Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1861-01-04
Heavy DefalcatfOn.

A large defalcation was discovered in the
Interior Department last week, through the
voluntary statement Of a Mr.. Bailey, one
of the parties implicated. E appears that
the Secretary of War had given acceptan-
ces to the amount Of $1,0o0,060, condi-
tional, upon Russell, Major & Co, for trans
porting the army supplies, according to
contract Bailey, of the Interior Depart
ment, with whom Russell was intimate,
loaned him $500, 900 worth Of bonds Of
the Indian Trust Fund, as security for rails
ing the money on these acceptances; but
when the stock became greatly deprecated,
the bankers in New York called for addi-
tional security, and Bailey advanced Rus
sell 100000 more Of the bonds. Bailey
made voluntary statement of the facts
yesterday to the Secretary Of the Interior.
On investigation, it appears that none but
Bailey and Russell are implicated in the
fraud.
W. IT. Russell has been arrested He
is one of the largest spectators and bust
ness men in the West. His family reside
at Lexington, Missouri, but his principal
place Of business, for several years past, has
been Leavenworth City, Kansas Territory
He has failed once or twice in his life, but
always recuperated by means of his indom-
liable energy
It appears from the facts in connection
with the late abstraction Of the bonds of the
Indian trust fund, that about FIVE months
ago, W. IT. Russell, Of the firm of Majors,
Russell and Waddell, held about one mil
lion dollars worth of the official acceptances
of the Secretary of War. These acceptan-
ces bad been given conditionally, in accord
ancc with the usual course of business, for
tie transportation of the supplies Of the
army under contract with the government
Mr. Russell, finding himself unable to
negotiate these acceptances, being greatly
embarrassed. pecuniariy, and ascertaining
from GODDARD Bailey, with whom he was
intimately acquainted, that the latter had
control of over $4,000, 900 of the Indian
trust funds, invested in bonds of the differ
ent States, arranged with him to let hila
have about $500, 900 worth of these bonds,
to be hypothetical in New York, and as Sc
curity for which ne gave the acceptances
of the War Department, which he placed
in the safe where the bonds were kept.
Recently these bonds have greatly de-
|preciated, and the bankers in New York,
who made the advances on them, therefore
called For additional security, when Bailey,
in order to save the bonds, delivered up
over $500, 900 worth of them additional, in
all about $3.50, 600 On the 18th inst,
he addressed letter to the Secretary ofthe
Interior, frankly imparting these facts, and
requesting an investigation. This letter he
gave to Senator, to be delivered to the
Secretary of the Interior, on his return from
North Carolina, which request was com~
piled with. Tae investigation proved the
truth of these statements.
Messrs. Suter, Lea Il Co. compose the
banking firm through which the negota-
ton was transacted. Nothing either in the
papers or in the investigation shows that
any parties excepting those Immediately
concerned in this business, as above rela-
lated, are in the slightest manner concerned
in the transaction 1t may be stated that
the acceptances of the Secretary of the War
Department have been given from time to
time, in compliance wiki contract with
Messrs. RUSSELL Majors and Co., and UNI
til recently that firm have had no difficulty
in negotiating them.
The special committee Of the House, to
which the investigation Of the subject is
referred, consists of Messrs. Morris, of Hi
nois. Conkling, Of New York, Bocock, Of
Virginia, Harris, Of Maryland, and Case,
OF Indiana.