Raftsman's journal. [volume] (Clearfield, Pa.) 1854-1948, 1861-02-20

AS portion OF these are lnSeparaby connect
ed with the history of the bond embezzlement.
it is proposed first to inquire into the circum-
stances attending their issue. 1t is stated by
Mr.. Russell that, on the day he made his last
application for securities, Mr.. Bailey agreed to
furnish them on the condition that there should
be deposited with him, in their place, the ac-
ceptances of Gov. Floyd as Secretary of War.
Mr.. Russell, it would appear, had then on hand
S735 ,0OU Of acceptances, Seyenty-two thousand
of which were unconditional, and the balance
conditional and payable out of the earnings OF
Russell, Majors and Waddell for 1861. The
amount of the bonds he received on that and
previous occasions was eight hundred and sew
enty or eight hundred and seventy-two thous-
and dollars. There was therefore wanting to
make up the requisite sum Of securities, one
hundr ed and thirty-tive thousand dollars, and
we accordingly find that there is an accept
ance, bearing date Dec. 18th, for that precise
amount. When it is remembered that that is
the date of the last delivery of bonds, and OF
the receipt therefor, the inference seems una
yoidable that the acceptance was issued to
make up an ascertained deficiency, and that 1t
was anticipated that it would go into the pos
session Of Bailey. There are other facts that
should be stated in this connection. Mr.. Rus
sell fixes the probable earnings of his firm for
the year 1861 at from S500,000 to S600,0 900,
while Captain Van Vlet estimated them at
S4SS, 900 for 1860; and General Johnson says
in his testimony that for the present year they
will be about what they were in 1860, which
S540, 900, including payment made in
Washington by Captain Miller of little more
than SOS, 900. The conditional acceptances
given to Mr.. Bailey amount 10 S798,00O, or
S24S, 900 more than the maximum sum that
could have been earned by Messrs. Russell,
Majors and Waddell during that year, accord
ing to the estimates of the Department based
upon the earnings of the previous year. The
acceptances for the $79S 900 were the only
conditional ones issued, and these, together
with those for S72 900, issued unconditional
ly, must be regarded as a loss, as the Govern
ment will, doubtless, acknowledge the obliga-
tion 10 replace the bonds belonging to the In
dian trust fund; and there is little reason to
expect that Russell, Majors and W addell will
make return of what they have received.
1fyour committee could rest here and could
feel justified in expressing the belief that there
are no other outstanding liabilities, and that
no further demands would be made upon this
or any future Congress, in connection with
these extraordinary proceedings, they would
deem this occasion tor congratulation to the
House. But, unfortunately, there are transac-
tions Of similar character, but of still great
er magnitude, that claim your attention. In
1855, the Secretary of War, commenced the
issue of acceptances, and, at the same time,
wrote to various banks and individuals urging
and one from Col. Drinkard, Chief Clerk of the
War Department. to James T. Soutter, Esq,
president of the Bank of the Republic, will be
found included in the testimony taken in New
York. Copies of various other letters relating
to the same subject, obtained from the War
Department, accompany this report. Mr.. +.
2. James, of New York city, testified before
the committee, that Mr.. Soutter, to whom
reference has been alrerdy made, said to him
upon one occasion that he had a draft for S15,-
600, and with i: letter from the Secretary Of
War, stating that he had issued, or was about
to issue, acceptances in favor OF Russell, Ma
jors, and Waddel, but that at no time should
he issue those acceptanceS to exceed one-haif
of the amount which he knew, of his own knowl-
edge, was actually due to the parties for SER
vices alreadyiperformed. Dir. Soutter, on be-
ing called on to produce this communica-
ton, says that 'she had impression, and he
supposed it was derived from letter of Mr..
Floyd's, that the War Department issued ac-
ceptances to the extent only of one-half of the
amount that would become due to Russell.
Majors, and Waddell on work in process of ex-
ecution.' Although al examination ofthe let
ters received by the bank, and his own private
letters, failed to bring to light such a commu-
nication as he had expected to find, Mr.. Sout-
ter does not change his opinion, but concludes
that it was derived from the statements of some
persons whose names he cannot now recall.
These letters and representations arc impor-
taDt as showing the means adopted by the Sec
retary of War to get the paper he issued into
circulation.
OVER $4,000, 900 OF ACCEPTANCEs ISSUED.
In relation to the acceptances issued uncon
ditionally by the late Secretary of War, your
committee deem it their duty to state all the
facts they have been able to discover, as fully
as possible. They amount in the aggregate.
to the enormous sum of S6,179,195. Add
fhar hn UhJ Jnh
have already been thrown back upon the Gov
ernment through the agency of Mr.. Bailey,
and the sum total is Sc, ,977 ,395. This estl-
mate is based upon data furnished by the War
Department. 1t appears therefrom that ac-
ceptances to the amount OF S840, 900 were re-
turned TO the Department for cancellation. Mr..
Russell, however, claims to have returned
only 100000 or $3.50 900. He further states
that the acceptances which he did return were
those which had matured in his own pocket
and could not, therefore, be negotiated. But
this assertion is positively contradicted by the
endorsements on the returned acceptances,
and by the testimony of Mr.. Irwin, clerk IN
the War Department. From the careless and
irresponsible manner in which business was
transacted by that gentleman aud the late
Secretary of War, and from the fact that it
was the habit of Governor Floyd to issue ac-
ceptances at the Department at his house,
or at whatever place he happened to be, it is
g matter of great uncertainty whether or rot
the S840,000 should be deducted from the
sum heretofore stated. The probability is,
that when the acceptances were returned to
Governor Floyd by Mr.. Russell he accepted
others at the same tine for the same amount, OF
which there was registry made. 1t is deem
ed safest to proceed upon the suppostion that
the acceptances made in the place of those
returned were registered. Upon this hypothe-
sis, the $40 900 must be deducted from the
Sc ,I79, 1896 of unconditional acceptances made
and registered in the War Department This