The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1860-12-27
The Washington pefaIca,ion. SC.
Ahe washington Star of NJ 2nday evening
furnishes the following additional particular
anout the defalcal ion in w hinn-tnn

clerk OF the Iuterior Daparlmaut-a nafive oT
Soutn carolina, appointed TO Office fro n Ala .
oaiha, "a young married man of abont thirty
Sedis OF age, admitted 10 be a person of re.
| hiarkaoiy hne abilities and attainmeuts-
p'asso ih the hands OF a friend letter to be
nanaed 10 Secretary Thompson. This was
uulihg tue latter's recent absence His man.
heI was sucn as that the frind pressed him
WIN inquiries concerning its contents, and
learning them, hastened to deliver il to Mr. T
On lhe instant OF his return TO this city on
saturday evening last. II proved to be i vol
uhtary confession from Bailey that at the in
stance OF another ne had abstrac ed (and
loaned 70 mat person. from the iron safe un-
ueF ms charge, large amOunt--So3G,0 ,0UO-of
tne State ponds held by Mr.. t. as Secretary of
tue ihleror IN trust for sundry IDdian TRIES
the proceeds of their bonds so.d by the Gov
eIhHtht, ana so Invested and held for their
oeneht In pursuance of treaty stipulation.
IL seems that the Secretary had ende4vored
10 ihuuee the regular treasurer OF his deDart-
lbeht, Mr- Peter hammond, 70 become their
CUSTODIAN, but not being obliged SO 70 do by
idW or reg sulatiOn, he decliued the RESPONSE
oility OF their charge. The Secretary then
entrusted Them to the keeping of Baley, the
departments law clerk, who was under bonds
OF ten thousand dollars for the faithful per.
;ormance OF other trusts-not that one TIL.
receipt Of this letter by the Secre AIRY of course
created great commotion in the department,
ana he, with Bailey and other clerks. were here
engaged IN the consequent Investigation al!
SATURDAY nlRht last until ) a. N -, with hacks
police officers, dc, plying over The city Ac-
coTding 10 baiiey's confession, he loaned the
bonds TO the party who had induced him to
commit this abs traction, but was not to re.
ceiVe single dollar OF the proceeds of the
speculation. He had cut oil and preserved in
the safe the coupons for the next SIX months
interest, so that no part of that could be lost
to the Government or Indians
One theory OF the abstraction is that Bailey
and his con tedeTate desired 10 make large
sum by speculation in the stolen bonds (the
first OF which were taken as early as five
months ago. By selling them at the compare
uVeiy high prices at which they sold some
time since, and buying them back and repiac-
lug them IN the safe when the sectional trou-
DteS they knew were about 10 arise should de-
press their prices, as at present; and that his
confederate having failed 10 return any of
them So iar, b. became alarmed and made his
voluntary confession TO The Secretary.
| Bailey Is SAID TO ailege that he loaned Rus
Sc the bonds under his persuasions ard those
Of Washington banker, NOT for the purpose
of speculation in stocks, but that by selling
| them he might meet sundry accepted drafts OF
| his firm on the War Department, payable out
| of any moneys due them or 10 become due 10
| tnem from the Government, to meet Which
| the Department Dad then no money at com
| mand. OF course he alleges that he antici-
| pated that when the Department might be in
| funds, the stocks would have been re-uur-
| chased and handed back 10 him. Russell gave
| him an amount of such accepted drafts equal
| tc the amount Of stocks j. illegally loaned t.
| MIN, which said SO accepted drafts he placed
4 Z
| Of the State b0nds.
| 1t is further said that Russell obtained from
| the Bank of the Republic, i'll New York. on
| The State bonds-that bank now having them
| in its pOssession-the money with which To
| take up the accepted drafts on the War De-
partmeut 1t is doubted whether the accepted
| drafts which Bailey held as security are really
| any security Whatever. But that TACT will be
| settled very shortly, we apprehend, on further
| invest stigatiou.
| All yesterday the Secretary continued his
inves tigation into the affair, and is said to have
SO far found all the statements OF Bailpv,s let
| ter OF confession correct to the letter lie
| obeyed the SecretaTy's summons, and aided
| hin on saturday night aud again yesterday
| afternoon i'll his labors OF search.
This morning u warrant for his arrest and
| commitment was made out by Capt q oddarG
| Chief OF Police, and il was determined 10 place
| aim IN l2ii vi h0ut an examination at This
| 'lme, unless that was demanded by his coun-
| sci, Mr.. Carlisle.
| AS soon as Mr. Thompson received The letter
| ana asceTtaiAed the pIObabio VheTeab0uts I'm
| New York; Ut BaIiey's alleged Confederate
| Nm. II. Russell, OF the firm OF Russell, Ma.
| JJr & Go, tae great overland pony express aud
| arm transportation coutractors-ne tele.
| graphed 10 Marshal hynders to effect his ar
| rest; but mp 10 tns hour at which we 20 10
| press We have not been able to learn that ne is
| IN custody. lie IS beileTGd TO have reached
| Washington this morning per rail, getting int
| the cars at PDiladelpAia, aud leaving them
only after hey had backed out Of the Waah- o
4 INEt0n Grt}Ot, 10 fetDTn III on another track
| eiudlHG tne 0tEGerS On tbs wa Ch for him. bE
jumping off thus on the outskirts OF tbs city.
Russell is said not TO be the only person i'm
p!icated besides Bailey. a Washington ban k
| ct, and others, whose names we have not been
able 10 learn, are rumOred at the Department
TO be we'll nigh as deeply involved in the trans
action, as aiders abetturs, adv ieeTs, &c and as
sharers in the contemplated profits of it.
Bailey had three millions of dollars in such
bonds in his custody, and might as easily bayt.
kan whole. Oar i'm il "a no
particular bonds CAn be iden tified. Ii SO,
while parties who may nave innocantly Eur-
chased portions OF them may lose their money
S. inyes ted the Government may not uitI-
ely be a loser.
Bailey was appointed TO Office on perhaps
the strongest testimonials as TO his alleged
high chaTac ter that were ever offered in baha L
of any other applicant tor a Government
clerks nip, though since his appointment ne
mas been known to the men about town us i
fast liver and regular freq quenter OF the faro
banks.
This morning Bailey went over to the Jail
IN company with his counsel, Mr. Carlisle,
aud gave himself up, and was fully committed
by magis trate.
LArkR.--A- we go to press we learn that
Capt. q Jddard, Chief OF Police. has lust Ie-
ceIyed dispatch from officers Allen and
Busher, OF this city, dispatched by the depart
ment TO New York TO arrest Russell an
noancing that they arrested him this fore
noon.
A teegraphic dispatch to the n. Y. Herald
announces the discovery OF another great
fraud:
IL has been discovered withn = few days
that two million OF dollars are missing trULl
the United States Treasury that is not &C
counted for ON the books The clerks have
been busy ever since the discovery searching
the books 10 ascertain whether actual rob-
berry has been committed to the above named
amount or not The matter is not yet known
70 the public, but the officers of the Govern
n9nL the secret, and very much
cised, fearing tn report may prove true right
upon The excitement cOnseq uent upon the rob
berry IN the Interior Department.