Savannah morning news. [volume] (Savannah) 1868-1887, 1885-04-23
A MYSTERY EXPLAINED.
Alleged Discovery of the Secret of the
Confederate Bond Craze.
Frona Ia oAarleston Ns.rs and CoNrier.


enigma of this decade has been the motive
of inducing the demand in England for
certain Confederate bonds. Conjectures
have been numerous, but none pointed to
a logical reason for the fact @hat worth
less Confederate obligations, which had
for fifteen years filed dusty chests and
trunks i'll Europe and in the South, sud-
denly commanded FROM close-mouthed
spectators a price eQualling several
percentum of their par value. Prepos-
ferrous stories as to the cause of the de-
mand have been circulated only to leave
the public unsatisfed and curious for a
logical solution Of the problem. There
has been no explanation of the reason for
the cessation of the demand, and the
ultimate disposition of the bonds pur-
chased and sent to London has not been
authoritatively announced. After vast
deal of inquiry and conjecture the mat
ter remains as it began-a tantalizing
mystery.
Chance has Just afforded me an eXplana-
ton of the whole business-an eXplana-
ton which l can announce with conf
dence, because it is complete and logical
and consistent with every phase of the
bond speculation, but chiefly because
it comes authoratively from one of the
few men in the United States who have
been from the first cQgniZant OF the facts
and of the meaning OF the so-called
''craZe.D He has been closely con-
nected with the bond operations, but
now that they have been completed he
gives me the facts, with the understand
ing that his name be withheld from pub
LEGATION. Judah p. Benjamin, Secretary
of State of the COnfederacy from 1852 I'M
til its collapse, WAS the originator OF the
plan by which a demand was created for
the bonds, and to his shTewdness is at
tributable the complete success OF the
project.
To begin at the beginning: Several de-
partments of the Confederate Govern
ment-such as the ordnance, quarter
masters and medical purveyOr'
special funds deposited with European
bankers for the purchase of supplies
which could only be obtained in Europe.
This was well known, and the members
of these departments and their agents
were also known, so that when the United
States Government succeeded to the
assets of the Confederacy the rem
nants of these funds were sUrren-
dered to it by those who held
them. There was one fund, how
ever, which escaped surrender because of
the mystery envelOping il. and this was
the secret service fund of the Confederate
Department OF State. At different times
the Confederate Congress, in secret ses-
sion, voted large sums for secret service,
the intention being, of course, to apply
this money in foreign countries so as to
aid the COnfederacy and embarrass its
adversary. The fund was used to intlu-
ence officials of other governments in
some degree to aid the State De-
partment in its efforts to secure recog-
milton for the Confederate States. and oc-
casiOnally to assist other departments by
smoothing the way for purchases which
were difficult. The members of the Sc
cret service were not known to the public
l have been shown list of the principal
ones. but am not permitted to print it.
Several were very prominent men identi-
fed with Confederate diplomacy, and
bore high characters. Others had never
heard of before. London and Paris were
the chief points of secret service activity.
There was an agent at Browns
vile, Tex, on the Mexican border.
The principal deposits of secret service
money were in London and Paris banks.
The funds were placed to the credit of
citizens of Great Britain and France
who were friendly to the South. The I'M
Outstanding with them was that they
would assume no responsibility, but
would honor drafts to the extent of the
money in bank. At the close of the war
there were large unexpended balances of
secret service money to the credit of these
parties. There was one account
of 100000, which seems to have
was charged 9242,000 sterling. The
balances of different deposits at the close
of the war were as follows: One of less
than 800 pounds, one of 100000 pounds,
one of $4,000 pounds, and one of 500
pounds. Then there was one of $1,000,
one of 100000, one Of $45S, 200, and huge
one OF $3,719,000. The total balance due
the Confederate Government at the time
of its fall was about So, 0SO000.
The men who had this money deposited
in their names were honest. They did
not make way with the assets of the dead
Confederacy, but they were puzzled to
know what to do with them. Mr.. Benja-
min, as Secretary of State of the Confed-
eracy, knew these agents, and during his
residence in England consulted with them
as to the disposition of the money. 1t
was agreed that it should not be surren-
dered to the United States. The question
was then, how to disburse the money so
as best to benefit those entitled to il. It
was concluded that the people who had
given their means TO the COnfedefacv for
its bonds were entitled to these the Con-
federacy's) assets.
The aggregate of the funds was ascer-
tanned, and a calculation was made as TO
how far it would 20 in paying the interest
on the bonds, because, of course, 10 was
Improbable TO declare dividend on the
principal. Publicity was to be avoided.
Secrecy was Indispensable. IL was de-
cided 20 pay off the unhonored coupons,
beginning with those last due by the Con-
federacy during its existence. These
were the coupons falling due Jan. /, 1865.
Then the balance was N be applied TO the
payment OF the next coupons falling due.
The bonds were advertised for. To cover
the real object Of the movement it
was limited that the bonds We're 10 be held
by spectators, and that suit was TO be
instituted against the United States for
their payment. This amusing idea gained
great prevalence. The bonds We're resdi-
ly obtained, and all Of the January, 1865,
coupons were paid, simply by the pur-
chase Of the bonds for the amount Of these
coupons and their subsequent destruc-
tion. The remainder OF the fund was alb
sorbed by the partial payment Of the cou-
pons next due, in the order Of their pre-
sentati0n. Very few Of the men who dealt
In the bonds knew what was the object
Of the purchase. The circle managing
the scheme was quite small. Mr.. Benja-
MINIS master mind conceived 10 and
secured its fulfllmept. He handled none
Of the money and none was paid 30 his
order. Nobody In the secret made money
out OF It. The purpose was simply 10 re- !