVA and the Smoky Moun t a in dur ing the
build ing of Doug las Dam in 1 9 4 2 , the Railway Cons t ru c t ion C ompany ( owned
by Ke s s elman ) , had paid $ 1 , 7 5 0 for tho s e ties , but later b i lled t h e r a i l­
road for $ 5 , 00 0 .
These t ie s were later resold , a f t e r Douglas Dam had
b e en comp l e ted , to the Blu e D i amond C o al Company and to the Emory River
Railroad Company f or $ 5 , 1 9 3 . 3 5 .
Thi s was done a t a t ime when t he Smoky
Moun t a in needed t i es bad ly in i t s main l ine .
Ac cording t o Maloney , "no
par t of this money s e ems to have been rec e ived by t he Ra ilr oad Company . "
Maloney a l s o point ed out o ther irre gular it i e s and went on to s t a t e
tha t i n h i s op inion the r a i lroad c ou ld be put o n a pay ing basis i f
s everal o f h i s sugges tions we r e f o l lowed .
H e b e li eved that the t ra in
should end i t s run at V e s t a l and not pay $100 a mon th t o the Southe rn
81
Ra ilway t o run the train int o Knoxv i l l e .
The mai l c ontract should be
r e covered by f u l f i l l ing c e rt ain r equirement s o f the Pos t O f f i c e ; i f the
rai lr oad c ou ld get t h e ma il to Sevierv i l le on t ime t o go out t o rural
rou t e s , it could reac qu ire the contrac t .
The r a il road shou ld also a l l ow
the t rain to s t ay in Sevierv i l l e overnight ins t ead of in Kn oxv i l l e as was
then done , because the tr ain crew l ived ther e .
If the railroad could s e l l
two o f the s t eam locomo t ives it owned and purchase a sma ll d i e s e l engine ,
it would reduce operat ing exp ens es by ov e r $ 500 a month .
The railr o ad
should make e f f o r t s t o acquire an o i l shipping bu s iness s ince the S t andard ,
S inclair and Gulf compan ies in S ev i e rv i l l e had said they would prefer t o
ship o i l by r a i l ins t ead o f b y t ruck .
L it t l e a t t en t i on , howeve r , was
paid to these sugg e s t ions , b e cause a no t i c e of ins o lvency c oncern ing the
Smoky Moun t a in appeared in the papers of S evi er County on May 1 9 s igned
by Ma loney .
On June 4 , 1 9 4 8 , t h e ICC hand ed d own i t s decis i on of May 2 5 , 1 9 4 8 ,
re fu s 1ng t o grant t h e app 1 1cat
1on
t o a b an d on .
'
.
.
76
The p e t i t ion f or
reorgan i z a t i on f i led by Max Kes s e lman b e f o r e Judge George Taylor in Knoxv i l le on Mar ch 2 0 , 1947 , was dec lared void in an o p ini on of the Un i t ed
S t at es Court of App eals is sued on June 2 8 , 1 9 4 8 , on the gr ounds that i t
had not b e en f i led i n good f a i t h .
Thi s d e c i s i on s t ruck d own a l l o rd ers
o f the court connec ted wi th the ca s e .
76
Sho r t ly therea f t e r , on July 15 ,
smoky Mount a in Bankrup t cy Ca s e . Mr s . J . R . Wha l ey inf ormed the
wr iter th a t the r a i lroad l o s t the ma il c ont:rac t due to the J anuary 20 ,
1 9 4 7 , washout . Interv i ew in Kn oxv i l l e , Augus t 1 1 , 1 9 6 7 .
82
in c ompl i ance w i t h an order given b y the Uni ted S t a t es Court o f App e a l s
f o r t h e S ix t h C ir c u i t i n the c a s e o f S t a t e � Tennes s ee ex .
C . Taylor , D i s t r ict Judge ,
rel . �· George
Jud g e T ay l o r o r d e r e d Genera l Mal oney t o turn
over t h e operat i on o f the road t o J .
B . Wa t er s ,
t h e r e c e iver app o in t ed
1947 .
by the Sevier Coun t y chanc ery court in Ma r ch ,
Wh i le Maloney tv-as operat ing t he r oad ,
Sr . ,
t h e Int erna l Revenue Serv i c e
and p r ivat e ind ividua ls h a d f i led c la ims amount ing t o $ 1 9 9 , 9 5 6 .
add i t ion ,
77
the road l o s t about $ 1 , 0 00 a month dur ing t h i s p er iod .
Ev i d ent ly f r an chi s e t axes f o r 1 9 4 7 were n o t p a id ,
In
78
and as a r e s u l t ,
the cha r t e r o f the Smoky Mount a in was revoked on Ma r c h 1 1 ,
1949 .
The r a i l -
r o a d p a i d t h e s e t ax e s later and t h e char t er w a s r e ins t a t e d in Apr i l ,
1949 .
79
P erhaps one r e a s on why t h i s f r anchi s e t ax h ad no t b een p a i d was
because the owner s of the road and thei r lawyer ,
W.
L . Amb r os e , were , at
t hat t ime t ry ing t o get the road b a c k int o l i t igat i on in f ederal c o ur t .
77
Sharp e t al . �·
S ep t ember 23,
1948 ,
Smok_y Mount �} n et _?1 .
Mal oney tv-a s d is charged on
Smoky Moun t a in Bankruptcy Ca s e .
Ac c or d ing t o one
s our c e , Wa t er s r emained a s r e c e iver thr ough O c t ob e r , 1 9 4 8 , but the mo s t
r e l iab l e s ource ind i c a t e s t ha t J . E . Temp le was app o i n t e d b y Sev i er C ounty
chancery court as o f July 1 6 , 1 9 4 8 .
Bank dep o s i t s l ip , Smoky Moun t a in
Al s o In t er s t a t e C ommer c e C ommis s ion , S t a t i s t i c s o f
Railroad Re c o r d s .
�ai lways in the Uni t ed S t a t e s (Gov ernment Pr int ing Of f i c e , Washing t o n ,
1949) , 57 .
A p e t i t i on was f i l e d in the chanc ery court of S ev i er C oun ty
July 2 0 , 19 4 8 , in an a t t emp t by c er t a in c i t i z ens of S ev i er C ounty t o g e t
t he c o u r t t o d e c l a r e t h e $4 , 7 5 0 n o t e c o - s igned by t h em f o r Maloney t o b e
dec lared a f i r s t l i en , but evi d en t ly no thing was d one .
Smoky Mountain et a l .
78
James B . I.Jr i g h t t o J .
P . Tyner , Ma r c h 2 1 ,
1 94 9 ,
Sharp et a l . v .
Smoky Moun t a in
Rai l r o ad Rec o rd s .
79
J.
P.
Tyner ,
Supervis o r ,
Mountain Railroad , Ap r i l 1 1 ,
194 9 ,
Franc h i s e and Tax D iv is i on ,
ib id .
t o Smoky
83
Fear ing t hat a new r e ce iver might b e appointe d , James B . Wright had the
80
'
t ax pa� d .
Dur ing t h e ear ly 1 9 5 0 ' s , the rai lroad cont inued t o operat e , but
pub l i c apathy cont inued t o g row , al though many peopl e , f e e l ing a nos t a l g i c
t\vinge , probab ly d id not want th e road t o f o l d .
81
Pas senger serv i ce ,
which had b e c ome p rac tically nonex i s t en t , was d i s cont inued in 1 9 5 0 .
many cases , t h e rai lro ad d id not adhere to i t s operat ing s ch edule .
In
The
Rai lway Exp re s s Agency , in an a t t emp t ro move g eneral commod i t i es b et\veen
Knoxv i l l e and Ga t l inbur g , c l a imed that " t he f r e igh t train be tween Knoxville and Sev iervi l l e very o f t en does not run a t a ll , apparently for the
reason that in the j ud gment o f the Smoky Mount ain Rai lroad o f f i c ials there
is not suf f i c i ent rail f re ight t o j us t ify operat ion o f the train on that
82
part icular d ay . 11
Dur ing the early 1 9 5 0 ' s , the railroad b e came involved in a d ispute
with the c i ty o f Sev i ervi l l e over s treet repa irs .
The c ity requ e s t e d that
the railroad repair the s t reet , whi c h eventually i t d id , a l t hough a
sho r t ag e o f funds and manpower was p laguing the road .
P erhaps one cause
of the d isput e was the fact t hat t he c i ty pav e d over the t r acks of the
. h s t oppe d tra i n movement 1n
.
road , wh �c
t own .
80
83
81
J ames B . Wr ight t o J . P . Tyner , March 22 , 1 9 4 9 , ib id .
Gat l inburg
____ ,
January 1 9 , 1 9 5 0 .
82
C opy o f Docket No . MC- 4 1 9 9 b e f o r e T enne sse e Pub lic Serv i c e C ommi s s i on , Smoky Mount a in Ra i lr oad Rec ord s ,
83
s ev i er County News-Record , Oc tober 1 8 , 1 9 5 1 , Oc tober 2 5 , 1 9 5 1 ,
Novemb er 1 5 , 1 9 5 1 , May 1 5 , 1 9 5 2 , May 2 9 , 1 9 5 2 , Mar ch 1 9 , 1 9 5 3 . Her eaf t er
r ef erred t o as News-Record .
84
Sevier County s t i l l needed t h e Smoky Mountain , however .
A n edi­
torial by Bi l l Bur chf iel , Jr . , in the Sevier County News-Record , O c t ob er
29 , 19 5 3 , p o in t ed out that rail transpor ta t ion was v i ta l t o the indus tr ial
growth of the county , and that some means should be f ound to put the Smoky
Mountain on a paying basis .
The ed itor ial went on to s ay that al though
the road showed a small pro f i t in 19 51 and 19 5 2 , the outlook for 19 5 3 was
no t very br ight .
Bur chf i el s ta t ed tha t outbound t r a f f i c was four t imes
heavier than inbound traf f ic , but that new indus try in Sevier County would
help this s i tuat ion .
The ent ire road and equipment was ava ilab l e to any
would-be purcha s er for $ 5 0 , 000 .
Burchf iel p o in t ed out tha t if a d iesel
engine c ould be s ec ured , o perat ion and maint enanc e would b e reduced to
one-third or even one-four th o f the cost of the thr e e coal-burning engines
which could be s c rapped for an e s t imat ed $ 5 , 000 to $ 8 , 000.
Thi s money
would then provide a d own-payment on the d iesel eng ine .
The ed i t o r ial went on to s ta t e that the total ind e b tedness o f the
railroad amounted t o between $ 2 5 , 00 0 and $ 30 , 000 .
This included county
and f ed eral taxes , l egal f ees , mate rials , e t c . , with f ed eral taxes making
up the lar g e s t s ing l e i t em .
Bur ch f i e l b e lieved that the f ederal taxes
could be c ompromised , or at l ea st sa t is f actor ily s e t t led .
I f a ll coal ,
cement , f er t l i zer , any o ther lar g e c ommo d i t ies used in the county were
shipped by rail , the d eb ts could be taken care o f .
84
I n l a t e 1 9 53 , go od news r eached the people o f S evier County that
Cherokee Text i l e Mills was go ing to build in the county .
84
News-Rec ord , O c tober 2 9 , 1 9 5 3 .
This , the text i l e
85
people b el ieved , would g ive new l i f e t o the r a ilr oad .
Also , in late 1 9 5 3 ,
H . C . Carruth and A . P . Swayne of Bowaters Southern Paper Corporat ion ,
which had l o c a t ed in lower Eas t Tenness e e , c ame to S evierv i l l e t o s e t up a
buy ing agency f o r pulpwood .
Bowa t er s leased l and near the rail tracks
and b egan the purcha s e o f pulpwo od .
Local sour c e s ind i c a t ed that p erhap s
a s much a s $ 2 5 , 000 in 1 9 5 4 would b e purcha s ed .
85
In an ec onomy move in Decemb er , 1954 , the A . J . King Lumber C ompany
agr eed to lease to the Smoky Moun tain Railroad a d i es e l l o c omo t ive , owned
by the lumber c ompany , for $ 5 0 0 a month .
The r ailr oad agr e ed t o maint a in
the engine a t i t s own exp ense in as g o od a c ond i t ion a s when it lea s ed the
86
.
eng�ne .
A d i spute aros e in Oc tober , 1 9 5 5 , as to whether or not the c i ty o f
Sevierv i l l e could appro p r i a t e part o f t h e railroad right-o f -way f o r a
The r a i lroad barricaded the s treet , and eventually the d i s pu t e
s tr eet .
ended in c our t .
87
In June , 1 9 5 7 , the railr o ad ins t i tuted a new type o f fas t s erv i c e
f o r smal l s h ipmen t s , which the owners hoped would b r ing more bus in e ss .
85
88
Ibid . , D e c ember 10 , 1 7 , 1 9 5 3 , February 1 1 , May 2 0 , 1954 .
86
C opy o f l ea s e f i led in Smoky Mountain Railroad Record s .
The
leas e , d a t ed D ecember 3 0 , 1 9 5 4 , c ould be t ermina t ed on f ive days wr i t t en
notic e . The eng ine was numb er 44 0 .
87
News-Record , June 3 0 , 1 9 5 5 , Dec emb er 4 , 1 9 5 5 , S e p t ember 1 , 1 95 5 ,
October 6 , 1 9 5 5 . The resul t s are no t known .
88
rbid . , June 2 1 , 19 5 6 .
86
This did not o c cur , and in 1 9 5 6 and 1 9 5 7 the railr oad laid o f f several
employees because o f insuf f ic ient fund s .
89
The road cont inued t o d e t e riorat e .
A s a f e t y surv ey , reques t ed by
the employees of the rail r oad , d i s c overed br idges b e coming r o t t en with
concre t e f a l l ing out , weeds growing up a l ong t he t rack and many mi s s ing
cros sroad warning marker s .
The T enne ssee Pub l i c Serv i c e Commis s i on
( f o rmerly Ra i lroad and Pub l i c U t i l i t ies Commission) r e ques t ed that the
unsaf e cond i t i ons be rec t if i ed , and J . E . Temp l e , t he r e c e iver , said the
railroad ap preciated their suggest ions , but that t he Smoky Mountain could
n o t keep warnin • s igns u p because vandals dest royed them .
90
The owners d i d no t press f o r aband onment , however , and the ICC , on
September 5 , 1 95 6 , said that t he Smoky Mountain app l i c a t ion f or abandon­
men t was be ing d i smis sed for want of prose cu t ion .
91
The rai lroad cont inued
t o operat e , but , a s usual , f inanc es cont inued in t h e red .
92
When a l l seemed l o s t , a last chance hope for surviva l wa s f ound .
On Novemb er 1 5 , 1 9 5 7 , Chancellor James Pa rro t t , in s e s s ion at Dand ridg e ,
c learned the way for the sale o f the rai lroad t o a gr oup o f Sevier County
businessmen .
The agr eed order s e t t led all g ov ernment claims of t he Rai lroad
89
1 . A . Taylor (Aud itor of Smoky Mountain) to Jame s M . Couch ,
Augus t 14 , 1 95 6 , L . A . Taylor t o Amon Smith , June 1 2 , 1 9 5 7 , Smoky Moun tain
Railroad Re cords .
90
B . H . Davis t o W . B . Pemberton , July 2 1 , 1 9 5 6 ; W . B . Pemb er t on
J
.
E
.
Temp l e , August 7 , 1 9 5 6 ; B . H . Davis t o J . E . Temple , August 2 4 ,
to
1 9 5 6 , ib id .
91
92
copy o f F inance Docke t No . 1 5 6 4 6 in Smoky Moun t a in Bankrup t cy Case .
Income-expense ac count f o r e ight months , end ing August 3 1 , 1 9 5 7 ,
Smoky Mountain Ra i lroad Rec ord s .
87
Ret iremen t Board and ot her creditors .
Knoxv i l l e a t t o rney W . Leonard
Ambrose repr e s ented Max Kes s elman , the maj or s t ockholder and general
manager of the road .
The Knoxv i l l e News-Sen t inel repor t ed the rumor that the purcha s e
p r i c e was $ 5 0 , 000 , and t ha t among the buyers were A . J . King , lumberman ,
J . E . Temp le , f lour mill owner , J . B . Wat ers , Sr . , real e s t a t e dealer , and
J im Atchl ey , funeral home owner .
I t was also b e l i eved that the owners o f
the Sevier County Mo tor Company were involved , b u t none o f those rumored
t o be invo lved would comment .
I t wa s und er s t ood that s ome thirt een or
f ourt een men were involved and that when the sale was c onsummated , J . E .
T emple wou ld f i l e a f inal r ep o r t and the receivership would be d ismis s ed .
93
The operat ion of t h e road b y t h e new owners will b e d i s cu s sed i n t h e next
chap t er .
All a t t empt s t o maint a in a prof itable operat ion had f ailed .
Know-
ing t his was the ca se , Midwes t St eel Corporat ion had purchased the railroad
f or j unk .
Aband onment o f the Smoky Mountain , however , proved t o be a
d i f f icult t ask .
The Smoky Mountain was the only ra il conne ct ion b etween
S ev ier C ounty and the outside wor ld , and Midwes t S t eel could no t prove t o
the ICC that t h e l ine should b e ab andoned .
This proved especially t rue
after TVA mad e u s e o f the line in the build ing o f Douglas Dam .
Hug e
prof i t s were mad e by t he S i lver st ein and Kesse lman f amilies whose only
93
Knoxv i l le News-Sen t ine l , November 1 6 , 1 9 5 7 . Other c laims ,
amoun t ing to $ 9 00 were d ismi ss ed , but could b e re-f il ed if the cred i t ors
so d e s ir ed .
88
int er e s t in the con t rac t with TVA was f o r personal g a in .
By a l l owing the
t ra cks and equ ipment to d et e r iora t e they hoped to obtain p ermis s ion to
abandon , b u t they fai led to r e cogn i z e the impor t an c e o f the Smoky Moun t a in
to c e r t a in c i t i z en s o f S ev ier C ounty and they f a i led .
Thus , many a t t emp t s
were mad e t o d e c lare the road bankrup t when a washout o c cu r r ed .
The r a i l­
road operated for s ome nine y ears und er a rec eiver appointed by the cour t .
In a f inal a t t empt t o make the r a i l r oad a p r o f i t a b l e organ i z a t ion , a group
of S ev ierv i l l e bus inessmen purchased the l ine .
b et t er than that o f their predec e s s o r s .
There luck p roved t o be no
CHAPTER IV
THE SMOKY MOUNTAI N UNDER S EVIERVILLE BUS INE S SMEN
The s a l e of the Smoky Moun t a in by Midwes t S t e e l was c omp l e t ed on
Novemb er 15 , 1 9 5 7 , to a group of Sevierv i l l e busines smen , for a p r i c e o f
$ 6 5 , 0 00 .
1
Rec eiver ship p r o c e edings were d i smis sed by the chancery c ou r t
2
.
o f s ev i er C ounty at t h e same t 1me .
Also , on Novemb e r 1 5 , 1 9 5 7 , app roval
was g iven by the o f f i cials of the ra ilr oad and the Sevier County chanc ery
c our t , enab l ing the purchasers to make a d emand no t e of $ .1 3 , 0 7 5 with the
Uni t ed S t a t e s government as a c ompromi s e s e t t l ement of the out s t and ing
taxe s owed by the r a i lr oad .
The security for the no t e was the s t e el r a i l s
i n t h e roadbed o f t h e rai lroad .
1
If the rai lroad operated f o r t en y ears
J ournal , November 16 , 1 9 5 7 .
2
T enne s s e e S t a t e Planning Commis s ion f i l e on f ea s i b i l i t y o f r ehab i l i­
t a t ing the Smoky Moun tain Ra ilr oad ( Ea s t Tenne s see Of f i c e , Knoxv i l l e ,
In the mat t er o f
Tennes s e e ) .
"Before Inter s t a t e C ommer c e Commi s s ion .
' Ap p l i c a t i on o f Smoky Moun t a in Ra i lr oad , a corporat ion , for c er t if ic a t e of
Pub l i c Convenience and Nec e s s i t y p ermi t t ing the abandonment o f r a i l r oad
l ine s , ' Knoxv i l l e , December 18 , 1 9 6 3 , 11 f i led in Smoky Moun tain y_. Paine
O i l Company , � a l . in Sevier County chanc ery court ( Sev ier C oun t y Cour t­
hous e , Sevi ervil l e , T enne s s e e ) . Her eaf t er c i t ed as app l i c a t ion o f Smoky
Moun t a in to ab andon , Smoky Hount a in y_ . Paine Qi l C ompany , e t a l .
The
busines smen and f irms cons i s t ed of S t oke ly-Van Camp , In c . ; A . J . King , Jr . ;
K . Rawl ing s , Jr . ; E . W . Pa ine ; J . E . T emp l e ; Jame s A . T emp l e ; James H .
At chley ; Blaine Atchley ; Har o ld At chley ; David P . Wa t e r s ; Hary L . Ha i l ey ;
J . B . Wat e r s , Sr . ; J . B . Wa t e r s , Jr . ; Bon Hicks , S r . ; C l eo Burchf iel ;
Blalock Bro ther s ; Carl Owenby ; Ray C . Sharp and Fred S . McMahon .
89
90
the no t e wou ld b e canceled , b u t i f the road c ea s ed operat ions before that
t ime , the no t e would be due immed iat ely .
3
E l e c t ed in Novemb er a s of f i c e r s of the c o rporat i on were the f o l l owing men :
p r e s iden t , B . M . Ang e l , Ind ianapo l i s , Indiana ; v i c e-pr e s id en t ,
A . J . King , S evierv i l le ; s e cretar y and treasurer , J . E . T emp l e , S ev i er ­
vil l e .
4
A spoke sman f o r t h e group s aid tha t i t would opera t e t h e r a i lr o ad
for the bene f i t of the ent ire commun ity and hoped to improve s ervi c e on
the r o ad .
5
In order t o put the r a i lr o ad on a pro f i t ab l e bas i s , H . A . Cut shaw ,
Jr . , was e l e c t ed superintendent on J anuary 1 , 1 9 5 8 .
However , the ra i lroad
oper a t ed in the r ed , pos s ib l y becau s e the new sup e r int end ent knew nothing
about operat ing a rai lroad .
6
The year-end r e p o r t no t ed eleven emp loyees ,
. es . 7
pay f or t h e i r s er v 1c
'
mo st o f whom were rec e1v1ng £ a1r
.
.
eviden t ly cont inued as usual .
Bus ines s
C u t shaw wro t e to J . A . J ohns on o f the Southern
Railway that the Smoky Mountain agr eed to c o nt inue the j o int use of the
tr acks f r om V e s t a l t o Knoxv i l l e .
In h i s reply , J ohnson s t a t ed that he
would comp l e t e the canc e l la t i on o f t he lease agr e ement c over ing S o uthern
3
H . A . Cut shaw , Jr . , Super intendent , t o J . A . J ohnson , Sou thern
Rai lway , Knoxv i l l e , J anuary 17 , 1 9 5 8 , Smoky Mountain Rai l road Rec o rd s .
4
Intervening p e t i t ion of the Uni t ed S t a t es o f America in Smoky
Mountain y_. Paine Oil Company , � a l .
5
News-Record , Nov emb er 2 1 , 1 9 5 7 .
6
H . A . Cut shaw , J r . , Aud i t or and Super int endent t o 0 . F . Quinn ,
C l inchf i e ld Railr oad , January 2 7 , 1 9 5 8 , Smoky Moun t a in Rai lr oad Record s .
7
Ib id . , D e c ember 1 2 , 1 9 5 7 , Quar t e r ly Report o f Compensat i on t o
Ra i lroad Ret irement Board .
91
locomo tive Numb er 154 .
8
Ev ident ly , the Smoky Mount a in had f ound i t
neces s ary t o repair the d i e s e l eng ine and had l ea s e d the above eng ine t o
u s e i n i t s plac e .
In an a t t emp t in 1 9 5 8 t o secure more operat ing cap i t a l , the Smoky
Moun t a in o f f ered t o s e l l as scrap the three o ld coal-burn ing engines
(No s . 107 , 1 1 0 , 2 0 7 ) o f the road , but the o f f ers were inad equat e and n o t
a c c ep t ed by the rai lroad .
9
The owners of the Smoky Mountain d i d not p a y
the taxes in S ev i erville and neg lec ted the ma int enanc e o f the s t r e e t
through which t h e t r a in r an .
The b oard o f mayor and ald ermen v ot e d t o
prosecu t e c o l le c t ion o f t h e taxes a s well a s t h e c o l l e c t ion o f an
indeb t edne s s of $ 5 3 4 . 68 owed to the c it y of S ev ie rv i l l e f o r r ep a i r s on
10
.
.
t �gat ed .
B ruce S t r e e t , b ut th e s u �. t was never �ns
On January 2 6 , 19 5 9 , H . A . Cut shaw o f f ered his r e s igna t ion a s
superintendent .
In his l e t t er o f r e s igna t ion , Cut shaw p o int ed out that
in the previous two weeks i t t ook nine days to get f iv e carl oad s to Knoxv i l l e and two c ar loads t o Sevierv i l l e .
The t ra in derailed three t ime s ,
forc ing Cut shaw t o s t ay with the eng ine f ive nights t o s t ar t i t at two
o r thr ee hour int e rvals to p r event its f r eez ing .
The superin t endent
8
smoky Mountain Rai l r oad Records , January 1 3 , 1 9 5 8 , January 1 4 ,
1 9 5 8 . Dur ing F ebruar y , 1 9 5 9 , the o f f i c ia l s met and arrived a t an agr e e­
ment f or j o int use o f fac i l i t ies with the Southern f r om Vestal t o
Knoxv i ll e .
Copy o f agreement e f f e c t ive November 1 5 , 1 9 5 7 .
9
Edward Minor to H . A . Cut shaw , Jr . , S ep t emb er 1 2 , 1 958 ; R . A .
Campbell t o H . A . Cut shaw , Jr . , August 2 7 , 1 9 5 8 , ibid .
10
News-Record , Decemb er 4 , 1 9 5 8 .
92
pointed out that h e had b een working f o r over a year w i t hout a t ruck t o
d e l iver the exp r e s s and f r e ight and had u s e d h i s own car .
had p laced 4 , 00 0 ties on the t ra c k ,
reworked ;
Even though he
i t s t ill needed to b e c omp l e t ely
the chief engineer o f t h e Southern c o n s i d e re d i t t he wor s t t r a ck
he had even b een over .
The super int endent s a i d t ha t he had done h i s b e s t
t o keep t h e t rain running ,
s erving where he was n e e d e d a n d would cont inue
to h e l p the ra i l r oa d by keeping the r e c o r d s and r e p or t s up t o d a t e unt il
a d e c i s ion c ould b e r eached on t he r a i lr o a d ' s f u t ur e .
c ont inued t o work as aud i t o r unt i l the r oad went
11
Ev iden t ly , Cut s haw
int o r e ceivers h i p .
Bowa t e r s Southern Paper Corporat i on o f C alhoun ,
in order t o help
the Smoky Moun t a in out o f i t s current f in an c i a l d i f f i cu l t i e s , was will ing
to let
t he r o a d add 2 5 c ent s t o the p r i c e of e a c h c o r d of pulpwoo d on the
condit i on that t he rate be for only two years and t ha t t he r ai l r o a d s ecure
a "sub s t an t i a l loan 1 1 t o r ehab i l i t a t e i t s line and equipment .
12
The Smoky Moun t a in c ont inued t o f a c e opp o s i t ion i n i t s at t emp t s t o
c r e a t e revenue and g o o d r a p p o r t w i t h t h e l o c a l peop le .
March o f 1 9 5 9
wit nes s ed a c ondemnat ion s u i t in the c i r c u i t cour t o f S ev i er Coun ty in
wh ich the c it y of S eviervi l l e a t t empt ed to cond emn a par t of
the Smoky
Moun t a in r ig h t - o f -way in o r d er to open Bruce S t r e e t int o a c onnec t ion w i t h
H i g h S t r e e t b eh ind and t o the e a s t o f the S ev i e rv i l l e E l ement ary Schoo l .
The t r i a l t o ok near ly two d ays and in the course of
11
H . A.
January 2 6 ,
12
March 2 ,
Cu t shaw , J r .
1959 ,
the t e s t imony the
t o s t o ckho l d e r s o f Smoky Mountain Rai l r oad ,
Smoky Moun t a in Railroad Recor d s .
w . H . Joub er t , T r a f f i c Manager , t o Smoky Moun t a in Railroad ,
1959 ,
ib i d .
93
c i t y s a i d tha t i t was only int er e s t ed in opening the two d ead-end s t r e e t s
t o through t r af f ic .
A j ury a\varded $ 4 , 0 00 in gener al damages , plus $ 1 , 000
for inc i d ental damages t o the r a i l r oad .
The city of S evierv i l l e prepared
to appe a l , a l though a s f a r a s can be a s c e r t ained , the appeal was nev e r
f i led .
13
Th is s u i t created i l l will toward the r a i lr oad and p r obably a
loss in r evenue to i t .
Dur ing the y ear , lawyer s who had hand led legal ma t t er s f or the Smoky
Mountain r e qu e s t ed payment of their f e es , wh ich they had no t a s ked f o r p revious ly s o the road could g e t on i t s f e et .
14
P ayment o f such ob l igat ions
was s low a t b e s t .
In the lat ter par t o f 1 9 5 9 , the Smoky Mountain Ra i lr oad owners a l ong
with other local businessmen oppos ed an a t t empt by the Ra i lway Expr e s s
Agency , Incorpor a t ed , t o g e t a depot
or
s t a t ion f o r i t s trucks i n Ga t lin-
burg and the T enne s s e e Pub l i c Serv i c e Cmmnis s ion d i sm i s s ed the app licat ion
in October .
The Ne�-Record predicted an app eal would be ma de , but this
d id not oc cur .
15
The r ailroad cont inued to opera t e , although with a g r ea t deal o f
d i f f iculty ; i t exp e r i enced f i f ty - f ive d e r a i lment s between J a nu ary
1
and
Ap r i l 2 4 , 1 9 6 0 , many of them caused by the 11 c a r s of p ip e whi c h had t o
b e moved t o S ev i erville a f ew c ar s at
13
a
t ime ,
Bad weather hamp ered this
News-Record , Mar ch 2 6 , 1 9 5 9 .
14
0 . M . Tat e , Jr . to H . A . Cut shaw , J r . , May 1 9 , 1 95 9 , Smoky
Moun t a in Ra ilroad Recor d s .
15
News-Record_, November 5 , 1 9 5 9 .
94
Engineer J a c k F o s t er inf ormed Cut shaw that t he d iesel eng ine was
wor k .
operat ing on dead wheel s , but Cu t shaw said that s ince all repair work on
equ ipment had t o b e done o u t s id e and s ince the weather wa s bad , t ha t
F o s t e r should c ont inue t o ope r a t e t h e eng ine .
Af ter being inf o rmed o f
t h e ser iousne s s o f running on d ead whee l s , Cutshaw mad e arr angemen ts with
W . J . Savage and Company t o repair the engine .
This movetl s t op p ed haul-
ing on the r oad for two weeks , although prev ious ly a l l the cars , exc ept
e ight in Sevierv i l l e , had been c l ear ed from t he l ine .
16
The chief c ommod ity hauled in 1 9 6 0 was c o t t on , along wi t h a sma l l
quan t ity o f p u lpwo od .
17
S ince C u t shaw worked in Oak Ridge and was only a
par t - t ime emp loyee , t her e was l i t t l e a c tual supervis i on o f the road in
1960.
18
Operat ions f or the year ran $ 8 , 2 6 9 . 6 5 in the red .
19
S ome dras t i c
measure had t o b e taken o r t h e l ine would b e f o r c ed t o c l ose .
D ir e c t or s and s t o ckho lders of the railr oad met on January 7 , 1 9 6 1 ,
t o seek s ome method of keep ing the road in o p er a t ion .
A t o t a l of 495 o f
the 6 5 0 shar e s wer e represented i n t h e meet ing and the e ight s t o ckho lders
16
H . A . C u t s haw t o D . E .
Inter s ta t e C ommerce C ommi s s i on ,
Ra ilr oad Record s . Probably the
that the per d i em cost for each
c ou ld no t a f f ord this .
17
Wi ll iams , D i s t r i c t Loc omo t ive In spec tor ;
Nashv i l l e , March 9 , 1 9 6 0 , Smoky Mountain
real reason for no t f ix ing t he wheels was
c ar per day was $ 2 . 8 8 and the railr oad
Aud i t o r s Repor t , ib id .
18
Nat R . Hamilton , Jr . , Claims Agent o f C on t inen ta l-Na t ional Gr oup
t o Howard Boody , Jr . , May 3 , 1 9 6 0 , ib id . A hear ing was held in Sevierv i l l e
o n June 14 , 1 9 6 0 , concern ing a m o t o r carrier ' s cer t i f ic a t e , which was
eventually acqu ired . B . M . Ang e l l to H . A . Cu t shaw , Jr . , May 2 0 , 1 9 6 0 ,
ib id .
19
Aud i t o r s Rep or t , ib id .
95
made it known t hey would s e l l the l ine f o r the $ 6 5 � 0 00 inve s t ed in it on
one cond it ion--that it cont inue to opera t e in the fu ture as a commer c ial
c ommon carrier .
J . B . Wa ter s , Sr . , real es tate man and l ong - t im e s upp orter
o f the r oad , summed up t he f e e l ing s o f the owners in these word s :
When we ab andon this l in e and go t o pu l l ing the r a i l s , S evierv i l l e
wil l never have another ra ilroad . The day that Sev ierv i l le loses this
r a i lr oad will b e the wor s t day S evierville ever had . For my part , I
wou l d be willing to g ive my s t o ck to any c ompany that will put the
ra i l road back into shape and keep i t opera t ing .
Wat e r s said that he had t a lked with the repre sent at ives of a t lea s t two
inter es t s � one a C ha t t anooga p r omo t ion conc ern and the o t her an East
T enne ssee indu s t rialist , who wan t ed an o p t ion to nego t ia t e a pur cha s e .
In
a l l fa irne s s , the r a ilroad had l it t le mor e than s en t imental valu e s t o
S evierv i l l e , because i t was both f a s t er and mor e e f f i c ient t o haul bulk
commodit ies to S evierv i l l e by truck .
The sto ckhol d ers � however , f e l t i t best t o call ano ther meet ing for
F ebruary 2 1 , t o g ive proper no t i ce .
They asked a c ommit t e e c ons i s t ing o f
J . B . Wa t e r s , S r . , K . Rawlings , J r . � and Ned Williams t o report then on
any proposals t o put new l i f e in to t he r oad .
At the s ame meet ing , E . W . Pa ine , a d ir e c tor and the a c t ing chairman o f the s t o ckholder s ' meet ing , r ead a proposal of fer ed by a Knoxville
p r omo t ional g roup .
20
The proposal was to o f fer 2 , 0 00 shar e s of new s t o c k
to b e s o ld a t $ 2 0 0 a share t o r a i l f ans , railroad men and the general
publ i c , with a limit of three shar es per per s on .
20
J ourna l , February 8 , 1 9 6 1 .
T ho s e pur chasing one
96
share would b e come vice-pres ident s o f the r a ilroad , tho s e owning two shar e s
would b e come execut ive v i c e-pre s id en t s , and t h o s e a c quir ing three shar es
wou ld b e g iven the t it l e o f execut ive vice-pres ident and a s s istant to the
pres ident .
Al l the money r e c e ived from the sale o f the shar es would b e
p laced i n a n e s c row account i n a local bank and held unt il a t l e a s t half
o f the two thousand shares had been s old , at which t ime i t would b e u s ed
t o pay the owner s for their s to c k as we l l as u s e d t o beg in repair ing the
r oadbed and p l a c ing new equ ipment on the road .
F ive percent of the money
in the e s cr ow ac count would be withheld and used f or promo t ional ma t e r i a l s
a s needed t o s e l l t h e remain ing s t o c k .
When a l l shar e s had been sold ,
another 5 percen t would b e paid t o the promo t i onal organ i z a t ion .
When a l l s to c k had be en s o l d , the new s t o c kho lders would elect a
new board o f d ir e c t o r s .
of the o ld s t o c k .
This board would then aut ho r i z e the l iqu idat ion
T h e new b oard in turn would s e l e c t a manager w i t h s ome
railroad operat ing exper ience who would oper a t e t hen und er t he d ir e c t ion
o f the board .
The Knoxv i l l e group proposed that the new company would then
a t t emp t t o secure new fre ight while running a mixed t r a in , haul ing b o t h
f reight and p a s s eng ers on a t enta t ive s chedule and a t s uch r at e s as would
create a good operat ing income .
The p romot i onal g r oup went fur ther and
sugg e s t ed that when half of the new s t ock was s o l d , the c ompany should try
to o b tain a government loan t o re-equ ip the r a i lr oad .
r oad might br eak even or m ight perhap s be prof i t ab le .
21
The group f e l t t he
21
"ou t l ine of Prop osal t o S t o ckho ld ers , Smoky Moun t a in Rai lway ,
Inc . , " Smoky Mount ain Ra i lroad Rec o rd s .
97
The track was i n a deplorab le cond it ion and it would b e exp en s ive
to r epair .
H . A . Cut shaw , Jr . p o inted out that it would take from four
t o s ix months to put the railr oad into an operat ional cond it ion , becau s e
new cross-t ies , heavier rails , and f ive tre s t les needed t o b e p u t into
the road .
At one t re s t l e , i t was the pract i c e f or one cr ewman t o s t ar t
the eng ine across and , when the eng ine r eached the o ther s id e , for another
crewman t o j ump on the t rain and s t op i t .
When the r ailr oad was f o r c ed to s t op i t s d aily train on J anuary
1 6 , becau s e o f the weakness o f the track , it d e clared an embargo on carload f r e ight and dur ing the weeks ther eaf ter transpor ted le ss than
carload f r e ight by t ruck .
Both the promot ional group repr e s ent ed by P a ine and the would -b e
pur chasers represented b y Wa t er s wer e int er e s t ed i n u s ing one o f the old
s team eng ines on the l ine as a t our i s t a t t ra c t ion .
u s ing the d i e s e l t o pull fr eight only .
Plans called f or
Wat ers hint ed that there was even
a p o s s ib i l i t y of r e s t o r ing the ext ens ion to P igeon F or g e , which had been
abandoned in the 1 9 3 0 ' s .
Wa t e r s p o inted out that the r a i lroad had b een
in numerous r e c e iver ship s , and he s a id that i t "had b een milked at both
end s " f o r years .
The owners e s t imat ed that the total ind eb t edne ss at the
t ime of the J anuary 7 meet ing was about $14 , 3 3 0 , of which approx imate ly
$ 4 , 000 was in local t axes upon which the owners f e l t they could get
r e 1 1. e f .
22
22
1961 .
Knoxville News- Sent inel , F ebruar y 8 , 1 9 61 ; J ou rnal , February 8 ,
98
The owners agr eed at the F ebruary 2 1 mee t ing that the ent ir e s t ock
of the Smoky Mount ain Railr oad would b e placed in es crow t o b e held by
Bon Hicks , one of the directors , for a 90-day period of t ime .
The s t ock-
holders dec ided t o meet again in two weeks and f inal i z e plans t o sell
their s t ock at i t s par value o f $100 a share .
When the old s t ock was
sold , then the new promot ional p lan as outlined would go into e f f ect ,
which would p r ovide $ 3 3 5 , 000 in new revenue .
As noted in the plan , only
three shar es would be allowed per p er s on , a provis ion which would prevent
the ac cumulat ion of wealth fr om the line by any one individual .
From the
number of let t er s received , i t was ev ident that many people were int er es ted
in purchas ing the s t ock .
23
The red tape involved was very lengthy , how-
ever , becau s e the Secur it ies and Exchange Commiss ion had to approve any
s t ock sale of over $ 3 00 , 000 .
every way t hey could .
Rail f ans were trying to promo te the plan
In an e f f o r t t o speed up the SEC , a spokesman f or
the Smoky Mountain said tha t a let ter would be wr it ten t o
every Kennedy i n Amer ica if neces sary i n a n e f f o r t t o g e t the f amily
in teres ted , Car o l ine might b e the b e st bet . We are , however , promised
that c ome hook or . . . , er , ah . . . p o l i t i c ian , the veep- lad en
rai lroad idea will be r o l l ing soon . 2 4
I n Augu s t , t h e s tockho lders m e t i n S evierville and d ec ide d to go
on with their p lans t o sell the vice-pre sident s cer t if icates to r a il f ans
acro s s the country .
At the meet ing , the f o l l owing o f f icers were e lec t ed :
president , John B . Wa t er s , J r . ; vi ce-pres id ent , K . Rawling s , Jr . ;
23
rbid . , F ebruary 2 2 , 1 9 6 1 .
24
News -Recor d , Apr i l 6 , 1961 .
99
secretary-treasurer , Har o ld Atchley ; and d irec t or s , E . W . Pa ine and Bon
Hicks , S r .
Legal detail s , however , c ont inued t o hold up t h e p lan .
25
The end had come , a lthough a f ew d iehards cont inued t o b e l ieve
otherwise .
The f inal r eport o f J . E . T emp le as receiver f or the Smoky
Mount a in was accep t ed and h e was d ismissed o n June 2 6 , 1 9 6 1 , f r e e o f any
l iab i l it y .
26
The railroad cont inued to operat e f o r s ome t ime by carry ing
less than car load express and f re ight by truck to S eviervil le , but th i s
was d is con t inued in May , 1 9 6 3 , b ec au se it was not prof i t ab le .
27
F inally , on Apr il 1 7 , 1 9 6 3 , a j o int meet ing o f the board o f
direc t ors and s t ockholders vo t ed t o abandon t h e l ine .
The r e s olution t o
abandon r ead a s f o l l ows :
Be i t her e r e s o lved that the Corporat i on President be hereby
authori ze d and d ir e c t ed to f i l e with the Federal Government , S t a t e
o f Tenne s s e e , and Inters t a t e C ommerce Commis s ion a ll necessary appl i ­
cat ion f orms and legal pa pe rs f or permi s sion and authority t o abandon
the Smoky Mount ain Railroad , and the oper a t ing thereof .
This r es o lu t ion meant that the owners would c omp l e t e ly r elease a l l control
and operat ion of the road , and the only way i t would b e r e ac t ivat ed would
be f or an individual to purchase it .
25
rb id . , Aug u s t 1 7 , 1 9 61 .
26
Ray � · Sharp , e t a l . � · Smoky Mountain Railroad , in Chancery
Cour t of S evier C ounty
C ount y C our thou s e , S ev i erv i l l e ) , Docket
No . 3 9 07 . Als o in 1 9 6 1 , the railroad a t t empt ed to move the old s t eam
engine number 1 1 0 f rom Knoxville to S evierville , but this p lan had to b e
abandoned because o f the cond it ion o f the t rack and bridges .
"Propos ed
request f o r Technical Assistance in Det ermining the Feasib ility o f
Rehab i l i t a t ing the Smoky Mount ain Ra ilroad , " T ennes s e e S t a t e Planning C om­
miss ion F i les , Knoxville , T ennessee .
27
Appl icat ion o f Smoky Mountain t o Abandon , Smoky Mount ain v . Paine
Oil Company , et al .
100
A great many l egal details had to b e ironed out and this required
ext ens ive court act ion .
A g ood d ea l of r igh t-of-way wa s (and st ill i s )
owned by the Smoky Mountain Company .
Details for the s a l e o f this land
were to be worked out lat er and then announced and advert ised in the paper
in advanc e .
At l eas t ninety days would b e r equired t o d o this , so new
of f ic e r s were e l e c t ed .
They wer e :
John Temple , pres ident ; Bon Hi cks , Sr . ,
vice-president ; A . J . King , secre tary-treasurer ; and K . Rawlings , Jr . ,
and Har o ld At chley , d irector s .
At the t ime o f the v o t e t o aband on , two
st eam engines b elong ing to the line wer e on loan to Reb el Railroad (now
Goldrush Junct ion) at Pigeon Forge to call the a t t ent ion o f travelers on
U . S . 441 t o that tourist a t t r a c t ion .
Event s moved slowly .
28
On December 18 , 1 9 6 3 , the Inter s ta t e Comme r c e
Commiss ion received a formal applicat i on from the Smoky Mountain to aband on
its l ine .
In i t s r eques t , the company point ed out that a l though the r a i l-
road was cons t ru c t ed for passenger and fr e ight s ervice , it was not ab l e t o
comp e t e with the new mod es o f transportat ion and that i t s r evenue had
dec lined to the p oint that it c ou ld not operate prof i t ab ly .
In their
answer t o f orm quest ions s ent by the ICC , t he railroad o f f ic ials not ed
that no maint enance work of impor tance had b e en done on the l ine and the
.
equ1pment
was o f n o pract1ca 1 u se .
29
.
28
29
Ib id . ; also News-Record , May 2 5 , 1 9 6 3 .
Applicat ion of Smoky Mountain t o Aband on , Smoky Mountain v . Paine
Oil Company , � al .
101
A cer t i f i c at e and order was issued by the Inter s t a t e C ommer c e C ommiss ion on Apr i l 15 , 1 9 6 4 , grant ing the Smoky Mountain permiss ion t o
abandon i t s ent ire l ine o f road o n May 2 0 , 1 9 64 .
O n Ap r il 3 0 , 1 9 64 , J . B .
Wa ters , Sr . , was app ointed rec eiver and at the t ime o f this wr i t ing he wa s
s t ill s erving in this capac i t y .
Cred i t o r s began to b ombard the r e ce iver
f or payment of d eb t s , with the U . S . government b eing one of the chief
cred i t or s .
C o l l e c t ion of these d eb t s was ex tremely s l ow .
On July 3 0 , 19 65 , Wa ters asked for and received permission t o s el l
the rails and r o l l ing s t ock owned by the Smoky Mountain wi th all sales ,
however , t o be c onf irmed by Chancellor Buford T ownsend .
30
On August 5 ,
the a s s e t s of the railroad were put up for s ale and adver t i s ed in the NewsBids were reque s t ed on three lo como t ives , s everal box car s ,
Re cord .
trackage and al l tools and equipment .
a check f or 1 0 per c ent o f the b id .
31
Each b id had to b e accompanied by
The bids for the a s s e t s o f the road
were as f o l lows :
Group 1 .
Al l trackage and track mat erials for approximat ely 2 6
miles--Midwes t S t eel Corporation , P . 0 . Box 2 7 1 , Char lest own , We s t Virginia-- $ 9 5 , 100 .
Group 2 .
S t eam Locomo t ive Numb er 110--Railway En terprise , Midd le-
t own , New Jersey-- $ 8 5 5 .
Group 3 .
St eam Locomo t ive Number 116--Goldrush Junc tion Railroad ,
P igeon Forge , T ennessee-- $ 2 , 5 00 .
30
31
Smoky Mount ain � · Paine Oil Company , � al .
News-Record , Augu s t 5 , 1 9 6 5 .
Water ' s hands by Sep t ember 1 , 1 9 6 5 .
All b i d s wer e to b e s ealed and in
102
Group 4 .
S t eam Locomo t ive Number 125 --Goldrush Junc t ion Ra ilroad ,
Pigeon Forge , T ennes s ee-- $ 2 , 5 00 .
Group 5 .
All rolling s t ock--Midwest S t eel Corpora t i on , P .
0.
B ox
2 7 1 , Char l e s t own , Wes t Virginia--$ 1 , 5 5 0 .
Group 6 .
All tool s , equipment and scrap in Repair Shop--Midwes t
Steel Corpor a t ion , P .
0.
Box 2 7 1 , Char l e s t own , Wes t Virginia-- $ 6 00 .
32
The idea that the Smoky Mount ain could be r ehab ilita te d b e came
wid ely accepted by the local p opulace and eventually an a t t empt wa s mad e
t o s t ud y the s ituat ion .
O n Sep t emb er 2 4 , 1 9 65 , the board o f d irectors o f
t he Smoky Mountain and Receiver J . B . Wat ers , Sr . , he ld a meet ing f or that
pur pose .
In a prior meet ing , Midwest St eel Corpor a t i on mad e it known
through i t s a t t o rney Leonard Ambr ose that unle ss i t s b id was accep t ed on
the trackage by September 2 4 , the b id would be withdrawn .
The d ir e c t ors
decid ed t o ac c ep t the bid f r om Midwes t S t eel o f $ 9 5 , 100 f or the old rails
and app o int E . W. Paine t o chair a commit tee to det ermine if it was f eas ible
t o rehab i l it a t e the railroad .
In a meet ing with t he T ennessee State P lanning Commiss ion , on
I
September 2 9 , Joe McAfee repor t ed that in May , 1 9 6 5 , the In t er s t a t e C ommerce
Comm i s s ion gran t ed p ermi s s ion to abandon the r a ilroad by May , 1 9 6 6 .
33
Paine
in his capacity as chairman of the commit tee concerning r ehab ilita t ing the
32
33
Smoky Mountain � · Paine Oil Company , � al .
F i l e s o f T enne s s e e S t a t e Planning Commission on S evier County
(East Tenne ssee O f f i c e , Knoxvi lle) .
103
line conta c t ed Tennessee ' s g overnor , Buford Elling t on , b oth by phone and
let t er .
He p ointed out to the governor that the ind eb t edness of the rail­
road was approxima t ely $ 6 5 , 000 , o f which $20 , 000 to $ 2 5 , 000 was l o cal and
s t a t e t axes and a f ed eral c laim o f $ 1 3 , 000 which could b e compromised .
Paine p oin t ed out that the r ight-o f-way , owned both in f e e and cond emned
by cour t a c t ion , was worth over a mill ion dollar s , and that s everal con­
tractors had s t a ted that the road could b e rehab il i t a t ed f or about $ 5 00 , 000 .
The s t ee l sold to Midwest S t eel , however , was t o o l ight t o opera t e on , but
the chairman be l ieved that local sour c es could provide $ 5 0 , 000 t o help
r enovat e t he l ine .
He hoped that a s t a t e grant could f inan ce a s t ud y to
det ermine whe ther or not it was f easible to r ehab i l i t a t e t he road , and said
he would appr eciate any help E l l ing t on could g ive .
34
In ear ly O c t ober , the Sevier County Ar ea Redevelopment Commi t t ee ,
c ons i s t ing o f Ray L . Reagan , president , James O ' Neal , vice-presid ent , and
Joe Sharp , secretary and t r easurer , requested t echnical a s s i st ance from the
T enness e e S t a t e Planning Commis s ion to det ermine whether or not t o r enova t e
the Smoky Mountain .
In the ir r equest the commit t e e pointed out that the
ri ght -of-way not owned in fee simple would b e lost i f the line was abandoned .
The request also s t a t ed that help would be ava ilable f r om s everal local
groups ; an alt ernat ive p o s s ib i l i t y was the creat ion o f a u t il ity d i s t r i c t
which could l e a s e o r pur chase the proper ty and thus make t h e rehab i l i t at ion
a pub lic proj e c t .
The report noted that fund s might be obtained fr om
privat e sources , or , i f the railway should b e come publ i c property , through
34
Ibid . , E . W . Pa ine to Bu for d Elling t on , S ep t ember 2 8 , 1 9 6 5 .
104
a comb inat ion o f grant s , loans and the sale o f bond s .
The r eque st for a
study grant was endorsed by the S evier County Area Redevelopment Commit t ee ,
S evier County Cour t , Sevierville Chamber of Commer c e , S evierv ille Reg ional
P lanning Commi s si on , City of S eviervi lle , City of P igeon Forg e , Pigeon
Forge Planning Commis sion , S t a t e P lanning O f f i c e (Depar tment of F inanc e
and Adminis t rat ion) , Economic Development Administ rat ion F ield Coordinat or
in Knoxville , C i ty of Gat linburg , Gat l inburg Chamb er o f Commerce , and the
Gatlinburg Planning Commis s ion .
The proposal also reque s t ed an inquiry int o the p o s s ibility of the
acqu i s i t ion and r ebuild ing of the eight-mile ext ens ion from Sevi erville t o
P igeon Forge , a n ext ension t o the Sevier County Indus t r ial Park near
S evierville and the r ebuild ing of the line to Douglas Dam .
The report fur­
ther suggested a s t udy o f the operat ion o f an old st eam eng ine as a tour i s t
attrac t ion , as w e l l as an invest igat ion into the p o s s i b i l i t y of a need f or
a st eam-electr i c p lant near Douglas Dam .
A meet ing was held on Oct ober 2 9 , 1 9 6 5 , on the proposed s t udy .
Tho s e present inc luded P e t er Fernald and James Laur ie , railroad consul tant s
with Arthur D . L i t t l e of B o s t on , Mas sachus e t t s , Char les Pa t e of the Ec onomic
Deve lopment Administrat ion , Linzy Albert and Bob Freeman o f the S t a t e
P lanning O f f i c e , Frank Young o f Southern Railway , Pete Hailey , a tt orney
f or Smoky Mountain , and Claude Ander s , real e s t a t e owner .
Afte r v i s i t ing
S evierville and dr iving along the rou t e of the rail line , Fernald said
that he f e l t the c os t of rehab ilitat ing the l ine would b e fr om $3 , 000 , 000
t o $ 5 , 00 0 , 000 and that this was s imply not f eas ib le unle ss some hug e
105
indu s t ry were t o locat e i n Sevierville or near t h e ar ea .
Fernald said it
would probab ly be b e t t er to study Sev i er County as a who l e .
35
S lowly the as s et s o f the Smoky Mountain wer e s old t o var ious
b idders .
Wat er s , as receiver , announced in late S ept emb er that the b id
for the s t ee l rails had been accept ed by the court on h i s recommendat ion ,
but that he had recommended and the court had agreed that all o ther b ids
b e reJ. e c t e d .
36
He also s t at ed that if r ehab il ita t ion was imprac t ical , the
rest of the r ai l propert i es would b e s o ld .
37
On May 6 , 1 9 6 6 , t h e cour t ordered the sale o f the combinat ion
passenger and baggage car for $ 5 00 and the coach f or $ 2 0 0 to C . F . Reedy ,
S r . , of S t . Augus t ine , F lorid a .
38
The court , on June 2 2 , 1 9 6 6 , order ed the
two s t eam locomo t ives on loan to Goldrush Junc t ion (f ormer ly Reb e l Ra i lroad)
sold f or $ 5 , 000 .
Just what the future o f what r emains o f the Smoky Mountain i s c l o ud y .
S everal proposals have b een mad e as to the r ight -of-way .
The old r ight - o f -
way could b e mad e into a hiking o r b i cyc le path or as a training p a t h f o r
high s c h ool athlet es , but there are leg a l comp l i c a t i ons s ince the r oad is
. rece1vers
.
h 1p
' .
s t 1' 1 1 1n
35
36
37
38
39
39
F iles of Tennessee S t a t e Planning Commis s ion , Knoxville , T enne s s e e .
Smoky Mount a in � · Paine O il Company , � al .
News-Record , Oc t ober 2 1 , 1 9 6 5 .
smoky Mounta in � · Paine O il Company , � al .
Knoxville News- Sent inel , March 19 , June 5 , November 2 9 , 1 9 6 7 .
106
Other prob lems have arisen .
Hodgen Oil Company built a gas s t at ion
on a sect ion of the r igh t-of-way j u st east of Shook ' s Gap and legal ac t ion
has be en threat ened if s omething is not d one .
40
S ince the road has b een
abandoned , s ome people would like their land back , and at least one owner
has gone t o court to a t t empt to get it .
Wal t er Runyan has f i led an inter-
vening p e t i t ion in Paine Oil Company y. Smoky Mountain Railr oad ( in which
the o i l c ompany s eeks about $ 2 , 80 0 ) s t a t ing that the d eed called for the
land t o be u s ed for railr oad purpos es .
S ince this i s not now done , Runyan
want s the land d eed inher i t ed from his mo ther to be returned to him .
There thing s r e s t .
41
Char tered by c ivic-minded c i t i z ens to carry
passengers and freight b e tween Knoxville and Sevi ervi lle , the Smoky
Mount ain has s een a c olor ful life under s everal operat ing names .
Her
chief t r oub l e f r om the b eg inning was an inab i lity to make a large pr o f i t ,
and the owners s imply u s ed what lit t le money was made for their own personal gain .
Some individual s dr eamed o f a connect ion wi th a maj or Atlantic
Coast railroad line , but the Appalachian Mountains seem to have b een an
insurmountabl e barr i er .
The coming o f paved highways and motorized
t r a f f ic served t o weaken the line .
Passenger serv i c e was d i s c ont inued ,
and f inal ly even fr eight revenue became so small that proper track and
equipment main t enanc e b e came imp o s s ib l e , with the nece s s it y for abandonment be coming increas ingly mor e evident .
40
An ind i f f erent a t t itude on
J . B . Wat ers , Sr . , to Ho l l i s Hodgen , F eb ruary 2 3 , 1 9 6 7 ( o f f ic e
f i le s o f J . B . Wat er s , Sr . , Sevi ervi lle , Tennes s e e ) .
41
J ournal , June 2 9 , 1 9 6 7 .
107
the part o f t h e industrial concerns a s well as t h e maj or ity o f t h e people
of S ev ier County led to the demise o f the road .
Thus the name "Ole S low­
Poke and Ea sy" has be come only a memory which those who knew the Smoky
Mountain Railroad will cher ish throughout their l ives .
B IBLIOGRAPHY
BIBLIOGRAPHY
A.
1.
PRIMARY S OURCES
Unpub l ished Ma terials
a.
Smoky Mountain Ra ilroad Re cord s .
Special C o l l e c t ions , The Univer­
s i ty o f Tenne ssee Library , Knoxville .
b.
C ou r t Records
1.
Bank o f S evierville v. Knoxv i l l e , S evierv i l l e and Eas t ern
Railway, e t a l . Kno� C ounty C our thou s e , Knoxv i ll e .
2.
Bankruptcy C a s e No . 1 4 1 2 2 , Smoky Mounta i n Rai l r o ad . General
Services Admini s t ra ti o n , Federal Record s D iv i s ion , Eas t Point ,
Georgia .
3.
C op ie s o f trust d eeds b etween Knoxv i l le , S evierville and
Eas t ern Railway C ompany and Mechanic s ' Bank and Trust C ompany
and Knoxville Banking and Tru s t C ompany as rec orded in Trus t
Book 1 0 . Reg i s t er of Deeds O f f i c e , S evier C ounty C ourthouse ,
S ev i erv i l l e .
4.
E . E . Conner v . Knoxville and Carolina Rai l road and J . A .
Sevier C ounty Chance ry Court , S evier C ounty Cour t Wal la c e .
hous e , S evierv i l l e . C a s e No . 1 7 4 0 .
5.
Minu tes o f Knox County Chancery Court f o r 1 9 1 1 -1 9 2 6 .
C ounty Courthou s e , Knoxv i l l e .
6.
Minu tes of Quar t e r l y Court of S evier C ounty f o r 1 906-19 3 0 .
S evier C ounty Cour thous e , S evierville .
7.
Minu tes o f S evier C ounty Chancery Court for 1 9 4 8 - 1 9 6 5 .
C ounty C ourt hous e , S eviervi l l e .
8.
�· Sharp ,
Bon Hi cks , and J ames McAfee
--:Ke s s elman. S evier C ounty
Smoky Moun tain ==���
Chancery C our t , S evier C ounty Cour thous e , S ev iervi ll e . C a s e
No . 3 7 09 .
---
109
-
Knox
Sevier
110
9.
c.
10 .
S evier C ounty y. Knoxv i l l e , S evi erv i l l e and Eas ter n Railroad .
S evier C ounty Courthous e , S eviervil le . C a s e No . 1 1 1 8 .
11 .
Smoky Mount a in Ra il road v . P a ine Oil Company , e t al . S ev i er
C oun ty Chancery C our t , S ev i er County C ou rthous e , Seviervill e .
Case No . 6429 .
Interviews
1.
d.
2.
Separ a t e answer of Southwes t ern Insuranc e C omp any and Southern
Sur ety C ompany to the b i l l s f il ed by them and o thers in
Mechani cs ' Bank and Trus t Company , e t al . y. Knoxvill e , S evier­
v i l l e and Ea s tern Railway C ompany . Kn ox County Chancery C our t ,
Knox Coun ty Cour thouse , Knoxv i ll e . C a s e No . 1 7 98 1 .
Interv i ew wi th J . B . Wa ters , Sr . at S ev i erv i l le , Novemb er 1 9 ,
196 6 .
2.
Interview with Mrs . J . R . Whaley in Knoxv i l l e , Augus t 1 1 , 1 9 6 7 .
3.
Interview wi th Raymond Nor t on in S eymour , Augu s t , 1 9 6 7 .
M i s c e l l aneous
1.
Copies o f char t e r s f o r the Knoxv i l l e , Sevi erv i l l e and Eas t ern
Railway of 1 8 9 8 ; Knoxv i l l e , S evierv i l l e and Newp o r t Ra i lway ;
Knoxv i l le , S ev i erv ille and Eas t ern Railway ; Knoxville and
Carol ina Ra ilroad ; and Smoky Moun t a in Railroad obtained by the
wr i ter f r om Records D iv i s ion , D epar tment o f S t at e , Na shv i l l e .
2.
Copy o f contr a c t b e tween TVA and Smoky Moun t a in Railroad .
F i l e s o f TVA , Knoxv i l l e .
C ontrac t No . TV- 7 0 1 4 7 .
3.
Corre spondence and r e cords in off ice o f J . B . Wa ters , Sr . ,
S evierv i l l e .
4.
C orre spond ence b e tween Jo e C . Carr and Wil l iam Rob e r t Rogers .
5.
F il e s on S evier C ounty . T ennessee S t a t e P l anning Commi s s ion ,
Eas t Tennes s ee Of f ic e , Knoxv i l l e .
Publ ished Mat er ials
a.
Inter s tate Commerce C ommis s i on . S ta t i s t i cs o f Rai lways in the
Un i t ed S t ates . Government Pr inting Of f i ce , Washing ton , 1 9 2�
1949 .
b.
Int er s t a t e Commer c e Commi s s ion Repo r t s . Government Pr int ing
Of f i ce , Wa shing t on . Vo l . Nos . 7 2 , 7 9 , 8 4 , 1 2 4 , 1 62 , 1 7 0 , 2 3 0 ,
267 .
111
c.
Newspapers
1.
Ga t l inburg Pre s s , 1 9 4 7 - 1 9 5 0 .
2.
Knoxville J ourna l , 19 2 6- 1 9 6 7 .
3.
Knoxville Journal and T r ibune , 188 7 - 19 2 6 .
4.
Knoxville News , 1 9 2 2- 19 2 6 .
5.
Knoxville News -Sen t ine l , 1 9 4 7 - 19 6 7 .
6.
Knoxville Sent ine l , 19 2 6 .
7.
Montgomery ' s Vind icator , 190 6- 19 2 4 .
8.
S evier County News-Record , 1 9 5 1- 19 65 .
B.
1.
2.
SECONDARY SOURC E S
Unpub l i shed Ma terials
a.
Biggs , Riley Oakley . Development of Ra i lroad Transportat ion in
Eas t Tennessee during the Recons tr uc t ion Period . Ma s t er ' s thesis ,
The Univers ity of Tennessee , Knoxville , 1 9 3 4 .
b.
Hedman , Aake F . " Cons truc t ion P lant a t Douglas Dam . " T ennessee
Valley Author i ty Engineer ing and Cons truc t ion D epar tment s , Knox­
ville , May , 1945 . P r inted Rep o r t No . 20-300-5- 2 .
Pub l ished Materials
a.
F olmsbee , Stanley J ohn .
S e c t ionalism and Internal Improvements
in T ennes see , 1 7 9 6 - 1 8 4 5 . The East T ennessee His t or ical S o c i ety ,
Knoxville , 1 9 3 9 .
b.
New Encyclopedia Interna t ional Yearb ook .
1944 .
c.
Tennessee Valley Autho r i ty . T echnical Repor t No . 10 , The Douglas
Proj e c t . Uni t ed S t a t es Government Pr int ing Of f i c e , Washing ton ,
1949 .
Grol ier Inc . , New York ,
V ITA
Will iam Rober t Rogers was b orn in Sevierville , T ennessee , on
February 2 3 , 1 9 4 1 , the eld es t o f two children of V ic tor Boyd and Ir ene
Tarwa t er Rog er s .
He a t t end ed the pub lic elementary s choo l s of Sevier
County and was graduated f r om Harr ison-Chilhowee Bap t i s t Acad emy , Sey­
Mour , in 1 95 9 .
The f ollowing S ep t ember he ent ered The University of
T ennessee , and i n December , 1 9 6 2 , he received a Bachelor o f Science
degree in S o c ial S tud ies .
In the month o f Decemb er , 1 96 2 , he acc ep t ed
a p o s it ion t each ing history a t Seymour High Schoo l .
He was eleva ted to
the p o s i t ion of pr inc ipal o f Seymour High Scho o l in November , 1 9 6 7 , the
posit ion he now hold s .
He ent ered the Graduate Scho o l at The Univ ers i t y o f Tenne s s ee in
July , 1 9 64 , and r e c e ived the Mas t er of Ar ts d egree with a maj or in
His tory in Augus t , 1 9 6 9 .
He is mar r ied to the f o rmer Mar tha C . Breed en o f Alcoa , Tenne s s e e .
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