36TH CONGRESS, l HOUSE OF REPRESENTATIVES. I REPORT
2d Session.                                           No. 78.
ABSTRACTED INDIAN TRUST BONDS.
FEBRUARY 12, 1861. —Laid upon the table, and ordered to lbe printed.
Mr. ISAAC N. MORRIS, from the select committee, submitted the
following
REPORT.
The select committee, to whom was referred the resolution of the House,
adopted on the 24th day of December last, directing them to inquire
into and report the facts in relation to the fraudulent abstraction of
certain bonds, held by the government in trust for the Indian tribes,
from the Department of the Interior; and to whom were also referred
the communication of Hon. John B. Floyd, late Secretary of War,
and the letter of Hon. Robert ZIMcflelland, late Secretary of the Interior, beg leave, respectfdully, to report:
That, upon the day of their appointment, they repaired to the Interior Department and held an interview with Hon. Jacob Thompson,
then Secretary of said department, and expressed to him their desire
to enter upon the duty assigned them, at as early a period as would
comport with his convenience, and be consistent with the public
interest. Three days thereafter, and as soon as they were authorized
to employ a stenographer, your committee organized, and have labored
to bring their investigation to an early termination, with a diligence
that has been quickened by an appreciation of the grave character of
the subject committed to them, and of the interest felt by the House
and the country in its remarkable details.
It soon became evident that the mere abstraction of certain bonds
from the Interior Department-a fact easily ascertained, and, indeed,
admitted by the person who took them-was an incident of minor
importance in comparison with the transactions preceding and connected with that act, and your committee therefore considered it incumbent upon them to trace as accurately and thoroughly as possible,
through the tortuous windings of vast and complicated interests, and
extensive, though concealed, ramifications, the motives and purposes
and deeds of those who have been the parties to a daring and unprecedented fraud upon one of the departments of the government. In
view of the magnitude of the offence and the great loss involved, they
have regarded themselves fully justified in pushing the investigation
to the furthest limit of the authority vested in them. The want of




2             ABSTRACTED INDIAN TRUST BONDS.
time, rather than the lack of zeal, has prevented them from obtaining
all the information they desired; yet enough has been ascertained to
satisfy, in their opinion, the material inquiries with which they were
charged.by the House, as they think will appear from a succinct
account of the evidence that has been adduced before them.
THE INDIAN TRUST BONDS.
By reference to the abstract marked "A," herewith transmitted,
it will be seen that the government still-holds State bonds and certificates and United States stocks for certain Indian tribes, to the amount
of $2,525,241 82. These bonds, as well as the eight hundred and
seventy abstracted, and one Indian bond handed to Hon.. G. N. Fitch,
and not returned by him to the department, for reasons assigned in
his correspondence with Godard Bailey, were purchased from time to
time by authority of law with the money of the Indians arising from
treaty stipulations. Originally, they were in charge of the Indian
bureau, while that bureau was connected with the Department of
War, and remained in its custody after it became one of the bureaus
of the Interior Department in 1849, and prom that time up to 1857.
In that year the custody of the securities was transferred to the Secretary of the Interior. The government, having the bonds in its possession, was the trustee for tht Indians, who were the actual owners
of them; and presuming that its agents have exercised ordinary diligence and care as their custodians, the question arises as to the
extent of its liability for their loss.
Your committee do not, however, propose to pursue that inquiry,
as they cannot doubt that a great and magnanimous government will
not permit those who have committed themselves to its protection to
be robbed by its officers or employes, without making prompt and
ample compensation. Yet the disregard of these fiduciary obligations
would seem to aggravate the turpitude of the offender whose felonious
hand could rifle so sacred a trust. Such an act furnishes most melancholy evidence of the decay of public virtue, and will remain a blot
upon our history, and an indication of our downward career. In this
respect it matters but little who was the transgressor. The tact of
the commission of the act, at a moment when we thought we had reason to boast of our good faith and integrity, will remain fixed in the
public mind, and be remembered as a dark offence when its guilty perpetrators have been long forgotten.
THIE MANNER OF KEEPING THE BONDS.
Under previous administrations the bonds were placed in the immediate charge of some clerk, selected for his integrity and capacity,
who kept them in a safe in the Indian office. No stamp or other mark
of designation was placed upon any of them, with the exception of a
small portion, and the only safeguard the government had was the
faithfulness and honesty of the person intrusted with their keeping.
So careless a mode of transacting the public business and administering a trust so delicate and important astounds us by the magnitude




ABSTRACTED INDIAN TRUST BONDS.                3
of its folly. Neither the Commissioner of Indian Affairs nor the Secretary of the Interior ever counted the bonds in person, and the only
information that either of them could have possessed touching their
safety was the payment of the coupons every six months, and such
examinations as they occasionally choseto order to be made by others.
Fortunately for the government, howevere, no loss was sustained during
previous administrations; nor is there the slightest ground to believe
that Hon. Robert McClelland, of Michigan, former Secretary of the
Interior, whose supervision of the trust while it remained in the Indian
office has been called in question, and whose letter was referred to your
committee, acted at any time or in any way unfaithful to it. On the
contrary, the evidence of Mr. Henry Beard entirely exonerates him
from any blame, further than the expression already made by the committee of their opinion of the mode in which the business was generally managed.
Your committee v ill not pause to inquire which Secretary exercised
the greatest watchfulness and care; for it is:not within their province
to institute such an investigation. Those desirous of further information
upon that point can obtain it from the records of the Interior Department.
Still, they deem it but just;' e to add that they have discovered nothing
to involve the late Secretary, HIon. Jacob Thompson, in the slightest
degree in the fraud, and nothing sto indicate that he had any complicity in the abstraction, or that he aad any knowledge of it until
the time of the disclosure by Goda td Bailey. Soon after he entered
upon the duties of his office, at the commencement of the present
administration, he appointed two additional disbursing clerks for his
department, one of whom was Mr. Bailey, who was placed in charge
of the Indian trust bonds. His letter of appointment, signed by J.
Thompson, Secretary, bears date July 1, 1857, and, among other
things, says: "Under this appointment I desire particularly that
you should take charge of the stocks held in trust by the head of the
department for the benefit of the Indians, collect the interest thereon
as it may become due, and see that the same is properly paid into the
public treasury." A bond was required of him, which he subsequently executed, in the penal sum of $5,000, with Benjamin McCollough, of Texas, and William C. Corrier, of Charleston, South Carolina, as securities. This bond was acknowledged before Moses Kelly,
justice of the peace, and its sufficiency certified to by Philip Barton
Key, United States district attorney. It was then approved by J.
Thompson.  Copies of the appointment and bond will be found
among the accompanying -documents. The evidence shows that Mr.
Bailey came to Washington a bankrupt in fortune, and a political.
adventurer seeking office. E[e brought with him, however, the highest testimonials of confidence and respect from various distinguished
men in Alabama, where he lived, and in South Carolina, where he
was born, and had previously resided. Being a man of acknowledged
talents, with these evidences of capacity and respectability, we are not
surprised that the Secretary of the Interior reposed confidence in him.
While he should, perhaps, have exercised a more watchful guardianship over the stocks, and the movements of his subordinate, it cannot




4             ABSTRACTED INDIAN TRUST BONDS.
be inferred that he was intentionally negligent of his duty. Any
other public functionary might have been deceived in the same way.
THE ABSTRACTED BONDS.
All the stocks, including those that were abstracted, were kept in
a room in the Interior Department occupied by MIr. Bailey, in a
safe, the key of which was in his sole possession. The accompanying
extract, marked "B," will show the character and respective amounts
of the abstracted bonds, as well as the States by which they were
issued, except in this-that the whole amount, as shown by said abstract, is eight hundred and seventy-two, of $1,000 each, when, in
fact, Mr. Bailey delivered to Mr. William H. Russell eight hundred
and seventy only. One of the other two is accounted for by the correspondence between Mr. Fitch and Mr. Bailey, already referred to.
The reason why the remaining one is embraced in the abstract, and
was included in the published list, is explained by the evidence of Mr.
Henry Beard, the faithful custodian of the bonds under Secretary
McClelland.
Mr. Beard says, " in the advertisement, eight hundred and seventyone bonds were embraced. The Indian bond handed to Mr. Fitch, as
stated, was not embraced. It occurred in this way: It needed only
one hundred and forty-three Tennessee bonds to complete the eight
hundred and seventy missing; but our office book, or list of bonds, as
prepared by Bailey, indicated one hundred and forty-four as missing.
The Secretary directed us to include all the one hundred and fortyfour, as at that time some uncertainty was felt whether there might
not be more than eight hundred and seventy missing. The advertisement was prepared in haste, and before the full investigation by MIr.
Lammond, Mr. Williamson, and myself was completed."
To avoid the inconvenience of referring to abstract " B," your committee will state that ninety-nine of these bonds were issued by the
State of Missouri for the St. Louis and Iron Mountain railroad; ninety
by the same State for the Hannibal and St. Joseph road; one hundred
and thirty for the North Missouri road; fifty-one for the Missouri
Pacific road; seventy-two by the State of North Carolina, dated January, 1856; one hundred and four by the same State, dated July,
1857; one hundred and nineteen by the same State, dated January,
1857; forty-five by the same State, dated October, 1856; two by the
same State, dated April, 1857; fifteen by the same State, dated October, 1857; fourteen by the State of Tennessee, dated January, 1852;
five by the same State, dated January, 1854; ten by the same State,
dated January, 1855; forty by the same State, dated January, 1856;
and seventy-five by the same State, dated January, 1857.
Some difficulty occurred in the identification of the North Carolina
bonds. Several witnesses stated that they held bonds whose numbers
corresponded with those given in a printed list, and as they had been
held by themselves, or those from whom they obtained them, long
before those in the Interior Department were abstracted, they inferred
that the list was incorrect. The solution of the difficulty or misunderstanding may be found in this: the State of North Carolina issued




ABSTRACTED INDIAN TRUST BONDS.                5
bonds to aid in various enterprises, and these were divided into classes,
each class bearing a different date, yet having a precisely similar
series of numbers. A party might, therefore, hold a bond whose
number corresponded with a number on the printed list, but the bonds
would not be identical, because belonging to separate classes, designated by different dates. There seems to have been no cause for
similar mistakes in reference to the bonds issued by other States.
NEGOTIATIONS BETWEEN MR. RUSSELL AND MR. BAILEY.
William H. Russell is the head of the house of Russell, Majors &
Waddell, a firm widely known as contractors with the War Department for transporting army provisions over the western and( southwestern plains. Mr. Russell stated to the committee that he had
heard in New York of such a man as Mir. Bailey, although he did
not exactly remember his name, who had been in that city to sell
Chiriqui securities and Florida bonds, the latter for Mr. Yulee, a
senator from that State. When asked from whom he received his
information, he gave the answer usually resorted to in such cases,
namely: he could not remember. The next heard of Mr. Russell is,
that he is on his way from New York to Washington, in company
with Luke Lea, esq., a banker in the latter city. Mr. Lea was formerly Commissioner of Indian Affairs, and is a partner of Mir. Russell
in the banking business at Leavenworth, Kansas.
In a conversation that ensued between them, 3Mr. Russell made
known to Mr. Lea his embarrassed circumstances, and asked if he
(Mr. Lea) did not know of some one that could assist him, (Mr. Russell.) Mr. Lea answered in the negative. He states in his testimony
that AMr. Russell suggested that he had heard of a man in Washington, by the name of Bailor or Bartey, who was a relation of Governor
Floyd, and an agent for the negotiation or sale of stocks, and asked
his friend if he knew him. Mr. Lea was again compelled to give a
negative reply, but stated that he knew a man there by the name of'
Bailey; and Mr. Russell said that he supposed he was the man of
whom he was in search.
It is very evident, from Mr. Lea's examination, that he was both
an artful and unwilling witness. He had to be pressed with great
pertinacity to induce him to disclose what he knew, and even then
his answers were so interspersed with irrelevant and equivocal remarks,
designed to relieve him from suspicion of complicity, that your committee are compelled reluctantly to notice the absence of the candor
and frankness that they might reasonably expect to find in his responses.
He was compelled, however, to say that he informed Mr. Russell that
Mr. ]ailey was in no condition to assist him; that he had no stocks
or money, "and was as poor as anybody."  Before separating, 3Mr.
Russell, seeming still to believe that aid might be obtained in the
quarter indicated, requested Mr. Lea to see Mr. Bailey in regard to
the matter. Mr. Lea complied with this request, and stated to Mr.
Bailey that IMr. Russell had said, unless assistance was rendered, the
acceptances of Governor Floyd would be protested, and he would be
compelled to retire from the cabinet, Mr. Lea is, however, careful




6             ABSTRACTED INDIAN TRUST BONDS.
to state in his evidence that he gave no intimation to Mr. Bailey that
he might use the stocks he had in his charge belonging to the Indian
trust fund. Mr. C. G. Wagner, who is nearly related to Mr. Bailey,
and in whose hands was first placed his confession, states, in his evidence, given, your/committee are pleased to say, with full and honorable frankness, that he learned from Mr. Bailey that Mr. Lea did
mention the stocks in the conversation between them. And, indeed,
this would naturally be inferred, from the fact that Mr. Lea was perfectly familiar with the business of the department, and knew that
Mr. Bailey had the stocks in charge, and4had no large command of
private means. Mr. Lea admits that after the delivery of the first
instalment of bonds to Mr. Russell, he knew that Mr. Russell and Mr.
Bailey were engaged in rifling the Indian trust safe; that they so
confessed to him; that he had conversations with them on the subject,
and that he endeavored to dissuade them from further commissions of
the crime.
He also states that he refrained from informing the Secretary of the
Interior of the transactions referred to, and that he exacted the most
solemn pledges from his two friends that his name should never be
publicly known in connexion with the business. But his precautions
have not availed to afford him entire exemption from responsibility in
connexion with the transactions your committee have inquired into.
Mr. Lea did not introduce Mr. Bailey to Mr. Russell, nor does he
state that he appointed for them a place of meeting; yet it happened
that these two persons did meet at the War Department on the same
day that the interview between Mr. Lea and Mr. Bailey occurred.
Mr. Russell says this was between the 12th and 15th days of last
July. It was probably on the 13th day of that month. The chief
clerk of the War Department, Secretary Floyd's most intimate friend,
Colonel W. R. Drinkard, was the medium through whom the introduction took place. On that day they had their first interview at the
War Department. Colonel Drinkard, as shown by his own evidence,
impressed Mr. Bailey with the belief that Mr. Russell was a gentleman of great respectability and pecuniary resources, and that if the
acceptances of the Secretary of' War were allowed to go to protest, he (the Secretary) would be greatly annoyed and disturbed.
Messrs. Russell and Bailey held a private interview in the third story
of the department, and within a few hours thereafter Mr. Bailey
delivered to Mr. Russell $150,000 of bonds, at the room of the latter
person, in Washington city, and on the same evening the recipient
returned with them to New York. Mr. Russell states that he left
with Mr. Bailey the note of Russell, Majors & Waddell in their stead
as security. Ninety of these one hundred and fifty bonds were Missouris, and the rest Tennessees. Mr. Russell does not recollect, at
first, whether or not the January coupons were on the bonds, but
states that subsequently the most of the bonds were retired by him,
in order to obtain those coupons to return to Mr. Bailey, as he (Bailey)
was positive in his request to have them  returned. These coupons
having been taken off, the bonds were afterwards disposed of. The
object was, of course, to conceal the fraud; for if the coupons were on




ABSTRACTED INDIAN TRUST BONDS.                7
hand, it was not probable that the bonds would be demanded or
inquired for.
According to the statement of Mr. Russell, there was no further
correspondence or communication between Mr. Bailey and himself
until the September following. At that time he returned to Washington for the purpose of obtaining others. An interview was held
with Mr. Bailey, the result of which was that three hundred and
eighty-seven bonds, in addition to those first taken, were transferred
to Mr. Russell on the following day. The protection of the honor of
Secretary Floyd, the necessity of providing for the other acceptances
and the bonds previously delivered, and which were alleged to have
been hypothecated, were assigned as the reasons for requiring further
assistance. In this, as in the first instance, the paper of Russell,
Majors & Waddell was left as security. Mr. Russell states that at
this conference Mr. Bailey -first informed him that the bonds in his
possession belonged to the Indian trust fund. It was the agreement
that the bonds first taken should be returned within ninety days, but
at the second interview the time was extended to the 4th of March,
1861.
In October MiNr. Russell returned South Carolina and Florida bonds,
which he had previously received, one hundred and forty or fifty in
number, having ascertained that he could not negotiate them, and
North Carolina bonds were substituted in their stead. Mr. Russell
again appeared in Washington in December following, and on the
grounds so successfully relied upon before, namely: the protection of
the War Department from disgrace, and the bonds previously taken
from sacrifice, he was efabled to obtain from Mr. Bailey three hundred and thirty-three bonds, as an additional advance, making the
entire number abstracted eight hundred and seventy. From the bonds
obtained on the second and third occasions, already referred to, it is
evident the January coupons were cut off, as a precaution against detection.  Nine Tennessee coupons, belonging to other bonds than
those abstracted, were returned by Mr. Russell, doubtless because the
abstracted bonds had passed beyond his reach.  The transaction last
referred to appears to have closed the business relations of these two
persons, so far, at least, as they related to the abstraction of bonds.
MR. BAILEY'S MOTIVES FOR TAKING THE BONDS.
Why Mr. Bailey abstracted the bonds is a question to which your
committee can present no satisfactory answer. As he and Mr. Russell
were entire strangers previous to their meeting at the War Department, neither the obligations of friendship nor the suggestions of
kindly feeling seem to have prompted the act. Mr. Russell insists
that no money or other valuable consideration ever passed to Mr. Bailey, or, indeed, was ever mentioned in their interviews. Mr. Bailey
confirms this statement in various communications which have reached
your committee. It is not ascertained, either, that Mr. Bailey came
suddenly into the possession of any large amounts of money. His
bank account was kept with Messrs. Riggs & Co., of Washington
city, and Mr. Riggs testifies that between July and the 13th of De



8             ABSTRACTED INDIAN TRUST BONDS.
cember, his deposits increased largely over former ones; but amounted
in the aggregate to not more than five or six thousand dollars. It is
true that this sum is a large one, to be in the possession of a person
whose salary was but $2,000 per annum, and who was supporting a
family; yet it would not, of itself, constitute a ground for grave suspicion, or afford a clue to the discovery of the purposes of the abstractor.
Mr. Bailey, in his conversations with various witnesses, stated that
his design was to protect the character of Governor Floyd, and to
save him from the dishonor and retirement from the cabinet that
would be necessarily incident to the protest and discovery of the acceptances which had been illegally issued to the firm of Russell, Majors & Waddell. Whether this consideration was the sole motive of
his conduct, it is left to the House to determine. Your committee
are, however, constrained to express the conviction that behind the
events that have been made conspicuous, and beneath the exterior of
the transactions that have been described, is a purpose which, although
successfully hidden, was none the less powerful and efficient, and has
given unity and vitality to the schemes now partially exposed.
MR. BAILEY S CONFESSION.
A part of the evidence adduced is a communication from Mr.
Bailey, dated December 1, 1860, and addressed to Hon. Jacob Thompson, Secretary of the Interior, containing a statement that a portion of the bonds constituting the Indian trust fund, amounting to
$870,000, were no longer in his possession. This confession was, on
the 13th of December, placed in the hands of Mr. Wagner, with the
request that it should be delivered to the Secretary of the Interior five
days before the expiration of his term of office; or, as Mr. Wagner
understood it, five days before the 4th of March. On the 20th of the
same month Mr. Bailey addressed a note to Mr. Wagner, requesting
that the note previously committed to him (Mr. Wagner) should be
given to the Secretary of the Interior immediately upon his return
from North Carolina. Mr. Thompson arrived on the afternoon of the
22d of December.
On the evening of that day the acceptances issued by the War
Department, and the receipt given for the bonds by Mr. Russell, were
handed to Mr. Thompson, at the office of the President, in the
Executive mansion, by Hon. H. M. Rice, United States senator from
Minnesota. No earlier intimation of the abstraction had reached Mr.
Thompson. Your committee not designing to examine Mr. Bailey as
a witness, the chairman addressed to Mr. Rice a note, and politely
requested his attendance. To this he replied that he would answer
any question that might be propounded to him in writing. Seeing
that he stood so pertinaciously on his privilege as a senator, it was
not thought consistent with the duty of the committee or dignity of
the House to press any further inquiries, unless the House shall so
order.
Had the original intention of withholding from the Secretary all
knowledge of the fraud until within a few days of the 4th of March




ABSTRACTED INDIAN TRUST BONDS.                9
been carried out, the confusion incident to a change of administrative
officers would have prevented prompt investigation, and deprived Mr.
Thompson of the means of immediate defence.
Mr. Bailey, in the exercise of forethought prudent to avoid detection,
made up his stock account for the current year, showing on its face
that all the bonds were safely in his custody, and had caused its
presentation to the Second Auditor, Mr. Fuller. That officer refused
to approve it for the reason that the coupon account, designed to be a
check upon it, did not accompany it. It is, perhaps, to this refusal
that may in part be attributed the early disclosure of the fraud.
It will be observed that, while Mr. Bailey's statement is dated
December 1, 1860, and embraces the entire number of bonds, and
fixes the month of July as the time at which he intrusted them to
other parties, the testimony of Mr. Russell shows that they were not
all delivered at one time, but that three hundred and thirty-three
were transferred to him on the 13th of December —nearly two weeks
subsequent to the date of Mr. Bailey's confession. The only satisfactory explanation that can be given of this noticeable discrepancy
is the supposition that the statement was actually prepared on the
day it was given to Mr. Wagner, and the day the last bonds were
delivered to Mr. Russell, and dated wrongfully " December 1," to
allay any suspicion that might be excited if it were seen that the date
of the abstraction was identical with the date of the last acceptance
which was issued by the War Department, for the purpose, as your
committee think, of making up a definite amount of securities.
TIE DISPOSITION OF THE BONDS.
As soon as the abstraction of the bonds was made known to the
Secretary of the Interior, he applied himself diligently to discover
with whom they were lodged, that proceedings might be instituted
for their recovery. Moses Kelly, esq., his chief clerk, was despatched
to New York, and he there caused writs of injunction to be served
upon a few parties, in whose possession he had reason to believe some
of the bonds to be. But ascertaining this mode of obtaining the desired information to be both slow and unsatisfactory, Mr. Thompson
advised that your committee should hold some of its sessions in the
city of New York. Being desirous of expediting the investigation,
and of avoidingthe heavy expense that would be incident to the summoning of a large number of witnesses from that city, your committee
concurred in the propriety of this suggestion; and having asked for
and obtained leave to sit in such places as they believed the public
interest required, proceeded, at considerable inconvenience, to New
York.
From the testimony there procured, it was apparent that the bonds
had been disposed of by Mr. Russell and his agent, and that Mr. Russell did not have it in his power to restore any of them. A limited
number were traced into the possession of certain individuals and corporations, as follows:




10             ABSTRACTED INDIAN TRUST BONDS
Merchants' Benevolent Association, New York city, (witness, Hector Morrison,) Missouris...............................  $1,000
Meigs &  Greenleaf, for account of C. W. Purrel & Co.,
Richmond, Va., (witness, C. A. Meigs,) Missouris.........  10,000
Mitchell, Schenectady, N. Y., from one to three, State not
mentioned, (Meigs witness).............................    2,000
Sanders, Haydensville, Mass., one to three, State not given,
(Meigs witness)......................................................  2,000
James G. King & Sons, New York city, (J. G. King witness,) Missouris..........................................  10,000
Clark, Dodge & Co., New York city, (witness, L. C. Clark).    2,000
Captain Porter, New York city, (Matthew Morgan witness).    2,000
Jerome Fitzhugh & Co., New York city, purchased with
knowledge of their character, (J. H. Garland witness)....   10,000
W. T. Coleman & Co., New York city, (Coleman witness)..  50,000
George Smith, Chicago, (A. Campbell witness)...............   21,000
Thomas Swann, Baltimore, (William McKim witness)......   10,000
R. D. Gaither, Baltimore, (W. Fisher witness).............:.   3,000
B. Atkinson, Baltimore, (W. Fisher witness)..................   1,000
Townshend Scott, Baltimore, (W. Fisher witness)...........    5,000
Lowndes, Thompson & Co., Baltimore, (Martin Lewis witness).................................................................... 5000
134,000
A  few other bonds were ascertained to have been purchased by
Riggs & Co., bankers of Washington, for other parties, and by other
individuals, which are not included in the above statement.
At an early stage of our proceedings, and before the examination
of any witnesses, your committee designated two of their number, the
chairman and Hon. Mr. Thomas, to consult with Robert Ould, esq.,
United States district, attorney for the District of Columbia, in reference to the abstraction of the bonds, and the legal questions connected
therewith. That officer advised that the testimony of both Mr. Bailey
and Mr. Russell should be taken.
An important witness, Jerome B. Simpson, who would be found in
New York, it was expected, could not be obtained. He had acted in
that city as the confidential business agent of Russell, Majors & Waddell, and knew, it was believed, all the details of their business transactions with the government, and of the abstraction of the bonds.
The most active and diligent search for him proved unavailing. As
none of his acquaintances remember to have seen him since about the
day following Mr. Russell's arrest, and as no trace of him  has yet
been discovered, it is evident that he absconded or concealed himself
to avoid the responsibility of his acts, and an appearance before the
committee or the courts.
In view of this circumstance, and of the advice given by the district
attorney, and under the belief that, unless a full statement could be
obtained from some one immediately connected with the transaction,
no satisfactory report could be made of "'the facts in relation to the said




ABSTRACTED INDIAN TRUST BONDS.               11
fraud," as was required by the resolution of the House, it was determined to afford Mr. Russell an opportunity of appearing before the
committee. Previous to his appearance, it had been decided to leave
it optional with himself to answer or not as he might elect. This purpose will plainly appear from the following extract from the record of
the proceedings.
"MONDAY, January 14, 1861.
"William H. Russell appeared.
" The CHAIRMAN. Mr. Russell, your counsel have doubtless apprised
you of your rights. You are under a criminal prosecution, and I
deem it my duty to state to you that the committee do not propose to
require of you to answer any questions. If you choose voluntarily to
do so, you can; but if you do not prefer to do it, as indicated to you,
you can withhold your answer.
" Mr. RUSSELL. I am anxious to make a full statement in regard to
the bonds. I claim to be an honest man, and would prefer to make
out a statement of the whole transaction in writing, and have you
spread it at length on your record. I ask that as a favor from the
committee. I am under a criminal prosecution, and think it due to
me that I should be permitted to make a full statement, although I do
not fear the result of the criminal prosecution. If the committee prefers the statement made verbally, I will make it in that way; but I
should like to make it in writing."
M r. Russell was then sworn, but after a few questions had been proposed, he again expressed a desire to submit a written statement, and
leave was accordingly granted. On the 18th of January he was again
before the committee, and presented a statement (which will be found
among the accompanying papers herewith submitted) prepared, as he
stated before the committee, by his attorneys, "the night after he
asked permission" of the committee.
Various interrogatories were proposed, which were promptly and
freely answered. But when asked, " Did you ever, directly or indirectly, give to any person any consideration, or make to any person any
present for services rendered to you connected with your business
with the War Department?"  Mr. Russell declined to respond before
consulting with his counsel.
Upon this suggestion the examination was at once suspended.
On the 23d of January he again appeared, and was reminded of
what had been said to him on a previous occasion, and more fully
admonished that he was not required to answer any questions. He
was also advised that his examination would be waived, if he desired
it, in whole or in part, and that, if he so elected, his evidence already
given would be expunged. The act of Congress, approved January
24, 1857, entitled " An act more effectually to enforce the attendance
of witnesses on the summons of either house of Congress, and to
compel them to discover testimony," was shown to Mr. Russell;
and after reading it, he requested further time to advise with his
counsel. Before leaving the committee-room, however, he stated, in
reply to a question, that he understood the statute, and that it had




12            ABSTRACTED INDIAN TRUST BONDS.
been explained to him previously to his appearing before the committee.
On the 25th Mr. Russell presented to the committee a paper, prepared, he states, as an answer to the question that had been previously
proposed to him, and requested that it should be placed upon the
record.  He left it with the committee, and no further questions
were proposed. This instrument, though not properly belonging to
the record of our proceedings, is transmitted to the House for its inspection as one of the accompanying papers. On examination, it
will be found to be not an answer to the question that had been asked
as introductory to more important ones, but an elaborate effort made
by Mr. Russell, with technical adroitness and legal acumen, to avail
himself of the act of Congress before referred to, and to interpose it
as a shield between himself' and the consequences of his deeds.
Nearly all the material statements therein contained are wholly incorrect. It is not true, as he alleges, " that he was not permitted by
law to refuse to testify to any fact" within the scope of our inquiries.
Neither is it true " that he was required to testify." He testified
of his own free will, and was not "' compelled," as declared by the
title of the act, " to discover testimony," nor was he " required,"
as expressed in the body of the law, to give his evidence. Your committee, therefore, while they are constrained to consider the course
adopted by Mr. Russell as a confession of his moral guilt, do not
deem it within their province to anticipate or prejudge a question of
law which may arise in legal prosecutions.
THE ACCEPTANCES ISSUED BY THE SECRETARY OF WAR.
WThen the iniquitous act perpetrated by one of the subordinate officers of the Interior Department in the abstraction of bonds was made
known, it was discovered at the same time that acceptances, unauthorized by law, and deceptive and fraudulent in their character, had been
issued by the Secretary of War in favor of Messrs. Russell, Majors
& Waddell. As a portion of these are inseparably connected with
the history of the bond embezzlement, it is proposed first to inquire
into the circumstances attending their issue.
It 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
acceptances of Governor Floyd, as Secretary of War. Mr. Russell, it
would appear, had then on hand $735,000 of acceptances, $72,000 of
which were unconditional, and the balance conditional, and payable
out of the earnings of Russell, Majors & Waddell for 1861. [Copies
of the acceptances will be found embraced in the testimony of Hon.
Jacob Thompson.] The amount of the bonds he received on that and
previous occasions was eight hundred and seventy, or $870,000. There
was therefore wanting, to make up the requisite sum of securities,
$135,000; and we accordingly find that there is an acceptance, bearing
date December 13, for that precise amount. When it is remembered
that that is the date of the last delivery of bonds, and of the receipt
therefore the inference seems unavoidable that the acceptance was




ABSTRACTED INDIAN TRUST BONDS.               13
issued to make up an ascertained deficiency, and that it was anticipated
that it would go into the possession of Bailey.
There are other facts that should be stated in this connexion. Mr.
Russell fixes the probable earnings of his firm, for the year 1861, at
from $500,000 to $600,000, while Captain Van Vliet estimated them
at $488,000 for 1860; and General Johnson says, in his testimony,
that, for the present year, they will be about what they were in 1860,
which was $540,000, including a payment made in Washington, by
Captain Miller, of a little more than $69,000. The conditional acceptances given to Mr. Bailey amount to $798,000, or $248,000 more
than the maximum sum that could have been earned by Messrs. Russell, Majors & Waddell during that year, according to the estimates
of the department, based upon the earnings of the previous year. The
acceptances for the $798,000 were the only conditional ones issued,
and these, together with those for $72,000, issued unconditionally,
must be regarded as a loss, as the government will, doubtless, acknowledge the obligation to replace the bonds belonging to the Indian
trust fund; and there is little reason to expect that Russell, Majors &
Waddell will make a return of what they have received.
If your 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 connexion with these extraordinary proceedings, they would deem
this an occasion for congratulation to the House. But, unfortunately,
there are transactions of a similar character, but of a still greater
magnitude, that claim your attention.
In 1858 the Secretary of War commenced the issue of acceptances,
and, at the same time, wrote to various banks and individuals urging
their purchase or discount. One of his letters, and one from Colonel
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. F. P. James, of New York city, testified
before the committee that Mr. Soutter, to whom reference has been
already made, said to him upon one occasion that he had a draft for
$15,000, and with it a letter from the Secretary of War, stating that
he had issued, or was about to issue, acceptances in favor of Russell,
Majors & Waddell, but that at no time should he issue those acceptances to exceed one-half of the amount which he knew, of his own
knowledge, was actually due to the parties for services already performed. Mr. Soutter, on being called on to produce this communication, says that " he had an impression, and he supposed it was derived
from a letter of Mr. Floyd, that the War Department issued acceptances to the extent only of one-half of the amount that would become
due to Russell, Majors & Waddell on work in process of execution."
Although an examination of the letters received by the bank, and his
own private letters, failed to bring to light such a communication as
he had expected to find, Mr. Soutter does not change his opinion, but
concludes that it was derived from the statement of some person
whose name he cannot now recall. These letters and representations




14            ABSTRACTED INDIAN TRUST BONDS.
are important as showing the means adopted by the Secretary of War
to get the paper he issued into circulation.
NEARLY $7,000,000 OF ACCEPTANCES ISSUED.
In relation to the acceptances issued unconditionally 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 $6,179,395. Add
thereto the conditional acceptances which have already been thrown
back upon the government through the agency of Mr. Bailey, and
the sum total is $6,977,395. This estimate is based upon data furnished by the War Department. It appears therefrom that acceptances to the amount of $840,000 were returned to the department for
cancellation. Mr. Russell, however, claims to have returned only
$200,000 or $250,000. 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 indorsements on the returned acceptances, and by
the testimony of Mr. Irwin, a clerk in the War Department.
From the careless and irresponsible manner in which business was
transacted by Mr. Russell and the late Secretary of War, and
from the fact that it was the habit of Governor Floyd to issue acceptances at the department or at his house, or at whatever place he happened to be, it is a matter of great uncertainty whether or not the
$840,000 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 time for the same
amount, of which there was no registry made. It is deemed safbst to
proceed, however, upon the supposition that the acceptances made in
the place of those returned were registered. Upon this hypothesis,
the $840,000 must be deducted from the $6,179,395 of unconditional
acceptances made and registered in the War Department.  This
would leave of them, so far as is shown by the records of that department, $5,339,395 still in circulation; add to this amount the $798,000
of conditional acceptances received by Mr. Bailey in lieu of the bonds,
and the aggregate is $6,137,395. Here, then, confining the statement
to the records of the War Department, is a deficit of $6,137,395 to
fall upon the holders of these acceptances, or to be assumed in some
way by the government.
WHAT WAS DONE WITH THE ACCEPTANCES?
The evidence shows that the acceptances have been sold in various
parts of the United States, wherever a bank or private individual
could be induced to purchase. Inasmuch, however, as the amount of
those that have been traced directly-into the hands of present holders
constitute but a small fraction of the sum still unaccounted for, and
as owners are daily filing additional claims at the War Department,
it is deemed unnecessary to give a detailed statement of the discovered
acceptances, or to make other mention of them than to refer to the




ABSTRACTED INDIAN TRUST BONDS.               15
papers relating thereto presented by the War Department, and to the
general evidence.
It is proper, however, to remark in this connexion, that while your
committee do not deem it necessary to give said details, the data in
the War Department fix the minimum amount of outstanding acceptances known to that department at $1,445,000.
FURTHER LIGHT ON GOVERNOR FLOYD S PROCEEDINGS.
Mr. Richard B. Irwin, the faithful and intelligent clerk to whom
reference has been made elsewhere in this report, says, in his evidence:
"There may, of course, be other outstanding acceptances, of the
whereabouts of which the department has no knowledge." There
will also be found embraced in his evidence, given upon being recalled
before the committee on the 6th instant, a letter addressed by R. A.
Barnes, esq., president of the Bank of the State of Missouri, under
date of January 24, 1861, to Hon. Joseph Holt, Secretary of War,
which is of interest, and will throw light upon the conduct of Governor
Floyd's proceedings and assurances in regard to the acceptances. Mr.
Irwin still further testified to the receipt of other letters by the War
Department since the papers furnished to the committee by that department were transmitted, of a character similar to Mr. Barnes's. This
branch of the inquiry is evidently prolific, and could be pursued to a
great length if necessity required or time would permit.
MR. RUSSELL'S ESTIMATE.
To avoid all appearance of unfairness, your committee consider it
proper to give Mr. Russell's estimate of the amount of acceptances
issued and taken up, as set forth in the following extract from his testimony:
Question. State as nearly as you can, of your own knowledge and
recollection, the amount of acceptances of Governor Floyd shown by
that (his) account to you.
Answer. I have got but an idea about it. It was very large. I
cannot tell how large. I believe it exceeds $3,000,000.
Question. Does it not exceed $4,000,000?
Answer. I do not recollect.
Question. Does it not exceed $5,000,000?
Answer. I judge not; it is all impression on my part.
Question. Can you state that you have not received his acceptances
to an amount exceeding $6,000,000?
Answer. I do not think I have.
Question. How much less than $6,000,000 can you say was the
amount?
Answer. I will not fix the amount. I know it was very large. I
know it was millions.
Question. Will you fix any amount short of $6,000,000 which you
can say covers it?
Answer. I do not think it exceeds $4,000,000.
Question. Can you state to the committee within a half million




16            ABSTRACTED INDIAN TRUST BONDS.
dollars the amount of the acceptances of Governor Floyd which you
have paid?
Answer. No, sir, I cannot. We have certainly paid upwards of
$3,000,000, and probably $3,500,000, and cancelled them or retired
them.
Question. Does $3,500,000 cover the amount?
Answer. I cannot say positively.
Question. Can you name a sum which you can be positive does cover
the amount?
Answer. I am sure we have paid $2,000,000.
Question. Are you sure you have paid and cancelled $3,000,000?
Answer. Well, I am pretty confident in my mind that we have.
Question. Can you state any amount larger than that which you
are confident in your own mind was paid and cancelled?
Answer. No, sir.
Question. Did you not pay and cancel Governor Floyd's acceptances
to an amount larger, at the outside, than $3,500,000?
Answer. I think $3,500,000 will cover the sum. I am very confident in my own mind that it will.
Mr. Russell then stated that, besides the acceptances he has used
and those still remaining in his possession, (the latter somewhat less
than $200,000 in amount,) Governor Floyd gave him others, which
he returned unused to the War Department.  If credence should
be given to these explanations, the amount of acceptances still outstanding is very large. But Mr. Russell's statements are so rambling, vague, and unsatisfactory, and he shows such utter ignorance
of the details of his business, and such incapacity, or unwillingness,
to make an exhibit of his affairs, that your committee have considered
it much safer to base their conclusions upon the records furnished by
the War Department. These records are of a character too peculiar
to be passed without comment.
PECULIAR RECORDS IN THE WAR DEPARTMENT.
By reference to the testimony of Mr. Irwin, clerk in the War Department, it will be seen that he kept a registry of the acceptances on
loose pieces of paper only, as they were reported to him from time to
time, and no other was made. He states, too, that there was no registration of the $798,000 of conditional acceptances which fell into Mr.
Bailey's hands; and that immediately after the discovery of the abstraction of the bonds, Governor Floyd went to his office and directed
him (Mr. Irwin) to enter an order of cancellation of those acceptances,
which he did upon a slip of paper, as he had entered the dates and
amounts of others that had been issued. The acceptances being in
the hands of Hon. Jacob Thompson, having been placed there by Mr.
Bailey in lieu of the abstracted bonds, an order of cancellation at such
a time was simply an order against the government. Had the acceptances been held by other parties, the order would have been equally
futile; for, if legally issued, it could not invalidate them.




ABSTRiACTED INDIAN TRUST BONDS.              17
PAYMENTS TO RUSSELL, MAJORS & WADDELL.
It also appears from the records of the War Department that while
these acceptances were being issued to the amount of millions of dollars, Russell, Majors & WIaddell were regularly receiving their pay
for the services performed under their contract, in money, from the
government. The aggregate amount of the payments made to them,
in cash, during the years 1858, 1859, and 1860, is $4,842,964 41, and
a large portion of this sum was paid by the proper officer at Leavenworth City, Kansas. Governor Floyd admitted in his evidence that
every acceptance which he made "c ran against unearned money," and
was designed to give them (the contractors) " the credit of their contract."  Yet there has not been discovered the slightest indication that
he made any inquiry about the payments, or concerned himself to see
that they were, when made, applied to the acceptances.
By reference to the testimony of General Johnston, of the army, and
of Hon. Mlir. Atkinson, the Third Auditor of the Treasury, and to a
detailed statement of the payments presented to the committee
the amounts of the earnings and payments, will more fully appear.
It would, perhaps, be sufficient to say, upon this point, that Mr. Russell acknowledges that there is now but a small sum due his firm for
current earnings. But it was considered desirable to remove all uncertainty from this question, and to ascertain positively whether Russell, Majors & Waddell had ever presented any claim to the War Department for extra services, and whether any claim for such services
had ever been paid by that department, and correspondence was accordingly had with the present Secretary of War, Hon. Joseph Holt,
who referred the letter of the committee to General J. E. Johnston,
quartermaster general, and Colonel J. P. Taylor, acting commissary
general of subsistence.
It will be seen from their replies that no such claim has ever been
made or allowed, General Johnston, however, states that there is an
account amounting to $27,390 49 still suspended, which the late Secretary of War directed to be reduced by a C"disallowance" of $9,125 62.
He also states the sum due them on the 4th of January last, upon
current earnings, to be $27,750 49, from which must be deducted
$15,000 for a duplicate payment. This amount was ascertained by
telegraphing to Leavenworth, (at which place the accounts of Russell,
Majors & Waddell are kept,) and, although it may not include other
earnings in New Mexico, it cannot be largely increased. The facts,
therefore, are, that Russell, Majors & Waddell not only absorbed all
the sums earned by them under their contracts, and sold all the bonds
they received from Mr. Bailey, but also raised very large sums of
money upon the acceptances issued by the Secretary of War.
COMMENTS ON GOVERNOR FLOYD'S LETTER.
The information thus plainly presented seems to demand that somes
mention should be made of the communication of the late Secretary of
War, Hon. John B. Floyd, addressed to the House, and by the House
H. Rep. Com. 78 —-2




18            ABSTRACTED INDIAN TRUST BONDS.
referred to your committee. In his letter occurs this passage: "' Within
the four years since I have presided over this department, not a dollar,
I believe, has been lost to the government by embezzlement or theft,
and within that time $60,000,000 have been disbursed. No system of
administration, no line of policy, I think, could reach better results.
No system of accountability could be more perfect." If by the best
" results" are understood to be the depletion of the public treasury
and the debasement of public virtue, the approval of the vicious and
the reprobation of the good; if by " the most perfect system of accountability" is meant a method of transacting business that promises
rewards to negligence, and affords the most valuable facilities and
incentives to fraud, then, indeed, may the late Secretary have reason
to speak with confident self-praises of his " system of administration 
and " line of policy."
Whether or not his assertion that there has been no "embezzlement"
or "theft" in his department is true will soon be decided in the courts.
The recklessness of his official conduct, his inattention, and the ignorance of the details of his affairs, have been already shown, and will
stand out in still greater distinctness on examination of the contradictions and obscurities of his testimony. Your committe will, therefore, leave judgment to be pronounced by the House, and by the
country; but will present, as a valuable aid in coming to a correct
conclusion, a brief abstract of the testimony of Hon. J. P. Benjamin,
United States senator from Louisiana.
IMPORTANT TESTIMONY OF SENATOR BENJAMIN-THE PRESIDENT NOTIFIED OF
GOVERNOR FLOYD S SYSTEM OF ISSUING ACCEPTANCES.
Mr. Benjamin, who promptly appeared at the request of the committee, and testified with commendable and courteous frankness, states
that during the first session of the present Congress, some twelve or
eighteen months ago, he was written to by the attorney of Duncan,
Sherman & Co., of New York, and his opinion requested as to the
legality of acceptances issued by Governor Floyd to Russell, Majors &
-Waddell. It was mentioned in that letter that these "drafts," as
they were then called, were offered for negotiation with the assurance
that they were issued with the approbation of the President and Attorney General. Mr. Benjamin visited the President, and submitted
the inquiry to him. The President replied that he knew nothing
about the matter; that they had been issued without any knowledge
of his; that he did not know by virtue of what law they were issued;
but that he [Mr. Benjamin] might rely, if Governor Floyd had issued
them, he had issued them properly, and that he had better apply to
him [Governor Floyd] to ascertain by virtue of what law he was
acting.
INTERVIEW WITH GOVERNOR FLOYD.
In pursuance of this suggestion, Mr. Benjamin called on Governor,,Floyd, and was informed by him that the matter had not been submitted to the Attorney General, as was stated; that the drafts were




ABSTRACTED INDIAN TRUST BONDS.                19
issued in pursuance of a long-established custom of the office; that he
was not aware of any law actually authorizing their issue; that he
would inquire into it; that the acceptances were issued to Russell,
Majors & Waddell only after he had ascertained that the trains for
transportation, which they had contracted to send from St. Louis to
Utah, had actually started on their way; that the payments were to
be made, under the contract, in instalments as the trains arrived at
different points; and that, having received intelligence of the actual
departure of the trains, he had accepted, in advance of their arrival at
the intermediate point, having a certainty that they would arrive.
" I suggested to him," says Mr. Benjamin, " that I thought he was
acting imprudently; that if any accident should happen to these trains
by attacks by Indians, or any other cause, and they should fail to
arrive, it would be impossible for him to pay the acceptances upon
intelligence of that fact, and that that would give good reasons for
complaints and investigations which would be injurious to him, and I
urged him to discontinue the practice. Two days afterwards I received a note from him, informing me that he was obliged for the
frank statement I had made to him, and that, upon reflection, he had
determined he would accept no more."
GOVERNOR FLOYD CONTINUES TO ACCEPT.
It has been shown that, contrary to the assertion of Governor Floyd,
no practice of issuing acceptances had ever prevailed in the War Department previous to its introduction by himself; that he issued these
acceptances indiscriminately, and without reference to instalments,
or the arrival or departure of trains, and without regard to money
which was due. One would naturally expect to find that Governor
Floyd, having been admonished by one whose position and legal
learning gave authority to his advice, having confessed the illegality
of his proceedings, and expressed a determination to make no further
acceptances, would have proceeded thereafter with great caution and
circumspection, even if he did not entirely discontinue his previous
policy. It appears, however, that, supposing the note to Mr. Benjamin, before referred to, to have been written a year ago, there have
been issued by Governor Floyd, since that time, acceptances to the
amount of $2,163,000, namely: In April, $40,000; in SMay, $250,000;
in June, $350,000; in July, $95,000; in August, $235,009; in September, $125,000; in October, $270,000.  To this amount must be
added the $798,000 of unconditional acceptances, of which there is no
registry, and the sum total is as above statetl. Only $60,000 of these
acceptances have been returned to the War Department, and cancelled.
Having had his error and its consequences distinctly pointed out,
having expressed his intention to refrain in future from the commission of similar acts, he still persists in his former course, and actually
issued an acceptance for $135,000, at a date so late as the 13th of
December, 1860. Whether this manifest contempt of counsel, disobedience of law, and violation of a solemn promise, can be reconciled
with purity of private motives, and faithfulness to public trusts, is




20           ABSTRACTED INDIAN TRUST BONDS.
for the House to determine. It is the opinion of your committee that
they cannot.
RECOMMENDATIONS FOR NEW LEGISLATION.
Your committee have now reported, so far as ascertained, all the
material facts connected with the abstraction of bonds from the Interior Department, and with a series of transactions unprecedented in
their character, and remarkable for alternate exhibitions of fraud and
folly.
As one of the results of the examination they have made, they
submit a bill to provide for the more certain and effectual punishment of crimes, such as those that have been brought to their
notice, and also amendatory of the second section of the act of
Congress, approved January 24, 1857, entitled "e An act more
effectually to enforce the attendance of witnesses on the summons
of either house of Congress, and to compel them to disclose testimony."
They also beg leave to suggest that the fluctuations of the stock
market, and the delay and uncertainty in the collection of the interest
on the bonds, seem to demand some further legislation in regard to
the Indian trust fund, as a measure of obvious justice and humanity
to the Indians.
All of which is respectfully submitted, on behalf of the committee.
I. Ni. MORRIS, Chairman,.




ABSTRACTED INDIAN TRUST BONDS.                21
Journal of select committee, appointed under resolution of the.House of
the 24th of December, 1860, to investigate alleged frauds in the Depcartment of the Interior.
COMMITTEE.
ISAAC N. MORRIS............................of Illinois.
RoscoE CONKLING...........................Of New York.
JAMES H. THOMAS..................of Tennessee.
J. MORRISON HARRIS.......................f Maryland.
CHARLES CASE,...............o..............Oof Indiana.
WASHINGTON, December 27, 1860.
The committee met upon the call of the chairman.
Present: Messrs. Morris, Conkling, Thomas, Harris, and Case.
The following communication from the Clerk of the House of Representatives was laid before the committee.
"' THIRTY-SIXTH: CONGRESS, SECOND SESSION.
"CONGRESS OF THE UNITED STATES.
"'IN THE HOUSE OF REPRESENTATIVES,
"'December 24, 1860.
" Mr. Sherman moved the following, which was adopted:
Whereas the Secretary of the Interior has this day addressed a
communication to this House, stating that an extensive fraud had
been committed upon his department, in the abstraction therefrom,
by one of its officers, and the conversion to private use of a number
of State bonds held in trust by the government for the benefit of
certain Indian tribes, and asked that a committee be appointed to
investigate and report upon the subject:
"Be it resolved, That a select committee be appointed, consisting
of five members of the House, who shall proceed to inquire into and
report to the House the facts in relation to said fraud; and that said
committee have full power to send for persons and papers.
"The Speaker appointed the following members to act as said committee:
"Mr. ISAAC N. MORRIS..............o....... of Illinois.
"Mr. ROScoE CONKLING........................of New York.
"Mr. THOMAS S. BococKi.......................f Virginia.
"Mr. J. MORRISON HARRIs.................... Of Maryland.
"Mr. (CHARLES CASE.............................Of Indiana.
"Attest:                  JOHN W. FORNEY, Clerk.
"By DANIEL BUCK, Assistant Clerk."
Mr. Harris moved that the chairman be instructed to present the
following resolution to the House:
Resolved, That the select committee, appointed under the resolution of the House of the 24th instant, to investigate the alleged frauds




22            ABSTRACTED INDIAN TRUST BONDS
in the Department of the Interior, have leave to sit during the sessions
of the House, and at such places in this city or elsewhere as they
may deem advisable; also, that said committee be authorized to
employ a stenographer, at a rate of compensation not exceeding that
paid to the reporters of the House for the Congressional Globe."
The motion was agreed to.
On motion of Mr. Case, it was
Ordered, That the chairman be directed to request the attendance
of Jacob Thompson, the Secretary of the Interior, before the coinmittee, at 2 o'clock this day, with such papers and documents pertaining to these alleged frauds in the Department of the Interior as he
may have in his possession.
On motion of the chairman,
Ordered, That a subpoena issue for the attendance of Luther R.
Smoot.
The committee then took an informal recess until 2 o'clock p. m.
At two o'clock the committee re-assembled; all the menmbers present.
On motion of Mr. Harris
Resolved, That Francis H. Smith be appointed stenographer and
clerk of this committee.
On motion of Mr. Case,
Resolved, That the testimony taken and proceedings had before
this committee be kept inviolably secret until its labors are concluded,
except so far as it may be necessary to make disclosures, by order of
the committee, on the floor of the House, for the purpose of furthering
business.
Resolved, That the stenographer be sworn to keep secret all the
doings of this committee.
The oath of secrecy was administered to the stenographer.
The chairman laid before the committee a communication from the
Hon. Isaac I. Stevens, of Washington Territory, which was placed on
file.
The Hon. Jacob Thompson, Secretary of the Interior, was then
examined as a witness.
The committee adjourned to meet on the call of the chairman.
SATURDAY, December 29, 1860.
The committee met at 11 o'clock, a. m. upon the call of the chairrman.
Present: Messrs. Morris, Conkling, Thomas, Harris, and Case.
Luke Lea was examined as a witness.
Committee adjourned until Monday morning at 10 o'clock.
MONDAY,  December 31, 1860.
The committee met pursuant to adjournment.
Present, all the members.
On motion of Mr. Harris, it was
Resolved, That the chairman be authorized to have the testimony
taken before the committee from day to day printed by such person
as he may select, under such circumstances of guarantee that it will
be kept inviolably secret, as will be satisfactory to the chairman.




ABSTRACTED INDIAN TRUST BONDS.               23
Hon. John B. Floyd appeared and was examined as a witness; without concluding his examination,
The committee adjourned until to-morrow, at half-past ten, a. m.
TUESDAY, January 1, 1861.
The committee met at half-past ten o'clock.
Present, all the members.
Hon. John B. Floyd was examined; without concluding his examintion,
The committee adjourned until to-morrow morning at 10 o'clock.
WEDNESDAY, January 2, 1861.
The committee met at 10 o'clock a. m.
Present: The chairman and Messrs. Thomas, Harris, and Case.
Luther R. Smoot and John B. Floyd were examined as witnesses.
Adjourned until Friday next at 10 o'clock a m.
JANUARY 4, 1861.
The committee met at 10 o'clock a. m.
Present: Messrs. Thomas, Harris, Case, and the chairman.
Mr. William R. Drinkard, Mr. George W. Riggs, and Mr. Richard
B. Irwin were examined as witnesses.
The committee adjourned until to-morrow at half-past ten o'clock.
SATURDAY, January 5, 1861.
The committee met at half-past ten o'clock.
Present: Messrs. Thomas, Harris, Case, and the chairman.
Mr. George W. Riggs, Mr. Thomas J. D. Fuller, Mr. Lammond,
and Mr. Irwin were examined as witnesses.
The committee adjourned to meet upon the call of the chairman of
the committee.
MONDAY, January 7, 1861.
The committee assembled at the St. Nicholas Hotel, New York.
Present, all the members.
John Thompson was called and examined as a witness.
The committee adjourned until to-morrow.
TUESDAY, January 8, 1861.
The committee met at 10 o'clock a. m.
Messrs. G. B. Lamar, Luther C. Clark, Richard Schell, Matthew
Morgan, John R. Garland, William  T. Coleman, Alexander Campbell, and Robert H. Lowry were called and examined as witnesses.
The committee adjourned until to-morrow at 10 o'clock.
WEDNESDAY, January 9, 1861.
The committee met at the usual hour.
Hector Morrison, H. L. Williams, A. E. Silliman, C. A. Meigs, R.
Bayles, and J. G. King were examined as witnesses.
The committee adjourned until to-morrow.




24            ABSTRACTED INDIAN TRUST BONDS.
THURSDAY, January 10, 1861.
The committee met at the usual hour.
Frederick F. Thompson, Stephen L. Miles, and C. A. Macy were
examined as witnesses.
The Sergeant-at-arms having reported that Robert W. Latham was
unable to attend the committee at their room on account of' indisposition, on motion, the chairman was deputed to examine the witness at
his residence, in Brooklyn. The chairman thereupon proceeded to the
residence of Mr. Latham, and examined him as a witness.
The committee adjourned to meet on the call of the chairman, at
their room in the Capitol, at Washington.
MONDAY, January 14, 1861.
The committee met pursuant to the call of the chairman.
Present: Messrs. Thomas, Case, and the chairman.
William H. Russell, J. A. Williamson, and R. J. Atkinson were
examined as witnesses.
The committee adjourned until to-morrow at half-past ten o'clock.
TUESDAY, January 15, 1861.
The committee met at half-past ten o'clock.
Present, all the members.
James T. Soutter, General J. E. Johnston, Henry Beard, John J.
Bogue, and James Chestney were examined as witnesses.
The committee adjourned until Thursday next at half-past ten
O clock.
THURSDAY, January 17, 1861.
The committee met at half-past ten o'clock.
Present: Messrs. Harris and Case.
William McKim, William Fisher, Martin Lewis, Ceorge W. Riggs,
and C. G. Wagner were sworn as witnesses.
The committee adjourned until to-morrow at half-past ten o'clock.
FRIDAY, January 18, 1861.
The committee met at half-past ten o'clock.
Present, all the members.
General J. E. Johnston and William H. Russell were examined Ma
witnesses.
The committee adjourned until Monday next at half-past ten o'clock.
MONDAY, January 21, 1861.
The committee met at half-past ten o'clock.
Present: Messrs. Conkling, Thomas, Case, and the chairman.
The committee adjourned until to-morrow morning at 11 o'clock.
TUESDAY, January 22, 1861.
The committee met at 11 o'clock a. m.
Present: Messrs. Thomas, Harris, Case, and Mr. Chairman.
The committee adjourned until to-morrow at half-past ten o'clock.




ABSTRACTED INDIAN TRUST BONDS.              25
WEDNESDAY, January 23, 1861.
The committee met at half-past ten o'clock.
Present: Messrs. Conkling, Thomas, Harris, Case, and the chairman.
Frederick P. James, William H. Russell, and Ashton S. H. White
were examined as witnesses.
The committee adjourned until to-morrow morning at half-past ten
o'clock.
THURS-SDAY, January 24, 1861.
The committee met at half-past ten a. m.
Present: Messrs. Harris, Thomas, Case, and the chairman.
The committee adjourned to meet upon the call of the chairman.
FRIDAY, January 25, 1861.
The committee met at 11 o'clock upon the call of the chairman.
Present: Messrs. Thomas) Harris, and the chairman.
Messrs. George W. Riggs and William H. Russell appeared before
the committee as witnesses.
The committee adjourned to meet on Monday next at 11 o'clock.
MONDAY, January 28, 1861.
The committee met at half-past ten o'clock.
Present: Aessrs. Thomas, Case, and the chairman.
The committee adjourned until to-morrow at half-past ten o'clock.
TUESDAY, January 29, 1861.
The committee met at half-past ten o'clock.
Present: Messrs. Case, Thomas, and the chairman.
The committee adjourned to meet upon the call of the chairman.
WEDNESDAY, January 30, 1861.
The committee met at half-past seven o'clock p. m. upon the call
of the chairman.
Present: Messrs. Case, Thomas, Harris, and the chairman.
Henry Beard was recalled and examined.
The committee then adjourned to meet upon the call of the chairman.
MONDAY, February 4, 1861.
The committee met at half-past ten o'clock upon the call of the
cdhairman.
Present: Messrs. Conkling, Case, Thomas, and the chairman.
Hon. J. P. Benjamin was examined as a witness.
The committee adjourned to meet on the call of the chairman.




26            ABSTRACTED INDIAN TRUST BONDS.
WEDNESDAY, February 6, 1861.
The committee met at half-past ten o'clock upon the call of the
chairman.
William R. Drinkard and R. B. Irwin were recalled and examined
as witnesses.
The committee adjourned to meet upon the call of the chairman.
FRIDAY, February 8, 1861.
The committee met, on call of the chairman, at I o'clock p. m.
Present, all the members.
On motion of Mr. Harris, the chairman was unanimously directed
to report to the House.
On motion of Mr. Conkling, Mr. Case was directed to prepare a bill
amendatory of the second section of the act more effectually to enforce
the attendance of witnesses on the summons of either house of Congress, and to compel them to discover testimony, approved January
24, 1857.
On motion of Mr. Harris, Mr. Conkling was directed to report back
to the House the joint resolution making provision for the recovery of
certain bonds belonging to the Indian trust fund, with the recommendation that it do not pass.
The committee adjourned 8ine dio,




ABSTRACTED  INDIAN  TRUST BONDS.                       27
Evidence taken before the select committee appointed under the resolution
of the House of Representatives of the 24th of December, 1860.
WASHINGTON, December 27, 1860.
Hon. JACOB THOMPSON, Secretary of the Interior, was called as a
witness, sworn and examined.
Examination by the chairman:
Question. Are you Secretary of the Interior?
Answer. I am.
Question. As Secretary of the Interior, have certain bonds purdhased for the, benefit of the Indian tribes bUen in your charge?
Answer. They have.
Question. Please state to the committee the number and character
of those bonds, and whether any of them have been abstracted from
your office; and if so, the facts in regard to said abstraction.
Answer. I have two statements of those bonds: one made out by
the clerk of my office, setting forth each of the bonds; the other made
out by the Indian office. They are checks to each other. The former
is a long statement.  HIere is the one made out by the Indian office:
A.
Securities.
Arkansas 5's.....................................................  3,000 00
Florida 7's.......................................            132,000 00
Georgia 6's..................................                  3,500 00
Indiana 5's........................................             70,000 00
Kentucky 5's.....................................................   183,000 00
Louisiana 6's....................................           10,000 00
Louisiana 6's....................................             27,000 00
Maryland 6's.................................................    1312611 82
Missouri 54's.......  63,000 00
Missouri 6's..................................       484,000 00
North Carolina 6's........................                    322,000 00
North Carolina 6's..............................    240,000 00
Ohio 6's...........................................................  150,000 00
Pennsylvania 5's................ 50,000 00
Pennsylvania 5's.........................................     46,000 00
South Carolina 6's..............................................  125,000 00
Tennessee 5's..................................................    125,000 00
Tennessee 5's...................................................  40,000 00
Tennessee 6's..................................................    143,000 00
United States, 1842, coupons, 6's...........................   63,000 00
United States, 1842, certificates, 6's.....................   130,280 00
United States, 1847, certificates, 6's.......................   58,050 00
Virginia 6's...........................................    581,800 00
Chesapeake and Ohio Canal Company 6's..,...........           43,500 00
City of Wheeling 6's....................................       168,000 00
Richmond and Danville railroad 6's.......................       3,500 00
Stock at this posting, balanced June 30, 1860.........  3,396,241 82




28            ABSTRACTED INDIAN TRUST BONDS.
The amount is $3,396,241 82. I think both statements agree.
OCu SaLtuday evening, the 22d of December, at half past three
o'clock, I returned to the city from a visit to North Carolina. In the
evening, at half-past eight o'clock, I called to see the President; I
found at the office of the President Senator Rice. Immediately after
my arrival Mr. Rice informed me, in the presence of the President,
that he had certain papers which had been placed in his hands, with
a request that he would deliver them to me, but which he declined to
keep until my return-not knowing when that would be-and which
he had just shown to the President. Those papers showed that bonds
to the amount of $870,000 had been abstracted from the safe of the
Interior Department, in which the Indian trust fund was kept. A
few minutes thereafter a letter of Godard Bailey was handed to me;
upon the envelope of that letter was this indorsement:
" WASHINGTON CITY, D. C.,.December 13, 1860.
"This communication was received this day from Mr. Bailey, with a
request that I should deliver it to the Hon. Jacob Thompson, Secretary of the Interior, five days before the expiration of his term of
office.
"'CHARLES G. WAGNER."
At the same time with the delivery of that letter, was another letter
directed to Charles G. Wagner, Census bureau, which letter was
indorsed"This letter was received from Godard Bailey this 21st of Deceiaber, 1860."
That letter is in the words following:' LAFAYETTE HOUSE, December 20, 1860.
"C MY DEAR SIR: I will be much obliged if you will deliver to ]r.
Thompson, immediately on his return from North Carolina, the letter
addressed to him which I placed in your hands some time ago. It
concerns my honor that Mr. Thompson should receive that letter at
the earliest possible moment, and I rely upon your friendship to see
that he does get. it.
"Yours, truly,
"GODARD BAILEY.
"C. G. WAGNER, Esq."
The first letter referred to was in the following words:
"  WASHINGTON, December 1, 1860.
"' SIR: I feel that, in justice to yourself, I ought not to permit you
to quit office without informing you of the fact that a portion of the
bonds constituting the Indian trust fund are no longer in my custody.
Those bonds I intrusted, in July last, to third parties, for purposes
which it is not necessary to discuss here, The bonds so surrendered
are the following, to wit:




ABSTRACTED INDIAN TRUST BONDS.                     29
Missouri 6's............................................................  $370,000
North Carolina 6's, January and July.........................   296,000
North Carolina 6's, April and October..........................    61,000
Tennessee 6's.......................................................,..   143,000
Making a total of............ o* oa. 0a........   870,000
"I desire to be permitted to place on record, simultaneously with the
preceding avowal, the following declaration: First. I have not converted any of these bonds to my individual use; I have not used them
for private speculation, nor made them a source of profit to myself in
any way. Second. When I parted with the bonds, assurances, which
I deemed satisfactory, were given me that they would be returned in
ninety days, and that no loss could accrue to the United States.
Tzhird. The United States are at this moment perfectly secured against
loss.  Fourth. I protest that the motives which prompted me to part
with the bonds were wholly unselfish, and that I never had at any
time the least idea of emhbezzling any part of the trust fund, although
I could have done so with entire impunity. Fifth. No officer of the
government advised me to part with the bonds, or even knew  that I
contemplated doing so. I alone am responsible for their surrender.
"I  make this statement now not because further concealment is
impossible or even difficult, but to afford you an opportunity of vindicating yourself from any suspicion of complicity, by instituting, before
leaving office, such proceedings against me as you may deem advisable
in the premises.
"' Very respectfully, your obedient servant,
"GODARD BAILEY.
C' Hon. JACOB THOMPSON,
" Secretary of the Interior.
C P. S.-I shall place this letter in the hands of a friend, without
informing him of its contents, and request him to deliver it to you
five days before the expiration of your term of office.  In case you
resign, it will be delivered to you five days before the time at which
your resignation takes effect.                             G0. B."
From Mr. Rice I received the following paper:
" WASHINGTON, D. C., December 13, 1860.
" We acknowledge to have received from Godard Bailey on the 13th
of July last, and at various times subsequently, the following bonds,
viz:
Missouri 6's..........................................  $370,000
North Carolina 6's, January and July.........   296,000
North Carolina 6's, April and October.......    61,000
Tennessee 6's...................................  143,000
Making a total of............................   870,000
which we agree to return to the said Godard Bailey, or to his assigns,
on demand.




30            ABSTRACTED INDIAN TRUST BONDS.
" As collateral security for the return of the above described bonds,
we have deposited with the said Godard Bailey acceptances of the
Hon. John B. Floyd, Secretary of War, to the amount of eight hundred and seventy thousand dollars.
"RUSSELL, MAJORS & WADDELL."
Below the signature is the following: " Deliver the above described bonds to the Secretary of the Interior.
" GODARD BAILEY."
With the exception of the signature of Russell, Majors & Waddell,
that whole paper is in the handwriting of Godard Bailey. With the
receipt there were delivered the following acceptances, referred to in
the receipt, drawn by Russell, Majors & Waddell on the Secretary of
War, John B. Floyd, and accepted, as they appear at the times and
in the manner in the respective drafts which I present to the committee as follows:
$15,000.                 WASHINGTON CITY, September 13, 1860.
Eight months after date pay to our own order, at the " Bank of
the Republic," New York city, fifteen thousand dollars, for value received, and charge to account of our transportation contract of the
12th day of April, 1860.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
No. 78.]                 WAR DEPARTMENT, September 18, 1860.
Accepted.
JOHN B. FLOYD,
Secretary of War.
$10,000.                 WASHINGTON CITY, September 19, 1860.
Twelve months after date pay to our own order, at the I" Bank of
the Republic," New York city, ten thousand dollars, for value received, and charge to account of' our transportation contract of the
12th day of April, 1860.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
No. 85.]                 WAR DEPARTMENT, September 19, 1860.
Accepted.
JOHIN B. FLOYD.
Secretary of War.




ABSTRACTED INDIAN TRUST BONDS.               31
$10,000.                    WASHINGTON CITY, October, 1, 1860.
Ten months after date pay to our own order, at the a "Bank of the
Republic," New York city, ten thousand dollars, for value received,
and charge to account of our transportation contract of the 12th day
of April, 1860.
RUSSELL, MAJORS & WADDELL.
Hon. J.'B. FLOYD,
Secretary of War.
No. 90.]                   WAR DEPARTMENT, October 10, 1860.
Accepted.
JOHN B. FLOYD,
Secretary of War.
$10,000.                    WASHINGTON CITY, October 8, 1860.
Ten months after date pay to our own order, at the " Bank of the
Republic," New York city, ten thousand dollars, for value received,
and charge to account of our transportation contract of the 12th day
of April, 1860.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
No. 99.]                   WAAR DEPARTMENT, October 10, 1860.
Accepted.
JOHN B. FLOYD,
Secretary of War.
$7,000.                    WASHINGTON CITY, October 11, 1860.
Ten months after date pay to our own order, at the "Bank of the
Republic," New York city, seven thousand dollars, for value received,
and charge to our transportation contract of the 12th day of April,
1860.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
No. 110.1                  WxAR DEPARTMENT, October 13, 1860.
Accepted.
JOHN B. FLOYD,
Secretary of War.




32            ABSTRACTED INDIAN TRUST BONDS.
$10,000.                   WASHINGTON CITY, October 12, 1860.
Ten months after date pay to our own order, at the " Bank of the
Republic," New York city, ten thousand dollars, for value received,
and charge to our transportation contract of the 12th day of April,
1860.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
No. 116.]                  WAR DEPARTMENT, October 13, 1860.
Accepted.
JOHN B. FLOYD,
Secretary of War.
$10,000.                  WASHINGTON CITY, October 13, 1860.
Ten months after date pay to our own order, at the " Bank of the
Republic," New York city, ten thousand dollars, for value received,
and charge to our transportation contract of the 12th day of April,
1860.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
No. 120.]                  WAR DEPARTMENT, October 13, 1860.
Accepted.
JOHN B. FLOYD,
Secretary of War.
$110,000.                  WASHINGTON CITY, October 22, 1860.
Out of any moneys becoming due to us for army transportation in
the year 1861, under our transportation contract of the 12th day of
April last, pay to our own order one hundred and ten thousand dollars, for value received, and charge to our transportation account for
moneys earned in 1861.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
WAR DEPARTMENT, October 26, 1860.
Accepted, payable according to its tenor.
JOHN B. FLOYD,=
Secretary.




ABSTRACTED INDIAN TRUST BONDS.              33
$125,000o                  WASHINGTON CITY, October 22, 1860.
Out of any moneys becoming due to us for army transportation in
the year 1861, under our contract for transportation of the 12th day
of April last, pay to our own order one hundred and twenty-five thousand dollars, for value received, and charge to our transportation account for moneys earned in 1861.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
WAR DEPARTMENT, October 26, 1860.
Accepted, payable according to its tenor.
JOHN B. FLOYD, Secretary.:$143,000.                 WASHINGTON CITY, October 23, 1860.
Out of any moneys becoming due to us for army transportation in:the year 1861, under our contract for transportation of the 12th day
of April last, pay to our own order one hundred and forty-three
thousand dollars, for value received, and charge to our transportation
account for moneys earned in 1861.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
WAR DEPARTMENT, October 26, 1860.
Accepted, payable according to its tenor.
JOHN B. FLOYD, Secretary.
$115,000.                  WASHINGTON CITY, October 23, 1860.
Out of any moneys becoming due to us for army transportation in
the year 1861, under our transportation contract of the 12th day of
April last, pay to our own order one hundred and fifteen thousand
dollars, for value received, and charge to our transportation account
for moneys earned in 1861.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
WAR DEPARTMENT, October 26, 1860.
Accepted, payable according to its tenor.
JOHN B. FLOYD, Secretary.
H. Rep. Com. 78 —-3




34            ABSTRACTED INDIAN TRUST BONDS.
$170,000.                  WASHINGTON CITY, October 23, 1860.
Out of any moneys becoming due to us for army transportation in
the year 1861, under our contract for transportation of the 12th day of
April last, pay to our own order one hundred and seventy thousand
dollars, fbr value received, and charge to our transportation account
for moneys earned in the year 1861.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
WAR DEPARTMENT, October 26, 1860.
Accepted, payable according to its tenor.
JOHN B. FLOYD, Secretary.
$135,000.                WASHINGTON CLTY, December 13, 1860.
Out of any moneys becoming due to us for army transportation in
the year 1H61, under our contract for transportation of the 12th day
of April last, pay to our own order one hundred and thirty-five thousand dollars, for value received, and charge to our transportation account for moneys earned in 1861.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
WAR DEPARTMENT, December 13, 1860.
Accepted, payable according to its tenor.
JOIIN B. FLOYD, Secretary.
Upon the receipt of this information, at my urgent request Mr. Rice
consented to apply to Mr. Bailey for the keys of the sate. Mr. Rice
was absent from the Executive Mansion but a few minutes befbre he
returned with the keys. I then requested Mr. ]ice to accompany me
to the Interior Department, which he consented to do. I sent for my
chief clerk, Moses Kelly, and called on Mr. Bailey to go with me;
and there finding Mr. Wagner, the chief clerk in the Census bureau,
I took him along with me. We opened the safe, and counted the
bonds which were then remaining, and found all with which he was
charged to be there with the exception of $870,000, which he had confessed had been abstracted, and one Indian bond, the interest upon
which had not been paid for years, and which had been delivered to
Mr. Fitch for the purpose of ascertaining whether payment could not
be had trom the State, which bond has been mislaid. All the contents of:he safe, as far as I could ascertain during the night, were
saLe, secure, and regular. On the next day I caused legal proceedings




ABSTRACTED INDIAN TRUST BONDS.                35
to be instituted against the parties who are implicated-Godard Bailey and William H. Russell.
Question (by the Chairman.) You have furnished an abstract showing the amount and character of the bonds you had in your safe: can
you give the committee a particular description of each bond abstracted?
Answer. I can; and according to the best evidence within my reach,
they are as follows, each bond being for the sum of one thousand dollars, viz:
Six per cent Missouri coupon bonds, issued in June and August,
1857.
State of Missouri, St. Louis, and Iron Mountain railroad State
bonds.
No. of bond.     No. of bond.     No. of bond.     No. of bond.
2037            1879              1827             1831
1876             1880             1822             1832
1996             1881             1821             1868
1997            1882              1820             1869
1998            1883              1819             1870
2008             1881             1818             1871
2007             1885             1809             1872
1993             1886             1817             1873
199i             1887             1816              1874
1995             1888             1815              1875
1891             1889             1814              2030
1990             1890             1813              2029
1892            2045               1812             2018
1991             2048             1810              2017
2003             2046             1811              2016
2002             2047             1808              2015
1992             2044             2031              2014
2006             2043             2033             2013
2005             2040             2034             2012
2'i04           2041              2035             2010
2001            2042              2036             2111
1999            2039              2032
2000            2038              1826               99
2009            1825              1828
1877            1824              1829
1878            1823              1830
NoTE.-Bonds No. 2000 and below, of this series, issued June, 1857,
and bonds No. 2001 and above that, dated August, 1857, payable at
the Phoenix Bank, New York city, in 1887.




36            -ABSTRACTED INDIAN TRUST BONDS.
State of Missouri six per cent. coupon bonds, viz: Hannibal and
St. Joseph railroad State bonds.
No. of bond.    No. of bond.      No. of bond.      No. of bond.
1853            1614              1626             1831
1852            1615              1627             1641
1851            1616              1628             1642
1850             1617             1629             1643
1849             1618             1859             1644
1848             1619             1865             1645
1847             1620             1863             1646
1846             1621             1862              1647
1845             1611             1860             1648
1844             1864             1861             1637
1832             1634             1856             1638
1835             1631             1858             1840
1833             1632             1855             1842
1834            1633              1854             1843
1836            1622              1822             1650
1837             1857             1823             1816
1838            1636              1824             1817
1839            1630              1825             1818
1649             1639             1826             1819
1640             1841             1827             1820
1635             1623             1828             1821
1612            1624              1829             -
1613             1625             1830               90
NOTE.-These bonds are dated January, 1857, payable at Bank of
Commerce, New York, in November, 1886. Interest payable in January and July of each year.




ABSTRACTED INDIAN TRUST BONDS.                37
State of Missouri six per cent. coupon North Missouri railroad State
bonds.
No. of bond.    No. of bond.      No. of bond.     No. of bond.
2952            2468              1638             1707
2940            2512              1641             2452
2939            2513              1642             2453
2941            2514              1643             2454
2942            2515              1644             2455
2946            2516              1'645            2456
2945            2911              1646             2457
2944            2910              1647             2458
2943            2912              1648             2459
2947            2913              1649             2460
2948            2914              1640             2461
2949            2916              1650             2462
2950            2915              2922             2463
2937            2917              2923             2464
2938            2918              2924             2465
1.653           2919              2936             2466
1654            2920              2951             2467
1655            2954              2953
1652            2955              1657               80
1656            1651              1705
2921            1639              1706
NOTE.-The bonds numbered 2516 and below, issued in January,
1857; No. 2910, and above that, issued in August, 1857, payable at
Phoenix Bank, New York city.
Missouri six per cent. coupon bonds, viz: North Missouri railroad
State bonds.
No. of bond.    No. of bond.     No. of bond.     No. of bond.
2773            2765              2763             2731
2784            2768              2787             2766
2786            2769              2730             2729
2781            2770              2717             2718
2782            2771              2734             2715
2779            2785              2721             2714
2783            2778              2719             2764
2711            2772              2733             2728
2712            2775              2722             2726
2710            2774              2720             2723
2725            2780              2716             2713
2777            273               2727
2776            2767              2724               50
NOTE. —These bonds are dated July, 1857, payable July, 1887, at
the Phcenix Bank, New York city. Interest payable in January and
July.




38             ABSTRACTED INDIAN TRUST BONDS.
Missouri six per cent. Pacific railroad State coupon bonds.
No. of bond.    No. of bond.     No. of bond.     No. of bond.
5246            5232              5261             5000
5259            5231              5258             4999
5245            5200              5256             4997
5244            5199              5255             4890
5243            5198              5254             4998
5242            5197              5253             4889
5241            5310              5252             4888
5240            5236              5251             4876
5239            5307              5250             5257
5238            5308              5249
5237            5309              5247               51
5235            5262              5248
5234            5306              5195
5233            5260              5196
NOTE.-These bonds are dated March, 1857, payable March, 1887,
at Phoenix Bank, New York. Interest payable in January and July
of each year.
Bonds of North Carolina —coupon six per cent. North Carolina six
per cents.
No. of bond.   No. of bond.   No. of bond.   No. of bond.
35            328              301            100
33            329              300             99
32            330              297            103
23            331              235               6
9            332              234             28
7            333              203             22
349            334              166              16
348            327              104             21
347            326               20             98
346            317               19             97
343            318               18             96
342            316               17             95
341            296               15             94
340            239               13             62
339            238                8              60
338            237               11           ----
337            236               10              72
336            303              102
335            302              101
NOTE.-These bonds are dated January, 1856; payable January,
1886, at Bank of Republic, New York. Interest payable in January
and July.




ABSTRACTED INDIAN TRUST BONDS                  39
North Carolina six per cent. coupon bonds.
No. of bond.   No. of bond.    No. of bond.   No. of bond.
833             852              736             811
832             853             758              812
831             854             759              813
830             855              760             814
829             856             761.             815
834             857             762              816
835             858             763              817
836             860              764             818
837             86L              790             819
838             862              791             820
871             863              792             821
872             864              793             822
873             865              794             823
874             866             a95              824
875             867              796             825
876             868             797              826
877             869             798              827
878             870             799              828
879             883             800              839
880             882              801             846
881             884             802              843
846             885             803              F44
847             731              804             845
848             732             805
849             733              806             104
850             734              808
851             735              807
These bonds are dated July, 1857; payable July, I887, at Bank of
Republic, New York. Interest payable in January and July.




40             ABSTRACTED INDIAN TRUST BONDS.
North Carolina 6 per cent. coupon bonds.
No. of bond.   No. of bond.     No. of bond.    No. of bond.
599            650              494            537
600            651              495            518
603            652              496            529
604            616              497            516
605            617              621            515
606            618              498             517
607            619              510             514
608            455              511             422
610            457              481             545
611            458              482             546
612            470              483             547
6;I            602              484             548
609            439              485             560
614            440              486             562
622            442              487            471
623            430              488            472
624            431              489             473
625            433              490             474
626            436              538             475
627            437              539             476
628            427              540             477
641            429              541             478
642            425              542             479
643            426              543            480
615            423              530            512
644            421              531            513
646            601              532
647            544              533            119
648            491              534
645            492              535
649            493              536
NoxE.-These bonds are dated January, 1857; payable January,
1887, at Bank of Republic, New York. Interest payable in January
and July.




ABSTRACTED INDIAN TRUST BONDS.                41
North Carolina 6 per cent. coupon bonds-coupons payable in April
and October, viz:
Forty-five bonds for $1,000 each, issued by authority of an act to
incorporate the Western North Carolina Railroad Company, chapter
228, dated October, 1856, payable in 1886 at Bank of Republic, viz:
No. of bond.   No. of bond.   No. of bond.    No. of bond.
51            124              151             192
52            125              152             193
53            126              153             194
54            127              154             195
95            128              155             196
96            179              156             197
97            180              162             198
98            129              163             199
99            130              164             200
106            137              165
122            144              178              45
123            146              191 
Two bonds for $1,000 each, dated April, 1857:
No. of bond.
9
10
Fifteen bonds for $1,000 each, dated October, 1857, viz: Payable at
Bank of Republic, October, 1887, viz:
No. of bond.   No. of bond.      No of bond.       No. of bond.
1183            1187              1191             1195
1184            1188              1192             1196
1185             1189             1193             1197
1186            1190              1194
15
Tennessee 6 per cent. coupon bonds, of $1,000 each, of loan of 1852,
payable 1892 in New York city, of the following numbers, and dated
January, 1852.
No. of bond.    No. of bond.     No. of bond.   No. of bond.
413            419              477             498
414            476              491             723
415
And of the following numbers issued January, 1854:
No. of bond.    No. of bond.     No. of bond.      No. of bond.
828              830             1278              1358
829




42             ABSTRACTED INDIAN TRUST BONDS.
And of the following numbers issued January, 1855;
No. of bond.    No. of bond.       No. of bond.     No. of bond.
1744            2581              2891             3066
2110            2605              2892             3121
2133             2655
And of the following numbers issued January, 1856:
No. of bond.     No. of bond.      No. of bond.     No. of bond.
3464             3941             4208             4550
3465             3942             4209             4556
3466             3943             4210             4566
3467             3944             4211             4569
3469             3945             4212             4570
3470             3946             4213             4571
3471             3985             4214             4749
3472            4199              4431             4751
3758            4200              4527             4881
3894             4207             4529
And of the following numbers issued January, 1857:
No. of bcnd.     No. of bond.      No. of bond.     No. of bond.
5056            5374              5417             5452
5195             5375             5418             5518
5326             5376             5419             5519
5359             5377             5421             5520
5360             5378             5426             5521
5361             5379             5427             5522
5362             5380             54.30            5703
5363             5381             5434             5704
5364             5385             5436             5705
5365             5386             5437             5706
5366             5387             5438             5707
5367            5388              5439             5708
5368             5389             5440             5709
5369            5390              5441             5710
5370            5391              5442             5712
537L            5392              5443             5713
5372            5393              5441             5.39
5373             5416             5445
The published list varies from this statement to the extent of ten
numbers in the advertisement of Tennessee bonds. The coupons do
not agree in these cases with our register, but I have no doubt the
coupons indicate the bonds delivered to Russell. We have coupons of
January 1, 1861, fbr the following numbered bonds, but these numbers are not found on the official register, viz: Nos. 352, 2938, 974,
362, 210, 1001, 356, 3018, 5154, nine bonds.
There are 871 bonds advertised, but my present list makes but 870,
agreeing with the amount in the receipt before mentioned.




ABSTRACTED INDIAN TRUST BONDS.               43
Question. In what capacity was Godard Bailey acting in your
office?
Answer. He held a position in the Interior Department as the appeal clerk of the Indian bureau, or, as we call him, he was the Indian
appeal clerk. I have four appeal clerks: one of them takes charge of
appeals to me from the Land Office; one from the Pension office;
one from the Indian office; and one on the judiciary expenses. Mr.
Bailey was the appeal clerk from the Indian office, and to him I assigned also the appeals and business from the Patent Office.
HIe was also one of the disbursing clerks, appointed under the act
of 3d March, 1853, and had given bond, as required by that act, before he was placed in charge of the chest; and the duties of his position indicated him as the proper officer to have the custody of the keys
of the iron safe, or chest, containing the trust fund bonds and certificates.
Question. Was he necessarily, by virtue of the position you say he
held, placed in charge of the keeping of those bonds, or were the
bonds placed in his keeping?
Answer. They were not placed in his keeping by law, but simply
by regulation of the department, as there is no custodian by law for
those trust funds.
Question. Who collected the interest on those bonds from time to
time as it fell due?
Answer. It was collected by letters addressed, and coupons sent by
the Secretary of the Interior, to the officers of' the government at the
various points where they were payable, and the proceeds covered into
the treasury by regular warrants.
Question. Iiad Mr. Bailey, by virtue of his position, any more authority than any other clerk over the collection of interest upon the
bonds?
Answer. It was his especial duty to prepare the letters and cut off
the coupons, and keep the accounts. The check upon him was, that
the financial division of the Indian bureau keeps the account of the
amount of bonds held for the use of each tribe, and the amount of the
annual income. From time to time it is the duty of that officer to
report to me what will fall due to the respective tribes. The books
of the financial branch of this department show through covering
warrants what is collected and paid into the treasury. Thus it would
become apparent should any collections not be made, and the reason
could be easily ascertained should any collection not be made as the
interest falls due.
Question. Were, then, the bonds entirely under your control as
Secretary of the Interior, and in your possession?
Answer. While they were not in my manual custody, they were, in
contemplation of law, in my possession as Secretary, and under my
control.
Question (by Mr. Conkling.) I desire to know what was the first
intimation or notice of any sort you had that these bonds were gone
or missing?
Answer. The first notice, or intimation, or suspicion that these
bonds were missing, was upon the evening that I visited the President,




44            ABSTRACTED INDIAN TRUST BONDS.
on the 22d of December, where I was informed of the fact by Mr Rice,
in the presence of the President, and a few minutes thereafter I received from  Mr. Bailey the letter, at that place, from Mr. Rice, who
said he had just received it from Mr. Wagner.
Question (by Mr. Case.) Please state, in general terms, how these
trust funds originated, and how they came under the control of the
Interior Department.
Answer. By the fourth section of the act of June 14, 1836, vol. 5,
page 47, of the Statutes at Large, entitled "'An act making appropriations for the current expenses of the Indian department, for Indian
annuities," and other similar acts for the year 1836, it is provided
"that the Secretary of War be, and hereby is, authorized and directed
to invest, in a manner which shall be, in his judgment, most safe and
beneficial for the fund, the sum of $33,912 40, being money in the
treasury of the proceeds of lands purchased from the Seneca Indians
of Sandusky, by treaty concluded on the 28th of February, 1831; from
the Seneca and Shawnees, by the treaty concluded on July 20, 1831;
from the Shawnees, by the treaty concluded on August 8, 1831; and
upon which sum the United States are, by stipulation in the said
treaties, bound to pay to said Indians an annual interest at the rate
of 5 per cent. per annum."
Then you find that the fourth section of an act, vol. 5, page 135,
Statutes at Large, provides " that the provisions of the fourth section
of the act of June 14, 1836, entitled'An act making appropriations
for the Indian department,' &c., be, and are hereby, extended in such
a manner as to apply to the disposition of all moneys that may hereafter be received under the treaties therein named, or under any others
containing stipulations for the payment to the Indians, annually, of
interest upon the proceeds of the lands ceded by them."
By section fifth, of an act approved the 3d of March, 1849, vol. 9,
page 395, Statutes at Large, all the powers of the Secretary of War
over Indian business was transferred to the Department of the Interior.
Question (by Mr. Harris.) Are you able to state the whole amount
of bonds under the control and in the keeping of your department
specifically? I mean the bonds in detail.
Answer. Yes, sir.
Question. Is there any register in your department of the particular
number, and the amount of each bond?
Answer. Yes, sir; I can give a description of each bond, the number,
the amount of each, and the date of' each certificate.
Question. Has there been an investigation made since this transaction, by which you have verified the fact that all the remaining
bonds are in the possession of your department now, by an examination of the numbers, &c.?
Answer. That has not been done. It is a tedious work,'nd will
take two or three clerks some days to do it. As to the identity of the
bonds, we can determine those we have; as to those gone, we have to
depend upon our previous registry of those bonds and the coupons
still on hand. Then we have a check in the fact that in our settlements at the treasury we report to them, as I believe, each bond purchased, its number, date, and amount.




ABSTRACTED INDIAN TRUST BONDS.                45
Question (by Mr. Case.) Do you know who had the manual possession of those bonds immediately preceding their passing into the
custody of Bailey?
Answer. They were in the possession of Mr. Beard.
Question. When was that transfer made?
Answer. It was made late in the summer or early in the fall of
1857, Mr. Beard having been disconnected with the Indian service
and put upon the land service. That was the cause of the transfer.
Question. Does Mr. Bailey fill the office Beard did?
Answer. No, sir. Beard was at the head of the financial division
in the Indian office.
Question (by the Chairman.)  When was Mr. Bailey first appointed
to office?
Answer. A few months after I came into office. After Mr. Beard
was changed from a clerkship in the Indian office and transferred to
the appeal clerkship in the land service, the transfer of the chest was
made, and they counted the bonds and passed receipts.
Question (by Mr. Harris.) Under the arrangement existing as to
the custody of those bonds, was it or not in the power of the clerk
who had the possession of the bonds to use them in any way he might
think proper, without there existing any opportunity, or any reason
for the discovery of such uses by the Secretary or head of department,
provided the interest was regularly collected or provided for?
Answer. Since I have looked into the matter, I find that he could
use some of those bonds if the interest every six months was paid.
But what I have now ordered to be done, which is to stamp each bond
as " Indian trust fund," will entirely prevent that for the future. Up
to this time my attention had never been called to the subject; as it
had gone on heretofore, so it has been conducted during my time of
service.
SATURDAY, December 29, 1860.
LuKE LEA sworn.
Examination by Mr. Harris.
Question. I believe your business is that of a banker in Washington city?
Answer. Yes, sir; that is my principal business.
Question. Have you ever had any connexion with the Indian department of the government?
Answer. Yes, sir; I was once Commissioner of Indian Affairs.
Question. During what years?
Answer. I was appointed during General Taylor's administration.
I entered upon the duties of the office, I think, on the 1st of July, 1850.
Question. Were the bonds in which investments were made for the
benefit of certain tribes of lndians in your charge at that time?
Answer. Well, sir, they could not be considered as strictly under
my charge, because they were under the charge directly of the Secretary of the Interior.
Question. How were they in your charge or custody?




46             ABSTRACTED INDIAN TRUST BONDS.
Answer. There may be some doubt whether they were properly in
my custody or not.
Question. How were they kept, and where?
Answer. They were kept, I believe, when I entered into office, in
an iron safe in the office of the Commissioner of Indian Affairs, and
during the whole time I was in office I believe they were kept there,
but the clerk who had them in charge was an immediate appointee
and confidential friend of the Secretary of the Interior, who considered
this clerk as in custody of these bonds for him. They were, at any
rate, in a safe in the office of the Commissioner of Indian Affairs; that
is, I have always understood that such was the fact. I do not know
that I ever saw one of' them during the whole time I was Commissioner.  My impression is that I never did.
Question. Did you keep in your office a memorandum or registration of these bonds?
Answer. I am  not positive whether there was a register of them
kept in the Indian office or not. It was a peculiar sort of affair-so
directly in connexion with the Secretary of the Interior that I did
not consider myself as having them in custody.  He was the trustee
of the fund, but, as I said, they were kept in a safe in one of the rooms
in the Indian office.  When I first came into the office they were in
the custody of a man by the name of Devereaux.  After the death of
Mr. Devereaux, Mr. Stuart, then Secretary of the Interior, put them
into the hands or custody of a confidential friend of his by the name
of Miller, who was considered, I believe, as a confidential clerk. His
name was James J. 3Miller. 1 recollect, after Devereaux died, saying
to the Secretary that he was the clerk who had charge of these funds,
and as the Secretary was responsible for them, as they were held in
trust by him, it was very important for him to select some man as the
successor of Devereaux who he personally knew to be a man of strict
integrity and worthy of trust.  I therefore declined to recommend
any man to Mr. Stuart for that place, although he had allowed me to
_nominate to him all the other clerks in the office. HIe thereupon appointed this man Miller, and put the bonds under his charge,'although
they were really in the office of the Commissioner of Indian Affairs.
Question. I understand you, then, to state that there was no account
of these bonds kept in your office?
Answer. I cannot now state with certainty; Mr. Mix, the chief
clerk, would be able to give you full information upon that subject.
I never had anything to do with the management of the bonds, and I
am not able to speak positively as to whether there was a record in
the office of thetn or not.  Mr. Mix is doubtless familiar with all
these things, and can give you any information upon the subject. I
do not recollect that I ever signed any paper in reference to the funds.
Question. How long did you continue in office?
Answer. I went into office in July, 1850, I think, and remained
there until the incoming oft' Pierce's administration-continuinl about
a month under that administration, when I was succeeded by Colonel
Manypenny, of Ohio.
Question. While you held that office were these bonds removed
from the office in any way or at any time with your knowledge?




ABSTRACTED INDIAN TRUST BONDS.                47
Answer. No, sir; I will state, however, in this connexion, that
when Miller was appointed in the way I mentioned, he represented to
the Secretary that the safe in which they were kept was insecure; I
think he got the Secretary to direct him to procure a larger and a
stronger safe; I am pretty confident that he got a new safb at considerable expense-a costly one. The old safe was taken away, and
the bonds were transferred to the new one, at least I have no doubt
that such was the fact, though I do not remember to have seen the
thing done. nor do I remember to have laid my eyes upon the bonds
during the whole time I was there. It was a matter of some delicacy;
for although they related to Indian affairs, and were properly in the
Indian office, yet the Secretary was directly concerned in the fund as
trustee; and, as he had appointed this man as their custodiai, I rather
kept myself aloof from the matter, and did not interfere with it in
any way whatever.
Question. Do I understand you to say that you had a personal
knowledge of the character of' the bonds in your office?
Answer. I had a personal knowledge of the fact that there was a
large number of State bonds held in the Indian office by the Secretary
of the Interior for the benefit of Indian tribes.
Question. But you had no personal knowledge of the description of
these bonds, of their registration, or of the amount of bends which
were held in the office?
Answer. None in the world. I do not recollect to have seen any
registration of them while I was there, although I will not undertake
to say there was no such register kept there. There was an account
kept between the Secretary of the Interior and the Secretary of the
Treasury, in reference to the collection of the coupons, and placing
the amount collected in the treasury, but the business was transacted
directly between the Secretary of the Interior and the Secretary of the
Treasury-all the papers being drawn, I believe, by this confidential
clerk. I do not recollect, as I said, that I had to sign any papers in
connexion with it; it was a transaction between the two departments,
throuah this confidential clerk.
Question. Do you know Mr. Godard Bailey, late clerk in the Interior
Department?
Answer. Yes, sir; very well.
Qnuestion. Have you known him for any length of time?
Answer. I have known him for, I should say, perhaps, three years.
Question. Are you competent to tell the committee what his habits
of life were, so far as relates to his expenditures, mode of living, &c.,
during that time?
Answer. I do not know, personally, anything about it. My relations and intercourse with him were not such as to enable me to know
what his habits of life were; I have heard some casual remarks about
them.
Question. Have you seen him recently?
Answer. Yes, sir; very frequently.
Question. Have you had any conversation with him in connexion
with the bonds I have spoken of, which were in his charge in the
Interior Department?




48            ABSTRACTED INDIAN TRUST BONDS.
Answer. Yes, sir.
Question. Will you be kind enough to tell the committee about
what time you had such conversations, and what was the character of
them, beginning from the first?
Answer. I suppose it will be better for me to begin at the beginning, and make a connected statement of all I know in reference to this
matter. I am not able to specify the exact time, but in July last-I
think, perhaps, the last of the month, or possibly as early as the
middle-Mr. Bailey went from Washington to Minnesota, where he had
been sent by the Secretary, to negotiate a treaty with some Indian
tribes away upon the Red river of the North. My impression is,
though I am not certain, that I did not have any conversation with
him before he went away. I have talked with him about it, and tried
to fix the time when I first had a conversation with him about these
bonds, but I cannot fix the time, and I will not be positive whether
this matter was mentioned before he went away or after.
Question. He went away in July last?
Answer. Yes, sir; I think so.
Question. When did you see him after his return?
Answer. Almost immediately.
Question. When was that?
Answer. I think he was gone about six weeks or two months.
Question. Then he returned in the early part of September?
Answer. I think so, though I do not remember precisely.
Question. Can you tell the committee what was the character of the
conversation which you then had with him?
Answer. Yes, sir; the character of the conversation itself was thisI cannot state positively everything which was said.
Question. What was the character of the conversation?
Answer. My impression is that it was at my office. I will not be
positive, but I think it was. He was in the habit of coming in frequently; it may have been in his own office; we had a good many
business transactions of one kind or another.
Question. Do you recollect whether he sought the interview in
order to have a conversation upon this subject, or whether you sought
the interview?
Answer. If it was held at his office, I presume I sought it; if it
was held at mine, then he came to see me. I cannot state at which
place it was held.
Question. State the conversation as distinctly as you can recollect
it.
Answer. I can state the substance of it; as to the language that was
used, or the precise terms of the conversation, it is impossible for me
to state. In that conversation the object of the interview was to talk
about his letting William H. Russell have a portion of these bonds.
What was said about it I cannot now bring to mind, except that we
talked about the fact of his having let Mr. Russell have the bonds under
circumstances which were mentioned, and which, perhaps, it will be
better to explain.
Question. Try to recollect whether that was the first conversation
between Mr. Bailey and yourself in connexion with these bonds?




ABSTRACTED INDIAN TRUST BONDS.               49
Answer. I have tried to do it, and I am not able to fix it in my
mind. I am not able to say; with your permission I will go on and
state how I came to have any knowledge of this matter. William
H. Russell has been connected or associated with me in business for
several years; it was an accidental connexion in the first instance;
he became a partner in a firm out west of Smoot, Russell & Co., in
which I was made a partner without my previous knowledge or
consent; Mr. Smoot was my partner in the banking-house of Suter,
Lea & Co.; Mr. Russell had been here on some business matters in
some of the departments, in which he had got Mr. Smoot to assist him;
I was absent from the city at the time, and had been absent for several months; this was in the spring; and I had been absent pretty
much all winter; growing out of the business matter of Mr. Russell
here, in which Mr. Smoot had served him, it was agreed that Mr.
Smoot should go out west with Mr. Russell; when they went out
there Leavenworth was about springing up as a place of importance 
it was known that there was going to be a large amount of money
disbursed there in connexion with the expedition to Utah and
the army operations being carried on in that quarter; the city
of Leavenworth was likely to be a place of large growth, as it turned
out, and it seemed to be a favorable location for temporarily establishing a banking office; in order to anticipate the establishment of such
an office by other parties who might be tempted by the inducements
which were held out, to get the start of others Mr. Smoot proposed
to Mr. Russell that they should forthwith start a banking-house
there, and Mr. Russell, thinking it might be a good thing, impulsively
acquiesced in it, and thereupon they took it upon themselves to advertise a banking firm under the name of Smoot, Russell & Co., using
our names-Thomas R. Suter and Luke Lea-as members of that
firm, thus making it appear as in connexion with our banking business here; my partner, who was left here in charge during my absence
and Mr. Smoot's absence, heard of this a day or two before my return
from a long absence at the west, and took no action in reference to it
until my return, when he, very much to my surprise, communicated
to me the information; I was displeased with it very decidedly, and
determined at first with him that we would repudiate the whole thing,
and disavow our connexion with it; it was a liberty they had taken
with our names which was anything but acceptable to us.
[The witness was here reminded that the matter he was stating was
entirely irrelevant to the subject of investigation.]
WITNESS. The reason why I wished to make the statement was
to show how it was that I came to have this conversation with Mr.
Bailey.
Question. Had Mr. Bailey any connexion with that partnership?
Answer. None in the world.
Question. Did this conversation with Bailey grow out of any matter
connected with this banking-house?
Answer. No, sir; I first saw Mr. Bailey, in connexion with this
matter, at the instance of Mr. Russell.
Question. Was the conversation to which you have alluded as
H. Rep. Com. 78 —— 4




50            ABSTRACTED INDIAN TRUST BONDS.
taking place in September or October the first you had with him
on the subject?
Answer. No, sir; it was before Bailey went to Minnesota that I
first saw him.
Question. Beginning, then, with this conversation, what was the
substance of it; what induced you to see Mr. Bailey in reference to
it?
Answer. I was proceeding to state that I had a great many matters
of business with Mr. Russell in consequence of this accidental-so to
speak-connexion with him as members of the partnership I have
mentioned in Leavenworth. Some time in July last I was in New
York; Mr. Russell was also there, and we had occasion to go on the
cars from there together. Travelling along in the cars, and having
nothirg else to do, we had a long conversation about our business
affairs, and in the course of that conversation he had given me a very
full exposition of his business affairs, more full than he had ever done
previously. In the course of the conversation he mentioned to me the
fact that some of Governor Floyd's official acceptances, which he had
received and passed, were about to be protested. He expressed great
uneasiness about it. He spoke of that in connexion with the government being in his debt, and of its having withheld from him money
which was justly due; that the means of the company of which he was
the head were very large, but that, in consequence of the government
refusing to pay the money they owed, and in consequence of their
failure to receive money from other sources upon which they confidently relied, they were unable to take up the acceptances which
Governor Floyd had given, and found themselves in this unpleasant
predicament. It seemed to disturb him very much that these acceptances were likely to be protested in spite of anything he could do to
prevent it. He manifested a great desire to raise money, and by some
means or other prevent this result, which he deprecated very deeply.
It seemed to make him feel very uneasy and unhappy. He said that
unless he could devise some way by which these acceptances could be
prevented from going to protest, Governor Floyd would be compelled
to retire and break up the cabinet.
Question. Before you go further in your statement, be kind enough
to inform us what acceptances of Governor Floyd he referred to, which,
if allowed to go to protest, would break up the cabinet?
Answer. I do not know.
Question. Then you are not aware of the character of those acceptances?
Answer. I know nothing about them more than the public generally has been informed of. I knew that Governor Floyd, at the time
of these expeditions to Utah, had been facilitating the operations of
these large contractors-Russell, Majors & Waddell-by giving his
acceptances from time to time, on which they raised money for carrying on the immense business of the transportation of supplies to the
Utah expedition.
Question. Did Mr. Russell say about what amount of these acceptances had been given upon which Governor Floyd was likely to be
dishonored about that time?




ABSTRACTED INDIAN TRUST BONDS.               51
Answer. It is very likely he did, but I do not recollect now.
Question. Were they for services already rendered, or for services
to be rendered?
Answer. I do not know.
Question. And you do not remember whether'he named the amount?
Answer. lie may have done so; I cannot state positively.
Question. Do you recollect what amount was named to you, if any?
Answer. I cannot positively; my recollection is not very good.
Question. Do you remember the amount of money he said it was
necessary to raise to save them from protest?
Answer. I think, if I mistake not, it was a little over or a little
less than $100,000. It may have been $120,000, though I am not
able to state with certainty that it was not less.
Question. That was in July last?
Answer. Yes, sir. 
Question. Did he ever tell you, and if so, tell the committee, what
amount of money was raised upon these acceptances?
Answer. I never knew about that. I do not know where they
were, or who held them.
Question. Did he say nothing about what amount of money had
been raised upon them, or from whom he had raised it?
Answer. No, sir.
Question. In fact, did he give the impression tha; he had parted
with the acceptances for the purpose of raising money?
Answer. Oh, yes, certainly; and I think, if I am not mistaken, he
had done it in various other instances.
Question. Do you know how he had done it in the other instances?
Answer. I think he put them into market and negotiated them.
Question. How?  I do not understand.
Answer. HIe would draw on the Secretary of War for such an
amount under contract coming to them for army transportation to
Utah. Governor Floyd would accept the drafts and, then Mr. Russell
would go into the market and get the acceptances discounted, just as
any other negotiable paper is discounted.
Question. Did Mr. Russell, in the conversation in which he complained of his pecuniary trouble, tell you that he had raised money
upon those acceptances?
Answer. That was my understanding. I understood that they
were in the hands of parties who held them expecting them to be
paid.
Question. Did he, in no single instance, indicate to you from whom
he had raised money upon those acceptances?
Answer. I do not know that I ever heard of whom he raised money
upon any one of those acceptances.
Question. Do you know how he obtained money upon any one of
them?
Answer. Not personally.
Question. What information have you upon that subject?
Answer. I only know that he pub that paper into the market and
raised money on it. I suppose he got the money wherever he could;
that he used the acceptances as he would use any other negotiable
paper.




52            ABSTRACTED INDIAN TRUST BONDS.
Question. He did not indicate to you, nor do you know, the way in
which he raised money upon any one of them; from whomn, and at
whEat place or places?
Answer. I do not know that he negotiated any one of them at any
time; I know that they were upon the New York market, and that
they have depreciated.
Question. Did you suggest any mode in which he could relieve
himself?
Answer. No, sir.
Question. Did he suggest any mode?
Answer. Yes, sir; he urged me and said,," is there any plan by
which I can raise the money and extricate myselffrom this dilemma?"
Question. Were you able to suggest none?
Answer. I told him I could not; that if I had the money he knew
I would let him have it. He asked me if I knew any mode; if I
knew anybody who had any bonds, or stocks, or securities; any one
who had any capital lying idle which he could borrow temporarily on
security. I told him Washington was a poor place; that I did not
know anybody who had money or any considerable amount invested
in bonds; that I could not think of any way in which he could raise
the money or make any arrapgement.
Question. In that conversation was any reference whatever made to
the government securities involved in this transaction?
Answer. No, sir.
Question. None by Mr. Russell or yourself?
Answer. Possibly there might have been, but Russell thinks there
was not.
Question. Do you recollect nothing in your conversation with
Russell which led to the suggestion on his part whether or not bonds
of some sort could not be obtained in Washington upon which he
could raise money?
Answer. He suggested the idea himself. He wanted to know
whether I could tell him where he could find anybody from whom he
could borrow bonds. The suggestion was made entirely by him. It
came into his mind under the pressure of the exigency in which he
was placed.
Question. Try to recollect, on reflection, whether in that conversation there was no suggestion made by you to him, or by him to you,
of the chances of his raising money on government securities, and
especially on such securities as are involved in this transaction.?
Answer, None on earth. He talked a good deal in reference to
the rmatter, and as to whether some plan could not be suggested by
which he could be extricated from this dilemma, and Governor Floyd
protected. That seemed to be his great point of anxiety, as he felt
under great obligation to Governor Floyd who had done him a favor
by giving these acceptances, and he wanted to prevent the injury
which would result to Governor Floyd from having these acceptances
dishonored, and which would cause Floyd to leave the cabinet. It
seemed to distress him exceedingly. He was casting about, as' any
man would do under such circumstances, and was trying to strike out
some plan, and was urging me very earnestly to see whether I could




ABSTRkCTED INDIAN TRUST BONDS.              53
not suggest something or other to extricate him from this dilemma.
I told him I could not. Then he went on and said, " I have heard of
a man, I understand, in Washington, by the name of Bartey or Bailor, who is an agent for the negotiation of stocks and securities."
Says he " do you know him?" I paused and said I did not know
any man of that name. Russell seemed rather surprised that I should
not know a man of that name who was an operator in stocks, as he
understood. " Well " said he, " this man is a friend or counexion
of the governor," meaning Secretary Floyd. When he suggested
the idea that he was a connexion of Governor Floyd, I recollected
that Bailey sustained that connexion to the governor, and supposed
that perhaps that was the man he was thinking of, and whom he
called Bailor. I told him I knew a man by the name of Bailey who
was a connexion of the governor. Said he "I think that is the
name."  I said I knew  him  very well, but said "he has not a
dollar of stocks; he is as poor as anybody; I have had frequent
transactions with him, and have loaned him money from time to time
when he was hard up, but he has no stocks that will answer your
purpose."  It is possible that in that connexion I may have incidentally mentioned the fact that Bailey was a clerk in one of the
departments, and was custodian of some trust funds.
Question. Do not you think, upon reflection, that you made such
a statement?
Answer. I think it is very likely, but Mr. Russell tells me he does
not think I did. If I did, it was merely in that incidental way.
Question. What did Russell say?
Answer. He said he understood that Bailey was a man engaged in
the negotiation of stocks; that he had heard of him in that way negotiating in New York a large amount of Florida railroad bonds. Then
I recollected that Bailey had before that time consulted with me about
a large amount of railroad bonds, in reference to which he had been
employed by Senator Yulee on behalf of the State or railroad. Heo
consulted me about the negotiation of them. He told me lie had a
good thing of it, and wanted to know if I could make any suggestion
about them.
Question. When you told him about Bailey being in possession
of a large amount of securities, what did he say?
Answer. I said to Russell that I had no idea that Bailey could be
of any service to him in putting him in the way of getting any securities for him; but, said I, " he may be of service to you in expediting the payment of the money which the government is owing to you,
and which they are delaying the payment of."
Question. How did you expect him to expedite that payment?
Answer. By using his influence with Governor Floyd, or with anybody who might have any connexion with him. Bailey had served
me as to money matters in his own department, and I thought he was
rmore efficient than anybody else.
Question. You thought he could get Floyd to pay the money?
Answer. I thought he might expedite the payment of the money
which the government was withholding.




54            ABSTRACTED INDIAN TRUST BONDS.
Question. Was there in that conversation any reference to the securities of the government in the control and custody of' Bailey?
Answer. None on earth.
Question. When did you have your next conversation with Russell?
Answer. Russell seemed impressed with the belief that Bailey had
a large amount of stocks and was a dealer in stocks, and he evidently
thought that somehow or other Bailey was in a position to put him in
the way of getting hold of some securities of some kind which he could
borrow for the purpose of' extricating him from his dilemma. He
asked me to see Bailey, and said that perhaps I could be of some service to him. I told him I did not believe Bailey had control of any
securities which he could avail himself of. He still wanted me to see
Bailey, because I had suggested to him that he might be of service in
getting this money paid at the department, the payment of which
Russell said was unreasonably delayed. In that way I supposed
Bailey might serve him.
Question. Did you bring the two parties together?
Answer. No. sir; not directly.
Question. Did you do so indirectly, and how?
Answer. Russell requested me to see Bailey, as he thought he might
be of service to him. It was a desperate and forlorn idea of his. He
asked me if I would see him on my return to Washington. I told
him I would. When I reached Washington and went to my office I
found that several matters of business had accumulated, and getting
engrossed in those matters, this promise to see Bailey got out of my
mind. About the time the bank closed Russell came in and said that
he had been up to the department and had failed to get them to pay
the money. He expected $75,000 or $100,000. He said he had not
been able to get them to pay the money in time for his purposes. He
asked if I bad seen Bailey. I told him I had not. He asked me if I
could see him that day. I said that I might perhaps see him the next
day. He asked me if I would  I said I would.
Question. Did you see him the next day?
Answer. I did.
Question. For what purpose?
Answer. For the purpose of communicating to him the information
that Russell desired.
Question. What was that?
Answer. The fact of the predicament in which he was placed, and
his great desire to find out some means of getting money to protect
the acceptances of' Secretary Floyd.
Question. You stated to Bailey that the great desire of Russell was
that he might put him in the way of getting some means of protecting
those acceptances?
Answer. I did not express any desire to see him myself.
Question. You told Bailey that you saw him at the instance of
Russell, who was distressed about those acceptances, and that he had
the idea that Bailey could help him in some way.
Answer. I suppose we had an interview of four or five minutes, in
which I stated those facts which Russell had communicated to me.
Question. What did Bailey say?




ABSTRACTED INDIAN TRUST BONDS.              55
Answer. He said c" can it be possible?"  He seemed fired up with
the idea of Floyd's predicament, and said " can it be possible that
Floyd is in this predicaments" or some such expression. I told him
I knew nothing except what Russell had told me. He said he would
look into it; he seemed to be much exercised about; he said "I am
busy now, but will look into it."
Question. Did you tell him that the condition of things would make
Floyd's resignation necessary?
Answer. No, sir. I said that Russell had said so.
Question. You did not, in conversation with Bailey, suggest any
particular mode in which he could raise the money to save Floyd, but
told him that that was Russell's anxiety on the matter, and that he
desired to be put into communication with Bailey?
Answer. In conversation with Bailey I never alluded to the trust
fund.
Question. Did Bailey make any remark to you indicating his
ability or intention?
Answer. None.
Question. Did he ask to see Russell?
Answer. He did not.
Question. Did you make any arrangement by which they came into
contact?
Answer. I did not.
Question. Did they come together?
Answer. I heard they did.
Question. Did Mr. Bailey in that conversation indicate his ability
in any way to serve Russell?
Answer. He did not make the slightest suggestion about it. He said
he would look into it, or inquire into it, to see whether those facts
were so; not that he doubted me, but because I had stated those matters to him as information.
Question. What is Bailey's connexion with Secretary Floyd?
Answer. I think their wives are cousins.
Question. Did you see Russell immediately after this, and indicate
to him this conversation?
Answer. No, sir. My impression is that I did not see him for some
considerable time. He went off that evening to New York, as he had
to be there the next day in order to protect the acceptances.
Question. Was this conversation with Bailey the same day Russell
got the bonds and went to New York?
Answer. So I understand.
Question. Had you other interviews with Russell and Bailey upon
this subject?
Answer. Numerous ones afterwards.
Question. What time in the day did you see Bailey?
Answer. In the middle of the forenoon I should think; before 3
o'clock.
Question. I understand you to say distinctly that in your conversation with Bailey there was no reference to these particular securities,
or to any securities, in his custody and under his control in the
department?




56            ABSTRACTED INDIAN TRUST BONDS.
Answer. There was none whatever; not the slightest intimation
about them. It was a thing I did not contemplate as possible. The
idea did not come into my mind.
Question. You say you have had subsequent conversations with Bailey upon this subject, but that you did not communicate to Russell this
particular conversation?
Answer. I did not see Russell after that conversation for some time;
I am not positive.
Question. Are you positive you did not see Russell and communicate that conversation to him?
Answer. I do not think I did. If I did, it has escaped my recollection.
Question. Was he at your office the day you had the interview with
Bailey?
Answer. My impression is that he was not. He was -there the day
before.
Question. His object in coming to see you the day before was to ascertain whether you had seen Bailey?
Answer. That was his object.
Question. Did you say you would see Bailey?
Answer. I told him I would. He did not come back to find out
whether I had seen Bailey, because he had communicated with Bailey
at the War Department.
Question. Have you had subsequent conversations with Bailey, in
which the matter of these bonds was spoken of?
Answer. Yes, sir; repeatedly.
Question. What was the substance of those conversations?
Answer. The conversations have been frequent, and it is impossible
for me to state the precise time or what took place in any one of them.
Some time after Mr. Russell obtained these bonds I learned the fact.
I forget now whether I learned that from Bailey or Russell, and I
cannot be positive as to the time, or whether I learned it from Bailey
before he went to Minnesota, or whether I spoke to him upon the subject previous to his leaving or after his return. My impression is that
I first learned it from Russell; and when Russell told me he had got
certain bonds from Bailey, my impression is I told Russell I was apprehensive he had got Bailey into a scrape, or that they had got themselves into a scrape.
Question. Are you utterly unable to fix the time of that knowledge?
Bailey went to Minnesota about the middle of July, and returned in
October.
Answer. It may be I talked with Bailey before he went away, or
it may have been afterwards. I think I learned the fact from one or
the other of them before Bailey's return. Whether Bailey communicated to me what he had done before he went to Minnesota I do not
know; I think it probable he did.
Question. What did he communicate to you?
Answer. He or Russell communicated to me the fact that Bailey
had let Russell have the bonds.
Question. What bonds?
Answer. I think there were $150,000 of North Carolina and Mis



ABSTRACTED INDIAN TRUST BONDS.              57
souri, and perhaps Tennessee bonds-one or the other of those three
classes.
Question. Did he state how he had come to do that-with what impulses, and under what idea?
Answer. Yes, sir. He stated that upon the information I gave him
he went up to the War Department to see Mr. Floyd; that Mr. Floyd
was closeted with General Scott; that he was in a hurry, and, failing
to see Mr. Floyd, he had spoken to Colonel Drinkard, and stated
to Colonel Drinkard the information which had been communicated
to him —that is, the facts that Russell, Majors & Waddell had these
acceptances, that they matured soon, and that there was a temporary
embarrassment about allowing them to go to protest. Drinkard told
him it was true. He said, " It is true that if they are protested they
may compromise Mr. Floyd, and he may be obliged to leave the cabinet?" Mr. Drinkard told him it was so. It seems that just at that
time Mr. Russell happened to make his appearance at the department, and Drinkard introduced them, as I understand. Bailey
took Russell aside and had some conversation, in which this thing was
arranged, Russell giving assurances that if Bailey placed any securities in his hands upon which he could raise the money to meet those
acceptances, he would certainly return them within the time specified
between them-perhaps sixty or.ninety days. Russell gave Bailey
those assurances, and thereupon, for the purpose of extricating Floyd
from his dilemma, he made up his mind himself, without instigation
from anybody, to place those trust fund securities in the hands of Russell.
Question. You have stated that before Bailey went to Minnesotayou are pretty confident it was-you learned these facts from him?
Answer. I think Bailey must have mentioned it to me before he
went away.
Question. When did you see Russell after that?
Answer. Russell went to New York, and returned in a few days;
afterwards he received a considerable amount of money from the government.
Question. When was the conversation, and with whom was it, in
which you stated that one or both of them  had got themselves into
trouble?
Answer. I made the remark when I was informed of the fact by
one of them, whichever it was, that those State stocks had been used.
Question. Then you saw Bailey before you did Russell?
Answer. I do not know as I did.
Question. To which one of them did you give this information?
Answer. I cannot state positively which one it was I first saw and
learned this thing from.
Question. When you saw Russell after his return from New York,
where he had taken this first instalment of bonds, had you any conversation with him about the bonds he had received?
Answer. Yes, sir. He told me had got those bonds from Bailey.
Question. Did he tell you that that process had enabled him to relieve himself?




58            ABSTRACTED INDIAN TRUST BONDS.
Answer. That was what he said. He had taken up the acceptances.
Question. Did he tell you in what way he had used the bonds to
take up the acceptances?
Answer. He had hypothecated them.
Question. With whom?
Answer. He did not tell me.
Question. Where?
Answer. In New York.
Question. Are you cognizant of the transactions which led to the
delivery of the balance of the bonds to Russell?
Answer. Only partially. There were frequent conversations between Russell and Bailey and all the parties. Sometimes I talked
separately with them, and sometimes altogether.
Question. After you advised either Russell or Bailey that by this
operation they had gotten themselves into a bad business or scrape,
did it seem to produce any impression upon them'?  Did not the operation still go on?
Answer. Yes, sir; it went on, and I account for it in this way: the
bonds which Russell got hypothecated in the first instance were so
far from meeting his necessities, that when the time came round to return the bonds, his embarrassments were increased instead of being
removed.
Question. Did he know precisely where these bonds came from?
Answer. I do not think he did; he tells me that he did not at that
time, though he afterwards learned; I do not know at what time Mr.
Russell learned the true character of' the bonds.
Question. As far as he informed you, was it before or subsequent to
this first transaction?
Answer. It was subsequent to the first transaction that he learned
they were taken from the Indian fund; at least, if he knew it before I
have not been informed of it. I think the reason why he took the
course that he did was this: Mr. Russell is a sanguine man, and was
disappointed about the means that he expected to have at his cominand.
Question. That is not testimony; it is rather a plea put in as excuse for Russell. I understand you to say that Russell never informed
you. and that you do not know into whose hands these bonds went in
the city of New York?
Answer. I do not; I never knew what he did with one of them. I
understood, however, that he hypothecated them with various parties.
Question. Have you never learned from Bailey what use was made
of them?
Answer. No, sir; I do not think Bailey knew.
Question. Do you know from any source whose hands these bonds
went into?
Answer. I do not know what Russell did with any of them.
Question. Have you any knowledge of where they are now?
Answer. I have not; not one of them.
Question. Nor any information?
Answer. No information upon the subject; I never asked Russell




ABSTRACTED INDIAN TRUST BONDS.               59
what he had done with them, and never received any information
from him except that he had taken them to New York and hypothecated them for the purpose of raising money.
Question. Did Mr. Russell in this conversation, when speaking of
the peculiarly embarrassing position in which Governor Floyd would
find himself if these acceptances were not taken up, state why Governor Floyd would be compelled to resign?
Answer. No, sir; the impression made upon my mind, however,
was that Governor Floyd had improperly, and perhaps illegally, made
these acceptances.
Question. Did Mr. Russell make that statement to you?
Answer. No, sir; it was rather an inference of mine that Governor
Floyd had been at least guilty of an indiscretion in giving out these
acceptances; that he had gone beyond his strict authority; and that it
would be a very delicate matter for him if the acceptances were not
taken up.
Examination by the chairman.
Question. If I understood you correctly, you stated that the first
-conversation you had with Russell was on the cars coming from New
York to Washington?
Answer. Yes, sir; that was the conversation which led me to see
Mr. Bailey.
Question. That was before Bailey went to Minnesota?
Answer. Yes, sir; it was early in July.  Mr. Bailey went to Minnesota, I think, in the latter part of July; I do not recollect the precise time, but it was after my conversation with him.
Question. Was it on the next day after the conversation referred to
between you and Russell on the cars that Russell called at your office
to know whether you had seen Bailey?
Answer. It must have been, because Russell expected me to see
Bailey the next day.
Question. And it was the next day after that that you had an interview with Bailey?
Answer. Yes, sir; it was the next day after Russell called at my
office.
Question. Was it that day that the $150,000 bonds were delivered
to Russell?
Answer. That is what I understand.
Question. How long afterwards was it that you saw Bailey or
Russell, and stated to them that they had got themselves into a scrape,by delivering these bonds?
Answer. I cannot recollect precisely; it was soon after —several days
after, I suppose. I think before Bailey went to Minnesota he saw nme
in regard to some business matters, and in some of these interviews
he may have mentioned this fact.
Question. Fix the time as nearly as you can?
Answer. I am sorry I cannot do it precisely.
Question. How did that communication take place to you and
Russell?
Answer. I do not think I saw them together. I do not know that




60            ABSTRACTED INDIAN TRUST BONDS.
I saw them together at any time until after Bailey's return from
Minnesota.
Question. Did you see them together soon afterwards?
Answer. It is quite likely that I did, though I cannot be positive
whether I saw them together or separately.
Question. Did you state to them separately or together, soon after
Bailey's return, that these bonds had been improperly removed?
Answer. That was the whole of my conversation with them ever
afterwards.
Question. At that time had any others than the $150,000 of bonds
been delivered to Russell?
Answer. I think not.
Question. But you learned from the parties separately that other
bonds were from time to time delivered from Bailey to Russell?
Answer. Yes, sir.
Question. I will ask you whether you are acquainted with the
Secretary of the Interior?
Answer. Very well.
Question. Did you at any time after the knowledge of the use of
these bonds by Bailey call upon the Secretary and inform him that
Bailey was using them in the manner he did?
Answer. I did not. It is perhaps necessary for me to state here my
view of the matter.
The CHAIRMAN said the committee desired the witness only to state
facts.
The WITNESS remarked that the position he occupied in reference to
this matter was a very peculiar one; that by simply stating facts,
without being permitted to accompany them with explanation, he
might render himself liable to a criminal prosecution; when if permitted to explain, it would appear that lie was innocent.
Question. You state that you have had recently conversations with
Bailey and Russell with reference to these transactions?
Answer. Yes, sir.
Question. Where did these conversations take place?
Answer. Some of them have taken place at my bank, and some at
Russell's room here. Mr. Bailey has been at my house, and I have
been at his boarding-house. We have had repeated conversations at
different times.
Question. Was there ever any person present at these conversations
but yourselves?
Answer. Never.
Question. When was the last conversation you had with Bailey and
with Russell?
Answer. At the jail, day before yesterday, I think.
Question. Did they send to you, and request you to come, or did
you go voluntarily?
Answer. I went there voluntarily.
Question. When you got to the jail you conversed with them freely
in regard to these transactions?
Answer. Yes, sir; just as anybody else would.
Question. Have you ever had more than one conversation with them
at the jail?




ABSTRACTED INDIAN TRUST BONDS.                61
Answer. I have been there twice, and seen Mr. Russell. I have
seen Bailey there but once. When I first went Russell only was there,
Bailey having been released on bail. Afterwards Bailey was remanded
to jail, and the last time I was there I saw both.
Question. I understand you to say that you had no connexion with
these parties in these transactions?
Answer. Only as a friend.
Question. And your friendship for the parties was so great as to
induce you voluntarily to go and see them about this matter?
Answer. Yes, sir.
Question. And to hold frequent conversations at various times with
both parties?
Answer. Yes, sir.
Question. You say you have known Bailey some three years?
Answer. I do not know how long. I suppose about that time.
Question. You have, if Iunderstand you correctly, been very intimate with Mr. Bailey since he has been in the city?
Answer. No, sir; I cannot say that I have been very intimate with
him.
Question. Has he been frequently at your house?
Answer. Not very often.
Question. Has he frequently been at your office?
Answer. He has not been there very often.
Question. Have you been frequently at his office or room?
Answer. Not very often.
Question. How often?
Answer. Not more than half a dozen times, I suppose, in my life.
Question. Your acquaintance was not very intimate, then?
Answer. It was not.
Question. Not such as to make you intimate personal friends?
Answer. I could not say that we were such. Our acquaintance
related more to business matters than personal matters.
Question. What were your business matters to which you refer?
Answer. I must say that they had nothing to do with these transactions. I do not know that I ought to expose my business transactions.
The CHAIRMAN. I understand you say that you had frequent business transactions with Bailey. I repeat the question, what were those
transactions?
WITNESS. I decline to answer. I do not think I am called upon to
disclose private business.
Question. Were they of a monetary character?
WITNESS. I am willing to say that they were, but I will not be
drawn into what I believe to be a wrong; that is, to expose the confidential business transactions of those who confide in me.
The witness was here directed to retire.
After consultation, the committee deternined not at present to press
the question which the witness had declined to answer.
The witness was again recalled.
Question. I want to ask you if you know who compose the firm
known as Russell, Majors & Waddell?




62            ABSTRACTED INDIAN TRUST BONDS.
Answer. Winm. H. Russell is one. I do not recollect the christian
names of Mr. Majors and Mr. Waddell. There are others, I believe,
who are silent partners, but I do not know their names.
Examination by Mr. flarris.
Question. You stated before that you had frequent conversations
both with Mr. Russell and Mr. Bailey after this first $150,000 transaction?
Answer. Yes, sir.
Question. And that the character of these bonds was frequently
spoken of?
Answer. Yes, sir.
Question. Now I want you!to recollect, if you can, whether you
had any such conversation with Mr. Russell prior to this $150,000
transaction?
Answer. None in the world.
Question. I want you to state as clearly as you can whether he was
not aware of the character of these bonds even before this $150,000
transaction was communicated to you?
Answer. My own best information and judgment is, that he was
not. I don ot think that Mr. Russell knew the character of these
bonds when he received the first $150,000 of them.
Question. You say that afterwards you had frequent conversations
with these parties, both of them, in which you stated to them that
the transaction was a dangerous'one, and that they would get into
trouble?
Answer. Yes, sir.
Question. How many conversations do you think you had with
these parties after this statement was made by you?
Answer. I cannot say how many. They were frequent.
Question. All the time, however, after this disclosure of the character of the transactions was made, and the transactions still went
on, these parties communicated freely to you their operations?
Answer. Partly they did. I cannot say they did fully. I did not
know the precise times at which further advances were made, nor did
I know the amounts. I learned afterwards, rather incidentally, that
other advances had been made; not that I was consulted about them
in advance at all. I was not advised what bonds they had, or the
precise negotiations that took place between them, but I was advised
from time to time that further advances had been made.
Question. Were you not informed of the fact that the same character of negotiations were going on that took place in reference to this
first advance of $150,000?
Answer. O yes, I am free to admit that.
Examination by Mr. Conkling.
Question. I wish you would state to me at what time you had the
first conversation with Mr. Russell after you learned that these bonds
had been handed to him?




ABSTRACTED INDIAN TRUST BONDS.               63
Answer. I am not able to state precisely when it was.
Question. I am asking you to fix the time as nearly as possble.
How long after you first learned that these funds to the amount of
$150,000 had been handed to him?
Answer. I am not able to state.
Question. As nearly as you can.
Answer. My impression is, that he weut to New York. How long
he was there, and how long before I saw him, I am not able now to
state.
Question. Still I repeat the question, as nearly as you can?
Answer. It may have been a week, and it may have been two or
three weeks.
Question. Is that as near as you can fix it?
Answer. It is.
Question. Was it in that conversation that Mr. Russell first spoke
to you or you to him in reference to his having received the bonds?
Answer. It was.
Question. And was it in the same conversation that you first made
to him the remark you did in reference to its being a hazardous and
unwarrantable transaction, that " they had got themselves into a
scrape? "
Answer. I do not recollect that in that conversation I stated to
Russell why it was that they had got into a scrape.
Question. My question is simply whether you made that remark in
that conversation, and that admits of an answer " yes" or " no."
Answer. I will use the language I then used as nearly as I can.
I said: "I am afraid you have got into a scrape," or "a bad predicament about it."
Question. Did Mr. Russell reply to that remark?
Answer. Yes, sir.
Question. What was the reply?
Answer. He expressed some astonishment, and said: " Do you not
believe I will return them?"
Question. What did you say to that?
Answer. I said: " I have no doubt of it."
Question. And what did he say?
Answer. " Of course I shall return them."
Question. What further conversation then, if any, was there upon
that point?
Answer. I do not recollect.
Question. Subsequently between you and Mr. Russell was this same
point of danger recurred to?
Answer. All the time throughout; and I urged upon them always
the speediest restoration of the bonds.
Question. Did Mr. Russell, at any time subsequent to this first
conversation, put any question to you for information as to the
character of those bonds?
Answer. I do not think he did; I do not think Russell cared what
the character of them was.
Question. Have you received any written communication from
Mr. Russell at any time in reference to those bonds?




64            ABSTRACTED INDIAN TRUST BONDS.
Answer. Mr. Russell has written to me letters, in which he has
referred to those bonds, and to these transactions, repeatedly.
Question. When first?
Answer. I cannot say when.
Question. As near as you can tell?
Answer. It may be early after he received them, and from that
time up to the present day.
Question. Was it soon after he received those bonds that he wrote
you in reference to them?
Answer. I do not think it was.
Question. How soon after, according to your recollection?
Answer. I am really not able to fix any time. It may have been
a month, and it may not have been until two months.
Question. How long ago, according to your best recollection, did
you first receive a letter from Russell touching these bonds?
Answer. Well, perhaps it may have been two months ago; I would
not be positive.
Question. And how many letters in all have you received from him
touching those bonds or alluding to them?
Answer. Perhaps five or six.
Question. Where are those letters?
Answer. I destroyed them.
Question. When?
Answer. When I got them; I do not preserve private, confidential
letters.
Question. When did you destroy those letters? I do not want to
know what your customs are.
Answer. As I received them, as is my rule in all such cases.
Question. Is that the nearest answer you can give?
Answer. Yes, sir, because it is the fact.
Question. And that is the nearest statement as to the time of the
destruction of those letters?
Answer. I have stated the time exactly. If you want to know as
to the time of the receipt of those letters, I cannot tell.
Question. How recently have you destroyed any letter from Russell?
Answer. I think I destroyed one last week.
Question. What day?
Answer. Perhaps it was Friday; it may have been Saturday.
Question. When was that letter received?
Answer. Five minutes before I destroyed it.
Question. It came by post?
Answer. Yes, sir, from New York.
Question. Have you received any letter since from Russell?
Answer. No, sir.
Question. Have you received from Russell any other written communication about those bonds?
Answer. None at all, except in business correspondence, and in
answer to letters I wrote to him upon the subject.
Question. Did you reply to those letters?
Answer. Yes, sir; there were letter and answer, letter and
answer.




ABSTRACTED INDIAN TRUST BONDS.               65
Question. Can you state how many of those letters you have
referred to were in answer to letters previously written by you?
Answer. I cannot state precisely; there may have been five or six,
or more; we never had much correspondence upon the subject, because
our communications were generally conversational.
Question. How many in all were there of letters all'uding to these
bonds?
Answer. I have stated I do not know; there may have been four,
five, or six, and there may have been as many as ten, in which allusion of some kind was made to them.
Question. And you cannot state how many of these letters were in
reply to yours, and how many you replied to?
Answer. They were all one in answer to another.
Question. I am asking you if you can state how many, on the one
hand, were replies to yours, and how many you replied to?
Answer. I think all of Russell's letters were in reply to letters I
wrote him; I do not know as I got any letters in which the bonds
were alluded to, except in reply to something I had said.
Question. Did you keep copies of your letters?
Answer. No, sir.
Question. Is it your general practice not to keep copies?
Answer. The bank keeps copies of business letters which we write
upon the ordinary business of the bank; but my rule is not to keep
copies of private correspondence. These letters were of a private and
strictly confidential character-of the most sacred and confidential
nature.
Question. And was it owing to their sacredness that you didnot
keep copies?
Answer. It was; it was for that reason that I destroyed the letters
upon this subject. I betray no private confidence myself, and keep
no letters which will betray it.
Question. Will you state to the committee the contents of the first
letter you received from Russell alluding to those bonds, as nearly as
you can?
Answer. I think the first letter was giving me some assurance that
he would speedily be able to return the bonds. I had written him, as
I had urged him in conversation, to do so; and I think the first letter
he ever wrote upon the subject was giving me assurance that he
was exerting himself to get the control of them, and that he would
speedily bring them back and restore them.
Question. In what month was that letter written?
Answer. I think it was some two or three, perhaps three months
ago. I think it was in October last.
Question. Give the day of the month.
Answer. I cannot.
Question. Is that all you can state of the contents of that letter?
Answer. I cannot state positively that I have given all, but that is
my impression.
Question. How long after that did you receive the next letter?
Answer. It is impossible to say, but it may have been two or
three weeks.
H. Rep. Corm. 78 —5




66            ABSTRACTED INDIAN TRUST BONDS.
Question. Give the contents of that next letter.
Answer. They were all pretty much of the same character.
Question. Give the contents as nearly as you can.
Answer. It is impossible for me to do it. Mr. Russell never wrote
me much about them; his allusions to them were brief.
Question. Can you give any part of the contents of that next letter?
Answer. Nothing, except in a general way.
Question. Can you give, in substance, any part of it?
Answer. No, sir.
Question. Why can you not?
Answer. Because I do not recollect; it was something about
the bonds, and in answer to my plying him to return them; and
I think all he wrote me was to quiet me about his returning them.
Question. Is that all you can state about the contents of the letter?
Answer. Yes, sir.
Question. The first letter was in October?
Answer. Yes, sir.
Question. The second one in two or three weeks after?
Answer. Yes, sir.
Question. And the third one, how soon after that?
Answer. It may have been two or three weeks; I cannot tell.
Question. Can you give the contents of the third letter?
Answer. No, sir.
Question. And for the same reason, that you do not recollect.?
Answer. Yes, sir.
Question. How soon again came a letter?
answer. It is impossible for me to tell; it may have been 5, or 10,
or 15, or 20 days; I cannot fix the time.
Question. Can you give the contents of that letter, or any part of it?
Answer. No, sir; and for the same reason, that I have forgotten.
Question. The next letter, as near as you can tell.
Answer. I do not know as there was a next.
Question. Then I come to the letter which you destroyed within a
week. How long a letter was that?
Answer. I suppose it was about a page.
Question. Letter paper?
Answer. Yes, sir.
Question. Can you state the contents of that letter?
Answer. Yes, sir; perhaps I can.
Question. Give it in order, and all you can of it, beginning with
the date.
Answer. I cannot say what the date was; it may have been Thursday or Friday; it seems to me that I got it on Saturday morning.
Question. Dated in New York?
Answer. Yes, sir.
Question. Any place in New York?
Answer. I cannot say.
Question. Was there any stamp upon the letter indicating the particular place from which it came?




ABSTRACTED INDIAN TRUST BONDS.              6;7
Answer. I cannot say whether it was written in his office or at the
office of the Pony Express, where he generally writes his letters. The
letter was in answer to one I wrote him. The substance of the letter
was excusing himself for not coming over here immediately, with all
the bonds he could possibly control, as I had urged him to do. That
was the sum and substance of the letter, with the exception to some
brief allusion to some other business.
Question. Can you give any of the language of the letter?
Answer. Perhaps I might, but it would be rather a vague thing.
"Yours of such a date is received. It will be impossible for me to
come to Washington, as you request. I have business that will compel
me to remain here until Sunday, and I will be over on Monday morning; you may expect me on Monday morning."  I forget whether he
was any more specific. He had an appointment and engagements
which prevented him coming over, as I had requested and urged him
to do, until Sunday night. He would try to come on Sunday morning, but that his business arrangements were such there that he could
not, he believed, make his arrangements to leave and come before
Sunday night.
Question. What further?
Answer. Nothing.
Question. He did not mention the bonds in the letter?
Answer. I do not think he spoke of the bonds in this last letter.
Question. At whose instance had you written the letter which this
letter of a week ago was a reply to?
Answer. At my own instance.
Question. And the letter urged him to get all the bonds he could?
Answer. Yes, sir; all the bonds he could control, and to get up
the bonds and restore them as fast as he could.
Question. Have you any memoranda relating to this?
Answer. None in the world; I never saw one of the bonds in my
life.
Question. Did you state that you had recently made a communication to the Secretary of the Interior about this matter?
Answer. No, sir.
Question. Have you stated the matter to the Secretary of the Interior?
Answer. I have stated the whole case to him.
Question. When was it?
Answer. Sunday night last.
Question. What time?
Answer. In the evening, about tea time; about dark I went up there.
with a certain gentleman.
Question. Who?
Answer. Senator Rice.
Question. And what you stated to the Secretary you stated in hiss
presence?
Answer. Mostly; I think he left before I got entirely through thestatement. Judge Black also was present.
Question. Did you go to the Secretary in consequence of a conversation you had previously had with any one?




68            ABSTRACTED INDIAN TRUST BONDS.
Answer. In consequence of a conversation with Bailey and Rice.
Question. Was Mr. Rice present at the whole interview between
you and Bailey which led you to go to the Secretary?
Answer. He was not present.
Question. Then the interviews with Rice and with Bailey were separate?
Answer. Yes, sir.
Question. Where was the interview with Bailey?
Answer. At my house, Sunday morning.
Question. And was it that interview which led you to go and make
the statement to the Secretary?
Answer. Bailey had stated to me things which had taken place before the cabinet.
Question. You say Bailey came to your house Sunday morning
last?
Answer. Yes, sir.
Question. Detail that interview as near as you can.
Answer. Bailey came to my house Sunday morning, some time in
the forenoon-perhaps 11 o'clock-in a state of great excitement. He
told me had been up all night before the cabinet; that they had investigated this matter; had examined the safe, and all about it; had
interrogated him about all he knew, and that he had told everything
he knew about it; that they had counted the bonds, and found it all
ltrue that he had stated to them about the bonds and coupons, and all
that; that he had made, as he thought, a very favorable impression on;the >cabinet, and that they were disposed to sympathize with him
deefly, but that he had refused, as he promised he would do, to mention my name as the party which had given him the information originally which had led him to do this thing; that they had insisted on
knowing who it was who had given him these facts which had led him
to put himself in the way to find out whether the facts were true or
not, and which resulted in his giving the bonds to Russell. Bailey
represented to me that whereas he had promised me, as he knew me
to be an innocent party in the matter, he never would mention my
name-and;Russell had made the same pledge-he was determined to
abide by the pledge, and keep it to the last, and, if I insisted upon it,
he never would disclose it, yet that the favorable effect which his statement had made upon the members of the cabinet was prejudicial, in
his estimation, by his refusal to give the name of the party who had
given him the information which I communicated to him as to the
predicament in which Governor Floyd was placed; that the members
of the cabinet plied him in every way to get him to disclose the name
of the party who gave the information to him; that he refused, and
told them that he would suffer the tortures of the Inquisition before
he would give the information. He said, " Lee, you can judge for
yourself whether you will allow this fact to be made known or not;:you can see how it places me."  He told me, moreover, that they,were suspecting various parties, and named some who had been sus-;pected as the parties who had imparted this information from Russell.
W' Vell," said I,' I had Ihoped that it never would be necessary for
my.name to be mentioned in,connexion with this transaction; you




ABSTRACTED INDIAN TRUST BONDS.               69
know how much I have deprecated it; you know that I had no interest in it; that I was an innocent party in regard to it; and you can
very well understand how, in my situation, the disclosure of the fact
that I had in any way a connexion with it would subject me to suspicion."  Said I, "I believe it will ruin me to have it known; but if
what you have said is true-you are under excitement now, and it
may be you may not judge correctly about it-if it is necessary for
you to have the benefit of a full disclosure in regard to it, and if other
parties whom we know are innocent are subjected to suspicion in regard to it, I will go and communicate the information myself that I
was the party who imparted the information to you."
"Now," said I, "you may be mistaken about this. There may
not be a necessity for it. You say that Senator Rice was present
during your examination before the cabinet; do you suppose that he
would have any objection'to seeing me, and talking with me about
it?"  He said he thought not. I asked him if he thought Senator
Rice would be willing to come to my house during the day. He said
he thought he would. I then said, " present my respects to Senator
Rice, and tell him he will do me a favor if he will call at my house
at 3 o'clock." He came, and, in answer to my inquiry, said that the
refusal to disclose my name had created a prejudice in the minds of
the members of the cabinet; that it had created a suspicion that there
were other parties connected with the transaction.  "Well," said I,
" Senator Rice, although I know that the fact of my name being publicly mentioned in connexion with this thing will be to me the greatest
calamity that ever befel me in the course of my life, yet it is not in
my heart to refuse to disclose it. Will you go with me to see, Secretary Thompson?"  He said he would.  I asked him to do me the
favour to take a seat in my carriage. He did, and went there with
me. I went voluntarily before him, and stated all I knew in reference
to the matter.
Question. Will you state, as nearly as you can, Bailey's language
when he told you that he was suffering for his refusal to withhold your
name?
Answer. I wish I could, but I could not do his language justice.
He is an eloquent fellow sometimes-a man of fine sense.
Question. Please state just that one"remark which informed you
that he was suffering in the estimation of the cabinet in consequence
of withholding your name.
Answer. The idea was, thatQuestion. I do not want the idea-you have given that-I ask you
simply to give your verbal impression of his remark.
Answer. I would be glad if' I knew how to do it.
Question. Give it as nearly as possible.
Answer. I do not recollect precisely what were his words. It was
the ideas and not the language that impressed me.
Question. If you cannot give the language, will you be good enough
to repeat what were the ideas.
Answer. The idea was, that in the estimation of the cabinet he was
greatly prejudiced in consequence of his suppressing the name of his
informant. With regard to the rest of his statement, they believed




70            ABSTRACTED -INDIAN TRUST BONDS.
him to be stating the truth; they believed that he had made a fair
and honest disclosure. He said Secretary Thompson told him he had
as much confidence in him as he ever had had.
Question. Suppressing the name of his informant of what?
Answer. The man who gave him the information that Governor
Floyd was about to be compromised, and which information led him
to do this thing.
Question. Do you mean the committee to understand that you
thought it was a cause of ruin to any man that he should have
informed another of the fact that Governor Floyd's acceptances were
out?
Answer. No, sir, by no means; but what I mean to say is this:
that these bonds having been abstracted, if the fact were to become
publicly known that I furnished the information which led to the
abstraction of the bonds, it would, in the estimation of the public, so
connect me with the transaction as to blast my reputation and destroy
me. I have felt it most keenly.
Question. Is there any other explanation you desire to make in connexion with this point?
Answer. No, sir.
Question. Did you understand that the mere fact of conveying to
Bailey a knowledge of the predicament of Governor Floyd was the
thing of which other parties were suspected, and whose reputations
were to suffer by it?
Answer. No, sir. The suspicion in the minds of the members of
the cabinet was, that the man who had communicated these facts was
one of a band of conspirators who were concerned in concocting a
scheme for the plunder of this fund. Mr. Bailey said, " I know you
are innocent."
Question. Then I understand you that the point was as suggested
by Mr. Bailey, who had suggested the doing of this thing, that what
the cabinet desired was the name of the man who had suggested the
doing of this thing —who had conceived the idea?
Answer. No; the idea upon the mind of the cabinet was, that the
man who had given the information upon which Bailey had acted was
connected with a conspiracy or a combination, entered into, as they
believed, in New York and elsewhere, for the abstraction of these
bonds.
Question. And it was the name of the man who had given such
information that they wanted?
Answer. It was the name of the man who had communicated the
facts which led him to do this thing, because they thought the possession of the name of the man who had communicated the facts
which brought about an interview between Bailey and Russell leading
to this transaction, would give them a clue by which they could learn
the names of other parties concerned in the abstraction of the bonds.
They believed they could find out through this man the names of all
the parties concerned.
Question. Will you account for the fact that during the whole
progress of this matter, in your efforts to obtain the restitution of
these bonds, you never inquired of Mr. Russell where they were, or
who had them?




ABSTRACTED INDIAN TRUST BONDS.               71
Answer. I simply account for it in the fact that it did not concern
me one way or the other to know.
Question. Have you never inquired of Mr. Russell what he knew
of the whereabouts of these bonds?
Answer. Never.
Question. Or the possibility of regaining them?
Answer. I never have.
Question. And the only explanation you can give of that is, that
it did not concern you to know?
Answer. That was all. I only knew that they had been abstracted,
and that was sufficient for me.
Question. How did it concern you to have them returned?
Answer. You may have your suspicions. I have my knowledge,
and I am glad of the opportunity of stating what my motives were.
I am glad you have called for such a response.
Question. The simple question was, how it concerned you to have
those bonds returned?
WiITNESS. That is precisely what I wish to have an opportunity to
answer, and I hope I shall not be interrupted this time. The fact
was just this: having been innocently instrumental in leading Mr.
Bailey to do this thing, I in my heart felt great anxiety to have the
bonds restored as speedily as possible. And that is not all: these
gentlemen were my friends-Mr. Russell more particularly-and I
would have considered myself a dishonored man if I had disclosed the
facts of the case, having come to my knowledge in the way that they
did. A third reason was, that I believed the best way to prevent loss
to the public, and to have the bonds restored, was not to have the
thing made public until Russell should have had an opportunity of
making the restoration. These were the considerations which influenced me. Both Russell and Bailey will bear witness, if they tell
the truth, that, from the first, my main desire and object was, that
they should shape their course so as to bring back the bonds as
speedily as possible.
Question. Have you no suspicion where any of these bonds are?
Answer. I have not the slightest.
Question. Have you no suspicion where any -of them have been
since they left Bailey's possession?
Answer. I have not. The truth is, I did not want to know. I
simply knew that these bonds had been taken, and I wanted them to
briang them back. I thought the best way to accomplish that object
was to keep the matter a secret, and let them have the opportunity
of bringing them back. Coming to me in the way in which this information came, I would have died-I would have suffered martyrdom
before I would have imade it public.
Question. When did the obligation upon the part of Bailey arise?
Answer. Some time ago. I cannot recollect precisely the date. I
think it was when I saw Bailey and Russell together on some occasion.
I was manifesting great anxiety and uneasiness-for I tell you it gave
me great anxiety and distress-in reference to the matter; that they
told me I need not be uneasy about it; that I had not been connected




72            ABSTRACTED INDIAN TRUST BONDS.
with it in any manner, and that, whatever occurred, my name should
not be mentioned in connexion with it.
Question. When was that?
Answer. I think perhaps three months ago.
Question. How soon after the bonds had been delivered?
Answer. It was some considerable time, but I cannot say how long.
Question. Cannot you state more definitely how long?
Answer. I cannot. I know that I manifested considerable uneasiness in reference to it from the beginning. I urged that the bonds
should be brought back.
Question. Was there, on the first interview between you and Bailey,
any injunction of secrecy?
Answer. None in the world.
Question. Then, so far as that first interview was concerned, in
what you communicated to Bailey, there never was any injunction of
secrecy about it at any time?
Answer. There was an injunction of secrecy, so far as mentioning
my name was concerned. They gave me their assurance that I need
not be uneasy, for my name never should be mentioned. I said to
them, " I trust that, whatever occurs, my name never will be mentioned in connexion with the affair;" and they both promised it never
should; and if I had not voluntarily disclosed it, I do not believe it
ever would have been. I do not believe either of them would have
betrayed my confidence.
Question. Did you ever, at any time, promise not to disclose this
transaction?
Answer. I do not recollect that I ever promised not to disclose it.
I certainly never intended to disclose it.
Question. Why did you not disclose this first transaction?
Answer. I have already stated that I was innocently the cause of
Bailey's having been led to do this thing, and I considered it a matter
of sacred honor that I should not involve him in trouble or difficulty
about it.
Question. Then, if I comprehend your position, you having told
Bailey that Governor Floyd had issued acceptances which were likely
to be dishonored, which information led him to other things, you
thought there arose from that transaction an obligation of secrecy paramount to your general obligation to disclose a dishonest transaction?
Answer. That was one reason. Although what I did was innocently intended, yet it led him into the predicament in which he was
afterwards placed.
Question. Was there any other reason?
Answer. I have already stated that f believed the only way to have
the government protected was not to disclose the transaction. I had
full confidence up to a very late period, as I have every reason to believe was his intention, that Mr. Russell would bring back the bonds.
Question. Did you continue in that belief after the abstraction of
the bonds went on?
Answer. Up to a very late period.
Question. How soon did you know that $800,000 worth of bonds
had gone?




ABSTRACTED INDIAN TRUST BONDS.               73
Answer. I did not know it until they were gone.
Question. As these deliveries were made, you knew of it soon after?
Answer. I did not know what amount of deliveries were made from
time to time. I think, at the very last, a large amount was delivered
of which I had no knowledge.
Examination by Mr. Harris.
Question. You say you have known Bailey about three years?
Answer. Yes, sir.
Question. And you assumed and considered him to be an honest,
upright man?
Answer. I knew nothing to the contrary.
Question. Upon what theory do you explain his going to this particular fund for the relief of Russell?
Answer. I have no knowledge of his motives; my opinion is that
his object was to extricate his friend Governor Floyd.
Question. My question is, whether there was anything at all that
you can recollect, or in your knowledge, that explains his recourse to
this particular fund for the purpose of raising money to extricate
Russell from his difficulty?
Answer. I know of nothing, except his desire to serve Governor
Floyd.
Question. Are you in possession of any particular information
which explains his recourse to this particular fund?
Answer. No, sir; except the fact that he had these funds in his possession.
Examination by the chairman.
Question. Was the last letter you addressed to Russell sent before
or after this transaction was disclosed?
Answer. It was before.
Question. Did you take any measures after the fraud had been detected, directly or indirectly, to inform Russell of the fact in New
York?
Answer. I think, in one of the letters I wrote to him, I told him
that the fact would be made known to the public.
Question. That is not answering my question. gMy question is,
whether you, directly or indirectly, adopted any measures to inform
Mr. Russell, after the disclosure of the fraud had been made, of the
fact that it had been made?
Answer. Not after there was a public disclosure.
Question. Just before?
Answer. Yes, sir; I think two or three days before I wrote to him
that the thing would soon be disclosed.
Question. What induced you to believe it would soon be disclosed?
Answer. Mr. Bailev told me he should disclose it before Secretary
Thompson left the cabinet.
Question. And then you wrote immediately to Russell?
Answer. Yes, sir; I think I did.




74            ABSTRACTED INDIAN TRUST BONDS.
Question. Was that the last letter you wrote to him?
Answer. I think it was; I think I had expressed before to him my
apprehension that it would not be possible to conceal it.
Question. What was the date of that letter?
Answer. I think it was Thursday or Friday. Bailey had then told
me that he might tell Governor Floyd about it.
Question. Do you know whether any other measures were adopted
to inform Russell that Bailey had been arrested and the fraud disclosed, or that the fraud had been disclosed, and that Bailey would be
arrested, by any other person?
Answer. I do not. I did not advise Russell that Bailey had been
arrested.
Question. How long after Russell had been arrested and brought to
this city before you saw him?
Answer. He was brought here on Monday morning; he was first
taken to jail, I think, and then went to his house; he had rented a
house in this city, on F street; I heard in the afternoon that he had
again been taken to jail, and I went there to see him.
Question. Did you know of any use that Russell had for money in
this city?
Answer. I know that he is in the habit of spending a good deal of
money in Washington; I do not call to mind any particular case just
now.
Question. Do you know whether he has purchased property in this
city within the last few years?
Answer. I do not remember to have heard of his having done so.
He bought some property in New York some time ago, but I think I
never heard of his buying property in this city.
Question. For himself, or anybody else?
Answer. No, sir, not that I ever heard of. He has rented a house
here, but I never heard of his having bought property here.
Question  Have you received any letters from Mr. Bailey in reference to this transaction?
Answer. I think he has once or twice sent me notes that he wanted
to see me, or wanted me to call on him.
Question. How many notes have you received?
Answer. I have received,- it may be, at different times half a dozen
such notes.
Question. What did you do with them?
Answer. I destroyed them; I never keep notes of this sort.
Question. Did you answer them in writing?
Answer. I think I have written notes to him sometimes when I have
received them from him, and sometimes have responded verbally.
Question. Can you inform the committee of about the date of the
first note you received?
Answer. I cannot; I did not attach any importance to them at the
time.
Question. As near as possible.
Answer. I cannot mention any time.
Question. When did you receive the last note from him.?
Answer. I am not able to say positively.




ABSTRACTED INDIAN TRUST BONDS.               75
Question. Fix the time as near as you can.
Answer. Some time within the last week.
Question. Since he has been arrested?
Answer. No, sir. I think I received a note requesting me to call
and see him after he had made the exposure, but they were permitting
him to run at large. The note requested me to call and see him at his
house.
Question. I understand you to say you cannot inform the committee of the time of the reception of any note sent you by Bailey?
Answer. I am not able to do it now; upon reflection I may be able
to do so.
Question. What were the contents of the first note?
Answer. I cannot say.
Question. Can you give the substance of it?
Answer. I cannot.
Question. Can you recollect, the language of either letter?
Answer. I cannot. I do not think T received any note at all which
contained anything except an invitation to see him, or something of
that kind.
Question. Do I understand you to say you cannot recollect the language of either of the notes you received?
Answer. I said I could not.
Question. Can you recollect the substance of either note?
Answer. I cannot.
Question. What did he want to see you about?
Answer. To talk about this affair. It was a matter of absorbing
interest to him and to me.
Question. Did you understand him to state in the notes that his
only object was to have a conversation with you in regard to this
matter?
Answer. I think he simply requested me to come and see him.
Question. Did you go and see him?
Answer. I did, frequently.
Question. What occurred at those interviews?
Answer. We talked about this affair. Nothing material occurred,
further than I have already stated; such general conversation as men
would have who had knowledge of such a thing. We were in the
habit of talking about it in its various bearings.
Question. Do you think it was as much as three months ago that
you received the first letter from him?
Answer. It is possible, but I cannot say. My recollection of dates
is bad, and always has been.
Question. To the best of your recollection, the first note must have
been received as much as three months ago?
Answer. I do not think it was as long ago as that. I have told you
I did not recollect, and it is impossible for me to say. I do not think
his first letter contained any reference to this thing.
Question. Was it two months ago?
Answer. Possibly, but I cannot say. I really cannot say when the
first communication was received from him. It may have been two,




76            ABSTRACTED INDIAN TRUST BONDS.
and it may have been three months ago. I do not think it was as
long as three months ago.
Question. Did you keep copies of your replies to Bailey's notes?
Answer. No, sir.
Question. And you did not preserve the originals from him?
Answer. No, sir.
Question. You say you went there to talk about this matter. Was
there no special object in your visit, or was the object merely a general
one, to have a general conversation?
Answer. Sometimes there might have been some special feature
which I wanted to talk with him about, or he wished to talk with me
about.
Question.. What was that special. feature?
Answer. I cannot recollect,
Question. Can you recollect what he said to you or you to him?
Answer. It is impossible for me to single out any particular thing.
We talked about Governor Floyd and other things.
MONDAY, December 31, 1860.
Hon. JOHN B. FLOYD sworn.
Examination by Mr. Conkling.
Question. Mr. Floyd, you have been for some time Secretary of
War?
Answer. Yes, sir.
Question. From what time to what time?
Answer. From about the 4th of March, 1857, until day before yesterday, when I resigned.
Question. Do you know Winm. H. Russell?
Answer. I do.
Question. How long have you known him?
Answer. Some two or three years: I have known him since about
the time he entered into his last contract for the transportation of
army supplies, which I think was in the winter of 1857.
Question. Where was his residence when you first knew him?
Answer. I do not know; at the west somewhere.
Question. Do you know in what firm he was a partner?
Answer. I do not know. The contract was entered into in the
name of Russell, Majors & Waddell.
Question. You know of none of his partners except Majors and
Waddell?
Answer. I do not know them. I saw Majors once.
Question. What contracts exist now between the government and
Russell's firm.
Answer. They are contracts for the transportation of supplies to
New Mexico, Arizona, and the southwest.
Question. One contract, or more?
Answer. I think but one. There may be some minor contracts.
The general contract may be divided into different heads. There is
a general contract for transportation to New Mexico, and there may




ABSTRACTED- INDIAN TRUST BONDS.             77
be some contracts for transportation from New Mexico to the different
posts, but of that I am not certain. My answer would be that I know
of but one contract.
Question. Which provides for transportation from what point to
what point?
Answer. From any point the government may designate to New
Mexico and the southwest. The contract itself would be the best
proof of what the terms of the contract are.
Question. Have other contracts with Russell previously existed?
Answer. Yes, sir.
Question. How many?
Answer. But one I know anything about, which is the contract for
the transportation of supplies to Utah.
Question. And has that contract expired?
Answer. It has.
Question. When?
Answer. Last year.
Question. Are there, or have there been, other contracts, whether
in the name of Russell or not, in which Russell was interested?
Answer. No other that I know of, either now or in the past.
Question. These contracts are executed in quadruple?
Answer. I think they are in duplicate. They are in the usual form
the department has adopted in the execution of contracts.
Question. Have there been at any time, to your knowledge, any
transactions or business relations between Russell and any officer of
the government?
Answer. None that I know of.
Question. Between any officer of the War Department and Russell's firm, or Russell himself?
Answer. None that I know of.
Question. Under these contracts you speak of, explain, if you please,
where and in what manner, by the terms of the contracts, payments
were to be made.
Answer. Payment was to be made, under the terms of the contract,
when the work was done, and to be made by the nearest quartermaster-at the nearest point-according to my recollection of the contract.
I will not undertake to say positively, because the contract is the best
proof of it, and it is easy to be obtained; but I think the payment was
to be made by the quartermaster that might be designated for that
purpose; chiefly they have been made at Fort Leavenworth.
Question. In point of fact, from what point has this transportation
taken place?
Answer. From the upper partof Missouri and from Kansas Territory.
Question. From what station?
Answer. From Fort Leavenworth chiefly, and from several places
along the Missouri river.
Question. By what quartermaster at Fort Leavenworth?
Answer. Mr. Van Vleet. The transportation across the plains is
a heavy business, and the number of cattle engaged in it is very large.
The habit has been to designate different points along on the river at
which the trains should start, for the purpose of accommodating them




78            ABSTRACTED INDIAN TRUST BONDS.
to the grazing. The contract, however, will show the stipulations as
to the point of starting.
Question. The point is this, whether the loading was chiefly at
Leavenworth and from there onward.
Answer. That is the case.
Question. And there was no transportation this way from the station you have referred to?
Answer. I think there was not under their contract. There may
have been a stipulation in their contract requiring them to do any
transportation which the army wanted; but if you mean to ask
whether they have been employed in transporting goods this way, I
answer no.
Question. Explain the mode of making payments by the department through the quartermaster at Fort Leavenworth.
Answer. The payment is generally made by requisition. The
quartermaster makes a requisition upon the quartermaster general
here for a particular amount of funds. He states that there will be
needed for the payment of' all concerned-not to contractors in particular-a certain sum of money, and calls for a requisition of $50,000,
for instance.  That requisition is sent over by the quartermaster
general to the Secretary, and the Secretary signs a requisition upon
the treasury, and then the Secretary of the Treasury directs that that
money shall be placed to the credit of the quartermaster at Fort Leavenworth; the quartermaster at Fort Leavenworth pays out that
money, and sends his vouchers to the treasury. The vouchers upon
which the money has been paid agree precisely with the amount of
money placed to the quartermaster's credit, and then his accounts are
settled.
Question. And between the quartermaster and the contractor, what
is the operation?
Answer. I suppose, of course, the quartermaster pays to the contractor upon being satisfied that so much money is due him upon such
vouchers as may have been given to him at the treasury, and he takes
up the vouchers.
Question. The quartermaster pays the money, takes the vouchers,
and remits them here?
Answer. Yes, sir.
Question. In the case of these contracts with Russell, Majors &
Waddell, was any direction given to the quartermaster there to depart
front the ordinary usage?
Answer. None whatever.
Question. Did any departure from the usage take place in respect
to making payments upon those contracts?
Answer. None whatever. If you have reference to those acceptances,
then there was; if you mean in the ordinary payment of dues, there
was not.
Question. I did not point my question to acceptances generally, but
to what directions had been given, and to what changes had been
made originally?
Answer. None whatever.




ABSTRACTED INDIAN TRUST BONDS.               79
Question. Who, upon the part of these contractors, has conducted
the business in reference to these contracts?
Answer. Mr. Russel himself.
Question. And no other person?
Answer. Nobody authorized by Russell that I know of. A great
many persons have come to me-Mr. Green, of the Senate, Mr. Phelps,
of the House, and other members of Congress —as friends of the contractors, have spoken to me, asking that certain faci'ities should be
afforded to Russell in the ordinary transaction of his business there,
but no agent of Russell-no one but himself.
Question. What facilities do you speak of?
Answer. Such as starting the trains from one point instead of
another. There is a place upon the river called White Cloud, from
which they were anxious that a portion of the supplies for the army
should start. These gentlemen and other gentlemen from Pennsylvania spoke to me about it.
Question. They desired to have the service adapted to the convenience of the service, and not facilities in any other sense?
Answer. That is all.
Question. Who, on behalf of the War Department, conducted this
business with Russell & Co.?
Answer. The quartermaster only.
Question. Who is he?
Answer. Quartermaster General,General Jesup, and after his death
General Johnston, except at such periods when he was absent from the
department, and then by the next in command.
Question. Do you mean that the transactions between Russell and
the War Department have been confined to those gentlemen?
Answer. I do, unless there was some particular thing that Russell
himself would address a letter to me about, and then it was done
directly between Russell and myself.
Question. What has that business been?
Answer. The ordinary routine of business which I have attempted
to describe.
Question. Do you know how much, under this contract now subsisting, has been paid by the government to the contractors?
Answer. I do not know the amount; it is a large sum.
Question. Have the accounts been made up recently?
Answer. I dare say they have; I have not looked into it.
Question. Have you any idea of the proximate amount?
Answer. Yes, sir; I should think half a million of dollars.
Question. Who has the custody of the accounts between the government and these contractors?
Answer. The quartermaster and the Treasury Department.
Question. Are you able to state whether, at any given time for the
last year, the contractors have been overpaid.
Answer. They have never been overpaid a dollar at any time, either
this year or at any time since I have been Secretary of' War.
Question. Are you able to state at any given time the amount due
them?




80            ABSTRACTED INDIAN TRUST BONDS.
Answer. No, sir; because that depends upon the amount of work
they have done.
Question. Has there been any time during the last year when you
at the time have known yourself whether the government was in
arrears, or how the balance stood?
Answer. The government is always in arrears as the work goes on;
they are to be paid as the work is done. When a train starts from Fort
Leavenworth to Utah or New Mexico, they get a receipt for so much
freight shipped. When they get to a particular point, so much money
is due upon it; and when the freight is delivered, the entire amount is
due for the transportation. As the thing progresses from the start
to the conclusion, of course the government becomes indebted to them
to the extent of the work done; but the indebtedness is never consummated until the work is done, so the government could never be in
arrears to them, except as the work progressed in that way. As soon
as the work is done, and satisfactory vouchers presented of the completion of the work, then the government pays.
Question. That is, the quartermaster there pays?
Answer. Yes, sir.
Question. The particular question is, whether at any time you have
known, at the time, whether, as between the contractors and the quartermaster there, anything earned has been unpaid?
Answer. I do not know. I would know from orders given for so
much transportation in any particular month that there would be about
so much due at another time. The prices of transportation vary according to the month they start. If in May, they receive so much a
pound; in June, so much; and so on through the year. It is a sliding
scale of prices.
Question. Then you never had in your hands at the time the means,
either by calculation or by vouchers, of stating whether they had been
fully paid up the amount they had earned or not, varying as the
amount did according to the time of starting?
Answer. I could have told if I had put myself to the trouble of ascertaining the orders for transportation, and ascertaining the probable
time it would take to do the transportation.
Question. Did you ever do it?
Answer. No, sir.
Question. You alluded to acceptances: what acceptances did you
refer to?
Answer. Those you are investigating, and which have been in the
hands of a delinquent clerk in the Interior Department.
Question. The $870,000?
Answer. Yes, sir; and others which have been given along in the
progress of the business of the department.
Question. When first was any acceptance given by you to either
of these contractors?
Answer. The first was given about the time the order was made for
the removal of the troops from Fort Leavenworth to Utah.
Question. At what date?
Answer. It was in 1858. I do not know what period of the year it
was. It was before Congress made an appropriation.




ABSTRACTED INDIAN TRUST BONDS.               81
On that subject I have written a communication to the House, which
will be sent in to day, and I would ask that that communication be
spread upon your record as my testimony and my explanation upon
that point.
Here the examination was closed for the day.
TUESDAY, January 1, 1861.
Hon. JOHN B. FLOYD recalled.
Examination by Mr. Conkling.
Question. About what time was the first contract made with Russell,
Majors & Waddell?
Answer. I think it was in the winter of 1857-the winter after the
present administration came in; the winter of 1857-'58.
Question. Designate the contract in some way.
Answer. It was a contract for the transportation of army supplies
to Utah across the plains. It was for general army supplies, I think.
The contract itself is the best evidence.
Question. And was there a contract made a year ago, in April?
Answer. I cannot remember when the contract was made.
Question. Was there a contract for the delivery of flour?
Answer. The contract about the delivery of flour was one I explained in a report to the Senate, I think.
Question. Was there a contract for the delivery of flour separately?
Answer. There was, and that contract was of this sort, which I will
give particularly and carefully. Under the contract for the transportation of supplies to Utah there was a provision which required
that notice should be given that supplies of a certain character and
amount would be sent off at particular times. Upon giving that
notice to the contractors for the transportation of supplies they were
entitled to take the transportation, and in case the government thought
proper to countermand the order, for any reason whatever, then, according to the ternm s of the contract, as you will see by reference to it,
the government was called on to take off of their hands, at their cost,
all the transportation which they had supplied. Notice had been
given, in due form and at the proper time, for transportation to be
gotten ready, to take out supplies of flour to the army of Utah.
Question. The question I intended to point to this contract was
this: I desired to know which contract, if any, first was given to these
men by your direction?
Answer. The first contract given by my direction was a contract
for the transportation of supplies, which was given in the winter of
1857-'58, after due advertisement for the lowest bidder, they being
the lowest bidders.
Question. Then that was not given by your direction, but by law
to the lowest bidder?
Answer. No, sir, for the Secretary of War has a right to approve
or disapprove contracts.
H. Rep. Com. 78 —6




82            ABSTRACTED INDIAN TRUST BONDS.
Question. When was the next contract given to these parties by
your direction?
Answer. If you refer to the contract about flour, which I was going
on to explain when I was stopped, then it was some time after that;
I do not know when. The next one was a contract for the transportation of supplies; the last contract for the transportation of supplies.
Question. Then each contract they had was given by your direction?
Answer. Yes, sir, after advertisement, and in each instance they
were the lowest bidders, except in reference to the flour contract, and
that was the modification of a contract, as I was going to show you
when you stopped me.
Question. When and under which contract were acceptances first
given.?
Answer. Under the contract for the transportation of supplies to
Utah.
Question. And that was the first contract of all they had?
Answer. That was the first.
Question. And under all those contracts, by the terms of them,
payments were to be made and vouchers taken at Fort Leavenworth
by the quartermaster there?
Answer. That was the usual mode of business, but the contract will
show that. It is a matter of detail, and I cannot say anything more
about it than I have stated.
Question. Describe the paper accepted in the first place?
Answer. The paper accepted in the first place was paper purporting
to be paid when the work under the contract should be done to the
amount of it.
Question. In the form of drafts?
Answer. In the form of drafts by them on the Secretary, and accepted as Secretary, when the work should be done. Those were the
first.
Question. And what was the amount of the first acceptances?
Answer. I do not know.
Question. As near as you can state?
Answer. I do not know; a very large amount, and they have been
regularly paid up.
Question. Give the committee some idea of the amount of the first
batch of acceptances.
Answer. I do not think I can unless I refer to some memoranda.
The transportation under the first contract amounted to several millions of dollars.
Question. Will you give some idea of the amount of the first batch
of acceptances?
Answer. I should suppose somewhere between $200,000 and
$500,000. I suppose so; it is mere conjecture.
Quest;on. And were these acceptances all made the same day?
Answer. No, sir; they were not all made the same day. They
were made at different times, and made in the regular progress of the
business whenever they wanted to raise money.
Question. I want to get at the date of events. State to the corn



ABSTRACTED INDIAN TRUST BONDS.                83
mittee about the time when the first acceptances were made, as nearly
as you can.
Answer. I cannot state, for I do not know.
Question. About how long after this first contract was made was it
that the first acceptances were made?
Answer. I do not know; it could have been but a few months, as
well as I remember.
Question. And in the first instance, what was the amount, as near
as you can state it, of the acceptances?
Answer. I have no idea whatever now.
Question. At whose request were those acceptances given?
Answer. At the request of Russell, Majors & Waddell.
Question. Made by whom?
Answer. By Russell.
Question. To you?
Answer. To me.
Question. Was any registry of these acceptances kept in your office?
Answer. A memoranda was kept by a clerk in my department.
Question. By whom.
Answer. By 5Mr. Drinkard, I think. It was kept in the clerk's
office, through the chief clerk.
Question. Is it there now?
Answer. I presume so.
Question. When these acceptances were paid, as far as they were
paid, what became of them?
Answer. I do not know. I never heard of them afterwards. They
were paid, cancelled, and destroyed, I presume.
Question. Do you know that was so?
Answer. I do not.
Question. Did you see them afterwards?
Answer. I did not. I never heard of any difficulty about them.
Question. How long after the first batch of acceptances was given
was there another given?
Answer. I cannot tell, nor can I form the least idea. It was along
in the progress of the business of transportation.
Question. At whose request?
Answer. At the request of Russell, Majors & Waddell.
Question. And communicated to you by whom?
Answer. By Russell always.
Question. Verbally or in writing?
Answer. Verbally generally, but sometimes by note.
Question. Did any other person apply or communicate with you
upon the subject before the acceptances were made in the first instance?
Answer. Not on their behalf. Before I made the acceptances I
went to Riggs & Co. to consult as to the shape of the acceptances,
and the manner in which to put the acceptances in form. I had a
consultation with Mr. Riggs about it.
Question. Have there ever been such acceptances given during your
administration except to Russell, Majors & Waddell?
Answer. No, sir.
Question. Previous to the giving of those acceptances to Russell,




84           1ABSTRACTED INDIAN TRUST BONDS.
had there been any transactions, or relations, or accommodations of
any sort, with him, except the execution of these previous contracts?
Answer. I do not know. There had been none with me.
Question. Can you state the amount, in all, of the acceptances
which you gave to Russell, Majors & Waddell?
Answer. I cannot, but I suppose they are upwards of $2,000,000.
Question. And when were the last acceptances given?
Answer. In December, this last month.
Question. On more than one occasion?
Answer. Yes, sir.
Question. On how many occasions?
Answer. I cannot tell. I do not know how many. Two or three
times, and probably more, but I do not remember.
Question. Where were they given?
Answer. They were given here in this city.
Question. At the War Office?
Answer. At the War Office; at least, the transaction was consummated at the War Office. I may have signed some of the acceptances,
and probably some at my office in my house.
Question. Nowhere else than at the War Office and at your house?
Answer. No, sir; never one, except at my place of business, at the
War Gffice, and in my house.
Question. Was there any registration made of these acceptances?
Answer. Yes, sir.
Question. By whom?
Answer. By a clerk in the War Department.
Question. By this same clerk, Drinkard?
Answer. I think so; at least, the register will show. I gave him
the memoranda which I kept myself, and he entered them upon the
books.
Question. What is thu book that contains them?
Answer. No particular book that 1 could name; these memoranda
were merely entered in a book.
Question. Is there no way by which you can designate the particular book?
Answer. There is not.
Question. It is a bound book?
Answer. I do not know; I never saw it that I know of.
Question. Then you do not know that there was a register kept?
Answer. Only as I have stated.
Question. How is that?
Answer. From my clerk.
Question. Who?
Answer. Mr. Drinkard.
Question. Then you do not know that there was a registration?
Answer. I do know that I gave to him memoranda of these acceptances. I have already stated that I have not seen the book. I have
never seen any book in the department except those containing orders
for me to sign.
Question. What did Mr. Drinkard register-the acceptances themselves, or the memoranda?




ABSTRACTED INDIAN TRUST BONDS.              85
Answer. The acceptances themselves.
Question. In the case of those acceptances made out at your house
how were they conveyed to Mr. Drinkard for registration?
Answer. I do not know that the acceptances themselves were conveyed to Mr. Drinkard. I gave to Mr. Drinkard memoranda of the
acceptances for him to register. He could not have the acceptances
themselves, because at the time of making them they were handed
over to Mr. Russell; he had the memoranda.
Question. Then he kept a list of the acceptances, and registered
them not from the acceptances themselves, but from memoranda? It
seems to me that there is a little discrepancy in your statement that
the registration was made from the acceptances themselves.
Answer. I did not observe any discrepancy. When the acceptances
were made at the War Office, the registration may have been made
from the acceptances themselves; those that were made at my house
were registered from memoranda made from the acceptanccs themselves.
Question. Can you give the committee any idea of the proportion
of acceptances which were made out at your house?
Answer. No, I cannot.
Question. Can you state whether the amount given at your house
would be a half, i quarter, or any given proportion of the whole
amount?
Answer. No, I cannot; I do not know anything about it; I just
signed them whenever there was any necessity for it wherever I happened to be.
Question. And upon what data did you act in signing them whereever you happened to be?
Answer. Upon a general knowledge of the amount that was coming to these people from their transportation, and in the last instance
upon the data particularly that money was to be paid whenever the
work was done; that it could mislead nobody, it could deceive
nobody, being merely an accommodation to these people to enable
them to raise the means to sustain themselves in carrying out their
contract. I gave the acceptances upon that general data.
Question. At the time of the giving of the first acceptance in
December, did you know the amount due Russell, Majors & Waddell?
WITNESS. What December do you mean?
Mr. CONKLING. I mean this past month, ultimo.
Answer. I had a general knowledge of the probable amount that
would be due to them for the transportation covered by the accepta;nces.
Question. I would like, if you please, to have a more specific
answer to the question. Did you, at the time of giving the first
acceptance in December, know the amount due them?
Answer. I had a general idea of the amount that would be due
them under these acceptances?
Question. What was that amount?
Answer. I suppose they would range from $700,000 to $1,000,000.
There was no means of having accurate information.




86            ABSTRACTED INDIAN TRUST BONDS.
Question. What was the amount of acceptances on the first occasion in December?
Answer. I have forgotten.
Question. Can you approximate?
Answer. No, I cannot.
Question. Can you state within $100,000?
Answer. 0 yes; it was more than $100,000.
Question. I say, can you state the amount within $100,000?
Answer. I could not.
Question. Where was the first batch of acceptances executed, in
tact, in the War Office or at your house?
Answer. I think it was done in this way: the arrangement was
made in the War Office, where the first batch was prepared under
my order.
Question. By whom?
Answer. By Russell, I think.
Question. Was anybody else present when they were signed?
Answer. Nobody else was present.
Question. Did you take a memoranda of the acceptances then?
Answer. I did.
Question. In your own handwriting?
Answer. No, sir; in Russell's handwriting, because I write with
difficulty; but they were put down in my presence.
Question. Put down upon what?
Answer. Upon a piece of paper.
Question. To whom did you deliver them?
Answer. To Mir. Drinkard.
Question. With the direction that he should make a registration
from them?
Answer. Yes, sir.
Question. What date in December was that, as near as you can
state?
Answer. I cannot tell.
Question. Cannot you give some general idea?
Answer. The giving of these acceptances began about the middle
of December, and continued until towards the last of December.
Question. Then these first acceptances were given about the middle
of December?
Answer. I think it was earlier than that. They were given on
several different occasions, and there was not a good many days
between them. They were taken immediately by Russell, and put
into the hands of Bailey.
Question. I will come to that presently. I first desire to know the
date of these first acceptances?
Answer. I do not know.
Question. You think they were before the middle of December?
Answer. I think so.
Question. You cannot be more definite in respect to the date?
Answer. No, sir.
Question. How soon afterwards in December were other acceptances
executed?




ABSTRACTED INDIAN TRUST BONDS.               87
Answer. I do not think there was more than 10 to 15 days between
all of them.
Question. How many days intervened between the execution of the
first acceptances in December and the next that were executed?
Answer. I cannot tell; I do not remember; they were all executed
in the course of ten days.
Question. On how many different days in December?
Answer. I do not know.
Question. Were the acceptances all given out at your house in
December?
Answer. I cannot tell that; it is a thing to which I paid no attention?
Question. Were they given in the presence of any one besides Russell?
Answer. They were given in the presence of no one besides Russell,
that I remember.
Question. Can you state the amount of acceptances given within
this period of ten days?
Answer. Yes, sir, very nearly; I think it was about $700,000.
Question. Was this:700,000 all of the same character of paper?
Answer. Yes, sir.
Question. Were there in December any other acceptances given
than this $700,000 of similar paper?
Answer. I think not.
Question. Were these acceptances, any of them, numbered?
Answer. I do not remember. The acceptances themselves will show
that.
Question. Were any of the acceptances given at any time numbered?
Answer. At first the practice of numbering them was pursued, then
they were lettered, and latterly-these last acceptances-I do not
know whether they were numbered, or lettered, or neither. The character of the paper changed, and it was not very essential.
Question. What was the object of the practice of lettering the
acceptances, or numbering them?
Answer. I gave the direction, in the first place, to have them numbered as a guide to prevent the issue of more acceptances than there
was likely to be money coming to these parties for transportation.
Question. And when did that practice cease?
Answer. When it was found to be more convenient to letter them.
I do not know the time the first practice ceased, but the change took
place from this cause: it went on until there was a very large number
of acceptances in different amounts, and Russell represented to me
that the number indicated that all the acceptances that had ever been
given were still in existence, and that therefore he was unable to
negotiate. For instance, he would get an acceptance for $50,000 that
was numbered 10, 20, 30, or 40, for there had been acceptances of
$10,000, and even of $5,000, and the inference would be drawn that
there were acceptances in existence for an immense sum of money.
For this reason, finding that he could not negotiate, he desired that
the numbering should be discontinued and the lettering should be




88            ABSTRACTED INDIAN TRUST BONDS.
substituted, which enabled the department to understand the amount
of acceptances given just as well as the numbers. With that view,
and upon that representation, I consented to change the numbering to
lettering, because letters represented the truth, and numbers did not.
Question. And the object was to give greater negotiability and
facility to the paper?
Answer. The whole object from first to last was to give these parties
greater facilities to enable them to raise money.
Question. And with that object a practice was discontinued which
impeded the negotiability of the paper?
Answer. Yes, sir; because many of the numbers had been long
before paid and cancelled.
Question. Did I understand you to say that you had never seen
them afterwards?
Answer. I never saw them. There was never anything heard at
the War Department about them, and I never doubted at all but that
they were cancelled and paid.
Question. When did the habit of either lettering or numbering
them cease?
Answer. I do not know. I have no idea.
Question. To put the question in a more direct form, when did you
first execute acceptances that were neither numbered nor lettered?
Answer. I think never until the December acceptances.
Question. How did these come to go out without being either lettered or numbered?
Answer. In this way: it was the last transaction; I intended to
give no more. There was a change in the paper, and it was understood distinctly that it was to go into the hands of bankers and firms
who held acceptances issued during the past season that had not been
redeemed.
Question. Please name the bankers and firms into whose hands
they were to go.
Answer. Into the hands of bankers in New York, as represented to
me, and in St. Louis.
Question. Were none of the New York banks named to you'?
Answer. I never heard the name of but one that I remember.
Question. Which was that?
Answer. The Shoe and Leather Bank.
Question. Can you name any other?
Answer. I cannot. There was a large firm in Boston, I believe,
which held a considerable amount of the paper.
Question. What was the name of that firm?
Answer. Pierce & Bacon, or Bacon & Pierce; I do not remember
which. It was understood that these acceptances were to go into the
hands of those people who held acceptances of a different sort, and
that they were to be held as collateral security, to be paid when
the work required under contracts had been performed to a sufficient
extent.
Question. Can you name any bank in St. Louis?
Answer. I cannot name it.
Question. Was there more than one bank there?




ABSTRACTED INDIAN TRUST BONDS.               89
Answer. I am not sure but there were two or three.
Question. What object was to be accomplished by the absence of
either letters or numbers on these last acceptances?
Answer. There was never anything said about it. I never heard
about it, and never thought of it, to tell the truth.
Question. Then the omission of letters and numbers on these
acceptances was, in fact, accidental.
Answer. Yes, sir, purely accidental. I do not know that either
letters or numbers were put upon all the others that have been issued.
I do not know about that.
Question. Who put these letters or numbers upon the papers?
Answer. The man who drew them; the clerk who prepared them.
Question. Were the acceptances prepared by Russell or in the
office?
Answer. The last ones were prepared by Russell under my direct
tion.
Question. Where was that done?
Answer. I do not know. Hie brought them to me. I gave him
the form, and he brought them to me prepared. I did not know that
they had not been prepared by a clerk in the office until I saw them
in Russell's handwriting.
Question. You say these were the last acceptances you were to
give?
Answer. Yes, sir.
Question. Why?
Answer. Because I would not consent to give any more. I would
not oonsent to give them except in large amounts, to keep them from
being put into market. I would not consent to give them except with
the understanding that they were to go into the hands of those who
already held other acceptances. The paper simply indicated the
probable amount that would be likely to accrue under their contract
up to next June.
Question. Did these acceptances in December anticipate all that
would be due up to next June?
Answer. They indicated the amount of work that would be likely
to be required, and when the work was done the money would be due,
but not otherwise.
Question. Was the fact that you intended to make these acceptances
cover the earnings of Russell, Majors & Waddell up to June next the
reason why you considered these the last acceptances you would give?
Answer. That was one reason. There were a multitude of other
reasons which will readily suggest themselves to you.
Question. Such as what?
Answer. Such as that my term of office was nearly out; that I
would not give acceptances to go into the general market; I would
not give acceptances that did not indicate upon their face that they
were to be paid when the work was performed, so that they could
deceive no one, nor for more than in my opinion was necessary to
enable these people to raise money sufficient to extricate them from
their difficulties. In other words, the transaction was intended to
carry them through this year and into the next year. The reason




90             ABSTRACTED INDIAN TRUST BONDS.
of that was that there was a general breaking up of the commercial
prosperity of the country, and these people were likely to fail, as I
believed, unless they obtained the additional accommodation and
credit to which they were entitled under this contract. It was another
form and shape of showing what would be due under their contract if
the work was performed.
Question. For what purpose were the first acceptances given to
Russell, no matter when they were given?
Answer. That I have stated several times.
Question. I mean what was he to do with them?
Answer. I do not know.  Raise money on them, I suppose.
Question. And were acceptances given him for no other purpose
than to raise money?
Answer. Never, except these last, which were given to be substituted in the place of the others as collateral security.
Question. Collateral security or renewals?
Answer. Collateral security for the redemption of the others, as it
was represented to me.
Question. Am I right, then, in supposing that all the acceptances
given were for the purpose of raising money, except those given in
December, which were to be placed as collateral security to cover discounts that had been obtained?
Answer. The first acceptances were given for the purpose of raising
money to enable them to start the trains. Then the next acceptances, and from that clear on, were given, as I have said, as a matter
of necessity for a renewal of the first, and afterwards as a matter of
convenience to enable these people to get along with their large
business.
Question. Did you know what was to be done with these acceptances?
Answer. I did not, except that I supposed these people were to
raise money on them.
Question. Is it true. then, that all the acceptances were given to
raise money upon, except those in December, which were given as
collateral?
Answer. As collateral, and in all probability to raise money upon.
They were given with the same intention precisely, and in the same
mode as all the others, except that the character was changed.
Question. Except as the character was changed; how?
Answer. As I have already designated.
Question. By leaving off letters and numbers?
Answer. And that they expressed more distinctly on the face of
them that the money was to be paid only when the work was done.
Question. Was it the intention to change their character in that
respect?
Answer. Yes, sir; and for a reason which I will explain, if you
wish it.
Question. What was the reason of that?
Answer. It was that while I was Secretary of War I could control
the payment of these acceptances if they were filed in the War
Department. If an acceptance given and not paid was sent by the




ABSTRACTED INDIAN TRUST BONDS.              91
person holding it to the War Department, I could cause it to be filed
and paid as the money was due to them; but when I ceased to be
Secretary of War I could have no such command over them; therefore I intended more distinctly than formerly that the paper should
express upon the face of it how it should be paid, and when it should
be paid, and then I gave the acceptances in large numbers, so that
they could only go into the hands of parties who had had transactions in them before.
Question. When did you first know that persons other than Russell,
Majors & Waddell held these acceptances?
WITNESS. What acceptances?
Mr. CONKLING. Any that you had given?
WITNESS. Do you mean to ask when I first knew that acceptances
had been negotiated and not paid?
Mr. CONKLING. Yes, sir.
Answer. In July last, or somewhere thereabouts.  In June or
July, I think.
Question. What amount was then outstanding unpaid?
Answer. I do not remember. A small amount.
Question. About what?
Answer. I cannot tell.  I have not the least remembrance. I
think my attention was called to it by some notice of a bank in St.
Louis of an acceptance held by them which had not been paid.
Question. From that time on from whom did you receive other
notices of that description?
Answer. I do not remember. I presume the letters on file in the
War Department will show.
Question. From a number of parties?
Answer. Not a great number.
Question. What amount of acceptances had been protested up to
December?
Answer. I should think about $300,000, or perhaps $350,000; I
do not remember the exact sum.
Question. Was the acceptance protested in St. Louis in July ever
paid?
Answer. I do not know.
Question. It was never paid, then, to your knowledge?
Answer. No, sir. The house of Russell, Majors & Co. represented
to me that they were making arrangements to restore their credit and
take up these acceptances-that they could arrange the matter with
the parties who held these acceptances-otherwise their pay would
have been stopped in the Quartermaster's department.
Mr. CONKLING. That is not in answer to my question.
WITNESS. If you will permit me to go on I will show how it is,
About the time that I speak of they were a good deal embarrassed,
and were attempting to arrange with their creditors to reinstate their
paper, which had been temporarily under protest. The president of
one of the banks in Missouri came here and had a good deal of conversation with me in regard to the matter. He inquired as to the
probable amount of transportation that would be due these people.
Being informed from the Quartermaster's department of what would




92            ABSTRACTED INDIAN TRUST BONDS.
be likely to be the proximate amount, he told me that Russell,
Majors & Waddell would be able to make arrangements for going on
with their business and paying up these acceptances.
Question. Then the answer is the same as that already given, that
they have never been paid that you know of?
Answer. I know nothing about it since. I have heard nothing
about it.
Question. Of what amount were those acceptances issued in December to be placed as collateral to other acceptances?
Answer. As far as they were out.
Question. How far was that?
Answer. I think about $450,000.
Question. Do you think now it was about that amount?
Answer. I do suppose so now, and I did suppose so then, and I
gave them this amount to raise upon the balance, if they could do so.
The object of giving them was to substitute them for those out, which
I supposed to be about $450,000; and then, so far as they could, upon
the balance, over and above that amount, raise money for their
ordinary purposes to enable them to get along. It was done to give
them the full credit of their contract.
Question. And did' you know with whom they were to place this
$450,000 as collateral to other securities?
Answer. I had an idea.
Question. Who was it?
Answer. Bacon & Pierce were to get $260,000-as I understood
it-one of the banks in Missouri was to get about $80,000, and their
banks in New York and other banks which held their paper were to
get the balance, as I thought.
Question. Who was that president of a St. Louis bank that came
to see you?
Answer. I think his name was Barnes.
Question. Of what bank?
Answer. I do not know; the oldest bank there.
Question. Allow me to understand you precisely. Bacon & Pierce,
and other persons, who held $450,000 of unpaid acceptances, were to
receive other acceptances to the same amount as collateral?
Answer. That was what I supposed.
Question. And the residue of this $800,000, or whatever the sum.was, to be used generally for the purpose of raising money?
Answer. Yes, sir.
Question. Do you know the precise amount of acceptances put into
the hands of Bailey by Russell?
Answer. Bailey gave me a memorandum of them.
Question. When?
Answer. After the exposure.
Question. I will assume, then, that they were $870,000. If you
gave Russell, in December, $800,000 of acceptances, how do you account for his having the other $70,000?
Answer. He must have had $70,000 of acceptances which had been
formerly given, and which he never had used.
Question. And you gave him, in December, no more than $800,000?




ABSTRACTED INDIAN TRUST BONDS.              93
Answer. I think that was the sum. I certainly never gave him
the $70,000, in December, which he put into Bailey's hands.
Question. Have any acceptances which you ever gave to Russell
been destroyed, to your knowledge, before being used at all?
Answer. I have understood that they have been. He often told me
that he had done so; and some, to my knowledge, have been destroyed.
Question. When first did Russell tell you he had destroyed acceptances?
Answer. I cannot tell, and I have no idea.
Question. Has he frequently told you so?
Answer. I do not think he has.
Question. Several times?
Answer. I cannot tell; it was a thing to which I paid no great deal
of attention, and a matter about which I never expected to hear again.
Occasionally there were acceptances given and destroyed without being
used. Occasionally he told me they had been paid, cancelled, and
destroyed.
Question. I am asking you about what he told you of the destruction
of acceptances unused. I want to know whether he told you that on
only one occasion, or on more than one?
Answer. I do not remember.
Question. Did he tell you the amount of unused acceptances?
Answer. No, sir.
Question. Did you ever know the amount?
Answer. No, sir; nor of the used acceptances.
Question. In giving him additional acceptances did lyou assume
that he had destroyed the unused acceptances, as he said he had?
Answer. Whenever he told me he had destroyed them I assumed
it was true.
Question. And then you deducted the amount?
Answer. The amount was always within the power of the department to pay.
Question. Do you mean by that, assuming that he had used them
all?
Answer. Yes, sir; as he said he had used them.
Question. Explain your meaning.
Answer. Suppose the amount due him for transportation of last
year is $500,000, and I give him in the aggregate, from one time to
another, $500,000 of acceptances; the $500,000 would be paid by the
work when it was done.
Question. And do you mean that you never gave him in all a greater
amount of acceptances than there were earnings due?
Answer. Never, except in this last instance, and that bore upon its
face that he was to earn them; that was the intention, and that was
about the fact, I think.
Question. Since the giving of these $800,000 of acceptances, in
December, have you given any other?
Answer. I have not, as I stated before.
Question. Shall the committee understand that the acceptances
which you gave Russell would have exceeded the amount of earnings




94            ABSTRACTED INDIAN TRUST BONDS.
if it had not been true that he had paid or destroyed others as he said
he had?
Answer. I am not prepared to say. You put a supposititious case.
Question. Well, did you, in point of fact, execute to Russell an
amount of acceptances larger in the whole than the earnings upon his
contract?
The WITNESS. Do you mean from the time the acceptances were first
issued up to this time?
M1r. CONKLING. I do.
Answer. Then I think the acceptances have never been equal to
the amount of money which, from the first to the last, he was entitled
to; that is my opinion.
Question. Have you ever issued to them acceptances larger in the
total than the amount due them at the time you executed them?
Answer. Oh! yes; because the object of the acceptances was to
anticipate what would be due them.
Question. That was so previous to December?
Answer. Yes, sir; I stated at first that the object of the acceptances was to enable them to raise money and give them the credit of
their contract.
Question. Then every acceptance ran against unearned money?
Answer. Every acceptance ran against unearned money.
Question. Was there any difference in that respect between the
December acceptances and any other?
Answer. No; of course in that particular there was no difference,
because all the acceptances were against unearned money.
Question. I do not yet understand whether or not these acceptances
overran the amount which you intended to anticipate, and whether or
not you deducted from them those which he said he had paid and
destroyed?
The WITNESS. I do not comprehend the question.
Mr. CONKLING. I do not understand whether or not, in order to keep
the amount of these acceptances within the bounds of what they would
earn, you assumed that Russell had destroyed what he said he had,
and had paid what he said he had.
Answer. From the first to last acceptances. have never been, as I
think, and as 1 have always thought, issued to an amount that was
likely to accrue to him from his earnings. It was certainly necessary
that he should have paid the acceptances, as he said he had paid them,
in order to keep the account straight, I have answered that question
in half a dozen different ways.
Question. When did you first receive from Bailey any communication about these acceptances?
Answer. I have a letter from Bailey here that discloses the whole
thing, and it will answer your question.
Question. Was that the first communication?
Answer. Yes, sir.
The letter was read as follows:




ABSTRACTED INDIAN TRUST BONDS.               95
[" Private.]
C " LAFAYETTE HOUSE,
" December 19, 1860.
" MY DEAR SIR: I enclose herewith the draught of a letter addressed
by me, on the 1st instant, to the Secretary of the Interior. The letter
itself is in the hands of a friend, and I think that I ought to direct
that it be delivered to Mr. Thompson immediately on his return from
North Carolina.
"I am very loth to disturb you on your sick bed, but I feel bound
to show you the letter, and to inform you that the bonds were delivered
to Wm. H. Russell, to enable him to raise money to protect certain
acceptances of yours, which otherwise would have been protested.
" The facts are as follows: I was informed on thie 12th of July last
that certain official acceptances which you had illegally given would
mature on the following day; that there were no means of meeting
them, and that they would consequently be protested; and that your
retirement in disgrace from the cabinet would necessarily follow. I
called immediately at the War Department to ascertain from you if
the facts alleged were true. You were engaged with General Scott.
I then stated the case to Drinkard, and he told me that I had been
correctly informed. I did not tell Drinkard, neither did I intend to
tell you, what I proposed to do. I merely called at the department
to get the facts. Having satisfied myself; I returned to my own office
and procured 150 bonds, which I gave to Russell. Subsequently I
let him have other bonds to a very large amount. When I gave him
the first lot of bonds Russell assured me that the embarrassments
of Russell, Majors & Waddell were only temporary, and that the
bonds would certainly be returned in ninety days.
"I  have no right to require you to consider this communication confidential, but I earnestly request that you will take no action upon it
until you have had an interview with me; and inasmuch as I have
made the statement in writing only because I could not see you, I feel
justified in asking you to burn this letter, and consider the statement
made to you verbally. I ought to add that I hold your official
acceptances as security for the return of the bonds. I required this
of Russell.
"Very respectfully, your obedient servant,
"G. BAILEY.
"Hon. JOHN B. FLOYD, Pennsylvania avenue."
Question. When did you receive that letter?
Answer. I probably received it that day or the next-the 19th or
20th.  I was sick in bed. 1 have not a distinct recollection about it,
but I did not see Bailey until Saturday morning   Bailey came to see
me Saturday morning, which is the first time I had an opportunity of
seeing him, and in that interview with him I told him that it was a
thing which must be at once revealed; that I was the last man in the
world he should have made any such communication to if he wanted
it kept secret; that I would wait until Thompson returned, who was
absent, and expected that day; that as soon as Thompson came I




96            ABSTRACTED INDIAN TRUST BONDS.
would make a statement to him. Bailey said that there were two men
in town-one a senator, and somebody else-who knew it, and that he
had put this letter which he wrote to Thompson in the hands of somebody to give to him. Well, he left me immediately, and went off
and directed that the papers should be put into the hands of the
President. I think he was afraid that Thompson might be delayed
a day or two. I had no idea, and he did not give me any distinct
idea-and I had no idea, I am so little acquainted with the matters
in the Interior Department-what funds he had in his hands. I did
not know that he or anybody else had in their hands any such amount
of property as that, that they could dispose of. He attempted to explain to me how it was, and I did comprehend it pretty well, and
then I told him the revelation must be made. Thompson came home
that night. The President told me that Thompson happened to be
in his room when the revelation was made to him. He and Black
came to myv house the next day, and we had a Pill conversation about
the whole affair. The letter the draught of which he had prepared for
Thompson was enclosed in the envelope with the letter to me. I
think there is a difference in the date between that letter and the
letter to Thompson, but Ledo not know.
Question. Have you had any other communication with Bailey
about this matter?
Answer. I received a note simply asking for an interview, but no
other communication.
Question. Any statement from him?
Answer. None, except this conversation I have attempted to det
between him and myself.
Question. Did he show you those acceptances?
Answer. No.
Question. Have you seen them P
Answer. I have.
Question. And examined them?
Answer. I did, and cancelled them. I made an order at the War
Department to cancel them. It was a fraud perpetrated upon me,
and, as it was in my power to acknowledge the validity of them or
not, I cancelled the acceptances, and entered a memorandum that those
acceptances were cancelled.
Question. So that the holder of those acceptances, whether it be the
government or anybody else, when the acceptances mature, will not
be able to collect them.
Answer. They cannot collect them, because they were a fraud perpetrated upon me, and the only remedy I had, in my judgment, was
to annul the whole transaction by cancellation.
Question. Did any other officer of the government consent to these
acceptances being cancelled?
Answer. No, sir; and I did not care whether they did or not.
Question. Have you any communication from Russell in relation to
these acceptances, or any acceptances?
Answer, I have not.
Question. Have you ever received any written communication from
Russell about themn?




ABSTRACTED INDIAN TRUST BONDS.             97
Answer. I have not.
Question. Any letter from Russell in relation to any acceptances
whatever?
Answer. I have, often.
Question. Where are they?
Answer. They may be on file in my department.
Question. Are they on file in the War Department?
Answer. I do not know.
Question. Did you go to Mr. Thompson about this matter first, or
did he come to you?
Answer. He came to me, because he only got home Saturday night,
and I had not any opportunity to see him. I intended to go to him
the next day and make the revelation, but it was made before I got
there.
Question. Did you go to any other persons than Mr. Thompson
about this matter?
Answer. I did not.
Question. Did any persons, at the time of this exposure, except
Bailey, come to you about this?
Answer. No, sir.
Question. Did you go to any persons besides Mr. Thompson about
this matter?
Answer. I did not.
Question. Did any persons besides Thompson and Bailey come to
you about it?
Answer. No, sir.
Question. Did you communicate with any other person about it?
Answer. I did, but not fully.
Question, With whom?
Answer. I did not communicate the intelligence nor the fact; but
I sent this word to Russell- 
Question. I ask you with whom did you communicate?
Answer. Upon this subject I communicated with nobody beyond
what I tell you, unless you call the earnest message I sent to Russell to come here a communication.
Question. Did you write to Russell?
Answer. I did not.
Question. You sent to him?
Answer. Yes, sir.
Question. By whom?
Answer. By Latham.
Question. But you did at that time communicate to Latham something?
Answer. I communicated a message by Latham to Russell.
Question. Did you communicate with any other person touching
this matter other than Latham, Bailey, Thompson, and the President, for I think you mentioned him?
Answer. I communicated to the President, but not until after I saw
Thompson.
Question. Then, Bailey, Thompson, Latham, and the President are
H. Rep. Comn. 78 —-7




98            ABSTRACTED INDIAN TRUST BONDS.
the only persons with whom you communicated in any way about this
matter about that time?
Answer. And Black. Black was with Thompson; they came together.
Question. Did Latham write to Russell?
Answer. I think not.
Question. Did he telegraph him?
Answer. I do not know whether he did or not.
Question. Did he go to New York?
Answer. I happened to meet him as he was going to New York.
Question. I ask you did he go to New York?
Answer. He did. I said I met him as he was going to New York,
and sent the message by him to Russell. He did not go to New York
for the purpose of communicating with Russell.
Question. My question is simply whether Latham went to New
York?
Answer. Hie did.
Question. When?
Answer. I think it was Friday night.
Question. And where was your interview with him?
Answer. At my house.
Question. Did he come there by your request?
Answer. No, sir.
Question. Of his own accord?
Answer. Of his own accord.
Question. Had you previously had any communication with Latham
in reference to these contracts with Russell, Majors & Waddell?
Answer. No particular communication. I do not know that I ever
had any communication with him about it or about the acceptances.
Question. Did Latham ever have any of these acceptances, to your
knowledge?
Answer. Not that I know of.
Question. And when did Latham return from New York?
Answer. I do not know.
Question. When did you next see him?
Answer. After Russell was arrested.
Question. Did you receive any communication from him in the
meantime?
Answer. I did. I directed Drinkard, my chief clerk, to telegraph
to Russell to meet Latham by all manner of means.
Question. My question is whether you received any communication
from Latham?
Answer. I did.
Question. What was it?
Answer. It was a letter.
Question. Did it come by post?
Answer. Yes, sir.
Question. Where is that letter?
Answer. I do not know whether I have it or not. It was a private
letter, about other things. There was an incidental remark in it,




ABSTRACTED INDIAN TRUST BONDS.              99
that he had seen Russell, and that Russell would be here on Sunday
morning or Monday morning, or whatever morning it was.
Question. Now, before Latham went to New York did you communicate with Mr. Drinkard on the subject?
Answer. I never communicated with Mr. Drinkard on the subject
at all about it. Mr. Drinkard did not understand the purport of the
telegraphic despatch which I sent.
Question. Did he write it?
Answer. Yes, sir; I directed him to write it so emphatic as would
insure the meeting between Latham and Russell, and that Russell's
presence here might be certainly secured.
Question. Was this letter from Latham the only communication
you received from him before he saw you again?
Answer. The only one.
Question. When did you see him again?
Answer. I answer again that I saw him after he returned here, and
that he returned here after Russell had been arrested.
Question. Cannot you fix the time more definitely?
Answer. I do not remember.
Question. The next week, I suppose?
Answer. I think that Russell came here on Saturday; you have the
proof before you, I suppose, as to the time when he came. It was a
day or two after that I saw Latham.
Question. Was there any reason for communicating to Latham and
requesting him to see Russell, rather than to have communicated
direct to Russell that' his presence was required here?
Answer. Yes, sir, there was a very good reason. I wanted him
here immediately. I wanted him here before there was any development made about this thing publicly, because I did not know bilt if'
he got an inkling of it he might never come at all. I therefore desired this communication to reach him without fail.
Question. But Latham could not see Russell as soon as a telegraphic
despatch sent directly to him would reach him.
Answer. That is true; but I sent a telegraphic despatch to Latham,
requesting him to see Russell and press him to come on immediately
upon matters of urgent importance.
Question. Perhaps you do not comprehend my question. It was
whether there was any reason for telegraphing Latham to meet Russell
rather than to have sent the despatch directly to Russell?
Answer. Bailey told me that he had the assurance from Russell
that he would be here on Saturday morning. Russell had been telegraphed, as I understood from Bailey, and was certain to be here;
but not knowing whether I could place reliance on his being here, I
telegraphed Latham to see him and have him here if possible.
Question. Was there anything to be accomplished by sending the
despatch to Latham rather than to Russell himself?
Answer. I have already stated that I understood Russell had already
been telegraphed on the subject.
Question. Does Latham know Russell well?
Answer. I presume he does know him very well.
Question. Have Russell, Majors & Waddell ever received from the




100           ABSTRACTED INDIAN TRUST BONDS.
War Department or from you anything other than those acceptances
upon their contracts?
Answer. They have received the money on their contracts.
Question. Have they received their payments in money and nothing
else?
Answer. Nothing else.
Question. From whom have they received the money which has
been paid them?
Answer. I answer as before, that, as I understand, they have received their money from the quartermaster's department.
Question. At Leavenworth?
Answer. At Fort Leavenworth, or wherever else they were to be
paid?
Question. What I wanted to know was whether they received the
money which they received through the regular channel and not from
any one else irregularly?
Answer. I presume they received it through the regular channel.
I myself never saw a dollar of money paid to anybody in the War
Department.
Question. Have Russell, Majors & Waddell, or either of them, ever
furnished any means or facilities or accommodations of any kind to
the government that you know of?
Answer. Yes, sir, they have.
Question. In what manner?
Answer. I cannot just at this moment describe the manner in
which they have done it; but I recollect that on some occasions they
did afford to the government very considerable accommodations. I
think it was in the postponement of money due to them. I am not
clear about that, however. It was some arrangement in reference to
their contracts for transportation. I recollect it was taken and received at the time as a very great accommodation to the government.
Question. Any other?
Answer. Not that I remember.
Question. Have Russell, Majors & Waddell, or either of them, ever
furnished to any officer of the government, to your knowledge, any
facilities or accommodations or means?
Answer. Not that I know of.
Question. Or in indorsements?
Answer. None that I know of or ever heard of.
Question. None for you?
Answer. Certainly none for me.
Question. Do you know how Bailey came to communicate this thing
to you?
Answer. I do not. I have my conjectures; and, if it is a matter
of any interest to the committee, I will state them.
Question. I do not care for them. Have you known Bailey long?
Answer. Yes, sir, a good while; that is to say, it is a good while
since I first knew Bailey's person.
Question. Is he a relative of yours?
Answer. His wife is the daughter of a cousin of mine.




ABSTRACTED INDIAN TRUST BONDS.             101
Examination by the chairman.
Question. I understood you to speak of Russell, Majors & Waddell
as gentlemen of large means.
Answer. It has always been so represented to me.
Question. I want to ask you what are your means of knowledge as
to that fact?
Answer. I knew it from two or three sources. The first was generally from army intelligence-from army officers who had connexion
with the quartermaster's department. Then I knew it afterwards
from the representations of members of Congress from the west, generally speaking, who have taken a very earnest and active part in
advancing Russell's interest; then I knew it from the representation
of this Mr. Barnes, bank president in St. Louis, who came to see me
in July last.
Question. Can you name those army officers and members of Congress who gave you that information?
Answer. The army officers were both of the quartermasters general-General Jesup and General Johnson; Major Van Vliet I remember
particularly. As to the members of Congress, I do not now recollect
specific conversations; I only remember general conversations and the
impression left upon my mind by Senator Green, Mr. Phelps, Mr.
Craig, and, I think, Mr. Barrett. I do not remember any specific
time, but that was the general impression.
Question. The general impression at the time they made their first
contract, then, was that they possessed means sufficient to carry out
their contract and fulfil all their obligations, independent of those
they derived from the government?
Answer. Yes; I understood at the time that they were worth between
$2,000,000 and $3,000,000.
Question. Before they entered into their first contract?
Answer. At the time they entered into that contract I understood
they were good for any business transaction that they might engage
in; I understood this at the time I gave acceptances, and intended to
give them facilities for raising ready money.
Question. Do you know whether they ever gave any bonds to any
person or persons to assist them in getting or renewing any contract
from the government?
Answer. Not to my knowledge, and I do not very readily see why
they should do it, because they got these contracts as the lowest bidders.
Question. I ask you whether the government is in arrears for services performed by Russell, Majors & Waddell, or either of them, upon
any contract existing for work already done?
Answer. No, I should think not.
Question. What amount of work did they perform during the past
season, since last spring?
Answer. I think it must have amounted to something like half a
million dollars, and probably more; I do not know certainly the
amount.




[102          ABSTRACTED INDIAN TRUST BONDS.
Question. Will it be larger next year?
Answer. It will be if things go along smoothly. There is an addition
to the army at the points they transport to., and it will be a good deal
larger next year.
WEDNESDAY, January 3, 1861.
LUTHER R. SMOOT sworn.
Examination by the chairman.
Question. Be good enough to state your residence and business.
Answer. My place of residence is Leavenworth City, Kansas; my
business is banking.
Question. When did you first locate in Kansas?
Answer. I first went to Kansas in 1856; I date my residence
there, however, from February, 1857, at which time I embarked in
business there.
Question. Have you any partners in the business of banking?
Answer. Yes, sir.
Question. Please state who they are.
Answer. I had better first state the name of the firm; it is Smoot,
Russell & Co. The partners are Suter, Lea & Co., of which I am a
member, and Wm. IT. Russell; I am in charge of the business of the
firm.
Question. You are then a partner of the firm of Suter, Lea & Co.,
of Washington, and also of the firm you have mentioned in Leavenworth, Kansas Territory?
Answer. Yes, sir; Russell is not a member of the firm of Suter,
Lea & Co.
Question. When was that partnership formed with Russell?
Answer. In February, 1857.
Question. What amount of means did he put in, or has he put into,
the firm?
Answer. I am not prepared to answer, because I have not the books
of our house here, and I do not know from recollection.
Question. State as near the amount as you can.
Answer. I shall say, then, to the best of my recollection, that Russell
has never put in any means as capital. What amount has been from
time to time to his credit on our books has been subject to his check
though our partnership arrangements, provided that he should put in
such an amount of capital.
Question. Has he been in debt from time to time to your house in
Leavenworth, Kansas?
Answer. His account has been over-drawn at times, I believe; I
know I wrote to him once upon the subject.
Question. Does he owe anything to the firm now?
Answer. I think' not.
Question. Where did you formerly reside before you went to Leavenworth?
Answer. In this city.
Question. Were you at any time, when a resident of the city of




ABSTRACTED INDIAN TRUST BONDS.              103
Washington, engaged in any public department in the employ of the
government?
Answer. I was.
Question. Please state what position you occupied.
Answer. I was a clerk in the Indian department from November,
1850, up to my resignation, which, I think, was on the first of December, 1853. I have not had occasion to call up these dates recently, but
my recollection is pretty good on that point.
Question. What duties did you discharge while in the employ of
the government?
Answer. My duties were various. Shortly after I was appointed
my duties were promiscuous. Towards the latter portion of my term
I was in the finance division of the Indian department.  The Indian
office is divided into divisions, such as the civilization division, finance
division, &c.
Question. What were your duties, then?
Answer. My duties in the finance division were of a miscellaneous
character. I was confined to no one particular desk.
Question. Do you mean to inform the committee that you were assigned to no particular branch or department of the public business,
but that you were to perform any duty that might be required of you
from time to time by the Secretary?
Answer. The duty, if I had any special duty assigned me in the
finance division, to the best of my recollection, was the care and examination of miscellaneous claims and accounts, or anything of that sort
which might be put into my hands by the chief clerk or head of the
division. I attended to everybody's business, as it were, in that room.
I was familiar with it all.
Question. Did you not perform any duties as disbursing clerk?
Answer. Never.
Question. Did the nature of your duties in the Indian office make
you acquainted with the funds or bonds that were in charge of that
department?
Answer. Yes, sir; as every one in the same room and office was to
a greater or less extent, i suppose.
Question. Can you inform the committee what bonds were held in
trust by the government for the Indian tribes at the time you were
there?
Answer. I cannot with certainty, although I made out what was
called the Secretary's account for Mr. Miller, who was the disbursing
clerk, and who was looked upon as the one to arrange that matter for
the Secretary.  He could not make it out, he said, and I made it out
for the Secretary, but I have not refreshed my recollection upon that
point, and cannot speak with certainty. There were stocks of nearly
all kinds-some United States stocks I know.  Some Alabama stocks
and some Virginias were either bought or other stocks exchanged for
them. Some were sold and others purchased by the direction of the
President, through the request of the Ottawas and the Chippewas of
Lake Superior, I believe. I have not, howbver, as I said, refreshed
my recollection on the subject, nor have I seen a bond since I left
there in 1853.




104           ABSTRACTED INDIAN TRUST BONDS.
Question. Do you know the aggregate amount of the bonds held in
trust while you were there? 
Answer. I cannot state with any certainty.  It must have been in
the neighborhood of $2,000,000.
Question. Mr. Miller had these bonds in charge?
Answer. Yes, sir, Mr. James J. Miller.
Question. Where is he now?
Answer. I don't know; have not seen him or heard of him for a
long time.
Question. When did you first become acquainted with the fact that
a portion of these bonds had been fraudulently abstracted from the
department?
Answer. Last Sunday week.
Question. From whom did you learn that fact?
Answer. Mr. Lea advised me of the fact.
Question. What time in the day was it that Mr. Lea advised you of
that fact?
Answer. It must have been between one and two o'clock in the
afternoon.
Question. Where were you at the time you held this conversation
with Mr. Lea?
Answer. It was at his house.
Question. Were you informed by anybody previous to being informed by Mr. Lea?
Answer. I was not.
Question. Have you since learned from other persons that they
knew of the transaction previous to your being informed by Mr. Lea?
Answer. I have.
Question. Please state who they were and when they were so informed?
Answer. I have tried my best to recollect. As many as two or
three have so informed me in casual conversation, perhaps at the
hotel, but I cannot remember who. I was informed by these persons
that they knew of the transaction as early as Saturday night.
Question. In your conversation with Lea, did he tell you how he
learned the facts?
Answer. Yes, sir. He told me that Bailey had informed him. I
think he said Bailey had just informed him that he had made known
the facts.
Question. In that conversation did Lea say whether he had any
previous knowledge of the use which had been made of those bonds
by Bailey?
Answer. I do not recollect of his so stating.
Question. Please say what he did say to you in that conversation?
Answer. I went to his house and was in his parlor when he came
in. In talking about this matter, he said, as near as I can recollect,
" If Gabriel were to blow his trumpet you could not be more astonished
than you will be about the communication I am about to communicate to you. Mr. Bailey has just advised me that he had advised the
President, or the Secretary, or somebody, that he had abstracted those
bonds from the Indian department and gave them to Russell." He




ABSTRACTED INDIAN TRUST BONDS.             105
also stated that he presumed that Russell and Bailey would be arrested.
We then debated the question whether we should send for Mr. Suter,
in order to communicate the information to him, and- see what action
should be necessary, or what he thought about it. I advised against
it on the ground that Suter knew nothing about it; that it would be
folly to worry him about it; and, furthermore, it was Sunday, and
Suter was a church-going man. Our conversation was desultory, and
after leaving that topic we commenced talking about our own business
here and at the west.
Question. Why was it deemed necessary by Mr. Lea to send for
Suter?
Answer. That I am not prepared to state. Russell was a partner
of ours in our western business, and, of course, a matter so affecting
his reputation was a matter of importance to us.
Question. I only asked what reason Lea assigned?
Answer. None whatever.
Question. Have you had any conversation with Russell since you
have been here in reference to this matter?
Answer. I have not. I have purposely avoided seeing Russell since
receiving your summons.
Question. Did you see him before that?
Answer. I did.
Question. Where, and how often?
Answer. I saw him in New York and here. I cannot say how many
times.
Question. I mean since this transaction.
Answer. I have seen him several times, but I do not know hiow
often; but I have not seen him since I received your summons.
Question. When did you first see him after the fact of the abstraction of the bonds was made public?
Answer. I saw him in New York on the morning of his arrest.
Question. Did you have any conversation with him at that time in
relation to the loss of the bonds?
Answer. I did. I had not seen Mr. Russell before since my arrival
from the west. After salutations were over, Mr. Russell took up his
mail, which was lying upon the table in his office, and read it. I had
seen the morning papers before I left my hotel. I then asked him if
he had read the papers. He said he had. I said, " Mr. Russell, if
the facts be as I see in the papers, you are interested in the facts
recorded there."  Said he,'"What is it?"  I took the paper and
showed it to him. I think it was the New York Herald. He said he
had not noticed the statement I showed him, although he had read
the morning papers. That was Monday morning, the 24th day of
December. He asked me if I thought he would be arrested, or if I
had heard that he would be. I told him I presumed he would be.
He replied, "I have done nothing criminal, and they certainly will
not put me in jail," or something to that effect; to which I replied,
"Mr. Russell, you know better than I whether you are mixed up in
it at all."
Question. Had you any knowledge previous to that. time that Bailey
had abstracted these bonds?




106           ABSTRACTED INDIAN TRUST BONDS.
Answer. Up to the hour, moment, and second that Lea informed
me on Sunday of the fact, I had not.
Question. This conversation took place in New York on Monday?
Answer. Yes, sir.
Question. Did you go over to New York on the Sunday evening
befobre?
Answer. I did.
Question. Did you meet with Mr. Russell before you saw him in
his office on Monday morning?
Answer. I did not, nor did I expect to find Russell in New York
at all.
Question. When you saw him on Monday morning did you inform
him of what Lea had said, or did you merely show him the Herald?
Answer. I merely showed him the Herald. He asked me some
question about business, but instead of answering it I asked him if
he had read the morning papers.
Question. Was the object of your business to New York to inform
Mr. Russell that this matter had been disclosed?
Answer. It was not. I had other business which called me there.
Question. Did you go at your own suggestion, or at somebody's
else?
Answer. I went at my own suggestion. Lea advised me not to go,
but my business was urgent and pressing.
Question. Did Russell state to you on Monday morning, at the time
of the interview, where any of these bonds were?
Answer. He did not.
Question. Do you know where they are?
Answer. I do not, except from hearsay. I have no personal knowledge. I know where Russell kept his account in New York.
Question. Did you ever, at any time, see any of these bonds?
Answer. I never have.
Question. And, until the Sunday morning referred to, when you had
a conversation with Lea, you had no knowledge, directly or indirectly,
in reference to the abstraction of those bonds from the Interior Department, or that Russell was, in any way, connected with the matter
or had received the bonds?
Answer. I have stated that my conversation with Lea was between
I and 2 o'clock. If you call that morning, I answer, emphatically, I
had not.
Question. Were you familiar with Russell's mode of transacting
business at the War Department?
Answer. I was familiar with the transactions in reference to the
first acceptances of the Secretary of War.
Question. When were they given, who held them, and to whom did
Russell deliver them?
Answer. When the contract was entered into between the Quartermaster General and Russell, Majors & Waddell, in 1858 —January
16, 1858, is my impression of the date-I was in this city. It was a
contract for carrying supplies to Utah. It became necessary for those
gentlemen to have means to start the work. Mr. Russell and myself
conned the matter over with a view to ascertain how that money could




ABSTRACTED INDIAN TRUST BONDS.              107
be raised. Not at my suggestion, but at the suggestion of some one,
or of Russell, this project of having the Secretary of War accept payable out of funds to be received when the work was performed, was hit
upon and proposed to the Secretary of War. He addressed a letter to the
President of the Bank of America, in New York, setting forth the fact of
this large contract, the importance to the government of having it
carried out, and stating that it would be very agreeable to him to have
it done. The result was (without going into particulars) acceptances
to the extent of $200,000 soon after were furnished. Additional acceptances, if I recollect aright, were made, which were discounted by
Augustus Belmont, Riggs & Co., of New York, and another house.
I was delegated by Mr. Russell to pay those acceptances when they
became due. They were payable the 1st of July, 1858. I came here
with over $100,000 worth of quartermaster's receipts for transportation by Russell, Majors & Waddell, and a letter setting forth the fact
that, in consequence of the very wet sprinig, further receipts could not be
had in time, and asking the Secretary of War to give another acceptance
or other acceptances, to take the place of those then due. I received
from the Secretary of War-or rather indirectly from him through his
office, for I never saw the Secretary of War myself, as I recollect ofone or more acceptances, and with that, and the receipts I brought on,
and others which were afterwards sent on to me here, I succeeded in
paying the $200,000 of acceptances, in full, by borrowing, and by discounting at the Bank of the Republic one acceptance for $25,000.
Mr. G. W. Riggs, because I would not pay that money in Washington as soon as I got it, and before the notes were due, wrote me down
his enemy from that day to this. That is the last I had to do with
the acceptances of the Secretary of War.
Question. What did you do with those acceptances you took up?
Answer. I cannot say, positively, but I think I returned them to the
War Department.
Question. Did you say you paid off those $200,000 partly in money
and partly in new acceptances?
Answer. I paid the old acceptances entirely in money, but I was
compelled to negotiate one of $25,000 in order to give me full means,
or rather, Mr. Suter, of the Bank of the Republic, had it done for mo.
Question. And where did you get the balance of the money to pay
the $200,000.
Answer. I have already stated that I brought a certain amount of
quartermaster's receipts with me; that others were forwarded to me;
and that with those and the new acceptance of $25,000 which I got
discounted, I paid the $200,000. I have at home all the figures in
reference to this transaction, which I kept at the time because I had
to make an account of the matter to my firm.
Question. What was the amount of those receipts of the quartermaster you subsequently received?
Answer. My impression is that I came on with about $135,000
worth of receipts. I cannot say precisely, because it is over two years
since the transaction occurred. If I am correct, I must have received
by express enough, with what I had originally, to make $175,000,
because I had only to borrow $25,000 to pay the $200,000.




108           ABSTRACTED INDIAN TRUST BONDS,
Question. Was it a new acceptance of the Secretary of War of
$25,000 that you got discounted, or was it an old acceptance?
Answer. It was a new one-one I got as I passed through here.
Question. Are you connected with Russell, Majors & Waddell in
their contract?
Answer. I am not, and never have been.
Question. You informed the committee that it was necessary for
them to raise means by those acceptances for the purpose of putting
their contract into operation: had they, besides that, means to do it?
Answer. They had'not; the previous year had exhausted their resources in money. They had an abundance of stock, but their losses
the year before, and the crisis of 1857, left them, as it did everybody
else in our country, without money.
Question. In your estimation, what were they worth at the time
they entered into this new contract with the government, in 1858.?
Answer. I regarded them as men of very large means; I cannot
say of what amount.
Question. Can you tell in what those means consisted?
Answer. In lands and property of various descriptions-wagons,
oxen, mules, farms, houses, and everything of that kind.
Question. You were then acquainted with their business sufficiently
to know that they were possessed of a very large amount of real estate
and personal property?
Answer. Yes, sir.
Question. When were those lands purchase'd, and where were they
located?
Answer. I knew of their owning a large amount of land in Kansas
and Missouri; I was not present at the buying of all of it.
Question. Do you know, of your own knowledge, that they owned a
large am'ount of real estate? and if so, state to the committee how
you knew it.
Answer. Well, sir, so far as my personal knowledge of this matter
is concerned, I s: w Mr. Russell, at the sales at Fort Leavenworth in
1856, buy a large amount of land for himself' and his firm, and I have
repeatedly seen deeds upon deeds to them, and to him individually,
for real estate.
Question. When was the first partnership between Russell, Majors
& Waddell formed?
Answer. I do not know.
Question. Do you know what they were engaged in previous to the
formation of their partnership?
Answer. I do not know, but I think they were contractors.
Examination by Mr. Harris.
Question. Do you know where any of these bonds have gone?
Answer. I do not.
Question. Do you know R. W. Latham?
Answer. Yes, sir.
Question. Have you ever had any conversation with Mr. Latham as
to the transactions between Russell and the War Department?




ABSTRACTED INDIAN TRUST BONDS.             109
Answer. Never to my recollection.
Question. Have you ever had any transactions with Latham of a
pecuniary character?
Answer. I think I had when he was in business here, on his privath
account, or with Selden, Withers & Co.
Question. Have you had any transactions with Latham in which,
in any way, the government securities were concerned?
Answer. No, sir.
Question. How lately have you seen Latham?
Answer. I have seen him in the streets the last few days.
Question. Have you had any conversation with him in reference to
these bonds, or any of these matters?
Answer. No more than I have had with anybody I have met in the
streets. I presume the subject has been brought up between us.
Question. Has Latham imparted to you any knowledge on his part?
Answer. He bas not.
Question. Do you know Drinkard, chief clerk in the War Department?
Answer. Yes, sir.
Question. Have you had any conversation with him upon this subject?
Answer. Only as I have already stated.
Question. Have you had any conversation before or since this transaction with any persons whatever, who communicated to you in such
conversation a knowledge of these transactions?
Answer. The only person is Mr. Lea, when I called upon him the
other day, and that conversation I have stated. Mr. Russell made
no admission whatever to me.
Question. When work had been done under this contract for the
transportation of supplies, did you receive at your banking-house any
of the certificates of the quartermaster which authorized the payment
of money earned?
Answer. No, sir.
Question. Had your house any connexion with it?
Answer. None in the world.
Question. When moneys were earned under these contracts for transportation, did I understand you to say that the usage of the government was that the quartermaster at Leavenworth, or wherever the
proper point was, paid the money to the contractor, if he had it in his
possession?
Answer. I think their contract provided that they should have the
money where they choose, whether in Leavenworth, St. Louis, or New
York.
Question. Were they paid through the quartermaster at Fort Leavenworth?
Answer. They were entitled to be paid there if they saw fit. Their
contract left it at their option to say where they should be paid?
Question. I understand you to say that if the quartermaster at
that point had not the money they transmitted his certificates to the
department, and that Mr. Miller, the quartermaster here, paid the
money on the accounts of the quartermaster at Fort Leavenworth?




110         ABSTRACTED INDIAN TRUST BONDS.
Answer. Yes, sir, on the accounts which would have been paid at
Fort Leavenworth if the quartermaster there had had the money.
Question. Then I understand you to say that these vouchers for
work done by the contractors out there were paid by the quartermaster out there if he had the money, if not, by Mr. Miller here?
Answer. That depends very much upon the wants of the contractors,
and upon various circumstances. I have known them to have sums
of money due when the quartermaster there had no funds in his possession, and the vouchers were not forwarded to Washington, because
the quartermaster expected every day to receive the means of paying
them.
Question. But still was not the quartermaster there the proper
person to pay the money upon their vouchers?
Answer. I believe so.
Question. Then I can ask you, if in cases where the Secretary of
War gave acceptances covering amounts due to these contractors,
which amounts were also included in vouchers in the hands of the
quartermaster at Fort Leavenworth, they could not have been paid by
the process you have stated?
Answer. If I understand your question to be as to whether the
moneys earned were applicable to the paymnent of these acceptances, I
answer certainly they were.
Question. How do you mean applicable to these acceptances? Do
you mean that Russell's vouchers could have been paid by either of
the quartermasters, notwithstanding the amounts covered by them
were also covered by the acceptances of the Secretary of War?
Were they assumed to be bound to take up these acceptances out of
the money they received?
Answer. Yes, sir; that money was applicable to these very acceptances.
Question. Then when Russell, Majors and Waddell received such
acceptances it was understood that they were to pay them out of these
moneys?
Answer. That was my understanding. Let me say that, so far as
my statement to the committee in reference to these acceptances is
concerned, my personal knowledge extends only to one transaction;
in that transaction the money which I drew could not possibly have
been diverted to any other purpose than the taking up of these acceptances?
Question. Because you made the arrangement that the acceptances
should be taken up?
Answer. Yes, sir.
Question. Now, why was it that money was more easily raised upon
the acceptances of the Secretary of War than upon the vouchers of
the department itself?
Answer. Your question would indicate that you had not understood
my explanation.
Question. Were the acceptances never given for moneys earned, and
so expressed upon the face of them?
Answer. I should say that no acceptance was ever given for money




ABSTRACTED INDIAN TRUST BONDS.             111
alreary earned, for that would be like borrowing $1,000 when you had
the money already in bank.
Question. When Russell, Majors and Waddell had vouchers from
the Quartermaster's department for money already earned under their
contract, and had also acceptances of the Secretary of War covering the same money, was it in their power, under the circumstances of
the arrangement, to have paid or not to have paid these acceptances?
Answer. If they had failed to pay them I do not know what action
the department would have taken.
Question. Could they not have made the money from one quarter
from the vouchers of the quartermaster's department anda raised the
money from another quarter upon the acceptances of the Secretary?
Answer. I have stated, I believe, in my testimony very fully that
it was in the power of these gentlemen to apply any money that they
received to these acceptances if they saw fit.
Question. I put the question again: was it not within the power of
these contractors to have raised money upon the vouchers of the quartermaster's department for services under their contract, and at the
same time to have converted to their use the acceptances of the Secretary of War?
Answer. I should say it was.
Question. Then do you know of any evidence to the department
that these contractors had not used these acceptances for the purpose
of raising money upon them, and at the same time held the vouchers
of the Quartermaster's department?
Answer. They never held vouchers of the quartermaster, except in
transitu from one office to another, for the purpose of raising money.
The vouchers made out in Major Van Vliet's office in Leavenworth
could not go to Washington except the work had been performed and
the money paid or ready to be paid.
Question. Could not these contractors go to Washington for the
payment of the vouchers?
Answer. Yes, sir.
Question. And when demanded was not the money to be paid upon
the vouchers?
Answer. Yes, sir.
Question. Now, then, could not they have also used the acceptances
of the Secretary of War, which they held for the purpose of raising
money, at the same time?
Answer. Yes, sir; and I have no doubt they did, but for moneys
yet to be earned.
Question. I confine my question to acceptances for moneys earned,
and I ask whether the two did not run together?
Answer. No, sir; one was after date, and the other was at sight
or on presentation. There is no possible analogy between the two
things.
Question (by Mr. Thomas.) When these vouchers were presented
did the department, on paying the money, require the acceptances to
be produced, or did they pay it to Russell and leave him to take up
the acceptances at his pleasure?




112           ABSTRACTED INDIAN TRUST BONDS.
Answer. I only know in relation to one instance, and then the
money was paid to me and I paid the acceptance myself.
Question (by Mr. Harris.) And was it not in the option of the contractors to apply the money to the acceptances or not, as they saw fit?
Could not they have kept the acceptances and used the money also?
Answer. I judge they could.
Question (by the chairman.) Did Lea express surprise at the fact
that a fraud in the Interior Department had been detected, or at the
fact that the bonds had been used by Bailey in the manner in which
they were?
Answer. I did not observe or hear any expression of the kind, to
the best of my recollection.
Hon JOHN B. FLOYD, recalled.
Examination by Mr. Harris.
Question. I understood you that the usages of the government in
connexion with the payments to be made under these contracts was,
that the quartermaster at the point you named-I believe Fort Leavenworth-gave vouchers or certificates of the performance of service,
and that the money earned was payable upon these vouchers at Fort
Leavenworth, or at the Quartermaster's department here in Washington.
Answer. The idea I attempted to express was this: that the contracts provide for payments under them, and the manner in which
such payments are to be made. What I intended to say was, that
the payments to contractors and to all other persons having claims on
the Quartermaster's department was made through the quartermasters. My recollection is that, under this last contract of Russell,
Majors & Waddell, the payments were to be made at Fort Leavenworth, but any certificate for the performance of work would be paid
either there or here.
Question. Then, any certificate of work performed under that contract would entitle the. party holding it to payment either there or
here in Washington?
Answer. Yes, sir.
Question. When these certificates were paid here, where were they
paid?
Answer. By the Quartermaster's department, I suppose.
Question. Were they first presented to you for your indorsement or
assent?
Answer. Never; nor did I ever hear of them; nor did I ever know
of them; unless there was some dispute about some of the items.
Question. Then, for all the work absolutely done by these contractors, they were entitled to be paid, according to the usages of the
department, absolutely by the quartermasters, without being presented for your indorsement or approval at all?
Answer. Certainly.
Question. You stated yesterday to the committee that the indebted



ABSTRACTED INDIAN'IRUST BONDS.            113
ness to these contractors was never considered consummated until the
work was actually done?
Answer. Yes.
Question. Had you any means of knowing, at any time when these
acceptances in question were issued, whether these parties had been, in
fact, actually paid for the whole amount of work done up to the time the
acceptances were given?
WITNESS. The last $700,000 of acceptances do you mean?
Mr. HARRIS. No; I will take this particular acceptance, dated on
the 13th of September, 1860, and which is an acceptance for $15,000,
[handing it to witness.] Now the question is, whether, at the time
that acceptance was given, these parties were, in fact, paid for all the
work performed by them under their contract, up to that date.
Answer. I suppose that up to that date they had been paid, because
as fast as they earned the money they received payment, of course.
Question. Was this considered by you as a conditional, or an absolute, acceptance?
Answer. I considered it a conditional acceptance; you will observe
that in most of the others the language is different.
Question. Is not the acceptance you have in the language of an
absolute acceptance of negotiable paper?
Answer. Probably so.
Question. At the time of the issue of this acceptance was it expected the government would be relieved from responsibility upon it,
by its payment by the parties to whom it was given?
Answer. That was, at all times, the agreement and understanding.
These acceptances were given to them for accommodation, and were
put into a shape that would enable them to raise money for their
business; and were to be taken up and paid by them. It was my
conviction that they would be taken up and paid by these parties,
and there were two grounds upon which I rested that conviction: the
first was the money arising out of their business; and the next was
their own individual resources, which I had been taught to believe,
and did believe, were extremely large. The acceptances were given
as a simple accommodation, to enable these contractors to sustain
themselves.
Question. Then they were given for the purpose of keeping up
these contractors, and based upon an appreciation of their personal
means rather than any knowledge in the department of the amount
of money due to them?
Answer. Upon that ground, and also upon a knowledge upon the
part of the department of the amount of money under the contract it
could control in case of difficulty about the payment-both.
Question. Do I understand, then, that you held that the acceptances drawn in this form, for value received, payable at a given date,
and chargeable to the contract account of these parties, were acceptances which the department could at any moment revoke and annul,
although in the hands of a bona fide holder or owner?
Answer. No, not when in the hands of a bonafide holder or owner.
H. Rep. Com. 8 —— 8




114           ABSTRACTED INDIAN TRUST BONDS.
If such an acceptance were to be presented by a bona fide owner at the
department with the request to have it put on file, then a positive
order would be made that the money arising from their work should
be set aside for the payment of such acceptance.
Question. I understand, then, that when they were issued it was
without any knowledge on your part that the moneys up to that
time due these parties had not been paid to them in the ordinary
way, and with the further understanding that unless the acceptances
given were presented by a bona fide owner and registered in the
department they could not be made available by the holder?
Answer. They would be subject to certain payment in the hands of
the holder whenever he chose to have them registered in the department, and the order made that the money arising from the contract
of these parties should be applied to them, but not until that was
done. I never doubted but they would be used, as they had been
used, in very large amounts in the ordinary routine of business, and
that all concerned in them would be protected and taken care of by
them under the agreement made with the parties who held the paper.
What that agreement was I never knew and never desired to know.
Question. In case the holder of one of these acceptances presented
it to the department and the department agreed to pay it in the
manner you have stated, what course would the acceptance take on
the books of the department; would it be registered?
Answer. Yes, sir.
Question. Would it be numbered?
Answer. It would be filed.
Question. What would be the indication upon the face of the paper
that it had been so registered?
Answer. None that I know of.
Question. Is there any indication upon the face of that acceptance
[handing one to witness] that it has been registered?
Answer. I think not. It never was registered.
Question. Look at the numbering upon its face and tell the committee what it indicates, and for what purpose it was put there.
Answer. It was done by a clerk in the department; the purpose I
do not understand.
Question. Do you know whether or not it indicates its registration
in the department?
Answer. I do not. I do not know what it means.
Question. Is the indorsement in red ink in the handwriting of the
chief clerk of the War Department?
Answer. It is the handwriting of a clerk in the department, but
not of the chief clerk.
Question. What is his name?
Answer. His name is Irwin.
Question. Will you be kind enough to explain the difference in the
character of the two kinds of acceptances that I see here?
Answer. Yes, sir. I did it very fully yesterday, but I will do it
again. One description of draft has the assurance of an absolute
acceptance, and was given while I had the control of the funds arising




ABSTRACTED INDIAN TRUST BONDS.             115
from the work done. Desiring, as I have stated so frequently, to
sustain these people, and it being represented to me by them that the
acceptances of the other description, such as that you now hold in
your hand, could be substituted to a large amount for those held
by bankers, firms, and persons of wealth, who were disposed to extend
an additional credit and longer indulgence to the contractors, upon
that representation I changed the form of acceptances and made them
payable when the work was done. It was upon the idea, as I stated
yesterday, that these acceptances were only to go into the hands of
bankers and firms holding the other acceptances that I gave them in
large amounts in order to insure such a disposal of them, and to
prevent their going upon the market.
Question. I understood you yesterday that every acceptance given
by you to the contractors was to run against unearned money; was
that rule applicable to both classes of acceptances?
Answer. All the acceptances I ever gave to these people were to
run against money that was to arise from the execution of the work.
Question. Did you use the phrase unearned money?
Answer. I think likely; that is the same thing.
Question. I understood you further, that these acceptances had
relation to moneys yet to be earned by them, and which were understood by you to be under the absolute control of the department.
What do you mean by that?
Answer. I do not know as I can make my meaning any more
explicit. I will say that if you ask if these contractors were disposed
not to pay these acceptances into the hands of the men they had business with-men of whom I'knew nothing whatever-whether they could
draw the money from the quartermaster out there, put it into their
own pockets, and refuse to pay these drafts into the hands of the men
they had dealings with without any control of mine, I answer certainly
they could.
Question. The first acceptance I handed you a short time since is
number 78 and the next 90. HIave you any knowledge of what has
become of the acceptances intervening between those two?
Answer. I have not; I do not know, and never did know, where and
when those acceptances haye been paid. They have been given, exchanged, paid, and destroyed to the amount of several milions of dollars,
from firstto last. Until last September there never was any trouble about
thema; I said yesterday that it was July, but I was mistaken, I never
heard a breath of trouble about these acceptances until last September.
The contractors certainly had it in their power to do what you inquired
about just now. I had no guarantee against that except two things:
the first was that in doing so they would injure their credit; and the
next was that it would break up their contract entirely, because as
soon as I discovered that they had broken faith with these people and
endeavored to get money on false pretences, I would make an order
that all the earnings out of their contract should be disposed of in a
particular way. To tell the truth, however, I never regarded the
question in that point of view. It was from a different standpoint
-hat I looked at it. I looked at it as the means of sustaining the




116           ABSTRACTED INDIAN TRUST BONDS.
contractors in a great work-a work which it is very difficult for
persons not familiar with army transportation over the plains to comprehend; a work of infinite importance, as your folks will find out
before six months from  now; and to embarrass which is to produce
greater confusion and to run greater risks of injury to the public
service than could arise from any other cause whatever. And therefore, as a matter of administration, whilst the course I pursued was
certainly not in conformity to the ordinary routine rules of the department, which would have saved me from probable public clamor, I felt
that it was confering a substantial benefit to the public service, and I
did it, and I would do it again, unless there was a law to prohibit it,
which there is not.
Question. Do you know whether any of these acceptances went at
any time into the hands of the Bank of the Republic of New York,
and were discounted by them for the benefit of these indorsers?
Answer. I do not.
Question (by Mr. Case.) When these acceptances were destroyed
or taken up was there any evidence of it in the department?
Answer. No, sir; unless there was evidence that they were overdue.
Question (by Mr. Harris.) Were they always taken up?
Answer. So far as I know, they were always taken up until September last, when the troubles began. Then, upon consultation with
some of the creditors of Russell, Majors & Waddell, who came here
to see me, it was generally understood that they would be able to
arrange their affairs and go on with their business operations.
Question (by Mr. Morris.) I see that there are about $800,000 of
these conditional acceptances made by you payable in 1861, if the
money is earned. What assurance had you that these contractors
would be able to perform their engagements to the government if
they were forced in advance to hypothecate these acceptances for the
purpose of raising money on them to pay old debts?
Answer. I had this assurance, if they could raise money to sustain
their credit and keep their house on a business footing, that then,
with the stock I knew they had on hand, and the facilities they possess
for transportation, they would be in a condition to perform the work.
Question. What do you mean by keeping their house on a business
footing?
Answer. I mean by that keeping it in credit, and such credit as it
had and has had ever since I have been Secretary of War.
Question. Do you think the amount they will earn in 1861 will
exceed the amount of those acceptances?
Answer. That depends on the policy of the succeeding administration. If the army is kept on the footing it has at present; if the
Indian wars are prosecuted with the same energy, activity, and efficiency as they have been fobr the last two years, the amount of transportation will reach about that sum. But from the character of the
paper the holder could not be misled, nor could any one else, because
on the face of the paper itself nothing is to be paid unless the money
is earned. Therefore, there is to be in the mind of the holder that




ABSTRACTED INDIAN TRUST BONDS.             117
confidence in the ability of these people to earn the money which
would give the paper its credit.
FRIDAY, Janquary 4, 1861.
WILLIAM R. DRINKARD sworn.
Examination by Mr. Harris.
Question. Mr. Drinkard, what is your position in the War Department?
Answer. I am chief clerk, sir.
Question. What is the character of your duties as chief clerk?
Answer. They are of a very general character. I am the medium
of communication generally between the Secretary of War and parties
who desire to see him. Papers that are to be submitted to him are
generally passed through my hands.
Question. Are you familiar with the provisions of the contracts
made between the War Department and Russell, Majors & Waddell?
Answer. I don't think that I am sufficiently familiar to give you a
correct statement of their contents.
Question. How long have you been in the War Department?
Answer. Since the first of April, 1857.
Question. You are not, I suppose, familiar with the usages of the
department in the matter of acceptances for parties who were contractors prior to that time?
Answer. No, sir.
Question. Do you know of any cases in which acceptances have
been given to contractors by the Secretary of War since you have
been in the office?
Answer. I know of none, except those given to the firm of Russell,
Majors & Waddell under several of their contracts.
Question. They are, then, the only parties to whom such acceptances
have been given to your knowledge?
Answer. Within my knowledge.
Question. Are you familiar with the acceptances given by the Secretary of War to that firm?
Answer. I have seen them generally, sir; I have seen a great many
of them.
Question. Have any of them been drawn up by you?
Answer. None, sir.
Question. Have any of them been indorsed in any way by you?
Answer. None, sir.
Question. Have they ever been in your hands for any purpose whatever in connexion with your office?
Answer. Never, except to get the Secretary's signature-his
acceptance.
Question. Have you at any time made memoranda of the date and
tenor of any of those acceptances?
Answer. N.o, sir.
Question. Have any of them been handed to you at any time by the
Secretary of War for the purpose of registration?




118            ABSTRACTED INDIAN TRUST BONDS.
Answer. No, sir.
Question. Is there any register of any of these acceptances in the
War Department, to your knowledge?
Answer. They are registered by a clerk in the War Department
who occupies a room immediately opposite to mine.
Question. Do you know for what purpose they are registered?
Answer. They were registered simply for the purpose of keeping a
memorandum of the dates, the amounts, and the time that they fell
due.
Question. Was it the custom of the department for that registration to be made in the case of all acceptances given by the Secretary?
Answer. So far as I know anything of them, in the beginning of
the transactions in reference to the acceptances, the Secretary of War
desired that a register should be kept of them, and I selected a clerk
in the department, who was a very intelligent gentleman, and wrote
a fine hand.
Question. Was that Mr. Irwin?
Answer. Mr. Irwin, attached to the Secretary's office, was to keep
a registry of these acceptances; or rather, in the first instance, copies
of the acceptances were kept. I desired Mr. Irwin to keep copies,
thinking they would furnish the best evidence of the acceptances.
Question. Are you aware that that habit of registration has been
continued up to the issue of the last of these acceptances?
Answer. My impression is that a registration has been continued,
but the particular form of it may have been changed.
Question. I understand you to say that that registration was at the
instance, and by the direction, of the Secretary of War?
Answer. Yes, sir.
Question. And was to apply to all acceptances given by him in this
connexion?
Answer. Yes, sir.
Question. Do you know Mr. Russell, of the firm of Russell, Majors
& Waddell?
Answer. I do, sir.
Question. Did you see Mr. Russell at the War Office or elsewhere
about the 13th of December, in connexion with any of these acceptances?
Answer. I think Mr. Russell was at the War Office about that time.
Question. Had he an interview with you, sir?
Answer. He generally had an interview with me when the went to
the War Office.
Question. Had he on that occasion, in reference to the acceptances?
Answer. Yes, sir.
Question. Be good enough to state the character of that conversation, as nearly as you can. Did he come to the War Department to
see you about it?
Answer. No, sir; he came to see the Secretary.
Question. He had a conversation with you?
Answer. He had a conversation with me.
Question. Be kind enough to state it.
Answer. He told me he desired to get some acceptances from the




ABSTRACTED;INDIAN TRUST BONDS.            119
Secretary of War, to make arrangements for his business transactions
in connexion with his transportation; and I do not know that it was
unlike other interviews that he had with me on the subject. He had
difficulty in meeting the acceptances already issued, and he proposed
to make some arrangement with the Secretary, the particulars of
which I do not know, by which to meet his obligations arising out of
the transaction about the acceptances and so forth.
Question. Did you understand it to be for the purpose of taking up
the acceptances already due?
Answer. Yes, sir.
Question. In the nature of a renewal?
Answer. It was in the nature of a renewal, and of taking up acceptances overdue that had matured, and that he had not been able
to meet. What the result of his interview with the Secretary of War
was I do not know.
Question. Have there been, at any time, any of the acceptances
issued by the department returned to the department and cancelled?
Answer. Some of them have been.
Question. Do you know what number and the amounts?
Answer. I could not speak positively about that; they were returned to M3r. Irwin, and he kept a memorandum  of the cancelled
acceptances.
Question. Do you know whether those cancelled acceptances are in
the War Office?
Answer. I suppose they are, sir.
Question. Do you know Mr. Godard Bailey?
Answer. I do, sir.
Question. Had you any interview with him at any time in reference to any of these matured or overdue acceptances of the Secretary?
Answer. I had an interview with Mr. Bailey some time last
summer.
Question. About what time?
Answer. I do not really know how to designate the time except
from rumors which have recently reached me. I understand that it
must probably have been about the month of July?
Question, Where was the interview?
Answer. At the War Department. As well as I can recollect the
transaction, which I did not think of afterwards until within the last
three weeks, I will repeat the substance of the conversation that
passed between Mr. Bailey and myself upon that occasion. He came
up to the War Department, and, finding that I had a good many
gentlemen in my room, desired to speak to me privately, and I then
took him on the floor above my room. He introduced the subject of
these acceptances; said that he had understood that the Secretary of
War had issued acceptances to Russell, Majors & Waddell to a large
amount; that Mr. Russell was in a tight place in reference to money
matters at that time, and there was a probability that some of these
acceptances would be protested. He asked me what would be the
effect of the protest of those acceptances upon Governor Floyd. I
told him that I thought it would be very annoying to Governor
Floyd; that it would disturb him greatly that any of his official




120           ABSTRACTED INDIAN TRUST BONDS.
papers should be protested before the public; that I supposed and
firmly believed that the acceptances would be paid; that there was
money coming due to Messrs. Russell, Majors & Waddell, under
their contracts for transportation, sufficient to meet these acceptances;
that up to that time none of them had been protested; that Mr.
Russell had very promptly met all at maturity; and that while he
might be pressed for money at that time I did not suppose he would
be pressed so far as to be forced to submit to a protest. That was my
opinion from previous transactions that Mr. Russell had had with the
War Department. I stated to Mr. Bailey that I had understood Mr.
Russell to be a man of large means and considerable wealth; that I
believed him to be a business man and a man of honor and integrity;
that I thought he would meet his obligations as he had done thus far
to the War Department, and, therefore, I suppose he was perfectly
responsible.
Question. Your conversation, then, was intended to give to Mr.
Bailey the impression that these acceptances would be taken care of
by Russell.
Answer. That was my impression. lie then remarked that he did
not know Mr. Russell, and cared nothing about him, but that he felt
interested in Governor Floyd.
Question. Did he state why?
Answer. No, sir; he did not. He said then that if there was any
doubt-any difficulty apprehended, so far as Governor Floyd was concerned, he wvas disposed to make an effort to protect him, that he had
means which he could control, and that if he was entirely satisfied of
Mr. Russell's responsibility, he thought he could make a negotiation
with Mr. Russell by which he could relieve him. At that point of
the conversation, I said to him, " I do not know anything about this,
but you had better see Russell; he is in the building now." He desired
me to introduce Mr. Russell to him. I took Mr. Russell up stairs
and introduced him to Mr. Bailey; but I do not know anything of the
conversation that passed between them. I cannot state this conversation between Mr. Bailey and myself more distinctly than in these general terms, because it passed out of my mind. I did not remember
it again until, I think it was, last Thursday week.
Question. Did Mr. Bailey suggest to you that he feared the nonpayment of these acceptances might make the resignation of Governor
Floyd necessary?
Answer. No, sir.
Question. Did you suggest to him that you thought Governor Floyd
would be compelled to resign if these acceptances were not met?
Answer. No, I did not, sir.
Question. You did not?
Answer. Not at all, sir.
Question. Was anything said in the interview between you about
the probable resignation of Governor Floyd in case of their nonpayment?
Answer. Nothing at all.
Question. Did Mr. Bailey indicate to you what was the character




ABSTRACTED INDIAN TRUST BONDS.             121
of the securities upon which he could negotiate to relieve these acceptances?
Answer. He did not, sir. My impression from the conversation
was that Mr. Bailey was representing some friend who had means at
his command, and who desired to make a money negotiation. I did
not know the position that Mr. Bailey occupied in the Interior Department. I had heard that he was a law clerk to the Secretary of
the Interior.
Question. Then I understand you to say, Mr. Drinkard, that one
reason why you believe there was no risk of these acceptances not
being met, was that there were moneys then due to these contractors
which would probably be sufficient to meet them?
Answer. Yes, I supposed so, sir, and the principal cause of my
assurance in the matter was the prompt manner in which these
acceptances had been met. I had not heard a suspicion of a doubt
about their being paid.
Question. Did you know anything about the state of the account
from time to time of Russell, Majors & Waddell?
Answer. No; I did not.
Question. Was it not in the Quartermaster's department?
Answer. It was in the Quartermaster's department; most of the
payments made to Russell, Majors & Waddell were made by the
quartermaster at Fort Leavenworth, the eastern terminus of their
transportation line.
Question. Those payments were made upon vouchers?
Answer. Those payments were made upon vouchers, generally speaking. Sometimes the requisitions would be made payable in Washington city. Sometimes the quartermaster at Leavenworth would
send a requisition to the quartermaster general, and he would have a
certain amount of money transferred to the quartermaster at Leavenworth on the books of the assistant treasurer at New York, and, upon
that transfer, the quartermaster at Leavenworth would draw his checks
in favor of Russell, and that is the reason, I suppose, why all the acceptances were made payable in New York.
Question. Then, as I understand it, the money earned by these
contractors was paid either by the quartermaster at Fort Leavenworth
in the way you describe, or, if not paid upon vouchers by him, by the
quartermaster in Washington, Mr. Miller?
Answer. Yes, sir.
Question. Did you know from time to time the amounts paid by
either of these quartermasters to Russell, Majors & Waddell?
Answer. No; I did not, sir.
Question. How did you know, then, that there were moneys due to
them sufficient to cover these acceptances?
Answer. I did not know the fact, but that was my supposition.
Question. Might not, in point of fact, Russell, Majors & Waddell
have been paid up to the date of their last earnings either by the
quartermaster at Fort Leavenworth or the quartermaster here without your knowledge?
Answer. Oh, yes, they might have been paid it, but not in full




12 2          ABSTRACTED INDIAN TRUST BONDS.
under the contract, because the contract was a subsisting one; yet
they might have been paid in full for the money earned.
Question. Then you had no means of knowing, in your office,
whether they had or had not been paid up to the date of their last
earnings either by the quartermaster at Fort Leavenworth or by Mr.
Miller here?
Answer. I did not.
Question. Have you had any interview with Mr. Bailey since the
one to which you have referred?
Answer. Not that I remember, sir.
Question. Has there been any correspondence with Mr. Bailey from
the War Department?
Answer. None that I know of.
Question. Nor from yourself?
Answer. None, sir.
Question. Have you had any interview with Mr. Russell subsequent
to the date of the conversation with Mr. Bailey to which you have
referred?
Answer. Yes, I have. I saw him and had a conversation with him
in December last.
Question. What was that conversation about?
Answer. It was in reference to further acceptances. He told me he
desired to get those acceptances from the Secretary of War, to enable
him to make some arrangement with parties who held acceptances
then over due. I knew that he was embarrassed then, because a good
many of the acceptances had been protested and the War Department
had been informed of the protests.
Question. A good many of the acceptances had been protested in
December?
Answer. Yes, sir. I think the first protest took place about the
27th of September.
Question. Do you know now the amount or the date of any of the
acceptances of which the War Department had received notice of protest?
Answer. No, sir; I could not tell.
Question. What class of acceptances did those protests refer to?
Answer. They referred, as well as I remember, to the acceptances
without condition.
Question. Where were they protested?
Answer. I think most of them were protested in New York; they
were payable there.
Question. At what bank?
Answer. The Bank of the Republic.
Question. All of them at' the Bank of the Republic?
Answer. I am not certain.
Question. Are those notices of protest in the War Department?
Answer. No, the notices of protest are not; but there are letters in
the War Department informing the Secretary that certain drafts had
been protested.
Question. You said the War Department had been advised of it by
notices of protest.




ABSTRACTED INDIAN TRUST BONDS,             123
Answer. Not by notices of protest, but simply by letters from the
owners of the drafts.
Question. Are those letters on file in the department now?
Answer. They are.
Question. In whose charge are they-yours?
Answer. They are in charge of the record clerk.
Question. Who is he?
Answer. Mr. Lee.
Question. But they are at the disposal and under the control of the
Secretary of War?
Answer. Yes, sir.
Question. Was what you have stated the whole of your conversation
with Mr. Russell in December?
Answer. That is the substance of the conversation.
Question. Did he say anything to you then of this protested paper?
Answer. He said he would make arrangements for the protested
paper.
Question. Did he say what the character of the arrangements was?
Answer. No, sir.
Question. Did he name Bailey to you in that conversation?
Answer. He did not.
Question. Did he say anything to you about these Indian securities?
Answer. He did not, sir.
Question. Did he name any person to you in that conversation from
whom or by whom he expected to raise money to meet those protested
acceptances?
Answer. No; he said simply that he expected to raise some money
from friends in New York.
Question. Did he name them?
Answer. He did not.
Question. Nor did he say upon what character of securities he expected to raise it, but he asked for a renewal of some of these acceptancds?
Answer. Yes, sir; or, rather, an additional amount of acceptances.
Question. Were these acceptances that he asked for given?
Answer. I cannot say that they were; they did not pass through
my hands if they were.
Question. Then, to your knowledge, they were not given, nor any
registration made of them if given?
Answer. I must say now that the registration was made a few days
ago. Governor Floyd then handed me a list of acceptances which he
had given.
Question. I understand you to say that the registration of these
acceptances was made a few days ago?
Answer. I think I can say within the last eight or ten days.
Question. Within the last eight or ten days Governor Floyd handed
you a memorandum of other acceptances?
Answer. Yes; the acceptances that he gave to Mr. Russell in December.
Question. Well, now, sir, did that memorandum refer to acceptances




124           ABSTRACTED INDIAN TRUST BONDS.
given to Mr. Russell after notice to the War Department of the protest of the prior acceptances?
Answer. Oh, yes, sir.
Question. They did?
Answer. Yes, sir.
Question. They were for the purpose, then, of enabling Russell to
take up the overdue or unpaid acceptances?
Answer. I cannot say what the object was; the Secretary did not
tell me.
Question. But the acceptances were subsequent to the protest to the
War Department of the other ones?
Answer. Yes, sir; I so understand.
Question. Are you able to say what the amount of the acceptances
so given was?
Answer. No, I could not say.
Question. What did you do with the memorandum that the Secretary gave you?
Answer. I handed the memorandum to Mr. Irwin, and he made
record of it, and returned the memorandum to Governor Floyd.
Question. In the case of acceptances that were paid do you know
what became of them in the department? What course they took?
Answer. They were cancelled generally.
Question. How do you mean cancelled? Marked "' cancelled," dr
destroyed?
Answer. I think they were marked " cancelled" by Mr. Irwin on
the list that he keeps. I do not think the acceptances were returned
to the department.
Question. What evidence, then, had the department that they were
paid?
Answer. The simple fact of the time for payment having passed.
Question. Without notice of protest?
Answer. Without notice of protest.
Question. And upon that they marked them I" cancelled?"
Answer. Yes, sir, " cancelled."
Question. They cancelled them by marking them paid?
Answer. Mr. Irwin simply kept a list.
Question. Then did not the War Department consider that class
of acceptances as binding upon the government?
Answer. I suppose so, sir.
Question. I understand you to say that they were acceptances by
Mr. Floyd, and were not returned when paid to the department; but
might, so far as you know, have remained in the possession of Russell, Majors & Waddell?
Answer. They might have been, so far as I know.
Question. It appears, then, that at the time the Secretary of War,
according to the usage you have stated, gave acceptances to Russell,
Majors & Waddell, he had no personal knowledge of the fact that the
outstanding acceptances had been paid or returned?
Answer. In answer to that, I say that if he had any positive
knowledge, I did not know it.
Question. Do I understand you, then, to say that if he had any




ABSTRACTED INDIAN TRUST BONDS.              125
knowledge upon the subject, it was knowledge confined to himself,
and not apparent from the transactions upon the books of the department?
Answer. I did not know of any official knowledge; if he had any
knowledge, it was personal and not official.
Question You say you had one conversation with Mr. Russell in
December. Have you had any conversation with him since?
Answer. I have not; I have not seen him.
Question. Have you, from July last to this time, addressed any
letters to Russell in reference to this transaction?
Answer. It is very possible I have.
Question. Do you recollect at whose direction those letters were
addressed to him?
Answer. Sometimes I have written to him at the suggestion of the
Secretary of War, but principally I would write to him when the
Secretary received a notice of protest, and inform him of the fact.
Question. Then you wrote sometimes at the request of the Secretary
of War, when the Secretary was informed of the protest of some of
these drafts?
Answer. Yes, sir.
Question. Did you write to him upon any other occasion, and for
any other purpose than that?
Answer. No, sir; except in reference to general matters of business,
when he would direct letters to the Secretary or to myself, in relation
to general business transactions relating to transportation, and then
only giving him information or answering questions connected with
that business.
Question. Did you, at any time, on your own motion, or by the
direction of any other person, write to Russell any letters having any
connexion whatever with these Indian trust bonds?
Answer. No, sir. I might as well say here that I did not know of
the existence of those bonds until last Sunday night week.
Question. Is there any of the correspondence between Russell and
the Secretary of War on file in the department now?
Answer. I do not remember.
Question. Is it the usage of the department to keep on file letters
addressed to the Secretary of War?
Answer. Yes, sir; on official business.
Question. Any matters connected with these drafts would, I suppose, be considered official business?
Answer. I suppose so.
Question. Then, if the usage has been observed, these letters are on'file in the department. In whose possession would they be?
Answer. I suppose any letters in reference to these drafts are on file,
subject to the control of the Secretary of War. There are no letters
on file, I suppose, addressed to Russell; I did not make any record of
the letters I wrote to him calling his attention to these protested
drafts.
Question. How many drafts were protested?
Answer. I do not know; I cannot state accurately, but all the let



126           ABSTRACTED INDIAN TRUTST BONDS.
ters received by the Secretary of War in reference to them are, I sup.
pose, now in the War Department.
Question. Can you approximate to the number of drafts that were
protested?
Answer. It is very difficult to do that; I do not like to make a
surmise, when, I presume, the facts can be ascertained positively.
Question. But it occurred frequently.
Answer. A great many have been protested since the 27th of September last.
Question. And, of course, the fact of such protest was within the
knowledge of the Secretary of War?
Answer. Yes, sir.
Question. Did you, during the month of December, and towards its
close, telegraph to Mr. Russell in the city of New York?
Answer. I did.
Question. What was the purport of that telegraphic despatch?
Answer. The purport was that he should meet Mr. Latham at pier
No. 1, I think it was, on the arrival of the Amboy boat.
Question. For what purpose, and why, did you desire him to meet
Latham?
Answer. I added in that despatch, c it is vitally important to you
to do so."  In answer to the question why I did it, I say, I used
that language, and sent that despatch, at the direction of Secretary
Floyd. The object of the meeting I did not know; I simply used the
words that the Secretary dictated.
Question. And you have no knowledge at all of the necessity for
such meeting, nor of the purpose of the despatch?
Answer. I have not.
Question. Who is this Latham to whom you refer?
Answer. He is a gentleman who lives in the city of New York at
this time; at one time he lived in Washington. He las been, for a
part of the time during the last three or four years, attending to the
private business of Governor Floyd.
Question. What is Mr. Latham's relation to the War Department?
Answer. He has no relation at all with the War Department.
Question. Does he hold any office in the War Department?
Answer. No, sir.
Question. Is he in the employ of the government in any way?
Answer. Not that I know of.
Question. Has he a desk in the War Department?
Answer. No, sir.
Question. Has he ever kept one there?
Answer. Not that I know of.
Question. Then you did not know Latham in any relation except
his private relation to Governor Floyd?
Answer. No, sir.
Question. Did you receive any answer to that despatch?
Answer. No, sir.
Question. Did: you have any communication from Latham  subsequent to that despatch?
Answer. No, sir; Latham came on here.




ABSTRACTED INDIAN TRUST BONDS.             127
Question. Did you see him?
Answer. I did.
Question. What conversation had you with him?
Answer. I cannot repeat it. The substance of the transaction in
reference to these Indian trust funds had then been made public, and
Latham had heard of it in New York.
Question. Did he tell you how he had heard of it?
Answer. No, sir.
Question. What else?
Answer. He told me that he had heard of it in New York; that
parties had gone on to arrest Russell for connexion with the abstraction of the bonds in the Indian department; but he gave me no particulars connected with it. He did not tell me that he had had no
conversation with Russell upon the subject.
Question. Had you no curiosity to ask him about it?
Answer. I had not. I had heard of the whole thing here. It
seems that Latham got his information more from Washington than
elsewhere, by rumors.
Question. Did or did he not communicate to you any source from
which he had learned about this bond transaction?
Answer. I cannot say that he did. He told me he had a conversation with Russell, but I did not interrogate him.
Question. Did he refer to any other conversation with Russell?
Answer. He did not.
Question. Have you had any conversation with him since that time?
Answer. I have had several with him.
Question. Have any of them referred to these acceptances and these
bonds?
Answer. Only in a general manner, and in reference to this whole
transaction.
Question. Has he indicated to you the whereabouts of any of these
bonds?
Answer. He has not.
Question. Have you had any conversation with Mr. Bailey since
the one referred to by you in the War Department?
Answer. None whatever. I may have met Bailey casually, but
have had no conversation with him in relation to business connected
with the War Department. It was very seldom that I saw him.
Question. And I understand you to say that Russell has never intimated to you where any of these bonds are, or what use he has made
of them?
Answer. I have never interchanged a word with Russell upon the
subject. I did not know at all that he had them until I heard of it
after this revelation was made.
Question. And Latham, upon his part, has never indicated to you
any knowledge upon the subject?
Answer. No, sir.
Question. Nor Mr. Bailey?
Answer. No, sir.
Question. Then I understand from your testimony that so far as the
earnings, up to any particular date, of Russell, Majors & Waddell,




12 8          ABSTRACTED INDIAN TRUST BONDS.
under these contracts, are concerned, they might have been paid by
the quartermaster at Fort Leavenworth, or the quartermaster here,
without the knowledge of the Secretary of War that they had been
so paid; and that, so far as the acceptances given by the Secretary of
War are concerned, there was no knowledge in the department of the
fact of their payment, except such as may have been given by Russell
himself; and that new acceptances were being given, from time to
time, without the knowledge by the Secretary of War that the outstanding ones had been paid; and that, in point of fact, these parties
might not only have collected their earnings from these quartermasters, but might also have retained to their use the outstanding acceptances for which, at the same time, they received new ones? Is that
the substance of your testimony?
Answer. It is; that is a possible state of affairs. I do not know
of its positive existence, but such a state of affairs might have existed
under the circumstances.
Question. Here is a draft indorsed by Russell, Majors & Waddell,
in the following words:
"c$10,000.              WASHINGTON CITY, September 19, 1860.
A" Twelve months after date pay to our own order, at the' Bank of
the Republic,' New York city, ten thousand: dollars for value received,
and charge to account of our transportation contract of the 12th day
of April, 1860.
"RUSSELL, MAJORS & WADDELL.
"Hon. J. B. FLOYD,
"  Secretary of War."
And indorsed in red ink on its face:
" No. 85.]              WAR DEPARTMENT, September 19, 1860.'a Accepted.
Accepted.  OHN B. FLOYD,
"Secretary of Watr."
NTow is not that a positive acceptance?
Answer. It is what they call a positive acceptance, and for which
the government is responsible, in contradistinction from a conditional
acceptance.
Question. And in the course of business in the War Department is
not an acceptance of this sort always paid, in the hands of a bona fide
holder, if there are funds?
Answer. I should suppose so.
Question. Do you know, in connexion with any of this class of
acceptances, that any necessity existed for a party holding them to
notify the department that he held them and desired them to be paid,
before the department considered itself bound to pay them, if they
had funds?
Answer. I do not know that any such process is necessary.
Question. Do you know any reason why such a process should be
necessary?
Answer. I do not. As I understand it, it was never expected that
the department would take up these acceptances, but that these




ABSTRACTED INDIAN TRUST BONDS.              129
parties would receive their regular payments from the quartermaster
at Fort Leavenworth, or from the quartermaster here, and with the
funds they thus received they would take up these acceptances at
their maturity.
Examination by the chairman.
Question. When did your acquaintance with Russell first commence?
Answer. I think it was some time in the fall of 1857.
Question. Did you, at any time thereafter, write any letter or
letters to any persons urging upon them to loan these parties, Pussell, Majors & Waddell, money or capital?
Answer. I think I wrote one letter.
Question. To whom, and when?
Answer. I am not positive as to the time, but it occurs to me it was
about the time of the commencement of the issuing of these acceptances by the Secretary of War. I wrote a letter to the president of
the Bank of the Republic-I am not entirely certain as to the individual, but I think it was the president of the bank-stating my
opinion of the certainty of the payment of those acceptances from
funds which the contractors would receive from the government. The
Secretary of War wrote several letters of that kind, one, I think, to
Mr. Belmont, and also to other parties; they are on file in the War
Department. I think I stated generally in the letter, so far as I
could, the process of receiving money by these contractors of the department on account of transportation, and based my opinion on the
ability of the contractors to meet those acceptances from that process,
and from the general amount of business they had to transact.
Question. Did you, in that letter, give any assurance to the Bank
of the Republic that no acceptances would be given by the War Department unless the money was due to the contractors?
Answer. I do not remember that I did; I think it is possible. I
think I stated that the acceptances then made were for money that
was in process of being earned. According to the contract, as soon
as the contractors receive notice of a certain amount of transportation
to be carried from one point to another the department is considered
bound to them for that transportation, whether he carries it or not,
upon the principle that it subjects them to the expense of getting ready
to take it; and there is a provision in the contract, that if the government does not require the transportation to be made the government
shall make it good to the contractors.
Question, Your answer to my question is, that you do not remember to have written a letter of the character I referred to?
Answer. I wrote a letter, but do not remember precisely the contents of it.
Question. Have you given all the contents of the letter, so far as
your recollection serves you?
Answer. I have.
Question. You say Governor Floyd wrote quite a number of such
letters?
H. Rep. Com. 78 —9




130           ABSTRACTED INDIAN TRUST BONDS.
Answer. I think he wrote two or three.
Question. Do you recollect whether it was stated, either in your
letter or in the letters of Governor Floyd, in order to give these acceptances credit and currency, that it was a rule of the War Department not to give those acceptances for over half the amount that was
due to the contractors?
Answer. I do not remember.
Question. What was the character of those letters written by Governor Floyd?
Answer. I cannot give you the details. The object of the letters
was to assure the parties to whom those acceptances were presented
for negotiation that they would be safe in making the investment.
Question. Were those letters written by you as chief clerk?
Answer. No, sir; they were written by him, copied by the copying
clerk in the department, and signed by the Secretary of War.
Question. And you think copies of all those letters are on file?
Answer. I think they are, in the War Department.
Question. Can you tell us who compose the firm of Russell, Majors &
Waddell?
Answer. I think there are only three partners-Mr. Russell, MIr.
Majors, and Mr. Waddell.
Question. Do you know whether any other person or persons shared
in the profits of their contract?
Answer. I do not.
Question. Do you know whether Latham, or any other individual,
received any bonus from them for attending to their business in the
department?
Answer. I do not. I did not understand that Latham attended to
Russell's business, or to the business of the firm; Russell generally
attended to those matters himself.
Question. Mr. Latham, as I understand you, has been the private
agent and confidential friend of Governor Floyd?
Answer. Yes, sir; for a part of the time that Governor Floyd has
been here.
Question. Has Latham been in this city most of the time since Mr.
Floyd has been Secretary of War?
Answer. lie has been here a good deal.
Question. Do you know where their acquaintance commenced?
Answer. I think in this city, ten or twelve years ago; but I do not
certainly know.
Question. Do you know of any officers of the government having
paid off a larger amount of indebtedness, during his official term, than
he received salary?
Answer. I do not.
Question. Do you know anything in reference to this transaction,
other than what you have already disclosed, that would tend to throw
any light upon the abstraction of these bonds?
Answer. I do not.
Question. When did your acquaintance with Bailey commence?
Answer. During this administration, but I cannot tell precisely
when; I never had a very intimate acquaintance with him.




ABSTRACTED INDIAN TRUST BONDS.             131
Question. Do you know him to be a man of means?
Answer. I do not.
Question. Do you know him to be without means?
Answer. I do not know anything certain about his history, either
previous to or subsequent to his coming to Washington.
Question. I understood you to say that in the conversation you had
with Bailey in regard to accommodating Russell, with a view to save
the credit of the Secretary of War, the impression was left upon your
mind that he was to receive means from some friend. Is that so?
Answer. I supposed he expected some friend, who had money, to
assist him.
Question. Then did not you have the impression that he had no
means of his own?
Answer. That was my impression. I did not suppose he intended
a transaction upon his own account.
Question. What did he say to induce you to believe that he was to
receive some money from a friend or friends?
Answer. Nothing, except the simple remark he made that he could
control certain means. I did not ask him to make any explanation
of the details. I did not regard it my business.
Question. And the inquiry did not suggest itself to your mind how
Bailey was to command those means, or where they were to come
from?
Answer. Not at all. The conversation with Baily made a very
light impression on my mind, and I think it never again recurred to
me until possibly week before last.
Question. How did it happen that Bailey and Russell met at the
War Department at the time you introduced them?
Answer. I have not the slightest suspicion.
Question. Do you remember the day that introduction took place?
Answer. I do not.
Question. Fix the time as near as you can.
Answer. I could not fix the time at all, except for the fact that I
have heard it rumored that Bailey came to the War Department in
July last. There was no circumstance connected with it that left any
impression upon my mind sufficient to base an opinion or surmise oni
as to the day or particular time of the month.
Question. That was the only time you ever saw Bailey at the Wa-r
Department?
Answer. No, sir; I had seen him at the War Department frequently
before.
Question. Have you seen him there since?
Answer. I have not.
Question. Can you inform the committee whether Latham went to!
New York on the business of Governor Floyd, and in pursuance of the
telegraphic despatch you sent to Russell to meet. him?
Answer. I suppose he went to New York to see Russell.
Question. Did you have any conversation with him  the day that
despatch was sent?
Answer. I did not.
Question. How soon after did he return to this city?




132           ABSTRACTED INDIAN TRUST BONDS.
Answer. I think he returned in two or three days.
Question. Before or after Russell was brought here?
Answer. I cannot say. I do not know but he came on the day that
Russell did. I think he came on the same train, but I cannot say
positively.
Question. Do you know what amount of money was paid to the
contractors, Russell, Majors & Waddell, for the services they performed for the government during the past year?
Answer. I do not. The books in the quartermaster general's office
will show.
GEORGE W. RIGGS sworn.
Examination by the chairman.
Question. Are you a banker in this city?
Answer. Yes, sir.
Question. Have you seen a list, published by the Secretary of the
Interior, of bonds alleged to have been abstracted fraudulently from
the Interior Department?
Answer. I have seen the list published in the papers.
Question. Do you know where any of those bonds are?
Answer. I am informed that five bonds that are now in the possession of my house in New York are of that kind; are of the same
numbers as bonds on the advertised list. They are not my property,
but they belong to another party.
Question. When were those bonds purchased?
Answer. I cannot tell you exactly.
Question. When were they purchased, and for whom were they
purchased?
Answer. They were purchased by order for Captain Graham, of
New York. I cannot give you the date without reference to the New
York house. They were not purchased by me, but by our broker in
New York, at the broker's board.
Question. For Captain Graham?
Answer. Yes, sir.
Question. Have they been delivered to Captain Graham, or are they
still in the possession of your house?
Answer. They are held by my house for Captain Graham.
Question. Who is Captain Graham; is he a citizen of this place?
Answer. No; I do not think he is a citizen of this place. He is here
now. He was originally a New Yorker, I think, or lived in New
York.
Question. Is he in this city now?
Answer. He has been here within a day or two. I think he is in
the city now. He goes backwards and forwards, but he is principally
here.
Question. Do you know where he stays?
Answer. I do not, sir,
Question. Do you know what is his given name?
Answer. I think it is John, sir. I do not know that he has ever
seen the bonds himself. I know as much about them as he does. It




ABSTRACTED INDIAN TRUST BONDS.             133
was a simple order to invest money in bonds, and they were bought
for him at the broker's board, and are held for his account.
Question. On what day were they bought?
Answer. I cannot tell you. I think it was somewhere within two
or three months past.
Question. Do you know anything about others of the bonds referred to?
Answer. No, sir; I do not know anybody who holds any of the
bonds that are advertised. I know that bonds of the same numbers
as some of those advertised are held by other parties, but they do not
seem to be the same bonds, because the lost bonds have not coupons
on them. I asked the district attorney whether the bonds lost had
all the coupons cut off, and he told x:le they had. I then informed
him that I had coupons of the same numbers sent to me for collection,
and the conclusion is that the State of North Carolina had issued
bonds of the same number, perhaps at different dates. I do not know
that fact.
Question. What was the amount of those bonds?
Answer. $1,000 each; that, I believe, was the amount of each of
the bonds stolen.
Question. Did I understand you to say that the bonds you purchased for Captain Graham were bought before the facts were disclosed
in reference to the frauds?
Answer. Yes, sir; we have bought no bonds since.
Question. Are those all the bonds on the advertised list that you
have any knowledge of?
Answer. I have been told there is one in the hands of Judge Dunlop of this city.
Question. You know of no other person or persons holding any of
these bonds?
Answer. No, sir; I do not.
Question. Did you know Godard Bailey?
Answer. Yes, sir.
Question. Has he kept his banking account with you?
Answer. Yes, sir.
Question. What amount of money has he had on deposit within
the last two years at one time?
Answer. I cannot tell you how much he has had on deposit at one
time, but since'this affair occurred I had the curiosity to look at his
account, and I noticed that about $7,000 had been deposited by him
since last July.
Question. $7,000 since last July?
Answer. In round numbers, about that. I first ran my eye over
the ledger.
Question. Has he still that amount on deposit?
Answer. Oh, no; he did not leave it there, but kept drawing it
out as he put it in. I do not know that he has got any money on
deposit now. He may have a small sum. It is an ordinary deposit
account, and I never looked at it. I trusted my clerk would not pay
his checks without money; but since this affair I looked at it, and
saw that that amount had been deposited.




134           ABSTRACTED INDIAN TRUST BONDS.
Question. What was the amount of money deposited with you
previously by him?
Answer. It was small generally. I do not know how much. Never
much; his salary, perhaps.
Question. Please state the name of your clerk who keeps the deposit
account.
Answer. Well, that depends upon which book you want.
Question. Mr. Bailey's deposit account?
Answer. The teller enters the cash received, and the bookkeeper
keeps the ledger.
Question. What is the bookkeeper's name?
Answer. The bookkeeper's name is John Hunter.
Question. Do you remember whether Mr. Bailey has at any time
brought drafts from any person or persons to your bank?
Answer. I do not often see what is done at the counters, as I am in
a private room. I have seen Bailey at the counter, but never noticed
particularly what he was doing. Since this affair occurred I have
traced some of the deposits for my own curiosity.
Question. Please give us the information you have upon that
subject.
Answer. There was one deposit I noticed of about twelve hundred
and odd dollars. I do not remember the figures exactly. I did not
know why I was summoned before the committee, and I did not bring
any memorandum. I noticed that amount; I think it was in October; I may be mistaken about the date; it may have been later, but
it was one of the last deposits. I saw that amount, and it was an odd
sum, and I asked the teller to examine his book to see what it waswhether the book showed that it had been in money or in checks.
Well, the way in which we keep our accounts is such that we found
that on the night of the day on which that deposit was made we had
in hand a check for that exact sum, and by reference to the book of
exchanges next day-I mean the list of checks; we have no other
book-I noticed that a check for that sum had been drawn and sent
down to Suter, Lea & Co., and paid.
Question (by Mr. Harris.) A check of Bailey's?
Answer. We do not know that. I can only trace the amount.
There was a check on hand at night for the amount of that deposit,
and the next morning, on the list which we keep of the checks we
give to our runners, I found one on Suter, Lea & Co. for the same
amount.
Question. Corresponding exactly?
Answer. Corresponding exactly. I could not swear to the check,
but there is proof in our office that a check for that amount went
through our office to Suter, Lea & Co.'s.
Question. Had the bonds you purchased for Captain Graham the
coupons off?
Answer. They had the January coupons off at the time we bought
them.




ABSTRACTED INDIAN TRUST BONDS.              135
Examination by Mr. Harris.
Question. Mr. Riggs, being a banker yourself, and, I know, one of
very large business, I take it you are familiar with the operations of
business in the stock board?
Answer. Yes, sir; I am not a member of the stock board, but I
know how business is done there.
Question. Will you be kind enough to tell the committee whether
a register is not kept at the stock board-say in New York-of all
bonds that are bought in the stock board?
Answer. A register is kept in this way: It is like an auction. A
certain list is before the President. He reads from that list, for instance, United States stocks of such a loan, and then some member
offers to sell, and another to buy. There is a register of the transactions made at the board, but it does not specify what bonds are delivered; it merely states that such amounts were sold at such rates.
Question. It does not give the numbers of the bonds sold?
Answer. By the custom in New York the stock sold is deliverable
next day, and that is a private matter outside the board between the
brokers. The board has nothing to do with it, unless a member fails
to make the delivery, and then he is reported as being delinquent.
Question. What I desired to know was whether, by any of the
books kept at the stock board in New York, it can be ascertained
whether any, and if so, which of these particular bonds were dealt
with at the stock board?
Answer. I do not think it is possible to trace them in any way
except by the books of private purchasers, for brokers frequently
pass bonds without taking a note of them. They pass from hand to
hand.
Question. How long has Godard Bailey kept an account with your
banking-house?
Answer. I am not sure, but I think ever since he has been here.
Question. What length of time is that?
Answer. I think he came here soon after this administration came
in. I only know the fact that my first acquaintance with Mr. Bailey
was seeing him at the Interior Department when Mr. Thompson was
Secretary.
Question. Have you any knowledge of his keeping an account with
any other banking-house or bank in this city?
Answer. I have none. I never knew anything of Mr. Bailey's private affairs, except from the fact that he kept a deposit account at our
office.
Question. Did you, at the time you made this private examination
of his account for curiosity, glance over the whole of his account?
Answer. No, sir, I did not. I glanced so far as this, that I saw, I
think, in July the first deposit which struck me as being too large
for Mr. Bailey's means. I never had looked at his account before in
my life.
Question. His account became a large account from about July?
Answer. His deposits became larger than they had been before.




136           ABSTRACTED INDIAN TRUST BONDS.
Question. They became larger from July to an extent to attract
your attention?
Answer. Not until after this affair; for we have so many accounts
on the books that I seldom look at the private ones, except for a
special purpose.
Question. But, after you did look at his account for curiosity, you
found that, from July, his deposits were of a magnitude that excited
your attention, in connexion with your impression of his means?
Answer. Yes, sir. The district attorney saw the account, and has
a statement made from our books in his possession.
Question. You referred to a check for $1,200 on Suter, Lea & Co.
I presume the books of Suter, Lea & Co. would, of course, show the
details of that check?
Answer. They ought to, sir. The amount was about $1,200; it is
on the paper furnished to the district attorney. At the same time I
noticed that I found, I think, some time in July, a deposit, as nearly
as I can remember, of nine hundred and odd dollars; I think $960.
I asked the teller what it was, and, on reference to the book which the
teller keeps at night in settling his cash accounts, I found, in the remittances to New York, one of $960, and no other sum of that amount
in our transactions of the day, and then, on looking to my letter book,
I found a certificate of deposit for that amount in the Bank of the Republic, in New York. That is the way we trace these things. I cannot swear positively that Mir. Bailey deposited that check; but I trace
it as nearly as I can. I traced the check for $1,200 on Suter, Lea &
Co. in the same way.
Question. Will you be kind enough to have made out for the comaccount of Godard Bailey with your house,
and inform yourself of the general character as to amount of the deposits made by him during the whole time that he has kept his account
with your house, and bring with you to-morrow the books of your
receiving teller, which will show the details of his deposits since July?
Answer. I will get all the information you require, as far as I can.
Question. Will you be kind enough to say whether you consider
this acceptance a piece of negotiable paper?'$15,000.                    WASHINGTON CITY, Sept. 13, 1860.
" Eight months after date pay to our own order at the Bank of the
Republic, New York city, fifteen thousand dollars, for value received,
and charge to account of our transportation contract of the 12th day
of April, 1860.
"RUSSELL, MAJORS & WADDELL.
"To Hon J. B. FLOYD, Secretary of War."
Indorsed: "'Russell, Majors & Waddell."
On the face accepted as follows:
"No. 78.-WAR DEPARTMENT, Sept. 18, 1860.
" JOHN B. FLOYD, Secretary of War."




ABSTRACTED',NDIAN TRUST BONDS.             137
Answer. I consider it in the form of a negotiable instrument.
Question. Have you at any time held paper of that description in
your possession as banker?
Answer. I have in my possession two drafts accepted by the Secretary of War, which were sent to me for collection.
Question. Are they of the same character as this?
Answer. As near as I can remember, they are in the same form precisely. They had been protested for non-payment, in New York, I
think, not by me.
Question. Have you collected them?
Answer. I sent them to the Secretary of War, or rather to the person I think acting as Secretary, in the Secretary's temporary absence,
for payment.
Question. Were they taken up upon presentation?
Answer. No, sir.
Question. For what reason?
Answer. The information given to me was that they would be taken
up by the agent of Russell, Majors & Waddell in New York, a man
by the name of Simpson, I think. He is at the head of the Pony
Express Company.
Question. Have you the drafts still?
Answer. Yes, sir.
Question. What are the amounts?
Answer. One is for $15,000, I think, and the other for $20,000. I
am not certain, however, as to the amounts. I did not pay very particular attention to them, because it was not a matter that concerned me.
Question. From whom did they come?
Answer. I do not remember the name. From some one, I think,
in Paducah, Ky.
Question. Will you bring these drafts with you before the committee to-morrow?
Answer. I will.
RICHARD B. IRWIN sworn.
Examination by the chairman.
Question. In what business capacity are you engaged at this time,
and how long have you been so engaged?
Answer. I am, and have been since the 30th May, 1853, a clerk in
the War Department?
Question. What position do you fill?
Answer. I fill the position of corresponding clerk in the office of'
the Secretary of War.
Question. What are the duties required of you as corresponding
clerk?
Answer. My ordinary duties are to prepare letters for the signature of the Secretary of WVTar.
Question. As corresponding clerk did you ever write any letters to
the firm of Russell, Majors & Waddell, pertaining to their contract
with the government?
Answer. I prepared no letters to them for the signature of the Sec



138            ABSTRACTED INDIAN TRUST BONDS.
retary of War, except when a draft was furnished to me. I have
copied drafts of letters addressed to them.
Question. Were the drafts prepared by the Secretary?
Answer. By him or by his chief clerk.
Question. Can you furnish the committee with a copy of such
letters?
Answer. These letters are a part of the records of the department.
I can obtain a copy if you wish it. The records are, however, not in
my possession; they are in charge of the recording clerk.
Question. Have you occasionally been called on to discharge other
duties than to write or copy letters?
Answer. Yes, sir; I have been occasionally called upon to perform
duties of a miscellaneous nature.
Question. What were those duties?
Answer. They have been very numerous. If you will specify any
particular duties to which you refer I will answer.
Question. Did you keep at your desk a registration of the amounts
and character of the acceptances given by the Secretary of War to
Russell, Majors & Waddell?
Answer. Yes, sir.
Question. Are those [handing the witness a bundle of acceptances]
of the character you refer to?
Answer. [Examining one.] This has been registered by me; that
is my handwriting.
Question. What part of it is in your handwriting?
Answer. The indorsement across the face in red ink is in my handwriting.
Question. Describe the drafts or acceptances which have been registered by you.
Answer. No. 78, an acceptance or draft dated September 13, 1860,
for $15,000; No. 85, dated September 19, 1860, for $10,000; No.
110, dated October 11, 1860, for $7,000; No. 116, dated October
12, 1860, for $10,000; No. 120, dated October 30, 1860, for $10,000.
These have all been registered, but not all by me; some of them were
registered by another clerk in my absence.
Question. The drafts you have just described are unconditional
acceptances?
Answer. Yes, sir; they seem to be in that form.
Question. You never then kept in your office a registration of
drafts accepted by the Secretary of War payable out of moneys hereafter to be earned?
Answer. I cannot say that I have kept a register of all the drafts
accepted from the beginning, except some of these which I see here.
Question. Have you in your office a registration of a draft dated
December 13, 1860, for $135,000, accepted by the Secretary of War?
Answer. No, sir.
Question. Have you of a draft and acceptance, dated October 23,
1860, for $110,000?
Answer. No, sir.
Question. Have you of an acceptance, dated October 23, 1860, for
$125,000?




ABSTRACTED INDIAN TRUST BONDS.              139
Answer. No, sir.
Question. Have you of a draft, dated October 23, 1860, for
$170o,000?
Answer. No, sir.
Question. Have you of a draft. dated October 23, 1860, for
$116,000?
Answer. No, sir.
Question. In whose handwriting are those acceptances?
Answer. They are altogether in Mr. Russell's handwriting, except
the signature " John B. Floyd."
Question. Have you in your office any. memorandum showing that
these drafts were ever accepted by the Secretary of War?
Answer. No, sir. I have never before seen the acceptances, and
have no memorandum of them except of the order cancelling them.
All these drafts which have not been registered have been cancelled.
Question. When was that order entered?
Answer. I could not give the date without referring to the record.
Question. Did you cancel them?
Answer. The order was given by the Secretary of War.
Question. Did you furnish memorandums of these acceptances to
the quartermaster general?
Answer. At first I did.
Question. When was that practice discontinued?
Answer. I do not remember. I suppose the records of the Quartermaster General's office will show.
Question. Why did you discontinue the practice?
Answer. I was told by the chief clerk that it was not necessary.
The examination was here suspended to enable the witness to bring
before the committee certain written evidence.
SATURDAY, January 5, 1861.
GEO. W. RIGGS recalled.
Question (by Mr. Thomas.) Mr. Riggs, please state whether you
have purchased bonds fbr the present and other Secretaries of the Interior, and in what manner the present Secretary has had his purchases made?
Answer. I have purchased, I think, most of the bonds held by the
Department of the Interior which have been bought during the administration of Mr. Thompson. Previous to that I was never employed by the department for that purpose. Some time, I think,
from July to October, 1857, Secretary Thompson sent for me and told
me that there had been large land sales in the west, the money from
which was, under treaties, to be invested for the benefit of certain
tribes of Indians; he consulted with me in regard to future investments and employed me as a broker to make purchases on account of
the department. I was in daily intercourse with him with regard to
the purchases to be made, and he consulted with me as to how they
could best be made. He examined the bonds on hand, and told me
his object was to make the investment as safe as possible, and at the
same time as profitable as might be for the Indians in whose interest
it was to be made. We went into the market, but before purchasing




140            ABSTRACTED INDIAN TRUST BONDS.
I always consulted Mr. Thompson with regard to the prices I should
pay and the character of the bonds I should purchase. He told me
he did not wish to buy too many of the bonds of any one State. I
remember there was a pressure made to buy, for instance, the bonds
of the State of Virginia, but I remember Mr. Thompson said he did
not feel authorized to go further into the purchase of Virginia bonds,
because he had a sufficiently large amount of those bonds already on
hand for the Indians. He told me, moreover, that he did not wish to
confine his purchase to any one State nor to any one section of country, but he wished to divide it between the different States. I purchased for him bonds of Missouri, North Carolina, Pennsylvania,
Illinois, New York, Louisiana, Florida 7 per cents, Georgia, and
Ohio, and as I bought them, I saw him daily, and consulted with him
before making purchases. It was at a time when there was a great
deal of financial distress, in 1857, and the bonds were bought on very
good terms. I do not recollect the exact amount, but it was something like a gain, taking the bonds at their par value, on the amount
invested of' near $200,000. It was a discount saved to that amount
on the bonds purchased divided among the States I have mentioned.
I received instructions always never to buy too much of any one State.
They would have been divided amongst all the States in the Union if
it had not been impossible to secure the bonds of some of the States
in market.
Examination by the ch  a
Question. Since your examination yesterday have you referred to
your books to ascertain the state of Godard Bailey's deposits in your
bank, and can you furnish the committee with a copy of it, and also
give such explanation as you are able to make in reference to the
character of the deposits made, as to whether they were in money or
in paper, and if the latter, of what description?
Answer. I have here a statement which purports to be the deposits
of Godard Bailey with Riggs & Co., which is as follows:
Deposits of Godard Bailey with Riggs & Co.
January 4, 1860, by balance rendered..........................  $7 17
January 5, 1860, by cash.......................................   150 00
January 26, 1860, by cash.........................................   160 00
January 30, 1860, by cash.........................................   150 00
February 4, 1860, by cash.....................................  45 00
February 27, 1860, by cash.......................................    500 00
February 28, 1860, by cash.....................................    160 00
March 3, 1860, by cash............................................  62 65
March 7, 1860, by cash......................................  100 00
March 10, 1860, by cash..........................O...............   519 37
March 19, 1860, by Marbury....................................   588 47
March 27, 1860, by cash......................            200 00
March 30, 1860, by cash.......................................   150 00
April 11, 1860, by cash.....................,....................    20 00




ABSTRACTED INDIAN TRUST BONDS.                  141
April 20, 1860, bly cash.............................................   906 00
June 2, 1860, by cash............................................    910 00
June 16, 1860, by cash....................................  400 00
June 22, 1860, by cash............................................ 150 00
June 29, 1860, by cash.............................................   120 00
June 30, 1860, by cash...........................    100 00
July 12, 1860, by cash...........................................    946 00
July 18, 1860, by cash...........................................    672 00
July 20, 1860, by cash..............................................   825 00
July 25, 1860, by cash..... a....ao....-D,,.............700 00
July 28, 1860, by cash.........................    191 21
October 9, 1860, by cash............................................    300 00
October 11, 1860, by cash.........................................  1,265 50
November 1, 1860, by cash.....................................  160 00
November 9, 1860, by cash........................................  100 00
November 21, 1860, by cash....................................  259 31
November 28, 1860, by cash.......................................  160 00
December 3, 1860, by cash.........................................  35 00
December 10, 1860, by cash...................................  295 00
This account was taken by my book-keeper from  the ledger this
morning, and verified by me as to the amounts of deposits being
correct, as they appear upon my ledger; the character of the deposits
do not appear. They are placed in the ledger as cash entries; but I
have with me some memoranda of an examination made this morning,
previous to coming up here, which will explain several of the amounts.
I did not have time to go over the whole list, and did not investigate
any of the small sums. Supposing I should not have time to go through
with the whole account, and that it was the later deposits to which
you had special reference, I commenced at the end of the account
and examined backward. The first deposit of any considerable amount
(beginning at the end of the account) is on the 10th of October, for
$1,265 50. I stated yesterday that the amount was about $1,200;
and now to show the committee how I arrived at the data which I
have, I will explain: On the 11th of October here is an entry in the
ledger of $1,265 50. The book I have before me is the book kept by
the teller, in which he puts down the items he has in his drawer every
night, with the date of the transactions. Among the checks in his
drawer on that day appears to have been one of $1,265 60, it was
entered as 60 cents by the teller, though it appears in the ledger as
50 cents.  The other book to which I then refer is the teller's collection book; it is a simple memorandum book, in which he puts down
the amounts of the checks he hands to our runner every morning, and
upon what bank or individual they may have been drawn. This book
shows what checks were in the drawer on the preceding night. I find
that on the 12th October, in the list of checks handed to our runner,
was one of $1,265 50 on Suter, Lea & Co., presented that day, and
which was the only check of that amount presented.
Question. Was that paid?
Answer. It was paid; at least I presume so.  It would have been
taken from Bailey's account if it had noG been paid.




142          ABSTRACTED INDIAN TRUST BONDS.
Question. You do not know by whom the check was drawn?
Answer. I do not; it merely appears as I have stated. The next
amount which I examined is an entry, on the 25th of July, of a deposit
of $700. On the 25th of July this book of my teller shows that a
check was remitted to New York for $700. By reference to my letter
book, which I did not bring up, I find that on the 25th of July we
remitted the check of Suter, Lea & Co. to the Bank of America, on
the Importers and Traders' Bank of New York, corresponding with
the amount I have named, and the only check of that amount which
it appears we received or remitted that day.
On the 20th of July there was placed to the credit of Mr. Bailey
$825. On the 20th of July, by my teller's cash book, it appears
there was in his drawer a check for $825. On the 21st of July, the
next day, (the check having been received probably too late for transmission on that day,) we remitted to the Bank of America the check
of Suter, Lea & Co. for $825.
On the 18th of July is a credit to Mr. Bailey of $672. By my
teller's book there appears to have been in the drawer on that day a
check for $672. On the next day, the 19th of July, a check for $672
appears to have been presented to Suter, Lea & Co., and paid. The
deposits made on one day in checks are rarely presented till the next
day, because we send our runner out in the morning and we cannot
keep him going all day for each individual check as it appears.
On the 12th of July there was a deposit made of $946. By my
teller's books the only item of $946 that appears on that day is a
check remitted to New York. My letter book, which is a record of
checks remitted, shows that on that day we remitted the check of
William M. Peyton on the New York County or City Bank, I am not
certain which, I believe for $946. I do not know who Mr. Peyton is.
On the 2d of June there was a credit for $910. The only item I
see on the teller's account for that day of that amount was a remittance to New York. On that day, I find by my letter book, we remitted to the Bank of America, New York, a certificate of deposit in the
Merchants' Bank of $910. I do not know to whom the certificate of
deposit was issued.
On the 20th of April there was a deposit of $906. It appears that
we had in our drawer on that day one check, or piece of paper, representing $906, and but one, that I see. On the next day, the 21st of
April, we also remitted to New York a certificate of deposit in the
Bank of the Republic for that sum. I had not time to go further into
an examination of these items.
Question. All these several sums that you have specified here were
entered to the credit of Godard'Bailey?
Answer. They were, and placed in his bank book to his credit. I
do not know of any one by the name of Bailey who made deposits in
the bank at that time but himself.
Question. Are you able, this morning, to furnish the committee
with the original acceptances of the Secretary of War, drawn by Russell, Majors & Waddell, to which you referred in your testimony yesterday?
Answer. Yes, sir; I have them here.




ABSTRACTED INDIAN TRUST BONDS.             143
Question. Is this acceptance which you hand me, dated Washington, June 11, 1860, drawn by Russell, Majors & Waddell, due four
months after date, payable at the Bank of the Republic, in the city of
New York, one of the acceptances made by the Secretary of War, to
which you referred?
Answer. Yes, sir.
Question. And this other acceptance I hold in my hand, dated
Washington city, May 1, 1860, No. 5, for $15,000, payable six months
after date at the Bank of the Republic, in the city of New York, drawn
by Russell, Majors & Waddell, and accepted by the Secretary of War,
the other acceptance to which you referred?
Answer. It is.
Question. Do you regard those acceptances as in the form of commercial paper?
Answer. The form of the drafts is that of ordinary negotiable bills
of exchange.
Question. Were the drafts protested?
Answer. Those drafts came to us under protest from a bank in Kentucky, and I recognize the protests as in the usual form of protests
in the city of New York.
Question. What bank in Kentucky sent them to you?
Answer. I forget, but it was a bank at Paducah, Kentucky; whether
it was the Commercial Bank of Kentucky, or not, I cannot say. They
were sent to us to present by us, for payment by the bank-I think
the Commercial Bank of Kentucky, at Paducah.
Question. Did you present them for payment?
Answer. Not myself, but I sent my clerk to present them.
Question. Have they ever been paid?
Answer. No, sir; we were referred for payment to J. B. Simpson,
No. 160 Fulton street, New York. It is proper that I should state
that I understood the Assistant Secretary of War, or Mr. Drinkard,
had been informed that there was money, or would be money there,
by the time the drafts would reach New York, to take them up.
The following is a copy of the drafts, acceptances, and notices of
protest:' $10,000.                       WASHINGTON, June 11, 1860.
"Four months after date, for value received, pay to our own order,
at the Bank of the Republic, New York city, ten thousand dollars,
and charge to account of our contract for transportation, dated the
12th of April, 1860.
"RUSSELL, MAJORS & WADDELL.' Hon. JOHN B. FLOYD.
"Secretary of War."'
Indorsed.
"Pay Jas. L. Dallam, cashier, or order.
"RUSSELL, MAJORS & WADDELIi.




144           ABSTRACTED INDIAN TRUST BONDS.
"For collection; pay Riggs & Co., or order.
"JAS. L. DALLAM, Cashier."
Accepted, on its face, in red ink.
" WAR DEPARTMENT, June 12, 1860.
"C Accepted.
" JOHN B. FLOYD,
"Secretary of War."
"UNITED STATES OF AMERICA,:
"State of New York,'" On the thirteenth day of October, in the year of our Lord one
thousand eight hundred and sixty, at the request of the Metropolitan
Bank, I, Paschal W. Turney, a notary public, duly commissioned
and sworn, dwelling in the city of New York, did present the original
bill of exchange, hereunto annexed, to a teller at the Bank of the Republic, in the city of New York, (being the place where said bill of exchange is payable,) and demanded payment thereof, which was refused;
whereupon I, the said notary, at the request aforesaid, did protest,
and by these presents do publicly and solemnly protest, as well against
the drawer and indorsers of the said bill of exchange, as against all
others whom it doth or may concern, for exchange, re-exchange, and
all costs, damages, and interest already incurred, and to be hereafter
incurred, for want of payment of the said bill of exchange.'"In testimony whereof, I have hereunto set my hand, and affixed
my seal, at the city of New York aforesaid.
" P. W. TURNEY,' Notary Public, 110 Broadway."."$15,000.                    WASHINGTON CITY, May 1, 1860.
"Six months after date pay to our own order fifteen thousand dollars, for value received, at the' Bank of the Republic,' New York
city, and charge to account of our transportation contract of the 12th
day of April, 1860.
"RUSSELL, MAJORS & WADDELL.
"Hon. JOHN B. FLOYD,
"Secretary of War."
Accepted in red ink on its face.
" WAR DEPARTMENT, May 1, 1860.'"Accepted.' JOHN B. FLOYD,
"6 Secretary of War."




ABSTRACTED INDIAN TRUST BONDS.            145
Indorsed.' Pay Samuel & Allen, or order.
"RUSSELL, MAJORS & WADDELL."
" Pay James L. Dallam, cashier, or order.
"SAMUEL & ALLEN."
"For collection.
"Pay G. J. Seney, cashier, or order.
"JAS. L. DALLAM, Cashier."
" UNITED STATES OF AMERICA,  
"State of New York,
"On the third day of November, in the year of our Lord one
thousand eight hundred and sixty, at the request of the Metropolitan
Bank, I, Joseph B. Varnum, jr., a notary public, duly commissioned
and sworn, dwelling in the city of New York, did present the original
bill of exchange, hereunto annexed, to the cashier at the Bank of the
Republic, in the city of New York, (being the same place where the
said bill of exchange is payable,) and demanded payment thereof;
which was refused. Whereupon I, the said notary, at the request
aforesaid, did protest, and by these presents do publicly and solemnly
protest, as well against the drawer and indorsers of the said bill of
exchange, as against all others whom it doth or may concern, for exchange, re-exchange, and all costs, damages, and interest already
incurred, and to be hereafter incurred, for want of payment of the
said bill of exchange.        0
" In testimony whereof, I have hereunto set my hand and affixed
my seal, at the city of New York aforesaid.
"J. B. VARNUM,'"Notary Public, 110 Broadway."
Question. Are those all the acceptances of thle Secretary of War,
of the kind, you have in your possession?
Answer. They are all I have now.
Question. You have been in the habit of receiving and collecting
other acceptances of this character?
Answer. I never received, for collection, any of this kind, because
they are payable in New York. I have had some of my own, but not
exactly in this form. I think the first ever issued were negotiated by
my house.
Question. Please describe, as near as you can, the form of those
negotiated by your house?
Answer. I cannot do it exactly; but I was applied to, not by Russell, Majors & Waddell, but by an agent they sent, to negotiate a
loan of $200,000. It was soon after the contract was made. I looked
into the contract. An effort was made by the parties who came to me
to procure money in New York. They failed to obtain it from the
banks there on account of the irregularity of the paper. Application
H. Rep. Com. 78 —— 10




146           ABSTRACTED INDIAN TRUST BONDS.
was then made to me. Suter, of the firm of Suter, Lea & Co., first
came to me. Afterwards, by request, I called upon the Secretary of
W/Var; had the contract explained to me, and told the Secretary of War
I could make the arrangement if satisfactory assurances were given to
me that the Quartermaster's department should pay over the money
into my hands. He asked me, as near as I can remember, what sort
of acceptances I required. I then wrote, as near as I can remember,
something of this kind: " This draft has been presented to the War
Department, or to this department, and will be recognized according
to its tenor." It was a draft to be paid out of the transportation
money. Those drafts, to the amount of $200,000, I had recorded in
the Quartermaster's department. They were payable, not at any bank
in New York, but payable, like an ordinary assignment, at the treasury.
Question. Did you purchase those acceptances or advance the money
on them?
Answer. I and my correspondents in New York advanced the money
upon them.
Question. Were they to be paid out of money then earned by the
contractors, or thereafter to be earned?
Answer. The representation made to me-and I believe it was a true
one-was that the wagons had started, or were about to start; that,
according to the terms of the contract, there was a certain sum to be
paid when the wagons had gone a certain distance; that a quartermaster was to be at that post prepared to pay off a certain amount;
that when they had proceeded a certain distance further there was to
be another quartermaster to pay a sum which would be due there.
The understanding I had was that the money, if not earned, was
being earned at the time.
Question. Would you have purchased those acceptances unless you
were satisfied, by the representations made to you at the War Department, that the money had already been earned, or was in the process
of being earned?
Answer. No, sir; not unless I was very certain that the money
would be paid at maturity of the drafts, and the only way to pay it
was by the money earned by the wagons, which were about starting,
if they had not already started. The acceptance was conditional. It
was not, in fact, an acceptance. I did not venture to ask the Secretary for an acceptance, for I did not think it right that he should
accept; but I wrote, as I stated, that the draft would be recognized
according to its tenor. My object was that I should have a hold upon
the Quartermaster's department that he should pay me instead of the
parties drawing the drafts. I received assurances from the Secretary
of War that they would be paid.
Question. By whom did the Secretary of War say they were to be
paid?
Answer. He assured me, in general terms, that I should be paid,
but he did not say by whom.
Question. Were those drafts the first paper of the kind ever issued
by the War Department, so far as you are apprised?




ABSTRACTED INDIAN TRUST BONDS.              147
Answer. They were the first I knew of, and the first I ever saw,
and I presume they were the first of the kind.
Question. Had you any conversation at that time with the Secretary of War as to whether he would make acceptances on sums thereafter to be earned by the contractors?
Answer. No, sir.
Question. Did he intimate that he would accept drafts of that
character?
Answer. No, sir. My conversation was solely in reference to this
single amount they wanted to raise at that time. Hie was anxious to
facilitate the contractors, and told me I should certainly be protected;
that at any event I should be paid.
Question. You relied as much, or more, upon the verbal assurance
that you should be paid as upon any written obligation?
Answer. Not altogether; for my reliance was upon the contract,
and the certainty that the money would be earned.
Question. If I understand you, you say you had the personal assurance of the Secretary of War that you should be paid out of the money
that was being earned upon the contract, and that he would see that
you were protected at all events?
Answer. Yes, when the money was earned. I understood that
there would be no difficulty about the transfer of the money to me;
that it would be regarded as a transfer of that much money as it was
earned by Russell, Majors & Waddell; that there would be no objection to the form of the transaction.
Question. Do you know of any additional facts than you have
already disclosed, pertaining to these transactions of Russell, Majors
& Waddell with the Department of War, which are material to be
stated or known?
Answer. I do not. After the first transaction, when drafts were
presented to me for discount, I refused to discount them.
Question. Please state if other drafts were presented to you, and,
as near as you can, the time, and the character of the drafts.
Answer. Subsequent to this first transaction application was made
to me for further discounts, and in one instance, I know, drafts were
exhibited to me, but I declined touching them, not liking their form.
They were in the form of the drafts sent to me from Kentucky, payable at the Bank of the Republic, in New York.
Question. Were any drafts of any other form presented to you?
Answer. Not that I remember.
Question. Please name to the committee the name of the brokers
in New York who purchased a portion of these bonds?
Answer. Cammann & Co., of New York, as brokers, purchased
them for us.
THOMAS J. D. FULLER sworn.
Examination by Mr. Morris.
Question. Are you the Second Auditor of the Treasury.
Answer. I am.




148           ABSTRACTED INDIAN TRUST BONDS.
Question. As such officer, does the duty devolve upon you to pass
upon the accounts of the Indian trust fund in the Interior Department?
Answer. Those accounts were sent to me as Auditor, by the Secretary of the Interior, for auditing.
Question. When was the last account sent you?
Answer. It was received on the 14th day of December, 1860.
Question. Have you those accounts with you?
Answer. I have.
Question. Have you passed upon them yet?
Answer. I have not.
Question. Have you examined them sufficiently to know whether
they cover the January interest upon the bonds held as Indian trust
fund, and whether they show that all the bonds heretofore purchased
by the government for that fund were, at the time the account was
presented, in the Department of the Interior?
Answer. The account current and accounts of the various trust
funds show upon their face what they purport to be. These accounts,
sent to me on the 14th of December, embrace the account of bonds,
and not the account of interest. It was proposed by the Secretary that
the bond account should be settled distinct from the interest account.
When they were received I addressed a communication to the Secretary of the Interior, desiring him to furnish a statement of the interest
account before settling the bond account, as the bond account would
form a basis of computing the interest account, and serve as a check.
With the bonds came a communication from the Secretary of the Interior and from the Commissioner of Indian Affairs.
Question. You have not, then, passed' upon the bond account, for
the reason that the interest account has not been rendered to you?
Answer. No action has been taken upon the bond account, because
I was waiting the receipt of the interest account.
Question. Have you the bond account with you; if so, please state
to the committee the particulars of it.
Answer. By the account the Secretary charges himself with stocks
received from various times from July, 1857, to November 30, 1860,
to the amount of $3,396,241 82.
Question. Does the account purport upon its face to give a detailed
statement of all bonds held by the Secretary of the Interior in trust
for the different tribes of Indians?
Answer. There is nothing to show that this covers all the bonds in
his possession except that he renders it as his bond account.
Question. Do you know who made out that bond account for the
signature of the Secretary?
Answer. I am not acquainted with the handwriting. It purports
to be signed, as you can see here, by Godard Bailey. I believe it to
be his signature, but in whose handwriting the account current is
made out I do not know.
Question. Does the body of it appear to be in the same handwriting
as the signature?
Answer. I think not, sir.
Question. In what capacity is it signed by Godard Bailey?
Answer. As disbursing clerk.




ABSTRACTED INDIAN TRUST BONDS.             149
Question. Who presented that account to you?
Answer. I think it came through a messenger of the Interior Department.
R. J. ATKINSON sworn.
Examination by Mr. Harris.
Question. Do you hold a position in the State Department; and if
so, state what it is?
Answer. I am Third Auditor of the Treasury Department.
Question. Can you furnish to the committee, from your office, the
amounts paid to Russell, Majors & Waddell upon their contracts with
the War Department during the year 1860; and if so, please produce
before the committee such statement?
Answer. I can.
RICIIARD B. IRWIN recalled.
Examination by the chairman.
Question. Have you made an examination of the records in your
office; and it so, can you state to the committee the aggregate amount
of the uncancelled drafts of Russell, Majors & Waddell which were
accepted by the Secretary of War?
Answer. From a statement which I have prepared from the original memoranda, it appears that the aggregate amount of acceptances
on account of both contracts uncancelled was $5,339,395.
Question. Please state, also, the amount of the cancelled drafts of
the same parties which were accepted by the Secretary of War?
Answer. It appears from the same statement that the cancelled
drafts amounted to $840,000.
Question. What drafts do you refer to when you speak of cancelled
drafts?
Answer. Drafts which have been returned to the War Department
and cancelled there.
Question. Are the uncancelled drafts still outstanding?
Answer. As to that I have no knowledge at all.
Question. Is there anything on the records of the War Department
to show where those drafts are, or what has become of them?
Answer. There were notices of protest received from some of the
holders.
Question. And that is all the information you have upon the subject?
Answer. We have occasionally received notices that certain parties
had discounted them.
Question. By letter?
Answer. Yes, sir.
Question. Are the drafts to which you referred in your testimony
yesterday included in your statement of the amounts of the cancelled
and uncancellel drafts to-day?
Answer. The statement which I have produced before the committee to-day shows only such drafts as have been registered. The drafts




150              ABSTRACTED INDIAN TRUST BONDS.
which I referred to yesterday as not having been registered by me are
not included in that statement at all.
Question. What is the aggregate amount of those drafts referred to
in your testimony yesterday as not having been registered?
Answer. $798,000.
Question. Please state to the committee the aggregate amount of
the cancelled and uncancelled acceptances, the record of which you
have in your office, and also including the amount of the acceptances,
of which you have no registration in the War Department.
Answer. The amount of the cancelled and uncancelled drafts is
obtained by adding the amount, which I have stated as uncancelled,
to the amount which I have stated as cancelled, which makes
$6,179,395. The whole amount of registered and not registered is
obtained by adding to the latter amount $798,000, making a grand
total of $6,977,395.
Question. Please to state how the registration of the acceptances was
kept in the War Department.
Answer. They were kept on separate sheets, which were filed together.
Question. Were the entries made upon those sheets of paper at the
time of the acceptances, or subsequently?
Answer. They were made at the time that the drafts were accepted;
that is to say, some of them were made after their signature by the
Secretary of War, and some of them  before their signature by the
Secretary of War.
Question. Is the paper that you now  furnish to the committee an
accurate copy of the order of cancellation by the Secretary of War,
and the drafts to which it referred?
The following is the paper alluded to:
The following acceptances of drafts drawn by Russell, Majors &
Waddel, having been obtained by false representations, are hereby
cancelled, viz:
No.       Accepted.             Dated.            Time.        Amount.
78  September 18, 1860....  September 13, 1860.....  8 months ------ $15, 000 00
85  September 19, 1860.... September 19, 1860.... 12 months... — -    10, 000 00
90  October 10, 1860 ------ October 1, 1860 ------- 10 months --- --  10,000 0.0
99 ---— do-              October 8, 1860.. —.... — d o -------   10,000 00
110  October 13, 1860. —--- October 11, 1860 ------— do - ---    7,000 00
116..-.. do  -—.......... October 12, 1860  do. —-----  10,000 00
120 -    do-.......... —-  October 13, 1860 ----  ---— do - --   10,000 00
October 26, 1860     October 22, 1860     Not specified —.  110. 000 00
--.. do —         - October 31, 1860          do        ----  125, 000 00
-. do ---- -        October 23, 1860          do -143, 000 00
do.-   do- --.           do-.do       170, 000 00
------ do -  -.. do.-... do -----    115, 000 00
J December 13, 1860 -. — December 13, 1860.-.......do........ —  135, 000 00
870,000 00
JOHN B. FLOYD, Secretary of War.
WAR DEPARTMENT, December 26, 1860.




ABSTRACTED INDIAN TRUST BONDS.             151
Answer. The paper which I have just handed to the committee is
a correct and examined copy of the original order, and the drafts
therein referred to as cancelled appear to be the identical drafts first
shown to me by the committee.
Question. Has any order of cancellation of acceptances been made
upon the records of the War Department other than those embraced
in this paper?
Answer. Not to my knowledge.
PETER LAMMOND sworn.
Examination by the chairman.
Question. Mr. Lammond, please state to the committee what position you occupy in the Interior Department?
Answer. Disbursing clerk of the department, and likewise requisition clerk. I have charge of the appropriation ledger, and issue
all the requisitions signed by the Secretary of the Interior on the
treasury.
Question. Are you acquainted with Godard Bailey?
Answer. I am, sir.
Question. Has he been engaged in the department during the last
three or four years.
Answer. He was appointed, according to the pay-roll, on the 1st
of July, 1857, according to the information given me.
Question. Can you inform the committee what his habits were?
Answer. Well, sir, I was not acquainted with him enough outside
of the office to know what his habits were?
Question. Is there any record or memorandum in your department showing the amounts that have been paid to him, from time to
time, for his services other than those as clerk?
Answer. The books in the office show that moneys have been
advanced and paid to him on settled accounts.
Question. Other than his salary?
Answer. Yes, sir.
Question. Was he at any time within your knowledge sent as an
agent or commissioner to Minnesota to transact certain business with
Indian tribes?
Answer. He was, sir.
Question. What amount was paid him for that service?
Answer. Well, under the instructions he would be paid ten cents
a mile for travel, and three dollars a day for every day's detention on
business.
Question. Do you know how long he was gone?
Answer. He was gone about six weeks, I think, perhaps a little
more.
Question. What do the books in your office show to have been the
aggregate amount paid to him for that service?
Answer. The books in our office will not show that. That may be
ascertained by referring to the accounts when settled in the Second
Auditor's office.




152           ABSTRACTED INDIAN TRUST BONDS.
Question. Have you a memorandum by which you can furnish that
information to the committee?
Answer. I think I can furnish the information. One account was
settled November 22, 1858, Report No. 7612, which will slow the
transaction. In November, 1859, another account was settled, Report No. 8667; July 20, 1860, Report No. 33. July 21, 1860, there
was advanced to him  $1,287 58 —that account has not yet been
settled; July 26, $1,000, in the same way, and November 1, $259 31.
That is the last record we have in our office of any moneys charged
to him.
Question. Were the several sums of money to which you refer
paid him on account of his services in going to Minnesota?
Answer. Not all for services in Minnesota, I presume, but services
in other places.
Question. What other services?
Answer. He went to California one time.
Question. How long did he remain in California?
Answer. His commission and instructions to go to California were
dated July 2, 1858, and I will give the committee the compensation
he was to receive for that trip, if necessary.
Question. What was it.?
Answer. He was to receive ten cents per mile for travelling expenses, and five dollars per day for every day's detention on business.
Question. Do the several sums you have specified embrace the
aggregate amount of the expenses and compensation paid to him for
the several services to which you have referred?
Answer. I do not know that these would include the whole. I
will explain to the committee, if they will allow me the privilege of
doing so. When a man is sent out upon service —he may be sent
out by the Commissioner on Indian Affairs or the Secretary-he may
be directed to draw upon the superintendent of Indian affairs. The
superintendent takes this man's receipt. That receipt is a voucher
to him when his accounts are settled at the treasury, credited to him,
and charged to the agent. And when a requisition is issued for the
amount due the agent, that requisition is only for the amount due
him, although he may have had a great deal more money.
Question. In what department can we find the exact state of his
accounts?
Answer. You will find them in the Second Auditor's office.
Question. What time was it that he went to Minnesota?
Answer. It was some time last summer or fall. I think it was in
July or September, but I cannot fix the precise date.
Question. Can you tell when he went to California?
Answer. Yes, sir; his commission and instructions were dated
July 2, 1858, and he sailed a few days after that.
Question. Was he drawing his pay as a regular clerk in the
Department of the Interior during the time he was engaged in performing the services to which you have referred?
Answer. He drew his pay from the date of his appointment up to
the end of November last.




ABSTRACTED INDIAN TRUST BONDS.             153
Question. Can you inform the committee whether he drew upon
the government any drafts while he was in Minnesota or California?
Answer. I have a memorandum here taken from the books of the
department: " October 20, 1858. Draft drawn to the order of Stickney & Scollay on the Commissioner of Indian Affairs for $50, dated
St. Louis, October 10, 1858."  That draft was, of course, paid, and
charged to him as an advance.
Question. Are there any other drafts?
Answer. No others that I could find. I eraminel the records very
carefully, but that was the only one I could find.
Question. Did any person go with Mr. Bailey to Minnesota or to
California by appointment of the Secretary of the Interior?
Answer. Young Mr. Barksdale —John A. Barksdale-went with
him to Minnesota. I do not know that he went with him by
appointment, but I presume so.
Question. Was there any other person who went with him, to your
knowledge, either to California or to Minnesota?
Answer. No, sir, none to my knowledge.
Question. Have you any knowledge that he drew drafts, other than
those drawn on the government, upon any persons in this city during
his absence either in Minnesota. or California?
Answer. No, sir.
Question. Where were these bonds kept in the Interior Department?
Answer. They were kept in a large iron safe, and at one time the
safe was in the room that I occupy in the department.
Question. Where was it removed to?
Answer. It was removed to the room that was occupied by Mro
Bailey, across the passage from where I am.
Question. At what time?
Answer. As near as I can recollect, two years ago-after he took
charge of that branch of business.
Question. Have you any knowledge of any person or persons, at
any time, being locked up with Mr. Bailey in that room where the
sate was?
Answer. I have heard such rumors, but I was not cognizant of the
fact myself.
Question. Did Mr. Bailey frequently keep the room locked, and
exclude other persons.
Answer. As I had very little communication with him for the last
year, and was seldom at the room except on business, I never saw the
room locked myself. I may have gone to the room and found the
door locked, but I did not know when it was locked. I never asked
the question.
Question. Do you know whether Wagner was frequently in that
room with Bailey when the door was locked?
Answer. I do not know that. I know he was frequently in the
room with him.
Question. Did they appear to be very intimate?
Answer. Yes, sir.
Question. Has Mr. Bailey been in the Interior Department within




154           ABSTRACTED INDIAN TRUST BONDS.
the last few days for the purpose of demanding payment of arrearages
of salary due him?
Answer. He was in the department some day last week; I cannot
tell what day. He claimed his salary up to the date of his removal
from office.
Question. When was that removal made?
Answer. On the 22d day of December last.
Question. Please state what occurred at that time?
Answer. I was sent for by the Secretary; Bailey was in the room,
and the Secretary told me he supposed Bailey was entitled to his
compensation up to that date. Being off my guard, I went into the
room I occupied to make a calculation of the amount due him; but
while I was doing that it occurred to me that, being a defaulter, he
was not entitled to payment. I notified the Secretary of that. The
Secretary sent for Bailey and told him I had raised that question.
Question. What did Bailey say?
Answer. Mr. Bailey stood up, in a dignified manner, and said:' Mr. Secretary, you make me out a thief, and that does not make me
a defaulter." 1 refused to pay the salary.
Question. In whose custody was he at that time?
Answer. The custody of the marshal or assistant marshal.
Question. Did you pay the arrearages of salary due him?
Answer. I did not.
Question. Are you acquainted with Russell?
Answer. I am not.
Question. Do you know anything about Mr. Bailey's means or his
circumstances?
Answer. If my memory serves me, he told me he was considerably
hn debt; that he was worse off than nothing. I think he told me he
owed $9,000.
Question. What was the amount of salary paid him?
Answer. Two thousand dollars per annum.
Question. Is he a man of family?
Answer. He has a wife and two or three children.
Question. Was he married when he came here?
Answer. Yes, sir.
Question. When did he tell you he was about $9,000 in debt?
Answer. It must have been in September, 1857, or about that time.
MONDAY, January 7, 1861.
JOHN THOMPSON sworn.
Examination by MBr. Conkling.
Question. Where do you reside?
Answer. I reside in Brooklyn.
Question. What is your business?
Answer. My business is editor.
Question. Of what?
Answer. Of the Commercial Reporter.
Question. Is that your only business?




ABSTRACTED INDIAN TRUST BONDS.             155
Answer. I have no other regular business.
Question. Have you any other business whatever?
Answer. I do other business occasionally, such as broker and negotiator.
Question. Are you connected with any firm?
Answer. I am not.
Questign. Have you sons, bankers here?
Answer. I have.
Question. What are their names?
Answer. One's name is Samuel C. Thompson, and the other's name
is Frederick F. Thompson.
Question. And their banking-house is where?
Answer. Corner of VWTall and Broadway, New York.
Question. Is that under the Bank of the Republic?
Answer. Yes, sir.
Question. Have you read in the newspapers a notice and description
published of certain bonds or State stocks alleged to have been abstracted from the Interior Department in Washington?
Answer. I have read a notice, but failed to discover any description.
Question. Did the notice which you read contain the number of each
bond?
Answer. The notice which I read purported to contain the number
of each bond, but, as far as my investigation went, it did not contain
correct numbers of the bonds.
Question. How did you arrive at that discrepancy?
Answer. By comparing one bond with the list and finding it to be
a published number. I then went with an attorney to parties through
whose hands the bond had passed, and found that it had been in this
city for more than two years.
Question. What was the number of that bond?
Answer. It was 926.
Question. What state?
Answer. North Carolina.
Question. For what amount?
Answer. One thousand dollars.
Question. Dated when?
Answer. Dated 1856, I believe.
Question. Payable when?
Answer. I cannot give a positive answer to that question. I may
be wrong in my memory, but I think it was payable in 1886.
Question. At the Bank of the Republic?
Answer. I did not notice.
Question. Where is that bond now?
Answer. It is in the office of' my sons, I believe.
Question. Who holds it?
Answer. They hold it.
Question. Who owns it?
Answer. They own it.
Question. When did you first see it?
Answer. Within fifteen days past.
Question. How came you to see it then?




156           ABSTRACTED INDIAN TRUST BONDS.
Answer. When the announcement was made that there were bonds
abstracted from the Indian bureau, my sons and myself examined the
bonds which we had in the office; that is how I came to see it.
Question. Was that previous to the publication of what purported
*to be a description of the missing bonds?
Answer. It was on the day that the first publication made its appearance in the Herald of this city. We examined the bonds before
any numbers had been made public to see what we had. Then we
examined the bonds after the numbers appeared, to see if we had any
of the abstracted bonds.
Question. And did you find any bonds corresponding in number
with any of those published except the one you have spoken of?
Answer. No, sir.
Question. When did your sons obtain that bond?
Answer. It was a very few days before the announcement was made
that bonds had disappeared from the Interior Department.
Question. Did you obtain it separately, or as one of several bonds
obtained in the same transaction?
Answer. They obtained ten bonds in the same transaction.
Question. From whom?
Answer. From a broker by the name of Williams.
Question. What is his first name?
Answer. I do not remember.
Question. Where is his office?
Answer. His office is in Wall street; I do not remember the number.
Question. A member of a firm?
Answer. He is a member of the Board of' Brokers; he has no partner.
Question. When were these ten bonds obtained?  Can you fix the
date?
Answer. I cannot.
Question. What was the transaction in which they were obtained?
Were they purchased at the stock exchange, or purchased privately
of an individual?
Answer. Purchased at the board, I suppose. We gave an order to
purchase ten North Carolina bonds-that is, my sons did; I was knowing to the transaction.
Question. What figure was paid?
Answer. It was about 80; it may have been a fraction over or less.
Question. Was there any variation in the price of the ten bonds?
Answer. They were obtained at one purchase and at one price.
Question. This purchase, then, was made at so much per cent. upon
the bonds; there was no variation in the valuation of any particular
one of these ten bonds?
[The witness here stated that he was present withoutcounsel, but
he believed the committee had no right to inquire into individual
transactions.]
Question. Was the price paid for these ten bonds uniform as to each
bond, or did it vary?
Answer. It was a uniform price for the whole of the bonds?




ABSTRACTED INDIAN TRUST BONDS.             157
Question. Who was the attorney with whom you went to make investigations on this subject?
Answer. His name is Center.
Question. What is his first name?
Answer. That I cannot remember.
Question. To what parties did you go?
Answer First, to Smith & Patrick.
Question. Brokers?
Answer. Brokers, bankers, or commission merchants, I believe.
Question. Where?
Answer. In Wall street.
Question. How came you to go there?
Answer. Because we were told that they had obtained the ten bonds
which we bought from the Merchants' Bank.
Question. From them to whom did you go?
Answer. To the President of the Merchants' Bank.
Question. What is his name?
Answer. His name is Silliman.
Question. Did you trace them back to him?
Answer. We showed him this bond, and he said it was beyond question one of the bonds that he had passed over to a gentleman connected
with an Alabama railroad running into Georgia, or to Smith &d
Patrick; he did not explain to which gentleman he had passed it.
Question. Did you understand from him from whom he had received
it?
Answer. He said it had been in his trunk for more than two years,
Question. He held it as an individual, then, and not for the bank-?
Answer. He held it as an individual in trust for southern parties.
Question. Did he tell you what southern parties?
Answer. He did.
Question. Who were they?
Answer. I do not remember.
Question. Do not you remember anything about them, where they
were or how many?
Answer. The amount was some $70,000 or $80,000 that he held for
them, I believe.
Question. Did he tell you from what State?
Answer. I think he said Alabama.
Question. Did he name the parties as a bank, or as individuals?
Answer. Neither; I do not remember whether the parties were connected with a bank or not; he named them as individuals; but whether
as individuals acting in any official capacity, I do not know.
Question. Have you ever seen any other bonds answering to the published description?
Answer. I do not know whether I have or not.
Question. What is your belief?
Answer. My belief is that I have.
Question. Where?
Answer. At our office, or at the office of my sons; I say our office
for convenience sake.
Question. When first?




158           ABSTRACTED INDIAN TRUST BONDS.
Answer. I should think six or seven weeks ago.
Question. To what amount?
Answer. $25,000.
Question. In whose hands?
Answer. They were in my hands.
Question. Whose before that?
Answer. In the hands of a man by the name of Simpson.
Question. His first name?
Answer. I do not know.
Question. His business?
Answer. All the business I could fix on him was a borrower of
money; I never knew him to do anything else.
Question. Where does he reside?
Answer. In this city, I suppose.
Question. Had he any place of business here?
Answer. He had a place of business in Nassau street.
Question. Do you know what number?
Answer. I do not know.
Question. What business was conducted in his office?
Answer. I do not know.
Question. Have you ever been into it?
Answer. Yes, sir.
Question. What business was done there, as far as you could ascertain?
Answer. I could not well devise any particular business that was
done there.
Question. Was it the practice of medicine?
Answer. It might have been and it might not.
Question. Do you know where Mr. Simpson is?
Answer. I do not.
Question. When did you see him last?
Answer. 1 have not seen him  since about the time I saw these
bonds.
Question. Do you know whether he is a married man?
Answer. I do not.
[The witness here complained of the course of questioning on the
part of the committee. He said he was willing to disclose what he
knew of the transaction, which was nothing, but he did not wish to
be dragged into the disclosure of individual transactions.]
Question. When did you first know Mr. Simpson?
Answer. I should think it was two years ago.
Question.' Where?
Answer. In New York.
Question. What was your business with Mr. Simpson at the time
you speak of?
WITNESS. These two years?
Mr. CONKLING. During the time you have known him.
Answer. I have talked with Mr. Simpson about borrowing money,
and about making negotiations on various species of paper occasionally, for two years past.




ABSTRACTED INDIAN TRUST BONDS.               159
Question. What was your particular business with him at the times
when you went to his office?
Answer. I went to see if he wanted to buy a certain piece of paper.
Question. At that time did you know what Mr. Simpson's business
was?
Answer. I had understood that he was the financial agent in New
York of Russell, Majors & Waddell.
Question. You had no doubt about that?
Answer. I had no doubt that his office was the place where their
business was done.
Question. Who did you see, at either of these times when you
visited his office, besides Simpson himself?
Answer. I cannot tell.
Question. Do you know William H. Russell?
Answer. I cannot say that I do. I should not know him if I were
to see him to-day.
Question. You have had interviews with him?
Answer. I have merely seen him. As I said, I should not know
him ift  were to meet him now. I never had any business with him
at all.
Question. Have you seen a description of the acceptances of the
Secretary of War relating to this matter?
Answer. I think I have seen one or two pieces of paper of that description.
Question. The acceptances themselves?
Answer. Yes, sir.
Question. When did you first see acceptances predicated on the
transportation contracts of Russell, Majors & Waddell-acceptances
of John B. Floyd?
Answer. It was some time since; I cannot fix the date.
Question. As near as you can?
Answer. I think it was a year or more since.
Question. In whose hands?
Answer. I cannot say with certainty whose hands I did see them
in; and I may be a little mistaken about having seen any of that
particular class of paper at all; my mind may have confused it with
another class of paper of a similar class.
Question. What other class?
Answer. Acceptances of the Secretary of the Navy.
Question. Given to Russell, Majors & Waddell?
Answer. No; given to another man.
Question. According to the best of your recollection, in whose hands
were these acceptances?
Answer. I think I have seen Floyd's acceptances in the hands of
Simpson.
Question. To what amount?
Answer. $10,000.
Question. Can you fix the date?
Answer. A year or more ago, I should say; it is very indefinite in
my mind.
Question. Have you seen any of these acceptances since?




160           ABSTRACTED INDIAN TRUST BONDS.
Answer. I have not, to the best of my recollection; I have not seen
any of that description of paper lately.
Question. At the time Simpson showed you this $25,000 in bonds
you have spoken of, had you seen any bonds similar in character
before?
Answer. I had seen bonds similar in character, and had no suspicion
that these were not of a legitimate character.
Question. You saw them in Simpson's hands?
Answer. No, not before, but at the time I mentioned; I saw also
bonds of another State.
Question. To what amount?
Answer. $25,000 of the bonds of a State of which numbers are
given as being the bonds taken from the Interior Department, and
$25,000 of the bonds of another State which the department has not
given any numbers of.
Question. What State was that?
Answer. The State of South Carolina.
Question. Any others?
Answer. No, sir.
Question. He showed you bonds to the amount of $50,000 in all?
Answer. Yes, sir.
Question. Will you fix the date as near as you can?
Answer. I cannot fix the date; I should think six weeks ago.
Question. Have you any entry about it on your books?
Answer. There is an entry in the books of the office of my son's
rom which I could fix the date to my own satisfaction.
Question. Is it an entry relating to $25,000 only or to the whole
$50,000?
Answer. The whole $50,000.
Question. Have you seen the entry?
Answer. No, I have not.
Question. Do you know that there is one?
Answer. No, I do not.
Question. Did you not say there was an entry on the books by
which you could fix the date?
Answer. No, I did not say any such thing; I said I thought there
was an entry there; I think so still.
Question. What makes you think there is an entry there?
Answer. Well, I do not know; I believe there was a transaction
in the office which would involve an entry on the books.
Question. What was that transaction?
Answer. It was the loaning to Simpson of a sum of money.
Question. How much.
Answer. I forget
Question. State the amount, if you please, as near as you can.
Answer. Somewhere between $20,000 and $30,000.
Question. On what?
Answer. State bonds.
Question. This $50,000 you have mentioned 
Answer. Yes.
Question. Were the bonds left there?




ABSTRACTED INDIAN TRUST BONDS.              161
Answer. They were.
Question. On what time was the loan made?
Answer. On call.
Question. But no other security taken?
Answer. No, sir; or I should say there was a note taken, if you
call that security.
Question. Whose note?
Answer. Simpson's.
Question. A note on time?
Answer. A note on demand; that is my impression.
Question. Then it was a call loan, as you term it?
Answer. Yes, sir.
Question. Do you know how long, in fact, it run?
Answer. A few days.
Question. Do you know when the money was paid?
Answer. When the bonds were given up.
Question. When was that?
Answer. After a few days.
Question. When, as near as you can?
Answer. I think I have fixed the date of the whole transaction
already as near as I can.
Question. I repeat the question: please state as near as you can
when these bonds were given up.
Answer. Six or seven weeks ago, I should think.
Question. Is that as near as you can come?
Answer. As near as I can come without the books.
Question. Was the money paid then?
Answer. It was.
Question. In money?
Answer. In checks, I think.
Question. Whose checks?
Answer. I do not remember.
Question. Presented by Simpson?
Answer. Or by somebody on Simpson's behalf.
Question. Were you there when the bonds were talren away?
Answe#, I was there that day; I do not know whether I was there
when the bonds were taken or not.
Question. Do you know who took the bonds away?
Answer. I do not.
Question. Who, as you understood it, took them away?
Answer. The person who paid the money.
Question. My question was, as to whom you understood took the
bonds away.
Answer. I do not understand who took them away.
Question. Which son transacted this business?
Answer. I think it was my son Frederick.
Question. Who made the loan to Simpson?
Answer. My sons made it; I advised with them.
Question. Were you present at the time when it was made?
Answer. I was.
Question. For whom was this money borrowed by Simpson?
H. Rep. Comn. 78 —-11




I S2          ABSTRACTED INDIAN TRUST BONDS.
Answer. For himself, as far as appears by his transactions with uA.
Question. For whom was it in fact?
Answer. I do not know.
Question. Do you know where these bonds are now?
Answer. I do not.
Question. Have you seen them since the publication of this notice?
Answer. I have not.
Question. When did you see Simpson last?
Answer. I do not think I have seen Simpson since about the time
that loan was paid, some six weeks ago.
Question. Have you heard from him since?
Answer. I have heard people speak about him.
Question. You have heard from him in no other way?
Answer. No.
Question. Who else was acting here as the agent of Russell, Majors & Waddell?
Answer. I do not know of anybody.
Question. Have you seen at any other time any bonds answering to
the published description, other than the $25,000 bond of South
Carolina stock and the $25,000 of Missouri stock?
Answer. No.
Question. Were the coupons cut off from the entire $50,000?
Answer. Yes, sir.
Question. What is the name and place of business of the broker
who succeeded you in this operation with Simpson?
Answer. I do not know, except by hearsay.
Question. What is the name of the broker, as you understood, who
succeeded you in this operation?
Answer. William T. Coleman & Co.
Question. What street and number?
Answer. Wall street; I do not know the number.
Question. Cannot you recollect, upon reflection, who the Alabama
parties were for whom the president of the Merchants' Bank held these
bonds in trust?
Answer. I cannot; they were strange names to me.
Question. No recollection at all about it?
Answer. No, sir.
Question. For what purpose did Simpson at first show you the acceptances of John B. Floyd?
Answer. I do not remember much about it.
Question. Where did he show it to you?
Answer. At my office.
Question. Your editorial office do you mean.?
Answer. It is all the same.
Question. The office in which your sons do business?
Answer. Yes, sir.
Question. Can you fix more definitely than you have done the date?
Answer. I cannot, for I paid no attention to it of any consequence.
Question. Do you not remember the purpose for which he showed
them to you?
Answer. The purpose was to negotiate them and raise money.




ABSTRACTED INDIAN TRUST BONDS.             163
Question. How many pieces of paper of that description did he hold
that you saw?
Answer. I do not say that he showed me more than one.
Question. Do you recollect the amount of that?
Answer. I believe it was $10,000.
Question. Did he state whether he had more or not?
Answer. I do not think he did.
Question. What amount did he want to procure or negotiate for?
Answer. He wanted to procure what he could upon that piece of
paper.
Question. Only upon that one piece?
Answer. That is all that I have any recollection of.
Question. He never proposed a negotiation larger than that one to
you?
Answer. Not on that kind of paper to me.
Question. To what party did you refer when you spoke of the Secretary of the Navy having given acceptances to another person?
WITNESS. I do not know that I am under examination on anything
except what pertains to this transaction in relation to these bonds.
Question. The question I propound to you is this: state the name
of the party to whom you have referred as the person to whom the
Secretary of the Navy gave acceptances?
(On the request of the witness the question was furnished to him in
writing.)
WITNESS. The question being foreign to the subject under investigation, I decline to answer.
Question. Have you consulted as to what questions you should and
what questions you should not answer before this committee?
Answer. I have not.
Question. Have you consulted in reference to your rights before this
committee with any person?
Answer. I have not.
Question. You have consulted counsel about the matter of these
bonds?
Answer. About the matter of one bond I have.
Question. And you understand what your legal rights are as to that?
Answer. I do not know anything about legal rights; I consulted in
reference to it.
Question. When did you see any acceptance of the Secretary of the
Navy?
Answer. I must, in consistency, decline to answer that question.
Question. What did you mean by your answer respecting acceptances given by the Secretary of the Navy?
Answer. I meant just what I said.
Question. What was that?
Answer. That I had seen acceptances given by the Secretary of the
Navy as well as by the Secretary of War.
Question. To what amount?
Answer. $10,000, and I think $20,000.
Question. When did you see them?
WITNESS. I must decline answering.




164            ABSTRACTED INDIAN TRUST BONDS.
Question. In whose hands did you see them?
WITNESS. I must decline answering.
Question, At what time did you see them?
WITNESS. I decline answering.
Question. How came you to see them?
WITNESS. I must decline answering.
Question. State the circumstances under which you saw them?
WITNESS. I must decline answering.
Question. Was any person present when you saw them?
WITNESS. I must decline answering.
Question. How often have you seen acceptances of the Secretary of
the Navy?
WITNESS. I must decline answering.
Question. To what amount in all have you seen such acceptances?
WITNESS. I must decline saying more upon that subject than I have
already said.
Question. Do you stand, Mr. Thompson, in any position of confidence or trust in regard to these acceptances of the Secretary of the
Navy?
WITNESS. I must decline answering.
Question. Upon what contract or consideration were these acceptances of the Secretary of the Navy given?
WITNESS. I must decline answering any more questions upon that
subject.
Question. Have you ever had any contract with the Navy Department?
Answer. I never have.
Question. Any interest in any contract?
Answer. No, sir.
Question. Ilave you in your possession any acceptances of the Secretary of the Navy?
Answer. I have not.
Question. Have you had at any time?
WITNESS. I must decline answering that question.
Question. Have you ever seen acceptances of the Secretary of War
in, the hands of any person, except Simpson?
Answer. I do not think I have.
Question. Why do you answer with that qualification?
Answer. I do not remember that I have seen any.
Question. When did you first know that bonds had been removed
from the custody of the government?
Answer. I do not even know now that bonds have been removed
from the custody of the government.
Question. When as a matter of information?
Answer. When it first became a matter of public notoriety through
the newspapers.
Question. Do you know Latham?
Answer. I do.
Question. Itow long have you known him?
Answer. Ten years I should think.
Question. Do you know where he is?




ABSTRACTED INDIAN TRUST BONDS.             165
Answer. I do not.
Question. When did you see him last?
Answer. Last Thursday, I think.
Question. Where?
Answer. In our office.
Question. Do you know where he is now.
Answer. I do not.
Question. Did you ever see any paper or memoranda relating to
these acceptances of John B. Floyd?
Answer. I never did.
Question. Did you ever have any correspondence in reference to
them?
Answer. I never did.
Question. Did you ever see any statement or letter from the Secretary of War concerning them'?
Answer. I cannot give a satisfactory answer to that question; it is
my impression that I have, and that is about all I can say about it.
Question. From whom?
Answer. Written by Mr. Floyd himself.
Question. To whom?
Answer. I cannot say.
Question. Who showed it to you?
Answer. The whole thing is based upon such a frivolous impression
that you cannot catch me in making any definite statements in relation to it.
Question. According to the best of your recollection, who showed
you that letter from Secretary Floyd?
Answer. I cannot give any satisfactory answer.
Question. What was the paper you referred to just now as one you
thought you had seen?
Answer. My mind is foggy in relation to some paper written
by one of the Secretaries of the present administration.
Question. Have you had correspondence with any of the present
heads of the departments.
Answer. I have not.
Question. Have you seen an extensive correspondence with them?
Answer. I have not.
Question. Have you seen any.
Answer. I have seen some letters in relation to certain acceptances,
I think.
Question. A good many of them?
Answer. Not many.
Question. Now, to the best of your recollection, what was the paper
or papers referred to by you which you thought you had seen?
Answer. They were letters.
Question. Written or purporting to be written by Secretary Floyd?
Answer. I cannot say positively; I think they came from the War
or Navy Departments.
Question. Where did you see them?
Answer. In our office, I believe.
Question. Who brought them there?




166           ABSTRACTED INDIAN TRUST BONDS,
Answer. I cannot say.
Question. Your best recollection as to who brought them there?
Answer. My recollection is, that they were brought there by Mr.
Simpson, Mr. Latham, or Mr. Thompson.
Question. What Thompson?
Answer. Not any Thompson connected with our house; I believe
his name is Ambrose W. Thompson.
Question. What is his business?
Answer. I do not know.
Question. Do you know where he lives.
Answer. I do not.
Question. Did you ever see him?
Answer. Yes, sir.
Question. WVhere was this?
Answer. If the thing took place, it must have been something like
a year ago; but I have been so uncertain about the thing transpiring
at all, that you must let me have the benefit of the uncertainty.
Question. Do you mean the committee to understand that you do
not know that you ever saw letters from the War or Navy Departments.
Answer. I mean them to understand that I think I have seen them.
Question. Have you any doubt that you have seen letters from one
place or the other?
Answer. I have some doubt.
Question. Have you any doubt that you have seen letters purporting to come from the War or Navy Departments?
Answer. I have very little.
Question. Have you any?
Answer. I have no doubt that I have seen letters which purported
to come from one or the other.
Question. Then why did you say that if the thing happened, it happened something like a year ago?
Answer. Because the transaction is very unsettled in my memory.
Question. When was it that these letters, purporting to come from
one office or the other, were shown to you?
Answer. Something more than a year ago.
Question. That is the transaction you referred to when you said they
were brought by Simpson, Latham, or Thompson?
Answer. Yes, sir.
Question. How many letters were there?
Answer. I do not remember that I saw more than one or two.
Question. How many letters were shown to you purporting to come
from the War Office or the Navy Office?
Answer. I cannot say whether there was one or two.
Question. Not more than two?
Answer. [ should think not more than two; I should think two
were enough to cover the whole ground.
Question. According to the best of your recollection, did these
letters come from the War Office or the Navy Office?
Answer. I cannot draw in my mind an intelligible answer to that
question.




ABSTRACTED INDIAN TRUST BONDS.               167
Question. Have you no recollection as to which department they
came from?
Answer. No positive recollection.
Question. Have you any recollection at all as to which department
they came from?
Answer. My impressions are, that I have seen letters from both
departments.
Question. At different times?
Answer. I should think at different times, but it is drawing on an
imperfect memory to answer these questions at all.
Question. From which department first did you see letters?
Answer. I cannot say.
Question. Were there letters from both departments shown to you
by the men you have mentioned?
Answer. I have mentioned these men as the most likely, the most
probable men who have shown me such letters.
Question. Is it the best recollection you have that these are the men
who have shown the letters to you?
Answer. It is the best memory I have on that subject.
Question. What did you mean when you said you thought there
were not more than two letters, because you considered two ample to
cover the whole ground?
Answer. I meant that the exhibition of two such letters was sufficient to inspire confidence in certain pieces of paper. The Bible, I
believe, speaks of three witnesses being required; but I considered two
such witnesses, coming from a department of the government, as sufficient.
Question. That is what you meant?
Answer. Yes, sir; I think that ought to be sufficient to inspire
confidence.
Question. What were these two pieces of paper that confidence was
to be inspired in?
Answer. I cannot remember the wording of the paper.
Question. I ask what it was?
Answer. It was a written piece of paper.
Question. Is that the only answer you can make?
Answer. I do not remember the wording, and, therefore, I cannot
say what it was.
Question. Is that the best answer you can give to the question what
this piece of paper was?
Answer. It was what we call an acceptance.
Question. Whose acceptance?
Answer. The acceptance of a Secretary of a department.
Question. Which department?
Answer. Either the War or Navy, I cannot tell which.
Question. In whose favor?
Answer. I do not remember.
Question. Have you no memory whatever in whose favor these
acceptances were?
Answer. I have no remembrance in whose favor they were.
Question. None whatever?




168           ABSTRACTED INDIAN TRUST BONDS.
Answer. None whatever.
Question. Who presented them?
Answer. I cannot say who presented them, any further than to say
that the three names I mentioned are the persons most likely to have
shown them to me.
Question. Did the same persons showing the letters present the
acceptances?
Answer. I think the letters and acceptances were all together.
Question. Attached to each other?
Answer. No, not attached to each other, but in the same budget.
Question. What was the amount, as near as you can give it, of these
acceptances?
Answer. I think some $10,000; from $10,000 to $20,000.
Question. Do you know how many different pieces of paper there
were?
Answer. Not certainly.
Question. How long ago was it.
Answer. A year or a year and a half.
Question. Did you ever on more than one occasion see these letters,
or any such letters?
Answer. I cannot say.
Question. Who was present when the letters were shown you?
Answer. I do not know; I do not remember the transaction well
enough to give any more details about it.
Question. Were your sons present?
Answer. I think not.
Question. Neither of them?
Answer. I think not.
Question. Were these letters shown to you privately?
Answer. Not particularly so; they consider everything private in
Wall street.
Question. Were these letters shown to you (I put this question to
refresh your recollection) by one person, and no other person present
at the time, or by more than one person?
Answer. My impression is, that there were no other persons present
than the parties showing the letters and myself.
Question. Did the party showing you the letter consist of more
than a single person?
Answer. I do not think there was more than one person at a time.
Question. Then do you mean that these letters were shown to you,
successively, by different persons?
Answer. It is my impression that I have seen some of the letters,
and papers or acceptances, in the hands of different parties.
Question. At different times?
Answer. Yes, sir. I want you to understand that I give that
merely as my impression.
Question. You have named three persons that you think are those,
or among those, who showed you acceptances; can you name persons
in addition to those three in whose hands you saw those acceptances?
Answer. I cannot.
Question. These three embrace the catalogue?




ABSTRACTED INDIAN TRUST BONDS.             169
Answer. These three embrace the catalogue, according to the best
of my recollection.
Question. You refused to loan money upon these letters and acceptances?
Answer. I did.
Question. How many times did you refuse?
Answer. Two or three.
Question. Did you ever see or receive other letters in reference to
them?
Answer. Not that I know of.
Question. Do you know where any of the bonds are, or perhaps are,
except the one in the hands of your son?
Answer. I know a minister of the Gospel who came down to the
office and said he had two.
Question. Who is he?
Answer. I shall not tell you.
Question. You decline to tell that, do you?
Answer. I do.
Question. When did you receive this information that you have just
now related?
Answer. Two or three days after the list was published.
Question. The amount of those bonds, I suppose, was $1,000 each.
Answer. Yes.
Question. Does that clergyman reside in this city?
Anstwer. I believe he does.
Question. Did he tell you what the numbers of his bonds were?
Answer. He did not.
Question. Did he tell you what State they were on?
Answer. Yes; he did.
Question. What State?
WITNESS. I decline to answer.
Question. Do you know where any other of these advertised bonds
are?
Answer. I do not.
Question. Have you any information?
Answer. I have not.
Question. Do you know what became of the bonds placed by Simpson in Coleman's hands, or transferred to him by your son?
Answer. I do not; I never knew where they went to.
Question. Have you no information from Latham where any of
these bonds are?
Answer. Not a particle.
Question. Nor from any other person?
Answer. No, sir.
Question. Nor where they have been since they were taken from the
departmeLt?
Answer. Only hearsay.
Question. Have you any information as to where any of the bonds
advertised now are, or where they have been at any time since their
abstraction was made public 
Answer. I have not.




170           ABSTRACTED INDIAN TRUST BONDS.
Question. Have you no information directly or indirectly.
Answer. I have heard that a man by the name of Anderson, of St.
Louis, held a large amount of them.
Question. Who did you hear that from?
Answer. I cannot say.
Question. Do you not know who told you that?
Answer. I cannot say who it was.
Question. Where else, according to your information, are there any
of these bonds?
Answer. I have been told that there was a large lot of these bonds
in the hands of Duncan, Sherman & Co. at one time.
Question. Who told you that?
Answer. I am equally in default about who told me that. I cannot
get at the sources of these stories at all, they were so thick and so
much talked about at the time.
Question. Where else, according to your information, are there any
of these bonds?
Answer. I have been told that there was a lot of them in the hands
of BI. Morgan & Son, in William street.
Question. Where else?
Answer. We were told that there were some of them in the custody
and keeping of the president of the Bank of America, and that these
had been bought by Buchanan within the last six months, to tell the
whole story.
Question. Where else?
Answer. I do not remember any more of these street rumors that I
can tell you.
Question. Have you neither knowledge, information, nor advices of
any kind as to the present or recent whereabouts of any more of these
bonds?
Answer. I have not further than as the street rumor was that
Richard Schell had been the medium of putting large amounts of them
upon the market. Whether it was so or not I cannot say.
Question. Do you still refuse to name the clergyman who you mentioned as holding two of these bonds?
Answer. I refuse to give his name.
Examination by the chairman.
Question. You have said that $50,000 of the bonds you saw in possession of Simpson had the January coupons off?
Answer. Yes, sir.
Question. Was your attention directed to the fact that they were
off; and if so, what induced you to notice it?
Answer. 3My son observed to me that these bonds had their coupons
off, and I looked and saw it to be so.
Question. Did you call Simpson's attention to the fact that the
coupons were off the bonds?
Answer. We did.
Question. What reason did he assign why they were off?




ABSTRACTED INDIAN TRUST BONDS,              171
Answer. He did not assign any reason, but evaded giving any
reason.
Question. I understood you to say that he said there was a particular reason for it.
Answer. No; I could not have said exactly that. I asked him why
he did not sell the bonds instead of holding them, and he said there
was a particular reason why he would rather keep them than to sell
them.
Question. He did not assign any particular reason why the coupons
were off, but when asked the question he evaded answering?
Answer. Yes, sir.
TUESDAY, January 8, 1861.
G. B. LAMAR sworn.
Examination by the chairman.
Question. Please inform the committee what your present position
is in the Bank of the Republic?
Answer. I am president of the Bank of the Republic, and have
been since the 15th of May last.
Question. Has that bank had any business transactions since you
have been connected with it with Russell, Majors & Waddell; and if
so, please state the nature and character of them?
Answer. The bank has at different times discounted notes and
drafts from Russell, Majors & Waddell, and some drafts coming from
St. Louis, indorsed by Anderson & Co., for Russell, Majors & Waddell, and others accepted by the Secretary of War, Governor Floyd.
I am not sure that any of the latter description have been discounted
since May last. Without referring to the books of the bank I cannot
tell certainly whether they have been or not.
Question. Will you state the date and amounts of the acceptances
you discounted either of Russell, Majors & Waddell, or of the Secretary of War?
Answer. I could not without reference to the books of the bank.
Question. Has the bank in its possession any written communications from the Secretary of War pertaining to these acceptances?
Answer. It has a letter dated in 1858.
Question. Can you furnish the committee with that letter?
Answer. It is in the possession of the cashier; he will furnish it to
you.
Question. Have you any letter from any other person connected
with the War Department referring to the same subject-matter?
Answer. Not that I know of.
Question. Do you know whether there is a letter in the possession
of the bank from Mr. Drinkard, the chief clerk in the War Department?
Answer. I do not know; it is possible there may be such a letter;
if so, I will instruct the cashier when he comes before the committee
to bring it with him.
Question. You are not certain that you have held any of the ace




172           ABSTRACTED INDIAN TRUST BONDS.
ceptances of the Secretary of War since you have been president of
the bank?
Answer. No, sir, I am not certain that we have.
Question. Have you seen in the Constitution newspaper, published
at Washington city, a list of the bonds said to have been abstracted
from the Interior Department?
Answer. Not in that paper. I have seen such a list in other
papers.
Question. Have you in your bank any of these bonds?
Answer. Not one that I know of.
Question. Had you at the time that publication was made or just
previous?
Answer. Not that we know of.
Question. Did you ever have them?
Answer. I have no reason to believe we have ever had any of these
bonds in our possession except in a single instance. We did on one
occasion have bonds which we suspect may have been among those
abstracted from the Interior department; I think, in the latter part of
October.
Question. How many?
Answer. Twelve, I think.
Question. Can you furnish the committee with a statement showing the date and number of these 12 bonds, and the State which issued
them?
Answer. No, sir; we never keep a memorandum of such particulars. A person came in and got a loan of $9,000 on 12 of those
bonds. He afterwards came and paid the money and took up the
bonds.
Question. Who was the person that hypothecated them?
Answer. His name was Simpson.
Question. You have no memoranda or register in your office showing the numbers?
Answer. No; we never keep any record of the numbers of bonds
pledged as collateral security in that way; we just put the bonds away
with the note.
Question. Do you know what Simpson did with the bonds after he
took them up?
Answer. No, sir; I have no idea.
Question. Do you know Simpson?
Answer. Yes, sir; I have known him for the last six months.
Question. What has been his business?
Answer. He generally transacted the business of Russell, Majors &
Waddell at the bank.
Question. Do you know where he is now?
Answer. I do not. He was in the bank a few days ago and told us
he was going to Europe. He said he was very much broken down in
health; and he looked as though he was very far gone with consumption.
Question. How long ago?
Answer. Two or three days, or one or two days before the explosion
about the knowledge of this robbery.




ABSTRACTED INDIAN TRUST BONDS.             173
Question. Have you ever seen in the possession of any other corporation or individuals any of the bonds referred to?
Answer. I am not aware that I have seen any of them.
Question. Have you any knowledge which leads you to believe that
any person or persons or corporation has any of these bonds in their
possession?
Answer. I have no positive knowledge.
Question. Have you any knowledge?
Answer. I have only a suspicion arising from various circumstances.
Question. Please state to the committee what you know on that
point.
Answer. I do not know whether I ought to state suspicions, because
it might be doing injustice to other people. I do not know any fact;
it is a mere suspicion that has crossed my mind since the facts have
been made public.
Question. Please state the facts upon which you found your belief
that you may have a knowledge of what became of some of the bonds.
Answer. In the month of August I commenced buying Tennessee
bonds as a matter of speculation, supposing large quantities of them
would be wanted for banking purposes in some of the western States.
Some other gentlemen engaged in the same business. We found the
market supplied with bonds so abundantly that we at last desisted
from the purchase, because we saw no chance of their rising. We
were surprised that so many bonds were continually coming into
market for sale, and we could not imagine where they came from.
Question. Did you ascertain?
Answer. We ascertained that Clarke, Dodge & Co. were throwing
a large amount of these bonds upon the market.
Question. Did Russell, Majors & Waddell do their business in this
city through your bank since the time you became president?
Answer. I think they did a great deal of it; I do not know that
they did all.
Question. Will you be kind enough to furnish to the committee a
statement showing the acceptances of the Secretary of War discounted
at your bank for these parties?
Answer. I will ask the cashier to bring it with him when he comes
before the committee.
LUTIHER C. CLARK sworn.
Examination by Mr. Harris.
Question. Have you seen, at any time, any of the bonds alleged to
have been abstracted from the Interior Department.
Answer. I suppose I have, a great many,; I know we have two of
them in our house.
Question. What is the name of your house?
Answer. Clark, Dodge & Co.
Question. Have you seen the descriptive list of those bonds that
has been published by the Secretary of the Interior?
Answer. I have never examined it with any degree of care. A




174           ABSTRACTED INDIAN TRUST BONDS.
great many State bonds are bought and sold by our house, probably
amounting to $3,000,000 or $4,000,000 since this thing commenced,
and it is probable that a number of thousand of these bonds have
passed through our hands; probably some of them several times, but
I do not know.
Question. You have no memorandum or description of these bonds?
Answer. We intend to keep the numbers of most of the bonds that
pass through our hands, but we have never compared the list furnished by the Secretary of the Interior with our books, and that list
would not be conclusive in any event, because some of the bonds are
issued by letters, and there would be different bonds of the same
number issued by the same State.
Question. Would the number and letter correspond?
Answer. The bonds of some of the States are issued in this way:
A particular class of bonds is called A, and numbered consecutively,
beginning with 1; another class is called B, and numbered in the
same way; of course there would be a No. 1 of letter A, and a No.
1 of letter B.
Question. But each of the bonds would differ in letter or in
number?
Answer. Yes, sir.
Question. Are you able to say that you have none of these bonds in
your possession now?
Answer. None except the two I have mentioned.
Question. You have a description of them?
Answer. Yes, sir, a full description is given in our answer.
Question. What answer; has there been an injunction served upon
you?
Answer. Yes.
Question. Have you no further knowledge in relation to the bonds?
Answer. No more than I have seen in the papers.
Question. You do not know any parties who probably have them?
Answer. No; there are parties wanting to buy some of them; a
party yesterday wanted to sell some real estate and take these bonds
in payment.
Question. Have you ever seen, or have you any knowledge of any
acceptances of the Secretary of War in connexion with the contract
of Russell, Majors & Waddell?
Answer. I have seen these acceptances a great many different times,
but I do not think I ever bought any of them. I sold some two or
three years ago, but I have not sold any within the last year.
Question. Do you recollect the character of the acceptances you
saw; whether they were based upon the future earnings of these
parties, or whether they were in the ordinary form of negotiable
paper?
Answer. There was a paragraph —some words attached to them
which I cannot remember. If I could see a specimen of the two kinds
I could tell. I remember one was shown to Mr. Cisco, the assistant
treasurer, and he said that they amounted to an acknowledgment on
the part of the government that the service had been performed.




ABSTRACTED INDIAN TRUST BONDS.             175
Question. Do you recollect whether those presented to you were
negotiable in their character?
Answer. All were that I saw.
Question. You did not purchase any of them?
Answer. I did not.
Question. Do you know in whose hands they were when they were
presented to you?
Answer. I believe they were all indorsed by Russell, Majors &
Waddell. Some of them, I think, came direct from Mr. Anderson,
of St. Louis.
Question. Not through any intermediate party here.
Answer. I believe not; if they did, they came for his account.
Question. Did you ever see any letter or memorandum in writing
from any officer of the government in relation to these acceptances?
Answer. I have not.
Question. Have you any recollection of the date or amount of any
of these acceptances?
Answer. Not of the date; the amount, I think, was $10,000 each,
or it may be $20,000. I recollect that I sold to the amount of $20,000
on one occasion, but whether in one or two pieces of paper I am not
certain.
Question. What was the gross amount?
Answer. This is the only transaction I remember, and I am almost
certain this was in two acceptances of $10,000 each.
Question. And you think this transaction was a couple of years
since?
Answer. I should think all of that.
Question. Have you any recollection of the time on which they were
drawn?
Answer. I have no special recollection; my impression is that the
time was four months.
Question. Do you know where they are now-what has become of
them?
Answer. They were all paid.
Question. Those that you sold were paid.
Answer. Yes.
Question. Do you know by whom?
Answer. They were made payable at the Bank of the Republic.
Question. Here is a draft which reads as follows:
"$10,000                       WASHINGTON, October 12, 1860.
" Ten months after date pay to our own order, at the Bank of the
Republic, $10,000, for value received, and charge the same to our
transportation contract of the 12th day of April, 1860.
" RUSSELL, MAJORS & WADDELL.
"Hon. JOHN B. FLOYD,
"Secretary of War."




176           ABSTRACTED INDIAN TRUST BONDS.
(In red ink across the face:)
" No. 116.]                WAR DEPARTMENT, October 13, 1860.
" Accepted.
" JOH[N B. FLOYD,
"Secretary of War."
(Indorsed:)        "RUSSELL, MAJORS & WADDELL."
Looking at that paper are you able to say, to the best of your recollection, that it is of the character of the acceptances which you negotiated?
Answer. That is my impression.
Question. Do you consider such paper as that negotiable paper?
Answer. I do.
Question. Do you know any matter or thing connected with these
acceptances that you have not stated to the committee?
Answer. I believe nothing.
Question. Do you know any matter or thing connected with these
acceptances, or with the bonds referred to, which you have not stated?
Answer. I do not know anything further, of my own knowledge.
I know I have heard it stated, upon pretty good authority, that there
were existing facts and circumstances that would tend to throw doubt
as to the correctness of the list of bonds published by the Secretary of
the Interior.
Question. What?
Answer. I know this fact in connexion with it. There were bonds
which we sold bearing the same numbers contained in the published
li.st. A party who had purchased some of these came to us and said
they were included in the published list. IHe wanted to know where
we got them? I went to the bank from which we got them, and the
president told me that the bonds could not be among those abstracted
from the Interior Department, for he obtained them from a corresponding bank in North Carolina, and that he was certain that they came
direct to that bank from the State treasurer.
Question. What bank was that in New York?
Answer. It was the Continental Bank.
Question. Will you be good enough to state the name of the party
to whom you sold these bonds?
Answer. It was a broker who bought them, at least we delivered
them to him, but I have no doubt that he bought them for somebody
else. In fact I do not know who we did sell them to.
Question. To the best of your knowledge, who was the party you
sold them to?
WITNESS. Do you want the name of the broker.
Mr. HARRIS. Yes.
Answer. I do not know. I could give you his name by going to
my office.
Question. Do you know the name of any other party than the
broker who was connected with this transaction?
Answer. The party who came to see me was interested in them at
that time. I do not know whether he is interested in them now or
not.




ABSTRACTED INDIAN TRUST BONDS.              177
Question. Will you please state his name?
Answer.  His name is F. P. James.
Question. Does he live in this city?
Answer. He is living in the city this winter.
Question. I repeat the question I put some time ago: Have you
given us all the knowledge in your possession in relation to the subject-matter of our investigation?
Answer. I believe I have.
Question. I ask you this question in addition: Is the practice an
unusual one to sell bonds without the coupons attached to them?
Answer. They are very firequently sold without the coupons attached to them.
RICHARD SCHELL sworn.
Examination by the chairman.
Question. What business are you engaged in?
Answer. I am a broker and speculator.
Question. Do you know John B. Floyd, Secretary of War?
Answer. Yes, sir.
Question. Do you know William H. Russell?
Answer. Yes, sir.
Question Do you know J. B. Simpson?
Answer. Yes, sir.
Question. Have you had any business relations or connexions with
either of these parties pertaining to the contract of Russell, Majors &
Waddell with the government?
Answer. No, sir; neither directly nor indirectly, in any way, manner, or shape.
Question. Have either of the parties named, or their agents, called
upon you to assist them, at any time, in consummating any business
transaction, or to effect a loan of money?
Answer. I have here an account, which I will put in evidence if
you wish it, of all the transactions I have ever had with them.
Question. Please state the nature and character of your connexion
with these parties in consummating the business transactions referred
to in this account?
Answer. I was dining at this hotel. I met Russell, and he said to
me, " It has been a very tight day for money to-day."  He said he
wanted to borrow money on the security of State bonds. I told him
I would lend him money on that security; that I would get him all
he wanted. I then left him.
Question. What time was that?
Answer. I do not remember the date, but I think it was November
12 or 13; because here, on the 14th, I see he comes to me, or at least
his agent, Simpson, applied to me the next day or two after, and
wanted to borrow money of me on State stocks. He made the application for a loan of' $25,000 on $32,000 of North Carolina 6 per cent.
stocks, which he gave me, and I loaned him the $25,000. On the
16th ofNovember there was a sort of a panic, and I required $4,000
H. Rep. Com. 78-12




178           ABSTRACTED INDIAN TRUST BONDS.
additional bonds as margin.  On the same day he came into the office
and wanted to borrow money on Missouri 6 per cent. stocks. Money
was very tight that day. I told him we could not negotiate in Wall
street; but I finally said, "I could get you $12,000 on 20 Missouri
sixes, if you will allow the parties to sell them."  "Well,"' said he,
"you can make sale of them for me."  I did sell them, and obtained
71- or 72 less the coupons for January, which were off. The next
day, the 17th, I sent for $4,000 additional margin on the North Carolina sixes, which he gave to me, and which made $40,000 worth of
North Carolina stock, on which I had loaned or borrowed for him
$25,000. Then I said to him, "Now I sold $20.000 of Missouri sixes
for you yesterday; now I will take that sale and loan you the money
for sixty days, at 21 per cent. commission and 7 per cent. interest."
Said he, "I would rather do that."  " Very well," said I, " I will
do it."  Then the sale of Missouri sixes was my sale. On December
11 I sold these $20,000 of Missouri sixes, at the market price for the
day, which, in looking over the stock list fbr that day, I find was 64.
I settled with him at 64 per cent., which made $12,800, less coupons
off, $600, and less - per cent. brokerage, $50, leaving the amount
$12,150. Then I allowed him return interest and commission on the
loan for 60 days, $220, making the net worth for him $12,370. I
had loaned him $12,000. Now, then, we come to November 20. On
that day-I cannot be very positive in regard to these matters, but I
think I am right-I made him an additional loan on $25,000 worth
of North Carolina 6 per cent. stocks, of $15,000, for 63 days, 7 per
cent. interest off, and 21 per cent. commission, and then brokerage
for obtaining money, besides $125, making $500 in commissions in
all, and $183 75 interest. On December 12 he called at my office
and gave me a check certified, I think, for $14,877 50, to take up
the loan on $25,000 worth of North Carolina sixes; or, rather, he
gave me his check, and I sent to have it certified. On the 20th of
December he called and gave me a check for $24,833 41, which was,
I think, to take up the $40,000 worth of North Carolina sixes. These
are my transactions with him.
Question. Can you furnish the committee with a particular description of' the bonds that Simpson left to be hypothecated?
Answer. No, sir; I cannot. I have never been in the habit of
keeping an account in numbers of such bonds; but I will tell you
what I can if it will be of any service to you. The broker who sold
these $20,000 of Missouri sixes wrote me a note stating that, by looking at the advertisement of the Secretary of the Interior, he found
that the numbers of those bonds corresponded with the numbers advertised. I do not, however, know that fact of my own knowledge.
Question. What is the name of that broker?
Answer. Ward, Campbell & Co.
Question. Had the bonds to which you refer the January coupons off.
Answer. The $20,000 of Missouri sixes had.
Question. And the others?'
Answer, I do not know; I did not look at them specially; my impression is that some of these North Carolina bonds for April, 1861,
had the April coupons on; I cannot state positively, however.




ABSTRACTED INDIAN TRUST BONDS.              179
Question. Are the bonds you have described the only ones you ever
received from Simpson?
Answer. Yes, sir, all I have ever received.
Question. Did you ever receive any directly from Russell?
Answer. No, I never have.
Question. How did the interview occur at first between you and
Simpson or Russell?
Answer. I was here all the afternoon.
Question. Did they call upon you?
Answer. No, the meeting was accidental; I was here dining; I do
not know but what I met him in the hall; I met Russell, and I do
not know but what Simpson was with him.
Question. Was it Simpson or Russell who spoke to you about borrowing?
Answer. Russell.
Question. And Simpson came to you afterwards at the instance of
Russell?
Answer. That I do not know, and have no right to say; I have no
doubt, however, of the fact.
Question. Did either of them, at the interview which took place at
the St. Nicholas hotel, express a wish or desire to negotiate a larger
amount of bonds than that afterwards presented.
Answer. Simpson did.
Question. What amount.
Answer. I think it was $50,000 worth; that loan on $20,000 of
Missouri sixes he wanted to make $50,000; but things had come to
such a pass in Wall street that I would not go beyond $20,000 on account of the tightness in Wall street that day.
Question. What was the aggregate amount of the loan he desired
to make?
Answer. He did niot express the amount.
Question. Did Russell say to you that he had $20,000 Missouri
sixes upon which he was.adesirous of raising money?
Answer. Not to the best of my recollection. At the time I held
this conversation with him I was in hopes he might want some
$300,000 or $400,000; for as money was at that time I could have
made some $6,000 or $7,000 out of the operation; I did not care how
large an amount.
Question. Have you ever examined the description of bonds published by the Secretary of the Interior as having been fraudulently
abstracted from his department?
Answer. I have examined it generally, but not with precision,
because I had no interest in it. From that general examination I
came to the conclusion that no bond in my possession was-embraced
in the list.
Question. You say you have made a general examination of the
list, i. e., so many Missouris, so many North Carolinas, so many Tennessees, &c.?
Answer. Yes, sir.
Question. Can you now state to the committee whether you ever
saw any of these bonds to the best of your recollection?




180           ABSTRACTED INDIAN TRUST BONDS.
Answer. No, sir.
Question. Do you know where any of them are?
Answer. No, sir.
Question. Have you never met with them in the market?
Answer. I do not think I have.
Question. Did Simpson or Russell state from what source the bonds
came that they offered?
Answer. No, sir; I never asked a question.
Question. And they never made an allusion to them?
Answer. No, sir.
Question. Did you know Simpson well?
Answer. I had seen him in Russell's office.
Question. Did you know what his resources were?
Answer. I did not know, except from the money which he paid.
He gave pretty good checks, and I sent and got them certified; and
when he made loans he brought the securities in, and such as I considered pretty good securities.
Question. Did Simpson, at any time subsequently to your first
interview at the St. Nicholas to which you have referred, urge upon
you to take a larger amount of the bonds than you did take?
Answer. Never, except in the single instance I have mentioned of
$50,000 of Missouri sixes.
Question. Do you know what he did with the bonds you returned
to him?
Answer. No, sir; I have got my own impressions; but I could not
swear what he did with them.
Question. Upon what are those impressions founded?
Answer. I merely saw sales at that period of North Carolina sixes.
Question. Who made that sale?
Answer. That I do not know.
Question. Who was the broker that sold them?
Answer. I was not a member of the board, and therefore did not go
to inquire.
Question. Would an inspection of the books kept by the board of
their transactions afford any specific information as to their numbers
and dates?
Answer. I should think not.
Question. Please state the aggregate amount of bonds you received
from Simpson.
Answer. I received $65,000 of North Carolina State sixes and
$20,000 of Missouri sixes; that is all.
Question. Do you know where Simpson is?
Answer. I do not.
Question. W/Vhen did you last see him?
Answer. About a week ago.
Question. Then you have no knowledge, either directly or indirectly,
which will enable you to state where any of the bonds are which were
abstracted from the Interior Department?
Answer. No, sir.
Question. And have had no such knowledge at any time?
Answer. No, sir, no further than what I have told you of these




ABSTRACTED INDIAN TRUST BONDS.              181
$20,000 Missouri sixes, which were sold, and that I only know from
the broker.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell upon the Secretary of War which had his acceptance upon
them?
Answer. I mav have seen them; I never have dealt in them at all;
I never owned one; my impression is that I have seen one, but still
I cannot swear positively.
Question. In whose hands were they, if you ever saw them?
Answer. That I do not know; if I have ever seen them I cannot
tell in whose hands.
Question. Have you ever had any conversation with Russell in
reference to these bonds, except what you had here in this hotel?
Answer. I went into the office of Russell to see Simpson; he was
not in; I said to Russell that I understood North Carolina sixes were
down to 60, and, if that was so, I should require further margin.
Question. What was his reply to that?
Answer. That Simpson would see me; but he did not see me, for
the reason that when I came to examine closely I found I had made
a mistake of 10 per cent. on the price of the bonds.
Question. Russell seemed to know what bonds were meant?
Answer. I suppose so.
Question. You knew Simpson to be Russell's agent?
Answer. Oh! yes; I suppose so.
Question. You informed the committee, I believe, that you borrowed money upon the bonds that Simpson left you from other parties?
Answer. Yes.
Question. Please state the names of those parties?
Answer. I borrowed money of the United States Trust Company
upon North Carolina sixes; I also borrowed money of the Manhattan
Savings Institution.
Question. Can you state the dates?
Answer. It was within ten days of the dates when I made these
loans.
Question. Did you let him have your own money when you received
the bonds?
Answer. No; I borrowed the money.
Question. Where did you borrow the money?
Answer. I borrowed it of different parties; I borrowed some of
Daniel Torrence.
Question. Of what other parties?
Answer. I borrowed $4,000 or $5,000 of the Bank of the State of
New York on some of these bonds.
Question. Did you leave any of the bonds with Torrence as collateral security?
Answer. Yes, sir.
Question. Did you borrow of any other person or institution?
Answer. I gave some of the bonds to Shuchardt & Gebbard.
Question. Are these all the persons you can remember to have borrowed of'?
Answer. Yes, sir.




182           ABSTRACTED INDIAN TRUST BONDS.
Question. Did you subsequently repay the money and take the bonds
away?
Answer. Yes, sir.
Question. What did you do with them?
Answer. I gave them to the Manhattan Savings Institution and to
the United States Trust Company for the loan which was made.
Question. About how long after you received them from Simpson
did you do that?
Answer. I think within ten days.
Question. Did you take them up from these institutions subsequently
and deliver them to Simpson?
Answer. I did.
Question. These were the North Carolinas?
Answer. Yes.
Question. How about the Missouri bonds?
Answer. I took them to some broker for sale; he advanced me the
money on them and sold them.
Question. Do you know whether the persons or institutions you
have named as having these bonds kept a record of them?
Answer. Only from what I learned in reference to the Missouri sixes
from Ward, Campbell & Co., who informed me that they had received
letters stating that the $20,000 Missouri sixes were among the number
advertised by the Interior Department. I do not know the fact, but
I have no doubt they were.
Question. Did you see Russell in this city after he was arrested?
Answer. No, sir.
Question. Or immediately before?
Answer. No, sir.
Question. Did you see Simpson about the time Russell was arrested?
Answer. I saw him that afternoon; I stopped at his office, and said
I, "What does this mean?" said he, "I don't know anything about
it."
Question. And you have not seen him since?
Answer. I have seen him once.
Question. Was there nothing else said in the conversation you had
with Simpson?
Answer. No, sir.
Question. You say you saw him in his office, and asked-referring
to Russell's arrest-" What does this mean?" What object had you in
going into his office and asking that question?
Answer. You know I had made loans on North Carolina sixes and
Missouri sixes, and I did not know how it was going to affect me.
Question. Had you any knowledge or information from Russell or
the Secretary of War that one was drawing and the other receiving
acceptances?
Answer. I did not, except from the fact that at one time the matter
was talked of and seemed to be a matter of public notoriety. I never
had any transactions in reference to them myself.
Question. Did you ever receive any letter from Secretary Floyd, or
any other person in the War Office, relating to the drafts of Russell,
Majors & Waddell upon that office?




ABSTRACTED INDIAN TRUST BONDS,             183
Answer. No, sir.
Question. Then you state to the committee that you have no knowledge of any business transaction between the Secretary of War and
Russell, Majors & Waddell other than that derived from general
information?
Answer. No other; not in any manner or shape, directly or indirectly, except what I derived from the public prints.
Question. Did you ever hear any person say he held acceptances of
the Secretary of War, such as reference has been made to?
Answer. No, sir; I have heard other people say they knew somebody who held them, but that I cannot give you as evidence.
MIATHEW MORGAN sworn.
Examination by the chairman.
Question. Please state to the committee whether you have ever seen
a description of the bonds said to have been fraudulently abstracted
from the Interior Department at Washington, which was published
by direction of the Secretary of the Interior?
Answer. I have seen two bonds. These two bonds bore the numbers
advertised.
Question. In whose hands were they?
Answer. They were the only ones I have seen, and they are in the
hands of Captain Porter now. They were purchased for him. I
cannot remember exactly the date of the purchase.
Question. Can you state the numbers?
Answer. I can. Captain Porter commanded a ship which I was
interested in, and asked us to purchase North Carolina bonds for him.
We purchased two bonds bearing the dates of 873 and 875.
Question. Does Captain Porter still hold these bonds?
Answer. Yes, sir; at least he did the other day.
Question. Had these bonds the January coupons on when you purchased them?
Answer. Yes, sir. He has collected the couponis since the 1st of
January.
Question. Please state the place and time of purchasing these bonds
as near as you can.
Answer. I could not give an idea of the time, except that it was
some time after the election, which took place on the 6th of November. It was at a period when they were very much depressed, and
therefore I know it must have been after the election.
Question. What did you pay for them?
Answer. I think it was 75 or 76.
Question. Have you any knowledge, direct or indirect, where any
of the balance of these bonds are'?
Answer. None whatever.
Question. Are you a broker in this city?
Answer. No,,
Question. What is your business?
Answer. They call me a banker. My principal business is dealing




1 84          ABSTRACTED INDIAN TRUST BONDS.
in foreign exchange, and the purchase of securities for foreign account. We purchase them for anybody who comes and directs us,
however; but we do the business that comes to us in this way through
a broker.
Question. Please state the name of the broker who purchased these
two bonds.
Answer. Ward & Co. They purchased them, however, from another
broker.
Question. Where are they?
Answer. I believe their office is No. 56 Wall street.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell, and accepted by him?
Answer. I have seen one or two, but it must have been more than
twelve months ago. We buy domestic bills of exchange, and notes,
drafts, &c. I think that paper was offered to me, but I do not recollect
now by whom, or any of the particulars; I only recollect that there
was such paper offered in the market, and that I was asked if I would
purchase some of it.
Question. Do you remember who called upon you to get you to purchase some of this paper?
Answer. I do not.
Question. You never purchased any of the paper yourself?
Answer. No; and I will not be positive that I have ever seen it. I
recollect the circumstance that it was proposed to me to purchase some
of it.
Question. Do you know J. B. Simpson?
Answer. No. It is possible that I may know him when I see him,
but it could not be said that I know him.
Question. Do you know whether it was he who offered you the
drafts referred to?
Answer. I do not think it was him. You understand that when
they come into market with paper of that description, there are a
great many brokers who endeavor to make a commission by going
about and offering the paper. It is so common a thing for brokers to
come into my officie to offer bills, drafts, notes, and such things, that
it is very seldom that I recollect it, unless there is something peculiar
about it.
Question. If the January coupons had been off the bonds would
you have purchased them?
Answer. I think not, without an explanation as to what had become of them.
Question. You would have considered the absence of the coupons
as a badge of fraud?
Answer. It would have led at any rate to asking the question what
had become of them, and why they were taken off.




ABSTRACTED INDIAN TRUST BONDS.             185
JOHN H. GARLAND sworn.
Examina'ion by Mr. Harris.
Question. Are you a broker?
Answer. Yes, sir; a stock broker.
Question. Have you ever seen any descriptive list of certain bonds
of States fraudulently abstracted from the Interior Department?
Answer. I have seen some bonds that were represented to be lost,
by advertisement in the papers.
Question. Have you in your business had any transactions in any
way connected with these bonds?
Answer. I have had bonds of that description coming to me from
members of the board; bonds bought and sold at the board of brokers
and delivered to me by brokers.
Question. Do you remember what they were, and to what amount?
Answer. It would be impossible to specify without referring to my
books. I could give you the whole list of bonds which have passed
through my hands by referring to my books. These bonds, I suppose,
were in the street, and passing through the hands of the brokers
during the whole time after they were abstracted. It is possible that
some of them may appear upon my books half a dozen times.
Question. Do you know any persons connected with these transactions other than brokers?
Answer. Not a human being. I have sold bonds for parties who
are not members of the board, in the street. I have sold bonds to
Peters, Campbell & Co., and these bonds were delivered. Whether
they were bonds of that description I cannot tell, because my attention
was not directed to them at the time.
Question. Have you any knowledge indicating where any of these
bonds in question may be now?
Answer. I sold some of these bonds to a certain party in the street,
Question. How long ago?
Answer. Since the advertisement appeared.
Question. Will you state the name of' that party?
Answer. Jerome Fitzhugh & Co.
Question. Is that the only case that will enable you to speak of the
whereabouts of any of these bonds?
Answer. That is the only case. These bonds were in my possession
on the morning the advertisement, stating the numbers of the stolen
bonds, appeared. There were either nine or ten of them.
Question. Do you recollect what State?
Answer. I do not.
Question. Can you furnish the committee a memorandum of the
particulars in regard to the bonds by reference to your books?
Answer. I can.
Question. Is there any other case in which you have any idea of
where bonds are now?
Answer. There is not. I know nothing concerning the bonds except in the way of my business; in the way of abroker doing business




186           ABSTRACTED INDIAN TRUST BONDS.
on the street. The only party who ever came to me in reference to
these particular bonds was Peters, Campbell & Co., a party outside
of the board, as I have stated.
Question. I understand you to say that neither directly nor indirectly have you any knowledge, except in the instances you have
stated, as to who may have possession of any of these bonds?
Answer. Emphatically.
Question. Have you ever dealt in or seen the acceptances of the Secretary of War in favor of Russell, Majors & Waddell?
Answer. Never. I do not know the parties.
Question. Do you know Russell?
Answer. I never have seen him.
Question. Do you know J. B. Simpson?
Answer. I do not.
Question. Do you know Robert Latham?
Answer. I have khown a man by that name, formerly connected
with a bank in Washington some three or four years ago, but I do
not think I have laid my eyes upon him for twelve months.
Question. Have you ever had any transactions with him in connexion with these acceptances?
Answer. I never have had a transaction with Latham in my life.
Question. Is there any matter connected with these bonds or acceptances of the Secretary of War, within your knowledge, directly or
indirectly, that you have not communicated in this investigation?
Answer. None whatever.
Question. Do you know of whom you purchased the nine or ten
bonds to which you have referred?
Answer. I have a memorandum on my books showing of whom I
purchased them.
Question. I understand you that the party who purchased them of
you purchased them with a full knowledge of the facts connected with
this abstraction?
Answer. Certainly.
Question. And purchased them at a less rate than other bonds of
the same State sold for on the same day?
Answer. Yes, sir.
Question. They purchased them with a full knowledge that they
had been published as having been abstracted from the Interior Department?
Answer. Unquestionably they bought them with that knowledge,
under the belief, I suppose, that the government would make no reclamation, and that they would make a very good speculation by it.
WILLIAM T. COLEMAN sworn.
Examination by Mr. Conkling.
Question. You are a broker in this city?
Answer. Yes, sir; a commission merchant and broker. We do
not claim to be brokers, however; we are commission merchants.
Question. Commission merchants in what business?




ABSTRACTED INDIAN TRUST BONDS.             187
Answer. We are in the shipping business, and dealing in merchandise generally. We also deal in bills of exchange and in money.
Question. Are you a member of a firm doing business here?
Answer. I am.
Question. Of what name?
Answer. William T. Coleman & Co.
Question. Do you know J. B. Simpson?
Answer. Yes, sir.
Question. How long have you known him?
Answer. I do not recollect-for two or three years.
Question. Have you at any time received securities from Simpson
during the last year?
Answer. Yes, sir.
Question. When first?
Answer. I have been doing business with him for the last two or
three years in securities.
Question. When did you, if ever, first receive from him any State
stocks?
Answer. In October last, if I recollect right.
Question. What were they?
Answer. The first that we received were some Tennessees and some
South Carolinas, on which we negotiated a loan for him.
Question. What amount of bonds of each?
Answer. $25,000 of each.
Question. The January coupons on or off'?
Answer. The first January coupons off.
Question. Explain, if you please, the transaction in which you
received these bonds.
Answer. Simpson came to me and wanted to borrow money for 90
days, or four months; I told him I would lend him what he wanted
on call; he said that did not answer his purpose; that he could get
what he wanted on call, but he wanted to carry the loan over into the
new year, or into February; he came to us, knowing that we loaned
money, and did that kind of business; I told him we could not spare
the money ourselves for anything more than a short time, but I thought
if he wanted it I could negotiate it for him; I went to one of my banks,
but they did not want to loan for a long time, State bonds not being
a kind of security they liked; I then went to a trust company and
they readily took them.
Question. Which company?
Answer. The United States Trust Company. I proposed giving
them Simpson's name, and merely act as broker in the premises.
They did not know him, but they knew us, and said we could have
what we wanted in our own name, he being a stranger. I reported
to Simpson and told him we should have to charge 1 per cent. commission for the use of our name, but I would rather he would procure
the money in his own name; that if he would go directly to them I
would introduce him; he said he did not know them; did not know
as they would accept his name if he went. After trying to induce
us to take a smaller commission, he asked me to close the transaction,
and I went and did so.




188           ABSTRACTED INDIAN TRUST BONDS.
Question. Giving the Trust Company what besides the bonds?
Answer. A stock note, as it is called.
Question. Whose note?
Answer. Our own.
Question. What amount of bonds did you have?
Answer. $50,000.
Question. What was the amount of the note?
Answer. $35,000.
Question. What were the bonds left with them?
Answer. They were, if I recollect, $25,000.outh Carolinas and
$25,000 Tennessees. In a short time, as the political excitement
rose, the South Carolinas were not liked. There was something said
between the company and ourselves about substituting other bonds.
I mentioned it to Simpson, and he said he would give us North Carolinas, which he did, exchanging $25,000 of one for $25,000 of the
other.
Question. When was t'Lat?
Answer. I cannot give the date.
Question. As nearly as you can.
Answer. It was during November. There was afterwards a decline
in all these securities, and the Trust Company called on us for a margin. We responded and called on Simpson, and Tennessees declining
he gave us North Carolinas, so that it finally resulted in the company
holding 50 bonds of the State of North Carolina, besides the margin
which we paid in.
Question. What margin did you pay in?
Answer. Between $3,000 and $4,000.
Question. Does that complete the transaction?
Answer. It completes it up to the denouement about the bonds.
Question. What then?
Answer. I saw Simpson and asked him what he could do in the
premises. He said he could not do anything; that he was an innocent
party acting in good faith; he was satisfied that Russell would do
what would be satisfactory to us. I told him that we were merely
agents, and that we had no interest in the matter, except to serve
him; that we knew Russell pretty well, and I would like him to give
me some other securities. He said he would see. The Trust Company
called on us, and we paid them the whole amount in cash, they not
liking to hold these bonds as security. I then consulted my counsel
in the matter, and we proposed writing to the Secretary of the Interior
or Attorney General, but, after discussing the matter finally, did not.
I was afraid they would not appreciate our frankness and plain statement of the facts. I did not know but we should be published in the
newspapers as holders of these bonds; we were willing to tell all we
knew to a committee or any responsible authority, but did not want
to go into the newspapers.
Question. Then the bonds are now remaining in your hands?
Answer. In the hands of my counsel; I gave them to him.
Question.. Who is he?
Answer. Daniel Lord.




ABSTRACTED INDIAN TRUST BONDS,             189
Question. Did you examine the published numbers of the bonds
abstracted from the Interior Department?
Answer. I looked over the list, but did not examine it particularly.
Question. Will you state whether the present 50 bonds you hold
correspond with the numbers published?
Answer. I can furnish you the numbers by going to my office, if you
wish it. /ly cashier looked them over and told me that the numbers
of these bonds were included in the published list. I have not looked
at them myself particularly.
Question. Did the Tennessee bonds you held correspond with the
published numbers?
Answer. I never looked. I take it for granted, without going into
the details, that all these bonds came from the Interior Department.
Question. You knew Simpson at the time of this transaction as the
agent of Russell, Majors & Waddell?
Answer. Yes, sir.
Question. And supposed he was acting on their behalf?
Answer. Yes, sir.
Question. Have you ever seen any other bonds than those you have
spoken of, corresponding with the published description?
Answer. Not to my recollection.
Question. How long after the publication of the notice by the Secretary of the Interior before you purchased these bonds of the Trust
Company, and gave them the money?
Answer. The same day.
Question. The same day of the publication of the numbers of the
bonds?
Answer. The same day or the next day. They called on me, and
the money was paid
Question. The publication you refer to is the notice with the numbers of the bonds attached?
Answer. Yes, sir.
Question. Do you know what became of the Tennessees and South
Carolinas?
Answer. We returned them to Simpson.
Question. What became of them after that?
Answer. I do not know.
Question. Since this transaction that you speak of, when you loaned
the money, have you had any moneyed transactions with Simpson?
Answer. No, sir.
Question. Do you know where he is?
Answer. No, sir.
Question. When did you last see him?
Answer. I last saw him on the Saturday previous to this publication. I called at his office, but did not see him; then my cashier
called upon him.
Question. Will you state what your cashier informed you that
Simpson agreed to do?
Answer. He said that Simpson told him he had made other negotiations of the same sort.
Question.'Did he say with whom?




190           ABSTRACTED INDIAN TRUST BONDS.
Answer. He did not say.
Question. Do you know with whom?
Answer. I do not. And he said he was using every effort he could
to satisfy the parties, and make them good.
Question. Did he agree to substitute other securities for these?
Answer. He proposed to substitute the acceptances of the Secretary
of War, I believe.
Question. Did that complete the message which your cashier
brought you?
Answer. That was the general tenor of it. He was to see Simpson
the next morning in regard to the matter. Simpson told him he would
make it good; that it was all right; that it was perfectly straight, or
should be made so.
Question. Did you see him the next morning?
Answer. No, sir; and my cashier did not see him. In the meantime I had thought the matter over, and concluded that the bonds
were better than the acceptances, if anything. 1 consulted with
my counsel, and he agreed with me that it would not do to give them
up. If there was anything wrong about them, we concluded we would
not give them up except to the department, or with the consent of
Simpson. I went myself the next day and tried to find Simpson, to
get some additional security, and see what he would do. I went to
his office and went to his residence several times. I took the matter
in hand, but could not find him.
Question. Where was his residence?
Answer. Up town somewhere. I looked it out in the directory.
I think in East Twenty-fourth or fifth street; I have forgotten the
precise locality.
Question. Did you ever see any of the acceptances of either of the
heads of the departments?
Answer. Yes, sir.
Question. Whose?
Answer. Floyd's. I have seen a great many of them.
Question. When first?
Answer. I cannot tell you when first; a long while ago.
Question. Acceptances in favor of Russell, Majors & Waddell?
Answer. Yes, sir.
Question. In favor of any other parties?
Answer. Not to the best of my recollection.
Question. In whose hands?
Answer. In the hands of different people. In the hands of Simpson; in the hands of John J. Anderson & Co, of St. Louis, here;
and I think in the hands of a dozen people.
Question. For what purpose were they shown?
Answer. Negotiation.
Question. Did you ever buy any of them?
Answer. No, sir.
Question. Did you ever hold any of those which have been
celled?
Answer. Yes, sir.
Question. For what purpose?




ABSTRACTED INDIAN TRUST BONDS.             191
Answer. I have made negotiations upon them.
Question. For whom?
Answer. For Simpson.
Question. For what amount?
Answer. I made one negotiation for $35,000 or $40,000 on them,
and on the note of Holliday & Russell, during the summer, perhaps
in July or August last, and I think I made similar negotiations previously, but I do not remember them definitely. I know that John
J. Anderson wanted me to take some of them and to enter into negotiations with us upon them, but we never did. We have received
them from different people. Our correspondents in the west have
sent them to be placed to their credit. We have had them in our
possesion many times, but never bought one. Wea always regarded
them as irregular, and yet, from what I heard, I supposed they would
be paid.
Question. Did you ever see any letters from Secretary Floyd?
Answer. Never; I heard there were letters, but I never saw them.
Question. When last did you see any of these acceptances?
Answer. I cannot tell; not long ago.
Question. As near as you can.
Answer. Within three months.
Question. Did you in the month of December last, ultimo?
Answer. I do not recollect having seen any as late as that.
Question. When did you first know of these acceptances being protested for non-payment?
Answer. I never knew of their being protested for non-payment,
or heard of it until the last six months. I think we held some at
the time.
Question. Have you had any transactions with Winm.. Russell
during the last six months?
Answer. No, sir; I think he has been in our office about business
never consummated; we have had no moneyed transactions with him.
Question. Have you had any conversation with him in reference to
this transaction?
Answer. Never.
Question. Have you seen Russell since the exposure of the abstraction of the bonds?
Answer. No, sir.
Question. Do you know where any of these abstracted bonds are,
except those you hold?
Answer. No, sir.
Question. Have you any information in reference to the whereabouts of any of them?
Answer. No, sir.
Questioti. Do you know where, any of them have been at any time
since the abstraction?
Answer. No, sir.
Question. Have you any information?
Answer. No, sir; I would add that we sold four North Carolina
bonds and got the money a short time before this notice came out for
account of Simpson. Simpson gave us an order to close out the whole




192           ABSTRACTED INDIAN TRUST BONDS.
of them the week previous to this announcement, and our broker had
sold $35,000 of them, but they were deliverable some time afterwards.
The next week the announcement came out, and the transaction was
cut off-so that we stand now as sellers of $35,000 of these bonds
which have not been delivered.
Question. But the four bonds sold for cash were delivered?
Answer. Yes, sir.
Question. And you still hold $50,000 of them?
Answer. Yes, sir.
Question. These four being margin above that?
Answer. Yes, sir.
Question. Was that the only margin above $50,000 in these
bonds?
Answer. Yes, sir.
Question. Is there any other fact about these bonds that you know
which you have not disclosed to the committee?
Answer. Nothing, except that they came to us in what seemed to
be perfect good faith. We received them in perfect good faith and
presented them.
Question. Is there any point to which I have not interrogated you
about which you know in reference to these bonds?
Answer. No, sir.
Question. To whom were these acceptances sold?
WITNESS. The $35,000 transaction?
Mr. CONKLING. Yes.
Answer. There were three pieces of paper, either of which was
considered good, placed in the hands of C. K. Garrison. The money
was paid and the acceptances handed back.
Question. One of these papers was the acceptance of John B.
Floyd?
Answer. Yes, sir.
Question. Is that the only acceptance of his which you have negotiated?
Answer. I cannot say; we have had so many friends coming to
us with almost every description of security. I suppose, generally
speaking, we have had these acceptances offered to us a hundred
times. They have been the most common thing in the market imaginable. Before doing anything in them I went to the Bank of the
Republic, to the American Exchange Bank, and to the Metropolitan
Bank. I asked the cashier of the American Exchange Bank if he
could do anything for one of these correspondents in the way of
discounting this paper. He said they received nothing else from the
west but that paper; that their entire remittances from the west had
been in that paper, and they did not want any more.
Question. Name the party who said that,
Answer. I think it was the cashier of the American Exchange
Bank. It was the cashier of one of the banks I have mentioned.
Question. Do you know of any parties who now hold acceptances
of John B. Floyd?
Answer. I do not.




ABSTRACTED INDIAN TRUST BONDS.              193
Question. And you do not know what has become of the large
floating mass of acceptances which were circulating here?
Answer. No, I do not. Simpson nearly always told me whenever
I saw him that if any of my friends wanted to buy that paper to negotiate for him. I told him we had no faith in them at all. We
regarded the thing as an irregular transaction altogether, but that
was between the Secretary of War and them. He has frequently
asked me to enter into some transaction in them, but I always told
him it was of no use to offer them any more. He said they could
not dispose of them; that they had to fortify them by their " reserved
corps," by every other means in their possession.
Question. Did he ever explain to you the circumstances under
which the Secretary of War gave these acceptances?
Answer. Oh! yes; he went into a full explanation of all the circumstances.
ALEXANDER CAMPBELL sworn.
Examination by the chairman.
Question. What is the firm with which you are connected?
Answer. Ward, Campbell & Co.
Question. In what business is the firm of which you are a member
engaged?
Answer. We are bankers and commission brokers. One branch of
our business is to purchase and sell stocks on commission.
Question. Have you seen the publication made by the Secretary of
the Interior in reference. to certain bonds belonging to the Indian
trust fund alleged to have been stolen from his department.
Answer. Yes, sir,
Question.' Have you any of those bonds on hand?
Answer. No, sir.
Question.! Do you know of any person or persons who have?
Answer. I do.
Question. Please state what you know on that subject.
Answer. I did not expect that question to be asked, and therefore
I cannot give you all the particulars that I ought to be able to tell
you. The only knowledge I have has accrued since the appearance
of that advertisement. We have been notified by parties from whom
we have bought bonds that they have had delivered to them some of
the numbers of these bonds.
Question. Give the numbers and the parties?
Answer. I cannot give that; I will give you all the information I
have. The only knowledge I have is, that I find by my books that
there were $21,000 Missouris and either $1,000 or $5,000 North Carolinas of these bonds, of which we have been notified. I do not remember whether we discovered any Tennessees among our friends or
not. We bought, for instance, for George Smith, of Chicago, Tennessees, North Carolinas, Missouris, and all kinds of State stocks. I
think he has notified us that about $21,000 of Missouris were included
in the published list. I cannot tell whether he had any- Tennessee,
H. Rep. Co. C 8 —-13




194           ABSTRACTED INDIAN TRUST BONDS.
or not. We bought also for a bank in Washington, which has notified us of $4,000 or $5,000 North Carolinas as being among these
bonds.
Question. Do you remember the name of that bank?
Answer. No, I do not. Let me say that these bonds were all
bought in the market and the stock board for orders from our customers. The bonds were received, paid for, and delivered.
Question. Do you know who had the bonds sold in market?
Answer. Oh! no; I have not the least idea. We bought them in
open market, and received them from the different brokers of whom
we bought them.
Question. What are the names of the brokers of whom you bought
them?
Answer. I cannot inform you without referring to my books.
Question. Will the statement you propose to furnish the committee,
setting forth the number, character, and denomination of the bonds
you have dealt in, embrace all the knowledge you have with reference
to the bonds contained in the published list?
Answer. Yes, sir.
Question. State what other knowledge you have.
Answer. This is the point to which I supposed my testimony was
required. We have sold bonds, and among them are some issued by
the State of Missouri to the Iron Mountain road, the numbers of
which are included in the list published by the Secretary of the Interior, amounting to $20,000.
Question. Will you give the numbers of those bonds?
Answer. Yes, sir; they are 1870, 1872, 1873, 1874, 1875, 1876,
1877, 1878, 1880, 1884, 2037, 1808, 1809, 1879, 1882, 1883, 2039,
2040, 2041, 2042. On the 16th of November, 1860, we sold for
Richard Schell these 20 Missouri bonds, for which we paid him in
advance of the sale, i. e., we advanced money before the meeting of
the board. We advanced him $12,000 on the 20 bonds. We sold
them at the second board, and delivered them the following day,
giving a check for the balance due him of $1,250, I think it was.
We sold the bonds in open market: $9,000 to H. A. Johnson & Co.,
$5,000 to E. Whitehouse & Son, and $6,000 to Carpenter & Vermilye;
all at 72 per cent., less the January coupon.
Question. Was the January coupon off from all these bonds?
Answer. Yes; it was cut off.
Question. These bonds, of which you have given a description as
having sold, were not a part of the bonds that you purchased for
Smith and other customers?
Answer. No. These are all the bonds contained in that list of
which we have any knowledge of having sold to anybody. All I have
to say about this transaction in selling the bonds is, that it was in
the regular course of business. We paid for the bonds before we sold
them, in fact. We sold them legitimately in open market at the
price of the afternoon; and as to the purchases, of which I shall send
you a statement, they were all bought in open market, in the usual
course of business, on orders from our clients, without any knowledge
or information, or suspicion of any sort or kind, that there was any



ABSTRACTED INDIAN TRUST BONDS.             195
thing wrong about them. All these transactions occurred previous
to the publication of these bonds by the Secretary of the Interior, and
all in entirely good faith.
Question. Are you in possession of any information, either directly
or indirectly, with reference to any other of the published bonds than
those you have described?
Answer. None whatever of the slightest.
Question. Have you ever had any business transactions with J. B.
Simpson in reference to bonds?
Answer. No, sir. I do not know him.
Question. Or with Winm. H. Russell?
Answer. No. I do not know him. When I say "I," I speak of
my house; and when I say "I do not know him," I mean that the
firm does not know him.
Question. You are distinct in your recollection that you know of
no other person or persons or institution holding a portion of the published bonds?
Answer. I do not. Of course we have no knowledge of what may
have passed through our hands, but I have no information of any
sort or kind where any of the other bonds are.
Question. Have you ever seen in the market drafts drawn by Russell, Majors & Waddell upon the Secretary of War, and accepted by
him?
Answer. Not since the first and only ones that I ever did see,
which was some time in the year 1858, I think. We were asked
to negotiate some of them.
Question. By whom?
Answer. That is more than I can tell you-it is too long ago. We
were asked in reference to them, but had nothing to do with them.
Question. Do you know of any person or institution now holding
any of these acceptances?
Answer. I do not.
Question. Have you ever learned from any other person that they
were held by parties in this city?
Answer. I have no knowledge of it at all. We have been asked
at some time, by one of our correspondents in Boston, I think,
what such a paper would be sold at. We replied that we could not
tell them, and declined to say anything about it.
Question. What is the name of your correspondent in Boston?
Answer. There was a mere casual reference to the matter in the
correspondence, which attracted no notice, and I really cannot say
who was the correspondent.
The following communication was subsequently received from the
witness:
NEW YORK, January 9, 1861.
SIR: The published bonds bought by Ward, Campbell & Co., and
alluded to in my testimony yesterday, are as follows:
November 27, 1860, of W. R. Travers, $1,000 Missouri bond,
No. 2769, issued to N. M. railroad..............................  $1,000




1I6            ABSTRACTED INDIAN TRUST BONDS.
December 4, 1860, of Clark, Dodge & Co., $5,000 Missouri
bonds, issued to Pacific Railroad Company, Nos. 5306 to
5310..............................................$..0.....................  f0 00
December 5, 1860, of P. &- F. Jaudon, $15,000 Missouri
bonds, issued to Pacific Railroad Company, Nos. 5197 to
5200, 5231 to 5241...........................................  15,000
In all, 21 Missouri bonds, for George Smith, of Chicago..-....  21,000
December 22, 1860, of J. Brandon & Son, $5,000 North
Carolina bonds, Nos. 300 to 303, each $1,000, per account
of Richard Smith, cashier, Washington.........................   4,000
And No. 317, resold by us to Trevor & Colgate..............  1,000
5,000
Your obedient servant,
A. CAMPBELL.
Hon. J. N. MORRIS,
Chairman Committee U. S. H. R.
ROBERT H. LOWRY sworn.
Examination by Mr. Case.
Question. Will you state what your business is in New York.
Answer. I am cashier of the Bank of the Republic.
Question. How long have you held that position in the bank?
Answer. Nearly seven years.
Question. During that time state what knowledge you have of any
negotiations you have had at your bank of the acceptances of John B.
Floyd, Secretary of War.
Answer. I can only state, in a general way, that we have discounted
them to a very large amount, probably to the amount of three-quarters
of a million in two and a half years.
Question. As near as you can recollect,. when was the first time
when the acceptances were offered to you.
Answer. The first time such acceptances were discounted by the
bank was the 6th of May, 1858.
Question. For whose benefit were they discounted?
Answer. Russell, Majors & Waddell.
Question. Were all the discounts of these acceptances for their
benefit?
Answer. No, sir; they may, however, have been all directly or indirectly for their benefit, but we took them from brokers and other
parties who had them discounted.
Question. What was the amount of the acceptances which you discounted on the first occasion?
Answer. Two acceptances of $50,000 each, which were severally
due September 4 and October 4 of that year.
Question. What was the character of those acceptances?




ABSTRACTED INDIAN TRUST BONDS.             197
Answer. They were conditional, It has been only within the last
fifteen or seventeen months that Secretary Floyd accepted unconditionally.
Question. What was the condition attached to these acceptances?
Answer. They stated that they would be due upon the fulfilment of
a certain contract to Russell, Majors & Waddell, the sum named in
the instrument which he agreed to pay to the holder of the paper
chargeable to such an account.
Question. Did you have any communication or correspondence with
the Secretary of War relative to the payment of these acceptances?
Answer. We had no reciprocal correspondence.
Question. Did you receive any communication from the Secretary?
Answer. Yes, sir; we received a letter, of which the following is a
copy:
WAR DEPARTMENT,
Washington, May 1, 1858.
GENTLEMEN: As this department will be indebted to Russell, Majors & Waddell to a large amount, I have accepted five orders, two
calling for the sum of one hundred thousand dollars each, and three
for fifty thousand dollars each-all but two orders of the last-named
amount having been negotiated.
These acceptances will be promptly paid in pursuance of their tenor.
If you will advance the money upon their assignment of the orders to
you, I will see that the funds shall be applied to their payment.
I am, gentlemen, very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
The PRESIDENT AND DIRECTORS
Of the Bank of the Republic, New York Oity.
Question. Do you know at whose instance that letter was written?
Answer. It was written at the instance of Russell.
Question, Please explain the circumstance under which the letter
was written.
Answer. This letter was obtained from Floyd at the suggestion of
the president of the bank, in order to satisfy him and the board of
directors of the security of the acceptances.
Question. Will you state the reason why you desired something
from him?
Answer. Because we were not satisfied as to the validity of such
acceptances, although we were otherwise satisfied with the responsibility of the drawers.
Question. Please state whether you had other communications from
any person connected with the War Department with reference to
these acceptances.
Answer. There was a communication written, I believe, in reply
to a letter of the president of the bank upon the subject.
Question. From whom, was that communication?
Answer. From  W. R. Drinkard, chief clerk of the War Department.




198           ABSTRACTED INDIAN TRUST BONDS.
Question. Can you furnish a copy of that communication?
Answer. The following is a copy, underscored as in the original:
WASHINGTON CITY, July 4, 1858.
MY DEAR SIR: Yours of yesterday was received this morning. Being
Sunday, I have not access to the books or officers of the War Department, and therefore cannot give as good a reason for my opinion if I
were at this moment differently situated. I have not the slightest
doubt that the acceptances of the Secretary of War, discounted by
your bank for Messrs. Russell, Majors & Waddell, will be promptly
paid at maturity. If there had been any doubt on that point, the
Secretary of War would not have accepted them; and before accepting them, he consulted fully and freely with the officer in charge of
the quartermaster's department as to the propriety and safety of suc.h
an act.
Let me give you one idea which may possibly not have been brought
to your notice. The contract between the department and Russell &
Co. provides that for all transportation they may be required to do
they shall be previously notified by the department, and if, after being
notified, the department should not need the transportation, still Russell & Co. are to bepaid. The reason of this is obvious, because on
receiving the notice the contractors of course go to work at once to
make their arrangements. Now, it so happens that Russell & Co.
have already received the notice./or nearly all the transportation they
have contracted to do, and therefore they have an indisputable and a
certain claim to their pay. Besides this, it is very certain that the
government will require all the transportation that has been contracted for.
Further, although their bills of lading have not been received, I
feel sure that Russell & Co. have already carried at least five times
the amount of all the acceptances that have been given to them. In
a word, I consider those acceptances as good and as promptly convertible into coin at maturity as any government security, or any
paper you may have presented at your counter.
These gentlemen have a high reputation for personal and business
integrity, and I feel assured your experience will enable you to add
yours t6 this general testimony.
I am, dear sir, very truly yours,
W. R. DRINKARD.
JAMES T. SOUTTER, Esq.,
President Bank of the Republic, New York City.
Question. You say you discounted these two acceptances of $50,000
each?
Answer. We discounted one of them at the time for Russell, Majors
& Waddell; the other was discounted by another party, who had it
re-discounted at our bank.
Question. And that one was discounted before this letter of the 4th
of July was received?
Answer. It was discounted subsequent to the receipt of Floyd's letter, but prior to the receipt of Drinkard's.




ABSTR! CTED INDIAN TRUST BONDS.             199
Question. That acceptance was paid at maturity?
Answer. Yes, sir; all of them in fact-every acceptance we took.
Question. Were they paid by the Secretary?
Answer. Not directly, but through Russell, Majors and Waddell;
the paper was retired by treasury drafts and warrants, and by quartermasters' or paymasters' drafts.
Question. How recently have you' discounted any of the drafts of
Russell, Majors & Waddell?
Answer. The last one we discounted on the 26th of April, and that
was paid on the 26th of July.
Question. Have you a statement showing the number of acceptances?
Answer. I have a statement of the discounts made for them and for
other parties outside as near as I could arrive at it from a hasty glance
at our books. I think we discounted from May, 1858, to April, 1860,
these acceptances to the amount of $725,000, all of which were
promptly paid at maturity; not one of them laid over for a day.
Question. Have you any of these acceptances now?
Answer. Not a dollar; and we have not had, to the best of my recollection, fortified by an examination of our books, since the 26th of
July of last year.
Question. I ask you whether, in connexion with the negotiation of
any of these acceptances, you have received at any time collateral security in the shape of bonds?
Answer. We have not.
Question. Do vou know personally anything of the negotiation or
sale or hypothecation of these bonds alleged to have been abstracted
from the Interior Department.
Answer. No knowledge whatever.
Question. Have you seen the list of those bonds published by the
Secretary of the Interior?
Answer. I have just seen it; I have never scrutinized it.
Question. Your bank has no interest in it?
Answer. It has no interest in Russell, Majors & Waddell, or in
these bonds to the extent of one cent directly or indirectly, and never
has had an interest in any of these bonds.
Question.. Do you know J. B. Simpson?
Answer. Yes, sir; I do.
Question. How recently have you seen him?
Answer. I think it was about two weeks since.
Question. Since the publicity of this matter?
Answer. No, sir; previous to that; he said he was going to Europe
for his health, which was very much broken down; in fact, he did look
so. It was on Friday that I saw him, and he was to sail in the
steamer which left the next day.
Question. You say this paper was retired by paymasters' drafts or
treasury notes: were they forwarded to you by the paymasters themselves?
Answer. No, sir; they were generally deposited by Russell, Majors
& Waddell, through their collectors or servants, or remitted from
Leavenworth city.




200           ABSTRACTED INDIAN TRUST BONDS.
Question. Your communication was with Russell, Majors & Waddell?
Answer. Yes, or with Smoot, Russell & Co., at Leavenworth,
Kansas.
WEDNESDAY, January 9, 1861.
HECTOR MORRISON sworn.
Examination by the chairman.
Question. Please state whether you are in company with any other
person or persons, and the kind of business you are engaged in.
Answer. I am in business in the city, and constitute one of the firm
of E. Whitehouse, Son & Morrison; we are stock and exchange brokers and bankers.
Question. Do you know William H. Russell?
Answer. No, sir.
Question. Do you know J. B. Simpson?
Answer. Yes,- sir.
Question. Have you had any business transactions with him?
Answer. Yes, sir.
Question. Please state the nature and character of these transactions.
Answer. On the 9th of November last we loaned him $15,000.
Question. Upon what security?
Answer. On North Carolina State bonds.
Question. Were they hypothecated with you?
Answer. Yes, sir.
Question. Did he retire them?
Answer. They were retired, and the loan was paid on the 30th of
November. I think the loan was paid by Mr. Schell, or, at least, that
it was paid by his certified check. Both par.ties, however, were present
at the time it was paid.
Question. To whom were the bonds delivered; to Mr. Simpson or
Mr. Schell?
Answer. I think Mr. Schell took them. The delivery was intended
to be to Mr. Simpson, but I think Mr. Schell took them. I will,
however, not be positive in relation to the matter.
Question. Do you know what became of these bonds afterwards?
Answer. No, sir.
Question. Have you ever examined the published list of bonds, made
by the direction of Secretary Thompson, purporting to have been abstracted from his department?
Answer. I have, partially.
Question. Were any of the bonds referred to, in the transaction you
have named, a portion of these bonds?
Answer. I have not a record of the numbers of those bonds, and I
therefore could not tell.
Question. Were the January coupons off from the bonds youreceived?
Answer. I cannot be positive, but I think they were not.
Question. I would like you to be certain upon that point.
Answer. I cannot; nor have I any definite recollection on the sub



ABSTRACTED INDIAN TRUST BONDS.              201
ject. I think if they had been incomplete I should not have received
them as security; that is all I can say.
Question. You would have regarded the bonds as incomplete with
the coupons off?
Answer. Yes, sir; though it is not a very unusual circumstance.
Question. Would you regard it as a suspicious circumstance?
Answer. Oh! no, sir; they are very frequently cut off and discounted by persons wanting money.
Question. Have you ever had any business transaction with SMr.
Simpson, other than that you have stated?
Answer. No, sir.
Question. Did you understand from TMr.: Simpson that he was transacting that business for his own account or for some other person or
persons?
Answer. I supposed it was for himself. He gave his own notehis individual note.
Question. Do you know whether he was acting for Russell, Majors
& Waddell in that transaction'?
Answer. I do not.
Question. When did you last see Mr. Simpson?
Answer. I have no recollection of seeing him since the day he paid
that loan.
Question. You do not know where he is now?
Answer. I do not.
Question. Have you any knowledge, directly or indirectly, which
enables you to furnish the committee information of the whereabouts
of any of the bonds abstracted from the Interior Department?
WITNESS. According to that list of numbers?
Jr. MORRIS. Yes.
Answer. I think I have.
Question. Please state your knowledge.
Answer. I think I know where there is one of the Missouris. It
was purchased by us, and belongs to the Merchants' Benevolent Association of this city. It was purchased by them for an investment.
Question. Is that the only one you have any knowledge of?
Answer. I might, from our books, trace others, but I do not know
of any others now. There is one circumstance I would like to state
to you. I sold a very large amount of North Carolina bonds belonging to one of the banks in Tennessee; I sold them for the Merchants'
Bank of this city. In the fall of 1857 we made a loan to the State of
Alabama, receiving, as security, North Carolina bonds corresponding
with these numbers and with the numbers contained in the published
list, and in the meantime they have not been out of the possession of
the Merchants' Bank, except for a short time it may be in one of
the savings banks of this city.
Question. Do you know the letter of these bonds?
Answer. I do not.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell on the Secretary of War, and accepted by him?
Answer. I cannot tell; I think I have seen such acceptances.
Question. In whose favor?




202           ABSTRACTED INDIAN TRUST BONDS.
Answer. I do not remember.
Question. When and where did you see those acceptances; in whose
hands were they?
Answer. I can only speak from recollection; I think about two
years ago Mr. Simpson applied to us to make a loan.
Question. To make a loan upon those acceptances?
Answer. To make a loan on an acceptance; I cannot tell whether
there was more than one; I think there was, but I did not see but
one. It must have been more than two years ago.
Question. Is that acceptance the only one you recollect to have seen?
Answer. I think that he had more than one, but I did not see them.
Question. Did you purchase it?
Answer. No, sir.
Question. Did you advance money on it?
Answer. No, sir; we declined to take it. We doubted whether it
was legal.
Question. Have you detailed to the committee all the knowledge
you have respecting these acceptances?
Answer. I think I have. I have several times been asked questions
in regard to them, but that is to the best of' my knowledge the only
time.I have seen one of them.
Question. Have you stated to the committee all the knowledge you
have respecting these published bonds; if not, please add to what
you have already stated?
Answer. I have stated all that I am able to state from memory.
Question. Will your books furnish any additional information?
Answer. They show the numbers of the bonds that have passed
through the office, from whom they were received, and to whom they
have been delivered.
Question. Have you ever examined your books to see whether any
numbers correspond with those of the published bonds?
Answer. Our clerk has.
Question. Did he find any of them to correspond with the published
numbers?
Answer. He did.
Question. How many?
Answer.. A great many. I cannot tell how many; a large number,
including those North Carolina bonds which I have mentioned.
Question. Can you state what you did with the bonds corresponding with the published bonds in number?
Answer. We delivered them to the parties for whom we purchased
them.
Question. Who were those parties?
Answer. I cannot state without reference to our books.
Question. Will you furnish to the committee a statement of the
facts referred to by you?
Answer. I will.
Question. You say it is a very common thing to find bonds in the
market with the coupons off?
Answer. Yes, sir.




ABSTRACTED INDIAN TRUST BONDS.              203
Question. When they are presented to you in the market for sale,
do you not regard it a matter for explanation?
Answer. No, sir. It has been a very common thing, and is not
regarded as anything unusual, for the reason that they are frequently
cut off to borrow money upon.  We have received them  from
strangers.
The following statement, above referred to, was subsequently
handed in by the witness:
North Carolina.
July 23.-13, 15, and 11, received from G. Wedtfeldt, Hallett &
Co.; delivered to Ward, Campbell & Co.
July 24.-318, received from G.Wedtfeldt, Hallett & Co; delivered
to Mervin & Kunz.
August 3.-203, 296, 297, received from Meigs & Greenleaf; delivered to George Ellis.
August 4.-203, (same bond as above,) received from George Ellis;
delivered to Mervin & Kunz, August 21.
August 21. —317, received from G. Wedtfeldt, Hallett & Co.; delivered to A. D. Williams, August 21.
August 23.-316, received from G. Wedtfeldt, Hallett & Co.; delivered to C. Kowalski, August 23.
August 24.-236, 237, received from Clark, Dodge & Co.; delivered
to E. W. Hewitt, August 25.`eptember 13.-32, 33, received from Ward & Co.; sent to W. W.
Boardman, New Haven.
September 20.-51, 52, 53, 54, received from Merchants' Bank;
delivered to H. T. Morgan & Co.
September 21. —60, 62, received from Merchants' Bank; 60 delivered to T. Ketchum & Co.; 61 delivered to L. Thomas & Co.
October 22.-604, received from F. W. Worth; delivered to C. H.
Raberg.
November 24. —125, received from Lockwood & Co.; delivered to
E. W. Hewitt.
December 4.-178, 179, 180, received from Meigs & Greenleaf;
delivered to E W. Hewitt.
December 13.-191, 106, 99, 98, 97, received from Clark, Dodge
& Co.; delivered to E. W. Hewitt.
Tennessee bonds.
October 17.-210, received from Merchants' Bank, New York; delivered to Clark, Dodge & Co., October 17.
November 6.-828, received from W. & J. O'Brien; delivered to
E. H. Hewitt.
December 8.-5389, 5390, received from P. & F. Jaudon; delivered to John Sneden.




204            ABSTRACTED INDIAN TRUST BONDS.
Missouri bonds.
November 17, 1860.-Iron Mountain, 1870, 1872, 1873, 1874, 1875,
received from Ward, Campbell & Co.; 1870, 1872, 1873, 1874, 1875,
delivered to Weeks & Co., November 19.
November 22, 1860,-Iron Mountain, 2007, 2008, 2006, 2013, 2014,
received from W. R. Travers; 2007, sent to L. Cooper, Philadelphia,
December 8; 2008, 2013, delivered to H. Toland & Son, December
13; 2006, 2014, delivered to H. T. Morgan & Co., December 12.
November 30, 1860. -Iron Mountain, 1868, received from Clark,
Dodge & Co.; delivered to L. (3. Wilkins, December 1.
D1ecember 14, 1860.-Iron Mountain, 2010, received from  J. R.
Garland; sent to L. Cooper, Philadelphia.
December 15, 1860.-Hannibal and St. Joseph, 1831, received from
P. & F. Jaudon; delivered to L. A. Colin, December 17.
December 17, 1860.-Hannibal and St. Joseph, 1821, received from
Mervin & Kunz; purchased for the Merchants' Benevolent Society.
HOWELL L. WILLIAMS sworn.
Examination by the chairman.
Question. Please state to the committee what is your business in
this city.
Answer. Merchant.
Question. Wholesale merchant?
Answer. General shopping and commission merchant; also wholesale dealer in produce.  Cotton and sugar are my principal articles
of trade in the latter line of business.
Question. Are you doing business principally on your own account,
or in connexion with others?
Anmrswer. In connexion with others.
Question. Have you, as an individual, or the house with which you
are connected, examined a published list of bonds, made by direction
of the Secretary of the Interior, purporting to have been abstracted
Irom the Interior Department?
Answer. I have not; I have seen such a list in the newspapers, but
I have not gone over it to examine it.
Question. Have you any knowledge of these bonds?
Answer. No, sir.
Question. Did you ever see any of them?
Answer. Not to my recollection; I do not own any; the concern
with which I am connected does not own any, nor do they hold any
State stocks at all now.
Question. Do you know J. B. Simpson?
Answer. I do not; I may know who he is when I see him, but I
have no recollection of him now.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell on the Secretary of War, and accepted by him?
Answer. I have.




ABSTRACTED INDIAN TRUST BONDS.              205
Question. Please state when and where you saw these acceptances,
and in whose hands they were.
Answer. I saw one in November, 1859, and I think I have seen two
or three others. I saw it in the hands of a gentleman from St. Louis,
indorsed, if I mistake not, by the State Bank of Missouri. I will not
be positive, however; I am not sure who was the St. Louis party.
Question. Was it a gentleman by the name of Anderson?
Answer. I think it was Anderson; that is my impression.
Question. What was the amount of the acceptance?
Answer. $15,000.
Question. Do you know what became of it?
Answer. Yes, sir; I bought it, and was paid for it.
Question. From whom did you receive it?
Answer. I received my pay from the Bank of the Republic;' I received a check payable there, and which was certified by that bank.
Question. Do you remember the date?
Answer. No, I do not; I recollect I bargained for it on the 2d of
November. I got it, I think, on the 5th, and it was due in eighty
days from the time I bought it.
Question. Is that the only acceptance of the kind you recollect to
have seen?
Answer. I recollect to have seen others, but I did not take any particular note of them. This is the only one I ever bought. I had them
offered to me afterwards, but I Ueclined buying. - This was in November, 1859, please recollect, not 1860.
Question. Can you state to the committee whether you have within
your -knowledge such information as to lead you to believe that any
person or persons, or institution, in the city of New York now holds
any portion of the abstracted or published bonds?
Answer. Not the slightest.
Question. Or any of the acceptances referred to?
Answer. No, sir. In the case of the acceptance I speak of, I went
to Mr. Cisco and asked him about it. He said there was no doubt
about their' being paid. There were two kinds of acceptances. I
would not buy until I had that assurance from him.
Question. Did Mr. Cisco state the reasons which induced him to
believe these acceptances would be paid?
Answer. None, except that the money was coming to these parties.
Question. Did he state that the money was coming to these parties?
Answer. He said he had no doubt the money would be paid. He
said there were other bills which were drawn differently, but he had
no doubt that this one: charge for $15,000 would be paid.
Question. Did he state what induced him to make that statement to
you?
Answer. There was a difference in the wording of the drafts.
Question. Was that the reason?
Answer. One of the reasons, I suppose.
Question. Was there any other?
Answer. I do not recollect of any other.
Question. Did he state to you who he supposed would pay it?




206           ABSTRACTED INDIAN TRUST BONDS.
Answer. He did not.
Question. Who did you understand would pay it, from what he
said?
Answer. He had seen the draft himself payable at the Bank of the
Republic. I showed him the draft, and he said it would be paid.
Question. My question was, who did he say he expected would
pay it?
Answer. He did not say.
Question. Who did you understand would pay it, from what he did
say?
Answer. I understood that the Bank of the Republic would pay it.
It was payable there, and, if protested at all, it must be protested by
the Bank of the Republic.
Question. You do not mean that, because a draft is made payable
at the Bank of the Republic, it would necessarily follow that the Bank
of the Republic would pay it?
Answer. It is the presumption, when a bill is made payable at a
particular bank, that the money is there to pay it at maturity.
Question. Then it was your understanding that the draft being made
payable at the Bank of the Republic, it would be paid at that bank if
the parties drawing it, or accepting it, had the funds there to pay it
at maturity?
Answer. Yes, sir; it was presumed they would pay it.
Question. Are you acquainted with William H. Russell?
Answer. I am not; I do not know any one in the concern. If I
have seen him I do not know it.
Question. Did I understand you to say that your acceptance was
made payable at the Bank of the Republic?
Answer. It was.
Question. Do you mean that the acceptance written across the face
of the draft made it payable at the Bank of the Republic, or that the
draft was made payable at the Bank of the Republic, and then
accepted by the Secretary of War?
Answer. I presume it was Russell's draft which made it payable
there.
AUGUSTUS E. SILLIMAN sworn.
Examination by the chairman.
Question. State, if you please, the business in which you are
engaged in this city.
Answer. I am president of the Merchants' Bank.
Question. How long have you been president of that bank?
Answer. I think it- is about three years; I have been attached to
the bank a great many years.
Question. As director?
Answer. No, sir; in various capacities, from clerk up to cashier,
and finally president.
Question. Do you know J. B. Simpson?
Answer. No, sir.




ABSTRACTED INDIAN TRUST BONDS.             207
Question. Do you know William H. Russell?
Answer. No.
Question. Do you know whether the bank of which you are president has ever done any business with either?
Answer. I do not think they ever have.
Question. Have you seen an advertisement in the newspapers setting
forth a description of certain bonds alleged to have been fraudulently
abstracted from the Interior Department?
Answer. I have seen such a list and run my eye over it, but not
closely nor with any care. I looked to see whether a North Carolina
bond which we had had in our possession, No. 926, was contained in
the list, and I found that it was.
Question. Have you any knowledge of the whereabouts of any of
these bonds at this time?
Answer. No, sir.
Question. You do not hold any of them?
Answer. Not that I am aware of. I did hold bonds for the State of
Alabama, which were delivered up some six weeks ago, and the institution with which I am connected holds none at all now that I am
aware of, and I should probably know it if it did.
Question. Have you any knowledge, directly or indirectly, as to
where or by whom any of these bonds are now held?
Answer. None. It is proper to say that some of the bonds which
we held were of the same numbers contained in the advertised list.
Question. Do you refer to North Carolina bonds?
Answer. Yes, sir.
Question. Do you remember whether the bonds to which you refer
were designated by letters, such as "'A,"' B,"' C?"
Answer. I do not know that I ever looked at the bonds.
Question. Do you remember the dates of them?
Answer. I do not. The particular bond held by the Thompsons,
which is said to have come from me, was drawn, if I mistake not, in
favor of the commissioner of the State of Alabama.
Question. Is that the bond to which you refer in a former part of
your testimony?
Answer. Yes, sir.
Question. Please state the particulars in reference to it?
Answer. I know nothing about it, more than this: Mr. Thompson
came to me with this bond, which had come from me, to ascertain
how long it had been in my possession. I gave him the information,
for several years. It was in my possession, with others, as a special
deposit. I do not know the numbers, though I could, by referring to
my books, ascertain the numbers delivered up at that particular time.
These are only a portion of the bonds I held in my possession.
Question. You know the fact that that bond had been in your possession for some years?
Answer. I know that it must have been in my possession for at least
two years prior to the robbery.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell upon the Secretary of War, and accepted by him? If so,
please state all the knowledge you have pertaining to them?




'208          ABSTRACTED INDIAN TRUST BONDS.
Answer. We have had at several instances within a few years, I do
not know whether one, two, or three, acceptances of Mr. Floyd offered
to us for discount. VWho they were signed by, or what was their
character, I cannot now state. I have some general information that
it was in connexion with some western transportation contract, but it
was a character of security that we did not care to have anything to
do with. I have no recollection of any of the particulars about it
at all.
Question. Did the bank with which you are connected buy any of
them?
Answer. No, sir.
Question. Do you know who holds any of them now?
Answer. No, sir.
Question. Have you stated to the committee all the knowledge you
have, directly or indirectly, relating to the bonds said to have been
abstracted from the Interior Department, and of the acceptances made
by the Secretary of War?
Answer. Yes, sir; I recollect that in two or three instances these
acceptances have been offered to us, but it is not the character of
security that is recognized by the Merchants' Bank in its business.
Question. On the 2d of July, 1860, Riggs & Co., bankers at Washington, remitted to New York a certificate of deposit on the Merchants'
Bank for $910. Can you state to the committee in whose favor that
certificate was issued?
Answer. We can do it without difficulty by reference to our books.
The certificate was subsequently received by the committee, of which
the following is a copy:
$910.                                   MERCHANTS' BANIK,
New York, June 1, 1860.
Joseph H. White has deposited in this bank nine hundred and ten
dollars to the credit of himself, payable to his order on the return of
this certificate.
J. D. VERMILYE, Cashier.
GEO. ACHENBACH, Teller.
No. 1140.
Indorsed.
Pay to the order of Godard Bailey.
JOSEPH  EI. WHITE.
Pay to the order of Riggs & Co.
GODARD BAILEY.
Pay Bank of America, New York, or order.
RIGGS & CO.




ABSTRACTED INDIAN TRUST BONDS.             209
CHARLES A. AIEIGS sworn:
Examination by Mir. Case.
Question. Please state what is your business in this city?
Answer. It is that of a commission broker-buying and selling
stocks and bonds on commission.
Question. How long have you been engaged in that business?
Answer. About six years.
Question. Have you seen an advertisement, purporting to come from
the Secretary of the Interior, describing certain bonds alleged to have
been abstracted from his department?
Answer. I have.
Question. Have you looked over the numbers?
Answer. I have.
Question. Can you state to the committee any personal knowledge
in regard to any of these bonds-whether they have been in your
possession?
Answer. I have ascertained that several of these bonds have passed
through my hands in the way of business; I have been buying and
selling these bonds among other securities very freely.
Question. Have any of them passed through your hands or been
offered to you since the announcement of that publication?
Answer. None have passed through my hands, and I have not seen
any.
Question. Can you state what amount in all, so far as you can
identify them by the numbers, have passed through your hands?
Answer. My answer to that would be mere guess work. I should
say that $20,000 or $30,000 of these bonds have passed through my
hands; I think my attention has been called to these different numbers
to something like that extent.
Question. Have you any recollection in reference to these particular
bonds as to whether they had their January coupons off or not.
Answer. Not in respect to particular bonds. We bought and sold
bonds with the January coupons off, and the fact of their being off
from particular bonds would not be a circumstance that would attract
my attention.
Question. You do not know, then, whether these bonds were of this
description or not?
Answer. I have received bonds of these numbers with the January
coupons off, previous to the publication of this advertised list.
Question. Are you engaged in business alone?
Answer. There are two partners. The firm is Meigs & Greenleaf.
Question. Will you state to the committee whether at this time
your house holds any of these bonds?
Answer. We are holding some of these bonds at this time, belonging to our clients.
Question. To what amount?
Answer. We now hold ten of these bonds.
Question. On what State.
Answer. Missouri.
H. Rep. Comn. 78 —-14




~210           ABSTRACTED INDIAN TRUST BONDS.
Question. Can you state to the committee about what time they
were purchased?
Answer. Yes, sir; they were bought on the 22d day of December.
Question. From whom?
Answer. From John R. Garland. They were bought at the board
of brokers, on the 22d, and paid for on the 24th day of December.
Question. Have you the means of knowing from whom Mr. Garland received them?
Answer. I have not.
Question. On whose account do you hold these bonds?
Answer. They are held for the account of C. W. Purcell & Co.,
Richmond, Virginia; bought by their order and paid for by their
money.
Question. Have you any personal knowledge of the whereabouts of
any other of these bonds?
Answer. I have not.
Question. Have you seen, at any time, any of these alleged acceptances of the Secitetary of War?
Answer. I never have seen them.
Question. I will ask you this question: Have you, since this publication by the Secretary of the Interior, received from "your correspondents letters stating that bonds held by them and purchased by
you were a portion of the abstracted bonds?
Answer. Yes, sir; I have received letters stating that the numbers
of bonds held by the writers were among those advertised.
Question. Can you inform the committee from whom you have
received such letters?
Answer. Yes, sir; I can state the names of two parties who have
given me such information; the only ones that occur to me now.
One is a gentleman in Schenectady, by the name of Mitchell, and the
other a gentleman by the name of Sanders, of Haydenville, Massachusetts. These are the only two that I can recollect.
Question. What amount of bonds?
Answer. That I do not recollect. From one to three bonds in each
case.
Question. Please state whether you sold the bonds to them before
the publication of this list?
Answer. I did. Since the publication of the advertised numbers,
they are not taken.
R. BAYLES sworn.
Examination by the chairman.
Question. In what business are you engaged in this city?
Answer. I am the assistant cashier of the American Exchange Bank.
Question. Have you ever read a publication made by the Secretary
of the Interior giving a statement of certain bonds alleged to have
been abstracted from the Interior Department?
Answer. I have seen such a list published over the signature of
Moses Kelly, as chief clerk of the Interior Department.




ABSTRACTED INDIAN TRUST BONDS.             211
Question. Have you compared'that list with the bonds in possession
of the bank with which you are connected; and if so, do you find any
of the advertised bonds in your possession?
Answer. Such an examination has been made, and the bank does
not hold any such bonds.
Question. Did the examination made of your record show that you
have held any such bonds since the 1st of July last; and if so, what
amount, where did you get them, and to whom did you deliver them?
Answer. To the best of my knowledge and belief the records of our
bank show that we have not held any such bonds.
Question. Do you know of any institution in this city, or of any
person or persons holding any of the bonds referred to?
Answer. I do not.
Question. Have you any knowledge, directly or indirectly, which
will enable you to state to the committee where any of the bonds are?
Answer. I have not.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell on the Secretary of War, and accepted by him, on account
of transportation?
Answer. I have.
Question. When did you see them?
Answer. At various times, in the bank of which I am assistant
cashier.
Question. Have yo~ any of them on hand now?
Answer. I cannot say positively.
Question. What is your impression or belief?
Answer. I have no knowledge of any.
Question. Do you remember when you first received the acceptances
referred to?
Answer. No, sir; I do not.
Question. When did you receive the last of the acceptances referred
to-?
Answer. I could not give the date.
Question. Did your bank purchase or discount any of them?
Answer. My impression is that they were lodged there for collection.
Question. Are they in the possession of the bank yet?
Answer. I think they have been returned under protest.
Question. To whom returned?
Answer. To the best of my recollection they were returned to the
Farmers' Bank, Missouri.
Question. Do you remember the dates and the amounts of the ac.
ceptances?
Answer. I do not.
Question. State, as near as you can, the number, dates, and amount.
Answer. I have no recollection about the date. The amounts were,
I think, $10,000 each. I could not say how many there were, but I
think more than one.
Question. Were they hypothecated with your bank?
Answer. They were not.
Question. Have any drafts of the kind been hypothecated there?
Answer. To the best of my knowledge there have not.




212           ABSTRACTED INDIAN TRUST BONDS.
Question. Fix the time, as near as you can, when the acceptances
were protested for non-payment.
Answer. Some time in the month of December is as near as I can
come to it.
Question. Do you know J. B. Simpson?
Answer. I do not.
Question. Or William H. Russell?
Answer. No, sir.
Question. Did your bank ever have any business transactions with
either of them?
Answer. Not to my knowledge.
Question. Have you stated to the committee all the knowledge in
your possession relating to the bonds alleged to have been abstracted
from the Interior Department, and also relating to the acceptances of
the Secretary of War?
Answer. I have. I desire to correct one statement. I said none of'
the acceptances were discounted at our bank. I recollect now that
they were discounted in one or two cases by the bank.
Question. For whom were they discounted?
Answer. For the Bank of Lexington, Missouri.
Question. Have they paid the amount of the acceptances to your
bank since they were protested?
Answer. They have.
Question. As far as you know, then, the Bank of Lexington still
has these acceptances in its possession?
Answer. As far as I know.
JAMES G. KING sworn.
Examination by the chairman.
Question. Will you inform the committee what is your business in
this city?
Answer. I am a banker.
Question. Are you connected with any incorporated institution?
Answer. No, sir; we are private bankers; the firm is James G.
King & Sons.
Question. Have you seen and examined a certain publication containing a list of bonds alleged to have been abstracted from the Interior Department?
Answer. I have seen an advertisement, published originally, I
think, in the New York Herald, and signed by Moses Kelly, cuief
clerk of the Interior Department, containing a list of certain bonds
alleged to have been abstracted from the Interior Department-Missouris, Tennessees, and North Carolinas. I have not seen another
publication, which was promised, of some other North Carolina bonds,
which are also missing.
Question. Have you any of the bonds referred to in your possession?
Answer. I have; or rather my firm has bonds in their possession,
the numbers of which correspond with the advertised numbers.
Question. Of what State?




ABSTRACTED INDIAN TRUST BONDS.             213
Answer. Missouri.
Question. Will you state to the committee the numbers and
amount?
Answer. Yes, sir. My firm have five bonds, of $1,000 each, Missouri six per cents, issued to the North Missouri Railroad. The numbers are 2770, 2771, 2772, 2774, and 2775. They also have five bonds
of $1,000 each Missouri six per cents, issued to the Pacific Railroad,
the numbers of which are, 4887, 4888, 4889, 4890, and 5242. I did
not examine this statement with the bonds before me, but I have no
doubt it is correct.
Question. When did you purchase these bonds, and of whom did
you purchase them?
Answer. I will explain that my brother, who is a member of the
board, purchased these bonds. He is not well to-day, or he would
have come up here. They were bought, the first five, on the 20th of
November, of Messrs. Ward & Co., of this city; the second lot was
bought of Messrs. Peyton, Frank & Jaudon, on the 5th of December.
Question. Had the bonds to which you refer the JaDuary coupons
off?
Answer. They had at the time of delivery. They were bought at
the board, and allowance was made for the January coupons.
Question. Do you know who had them sold?
Answer. I know no more than that of those I bought of Peyton,
Frank & Jandon. I have heard nothing, and they have said nothing
further upon the subject. They do not know, I suppose, of whom they
purchased them. Ward & Co. informed me that they sold those we
purchased of them for account of the Nassau Bank, of this city.
Question. Have you any knowledge of any bank, or of any person
or persons holding any other of the bonds contained in the published
list?
Answer. No, sir. We have had our securities examined, and do
not find any others except those I have mentioned.
Question. Have you given the committee all the information that
you have, directly or indirectly, in your possession, in relation to the
bonds embraced in the published list?
Answer. I have. I will say that I have not examined whether we
have any Missouri bonds in our possession except those, but I do not
think we have.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell upon the Secretary of War and accepted by him?
Answer. I do not think I have ever seen one of those drafts. They
Lave been mentioned to us to inquire whether we would purchase them,
but I do not think I ever saw one of them.
Question. Do you know the name of any party or parties who now
hold them?
Answer. I do not.
Question. Do you know J. B. Simpson?
Answer. I do not.
Question. Did you regard the fact that the coupons were off the
bonds as a badge of fraud sufficient to put purchasers upon their
guard?




214           ABSTRACTED INDIAN TRUST BONDS.
Answer. No, sir; I think it is quite a usual circumstance to sell
bonds with the accruing coupons cut off. Sometimes they are cut off
by parties wishing to raise money on them by having. them discounted.
I should not consider that as any indication of fraud. At all events,
it would not strike me as unusual.
Question. Have you the bonds to which you refer in market, since
the publication of the list was made?
Answer. I have not. We sold these bonds previously, but we have
delivered others instead.
THURSDAY, January 10, 1861.
FREDERICK F. THOMPSON sworn.
Examination by thle chairman.
Question. Have you seen or read a publication embracing a description of' certain bonds alleged to have been abstracted from the Indian
trust fund at Washington?
Answer. I have read an advertisement in the papers-no separate
publication-I have simply read the list in the Herald. I have also
read a list of the bonds on which an injunction was served upon our
house.
Question. Have you made an examination of your books so as to
enable you to state to this committee whether you have any of those
bonds on hand?
Answer. We have one bond according to the Herald publication.
We have none of the stolen bonds on hand.
Question. Describe the bond you have?
Answer. It is a North Carolina bond, and is in the Herald list.
The number is 916, I think, but I will not be certain. But in the
list published in the Constitution, which list I have not read myself,
it is not, I understand, contained at all. As we know where the
bond has been for the last two years, I say it is not one of the stolen
bonds.
Question. Have any of these bonds passed through your hands
since July last? And if' so, please give us a description of them?
Answer. Not to my certain knowledge. No, sir.
Question. Have you a belief that any of them have passed through
your hands since that time?
Answer. I have a belief that we loaned a sum of money on some of
those bonds in October last. From the circumstance of the January
coupons being off, I believe we have had some of those bonds; the
numbers I do not know; we kept no account of them.
Question. State the amount of bonds hypothecated for that purpose,
by whom hypothecated, and the amount of money loaned on them?
Answer. On the 16th day of October, or thereabouts, Mr. Jerome
B. Simpson came into our office and borrowed a sum of money. He
borrowed $35,000 on $25,000 Missouri bonds, and $25,000 South
Carolina bonds. I-e gave us his note for the amount. Before giving
a check for the amount I examined the bonds and found they had the
January coupons cut off, I asked him why that was done, and he said




ABSTRACTED INDIAN TRUST BONDS.             215
they were retained by the parties for whom he was making the loan.
He made the loan in his own name; I did not ask him, that I remember, who he made it for. On the 29th day of' October, or thereabouts,
at any rate near the end of October, we called upon Mr. Simpson to
pay us the loan. He paid the money, or rather he said that his check
would probably not be good, and at his request I took the bonds, and'
went down the street with him. William T. Coleman gave me their
check for the amount. I gave him  the bonds, and Mr. Simpson
executed to them another note, I think.
Question. Is that the only transaction of the kind you ever had
with Mr. Simpson?
Answer. Yes, sir; the only one I can remember, certainly the only
one within the last six months. Mr. Simpson has several times wanted
to borrow money on bonds, but we have never loaned except on that
occasion.
Question. Do you know whether Mr. Simpson was transacting
business on his own account, or as the agent of another?
Answer. It was generally in his own individual name.
Question. Did you ever hear him say he was the agent of Russell,
Majors & Waddell?
Answer. I always understood he was when he signed for them. We
always understood that he negotiated the New York end of their
business.
Question. That he was their agent here?
Answer. Yes, sir.
Question. Do you know anything about his individual means?
Answer. No, sir, nothing whatever.
Question. When did you first become acquainted with him?
Answer. [ think I first became acquainted with him about a year
and a half ago; but it would be impossible to state with any precision,
as he has been in and out of the office a great deal, when I did first
become acquainted with him.
Question. Do you know where he is now?
Answer. No, sir; I have not seen him for several weeks.
Question. Have you any knowledge, direct or indirect, where any
of the bonds are published in the list prepared by the direction of the
Secretary of the Interior?
Answer. No, sir.
Question. Have you ever seen any of those bonds other than those
you have described?
Answer. I do not know that I have seen any of them, because I do
not know the numbers. These are the only ones I suspected of being
among the stolen bonds. The one we still have in our possession I
have stated is not one of those bonds.
Question. Of whom did you purchase that bond?
Answer. I do not know.
Question. When did you buy it?
Answer. That I do not know either.
Question. Have you offered it for sale since the publication of the
list?
Answer. No, sir; not to my knowledge.




216           ABSTRACTED INDIAN TRUST BONDS.
Question. Have you ever heard any person or persons say they had
any of these bonds? If so, give us the name of such person or persons, or corporation.
Answer. No, sir, I have not.
Question. Was that bond bought on your own account, or for some
correspondent?
Answer. For ourselves.
Question. Is there any written correspondence in your office between yourselves and Russell, Majors & Waddell, Jerome B. Simpson,
or the Secretary of War, relating to business transactions?
Answer. No, sir; relating to nothing. I do not think we have
got the signatures of' any of these parties excepting, perhaps, that of
Simpson to notes or checks.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell on the Secretary of War and accepted by him?
Answer. No, sir.
Question. Do you know of any corporation, person, or persons, who
now have any such acceptances in their possession?
Answer. No, sir; I have heard of such acceptances, but I have never
seen one, that I am aware of. I have seen in the newspapers that a
bank down in Lynn, Massachusetts, had some of them, but I do not
know where they are.
Question. Have you given this committee all the information you
have in reference to the bonds and acceptances referred to?
Answer. I believe I have.
Question. You know of no matter or thing pertaining to them that
you have not stated?
Answer. No, sir.
STEPIIEN L. MILES sworn.
Examination by the chairman.
Question. With what bank are you connected in this city?
Answer. With the City Bank.
Question. In what capacity?
Answer. As an accountant.
Question. How long have you been connected with that bank?
Answer. About ten years.
Question. Will you state whether there was transmitted to you, on
or about the 12th of July, 1860, the check of Wm. Peyton?
Answer. We have no account with any person by that name; neither
have we received any check of his that we can trace at all.
Question. Have you examined the published list, authorized to be
made by the Secretary of the Interior, of certain bonds alleged to have
been abstracted from the Interior Department?
Answer. I cast my eye over it, but not with a view of examining it
at all.
Question. Do you know where any of the bonds embraced in that
list are?
Answer. No, sir.




ABSTRACTED INDIAN TRUST BONDS.              217
Question. Did you ever see any of them?
Answer. Not that I have any knowledge of.
Question. Did you ever see any drafts drawn by Russell, Majors &
Waddell upon the Secretary of War, and accepted by him?
Answer. No, sir.
ROBERT W. LATHAM sworn.
Examination by the chairman
Question. Please inform the committee in what business you are
now engaged, and in what business you have been engaged for the
last two or three years.
Answer. I am engaged as an agent or attorney for any person who
chooses to employ me, and have been for several years-since 1855, 1
believe.
Question. Do you mean by the word I" attorney " to be understood
that you are engaged in the practice of the legal profession?
Answer. No, sir.
Question. What do you mean by it?
Answer. I simply mean that if you give me the power of attorney
to act for you I would do so.
Question. Have you been engaged as the agent or attorney, in the
sense in which you use the term, of John B. Floyd, late Secretary of
War, within the last three or four years?
Answer. I was engaged for him in business up to May, 1859, I
think, when I retired from his business.
Question. From what time?
Answer. From about the time he commenced his term of office as
Secretary of War.
Question. Was the character of the business he intrusted to you of
a public or private nature?
Answer. He never intrusted to me any public business at all; I
never had anything to do with his public affairs.
Question. Then you were his private attorney?
Answer. Yes, sir.
Question. What was the nature of the business you transacted for
him?
WITNESS. YOU would find the nature of my business in my testimony
before the Haskin committee, I think.
Question. Please answer the question.
Answer. I attended to any private business that he wanted me to;
his coal mines, or any of his other private affairs.
Question. Did you receive and pay out money for him?
Answer. Yes, sir.
Question. To what amount?
Answer. I cannot say.
Question. State the amount as near as you can.
Answer. I could not give you any particular idea about the amount
I received and paid out.
Question. Was it as much as $225,000?




218           ABSTRACTED INDIAN TRUST BONDS.
Answer. Yes, sir; while I was agent for him it was more than that
amount.
Question. How much more?
Answer. I could not tell how much more without looking at my
books.
Question. Was it as much as $50,000?
Answer. I could not say how much it was without examining my
books.
Question. Can you tell by an examination of your books?
Answer. I probably might do so, though some of. my accounts I
have not got.
Question. Was it as much as $50,000?
Answer. Mly answer to that is, that I could not say without an
examination.
Question. Could you not say whether it was as much as that?
Answer. No, sir.
Question. Can you inform the committee whether it was more than
that?
Answer. No, sir; I could not.
Question. Have you your books so convenient that you could refer
to them?
Answer. I have not.
Question. Where do you keep your books?
Answer. I do not have a regular set of books.
Question. Then you keep memoranda of your business transactions
instead of books?
Answer. I make memoranda.
Question. Have you, then, memoranda of' these transactions that you
can refer to and give the committee definite information in regard to
the subject-matter of their inquiry?
Answer. No, sir; unless I went into a calculation, I could not
answer.
Question. To what books did you refer when you stated that you
could not make an answer without examining your books?
Answer. I referred to my books and memorandums. I have a book
in which I keep my memorandums and accounts, but I have not, as I
said, a full account of my dealings with Mr. Floyd.
Question. Did you keep your business transactions with him in your
recollection, without making any entry of them at all?
Answer. No, sir.
Question. Was your authority to transact his business of a general
or specific character?
Answer. At one time it was of rather a general character, but he
generally gave me specific directions in reference to each transaction?
Question. Was that authority in writing or verbal?
Answer. I do not think I ever had any written authority from him.
Question. Do you mean to be understood as saying that it was
sometimes a general and sometimes a specific authority?
Answer. I say that it was sometimes very general, but that he
usually gave specific directions when any particular matter was to be
attended to.




ABSTRACTED INDIAN TRUST BONDS.              219
Question. Did he intrust to you the management of his business
generally, without limit?
Answer. Oh! no, sir.
Question. What business, then, did you transact for him?
Answer. Any business thathe wished me to.
Question. What was that business? Please inform the committee
more definitely than you have done upon that point.
Answer. If he wanted me to raise $1,000, he would ask me if it
could be done.
Question. And you would negotiate the monetary matter for him?
Answer. If I could.
Question. Have you or not received and paid out within the last
four years a large amount of money fbr John B. Floyd?
Answer. I ceased to be his agent in May, 1859. We then had a
difficulty, a dispute, or a falling out-in fact, a very bad falling outand I threw up his business entirely and ceased to be his agent.
Question. You have not answered my question.
Answer. I am coming to that. You say in the last four years. I
have stated that I did receive, by borrowing, and pay out for him, a
considerable sum of money, and I said that I supposed it to be near
$25,000.
Question. WVas it not much larger than that amount?
Answer. It may have been.
Question. What is the best of your recollection upon that point?
Answer. I have no idea, and could not speak definitely without
going into an examination of' my accounts, or of my memoranda, as
I have them upon my books.
Question. Did he pay you commission upon the business you did
for him?
Answer. No, sir, not usually.
Question. Were you employed at a salary of so much per annum?
Answer. He promised to pay me a salary for attending to his business, but he had not been able to do so at the time I left him.
Question. What was the amount of that salary?
Answer. He first proposed to pay me $4,000 per year.
Question. Where are the books and memorandums you refer to,
containing a statement of the business transactions you.lad with Mr.
Floyd?
Answer. I suppose I could get them.
Question. Will you be kind enough to do so, and refer to them, so
that you can give the committee definite information touching the
matter of which I have inquired?
Answer. I must say that there must be some other authority to
require me to render an account of my private transactions. They
have nothing at all to do with the government.
Question. Will you make out that account and furnish the committee with it?
WITNESS. When will the committee want it?
Mr. MORRIS. As soon as possible.
Answer. I suppose I could make them out.




220           ABSTRACTED INDIAN TRUST BONDS.
Question. You have not yet answered my question as to where the
books and memorandums are?
WITNESS. I answered by saying I supposed I could get them.
Question. My question is, where are they?
WITNESS. I must ask the committee to excuse me from answering.
Question. Do you decline answering the question?
WITNISS. Do you decline to excuse me from answering?
Mr. MORRIS. I do.
WITNESS. Then I must say that, believing the subject of the question is one with which the committee has nothing to do, I must decline to answer.
Question. Do you keep these books or memoranda in Washington,
or at your residence in this city?
WITNESS. In reference to the accounts or books containing the accounts of my private business with Governor Floyd, or anybody else,
I decline to answer.
Question. Did you keep the memoranda to which you refer in Washington or in the city of Brooklyn?
WITNESS. I decline to answer.
Question. Have you now got these books and memoranda referred
to in your possession?
WVINESS. I decline to answer.
Question. Have you these books or memoranda now in this (your)
house, or about your person?
WITNESS. I decline to answer.
Question. Do these books or memoranda show from whom you received money for Mr. Floyd, and to whom you paid it?
WITNESS. I decline to answer.
Question. Have you paid any money for John B. Floyd?
Answer. If I received money from Mr. Floyd, and paid off an account against him, I suppose it is an indebtedness.
Question. Do I understand you to desire that the committee shall
so construe your answer as that you have paid off indebtedness for Mr.
Floyd?
Answer. Certainly; if I received money for him, and appropriated
it to his accounts, I paid off indebtedness.
Question. Did you, in point of fact, do that?
Answer. I did.
Question. From whom did you receive that money?
Answer. I cannot tell now from whom I received money; I do not
know what particular item is alluded to.
Question. Any money that you received?
Answer. I have borrowed money from various parties.
Question. Who did you borrow from?
WITNESS. I decline to answer.
Question. To whom did you pay moneys received for Gov. Floyd?
WVITNESS. I decline to answer.
Question. On what account did you pay money for Governor Floyd?
WITNESS. I decline to answer.
Question. On what securities did you raise the money for Governor
Floyd to which you refer?




ABSTRACTED INDIAN TRUST BONDS.             221
WITNESS. I decline to answer.
Question. Were the securities on which moneys were raised placed
in your hands by Governor Floyd, or by some other person or persons?
Answer. I have no recollection that anybody ever placed any security in my hands to raise money for Governor Floyd except Governor
Floyd himself.
Question. What was the character of the securities which he placed
in your hands on which he desired you to raise money; were they
notes, bonds, or what were they?
Answer. Governor Floyd usually placed in my hands his own notes,
sometimes indorsed by his brother-in-law. On one occasion I had a
large amount of Virginia bonds placed in my hands to raise money on.
Question. Which brother-in-law do you refer to?
Answer. Colonel Preston.
Question. You referred to Mr. Floyd's usually putting his own
notes in your hands for the purpose of raising money upon them, do
you desire to be understood that he at any time placed other paper in
your hands, such as bonds or securities other than the Virginia bonds
to which you have alluded?
Answer. I do not.
Question. Did you, in fact, raise money upon the securities which
Governor Floyd placed in your hands?
Answer. I sometimes did and sometimes did not.
Question. Did you receive money at any time upon these securities?
WITNESS. I decline to answer.
Question. Do you know whether Governor Floyd ever paid these
notes?
Answer. He has not paid all the notes on which I raised money for
him, I do not think.
Question. Has he ever paid any of them?
Answer. I expect he has.
Question. Inform the committee which notes he has paid and which
notes remain unpaid.
Answer. I cannot do that.
Question. Do you mean to be understood by your last answer as
saying that you have no information in your possession which will
enable you to answer the previous interrogatory, or that you decline
to answer it?
WITNESS. I decline to answer.
Question. Did you, in fact, raise money upon securities placed in
your hands by persons other than Governor Floyd, which money was
used for his account?
Answer. I do not know that I ever raised any money for him upon
securities placed in my hands by other parties than himselt:f.
Question. Do you know of any person or persons who had transactions with the War Department who have paid to Governor Floyd,
either directly or indirectly, any money or other consideration?
Answer. I know of no party at all who has had transactions with
the War Department who has paid Governor Floyd any money or
other consideration.
Question.. Have you or not been the medium through which money,




222           ABSTRACTED INDIAN TRUST BONDS.
at different times, has been paid to Governor Floyd by persons having
transactions with the War Department?
Answer. I know of no person or persons having dealings with the
War Department who has paid any money through me to Mr. Floyd.
Question. Do you know of any person or persons through whom
Mr. Floyd has received money from those having tranactions with
the War Department?
Answer. I have no knowledge of any such person.
Question. To the best of your knowledge and belief, have you
information which will enable you to respond definitely to the last
preceding interrogatory?
WITNESS. I decline to answer the question.
Question. Have you ever been engaged by any person or persons to
transact business for them at the War Department? and if so, please
state the names of the persons who thus engaged you, and the nature
and character of the engagement you entered into.
WITNESS. I decline to answer.
Question. Have you at any time been employed to obtain contracts
of any nature or character from the War Department by any person
or persons while John B. Floyd was Secretary of War?
WITNESS. I decline to answer.
Question. Have you at any time received a commission or compensation fiom any person or persons desirous of obtaining contracts front
the War Department?
WVITNESS. I decline to answer.
Question. Have you at any time received commissions or compensation for service indicated in the last preceding interrogatory, which
commissions or compensation you divided with any person or persons?
WITNESS. I decline to answer.
Question. If you did divide with any person or persons any commissions you received for such services, state to the committee the name
or names of the person with whom you so divided.
WITNESS. I decline to answer.
Question. Have you spent a considerable portion of your time in
Washington city since John B. Floyd was Secretary of War? and if
so, have you frequently been at the War Department?
Answer. I have spent a considerable portion of my time in Washington city, and, when there, have been frequently at the War
Department.
Question. HIave you been engaged by any person or persons to
obtain contracts from any other than the War Department?
WITNESS. I decline to answer.
Question. Do you know what the pecuniary circumstances of John
B. Floyd were at the time he became Secretary of War?
WITNESS. I decline to answer.
Question. Was he in embarrassed circumstances?
WITNESS. I decline to answer.
Question. State whether you have in your possession, either directly
or indirectly, any knowledge of the money paid or used by Governor
Floyd since he has been Secretary of War.
WITNESS. I decline to answer,




ABSTRACTED INDIAN TRUST BONDS.             223
Question. Can you inform the committee whether John B. Floyd
had not a large amount of mortgage or other indebtedness upon his
real estate in Virginia or elsewhere at the time he was appointed
Secretary of War?
Answer. I cannot.'
Question. Can you inform the committee whether he had not a
large amount of indebtedness of any other character or kind at the
time of his appointment?
Answer. I have no knowledge of the extent of John B. Floyd's
indebtedness at the time he was appointed Secretary of War.
Question. Do you know whether it was large or snlall?
Answer. I do not know the amount or extent of it.
Question. State, to the best of your knowledge, the amount or extent
of it.
WITNESS. I decline to answer.
Question. How much indebtedness has Governor Floyd paid off
since he has been Secretary, as far as you know, directly or indirectly?
WITNESS. I decline to answer.
Question. Do you not know, either directly or indirectly, that he
has paid off a large amount of indebtedness?
WVITNESS. I decline to answer.
Quetion. If he has paid off a large amount of indebtedness since
he has been Secretary of War, from whence did he receive the money,
as far as you have any knowledge, directly or indirectly?
WITNESS. I decline to answer.
Question. Do you know, and if so, please state to the committee,
whether John B. Floyd has used in and about his business money
since the time he was appointed Secretary of War?
Answer. Of course he must have used money in his business.
Question. State the amount as near as you can?
WITNESS. I decline to answer.
Question. Was the amount large or small, as far as you know,
directly or indirectly?
WITNESS. I decline to answer.
Question. State what business John B. Floyd has been engaged in
since he has been Secretary of War that would require the use of
money to any considerable amount.
Answer. He has been engaged in the salt and coal business.
Question. Where?
Answer. In Kentucky and Virginia.
Question. Has that business been carried on pretty largely or not?
Answer I do not know to what extent it has been carried on.
There are large mines.
Question. Have you ever been at the mines?
Answer. Yes, sir.
Question. And to the salt springs or wells referred to?
Answer. Yes, sir.
Question. Then you can state that the business is a small or a large
one. Do you know how many hands were employed?
Answer. I have no knowledge on that subject, but I have under



224           ABSTRACTED INDIAN TRUST BONDS.
stood that there have been from 50 to 60 hands employed and sometimes less.
Question. Who was engaged in that business with Mr. Floyd as partners, either silent or otherwise?
Answer. I think one of his brothers was livinfg there and managed
the business.
Question. Had you any interest in the business?
Answer. Not a dollar.
Question. Where are these mines?
Answer. They lie in Virginia and Kentucky. The river divides
them.
Question. What river?
Answer. The Big Sandy.
Question. Has he been engaged in the construction of dams and
other improvements in that river for the purpose of making a slackwater navigation to his mines and springs?
Answer. He has been trying to do so, I believe.
Question. Has there not been a large amount of money laid out
for that purpose?
Answer. Not that I know of.
Question. When did you first become acquainted with John B.
Floyd?
Answer. Some ten or twelve years ago, as well as I remember.
Question. Where?
Answer. In Washington city.
Question. Have you been engaged in transacting his business, more
or less, since you first became acquainted with him?
Answer. I never was engaged in transacting any of his business
until he employed me.
Question. When did he first employ you?
Answer. I think it was in February, 1857.
Question. Have you been on terms of intimate social relationship
with him since you first became acquainted with him?
Answer. Yes, sir; or rather I was on intimate terms socially with
him up to May, 1859.
Question. You spoke of having some trouble with him about that
time, what was it?
Answer. We had a misunderstanding and a separation of the intimate relationship we held previously.
Question. Did that trouble originate out of monetary transactions?
Answer. The difference between us was outside of monetary affairs.
Question. Did it grow out of social or business relations?
WITNESS. I decline to answer.
Question. Have you been on speaking terms with Governor Floyd
since the difficulty occurred to which you referred?
Answer. I have.
Question. When did you last see him?
Answer. I think I saw him last just before I left the city of Washington, which was, I think, on the morning of' the 31st December.
Question. Did you have an interview with him at that time?
Answer. Yes, sir.




ABSTRACTED INDIAN TRUST BONDS.              225
Question. State the nature and character of that interview?
Answer. It was upon general subjects.
Question. Was nothing said between you at that time in reference
to any business or official transaction?
Answer. No official transaction was referred to, and I have no
recollection of any business transaction. It was of a private character, nothing affecting the government in any way.
Question. Where did the last interview you had with Governor
Floyd take place?
Answer. At his house, in Washington city.
Question. Did he send for you to go and see him, or did you go
there voluntarily?
Answer. He did not send for me.
Question. How happened you to go there at that time 
Answer. I could not say.
Question. Was it a social or a business call?
Answer. I was going off to New York, and I called before I went
to see him.
Question. Do you mean by the last preceding answer that your call
was of a social character?
Answer. I merely called as I was going to New York.
Question. To pay him your respects?
Answer. No, sir.
Question. What was the object of your call there?
Answer. To see him and converse with him in reference to any
matter that might come up.
Question. Who was present at that interview?
Answer. His wife may have been; I do not recollect.
Question. Did the conversation between you relate to public or private matters?
Answer. We talked about secession, as well as I recollect, the dissolution of the Cabinet, &c. I do not remember the particulars.
Question. Did you talk about anything else?
Answer. I think the subject of the abstraction of bonds from the
Interior Department was talked of.
Question. What was said about that?
Answer. It was just talked about in general terms.
Question. What was said?
Answer. I could not tell.
Question. Who introduced the subject of the abstracted bonds?
Answer. I do not recollect. It was the general subject of conversation with everybody I met with in Washington about that time.
Question. Did he state to you in that conversation any particulars
in regard to the abstraction of the bonds?
Answer. He did not.
Question. You say the conversation in regard to the bonds was
general. Can you not give some of the particulars of that conversation?
Answer. I cannot.
Question. Can you give the committee any particulars in reference
to the balance of the conversation?
H. Rep. Com. 78 —15




226           ABSTRACTED INDIAN TRUST BONDS.
Answer. No, sir; I only stayed there a short time. I think I was
there not more than fifteen minutes.
Question. Did you leave immediately for New York on the close of
that conversation?
Answer. I left by the afternoon train at 3 o'clock, or thereabouts.
Question. At what time were you at Governor Floyd's house?
Answer. About 9 or half-past 9 o'clock in the morning.
Question. Have you stated to the committee, as nearly as you can,
all the particulars of the conversation which took place between you
and Governor Floyd on that occasion?
Answer. I have.
Question. You know, then, of no matter or thing connected with
or growing out of that interview which you have not detailed to the
committee?
Answer. No, sir; I have no special recollection of the conversation,
and I could not state it more definitely than I have. It was a short
interview.
Question. Did you have any other interview with Governor Floyd
on that day?
Answer. I did not.
Question. Was the conversation you had with him on that day the
first conversation you had with him on the subject of the abstracted
bonds?
Answer. It was not.
Question. When was the first conversation upon that subject?
Answer. A few days before.
Question. How long?
Answer. I think I had a conversation with him on the Friday night
before Christmas day.
Question. Had you any other conversations with him relative to
the abstracted bonds except those to which you have referred?
Answer. I had two conversations with him relative to the abstracted
bonds, though the first was of a vague and unsatisfactory character,
and could hardly be said to be upon the subject of the bonds. Governor Floyd asked me if I knew of any trust fund in the hands of Bailey
in the Interior Department which he could use. I answered promptly
that there was none. He then asked me what dealings Russell &
Bailey could have. I answered that I knew of nothing except to
speculate in Indian lands. There the conversation ended, and I heard
nothing further from him at the time.
Question. When was that conversation?
Answer. I think this conversation was on Thursday. On Friday
night I informed him that I was going to New York. He then intimated to me that there was great difficulty with Bailey & Russell —
a serious affair —and he wished me to see Russell on Saturday night
in New York, and get him to come on to Washington city as soon as
possible, and to ascertain if I could what were the facts of the case.
I came on to New York and saw Russell. He told me he had received
bonds from Bailey, and that he had until next June to return them,
but that he would go on to Washington immediately and attend to it.




ABSTRACTED INDIAN TRUST BONDS.             227
That was on Saturday night. On Monday morning Russell was
arrested.
Question. This conversation, you say, occurred on the Friday night
before Christmas?
Answer. As well as I remember.
Question. Had the facts in regard to the abstracted bonds then been
made public upon the street?
Answer. Not that I know of.
Question. Did you learn the facts first from Governor Floyd?
Answer. He threw out these intimations- to me on Friday night.
Question. Did you go back, on Saturday morning, to have another
interview with Governor Floyd about the abstracted bonds?
Answer. I did not.
Question. I understood you to answer a preceding interrogatory,
by stating that you saw Governor Floyd about 9 o'clock in the
morning?
Answer. That was more than a week afterwards.
Question. What time on Saturday did you leave for New York?
Answer. I left in the 6 o'clock, a. m., train.
Question. You have stated to the committee that, in pursuance of
the request of Governor Floyd, you met Russell-where did you meet
him?
Answer. He was telegraphed to meet me at the wharf, as I landed
with my wife in New York.
Question. Why was it necessary for him to meet you there?
Answer. It was late in the evening when I got in, and I did not
want to go away up to his house, or wherever he stayed. I did not
know exactly where he stayed.
Question. So that the only interview you had with Russell before
he was arrested was on your return to New York, Saturday night?
Answer. I went up to his office, on Monday morning, to ascertain
when he was going to Washington, and he was arrested while I was
standing there.
Question. Have you received from Governor Floyd or Russell any
letters or despatches since your last interview with each?
WITNESS. I decline to answer.
Question. If you have received any such letters or despatches, have
you them now in your possession; and if so, please state the nature
of their contents?
WITNESS. I decline to answer.
Question. How long have you known William H. Russell?
Answer. I have known him, I suppose, about two and a half years?
Question. Have you ever transacted any business for him with the
War Department?
WITNESS. I decline to answer.
Question. Have you ever negotiated for him any State bonds or
stocks?
Answer. Not to the amount of a dollar. I never saw any of the
bonds he had, and never had anything to do with them-or heard of
them until what I have related occurred.




228           ABSTRACTED INDIAN TRUST BONDS,
Question. Do you know who has negotiated any bonds or stocks for
him?
Answer. Collector Schell told me he had. He is the only one who
has told me so. I have heard a good deal floating around about them.
Question. Have you answered the interrogatory as fully as you can?
Answer. I think I have.
Question. Do you know whether he hypothecated any bonds or
securities at any time with any person or persons, or banking institutions?
Answer. I have seen Mr. Simpson in at Thompson's, but I do not
know anything about their hypothecation or present position.
Question. Did you ever see one of them?
Answer. I never saw nor handled one of them in my life.
Question. Were you ever connected in any way with any business
transaction pertaining to the bonds, if you did not see or handle them.?
Answer. None whatever. I tried my best to ascertain, when I was
in Washington, and here in New York, who were the parties who
knew anything about these bonds; and, after the best investigation I
could make, I could learn of no one, except Russell, Bailey, and Colonel
Luke Lea. They were the only three who knew anything about it?
Question. How did you know Colonel Luke Lea was connected with
the transaction?
Answer. Colonel Luke Lea told me that suspicion rested upon
several persons in reference to who was the party between Russell and
Bailey; that he had known of the transaction, and he went up and
told Mr. Thompson himself that he knew it.
Question. When was this interview between you and Lea?
Answer. It was in the cars going to New York some time ago, at
least some few days ago.
Question. Do you know where any of the abstracted bonds are?
Answer. No, sir, I do not.
Question. Have you any information, directly or indirectly, which
will enable you to inform the committee where any of the bonds are?
Answer. I have not.
Question. Have you seen drafts drawn by Russell, Majors & Waddell
upon the Secretary of War, and accepted by him?
Answer. Yes, sir, I have seen them.
Question. Where did you see them first?
Answer. I think I saw them with Russell.
Question. To what amount did he hold them?
Answer. I do not know.
Question. Do you know what he did with them?
Answer. I do not.
Question. Did you ever see them in the hands or possession of any
one else except Russell?
Answer. I do not know; but I think I have seen them in the hands
of Mr. Souter, of the Bank of the Republic. I will not be positive.
Question. In the hands of any other person or persons?
Answer. I do not recollect. I think I have seen them in Simpson's
hands. I am not much acquainted with Simpson, and I could not
state pcsitively.




ABSTRACTED INDIAN TRUST BONDS.             229
Question. Do you know where Simpson is?
Answer. I do not.
Question. When did you last see him?
Answer. I saw him at the time Russell was arrested, and I think I
have not seen him since.
Question. Did you have any conversation with him at that time in
reference to this matter?
Answer. No, sir; he was in a great state of excitement. Russell
had to be taken away, and he went with him. He said that when he
read the newspapers of the morning stating that bonds had been stolen
he did not know that Russell was implicated.
Question. Where did he go with Russell?
Answer. He went from his office to the marshal's office, I suppose.
Question. Who telegraphed Russell to meet you at the wharf?
Answer. I think Colonel Drinkard telegraphed him.
Question. Do you remember to have read one of the acceptances of
the Secretary of War? and if so, state as nearly as you can the purport of it.
Answer. I think I have read one through, but I do not recollect,
and could not state the purport of it.
Question. Did Russell ask you to assist him in raising money upon
them?
Answer. Yes, sir; he asked me about fifteen months ago to assist
him in raising money upon them.
Question. Did you do it?
Answer. Yes, sir; I did what I could.
Question. What commission did he pay for your services?
Answer. He never paid me a cent; he offered to give me a commission for my services, but not having succeeded in making a negotiation to meet his limits I did not get it.
Question. Did he ever pay you any money for aiding him in business transactions?
Answer. He has.
Question. What were the business transactions you aided him in
for which he paid you money?
WITNESS. I decline to answer.
Question. Did he engage you to induce the Secretary of War to
make acceptances?
Answer. Why, the acceptances were given before I knew anything
about them.
Question. Did you negotiate or aid him in any way in getting
facilities from the War Department.
WITNESS. I decline to answer.
Question. When did you first see the names of Russell, Majors &
Waddell, or either of them, on Governor Floyd's paper?
Answer. I have no recollection of seeing their names on any of his
paper except these acceptances.
Question. When did you first know of any business or pecuniary
transactions between John B. Floyd and Russell?
Answer. I knew that Mr. Russell had engagements or contracts at
the War Department two ce two and a half years ago.




230           ABSTRACTED INDIAN TRUST BONDS.
Question. Is that the first you know of any dealings between
them?
Answer. If I am not mistaken as to the time when I became acquainted with Russell, it was after my knowledge of his dealing with
the War Department.
Question. Do you know of any business transaction between these
two parties other than those relating to his contract for transportation?
Answer. I know of no other transactions between them.
C. A. MACY sworn.
Examination by Mr. RHarris.
Question. Will you be good enough to state with what bank you
are connected?
Answer. I am cashier of the Park Bank.
Question. Have you seen the published list of bonds alleged to
have been abstracted from the Interior Department.
Answer. I saw the list published in the Herald.
Question. Have you seen, or have you now in your bank, any of
the bonds embraced in that list?
Answer. I think not.
Question. Do you know where any of those bonds are?
Answer. I do not.
Question. Have you ever seen or negotiated any of the acceptances
of John B. Floyd, late Secretary of War, given to Russell, Majors &
Waddell.
Answer. I do not remember that I have.
Question. Have you had frequent business transactions with these
parties?
Answer. I have not.
Question. Do you know J. B Simpson?
Answer. I do.
Question. Were any acceptances of the Secretary of War offered to
you for discount?
Answer. I think we have received some of them for collection, and
perhaps for discount?
Question. Will you furnish the committee with a statement of
whatever transactions your bank has had in these acceptances?
Answer. I will send such a statement to the committee.
The following communication was subsequently received from the
witness:
THE PARK BANK, New York, January 15, 1861.
DEAR SIR: Enclosed I hand you a list of acceptances of the late
Secretary of War which have been forwarded to this bank for collection during the past year.
I also enclose a copy of a draft which this bank held for collection,
received from the Bank of Mutual Redemption of Boston, that became
due 13th instant, and was protested for non-payment. We hold one




ABSTRACTED INDIAN TRUST BONDS.               231
more for $10,000, due January 21, dated June 18, at 7 months,
number 45; indorsed by T. L. Smith, cashier, to H. P. Shed, cashier
of Bank of Mutual Redemption, from whom we received it..
I find from our books we discounted an acceptance of like character
on the 23d of August, 1859, for $10,000, which became due, and was
paid, November 1, 1859.
This was discounted for the St. Louis Building and Savings Association.
All of the acceptances were drawn, I believe, by Russell, Majors &
Waddell.
Yours, respectfully,
CHARLES A. MACY, Cashier.
ISAAc N. MORRIS, Esq.
The following is a list of notes forwarded to the Park Bank for collection, with the name of the bank from whom received, date of maturity,
and whether paid or protested:
1860.
Bank of Mutual Redemption, Boston, Feb. 5, $10,000; paid.
Do...........   do..................Mar. 11,  5,000; paid.
Do............... do............Apr. 18, 10,000; paid.
Do..................do....,...ay 20, 10,000; paid.
Do..............do........June 11,  5,000; paid.
Do....       do...     June 18, 15,000; paid.
Do................do.,.......... July 22, 10,000; paid.
Do.................do.................July 23, 10,000; paid.
Do...............do....... A....Aug. 15, 10,000; paid.
Do................. do.................Aug. 22,  5,000; paid.
Do...............do................Aug. 27, 10,000; paid.
Do................. do...........Sept. 19, 15,000; pro. &rtd.
Do....do.................Oct.  1,  5,000; paid.
Do..............do............. Oct. 29, 10,000; paid.
Do..........do.....,   Nov. 17, 10,000; pro. &rt'd.
Do................do...... Nov. 22, 10,000; pro. & rt'd.
Do...............do.......  Dec. 17, 15,000; pro. &rt'd.
1861.
Do..............do.................Jan. 13, 10,000.
Do.................. do..................Jan. 21, 10,000.
1860.
Hide &.Leather Dealers' Bank, Boston, Oct.  9, 10,000; pro. & rt'd.
"$10,000.                      WASHINGTON CITY, July 10, 1860.
" Six months after date pay to our own order at the Bank of the
Republic, New York city, ten thousand dollars, for value received,
and charge to account of our transportation contract of the 12th day
of April, 1860.
"RUSSELL, MAJORS & WADDELL.
"To Hon. J. B. FLOYD, Secretary of War."
Accepted as follows:
"No. 47.-WAR DEPARTMENT, July 16, 1860.
"JOHN  B. FLOYD, Secretary of War."




232           ABSTRACTED INDIAN TRUST BONDS.
MONDAY, January 14, 1861.
WILLIAM H. RUSSELL called.
The CHAIRMAN. Mr. Russell, your counsel have doubtless apprised
you of your rights. You are under a criminal prosecution, and I
deem it my duty to state to you that the committee do not propose to
require you to answer any questions. If you choose voluntarily to
do so you can, but if you do not prefer to do it, as indicated to you,
you Can withhold your answers.
Mr. RUSSELL. I am anxious to make a full statement in regard to
the bonds. I claim to be an honest man, and would prefer to make
out a statement of the whole transaction in writing, and have you
spread it at length on your records. I ask that as a favor from the
committee. I am under a criminal prosecution, and think it is due
to me that I should be permitted to make a full statement, though
I do not fear the result of the criminal prosecution. If the committee
prefers the statement made verbally I will make it in that way, but
I should like to make one in writing.
The witness was then sworn.
Examination by the chairman.
Question. Are you the William H. Russell of the firm of Russell,
Majors & Waddell, who held contracts with the War Department for
the transportation of army provisions?
Answer. I am, sir.
The following paper was handed to the witness, who examined it:
WASHINGTON, D. C., December 13, 1860.
We have acknowledged to have received from Godard Bailey, on
the 13th of July last, and at various times subsequently, the following bonds, viz:
Missouri 6's...................* 0...................................... $370,000
North Carolina 6's, (January and July).....................  296,000
North Carolina 6's, (April and October)......................   61,000
Tennessee 6's...................................  143,000
Making a total of......................................    870,000
which we agree to return to the said Godard Bailey, or to his
assigns, on demand.
As collateral security for the return of the above-described bonds
we have deposited with the said Godard Bailey acceptances of the
Hon. John B. Floyd, Secretary of War, to the amount of eight hundred and seventy thousand dollars.
RUSSELL, MAJORS & WADDELL.
Deliver the above-described bonds to the Secretary of the Interior.
GODARD BAILEY.




ABSTRACTED INDIAN TR ST BONDS.             233
Question. Is that your signature 5Mr. Russell?
Answer. It is, sir.
Question. You signed that receipt?
Answer. I did, sir.
Question. When and where did you first become acquainted with
Godard Bailey?Answer. I first became acquainted with him in the War Department.
Question. Who introduced you?
Answer. Colonel Drinkard.
Question. What is his given name?
Answer. I think William It.
Question. Is he chief clerk of the War Department?
Answer. Yes, sir.
Question. On what day was that?
Answer. That I cannot say positively. It was somewhere in the
neighborhood of the middle of July; I do not remember the date,
but I think that it was a little prior to the middle of July.
Question. When and from whom did you first learn that he had
in his possession certain bonds or State stocks?
Answer. That is a question which I cannot answer definitely. I
learnt it in the city of New York, on Wall street. Mr. Bailey had
been there on several occasions dealing in stocks, and in this Chiriqui
expedition. I did not even get his name right.
Question. Can you give the name of the person or persons from
whom you first learned that he had these bonds?
Answer. I do not think I could. It was the general talk on Wall
street. Mr. Bailey had been there dealing in some Florida stocks.
How or from whom he got them, or whose they were, I do not know.
Question. Who told you that Bailey had been there dealing in
Florida stocks?
Answer. That is the same question I replied to a moment ago. I
could not tell you definitely the particular person; it was common
rumor on Wall street. I heard it more especially in connexion with
the Chiriqui matter.
Question. Did you learn any particulars in referenrce to the rumors
to which you refer as to the Florida bonds and the Chiriqui bonds or
securities, as they call them?
Answer. The common rumor in New York was in connexion with
Mr. Yulee and some railroad —I do not know what; I never inquired
into the particulars; but Mr. Yulee's name was connected with it in
some way.
Question. How about the Chiriqui securities?
Answer. Well, he had them there for sale. I do not know how
he got them. I can give you a fuller explanation as to the Chiriqui
matter.
Question. Who is your agent in New York?
Answer. Mr. Jerome B. Simpson.
Question. Can you tell us where Mr. Simpson now is?
Answer. I cannot.
Question. When did you last see or bear from him?




234           ABSTRACTED INDIAN TRUST BONDS.
Answer. The day I left New York.
Question. Have you received no letter or despatch from him since
that time?
Answer. No, sir; I have received a letter from my attorney in
New York saying that Mr. Simpson had gone to Kansas, but where
he-is now I cannot tell you.
Question. From whom did you receive that information?
Answer. From Mr. Borden, my attorney.  Mr. Simpson is the
vice-president of the Pony Express Company, with which I am connected, and he thought that my arrest would ruin our business and
he went west. I have not seen him since I left New York.
Question. Can you tell us where the bonds are that yoa received
from Mr. Bailey?
Answer. I cannot, sir.
Question. Have you got any of them in your possession?
Answer. I have not, sir.
Question. Do you know whether they have been sold or hypothecated?
Answer. I think they have, sir.
Question. All of them?
Answer. Yes, sir.
Question. What portion have been sold and what hypothecated?
Answer. That I cannot tell you. This man Simpson attended to
all the business. I think most of them were sold.
Question. Do you know who holds them?
Answer. I do not, sir. I have a general idea who holds some of
them. I do not know it of my personal knowledge.
Question. Can you inform the committee who holds them?
Answer. I can give you my impression. I do not know positively
who holds them.
Question. Let us have your impression?
Answer. I am inclined to think that Mr. Richard Schell, of New
York, owns some of them.
Question. Who else?
Answer. Well, I think the United States Trust Company holds
some.
Question. Who else?
Answer. My impression is Lee, Higginson & Co., of Boston.
Question. Who else?
Answer. The Shoe and Leather Bank, of New York; I know of no
other persons or institutions holding them.
Question. Please inform the committee the amount of these bonds
held by each of the persons and institutions to which you have referred.
Answer. That is more than I can tell you, sir.
Question. Give us your impression upon that point?
Answer. Well, I think Lee, Higginson & Co. hold 41; my impression is that Mr. Schell holds 20; I think the United States Trust
Company hold an amount covering $25,000-perhaps 30 bonds; and
I suppose the Shoe and Leather Bank hold 12. That is all I know of.




ABSTRACTED INDIAN TRUST BONDS.             235
Question. Did you sell those bonds yourself or hypothecate them,
)r were they sold or hypothecated by your agent or agents?
Answer. I sold twelve to the Shoe and Leather Bank. That is the
)nly transaction I made.
Question. Were they the only ones you sold yourself?
Answer. That is all I now recollect.
Question. Who were the balance sold by?
Answer. By Mr. Simpson, or rather he had it done by brokers. I
lo not know by what brokers.
Question. Did you receive these bonds from the hands of Godard
Bailey?
Answer. I did, sir.
Question. And delivered them to Jerome B. Simpson?
Answer. Yes, sir.
Question. As your agent?
Answer. We officed together; he was our general agent, and I was
working with him.
Question. Is he your agent or one of your firm?
Answer. He is the agent of Russell, Majors & Waddell.
[At this point Mr. Russell renewed his request for time to submit
X written statement, and was answered by the chairman, after consulting the committee, that he could have any length of time he desired.
Further interrogatories were then withheld, and Mir. Russell retired.]
J. A. WILLIAMSON sworn:
Examination by the chairman.
Question. Please inform the committee whether you are engaged in
the Interior Department, and if so, what desk you occupy and how
long you have been there?
Answer. I was for six years in the General Land Office; I was then
transferred, by order of the Secretary, to the assistant appeals desk; I
revised the decisions of the Commissioner of the General Land Office;
that situation I held until the first day of January last. On the 24th day
of December, at my residence in Georgetown, I read the Baltimore
Sun, and to my surprise discovered the information relative to the abstraction of these bonds. I immediately hurried down to the department; on my arrival there I was met with an order to go, in company
with Messrs. Lammnond and Beard, into Mr. Bailey's room, which was
next to my own room, and there take charge of all the government
property, make a thorough examination of everything, and report the
result of our labors. We did so, and made a report to the Secretary,
which I believe you have before you.
Question. Were you present when the safe was opened by the Secretary?
Answer. No, sir; I was not. It was opened, if I mistake not, on
Saturday night.
Question. Can you inform the committee whether the safe in which
these bonds were kept had a double set of keys?




236           ABSTRACTED INDIAN TRUST BONDS.
Answer. Yes sir; we discovered a double set of keys in the course
of our investigation.
Question. Is it usual for safes to have double sets of keys?
Answer. Well, I cannot say personally from my own knowledge,
but I have been told by my brother-in-law, who is an agent for these
safes, that it is. In regard to these keys, permit me to say that one
set of them was made of composition and the other, I think, of steel.
Immediately after we went into the room, Mr. Beard took the coupons
which belonged to these abstracted bonds and called them off to me,
and I took a list of them; Mr. Kelly started that afternoon with a
copy of that list; the original I have in my desk. Immediately after
we got through with that work Mr. Lammond, Mr. Beard, and myself
took the packages, examined them closely, and numbered them, and I
made an inventory of the sum, and found that the safe contained
$2,525,241 82; we then made up our report of the whole contents of the
safe, signed it, and handed it to the Secretary. On the 1st day of January I received an appointment from the Secretary of the Interior detailing me to the charge of that room, and appointing me also a disbursing officer, and 1 am now on work connected with that business, such
as collecting interest which is overdue.
Question. When you took charge of that room and made the examination, how many bonds did you find had been abstracted?
Answer. Well, sir, I should say, before I answer you that question,
and before I go into Mr. Bailey's abstractions, that there was an
Indiana bond missing, and the Secretary told me thoroughly to investigate the matter. I did so, and I found that in 1857 or 1858, I think,
Mr. Bailey had addressed a letter to the Hon. Mr. Fitch, of the Senate,
relative to the non-payment of interest upon a certain set of bonds
issued in favor of the Wabash and Erie canal, but that letter was a
private letter of Mr. Bailey. Secondly, I could not find any recognition by Mr. Fitch of the reception of such bonds on our files; I immediately told the Secretary that that would have to be inquired into in
justice to Mr. Fitch. He told me to use all the means in my power,
and suggested that I should go down and see Mr. Bailey. I went
down, and Mr. Bailey informed me that he had received the letter,
but said it was not a public letter, and that is the reason why I have
not put it on file. After some persuasion, he said that he was willing
to file it in justice to Dr. Fitch, and in order to save him.  "But, "
said he, " I will not put it into your hands, nor into the hands of any
other person to file for me. I must come up and do it myself."  I
reported the facts to the Secretary when I returned, and he requested
the marshal to bring Mr. Bailey up. In',be meantime Dr. Fitch
called upon the Secretary and informed him of this transaction, and
requested that he should address a letter calling upon him (Dr.
Fitch) fbr a statement of the facts. I addressed that letter to Dr.
Fitch, and received his answer containing a statement of these facts,
which are now on file in the department.  Mr. Bailey was brought
up, and filed the letter of Dr. Fitch, acknowledging the reception of
that bond, which I have now on file in the department. That is all
I have to say in regard to the Indiana bond. That bond has not yet
been returned to the department. But Dr. Fitch is making all the




ABSTRACTED INDIAN TRUST BONDS.              237
search he can for it, according to his statement. And here I should
say that Dr. Fitch states that he received the bond for the purpose of
getting a description in order that he could make inquiries in reference
to it in Indiana, in regard to the probability of the interest being
paid, &c. That is about all I know in regard to that one bond. Now,
in regard to Mr. Bailey's operations, I find that taking out the
$870,000, confessed to have been abstracted by him, and adding to it
what we have on hand, including the Indiana bond, it balances exactly
what should have been in the safe.
Question. You have stated, Mr. Williamson, that you occupied a
room adjoining the one occupied by Mr. Bailey; can you inform the
committee whether at times Mr. Bailey kept the door of his room
locked while himself and others were in there?
Answer. I cannot say that it was locked, but it certainly was shut.
Question. Who was in the habit of visiting the room occupied by
Mr. Bailey?
Answer. Well, sir, I have seen Mr. Luke Lea go in there sometimes. I have also seen Senator Rice go in there; and then I have
seen attorneys having business with the department, as I supposed,
go in there.
Question. Was Charles G. Wagoner in the habit of going in there?
Answer. Well, sir, he has been in the habit of going in there since
this excitement, but not previous to it. In regard to keeping the
door shut, Bailey's habit or custom was, when he was cutting his
coupons off in January and July, the interest being payable then, to
keep his door shut besides the times I have mentioned.
Question. Have you given the committee all the information you
have pertaining to the bonds abstracted and the circumstances attending their abstraction?
Answer. Yes, sir; I have.
R. J. ATKINSON recalled.
Examination by the chairman.
Question. Can you furnish the committee with the information
which you supposed the other day you had in your possession showing the payments made to Russell, Majors & Waddell, on account of
army transportation, under their contracts with the War Department?
Answer. Yes, sir.
I have caused a statement to be prepared in my office of payments
made to Messrs. Russell, Majors & Waddell, on account of transportation contracts, during the years 1858, 1859 and 1860, as appears by
the vouchers in accounts of disbursing officers on file in my office, and
the result is as follows:
1858.-Payments by Captain S. Van Vliet, assistant
quartermaster of the United States army, at
Fort Leavenworth, Kansas Territory......... $2,425,378 35
Payments by Captain M. S. Miller, assistant
quartermaster, at Washington city..........   712,213 65
3,137,592 00




238           ABSTRACTED INDIAN TRUST BONDS.
(In addition to the above, the sum of $209,104 60 was paid b3
Captain Miller to " Majors & Russell," and $14,644 38 by Captain
Van Vliet to " Majors & Russell.")
1859.-Payments by Captain Van Vliet at Leavenworth........$...............................  $1,010,731 84
Payments by Captain Miller at Washington..    126,899 5C
1,137,631 34
(In addition the above, the sums of $36,771 17 were paid by Captain Miller to " Majors & Russell," and $10,074 92 to "Brown, Russell & Co.," " Brown & Russell,"' Jones & Russell," and "Majors
& Russell.")
1860. —Payments by Captain Van Vliet, at Leavenworth, up till the 1st of October..........$.. 0 252,681 91
Payments by Captain Miller, at Washington,
up till the 1st of October........................  65,934 91
318,616 82
(In addition to the above, the sum of $89,402 23 was paid by Captain Miller to " Majors & Russell.")
Question. Can you furnish the committee with an abstract showing
each payment made to Russell, Majors & Waddell, and the particulars of each payment?
Answer. I can; and the abstracts herewith submitted, numbered
1, 2, 3, 4, 5, and 6, contain the information you inquire, giving the
date of each payment, the officer by whom made, the time when
made, and to whom the payment was made.
Question. State whether or not there are not items in these accounts
that are suspended, and whether any of them have been noted for rejection; and if so, what items?
Answer. In abstract No. 2, of payments by Captain Miller in 1859,
there are payments to the amount of $9,626 44 that have been disallowed by the accounting officers. In abstract No. 6, of payments by
Capt. Miller in 1860, there are payments to the amount of $27,390 80
that are noted for disallowance in my office, but the account has not
yet been reported to the Comptroller. A voucher for payment of
$54,250 has not yet been acted on, and another voucher for $69,656 09
has also not been acted on. There are a few other small items disallowed, which are noted in the abstracts furnished and above referred to.
By Mr. CAsE. What is the nature of the voucher for $69,651 09?
Answer. It is in the nature of an extra allowance for transportation,
made by the Secretary of War. I could not give the facts in detail
without reference to the papers in my office, but if the committee desire I can furnish them.
By Mr. CASE. Can you give particulars as to any other items?
Answer. Of the items of $9,626 44, disallowed as above, and




ABSTRACTED INDIAN TRUST BONDS.              239
$27,390 80, noted for disallowance, a considerable portion is for payments made under the same authority, on account of claims which, on
examination in my office, showed had already been paid, and being a
double payment was of course disallowed.
TUESDAY, January 16, 1851.
JAMES T. SOUTTER sworn.
Examination by Mr. cHarris.
Question. Are you vice-president of the Bank of the Republic, New
York?
Answer. I am.
Question. Have you seen a list in the papers purporting to be a list
of certain bonds abstracted from the Interior Department?
Answer. I have.
Question. Have you ever seen any of those bonds?
Answer. Yes, sir.
Question. Be good enough to state under what circumstances you
saw those bonds?
Answer. I have seen bonds which I presume were some of those
bonds, because they bore the same numbers.
Question. Were they all of the same State?
Answer. Yes, sir.
Question. Of what State were they and what were their numbers?
Answer. They were Tennessee bonds, but I cannot state the numbers of them.
Question. For what amount?
Answer. $19,000.
Question. Were they presented to you for purchase?
Answer. No, sir.
Question. Under what circumstances did you see them?
Answer. They were presented to me for loan.
Question. By whom?
Answer. By J. B. Simpson. I desire to say that they were presented to me as an individual, and not as an officer of the bank. The
bank never had any of them, I believe.
Question. Did you effict a loan?
Answer. I loaned $15,000 upon them.
Question. Where are those bonds now?
Answer. They are in my possession.
Question. You do not recollect the numbers?
Answer. I do not.
Question. Were they all Tennessee bonds?
Answer. Yes, sir.
Question. Are those the only bonds of the published list you ever
saw?
Answer. There were some bonds brought to me by individuals in
Wall street, since the publication and advertisement, that had numbers corresponding to those in the published list. ~ What the numbers
were I do not know. They were brought to me by persons who had




240           ABSTRACTED INDIAN TRUST BONDS.
bought them in the streets, and, fearing that they should lose them,
came to me with them for advice. Whether they were the same bonds
I cannot say. I am convinced that some of them were not, though
they had the same numbers.
Question.'Were the coupons off the bonds you invested in?
Answer. Yes, sir; some of the bonds which were presented to me
by alarmed persons had the January coupons on, and I felt satisfied
that they could not be any of the bonds specified in the published
lists.
Question. You say some of the bonds had the January coupons on,
and from that circumstance you were satisfied they were none of the
bonds contained in the published list?
Answer. I thought so.
Question. Do you know where these bonds are?
Answer. I do not; they were presented to me by transient individuals.
Question. Have you ever seen any of the acceptances of the Secretary of War, John B. Floyd?
Answer. Yes, sir.
Question. When did you see any such acceptances?
Answer. I have seen them off and on for two years.
Question. In whose possession were they?
Answer. In the possession of Russell.
Question. Of the firm of Russell, Majors & Waddell?
Answer. Yes, sir.
Question. Under what circumstances did you see them?
Answer. They were brought to me for negotiation, and to the bank
as well.
Question. Did you negotiate any of them?
Answer. Yes, sir.
Question. Do you recollect the character of the acceptances?
Answer. I do not.
Question. Do you know that there were two classes of bonds?
Answer. Yes, sir.
Question. Were they for money earned?
Answer. One class was for money earned and the other class was for
money to be earned.
Question. Which class did you negotiate?
Answer. I am inclined to think I negotiated some of both.
Question. Did you negotiate any amount of them?
Answer. Yes, sir; a large amount.
Question. What amount?
Answer. I do not know, but I think over $100,000.
Question. How long ago was your first transaction with Russell in
regard to these acceptances?
Answer. I think it must have been in the year 1857 or 1858; it was
not earlier than 1857, and it might have been in 1858.
[A paper, of which the following is a copy, was handed to the witness:




ABSTRACTED INDIAN TRUST BONDS.             241
$10,000.                   WASHINGTON CITY, October 12, 1860.
Ten months after date, pay to our own order, at the " Bank of the
Republic," New York city, ten thousand dollars, for value received,
and charge to our transportation contract of the 12th day of April, 1860.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
Indorsed.
No. 116.                  WAR DEPARTMENT, October 13, 1860.
Accepted.
JOHN B. FLOYD,
Secretary of War.]
Question. Look at that paper, and see if that is one of the class of
acceptances which you negotiated?
Answer. I do not think it is. Its language is, " charge to our
transportation contract of the 12th day of April, 1860." Now, I have
been an invalid to a date beyond that and in my bed.
[A paper, of which the following is a copy, was handed to the witness:
$115,000.                  WASHINGTON CITY, October 23, 1860.
Out of any monies becoming due to us for army transportation in
the year 1861, under our transportation contract of the 12th day of
April last, pay to our own order one hundred and fifteen thousand
dollars, for value received, and charge to our transportation account
for moneys earned in 1861.
RUSSELL, MAJORS & WADDELL.
Hon. J. B. FLOYD,
Secretary of War.
indorsed.
WAR DEPARTMENT, October 26, 1860.
Accepted, payable according to its terms.
JOHN B. FLOYD,
Secretary.]
Question. Look at that paper, and say whether it is of the character of those you negotiated?
Answer. I think not.
Question. Did any one but Russell, upon any occasion, present those
acceptances to you?
Answer. They were frequently brought to me by persons who held
them.
Question. Had you any conversation or correspondence with Mr.
Floyd, or with any one connected with the War Office, in relation to
those acceptances?
H. Rep. Com. 78- 16




242           ABSTRACTED INDIAN TRUST BONDS.
Answer. I think I had. Such letters are in the possession of the
cashier of the Bank of the Republic, and I believe they have already
been laid befbre the committee.
Question. That is the only correspondence with the War Department that you recollect of?
Answer. It is.
Question. Did that satisfy you to negotiate the acceptances?
Answer. It did.
Question. You understood that the department would see that they
were paid?
Answer. Yes, sir.
Question. Are you able to say what was the amount of the acceptances that you spoke of as having been seen by you about the year
1857?
Answer. No, sir. I can only say that they were more than $100,000,
and I should think probably they were as much as $200,000.
Question. Do you speak now of those presented at one single time?
Answer. No, sir; but of the gross amount.
Question. Were all of those that you negotiated paid?
Answer. Yes, sir.
Question. Were the acceptances presented to you for negotiation
all from the War Department?
Answer. They were.
Question. Do you know where Mr. Simpson is?
Answer. I do not.
Question. Are you able to indicate any person in whose possession
any of these bonds are at this time, or in whose hands they are likely
to be?
Answer. I cannot; but there were certain three or four parties who
had, or professed to have had small amounts of them; but who they
were I do not remember. They were unknown to me.
Question. Have you any one of those acceptances which you negotiated about 1857 in your possession; or are they all paid?
Answer.'khey are all paid.
Question. Try to give the committee the tenor of one of those acceptances, as near as you can?
Answer. I should think they were precisely like the first acceptance
you handed to me, up to the words " value received."
Question. In what respect did they differ from that?
Answer. I think they then went on to state, "out of money due
them" in certain months, naming the months. That is one class.
The other class was to be paid out of moneys to become due "' under
our contract."
By Mr. THOMAS:
Question. State the terms and manner of making the loan to Mr.
Simpson on the $19,000 of bonds.
Answer. About the 8th of October I loaned Simpson $15,000 on
$19,0u0 of Tennessee bonds, for his note, without other security, at
simple interest, seven per cent.




ABSTRACTED INDIAN TRUST BONDS.              243
General J. E. JOHNSTON recalled.
Examination by the chairman.
Question. The committee have been furnished by Mr. Atkinson,
Third Auditor, with a statement showing the amount of money paid
at different times to Russell, Majors & Waddell, on account of their
army transportation contracts, up to the 1st of' October, 1860.  Will
you be good enough to state, if you can, what amount has been paid to
them by.the government since that date, as nearly as you can?
Answer. The requisitions of' the officer paying those accounts
amounted, for the whole year, to $488,000. A little more than
$65,000, besides, was paid in the city of Washington.  That last sum
is included in the Third Auditor's statement. Theamount of the
requisitions for payments at Fort Leavenworth was $488,000 for the
year 1860. The difference between the amount of those two sums
and that given by the Third Auditor will give the amount of the
requisitions for the last quorter of the year.
Question. Please examine the statement of the Third Auditor, and
tell us the amount of that difference?
Answer. $318,616 82 is the sum reported by the Third Auditor as
paid up to the end of the third quarter of last year. The amount of
the requisition from Fort Leavenworth is $488,000. To that should
be added. $65,934 91, which was paid here. Subtract the Auditor's
statement from the amount of those two sums, and you have the
amount for the last quarter, which is $235,318 09, the sum paid since
the ist of October.  We have not yet the evidence of the payments,
because they are due after the end of December, and the officer, who
has large accounts to make up, is allowed three weeks from the beginning of January to make up the account; so that we shall not
get them until February. I ought to state that about the 12th of
December I ordered that officer to pay no more to Russell, Majors &
Waddell, and I shall not be able to say whether any part of that
requisition was withheld until I receive his account. There could
have been, however, a very small portion. The amount of his requisition for December was $22,000 only, and possibly $22,000 of the
sum I have given here may have been withheld.
FRIDAY, January 18, 1861.
General J. E. JOHNSTON was recalled, and testified as follows:
Examination by Mr. Harris.
Question. Are you able to furnish the committee with the information you were asked for when you were before the committee on a
former occasion?
Answer. Yes, sir. On that day I asked Captain Van Vliet, by telegraph, to report to me the amount of his payments to these contractors,
Russell, Majors & Waddell, made during the last quarter of the year
1860. His reply has been received.




244             ABSTRACTED INDIAN TRUST BONDS.
Question. Have you the papers with you giving you that information?
Answer. Yes, sir. The following is the reply received from Captain Van Vliet:
"' FORT LEAVENWORTH, January 17, 1861.
"The amount of my payments to Russell, Majors & Waddell, during
the last quarter of eighteen hundred and sixty, was one hundred and
seventy-five thousand eight hundred and sixty-four dollars and twenty
cents; the last payment was made November twenty-sixth.
"STEWART VAN VLIET,'" Captain, Assistant Quartermaster.
" General J. E. JOHNSTON, Quartermaster General."
"A true copy.
"J. E. JOHNSTON,
" Quartermaster General."
I have also here a statement of Captain Van Vliet's monthly estimates of the amounts required to pay for the services of these contractors, which is as follows:
Amounts estimated for by Captain S. Van Vliet to pay for transportation of stores to and in New Mexico, and Forts Larned, [Zise, and
Biley.
1860.
February..................................  $8,879 46
May............................................  12,579 85
June............................................      52,276   93
July.........................................  84,543 72
September..................................... 121,943 39
$280,223 35
October....................................... 123,670 14
November.................................... 62,063 66
I)ecember................................... 22,662 79
208,396 59
488,619 94
Due, $23,750 49, of which $17,134 20 is on indorsed bills of lading
received at Fort Leavenworth.
Question. I observe that these estimates of Captain Van Vliet show
for October, 1860, the amount of $123,670 14; for November,
$62,063 66; for December, $22,662 79, making an aggregate of
$208,396 59, and the statement of Captain Van Vliet shows th  payment, during the last quarter, of $175,864 20.  I observe that Captain
Van Vliet says that the last payment was made on the 26th of November. Do you know what additional amount was earned by them,
or was paid to them, at the close of the quarter ending the 31st of
December?




ABSTRACTED INDIAN TRUST BONDS.             245
Answer. Yes, sir; the amount earned by them is $23,750 49.
Questiorn. Then I understand you that the whole amount known to
be due them up to the close of the quarter ending December 31, 1860,
was $199,614 75?
Answer. Yes, sir.
Question. Will you state whether the whole amount was paid; and
if not, how much of it was retained?
Answer. The sum of $23,750 49 has been retained in consequence
of this transaction; an order for that purpose having been given by
the Secretary of War on the 12th of December.
Question. Are you able to state whether these payments which were
made, together with the amount ascertained to be due and retained
under that order, cover the whole indebtedness of the department to
those parties under their contract, on the 31st of December.
Answer. No, sir; they are contractors for transportation, also, in
New Mexico, and they may have done additional service during the
quarter, the account of which has not been rendered.
Question. Can you inform the committee the probable amount that
may be due them on that branch of the service?
Answer. No, sir.
Question. Can you give an approximate amount?
Answer. No, sir. There is an Indian war going on in New Mexico, so that things have not been going on there as usual. Under
ordinary circumstances I could give an approximate amount.
Question. Can you tell the committee about the amount the government owed them, or was likely to owe them, on the 31st December,
1860?
Answer. I do not think it could have much exceeded the estimates
furnished by Captain Van Vliet for the three months of October, Novemnber, and December, as has been before stated.
Question. Are you able to tell the committee whether the accounts
of these contractors with the government prior to the last quarter
were settled or not?
Answer. I cannot, precisely. Frequently after they are paid for
one quarter, sometimes two or three months subsequent a particular
bill of lading is brought from some other fort to Fort Leavenworth
and paid.
Question. Does that make any material difference?
Answer. Not much.
Question. Do you know whether, prior to this quarter, any large
amount of money was due and unpaid to these contractors.
Answer. No, sir.
Question. Do you think any large amount was due?
Answer. I think not.
Question. What sum due to them would cover the probable amount
remaining unsettled prior to the last quarter?
Answer. In the matter which the quartermaster's department decides, they have scarcely ever had a draft at any time much exceeding
$100,000-probably from $100,000 to $120,000. All these accounts
are paid almost invariably on presentation. Sometimes there is a
little delay in getting the money.




246            ABSTRACTED INDIAN TRUST BONDS.
Question. From your best knowledge of the facts are you able to
state whether any amount of money, or what amount, is -now due
under the contracts of these parties with the government?
Answer. I do not know of any except the sum of $23,760 49, heretofore referred to. I have very little doubt, however, that a few thousand dollars will be found to have been earned the last quarter in New
Mexico.
Question. Are you able to state, appr)ximately, the earnings of
these parties for the year 1861?
Answer. It will be just about what it was in 1860.
Question. Which was?
Answer. Which was very nearly, including what was paid here,
$540,000.  I am giving that sum without attempting to add the payments made in the different places.
TUESDAY, January 15, 1861.
HENRY BEARD sworn.
Examination by the chairman.
Question. Are you in the Interior Department?
Answer. I have been in the Interior Department since the 1st of
June, 1857. I was a clerk in the Indian office from May, 1853, up
to the 1st of June, 18 7.
Question. Have you had anything to do with the Indian trust
bonds?
Answer. I had charge of that branch of business in the Indian
office in connexion with other business, being head of the finance
division.
Question. Up to what time?
Answer. From about the 1st of July, 1853, until after the 1st of
July, 1857.
Question. Who succeeded you -in the charge of those bonds?
Answer. They were delivered to Mr. Godard Bailey by order of the
Secretary of the Interior.
Question. Did you keep an account of the bonds that were in your
charge?
Answer. Yes, sir.
Question. What did that account specify?
Answer. I will state. In 1853 schedules were made of all the
bonds in the chest. The bonds were examined by a committee designated by Secretary McClelland, in November, 1853, and compared
with those schedules. Duplicate copies of them, I think, were transmitted to the Department of' the Interior.  The rough drafts were
merely upon slips of' paper. I think those rough drafts were lost before I leit the Indian office. -Those which were formally transmitted
to the Indian Department ought to be there on file. That was in
1853. I think that there were no purchases of stocks after that time
and during Secretary McClelland's administration. By referring to
a memorandum I can state more accurately; but I think there were
no purchases of stocks or stock transactions of any importance from




ABSTRACTED INDIAN TRUST BONDS.                247
November, 1853, up to August or September, 1857; so I think there
were no essential changes in the stocks on hand.  The list of stocks
on hand in November, 1853, is as follows.
Question. Is that a detailed account of the stocks then in hand?
Answer. It is not a descriptive list, but a memorandum of the
quantity and a general description   I will state, generally, that in
1853 the chest was examined and the contents of it ascertained and
reported to the Department of the Interior.
Question. Can you state, from any memorandum in your possession
or of your knowledge, the aggrtegate amount of the bonds in hand for
the Indian trust fund in November, 1853?
Answer. I can, with accuracy. There were:
Maryland five and six per cent. stocks...................   $172,749 82
Virginia six per cents and guaranteed...................    796f,800 00
Michigan six per cent. coupon bonds...............  64,000 00
Indiana five per cent. coupon stocks.......................  70,000 00
Kentucky five per cent. coupon bonds....          183,000 00
Tennessee five per cent. stocks, (part certificate and
part coupon)..................................................    395,000 00
(I can state, from recollection, that $250,000 of this
Tennessee stock was certificate stock, and the balance
coupon stock.)
Missouri five and a half per cent. stocks.................  63,000 00
Missouri six per cent. coupon bonds.....................    100.000 00
Arkansas five per cent. (certificates)....................  3,000 00
United States loan of 1847....................................  58,050 00
United States loan of 1842..................................    193,280 00
Total.2.............................................  2,098,879 82
Question. Do you know whether any record was kept of the numbers and amounts or lettering of each of those bonds?
Answer. About that time, or shortly before, descriptive lists were
prepared by mysell and others and transmitted from the Indian office
to the Department of the Interior, under cover of official communications.
Question. What was the character of such lists?
Answer. They described all these bonds and stocks specifically.
Question. As how?
Answer. In this way, for instance: Certificate stocks of Richmond
and Danville Railroad Company, guaranteed by the State of Virginia,
issued at such a date, redeemable at such a time, six per cent. interest,
$13,500; interest payable semi-annually at Richmond, and the number and the party to whom issued.
Question. Abmout what time did you leave the Indian office?
Answer. I went into the Interior Department on the 1st of June,
1857.
Question. And left it when?
Answer. I left the Indian office on the last of May, 1857.




248            ABSTRACTED INDIAN TRUST BONDS.
Question. Was that the time you gave up these bonds to Mr. Bailey?
Answer. No, sir.
Question. When did you give them up to Mr. Bailey?
Answer. In-the Indian office the charge of this business fell to my
supervision. Before I left there there had been some conversation
between the chief clerks of the two offices and myself in relation to
the transfer of this business to the Interior Department, but it had
not been arranged; and about the time I have stated I was myself
transferred to the Department of the Interior, and had the key of the
chest at the time. I retained the key of the chest until September
or October of that year. I am not positive now of the exact date, but
I attended to the collection of the July interest in 1857. It was attended to some time after it fell due.
Question. By you?
Answer. Yes, sir.
Question. When did you give up the key of the chest?
Answer. The last of September or the first part of October, 1857.
Question. Who did you give the key to?
Answer. I delivered it, by order of the Secretary of the Interior, to
Godard Bailey.
Question. At the time of the delivery of the key of the chest to
Godard Bailey had you a detailed account of all the securities in the
chest?
Answer. The lists which had been transmitted from the Indian
office were, many of them, then on the files of the Interior Department,
to my certain knowledge; I cannot positively swear that they were
all there, because I did not examine them; I saw them there, and
knew what they were without examination.
Question. When you made the transfer of that chest to Mr. Bailey
did you then go over the securities that were in the chest?
Answer. Yes, sir; they were examined.
Question. Did you examine them?
Answer. I was not willing to give up the key without a full examination; they were examined by Mr. Bailey and myself, and, I think,
Mr. Lester.
Question. Did you find them to correspond with any detailed list
previously made out; and, if so, what list, and where is it?
Answer. They were not examined by a detailed list, but examined
as to the amount, and whether they answered the general description,
and whether all the coupons were there; that was the kind of examination that was made. It did not occupy more than one day probably.
The bonds were not checked off by the formal lists. I will state
further that I have been infbrmed that Secretary McClelland, when
those lists were received by him in 1853, addressed the different banks
at which the interest was payable, and informed them of the number
and description of the stocks.
Question. Are the committee to understand you as saying that at
the time you transferred the custody of these bonds to Mr. Bailey the
chest contained all the bonds that ought to have been in it according
to the previously prepared lists?




ABSTRACTED INDIAN TRUST BONDS.                    249
Answer. Yes, sir; and quite a number that had been bought afterwards, which I can state to you.
Question. State the stocks that were in the chest at the time you
made the formal transfer.
Answer. I can state positively so far as Secretary McClelland's
account was concerned; beyond that I may not be able to.
There were of bonds that had been held in Secretary McClelland's
time:
United States six per cents....................................  $251,330 00
Virginia six per cents................................    796,800 00
Missouri five and a half per cents...........................  63,000 00
Missouri sixes........                                     100,000 00
Tennessee fives and sixes,........,.................    395,000 00
Kentucky fives..................................................    183,000 00
Indiana fives.................70........................  70,000 00
Arkansas fives....................3.......   3,000 00
Maryland fives and sixes...................................    172,749 82
Total...............................................  2,034,879 82
This was the amount of stocks held when Secretary McClelland left
office; but shortly before I delivered the key of the chest to Bailey
$41,138 was delivered to the State of Maryland, to be redeemed, which
left an actual balance of those old stocks in the chest of $1,993,741 82.
At that time Mr. Bailey executed a receipt to me; I am unable to
state exactly what that receipt covered-whether it covered the stocks
and the key. He executed a receipt; that receipt was filed by me,
with a communication addressed to the Secretary of the Interior, about
the 10th of October, 1857, with a request that it be filed in the department. Secretary Thompson had purchased certain stocks prior to the
10th of October and after Secretary McClelland left office, and those
stocks were in the chest when the key was delivered to Bailey. I am
not able to say positively what they were, but I believe.that the following is a description of some of them:
North Carolina bonds (six per cent.)............................   245,000
Missouri bonds........................5.......... 75,000
Tennessee........................................................  6,000
Georgia.................................  2,000
Florida seven per cents.................................      50,000
A communication was addressed to the Secretary of the Interior by
me, about that time, containing a more accurate description of these
bonds.
By Mr. CASE:
Question. Who was the predecessor of Mr. Bailey in the office he
held?
Answer. I believe Mr. Ashton White.
Question. What is that office called in the department?
Answer. It is now called " Appeal Clerk, Indian Business."




250           ABSTRACTED INDIAN TRUST BONDS.
Question. Had it been known by that name before Mr. Bailey
assumred the place?
Answer. I do not know.
Question. Had the person who is now called appeal clerk, at any
time prior to Mr. Bailey's appointment, had the custody of these
bonds?
Answer. No, sir; he had not.
Question. Had they always been in the Indian bureau prior to that
timne?
Answer. Yes; with the exception of the anomalous state of affairs
that I have explained to you.
By Mr. THOMAS:
Question. I understood you to say, Mr. Beard, that the stocks in hand
in 1853, when you took charge of them, amounted to $2,098,879 82?
Answer. No, sir; that is not exactly accurate.
Question. Well, what was the amount?
Answer. On the 23d of' Nov., 1853, the amount was $2,098,879 82.
Question. I understood you to say that in 1857, when you delivered
over this fund toMr. Bailey, the stocks amounted to $2,034,879 82?
Answer. No, sir; $1,9)3,741 82 of the old stocks and the new purchases made by Secretary Thompson, which had been placed there in
August or September, 1857, before I delivered the key to Mr. Bailey.
The $2,034,879 82 1 stated as the balance on hand when Secretary
Thompson came into office.
Question. What is the cause of the difference between the two
amounts you have named?
Answer. I can explain that. $64,000 of Michigan stocks was redeemed before Secretary McClelland left office, and the money remained
in the treasury uninvested; this is the difference between the stocks
on hand November 23, 1853, and March 4, 1857.
Question. And $41,138 ot Maryland stocks went to be redeemed?
Answer. Yes, sir, after Mr. Thompson became the Secretary, and
before I delivered the key to Bailey.
Question. During the time you had charge of the chest, or at any
time since you have been connected with the department, have any
exchanges of stocks been made?
Answer. There were some exchanges of this kind while I had
charge; some stocks fell due and were reinvested in others. There
had been exchanges made by Secretary Stuart before I had charge, as
I understand from the records and books, but Secretary McClelland
made no changes, except to reinvest and exchange stocks that had
fallen due; and I think these exchanges occurred in July and August,
1853. The stocks that were on hand March 4, 1857, were identically
the same certificates and bonds that were in the chest in November,
1853.
Question. Have you examined the chest since this defalcation came
to light?
Answer. Yes, sir; in December, 1860.
Question. State what you found the contents of the chest to be in
stocks and bonds.




ABSTRACTED INDIAN TRUST BONDS.               251
Answer. $2,525,241 82. The amount of Virginia stocks was the
same as in 1853 and 1857, and the stocks were the same, or represented the same indebtedness  The Kanawha Canal Company'failed,
and the State of Virginia, since 1857, issued certificates in lieu of the
coupon bonds of that company; otherwise it was the same stock.
The five and a half' per cent Missouri stocks now in the chest are the
same which were there in 1853 and 1857. The 69 Indiana five per
cent. coupon bonds are the same, and have identically the same numbers, as 69 of the 70 refBrred to in my former statement.  The 183
five per cent. Kentucky bonds are the same, I can state from old
acquaintance with them; and the Arkansas five per cents, the United
States six per cent. stocks, and the Maryland stocks are also the same.
In relation to the others, I am unable to state, excepting that $125,000
Tennessee five per cent. certificates have been there a long time. I
ought to say that search has been made in the department for the
comrmunication I addressed to the Secretary of the Interior in 1857,
in which I enclosed Bailey's receipt, but it has not been found. I
ought also to state that when I had charge of that chest there were
other gentlemen who knew the contents of it, and sometimes opened
it, as well as myself.  Mr. Luther Smoot knew the contents of it in
1853, and Mr. VW. W. Dennison was well acquainted with all its contents in 1855, 1856, and part of 1857.
Quest;on. Where is Mr. Dennison now?
Answer. He is in Nebraska, I think.  Perhaps I ought to say, too,
that the stocks were examine-d when I took charge of the chest, in
July, 185:3, by Mr. Luther Smoot, Mr. James J. Miller, and myself.
JoHN J. BOG UE sworn.
Examination by the chairman.
Question. Please state, to the committee your place of residence,
and your business?
Answer. I reside in Georgetown, D. C.; and am a grocer.
Question. Have you seen a publication, caused to be made by the
Secretary of the Interior, of' certain bonds alleged to have been
abstracted from the Interior Department?
Answer. Yes, sir.
Question. Have you any of those bonds in your possession?
Answer. Yes, sir.
Question. State to us the number and character of the bonds which
you have in your possession?
Answer. I have numbers 1885 and 1886 of Missouri bonds.
Question. Of $6,000 each?
Answer. Yes, sir; I think I have number 1881 also; but I am
certain of the two numbers I have stated.
Question. From whom did you purchase those bonds?
Answer. I wrote to Mr, Daniel Torrance, a friend of mine in New
York, and he purchased them for me.
Question. When?
Answer. On November 21, 1860. I wrote to him  to buy them,




252           ABSTRACTED INDIAN TRUST BONDS.
and he wrote me that he had bought them, and I sent him a draft on
New York. The coupons had been torn off, and he gave me credit
for that. I sent him money to pay for coupons and all, supposing that
the coupons were attached to the bonds, and he sent me back $90.
Question. What did you pay for those bonds?
Answer. Sixty-eight cents on the dollar; I had the money idle,
and I used it as an investment.
Question. Do you know of whom Mr. Torrance purchased them?
Answer. It seems that he purchased them from William & John
O'Brien, of 29 Wall street, New York.
Question. When?
Answer. On November 21, 1860, the same day he sent them to me.
Question. Do you know anything further in relation to the abstracted
bonds?
Answer. No, sir; I have seen the publication of the list; that is
all.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell on the Secretary of War, and accepted by him?
Answer. No, sir; I know nothing at all concerning those parties.
JAMES CHESTNEY sworn.
Examination by the chairman.
Question. Please state to the committee what business you are
engaged in.
Answer. I am a clerk in the Pension office, but am at present
engaged as an assistant in the office of the clerk of appeals from the
Indian office and Patent Office. Mr. Bailey was clerk of appeals from
the Patent Office and the Indian office, and was also disbursing clerk of
the Indian trust fund. My desk was in his room, and immediately
close to the iron safe that contained the trust fund. I am at present
engaged as an assistant to Mr. Williamson, who succeeded Mr. Bailey.
Question. Can you give the committee any information in regard
to those bonds alleged to have been abstracted from the Interior
Department?
Answer. I cannot, sir; I am very glad of the opportunity of being
called here, as it were, to vindicate myself, because it has been suggested to me that worthy persons have said: " Mr. Chestney, being
in the room with Mr. Bailey and where the safe was, ought to have
known something of this abstraction."  I am charmed to have an
opportunity of saying that Mr. Bailey was a gentleman of about
thirty years of age, Mr. Chestney was sixty and over, so that there
was no sympathy or companionship between Mr. Bailey and him.
Question. Do you know whether Mr. Bailey at certain times kept
the door of that room shut?
Answer. Very frequently; but rather to avoid interruption when
he was engaged in some business that I supposed required calculation
on his part.
Question. Were you in the room at the time he kept the door shut?
Answer. Oh! yes, sir; I have been there frequently when he kept




ABSTRACTED INDIAN TRUST BONDS.             253
the door shut. He might have been there in the evenings, and I
suppose he was, because I often discovered that my desk had been
used by some person, and I suppose with his approbation, because a
person could hardly go in there without his knowledge.
Question. Who were in the habit of coming to that room to see Mr.
Bailey?
Answer. Well, very frequently gentleman that I did not know; I
do not recollect anybody particularly, except other gentleman who
were clerks in the Indian office, and who, I supposed, had some business with him.
Question. Did you ever see Luke Lea there?
Answer. Oh, yes; he has a lame leg, I believe. What struck me
as singular in those days was that occasionally Mr. Lea called towards
3 o'clock, about the time we were to leave; that struck me as a
little singular.
Question. Do you know Mr. William H. Russell?
Answer. I do not.
THURSDAY, January 17, 1861.
WILLIAM MCKIM sworn.
Examination by Mr. Harris.
Question. Have you seen a public list or any list of certain bonds
for the Indian tribes abstracted from the Interior Department?
Answer. I have seen such a list, but have never examined it.
Question. Have you seen any of the bonds described in that list?
Answer. No, sir.
Question. Have you had any negotiations connected with any of
these bonds, or any bonds that you believe to be included in that list?
Answer. No negotiations. We purchased some bonds which we
believe to be in that list.
Question. Can you state to the committee the amount and character
of the bonds?
Answer. So far as I know, which information I get from others,
for I have never examined them myself, we purchased $10,000 Missouris. I am not certain whether all of them are in that list, but I
believe they are.
Question. Do you know whether the January coupons were off these
bonds at the time of that transaction?
Answer. They were off when we received them. We purchased
them in New York a few days before the 1st of January.
Question. From whom did you purchase them?
Answer. These were purchased from Trevor & Colgate, brokers, in
New York.
Question. Is that the only instance in which you have encountered
any of these bonds?
Answer. I was just trying to recollect. I think there was a $1,000
Tennessee bond in another purchase made at another time for another
person. I have neglected to examine into it, but I just remember
some person in the office speaking of it.




25-I          ABSTRACTED INDIAN TRUST BONDS.
Question. Have you ever seen any of the acceptances of John B.
Floyd, late Secretary of War?
Answer. No, sir; I never saw and never heard of them until the
recent publications
Question. Dlid you purchase these bonds for your house or for some
other person or persons?
Answer. We purchased them on an order for a customer of ours.
Question. As an investment?
Answer. Yes, sir.
Question. For whom did you purchase them?
Answer. Considering that this is to some extent a violation of our
relation with the party for whom we purchased, I would prefer not to
answer, but being required by the committee to do so, I reply that it
was for Mr. Thomas Swan, of Baltimore.
Question. Does he still hold them, or do you hold them for him?
Answer. They were handed over to him, and I presume he still
holds them.
Question. Does that include the Tennessee bond?
Answer. No, sir; only the $10,000 Missouris.
Question. For whom was the Tennessee bond purchased?
Answer. I cannot answer without referring to my books. It was
purchased on an order from a customer, but I cannot say who.
Question. Do you know of any person or persons who hold any
other of these bonds?
Answer. No, sir; I do not recollect hearing of any person or persots who hold them.
WILLIAM FISHER sworn.
Examination by the chairman.
Question. Will you inform the committee whether you have any
knowledge of the bonds, or any portion of them, alleged to have been
abstracted from the Interior Department?
Answer. Yes, sir; we purchased some of these bonds, or some which
have been reported to us as being among those abstracted.
Question. Please give a description of them.
Answer. We purchased $4,000 Missouri stocks, which have been
reported to us by our customers as contained in the list of abstracted
bonds.
Question. Are they the only ones you have purchased?
Answer. They are all that have been reported to us, and all that
we are aware of.
Question. Have you any knowledge, directly or indirectly, where
any of the other bonds contained in that list are?
Answer. I have heard that some other parties held these bonds, but
I have no positive information or personal knowledge on the subject.
Question. Please give the committee what information you have in
reference to other parties holding the bonds.
Answer. I have heard as a mere report that Townshend Scott and
John S. Gittings have purchased these bonds. I have no knowledge,




ABSTRACTED INDIAN TRUST BONDS.             255
except the mere report in respect to Mr. Gittings. I believe Mr. Sc)tt
told me himself he had purchased some of them.
Question. Did he state how many?
Answer. I think he said $5,000.
Question. Had the bonds you purchased the January coupons on?
Answer. No, sir; I think they had not. IIere is an account for
one, in which it is stated that the coupon is missing, and in which our
broker in New York has credited us with the amount of $30. In the
other cases nothing is said, but I am under the impression the January coupons were off.
Question. Did you purchase the bonds on an order or for your
house?
Answer. On an order.
Question. For whom did you purchase them?
Answer. I should prefer not to give the names; but being required
by the committee, I state that we purchased $3,000 of them for R. D.
Gaither and $1,000 for B. Atkinson.
Question. Did they buy them as an investment?
Answer. Yes, sir.
Question. Do they hold them now?
Answer. Yes, sir; at least, I suppose they do.
Question. Do they reside in Baltimore?
Answer. Yes, sir.
Question. Have you ever seen any orders drawn by Russell, Majors
& Waddell on the late Secretary of War and accepted by him?
Answer. No, sir.
Question. And you know nothing about those acceptances?
Answer. I do not.
MARTIN LEWIS sworn,
Examination by the chairman.
Question. Please inform the committee whether you have seen any
of the bonds alleged to have been abstracted from the Interior Department.
Answer. I got $6,000 Tennessee bonds for a party on the 7th of
December, five of which were found to have numbers contained in the
list published'by the Secretary of the Interior.
Question. State the names of the parties for whom you purchased
them.
Answer. Being required by the committee to give the names, I
answer, Lowdnes, Thompson & Co., of Baltimore.
Question. Did they buy them for an investment?
Answer. They did.
Question. Have you any knowledge of the whereabouts of any others
of these bonds?
Answer. I have not.
Question. Do you know whether the parties for whom you purchased
these bonds still hold them?
Answer. I believe they do; I am not certain.




256           ABSTRACTED INDIAN TRUST BONDS.
Question. Have you ever seen any drafts drawn by Russell, Majors
& Waddell upon the Secretary of War and accepted by him?
Answer. I have not.
Question, Did the bonds you purchased have the January coupons
on?
Answer. I bought for this party $6,000 Tennessee bonds, five of
which had the January coupons off, and these five were among the
stolen bonds.
GEO. W. RIGGS recalled.
Examination by the chairman.
Question. Please inform the committee whether you have seen, and
if so, in what time and what amounts, orders drawn by Russell, Majors & Waddell upon the late Secretary of War, and accepted by him,
in which either the dates or amounts were left blank?
Answer. I have seen drafts in which the amounts and the dates
were inserted; but the time which they were to run left blank. For
instance, the word " months " would be written,.but the number of
months not put in the draft. They were acceptances, dated, the committee will understand, and commencing, instead of "one," " two,"
or "three months," with the word "months."  These have been
offered to me; but I could not mention the date or number, because
no record was made. They were merely offered, and refused by me.
As I have said, I do not remember the number of acceptances; and I
think they differed in amount.
Question. How many of these acceptances do you think you saw?
Answer. I really cannot tell the number. They were offered to
me only once-I should think two or three of them.
Question. By whom were they offered?
Answer. They were offered by Mr. Suter, of the house of Suter, Lea
& Co. They were offered to me to be negotiated; but I declined to
do anything with them.
Question. You speak of the time being left blank. Did Mr. Suter
say he was at liberty to fill in the time according to the arrangement
that he made with you?
Answer. I do not remember the exact words, whether he said he
was at liberty or I was at liberty, but he said they could be filled up,
if I would take them, so as to make the time two, four, or six months,
as I pleased. In other words, if I would discount them, I had the
privilege of selecting the time they were to run.
C. G. WAGNER sworn.
Examination by ifr. Harris.
Question. Where do you reside?
Answer. In Washington, temporarily.
Question. What is your position or occupation?
Answer. None, just now. I have been engaged in the Department




ABSTRACTED INDIAN TRUST BONDS.             257
of the Interior. I have been in the government service since 1854,
I think. My connexion with the government was first in the Pension
office, until the coming in of this administration. I then received an
appointment, and was out in Minnesota from that time until, I think,
February last.
Question. Have you at any time been connected with the Indian
office?
Answer. No, sir.
Question. Do you know Godard Bailey?
Answer. I do, very well. He is one of my blood relations, and a
very close one.
Question. Do you know whether M3r. Bailey had, in the Indian department, in his possession, or under his control and custody, the
funds held for the Indian tribes?
Answer. I only know by hearsay. I know that he was the clerk
having in charge the Indian bonds; but further than that, as to what
in particular he had charge of, or what were his duties, I know not.
Question. Has he made any communication to you in relation to
those trust funds?
Answer. Yes, sir.
Question. When?
Answer. It was the day before Mr. Thompson, the Secretary of the
Interior, returned from North Carolina.
Question. About what date?
Answer. Some time in December —about the 19th or 20th, I should
think.
Question. What was the nature of that communication?
Answer. Some time in December, the exact date I do not remember,
(there is a letter bearing a memorandum of mine showing the date,)
Bailey called at my room. I was then chief clerk in the Census bureau. He called at my room and said to me, " here is a communication which I desire you to place in the hands of Mr. Thompson five days
before he retires from office." We were intimate; necessarily so. I
was educated with him, and brought up in his father's family. I had
had several conversations with him relative to his resigning his position, and he had said repeatedly that there was a matter of honor
connected with that matter. He brought me that paper and requested
that I should deliver it five days before Mr. Thompson retired from
office. I took it to mean five days before the 4th of March. I received
it, and made a memorandum on it, presuming it contained an explanation in regard to his resignation, and threw it in my desk. The letter
remained in my desk until some short time before-a day or two
days-Mr. Thompson returned from North Carolina. About one
o'clock on that day I was sitting in my room, with some gentleman
in my office, and Bailey came in and said, " I wanted to see you this
morning; I have laid a letter on your table, have you got it?" I
told him I had not. After I got through with the interview with the
gentleman on business, I went to the desk and took up this letter;
or rather it was a little note. I do not remember what the note said,
but the purport of it was this: " I have had reason to change my
mind as to the delivery of the letter placed in your hands some days
H. Rep. Com. 78    17




258           ABSTRACTED INDIAN TRUST BONDS.
ago, and request you to deliver it to Mr. Thompson immediately after
his return;" and something was said about his honor being concerned.
I was much engaged in my business-sometimes I am detained late
at it-but as soon as I got my supper I went around to Bailey's house.
I said to him that the note I had received that morning was of such
a character that it required some explanation.
Question. Where is that note?
Answer. In Mr. Thompson's hands, I believe. I did not put the
note in his hands, but I know he had or has it. All the papers I received went into Mr. Thompson's hands. The interview I had with
Bailey then was in the presence of his wife. I said to him that the
character of the note was such that it required an explanation from
him before I could be the bearer of a sealed note, from the simple fact
that there was an allusion made to his honor. That was sufficient for
me, and I required an explanation. He said he would give me
an explanation. This, I think, was the night before Mr. Thompson returned; but the memorandum upon the letter will establish
the date. I may say here that my connexion with Bailey was very
intimate; I have nursed him like a brother, and have had him in
my arms when he was not more than three days old. He said he
regretted to have to say to me that he had parted with $870,000 of
bonds which were in his charge. I gave him an answer. I told
him I would rather have paid for his coffin. He said to me, " that
letter I gave to you"-I had it in my hand-" that letter is my
confession, and I have placed it in your hands, because, in the difficulties by which I am surrounded, I know of none that I have a
right to come to sooner than yourself, and 1 desire you to deliver that
letter."  I told him that, without any desire upon his part, I should
undoubtedly do it. I next morning went to Mr. Kelly, chief' clerk
in the Interior Department, and asked him when Mr. Thompson was
expected back. I was anxious to know, for I was determined that the
letter should go into his hands. In that conversation with Bailey, I
said further to him, "while I feel deeply what you have done, I want
to know whether you have any intention of getting out of the way;
if so, I will even now see that you are taken care of." He said he
bad no such intention at all. After that interview, and the assurance
that he would not get out of the way at all, I left him with the determination to deliver the letter.
Question. Did you deliver the letter?
Answer. No, sir; I kept that letter, as well as the other note, and
the next afternoon-I think it was Saturday —as soon as I heard of
Thompson's arrival in the city, I got an early tea and went to Bailey's
room, saw him, and said to him, "I am on my way to Thompson's to
deliver that letter; would it not be as well for.you to accompany me?"
He said he did not think it necessary; that he would be at home, and
that he was not going anywhere. I went up to Mr. Thompson's residence; he was out. I returned to Bailey's house, stated to him that
I had been up there, but that Mr. Thompson was out; that I would
set there awhile, and then return by and by. He said " It is of very
little importance whether you go or not. I think that Thompson is
now at the President's, and is in full possession of the whole matter."
I sat and talked with him, and then went into some particulars. I felt




ABSTRACTED INDIAN TRUST BONDS.             259
anxious, and I asked him some questions. I did not know what was
in his letter further than that it was his confession of having converted
those bonds. As he had thrown himself upon me as a friend; I could
not give him any assistance unless he made a clean breast of the matter
to me, as he had to Mr. Thompson. He then told me that he had not
received the first dollar for his own benefit. I am not in the habit of
using profane language, but I will give the language I used. I asked
him if he had grown to be such a damned fool as to risk his character
for other men, and to tell me that he had not received a dime of benefit? I told him I thought it was one of the most remarkable cases of
disinterested friendship.. He told me that John B. Floyd, of whom I
think he is a nephew by marriage, had been a friend to him, and had
come in between himself' and the starvation of his wife and children in
getting him that situation. I know the fact that when Bailey came
here he was poor. He did not at all allude to dates, but he told me
that when he parted with those bonds, or a portion of them-if I am
not mistaken, he told me it was $150,000-it was in this way: that
he was approached by an individual-he did not name him thenQuestion. Did he name him afterwards?
Answer. Yes, and I will give his name now. He told me afterwards
that Luke Lea was the man. He told me that the individual had approached him; that there were certain acceptances of John B. Floyd
that were about to be protested in New York; that he (Lea) wanted
him (Bailey) to assist him (Lea) in saving that protest-to assist in
saving Floyd's credit. I cannot give the exact words Bailey used, but
my impression is that the conversation was this, that he wanted him
to assist him by loaning him those bonds.
Question. Did the conversation of' Bailey produce the impression
upon your mind that Lea suggested to him the use of those Indian
trust bonds in his custody as a means of raising money for the purpose of protecting the acceptances of Floyd?
Answer. Undoubtedly so; and more than that, he said they would
be returned to him in ninety days.
Question. Did he say whom Lea named as a co-operator in the
transaction?
Answer. He did not. The whole confession was of such an interest
to me to know where the guilt was, that I charged my memory with
it, and am distinct in my recollection. I then asked him, "Have you
anything from John B. Floyd that will stand between you and harm
in this matter?"  He said he had nothing, except that he had the
acceptances of John B. Floyd, as Secretary of War, to the amount of
$870,000. He said "' that he was not satisfied that this was a matter in
which Mr. Floyd was at all concerned or anxious for, and that he went
up to the War Department to see Governor Floyd; that he foutnd Governor Floyd in an interview with Lieutenant General Scott, and that
that interview lasted a long time; that he then went to Drinkard, the
chief clerk, a man that he had reason to believe knew all of Governor
Floyd's business, and asked Drinkard as to the correctness of those
papers I have spoken of going to protest. He said he was told'it was so."
Question. Do you recollect whether he told you that Drinkard toldhim if they were not lifted Floyd would be compelled to resign?




260           ABSTRACTED INDIAN TRUST BONDS.
Answer. He was emphatic in that part of his language. I do not
say that Drinkard told Mr. Bailey this, but this expression was used:
" if it is not done, Floyd will be obliged to leave the cabinet in disgrace." That language was emphatic, and in those words. Drinkard assured him, he said, that the condition of things was as they had
been represented to him in reference to those papers; and if I remember aright-and that is a point I have been trying to settle in my
mind-he said he was then introduced to Russell by Mr. Drinkard,
and they had an interview in the third story of the War Department.
Question. In what story is Drinkard's office?
Answer. I do not know. My recollection now is this, as to what
Drinkard said at the time of the introduction, that he, Bailey, could
rely upon Russell as as honorable gentleman, and would do all he
said he would do. It was an indorsement of Russell by Drinkard.
Question. Was that the substance of the conversation?
Answer. It is; but there was other conversation. He said that
there was a promise by Russell that these bonds should come back in
90 days, and that whatever was done had to be done by three o'clock
that day, so that Russell could proceed to New York and prevent the
protest; and that he went to the office and delivered the bonds at
that time.
Question. Did you subsequently deliver the note to Mr. Thompson?
Answer. I did not. As I told you, I returned from my visit to Mr.
Thompson's residence when I found he was not at home, and was
waiting at Bailey's quarters, intending soon to return. But Bailey
told me it was of no importance whether the note was delivered or
not, as Mr. Thompson was in full possession of' the contents of it.
While sitting there, Mr. Rice, the senator from Minnesota, came in,
and I delivered the letters to Rice, as he, it appears, had been up to
Mr. Thompson's; I delivered them to Mr. Rice in Mr. Bailey's room;
that was the last I saw of them.
Question. Did you deliver them to Mr. Rice with Bailey's assent?
Answer. Bailey was there, and told me to deliver them to Rice, and
I did so.
Question. Have you had any conversation with Mr. Luke Lea on
the subject?
Answer. I do not know him. I have seen Mr. Lea once, I think,
some years ago, when I kept a bank account at his establishment.
Question. Had you any conversation with Mr. Bailey subsequent
to the one which vou have detailed?
Answer. I have seen him once or twice since at the jail.
Question. Have you had any further conversation with him  in
reference to these bonds?
Answver. I have not, sir.
Question. Have you had any conversation or interview relative to
these bonds, or to these transactions in any of their phases, with any
other parties?
Answer. I have not, sir.
Question. Has Mr. Bailey at any time stated to you whether he
knew where any of these bonds were?
Ansawer. I think, though I will not be certain of it, that, in the




ABSTRACTED INDIAN TRUST BONDS.            261
interview at his house, he said that he did not know. I asked him,
cursorily, where the bonds were, and he said he did not know where
they were.
Question. He stated to you that the sum he first gave to {Mr. Russell was $150,000?
Answer. That is my impression.
Question. Did he give you any explanation of the subsequent increase in the amount of bonds abstracted?
Answer. He did, sir.
Question. State what it was.
Answer. It was something to this effect: I said "you have only
accounted for $150,000, but here is $870,000; how was the amount
increased?"  The impression on my mind is this: that he stated that
when the time came for returning the $150,000 they were not returned;
they had reduced in value in the market, and as he had taken
$150,000 to save his friend, he went on and took more until the
amount increased from time to time to $870,000.
Question. Did he say to you that he ever sought an interwiew with
Mr. Floyd after the first occasion when he took the bonds?
Answer. On the night to which I have referred, when I went to
him for an explanation of his note, he said that he had either written
a note to Mr. Floyd, or that he had had an interview with him.
Question. What was the tenor of that interview?
Answer. I do not know that he went into any details; he merely
stated the fact that Mr. Floyd knew of this thing.
Question. Can you state whether it was Mr. Luke Lea or Colonel
Drinkard who gave Bailey the impression that if' these acceptances
were not paid Mr. Floyd would have to leave the cabinet in disgrace?
Answer. I cannot.
THONMAS HR. SUTER sworn.
Examination by AMr. Harris.
Question. Were you served with a subpoena to bring with you certain
books of your banking house?
Answer. Yes, sir; I was yesterday.
Question. Have you brought those books with you?
Answer. No, sir.
Question. Will you state the reason.
Answer. The reason I did not bring them was because there was
nothing in them. that bears upon this bond transaction whatever,
either directly or indirectly.
Question. Is there anything upon your books to show any of your
transactions with Godard Bailey?
Answer. Nothing whatever, sir; not a scratch of the pen.
Question. Have you ever had any transactions in your banking
house with Godard Bailey?
Answer. Yes, we have casually, as we have had with you or anybody else.




262           ABSTRACTED INDIAN TRUST BONDS.
Question. Will you state what the character of such transactions
was?
Answer. Well, if my recollection is right, on one occasion when he
wished to pay some money to Riggs & Co., and did not wish to take
the money up there, we took the money and gave him a certified
check, so as to save him the trouble of taking the money up there.
Where he got the money I did not know; it was none of my business
to inquire.
Question. Do you recollect what the amount of that transaction
was?
Answer. I do not.
Question. Do you recollect whether it was about, or above, or below,
$900?
Answer. I do not recollect the amount at all.
Question. Do you recollect what time it was?
Answer. I do not.
Question. Do you keep a memorandum of your certified checks?
Answer. None, of that irregular kind. They are generally destroyed; I do not know whether this one was destroyed. My instructions to the teller are to destroy them, as they are merely given out
for the accommodation of transient customers.
Question. Have you had other transactions with Godard Bailey in
connexion with certificates of deposit on any bank?
Answer. No, sir.
Question. Have you made any collections for him, or remitted any
paper for collection on his account to New York?
Answer. None that I am aware of.
Question. Has Mr. Luke Lea private transactions in your banking
establishment, or are his transactions and those of the house all
blended?
Answer. He has a great many private transactions that I know
nothing about.
Question. Do any of these appear upon the books of your banking
house?
Answer. No, sir.
Question. Does he keep private books of his own for these transactions?
Answer. No, sir.
Question. Have you seen, at any time, any of the bonds fraudulently abstracted from the Interior Department?
Answer. No, sir. I never knew anything about that transactionany more than you did-until I saw it published.
Question. Did you ever negotiate any of the bonds.
Answer. No, sir; never.
Question. Do you know where any of them now are?
Answer. I never saw any of them.
Question. Do you know anything of any acceptances of the late
Secretary of War, Mr. Floyd?
Answer. Oh, I have seen them often.
Question. Have you negotiated any of them?
Answer. I do not recollect now whether I have done so or not; I




ABSTRACTED INDIAN TRUST BONDS.             263
am not certain. I have taken some of them  to Mr. Riggs's for
negotiation.
Question. But you never negotiated any of them yourself?
Answer. No, sir.
Question. Who offered them to you at the time they were presented
to you?
Answer. Mr. Russell.
Question. Were you aware, from any source, of the operations
between Mr. Russell and Mr. Bailey in these bonds, until their public
development?
Answer. Never; I did not dream of such a thing.
Question. When did you last see Mr. Bailey in your banking
establishment?
Answer. I do not recollect; he did not come there often; I have a
very slight acquaintance with him; what transactions were done with
him were done at the counter.
FRIDAY, January 18, 1861.
WILLIAM H. RUSSELL reappeared.
Elxamination by Mr. Conkling.
Question. Who drew this paper?-(the statement presented and
asked to be filed on a former occasion by the witness.)
Answer. The paper was drawn by the assistance of my attorneys
and myself.
Question. Who did draw it in fact?
Answer. Colonel Thompson and Mr. Bradley.
Question. When was the original draft of it made?
Answer. It was made the night after I asked your permission.
Question. And when was it completed?
Answer. It was completed on the 16th.
Question. To whom was it shown or read?
Answer. Mr. Akers, a friend of mine in MIissouri, read it.
Question. Was it shown to Colonel Lea?
Answer. He has never seen it.
Question. To whom else?
Answer. It has not been shown to anybody, save to the attorneys
who helped me to get it up and to Mr. Akers. I have read small
parts of it to one or two of my friends —parties having nothing to do
with this suit.
Question. To Governor Floyd?
Answer. No, sir.
Question. To Mr. Bailey?
Answer. No, sir.
Question. To Mr. Lea?
Answer. No, sir; I say positively that no party connected in any
manner with this suit has seen it or heard of it from me, directly or
indirectly.
Question. Who, in July last, held the outstanding acceptances to
which you have reference in this paper?




264           ABSTRACTED INDIAN TRUST BONDS.
Answer. That is a question I cannot answer. Some of them were
held by banks in St. Louis, and some by Boston and New York bankers.
Question. I refer to the particular set of acceptances on which you
received the first lot of $150,000 in bonds from Bailey.
Answer. I cannot tell; they went into the hands of agents in St.
Louis and of our friends in Boston and New York. I kept a list of
those maturing, but I do not know who held them; they were all
made payable at the Bank of the Republic.
Question. What were the bonds which you received in the first
instance from Bailey?
Answer. I think they were Missouris and Tennessees-mostly
Missouris, according to my recollection.
Question. Were there any Florida bonds among them?
Answer. Not on that occasion.
Question. How did you dispose of the bonds which you first received
from Bailey?
Answer. I did not dispose of the $150,000 all at that time; they
were disposed of, as I said, to raise money.
Question. On what date did you receive them?
Answer. Somewhere between the 12th and 15th of July; I cannot
tell precisely; I have no memorandum to refer to; but my recollection is, that it was between those two dates.
Question. Where did you receive them?
Answer. I received them at my room at Potentini's.
Question. Who was present?
Answer. I do not think anybody was present; but I am not sure.
Question. What proportion of these bonds were Tennessees, and
what Missouris?
Answer. I think there were $90,000 Missouris.
Question.* And the residue Tennessees?
Answer. Yes, sir; that is my impression.
Question. Coupons on or off?
Answer. I do not recollect.
Question. Was anything said in that interview between you and
Bailey, or had there been at any time, about the January coupons of
these bonds?
Answer. Not a word.
Question. How many interviews had you with Bailey?
Answer. Three.
Question. At that time?
Answer. Oh, no; I had only one interview at that time.
Question. How many interviews had you had with him at the time
the first bonds were delivered to you?
Answer. Only one.
Question. Which was where?
Answer. At the War Department.
Question. Had you never seen him before?
Answer. Never.
Question. Nor had any communication with him?
Answer. I did not know there was such a man living before.




ABSTRACTED INDIAN TRUST BONDS.             265
Question. Were the bonds delivered to you on the first day you saw
Bailey?
Answer. They were.
Question. And how long after you had first met him?
Answer. I suppose it was probably three or three and a half hours.
Question. Was any agreement made between you and him in reference to interest, commission, or compensation for the use of these
securities?
Answer. Not a particle; no question was asked, and nothing said.
Question. How soon afterward did you leave the city?
Answer. I left by the afternoon train for New York.
Question. Carrying these bonds with you?
Answer. Yes, sir.
Question. Did you carry any other securities with you at the time?
Answer. i did not.
Question. What did you do with these bonds?
Answer. I left them with my agent in New York for the purpose of
hypothecation and raising money.
Question. When did you deliver them to him?
Answer. The next morning after I arrived in New York.
Question. Who was the agent to whom you delivered them?
Answer. Jerome B. Simpson. He is in the same office, and was
the agent of' our house; he had the control and management of our
money matters in New York.
Question. You handed them to him?
Answer. Yes, sir.
Question. With what direction?
Answer. To raise money upon, to hypothecate, and to pay the
acceptances of the Secretary of War.
Question. Anything else?
Answer. No, sir.
Question. You suggested to him the name of no party with whom
to hypothecate?
Answer. No, sir. I consulted withl him as to where we could get
the money.
Question. You gave him no direction as to the party, the terms of
hypothecation, or the time?
Answer. Yes, sir. I gave him the time, which must not exceed
90 days.
Question. And then what did you say to him?
Answer. I gave him the bonds, and told him to raise money on
them to pay the acceptances of the Secretary of War. I wished him
to go to parties who had money they would loan upon the bonds.
Question. What else did you say to him?
Answer. I do not know what else. We had a general conversation
about the mode of getting money, and where we could get it.
Question. Is that all you told him, by way of direction, as to the
disposition of those bonds?
Answer. Yes, sir.
Question. Did you go with him to negotiate them?
Answer. I went to one or two places.




266           ABSTRACTED INDIAN TRUST BONDS.
Question. Where did you go with him?
Answer. I went to the Chatham Bank, I think it is; I am not certain as to the name; I could give the locality of it.
Question. Was that a bank at which you did not borrow.
Answer. We did borrow at that bank.
Question. Did you place any of these bonds there?
Answer. Yes, sir.
Question. How many?
Answer. I think fifty.
Question. Which bonds?
Answer. I do not recollect.
Question. They were a part of the $150,000 which you first received
firom Bailey?
Answer. Yes, sir.
Question. For how long did you place them there?
Answer. 90 days; or rather, I think there were two notes givenone for 70 and the other for 90 days.
Question. Stock notes?
Answer. Yes, sir.
Question. You gave them stock notes?
Answer. Yes, sir.
Question. Whose notes?
Answer. Russell, Majors & Waddell's.
Question. And the terms of the notes were such as, in default of
payment, gave them the right to sell the bonds?
Answer. Yes, sir.
Question. At 90 days?
Answer. Yes, sir; or rather, as I remarked before, I think there
were two notes-one at 70 and the other at 90 days.
Question. What did you do with the residue of the bonds?
Answer. Mr. Simpson hypothecated them to raise money.
Question. With whom?
Answer. I think some of them  were hypothecated with the bank
with which we do business-the Continental Bank.
Question. How long did they have them?
Answer. I do not know; I presume I did know at the time, but I
have forgotten.
Question. Did you give them a stock note?
Answer. Yes, sir.
Question. Your note?
Answer. Yes, sir, I think so; I am not certain.
Question. And what did you do with the residue?
Answer. They were hypothecated by Mr. Simpson to raise money.
I do not know with whom.
Question. Did you give your note and sign it yourself in each case?
Answer. I do not think I did, but I am not sure.
Question. Do you know whether any of them were placed with any
one without the note being given?
Answer. I think some of them were placed in that way, or that
Mr. Simpson gave his individual note for them.
Question. Have those notes which you gave been taken up?




ABSTRACTED INDIAN TRUST BONDS.             267
Answer. Yes, sir, long ago.
Question. Where are they?
Answer. I do not know. MAr. Simpson has charge of our business
in New York.
Question. How were these notes taken up-by the sale of bonds, or by
being retired by you?
Answer. I think those notes were taken up with money without
reference to the bonds at all.
Question. Then the bonds were retired?
Answer. Yes, sir, upon that occasion.
Question. The whole of the $150,000?
Answer. I am not sure whether they were all taken up or not; my
impression is that most of them were.
Question. They were retired, then, at the maturity of the notes?
Answer. I think this bank, which I call the Chatham Bank, sold a
portion of theirs.
Question. Which bank do you speak of now; the one in Sherman's
building?
Answer. No, sir.
Question. The bank over in the Bowery?
Answer No, sir; but in that direction. It was not on Chatham
street, but between Chatham and Broadway.
Question. We will call it, then, for this purpose, the Chatham Bank.
You say they sold some of their bonds?
Answer. I think they did.
Question. How many?
Answer. I do not know.
Question. According to your best recollection.
Answer. I am inclined to think we settled with that bank, and
there were between seven and ten thousand dollars of money paid them
at the maturity of those two stock notes, and for the residue the bonds
were sold.
Question. In selling those bonds to pay the notes, did the bonds
fall short of par so as to leave a deficit of seven or ten thousand dollars?
Answer. The bonds fell short of par as a matter of course.
Question. I only want to know if they sold for what they would
bring, and you paid the deficit?
Answer. Yes, sir, that is so.
Question. How much did the bonds fall short?
Answer. I do not know.
Question. You know that some of the bonds were taken up?
Answer. Yes, sir.
Question. Do you know why certain of these bonds were takennup
and others not?
Answer. I do not know, except perhaps Simpson thought he could
sell them better.
Question. Do you mean to say that so far as you had the money to
-retire those bonds you did, and the residue you let them sell?
Answer. Yes, sir.




268           ABSTRA CIED INDIAN TRUST BONDS.
Question. Now, speaking of that portion of the $150,000 of bonds
which you retired, what next was done with them?
Answer. They were sold.
Question. By whom?
Answer. Through the agency of Mr. Simpson.
Question. Were they sold by Russell, Majors & Waddell as your
bonds?
Answer. Yes, sir; through our agent, Mr. Simpson.
Question. At what figure?Answer. I cannot tell; the price varied so rapidly from time to
time that it was hard to keep the run of the matter.
Question. Have you the means of ascertaining the figure at which
they were sold?
Answer. None, except by applying to the brokers who sold them.
Question. Can you inform the committee of the aggregate sum you
received for the $150,000 of bonds?
Answer. If I knew the amount of each class of bonds I could tell.
Question. You know you had $150,000 in all; you had $90,000 in
Missouris, which would leave $60,000 of Tennessees; that classifies
them.
Answer. I received about $97,000.
Question. Within what time were the last of those.$150,000 of
bonds sold; by what time did you part with the last of them?
Answer. They were sold in the month of December, or in the latter
part of' November, that is, the Missouris; I think they were sold in
November.
Question. Then all of the $150,000 you held were sold in the latter
part of' November or in December?
Answer. I think they were.
Question. On what day in December were the last of those $150,000
of bonds sold?
Answer. That is more than I can tell.
Question. As nearly as you can recollect?
Answer. They were sold prior to the 10th of December.
Question. Is that as near as you can state?
Answer. It is.
Question. To whom did you sell late in November or in December
any of those $150,000 of bonds?
Answer. I did not sell any personally.
Question. Russell, Majors & Waddell held the bonds, and of course
they sold them; to whom did they sell in November or in December
any of them?
Answer. I do not know.
Question. Through whom was the business done for you?
Answer. Through Simpson.
Question. When did you receive any bonds from Bailey again?
Answer. I do not recollect the date.
Question. Come as near to it as you can.
Answer. I think it was in September.
Question. Do you know what day in September?
Answer I cannot fix the date; I think that was the month.




ABSTRACTED INDIAN TRUST BONDS.               269
Question. On the occasion of receiving the first bonds from Bailey,
were any papers executed by you?
Answer. I gave him the note of Russell, Majors & Waddell for the
par value of the face of' the bonds, $150,000.
Question. With interest?
Answer. Without interest.
Question. Payable where?
Answer. Payable, I presume, in Washington; it was dated in
Washington
Question. Where is that note?
Answer. It is torn up; when we exchanged again we tore it up.
Question. Did you execute any other papers?
Answer. Not at that time.
Question. Did you see Bailey again until you received bonds from
him the second time?
Answer. No, sir; I saw him, say to-day, and got the bonds to-morrow; it was all on the same occasion. I think he had gone to the
west in the meantime.
Question. That was in September?
Answer. It was.
Question. Had he ever written to you in the meantime?
Answer. No, sir.
Question. Or you to him?.Answer. No, sir.
Question. Did you communicate with him through any other person?
Answer. I think not.
Question. Or he with you?
Answer. No, sir.
Question. Not between the first and second getting of the bonds?
Answer. I think not.
Question. Did you ever communicate with Colonel Lea in reference
to this $150,000 of bonds before you got any others?
Answer. I did not see Lea from the time I got the first until I
got the second.
Question. Did you hold any communication with Lea in reference
to these bonds between the time you got the first and the time when
you got the second?
Answer. No, sir.
Question. State as near as you can the day you came to see Bailey
the second tirne.
Answer. I cannot be more positive than to state that it was in the
month of September.
Question. Cannot you say it was in the forepart of the month?
Answer. It might have been the middle or the month.
Question. Did you come from New York to see him?
Answer. I saw him at my rooms at Potentini's, in this city. I addressed him a note upon my arrival here.
Question. And when did he come to see you?
Answer. I arrived in the morning, and I think he came to see me
the following evening.




270           ABSTRACTED INDIAN TRUST BONDS.
Question. Did he see you alone?
Answer. I presume we conversed alone. My room was full of
friends.
Question. What took place between you and him then?
Answer. I told him of my condition and distress; that I could not
take care of the bonds he gave me, and that they would be sold at a
sacrifice; that 1 came to Washington to get more aid to take care of
them. In that conversation, and after a long talk, he told me the
position of the bonds, what they were, and what fund they belonged to.
Question. That was the third talk you had with him?
Answer. It was.
Question. Begin with the first conversation you had with Bailey,
and detail it-the first conversation you ever had with him.
Answer. Mr. Bailey was introduced to me at the War Department
by Mr. Drinkard. He asked me if certain acceptances of the Secretary of War were due, and what would be the consequence of their
going to protest. He asked me if the reports he had heard of the
disastrous consequences of such a protest was true. I told him that I
believed the reports which had been related to him, as to the consequence of a protest to the War Department, Secretary Floyd, and the
army transportation, was true. He told me he had heard it from
MIr. Lea and Mr. Drinkard. He asked me if the acceptances were in
danger of going to protest, and if the report he had heard from Lea
and Drinkard, in regard to the consequences upon the War Department and the army transportation, was correct. He told me he
heard that from Lea in the first instance, and that Lea represented
that he got that statement from me; that Lea told him that I had
negotiated acceptances of the Secretary of War; that I was not able
to protect them, and that if they were dishonored, Mr. Floyd would
be disgraced; and not only that, but that it would break up the army
transportations and supplies. He also said he had got the same information from, Drinkard. He asked me if those were the facts, and
asked my opinion in regard to the disgrace of Secretary Floyd, and
his retiring from the cabinet. I told him they were literally true,
and I feared the consequences. His reply to me was that his mind
was made up. I asked him what his mind was made up to, and if he
could aid me. He said he could; that he had some State securities
that I could have to raise money on, and that such a state of things
as the ruin of Secretary Floyd must not be permitted. I told him
I was willing to make any sacrifice, if sacrifice would save Floyd in
this thing. He said that, for his part, he wanted no sacrifice; that
he had some State securities he would let me have. He appointed a
time to meet me at my room to give them to me; that he would go
and get the bonds and meet me at 2 o'clock, in time to enable me to
go to New York that evening, as the paper would mature in New
York the next day. At 2 o'clock he met me at my room with the
bonds or stock.
Question. Is that all the conversation?
Answer. It is all.
Question. Did no other persons participate?
Answer. No, sir.




ABSTRACTED INDIAN TRUST BONDS.             271
Question. Is there anything you can remember which you have not
detailed?
Answer. There is not. He came to my room with those bonds
about 2 o'clock, and told me he required me to give him our note for
them at ninety days; and that if I did not return the bonds in ninety
days he would make us pay the full par value of them. I was so confident that I could do so that I took the risk. He then required that
I should only hypothecate them, and return them in ninety days.
Question. Was there anything else in that conversation?
Answer. No, sir. There may have been some general conversation,
but I do not recollect.
Question. What did you do then?
Answer. I gave him the note, took the bonds, and took them to
New York with me.
Question. Come now, if you please, to the third interview, which,
you say, was at Potentini's.
Answer. As I said before, that was in September, and, I believe,
prior to the middle. I came to Washington, and was here a day or
two before I addressed him a note advising him of the condition of
things, thinking I could get money from the government. I wrote
him a note asking him to call and see me, and on the following evening, I think it was-I got in in the morning-he came to my room
according to my request, when I had a full conversation with him in
regard to what I had done with the securities. I do not know that I
can detail the conversation. I told him I came back to Washington
in an embarrassed condition; that our firm was in an embarrassed
condition; that those securities were hypothecated, some on short date,
and that they were liable to be sold; Band that in addition thereto, we
had other acceptances of the Secretary of War to protect; and that
owing to the state of the finances of the country, and especially of the
west, we could not raise money. I asked him if he knew of any way
in which he could aid me. He then told me that these bonds belonged to the government, and were held in trust for the Indians.
Question. What followed that?
Answer. He told me it was necessary to save those securities; that
it was utter ruin to him if they were not saved. In response to that,
I gave him to understand that I could not save them. He then proposed to give me additional aid to take care of those acceptances of
Governor Floyd's. I had mentioned to him that there were other
acceptances maturing, which it was necessary to take care of.
Question. Did you tell him to what amount?
Answer. I told him the amount.
Question. What was it?
Answer. To the best of my recollection, it was about $300,000.
He proposed to give me bonds even then, when I knew what they
were, to protect those out, and to save them from sale, and also to
save the additional acceptances of the Secretary of' War. I finally
consented to take them.
Question. What further occurred in that interview?
Answer. Nothing more than his getting the bonds and bringing
them to me, and taking our paper for them.




2 72          ABSTRACTED INDIAN TRUST BONDS.
Question. He did not bring them that evening?
Answer. No, sir, but the next day.
Question. What time next day?
Answer. I cannot say what hour; some time during the day; time
enough to take them to New York that evening.
Question. Where did he bring them to you?
Answer. At my room, at the same place.
Question. How many did he bring, and what bonds?
Answer. I think there were 387 bonds.
Question.. What bonds were they?
Answer. To the best of my recollection they were Missouris.
Question. How many AMissouris?
Answer. I cannot recollect.
Question. Tell as near as you can.
Answer. I do not know. I think they were Missouris, South Carolinas, and Floridas,
Question. How many Floridas?
Answer. To the best of my recollection there were 120 or 130.
Question. That made up the 387?
Answer. Yes, sir.
Question. What did you give him, if anything?
Answer. I gave him Russell, Majors & Waddell's paper. I took
up the $150,000 note, and gave him one for $387,000.
Question. Were the coupons off or on those 387 bonds?
Answer. I think they were left on. I am not positive.
Question. Did any other paper pass between you?
Answer. Not upon that occasion. I may be mistaken; I may have
given him a receipt; I do not now recollect. I think it probable I
did give him a receipt, specifying the bonds of each class.
Question. Was there any agreement as to what disposition you
should make of those bonds?
Answer. I was to hypothecate them.
Question. Any particular time mentioned?
Answer. It was agreed that they should be returned before the 4th
of March; and if I was forced to allow them to be sacrificed, I was to
return an equivalent amount of bonds of the same class.
Question. How came the 4th of March to be the limit fixed for their
return?
Answer. It is all supposition on my part how he came to fix that
day.
Question. Did he fix the 4th of March?
Answer. I think he did.
Question. Did you know why?
Answer. From his conversation I supposed it was because he was
going out of office then.
Question. What did you do with those bonds-take them to New
York?
Answer. Yes, sir.
Question. Did you take any other securities from here at that time?
Answer. I do not think I did upon that occasion. I cannot say
positively.




ABSTRACTED INDIAN TRUST BONDS.             273
Question. Did nothing occur between you and Bailey at that time
in reference to interest, commissions, or payment.
Answer. Not a word.
Question. What did you do in New York with those bonds?
Answer. I hypothecated some of them. I could not use the Florida
bonds at all.
Question. How many did you hypothecate?
Answer. I cannot answer that.
Question. According to the best of your recollection?
Answer. There were 120 or 130 of the Florida bonds I could not
use. A portion of the South Carolina bonds were not hypothecated.
Question. How many did you hypothecate?
Answer. I suppose about two hundred.
Question. With whom did you hypothecate them?
Answer. I cannot tell you.
Question. Have you no means of knowing?
Answer. A portion of them were hypothecated with Lee, Higginson & Co., of Boston.
Question. How many with them?
Answer. I suppose about sixty.
Question. For what time?
Answer. I do not recollect. I recollect that the paper became due
in January.
Question. Did they advance the money upon them to you?
Answer. Yes, sir, through Simpson.
Question. How much upon those sixty bonds?
Answer. Forty thousand dollars, less the discount upon the notes.
Question. What was done with the residue of the two hundred you
hypothecated?
Answer. I cannot say.
Question. Have you no means of knowing?
Answer. Not now.
Question. Did you keep no account, which showed?
Answer. I kept none. Simpson kept the only account which was
kept.
Question. What account was kept of these transactions?
Answer. I suppose Simpson had a list of sales when sold.
Question. Were regular entries made on books?
Answer. I think not.
Question. Upon what was the entry of these transactions made?
Answer. I do not think there was anything except a memorandum.
Question. Upon loose pieces of paper?
Answer. Yes, sir.
Question. Did you keep any account of your transactions with
Bailey?
Answer. None.
Question. Did you make any entry of your transactions with Bailey?
Answer. No, sir.
Question. Did you direct no entries to be made of them upon your
books?
Answer. I did not.
H. Rep. Com. 78 -18




274           ABSTRACTED INDIAN TRUST BONDS.
Question. How lone have you been a business man?
Answer. Ever since I went into a store in 1828.
Question. Since that time have you been in business?
Answer. Yes, sir.
Question. And a partner in a banking house, among other things?
Answer. A partner in one, but I did not have anything to do
with it?
Question. And you have now no means by which you can inform
yourself who were the parties that received those two hundred bonds,
except the sixty which Lee, Higginson & Co. received?
Answer. I have no means. I have a general impression of who
some of the parties were with whom they were hypothecated.
Question. Who were they?
Answer. I think a portion of them were hypothecated through Winm.
F. Coleman, of New York, with the United States Trust Company.
Question. How many?
Answer. I do not recollect.
Question. Were there forty?
Answer. I do not recollect. This was done through Coleman, at
the request of Simpson. I know it only from hearsay or rumor.
Question. You hypothecated two hundred bonds, sixty of them with
Lee, Higginson & Co.; now I want to inquire how many of the remaining one hundred and forty bonds Win. F. Coleman negotiated
with the Trust Company?
Answer. I think Coleman got $25,000 upon the bonds. I have had
no account current from Simpson.
Question. Aside from those which Wm. F. Coleman negotiated,
what became of those one hundred and forty bonds?
Answer. Some were negotiated through E. S. Darling & Co.
Question. How many?
Answer. I do not now remember.
Question. Who else?
Answer. Simpson negotiated some with J. T. Soutter, president of
the Bank of the Republic, New York.
Question. How many did he leave with him?
Answer. I do not know the number of bonds; but I think he got
$15,000 of money from him.
Question. Anybody else?
Answer. I think he got some from Duncan, Sherman & Co.
Question. How much; how many bonds?
Answer. I do not know.
Question. In all, if I understand you, you used at that time two
hundred of those three hundred and eighty-seven bonds. What
became of the Florida bonds?
Answer. I brought them back to Bailey.
Question. When?
Answer. I think it was early in October.
Question. That was the next month?
Answer. Yes, sir.
Question. Why?
Answer. I could not use them.




ABSTRACTED INDIAN TRUST BONDS.             275
Question. Did you try to use them?
Answer. Yes, sir.
Question. With whom?
Answer. I cannot tell any particular party. There was no market
for them.
Question. Why could you not use them?
Answer. They were worth nothing, I suppose.
Question. And you brought them back the next month?
Answer. I think it was early in October.
Question. What did you do with them?
Answer. I gave them to Bailey, and received other bonds in exchange.
Question. What did he give you in exchange?
Answer. To the best of my recollection he gave me North Carolina
bonds.
Question. How many Florida bonds did you return to him?
Answer. Some one hundred and twenty thousand or one hundred
and thirty thousand dollars' worth.
Question. And he delivered to you an equivalent amount of North
Carolina bonds?
Answer. Yes, sir.
Question. At the same time that you returned those Florida bonds
to him did you return anything else to him?
Answer. I think I returned some bonds of South Carolina.
Question. How many?
Answer. I cannot say.
Question. Did you return all the South Carolina bonds you did not
succeed in using?
Answer. Yes, sir.
Question. And you cannot state to the committee the number of
South Carolina bonds you returned?
Answer. I do not think any of the South Carolina bonds were used
except those which Lee, Higginson & Co. bought.
Question. State the number of South Carolina bonds you returned?
Answer. I cannot.
Question. What did you receive in exchange for the South Carolina
bonds you returned.
Answer. My impression is that I received the same that I did for
the Florida bonds.
Question. North Carolina bonds?
Answer. Yes, sir.
Question. Where did you receive those?
Answer. I do not recollect whether at his rooms or mine.
Question. Was it at one or the other?
Answer. Yes, sir.
Question. HIad you ever had any interview with Bailey up to that
time except the three you have detailed?'
Answer. I have not.
Question. Have you ever been in his office?'
Answer. Never in my life.
Question. You never have seen a safe where those bonds were kept?
Answer. No, sir.




276           ABSTRACTED INDIAN TRUST BONDS.
Question. Who suggested North Carolina bonds to be given in
exchange?
Answer. I think I did.
Question. Did Bailey state to you what bonds he had that you could
select from?
Answer. I do not think he did upon that occasion.
Question. You received from him then 120 or 130 North Carolina
bonds in exchange for Florida bonds, and received an additional
number of bonds for the South Carolina bonds you returned, but you
cannot tell how many. Can you tell how much, in all, you returned
to Bailey at that time?
Answer. I cannot. I only made the exchange of what I brought
over from New York.
Question. What did you give him at that time, if anything?
Answer. I may have exchanged the receipts he held.
Question. And gave him no new paper?
Answer. No, sir.
Question. Was anything said as to commissions, interest, or compensation?
Answer. No, sir.
Question. Neither directly nor indirectly?
Answer. No, sir.
Question. What did you do with those bonds?
Answer. I carried them back to New York.
Question. What did you do with them?
Answer, They were used there to raise money, as I had raised
money befobre.
Question. In the same way?
Answer. Yes, sir.
Question. By hypothecating them?
Answer. Yes, sir.
Question. Were any of them sold?
Answer. No, sir; they were hypothecated.
Question. Up to this time, October, none of them had been sold?
Answer. Some of the Missouris had been.
Question. Some of the original $150,000 of bonds?
Answer. Yes, sir.
Question. Were they sold to'this Chatham bank, as we call it, upon
the maturity of the note?
Answer. Yes, sir.
Question. There had been no bonds sold up to October, except those
by this bank?
Answer. There were nothing but Missouris sold.
Question. You hypothecated these in October?
Answer. Yes, sir.
Question. When did you see Bailey next?
Answer. I think it was the 12th or 13th of December.
Question. This, then, if I understand you, is the first interview
you had with Bailey after October?
Answer. The first personal interview.
Question. Did you receive letters from him before that?




ABSTRACTED INDIAN TRUST BONDS.             277
Answer. I did, in the month of September, after i got the second
lot of bonds.
Question. Is that the first time you received a note from him?
Answer. Yes, sir.
Question. Where did you receive it?
Answer. I do not recollect; I presume in New York.
Question. Where is it?
Answer. It may be with my papers in New York, but I may have
torn it up. I do not recollect. I think it most likely I tore it up.
Question. How long a letter was it?
Answer. My recollection is it was short, urging me to be sure to
take care of and return the bonds.
Question. Is that all you recollect about it?
Answer. That was the tenor of it.
Question. Did you receive any other letter from him up to December?
Answer. I think I received two or three notes of a corresponding
character, urging me to take care of the bonds.
Question, And you received no other communication up to December?
Answer. No, sir.
Question. For what purpose did you come here in)December?
Answer. I came here to get the privilege to sell those I had hypothecated, to save us from ruin, in consequence of the market going
down, and to get further aid to take care of the acceptances of the
War Department, and to make further arrangements with Bailey.
Question. What day did you come here?
Answer. I cannot state positively; about the 12th of December.
Question. What did you do first when you got here in reference
to seeing Bailey?
Answer. I sent for him.
Question. Did he meet you?
Answer. He came to my room.
Question. What took place?
Answer. I told him the condition I was in-the danger of losing
the stock-and my fear that they would be sold at a sacrifice on a
declining market. I asked him if I could not sell them all, and buy
in again after the market declined, as the best way to get them returned. We thought we could do so, with that and other resources
we expected to command. I explained to him, in addition thereto,
that there was some paper of the War Department maturing; that
all our accounts had not been adjusted and allowed at the department;
and if I did not protect my credit the credit of the War Department
would suffer and be disgraced. I told him if I did not protect myself
I could not take care of the bonds finally. He then told me if I would
get the acceptances of the Secretary of War to the amount of the
bonds I had already received, and the additional amount I required
to protect the whole thing-our credit and all-he would give me an
additional amount to do that thing with. I had suggested that the
amount would be $350,000. I told him that $350,000 would enable
me to protect the whole thing and get the bonds all back. By the




278           ABSTRACTED INDIAN TRUST BONDS.
way, I should say he proposed to give me an additional amount of
bonds to extend the matter to the first of June, if I got the acceptances of the Secretary of War. I procured the acceptances.
Question. What further occurred between you and Bailey at that
time?
Answer. Nothing that I know of pertinent to the case.
Question. I omitted to ask you whether the bonds you received in
exchange for the Floridas and South Carolinas had at that time
coupons on or off.
Answer. I think they were off.
Question. When were they taken off.
Answer. Before he gave them to me.
Question. By whom?
Answer. The bonds were brought to me with the coupons off.
Question. Was any remark made about it at the time?
Answer. He explained to me that he had taken them off so that if
they were sold it would give us to the first of June to get the bonds
back.
Question. That suggestion was never made until you came to exchange bonds with him?
Answer. I think that was the occasion.
Question. When this exchange was made $350,000 of the bonds
had been negotiated by you, had they not?
Answer. I suppose about that amount.
Question. Did you ever exchange bonds with Bailey more than
ounce?
Answer. That was all.
Question. Returning now to the December transaction, what did
you do upon the termination of that interview between you and
Bailey?
Answer. I secured acceptances of' the Secretary of War, which were
sufficient, with the amount I then had in my pocket.
Question. How many had you in your pocket?
Answer. I do not recollect; about $100,000.
Question. When had those bonds been given?
Answer. I think they were given in October; that is my impression.
Question. At the time you were on to exchange the bonds?
Answer. I do not recollect whether it was upon that occasion
or not?
Question. How many in addition did you procure from the Secretary
of War?
Answer. Over $700,000.
Question. What did you do with them?
Answer. I gave them to Bailey, and he gave me bonds which, with
what I had, amounted to $870,000, and I gave him a receipt.
Question. What bonds did he give you?
Answer. I think most of them were North Carolinas; some of them
were Missouris.
Question. How many in number?
Answer. Three hundred and thirty-three.




ABSTRACTED INDIAN TRUST BONDS.             279
Question. Did Bailey tell you how long those Florida bonds had
been there?
Answer. I do not think he did.
Question. Did he tell you how the department bought them?
Answer. Not then.
Question. When did he tell you that?
Answer. I heard him speaking of it in the pris)n; not in a private
conversation with me, but speaking publicly, and not privately.
Question. What did he tell you as to the source of those Florida
bonds?
Answer. My impression is that they bought them.of Mr. Yulee.
Question. Did he say when?
Answer. No, sir; it was only a general conversation, not addressed
to me.
Question. Did he say at what figure they bought them?
Answer. I do not think he did.
Question. Did he say how many they had of them in all?
Answer. My impression is that it was one hundred and thirty-two.
Question. Did he tell you how the bonds came to be purchased of
-Mr. Yulee?
Answer. Ite did not tell me that at all.
Question. Did you hear him state how they came to be purchased
of Yulee?
Answer. I recollect hearing him talk about it, but I cannot explain
exactly what lie said. I heard him state in jail, in conversation with
others, that he had had those bonds in New York to hypothecate and
raise money on, but that he could not do it.
Question. You say you heard him say in the jail that those one hundred and thirty-two Florida bonds in the department were purchased
from Yulee, and that he, before their purchase, had had them in New
York; and had attempted to raise money on them by hypothecation or
otherwise, and could not do it?
Answer. Yes, sir.
Question. Did he state to you how soon after he attempted to raise
money upon them the department took them?
Answer. He did not.
Question. Did he state to you when they were purchased?
Answer. He did not. In his conversation he referred to a railroad
in Florida.
Question. He said he was trying to raise money for a railroad?
Answer. Yes, sir.
Question. Were they railroad securities?
Answer. Yes, sir; my impression is that they were railroad bonds.
I do not know whether they had the State guarantee or not.
Question. Do you know the name of that railroad?
Answer. The Fernandina railroad.
Question. Where was the receipt drawn which you gave Bailey for
the bonds? I mean the last receipt you gave him.
Answer. It was drawn at his house, I presume.
Question. In December?
Answer. Yes, sir.




280           ABSTRACTED INDIAN TRUST BONDS.
Question. Were you at his house?
Answer. I was.
Question. Where was his house?
Answer. Well, sir, I think it was on F street. I think he had
rooms at the Lafayette House.
Question. Had you ever been in his rooms before?
Answer. On one occasion, which I referred to.
Question. Only once before?
Answer. That is all.
Question. Who drew the drafts and acceptances which you gave
him at that time.?
Answer. I did.
Question. Both the drafts and acceptances, leaving nothing in blank
but the name of Mr. Floyd; or was it only the drafts you drew?
Answer. There was but one paper in all.
Question. The acceptance was one thing, the draft another thing?
Answer. I think I wrote the acceptances myself.
Question. At that time who held the matured acceptances of Governor Floyd?
Answer. They were held by various persons; they were floating.
I merely had a list of the times of maturity.
Question. What did you do with that last batch of bonds?
Answer. I applied them, as I did the others, to raise money.
Question. Did you place any of them yourself, personally?
Answer. I think I gave twelve of those bonds to the Shoe and Leather
Bank; that is all I sold personally.
Question. Did you place any yourself?
Answer. I sold twelve to the Shoe and Leather Bank; that was all;
I did not place any others;.1 do not remember that I did.
Question. By whom were they placed? I speak now of the 333
bonds last received.
Answer. They were sold by different brokers.
Question. Do you mean that the whole 333 were sold without being
placed previously?
Answer. They were all parted with on sale in the first instance.
Question. Do you know who bought them?
Answer. No, sir.
Question. How much did you receive for the 333 bonds?
Answer. That is more than I can tell you.
Question. As near as you can tell.
Answer. If I only knew the class of stocks I could give a more
definite estimate of the value received for them; I suppose it was
about $234,000.
Question. What was done with the money?
Answer. It was used in paying out debts.
Question. When were these 333 bonds sold?
Answer. Right away; as soon as I could get them upon the market.
Question. By what day?
Answer. I suppose by the 20th of December.
Question. Can you be more definite than that?
Answer. By the 22d; that was Saturday.




ABSTRACTED INDIAN TRUST BONDS.             281
Question. Can you be more definite than that?
Answer. No, sir; I was arrested on Monday morning, and I had
no more business to do after that.
Question. When you returned to New Yock with the 333 bonds,
what other bonds had you remaining in your possession?
Answer. I had none.
Question. Do you mean that you had parted on sale with all the
bonds you had received from Bailey previous to your coming here in
December?
Answer. I think they were all parted with except those which were
hypothecated.
Question. And you continued to make sale of these bonds down to
the Saturday previous to the Monday on which you were arrested?
Answer. I do not think any were sold on Saturday, but up to that
day; I am not certain that any were sold on that day; I think there
were some sold.
Question. When did you first know that this matter was likely to
be made public?
Answer. I knew it on the morning that I was arrested.
Question. How?
Answer. Mr. Smoot came over and told me it; it was in the papers,
but I had not read it.
Question. Mr. Smoot is your partner?
Answer. Yes, sir.
Question. Was that the first intimation you had of it?
Answer. Yes, sir.
Question. That was on Monday morning?
Answer. Colonel Lea wrote me prior to that there was danger of
there being an exposure; I think he wrote me on Friday.
Question. What did he write?
Answer. The condition Bailey was in, and the probability that he
would expose the matter, and that I had better come on and see him.
Question. What time did you receive that letter?
Answer. I got it on Saturday.
Question. What time of day?
Answer. In the morning.
Question. How many bonds had you then on hand?
Answer. I do not recollect precisely; not many.
Question. Had you some?
Answer. Yes, sir.
Question. How many, according to your best recollection?
Answer. I think I had on hand, then, 25 or 30.
Question. Which bonds?
Answer. I do not recollect.
Question. Did you dispose of them during that, day?
Answer. Mr. Simpson disposed of them during that day.
Question. What was done with the money you got for them?
Answer. He made payments, I think, that day; there was a little
money left when 1 was arrested; I do not know what has been done
with it; it was not in my name; it was in Simpson's name in the bank.




282           ABSTRACTED INDIAN TRUST BONDS.
Question. HIow many of these bonds remain hypothecated? And I
use that word now to distinguish it from parted with on sale.
Answer. I think there were but two lots.
Question. W'hich two lots?
Answer. The one with Lee, Higginson & Co., and one with the
United States Trust Company.
Question. That is $100,000 in all?
Answer. About that.
Question. About $40,000 with the Trust Company, and $60,000
with Lee, Higginson & Co?
Answer. I think so.
Question. Do you know where any of the residue of those bonds
are?
Answer. I do not.
Question. Have you no information about that?
Answer. I have not.
Question. Now, sir, will you explain to the committee how it was,
if no reference was made to the coupons till October, that the coupons
were procured and returned from so many of these bonds?
Answer. Mr. Bailey told me the danger of an exposure if the coupons were left on ana sold upon them; I think he explained that to
me at the time he told me what the bonds were; that was my second
trip here.
Question. Did Bailey apprise you of the necessity of reserving the
coupons at the time of your obtaining the second lot of bonds from
him?
Answer. He did; he then told me I must be very sure to get them
back before the 1st of January, and he would be very much obliged to
me if I would get them back immediately; he said if they were hypothecated, that I must take them up and take off the coupons and then
re-hypothecate them.
Question. But the coupons were not cut from them then?
Answer. No, sir.
Question. Did you procure the coupons from that second lot of bonds,
and also from the first lot?
Answer. I procured the coupons from all those I had had.
Question. Including the $150,000 of bonds first received?
Answer. Yes, sir.
Question. Hlow did you procure the coupons from the $150,000 of
bonds?
Answer. It was done by taking up the loan, taking off the coupons,
and then renewing the loan with the same parties or with somebody else.
Question. Were all the bonds previously parted with retired fobr the
purpose of resuming the coupons?
Answer. I think they were.
Question. And then negotiated again?
Answer. Negotiated or sold.
Question. And when did you first make a return of any coupons to
Bailey?
Answer. I think it was when I came back to exchange the Florida
bonds.




ABSTRACTED INDIAN TRUST BONDS.             283
Question. How many coupons did you give him then?
Answer. I do not recollect; some fifty, I believe.
Question. Did you give him the coupons of all the bonds you had
previously received?
Answer. Not at that time.
Question. Did you, from time to time, give him the coupons upon
all the bonds that you had received?
Answer. Yes, sir.
Question. When did you first receive bonds without coupons?
Answer. I am not certain that it was on my second trip. I think
he gave me bonds in the second lot with coupons on, but I am not
positive.
Question. Had the bonds you received in exchange for the Florida
and North Carolina bonds the coupons on or off?
Answer. I think that was the first time he took the coupons off.
Question. And then the last lot you received had the coupons off?
Answer. Yes, sir.
Question. Were coupons procured from any bonds other than those
you received from Bailey in-order to take the place of those you had
received from Bailey and had parted with?
Answer. No, sir; they were the identical ones I believe. That
was my instruction, and I believe them to have been so. Simpson
got them all back.
Question. When did you first become a contractor with the War
Department?
Answer. In 1847 or 1848.
Question. Have you been such contractor from time to time since?
Answer. Every year.
Question. When did you first receive from any head of the War
Department acceptances such as we have been speaking of?
Answer. I first received them from Mr. Floyd in 1858.
Question. What time in 1858?
Answer. I think it was in March.
Question. How long had you then known Governor Floyd?
Answer. I was introduced to Mr. Floyd in December, 1857.
Question. By whom?
Answer. I do not recollect.
Question. By Latham?
Answer. No, sir.
Question. Can you state by whom?
Answer. I am under the impression that one of my delegation went
there with me.
Question. When did you first have any business transaction with
Governor Floyd?
Answer. I had an interview with him in relation to a contract in
December, 1859. I had- interviews with him often, and as early as
December, 1857.
Question. How soon after that did you become a contractor under
the new contract?
Answer. I think the contract was concluded finally on the 16th of
January.




284           ABSTRACTED INDIAN TRUST BONDS.
Question, Is that the contract which subsists now?
Answer. No, sir.
Question. When did Mr. Floyd first give you an acceptance?
Answer. I think in the month of March, 1858.
Question. Where did it occur?
Answer. At the War Department.
Question. To what amount did Governor Floyd accept for you upon
the first occasion?
Answer. I think it was $400,000.
Question. State the tenor of those drafts and acceptances.
Answer. They were conditional drafts upon our earnings under the
contract.
Question. Were they for so much money, to be paid out of the
first earnings?
Answer. I do not think any period of maturity was fixed. It was a
draft against our first earnings.
Question. Was it accepted absolutely or conditionally?
Answer. I do not remember. I think there was no condition of
acceptance. The draft itself was conditional, paying the money as
we earned it.
Question. Do you know what you did with that $400,000 of acceptances?
Answer. I know what I did with a portion of it.
Question. What?
Answer. I discounted $100,000 with August Belmont, of New
York. I think it was $100,000.
Question. What was done with the residue?
Answer. I discounted some with the Bank of the Republic.
Question. Were those acceptances numbered or lettered?
Answer. I do not recollect. I do not think they were.
Question. What account did you keep of them?
Answer. I kept a memorandum of them as though they were our
own notes.
Question. Did you enter it in your books?
Answer. Yes, sir; in our own books at home.
Question. Where?
Answer. At Leavenworth, in Kansas.
Question. Do you keep a regular set of books there?
Answer. Yes, sir.
Question. Was there any entry made of it in books elsewhere?
Answer. Not by me. I presume the War Department kept an account.
Question. Did your firm keep an account of all the acceptances
given you by Governor Floyd?
Answer. They kept an account only of those we used. Those not
used I always had in my own possession. They were received and
drawn payable at the Bank of the Republic.
Question. All of them?
Answer. Yes, sir; we have taken care of them invariably ourselves.
Question. To what amount does your account show that you have
used the acceptances of Governor Floyd in all?




ABSTRACTED INDIAN TRUST BONDS.              285
Answer. I suppose it shows several millions.
Question. State as nearly as you can, of your own knowledge and
recollection, the amount of acceptances of Governor Floyd shown by
that account to have been used by you?
Answer. I have got but an idea about it. It was very large; I
cannot tell how large; I believe it exceeds $3,000,000.
Question. Does it not exceed four millions?
Answer. I do not recollect.
Question. Does it not exceed five millions?
Answer. I judge not. It is. all impression upon my part.
Question. Can you state that you have not used his acceptances to
an amount exceeding $6,000 000?
Answer. I do not think I have.
Question. How much less than six millions will you say was the
amount?
Answer. I will not fix the amount; I know it was very large; I
know it was millions.
Question. Will you fix any amount short of six millions which you
can say covers it?
Answer. I do not believe it reaches four millions.
Question. I ask you whether you can name any sum  short of
$6,000,000, which you say will cover the amount you have used of
Governor Floyd's acceptances?
Answer. I say I do not believe it will reach four millions.
Question. Will you state what amount of acceptances you have
received from Governor Floyd and not used?
Answer. I cannot tell you. I have got some, but how many I do
not know; I do not think the amount is very large.
Question. Have you received any acceptances from Governor Floyd
which you have not used, aside from those which now remain in your
possession?
Answer. No, sir.
Question. What is the amount, as near as you can state it, of
Governor Floyd's acceptances remaining unused within your control?
Answer. I think it is less than $200,000.
Question. Has Governor Floyd given you any acceptances since the
occasion, in December, when you procured them to be given to Bailey?
Answer. No, sir. I have not seen him or conferred with him in
any way since.
Question. When you delivered the $870,000 of acceptances to Bailey,
had you, in your hands, acceptances of anything like the amount of
$200,000 besides?
Answer. I had not; not here.
Question. Where were they?
Answer. In New York and St. Louis.
Question. Can you name any amount of money which you say now
is due upon these contracts?
Answer. I cannot; but I believe the trains are not all in.
Question. Can you say that there is one cent due?
Answer. I believe there is.




286           ABSTRACTED INDIAN TRUST BONDS.
Question. You cannot say positively that anything is due; you
believe there is, but you do not know how much?
Answer. If our trains are all in, and our accounts settled, I do not
know it.
Question. When does your last contract expire?
Answer. Next December-on the last day of 1861.
Question. You know, I suppose, about what the maximum of your
earnings under that contract will be?
Answer. That will be governed by circumstances.
Question. Do you know the range within which the maximum of
your earnings will be?
Answer. I do.
Question. Will you state the maximum of unearned money to
accrue by the last of December, 1861?
Answer. As near as I can state it, it is five or six hundred thousand
dollars.
Question. Can you state to the committee to what amount you have
paid the acceptances of Governor Floyd?
Answer. I cannot.
Question. Can you state to the committee within half a million of
dollars the amount of acceptances of Governor Floyd which you have
paid?
Answer. No, sir; I cannot. We have certainly paid upwards of
$3,000,000, and probably $3,500,000, upon Governor Floyd's acceptances, and cancelled them, or retired them.
Question. Does $3,500,000 cover the amount?
Answer. I cannot say positively.
Question. Will you name a sum which you can be positive does
cover the amount?
Answer. I am sure we have paid and cancelled $2,000,000.
Question. Are you sure you have paid and cancelled three millions?
Answer. Well, I am pretty confident in my own mind that we
have.
Question., Can you state any amount larger than that which you
are confident in your own mind was paid and cancelled?
Answer. No, sir.
Question. Did you pay and cancel Governor Floyd's acceptances to
an amount larger, at the outside, than $3,500,000?
Answer. I think three and a half millions will cover the sum. I
am very confident in my own mind that it will.
Question. Do you mean to say that, aside from the acceptances
used, and aside from the $200,000 of acceptances still remaining in
your possession, Governor Floyd gave you acceptances?
Answer. Yes, sir.
Question. What was done with those?
Answer. I returned them unused to the department, and they were
cancelled.
Question. To what amount in all, as near as you can state?
Answer. I think they must exceed $200,000.
Question. How much would they exceed $200,000?
Answer. I cannot say.




ABSTRACTED INDIAN TRUST BONDS.              287
Question. As near as you can?
Answer. I think they exceeded $250,000.
Question. The acceptances which you returned to the department
unused were acceptances which had matured in your pocket?
Answer. Yes, sir.
Question. Where are the two or three million dollars of acceptances
which Russell, Majors & Waddell have retired?
Answer. I suppose they are at home.
Question. In whose possession do you suppose they are?
Answer. At our office in Leavenworth.
Question. And who is the partner in charge there?
Answer. Majors, and Waddell, occasionally.
Question. And all that have been retired are there as vouchers?
Answer. I suppose they are.
Question. Have you paid any of Governor Floyd's acceptances since
the 12th of December, 1860?
Answer. Yes, sir.
Question. To what amount?
Answer. I do not know. I should think to the amount of sixty or
eighty thousand dollars.
Question. Will that cover it?
Answer. I think it will.
Question. Where are those you have paid since the 12th December?
Answer. I cannot tell you. Simpson.has them among his vouchers
to settle with the firm.
Question. That was no part of the $200,000 you had in your possession?
Answer. No, sir.
Question. To whom were those sixty or eighty thousand dollars of
payments made?
Answer. I do not know; they are floating in the market.
Question. How do you know they were paid to the amount of sixty
or eighty thousand dollars?
Answer. Simpson had a list of all payments lying before him on his
desk, and I saw it every day. I saw some of' the paper which was
taken up afterwards.
Question. Have you in your possession or under your control any
paid acceptances of Governor Floyd?
Answer. I cannot say that they are in my possession.  They were
when I was arrested.
Question. Are they in New York and in Washington?
Answer. Yes, sir.
Question. What compensation was Bailey to have in this transaction?
Answer. Nothing in the world from me.
Question. What was Bailey's compensation?
Answer. Nothing was said about it by me to Bailey or by him to
me.
Question. What was the compensation really that Bailey was to
have?
Answer. Nothing in the world.




288           ABSTRACTED INDIAN TRUST BONDS.
Question. You had no expectation of giving him any equivalent or
present?
Answer. I may have had a reservation in my own mind, after the
thing was got through with; nothing was said about it.
Question. You think you had it in your own mind though?
Answer. I think it likely I had a kind prompting to him at the
time, as the man was kind to me. I thought so on the first occasion,
but towards the latter part of the matter I did. not have it.
Question. Did you make Bailey at any time any present?
Answer. No, sir.
Question. Have you never made him any present?
Answer. Nothing that I recollect, and nobody -made him any present on my account.
Question. Has he not received anything?
Answer. No, sir.
Question. Is he not going to receive anything on your account?
Answer. No, sir.
By MIr. MORRIS:
Question. Did you ever, directly or indirectly, pay to any person
any consideration, or make to any person any present, for services
rendered to you connected with your business with the War Department?
The witness declined to answer the question, and asked permission
to consult with his counsel before giving his final decision.
The committee granted his request, and thereupon the examination
of the witness was suspended for the present.
WEDNESDAY, January 23, 1861.
FREDERICK P. JAMES sworn.
Examination by the chairman.
Question. Where do you reside and what is your business?
Answer. I reside in New York city and am a banker.
Question. Have you ever seen a letter written by the Secretary of
War, John B. Floyd, relating to acceptances made by him in favor of
Russell, Majors & Waddell?
Answer. I cannot say positively whether I have seen it or not.
Question. What do you know about its contents?
Answer. I have been told of its contents.
Question. By whom?
Answer. By James T. Soutter.
Question. Please tell the committee what he said to you relating to
the contents of said letter, and where that conversation took place?
Answer. The conversation took place the morning after there was a
publication in the papers that the Bank of the Republic had some of
the Indian fund stolen bonds. He said he had a draft of $15,000
which was protested, and the only one he had; that with that draft
he had a letter from the Secretary of War, in which the Secretary




ABSTRACTED INDIAN TRUST BONDS.             289
said he had issued, or was about to issue, acceptances in favor of
Russell, Majors & Waddell, but that at no time should he issue those
acceptances to exceed one-half of the amount which he knew of his
own knowledge was actually due to the parties for services already
performed.
Question. Had you any further conversation at the time referred
to by you, or at any other time, with Mr. Soutter, in reference to the
bonds alleged to have been fraudulently abstracted from the Interior
Department? and if so, please give us the whole of those conversations.
Answer. He said that the Bank of the Republic had never had one
of these bonds, never had loaned upon them, nor had received one of
them, to the best of his knowledge; that he (Mr. Soutter) was of the
impression that he once loaned $15,000 to a man, on eighteen of them,
and that the man had paid the loan, and that he was of the impression that that was all he had ever seen or known of the bonds, either
directly or indirectly; that he could not think of any other bonds he
had had which related to this Indian trust fund.
Question. State whether he gave you the name of the person from
whom he received those eighteen bonds?
Answer. I think he said it was Simpson —a man I never had heard
of before in connexion with business.
Question. Did he say anything to you, in any conversation you
had with him, whether he had ever seen or held any other acceptances
except the ones you have referred to, made by the Secretary of War,
John B. Floyd, in favor of Russell, Majors & Waddell?
Answer. I think he said he had had some before, but that they
had been paid always.
Question. Did you understand Mr. Soutter to say, in that conversation you had with him, that he held the acceptance referred to in his
own right, or for the Bank of the Republic?
Answer. He said positively it was not for the Bank of the Republic; but whether it was his individually, or belonged to the people he
was dealing with, he did not say. Het said positively that the Bank
of the Republic had none of the stolen bonds, or of the acceptances of
the Secretary of War.
Question. Do you know where any of the abstracted bonds are?
And if so, who holds them?
Answer. I think we have had them pass through our hands, and
we know whom we purchased them for. We purchased some bonds,
but I do not know whether they were any of the abstracted ones or
not, though some of them bore the same numbers, for we have the
best reason to believe that the numbers were not correctly published.
We purchased of Clark, Dodge & Co. ten North Carolina bonds,
numbering from 226 to 235 inclusive, and of those numbers 234 and
235 are advertised as being stolen bonds.
By Mr. THOMAS:
Question. When were those bonds issued?
Answer. I do not recollect.
Question. Did those bonds have the coupons on?
Answer. My impression is that they had the coupons on. We also
H. Rep. Com. 78 —19




290           ABSTRACTED INDIAN TRUST BONDS.
purchased three Missouri bonds, the numbers of which-1823, 1632,
and 1631-were among those advertised.
By Mr. MORRIS:
Question. Had they the January coupons on?
Answer. We purchased five bonds, three of which came in with
the coupons off. I do not know whether they were these three or not.
By Mr. CASE:
Question. What was the date of that purchase?
Answer. The 14th of December, 1860.
By Mr. MORRIS:
Question. Whom do you mean when you say we purchased?
Answer. F. P. James & Co.
Question. Did you purchase the bonds to which you have referred
for yourselves or for other persons?
Answer. We purchased them for the Passaic County Bank of New
Jersey-that is, the three last ones.
Question. Did you ever hold any of the orders drawn by Russell,
Majors & Waddell upon the Secretary of War, and accepted by him?
Answer. No, sir; we always refused to take them.
Question. Do you know of any other person than Mr. Simpson
who holds any of those orders?
Answer. I do not, of my own knowledge; I cannot say positively,
but I have heard that there is about a hundred thousand dollars of
them held by the different banks in Dover, New Hampshire. One
notary last night told me that he had protested $200,000 of those
War Department drafts.
Question. Can you give me the names of those banks?
Answer. I cannot; one was a savings bank in Dover.
Question. Give the name of the notary who protested $200,000 of
those acceptances?
Answer. I cannot recollect; he is the notary for the Metropolitan,
and, I think, for the Continental Bank of New York; he is here in town.
Question. Have you any other knowledge, directly or indirectly,
other than that you have communicated to the committee, relative to
the bonds and acceptances? If so, please communicate it to the co'mmittee.
Answer. I do not know of anything in particular; all these protested bonds are recorded in the different notary's books in New York;
they have a record of every name, indorser, and everything of that
kind.
WILLIAM H. RUSSELL reappeared.
Mr. MORRIS. Mlr. Russell, the committee was careful, before administering the oath to you, to apprise you that if you took the oath and
testified, you must do so voluntarily and entirely at your own election;
that you were not required by the House or the committee to answer
any question or to make any statement whatever touching the matter




ABSTRACTED INDIAN TRUST BONDS.            291
whereof the committee is charged to inquire. You declared your desire to testify on those terms; we deem it fair now to repeat the same
caution; your examination may now be waived, if you desire, wholly
or in such part as you choose; and in the event of your so electing,
any or all parts of your evidence will be expunged and held for
naught.
In order the more fully to renew the admonition heretofore given
you as to your rights, we call your attention to the following section
of an act of Congress that you may determine whether you are willing
to testify further on the same terms as heretofore.
There was then handed to the witness an act of Congress approved
January 24, 1857, entitled'"An act more effectually to enforce the attendance of witnesses on the summons of either house of Congress,
and to compel them to discover testimony."
After reading the same, the witnessed answered as follows:
Answer. I am no lawyer, and know nothing about my rights-not
enough to protect myself or take care of myself in this case; and as I
asked the other day, I now ask the privilege of consulting my counsel
about it.
Question. State to the committee what your decision is?
Answer. I would like time to confer with my counsel, to suggest to
him what you have laid before me.
Question. How long a time do you desire?
Answer. Until to-morrow morning.
Mr. CONKLING. You understand the meaning and effect of the section to which you have been referred, do you not?
Answer. Yes, sir, generally.
Question. You did understand it before reading it now, did you
not?
Answer. Yes, sir, in general.
Question. You understood it before being examined in the first
instance, and had had it all explained before appearing before the
committee, had you not?
Answer. Yes, sir.
[The witness then desired that the committee would give him time
to consult his counsel to decide upon the matter. The committee informed the witness that he could have such time as suited his convenience; whereupon the witness suggested to-morrow morning, and
that time was granted him.]
ASHTON S. H. WHITE sworn.
Examination by the chairman.
Question. Are you a clerk in the Indian bureau?
Answer. I am.
Question. Do you know anything in regard to the Indian trust fund.
bonds, or have you heretofore known anything in regard to them?
Answer. Nothing; except that I knew they were in existence, and
I have seen some of them.
Question. Did you ever have them in your charge?
Answer. Never.




292           ABSTRACTED INDIAN TRUST BONDS.
Question. Are you familiar with the description of the bonds?
Answer. I cannot say that I am; I have never seen them but once.
By Mr. CASE:
Question. Are you the predecessor of Mr. Godard Bailey?
Answer. I am; he occupies the same desk I did, but these bonds
never were in the custody of any officer in the office of the Secretary of
the Interior until Mr. Bailey was appointed.
Question. In what department were they held previous to that?
Answer. In the Indian office.
Question. What particular officer or clerk had them in charge?
Answer. They were taken from the custody, in the Indian office, of
a clerk named Henry Beard.
Question. What office did he hold there?
Answer. He held the office of chief of the finance division in the
Indian office.
Question. And always, up to that time, the bonds had been held by
that officer?
Answer. They were in the custody of the Commissioner of Indian
Affairs, Mr. Beard being his subordinate.
Question. When Bailey was appointed your successor the additional
duty of the custody of those bonds was imposed upon him by Secretary
Thompson?
Answer. Yes, sir; by giving to him the trust fund account to
settle.
Question. For what reason?
Answer. Prior to that time there had been but one disbursing clerk
for the whole Department of the Interior. At the time of Bailey's
appointment three disbursing clerks were appointed, and this additional
duty of the custody of those bonds, and the Indian trust fund account,
was given to Mr. Bailey. I presumed it was done with the view to
give him the additional amount of $200 per annum, making his salary
$2,000. I received but $1,800.
FRIDAY, January 25, 1861.
GEORGE W. RIGGS recalled.
Examination by Mr. Harris.
Question. Has your house been in the habit of purchasing all the
bonds for the government which they have purchased?
Answer. For the Indian bureau, on the occasion of this investment; I do not know what other bonds the government has purchased
recently.
Question. Did you purchase all the bonds for the Indian fund on
behalf of the Interior Department?
Answer. I cannot say certainly, but I believe they nearly all passed
through my hands.
Question. Do you know what amount, in all, you purchased for the
department on this occasion?




ABSTRACTED INDIAN TRUST BONDS.             293
Answer. I could not answer without reference to my books.
Question. About what?
Answer. I cannot tell; a very large sum.
Question. Two or three millions?
Answer. Oh, no; not that amount. I think not above $1,000,000.
Question. You stated in your former examination that, among others,
you purchased Florida bonds: will you be good enough to state what
class of bonds they were —whether for railroad, or for what purposes?
Answer. They were bonds issued, I think, to defray the expenses
of Indian hostilities in that State.
Question. Were they all of that class?
Answer. Yes, sir. I sold no railroad securities to the department.
In my purchases for that fund were included some Tennessee railroad
bonds, guaranteed by that State; but when I offered them to the department, Secretary Thompson told me he would take nothing except
clear State bonds. I therefore withdrew those bonds, and sold thenl
in New York at my own loss of commission.
Question. Are you able to state at what rate the Florida bonds
which were accepted by the department were purchased by you?
Answer. They were purchased, I think, at par. They were purchased, according to my recollection, from the governor and treasurer
of the State. We had negotiations and correspondence with the governor of the State on the subject.
I presume your question is asked for the purpose of finding out
whether I purchased bonds of the railroads guaranteed by the internal improvement fund of the State for the government. If that be
the object, I will state that I never purchased any of those bonds
which were received by the department, but that, on the contrary,
such bonds were peremptorily refused by Mr. Thompson. He would
not touch them. The bonds bought by me, which were received by
the department, came direct to me from the State of Florida, in
pursuance of correspondence which we had with the governor and
treasurer of that State. Some of the checks fbr the payment of the
money were drawn by the treasurer. Some checks were remitted to
the governor. They were seven per cent. bonds, purchased at par,
issued in payment of Indian hostilities, which they claimed the
United States would eventually have to pay. My understanding was,
that an appropriation to be made by the United States would be used
in payment of the bonds. When applications were made to 3Mr.
Thompson to purchase-bonds for the Indian fund, he referred them to
me as his broker. He refused to have anything to do with the negotiations fbr the purchases himself, but referred all applicants to me.
Question. Do I understand you to say that you purchased these
Florida bonds of the governor and State treasurer of that State?
Answer. I purchased them, as I understood, direct from the State,
accounting to the State treasurer for the money.
Question. Who delivered them to you?
Answer. I could not tell without referring to my books. I think
Mr. Austin, the State treasurer, delivered some of them to me, and
some were furnished by the governor.
Question. Did the bonds show upon their face that they were issued




294           ABSTRACTED INDIAN TRUST BONDS.
by the State of Florida in payment of expenses which that State
alleged were incurred growing out of Indian hostilities?
Answer. I do not remember. You would have to refer to the bonds
themselves for that.
Question. Do you remember what you paid for the other bonds that
you purchased.
Answer. I do not. I could ascertain by reference to my books.
In this instance I think the governor of Florida told me that he could,not or would not sell the bonds below par.
WILLIAM H. RUSSELL appeared before the committee, and requested,
before answering definitely the question propounded to him by the
committee when he was last before them, he should be allowed the
presence of counsel to consult with from time to time as occasion
might require. By that means the committee would be able to proceed much more rapidly with his examination. As he had previously
stated, he was no lawyer, and did not understand his rights as a witness, having never been before any court or jury as a witness.
The CHAIRMAN said the question propounded to the witness when
last before the committee related to but a single point, as to whether
the witness desired the evidence given before them by him to become
a part of their record or be stricken out, and as to whether he elected
that his examination should proceed further. The committee wished
the witness to answer that question if he was prepared to do so, and
also to state the object for which he desired the presence of counsel.
The WITNESS replied he was willing that his examination should
proceed, and that he desired the presence of counsel to advise him
from time to time whether questions asked by the committee in the
progress of the examination were pertinent and proper. He had prepared a written answer to the question submitted by the committee
when he was last before them which he asked to have placed upon
record, which answer he then handed to and left with the committee,
The committee then deferred further action as to Mr. Russell.
WEDNESDAY, January 30, 1861.
HENRY BEARD recalled.
Examination by the chairman.
Question. I see that in abstract B, furnished to the committee by
the Interior Department, embracing the list of missing bonds, that
the number is put down at 872. As Russell only received from Bailey
870 bonds, and one was handed to Mr. Fitch, of Indiana, and all the
remainder of the bonds are on hand, please explain to the committee
how it occurred that 872 bonds were embraced in the abstract?
Answer. In the advertisement 871 bonds were embraced. The Indiana bond, handed to Mr. Fitch, as stated, was not embraced in the
list. It occurred in this way: it needed only 143 Tennessee bonds to
complete the 870 missing, but our office book or list of bonds, prepared
by Mr. Bailey, indicated 144 as missing. The Secretary directed us
to include all of the 144 bonds, as at that time some uncertainty was
felt as to whether there might not be more than 870 missing. The




ABSTRACTED INDIAN TRUST BONDS.               295
advertisement was prepared in haste, and before the full investigation
by Lammond,"Williamson, and myself, was completed. The inaccuracy is in the advertisement and list prepared.
Question. State whether any of the stocks, bonds, or securities held
in the Interior Department for the benefit of certain Indian tribes had
any marks, designations, or assignments thereon when you delivered
them to Bailey; and if so, what ones, and when purchased?
Answer. There was a little over two millions of stock in the chest
in 1853, when I took charge of it. It consisted largely of stocks which
had been assigned by the Secretary of War to the Secretary of the
Interior for the time being-probably as far back as 1849. Another
large portion of stocks consisted of certificates, which had been issued
to the Secretary of the Interior for the time being, the interest of
which was payable by drafts on the State treasurer or other State officers. All the coupon bonds contained in the chest had, upon the
backs thereof, the indorsement of the Secretary of War, with the exception of the Virginia coupon stocks. The United States stock fell
within the first two classes I have mentioned. A very considerable
portion of the Virginia stock was coupon bonds. Some time during
that summer a portion of those coupon bonds were indorsed in red
ink, with the name of the tribe to which they belonged. I will state
that in the summer of 1853 a considerable portion of the United States
stock fell due, and $105,000 of Tennessee five per cent. stocks for the
Wyandotte Indians was substituted for a large proportion of such
stock; and in October $100,000 of Missouri six per cent. coupon bonds
were purchased.  These together, making $205,000, were coupon
stock. I am of the impression that a portion of the Tennessee five
per cent. stock was indorsed with the name of the tribe to which they
were assigned. The Missouri stock was not indorsed. We could not
do it, because it was held in fractional portions by the different tribes.
In 1857, when I delivered up the chest, those Tennessee stocks were
there, and the Missouri stocks were there. I understand that
the $105,000 Tennessee five per cent. stocks to which I have
referred have been delivered to the Wyandotte Indians, and receipted for by them; and from* an examination made to-day I am
fully satisfied that the $100,000 of Missouri six per cent. bonds purchased in 1853 are now in the safe. The result is, referring to my
former testimony, that the stocks now in the safe are substantially the
same stocks that were there in 1853, except so far as the same have
fallen due and been redeemed, or others have been exchanged for other
stock of the same State. None of those bonds have been abstracted,
but all the abstraction has been confined to bonds lately purchased.
The $3,000 of Arkansas bonds have been on hand a long time. and
have the assignment of the Secretary of War to the Secretary of the
Interior upon the back. All the Maryland stocks are certificates, the
interest on which is payable by drafts upon the State treasury, and
were issued, I think, to the Secretary of the Interior for the time
being.  $183,000 of Kentucky five per cent. bonds are all indorsed
upon the back by the Secretary of War to the Secretary of the Interior
for the time being. The same is true of $70,000 of Indiana stock, and
ijf $250,000 of Tennessee five per cent. certificates. $145,000 of the:ennessee five per cents. were coupon bonds. I think some of these




296           ABSTRACTED INDIAN TRUST BONDS.
were indorsed with the name of the tribe, but not otherwise. According to my recollection, we indorsed the Wyandotte bonds, and none
others. I think they were $150,000. I think they were the bonds
delivered to the tribes afterwards. $63,000 of Missouri five per cents.
were indorsed by the Secretary of War. All the United States certificates and coupon bonds were indorsed in the same manner. I cannot tell what amount were certificate and what amount were coupons.
There were $157,000; a part issued to the Secretary of the Interior for
the time being; a part were coupon stock, and all the coupon stocks
had the indorsement upon them. The Virginia stocks consisted partly
of certificates and partly of coupon bonds. Some of them had no
indorsement on whatever, but I am under the impression that part
of them had. The certificates, of course, had none. We have them
all in the safe now, with the exception that some of the Chesapeake
and Ohio canal bonds have been surrendered to the treasurer, who
issued certificates for them. I cannot remember about the Michigan
stock. There were $64,000 of them, and I think they were indorsed
upon the back by the Secretary of War. $100,000 of Missouri six per
cent. coupon bonds had no indorsement on whatever. They were purchased in 1853 by Secretary McClelland.
Question. State to the committee more definitely than you have
what stocks, certificates, or other securities you find in the safe at this
time which were there when you delivered over that safe to Mr.
Bailey.
Answer. The result is obtained by subtraction.  There were
$1,993,741 82, less 105,000 of Wyandotte bonds delivered to the
Wyandotte Indians, also less $125,000 of Tennessee five per cent.
certificates, which fell due in the meantime, and in some manner
had been redeemed —making $230,000-which would leave in the
chest $1,763,741 82, which was substantially there at that time.
Question. State more definitely than you have what stocks, bonds,
or securities were in the safe at the time you delivered it to Bailey
upon which there was no indorsement whatever?
Answer. There were $100,000 of Missouri six per cent. coupon
bonds, and at least $40,000 of Tennessee five per cent. coupon bonds,
which had no indorsement whatever upon them. There were also
$168,000 of Wheeling city bonds, guaranteed by the State of Virginia, which had no indorsement on. A very considerable portion of
the Chesapeake and Ohio canal stock was indorsed, but I cannot state
here what portion was indorsed and what not. Some of these stocks
were purchased by Secretary McClelland, and some by Secretary
Stewart, as appears by the books.
MONDAY, February 4, 1861.
Hon. J. P. BENJAMIN sworn.
Examination by Mr. Morris.
Question. Have you been employed heretofore, and if so, when, by
Duncan, Sherman & Co. as an attorney to ascertain for them whether
drafts drawn by Russell, Majors & Waddell on the late Secretary of
War, John B. Floyd, and accepted by him, were legal?




ABSTRACTED INDIAN TRUST BONDS.             297
Answer. I was written to by an intimate friend, who is their attorney in New York, asking my opinion upon that subject. I was not
employed by them directly, nor did I receive any fee for my services.
Question. Did you consult with any of the government'officers
with reference to those acceptances; and if so, what was said?
Answer. In the letter I received it was stated that those drafts were
offered for negotiation on the assurance that they were issued with
the approbation of the President and the Attorney General. I called
upon the President, therefore, and submitted the inquiry to him.
He said he knew nothing about the matter; that they had been issued
without any knowledge of his; that he did not know by virtue of
what law they were issued; but that I might rely, if Mr. Floyd had
issued them, he had done so by virtue of law, and that I had better
apply to him to ascertain from him by virtue of what law he was
acting; he was confident that Floyd would satisfy me fully. I then
called upon Secretary Floyd and inquired of him. He informed me
that the matter had not been submitted to the Attorney General, as
that letter stated, and that the drafts were issued in virtue of a long
established custom of the office, and that he was not aware of any
law actually authorizing their issue, but that he would inquire into
it. he said the acceptances were issued in favor of those gentlemen
only after he had ascertained that the trains for transportation, whichi
they had contracted to send from St. Louis to Utah, had actually
started on their way; that the payments were to be made, under the
contract, in instalments, as the trains arrived at different points;
and that, having received intelligence of the actual departure of the
trains, he had accepted in advance of the arrival at the intermediate
point, having a certainty that they would arrive; and actuated by a
desire to facilitate the operations of gentlemen who had undertaken
to perform the contract at a time when it was exceedingly difficult to
have the work done, and when the government was not in funds to
advance for services it required. I suggested to him that I thought
he was acting imprudently; that if any accident should happen to
those trains, whether by attacks by Indians or any other cause, and
they should fail to arrive, it would be impossible for him to pay the
acceptances upon intelligence of that fact; and that that would give
good reason for complaints and investigations which would be injurious to him; and I urged upon him that he should discontinue the
practice. Two days afterwards I received a note from him informing
me that he was obliged for the frank statement I had made to him,
and that upon reflection he had determined that he would accept no
more. I communicated that to my correspondent.
Question. At what time did you have that conversation with the
President and Secretary of War?
Answer. My memory of dates is very bad; it was about a year
ago I should think, possibly eighteen months ago.
Question. Fix the time as near as you can.
Answer. It was during the first session of this Congress.
Question. Have you detailed all the conversation you had with the
President, Secretary of War, or any other officer, upon the subject of
the acceptances to which you have referred?
Answer. I have detailed everything I remember upon the subject.




298           ABSTRACTED INDIAN TRUST BONDS.
WEDNESDAY, February 6, 1861.
WM. R. DRINKARD recalled.
Examination by Mr. Morris.
Question. What has been the general custom of the War Department in reference to the acceptance of drafts of persons who hold con:tracts from the War Department?
Answer. I do not know that there is any custom, except that which
has prevailed during this administration. I do not know that there
was any other outside of that.
Question. Do you know whether any other Secretary of War than
Mr. Floyd has ever issued acceptances to persons holding contracts
with the War Department?
Answer. I do not.
Question. Then, your ans ver is, if I understand you correctly, that
he was the first Secretary of War who issued acceptances?
Answer. So far as I have any knowledge.
RICHARD B. IRWIN recalled.
Examination by Mr. Morris.
Question. Has any general custom prevailed in the War Department other than that which has prevailed during the present administration in making acceptances for parties who hold contracts from
that department?
Answer. I have never known or heard of any such acceptances being
given, except by Secretary Floyd.
Question. Please give to the committee such information as you
have in your possession pertaining to the amount of outstanding acceptances made by the late Secretary of War, John B. Floyd, for
Russell, Majors & Waddell, and also such further information as you
possess relating to the amount, dates, and numbers of acceptances
which the War Department have been notified are held by corporations and individuals, giving the names of the individuals and corporations holding them.
Answer. 1 have not the dates, but only the numbers here. A large
number of drafts having been accepted with blank months to run, I
am, of course, unable to fix the maximum amount; but I have endeavored to fix the minimum amount that can be now outstanding as
follows: The drafts shown by the Register to have matured on and
after the 28th of September, 1860, when the first drafts of which we
have notice of protest fell due, is $510,000. To these add the amount
accepted, with blank months to run, since the 1st of January, 1860,
the first acceptance of which was on the 12th of June, $795,000, and the
total is $1,305,000. Adding the amount of unregistered drafts shown
me by the committee, $798,000, makes the grand total of $2,103,000,
of which there are held as follows:




ABSTRACTED INDIAN TRUST BONDS.                                       299
By the Department of the Interior...............     $870,000
By private parties, to wit:
By Pierce & Bacon, of Boston —
No. E. J.................................................. $20,000
E. 0................................................ 20,000
8.........................................                       10,000
33.......                                                      15,000
unknown..............................................  195,000
-------- $260,000
By Hide and Leather Bank of BostonNo. unknown........................................  10,000
By Shoe and Leather Bank, New YorkNo. unknown...................................................         50,000
By Solon Humphrey, New YorkNo. 61........................................................   10,000
63...................................................   10,000
20,000
By Western Bank of MissouriNo. unknown...........10,OCO
By ilMerchants' Bank of St. LouisNo. unknown............................................    40,000
By Union Bank of MissouriNo. 1.......................................................    10,000
9.......................................................        5,000
15,000
By Bank of State of MissouriNo. E. N....................................... 5,000
E. P....................................................   10,000
unknown.................. 50,000
E. H..................................................O   10,000
E. J.............                        10,000.... 85,000
By Boatman's Saving Bank, St. LouisNo. 13..................................................   25,000
1.7..............................................    10,000
35,000
By North St. Louis Saving Institution, St. LouisNo. 36....................................,......... ~.........0  15 000
By Branch Bank of Louisville, Paducah, KyNo. 25......................................................   10,000
56.......................................................   10,000
- -------- 20,000
By South Berwick Bank, North CarolinaNo. 119......................................................                   15,000
Making   total in hands of private parties....................... 575,000
Adding amount held by Interior Department.................                            870,000
Makes a total of.............*..................... O.. 1,445,000




300           ABSTRACTED INDIAN TRUST BONDS.
Question. Do I understand your answer to be, that this $1,445,000
is the amount of outstanding acceptances in the hands of private
parties and corporations of which the department has had information?
Answer. It is.
Question. May there not be other outstanding acceptances, of which
the department has had no information?
Answer. There may of course be other outstanding acceptances, of
the whereabouts of which the department has no information.
Question. Have you in your possession a letter addressed by R. A.
Barnes, president of the Bank of the State of Missouri, to the present
Secretary of War, Hon. J. Holt, relating to acceptances of Governor
Floyd? If so, read it to the committee.
Answer. I have; and it reads as follows:
"BANK OF THE STATE OF MISSOURI,' St. Louis, January 24, 1861.
"DEAR SIR: I embrace the earliest opportunity, after your confirmation as Secretary of War, to notify you that this bank holds the
unconditional acceptances of the Hon. John B. Floyd, Secretary of
War, to the amount of $85,000, now past due, as per memorandum
herewith.
" We commenced taking these bills in May, 1858, at the earnest
request of the Secretary of War, contained in his letter of the 5th of
May, 1858, as per copy, which I annex; and, in the summer of 1859,
requiring further evidence, Colonel Drinkard addressed a letter under
date of September 7, 1859, a copy of which we also send, as well as
an attested copy of the letter of John B. Floyd, Secretary of War, to
J. T. Soutter, esq., president of the Bank of the Republic, New York,
of which we also send you a copy.
"The drafts we hold are all drawn against specified contracts; and
when the first protest occurred, on the 28th of September last, I went
to Washington, had two interviews with Secretary Floyd, in which
he told me to make myself perfectly easy on the subject; that not an
acceptance had been given except to facilitate the fulfilment of an
actual contract; that a memorandum  account of every acceptance
issued had been kept; that the contracts had been performed, or were
in the course of performance; that he kept a large percentage back
from  Russell, Majors & Waddell, which would always make the
government safe; and that while he could not advance the money, if
Russell, Majors & Waddell did not make arrangements to take up the
paper then under protest, and pay the others as they became due, he
would apply their earnings, as fast as they became due, to the payment of the acceptances himself.
"Respectfully,
" R." A. BARNES, Pre{ident.
"Hon. J. HOLT,
"Secretary of War, Washington City, D. C."




ABSTRACTED INDIAN TRUST BONDS.              301
Question. Have you in your possession the letter of Colonel Drinkard, chief clerk in the War Department, to which reference has been
made by Mr. Barnes in his letter,?
Answer. A copy of that letter was enclosed; it has already been
communicated to the committee by the department.
Question. You stated in your former testimony that $840,000 of
acceptances had been returned to the War Department. Please state
more definitely than you have heretofore by whom they were so returned.
Answer. So far as I recollect, they were returned by Mr. Russell
himself, with the exception of a few which we received from Samuel
& Allen, of St. Louis.
Question. Did any of the acceptances returned by Russell bear any
evidence of having been used by him?
Answer. They were drawn payable to the order of Russell, Majors
& Waddell; and most, if not all, of them had been indorsed by that
firm; and some also by Samuel & Allen in addition.
Quaestion. Have you received letters other than the one from Mr.
Barnes pertaining to the acceptances? If so, please state as nearly
as you can their substance; and whether you drew up the replies of
Secretary Holt to those letters; and if so, the substance of the
replies.
Answer. Since the copies of papers in regard to those acceptances
were communicated by the department to the committee, we have
received letters from several parties containing information of the
non-payment of drafts over due. I prepared the replies to those letters; and they stated, in substance, that, so far as the department was
informed, no provision had been made to meet the acceptances, and
that the amount due to Russell, Majors & Waddell on the first of
January was, so far as known to the department, about $8,750,
which would be retained until further advised by the Department of
the Interior. This matter was stated on the basis of a memorandum
from the Quartermaster General's office setting forth the gross amount
due as about $23,750; of which, $15,000 was to be withheld to refund
a duplicated payment by the assistant quartermaster of this city.




302            ABSTRACTED INDIAN TRUST BONDS.
APPENDIX.
EXHIBIT A,
Embracing copies of letters from the Secretary of War, John B. Floyd,
and his chief clerk, Mr. Drinkard, recommending Russell, Majors &
Waddell to credit, and that acceptances of the Secretary of War be
cashed; also letters from bankers and others in regard to acceptances.
WAR DEPARTMENT, Washington, February 9, 1858.
SIR: I have received yours of the 5th instant, making certain inquiries in regard to Messrs. Russell, Majors & Waddell, their contract with this department, and the probability of prompt payment
under that contract.
In reply, I have to say that these gentlemen have been for some
time connected with this department as contractors, and they now
have a very large contract for the transportation of army supplies.
They have a reputation for integrity, industry, and energy second to
none, and no doubt is entertained they will faithfully perform their
obligations under the present contract. The times and manner of
payment are specified in the instrument itself; and whenever Messrs.
Russell & Co. are entitled to a requisition, their direction as to its
disposition will be respected by this department.
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
WM. Cox DUSENBERY, New York City.
WAR DEPARTMENT, Washington, March 4, 1858.
SIR: The entire transportation of supplies for the army of the
United States from the borders of Missouri and Iowa to the military
posts upon the Great Plains, and to Utah Territory, has been confided to the firm of Russell, Majors & Waddell' who have long been
in the service of this department, and have given entire satisfaction.
An early movement upon the plains and on the mountains having
been resolved upon, a large expenditure of money has become a necessity. As this department will be indebted to Messrs. Russell,
Majors & Waddell to a far larger amount, I have accepted two
orders, each calling for the sum of one hundred thousand dollars.
These acceptances will be promptly paid, in pursuance of their
tenor, when the War Department is provided with funds, which,
probably, will be before long, though possibly not until towards the
close of the present session. The probabilities are, that funds will be




ABSTRACTED INDIAN TRUST BONDS.              303
appropriated in a deficiency bill, in anticipation of the passage of the
regular appropriation bills.
Messrs. Russell, Majors & Waddell desire to get an advance of
money upon this paper. If you will accommodate them you will
promote the wishes and assist the measures of this department. This
firm have been efficient and trusty servants of the government, and
were never more essential to it than at the present time. If you will
advance the money upon their assignment of the orders to you, I will
see that the funds shall be applied to their payment, according to the
tenor thereof. This is unusual, but as the wants of the contractors
are imperative, as I am informed, and as the department is without
funds with which to pay them for services already rendered, and is in
no condition to make advances to them, I have thought proper to give
you this assurance.
With a hope that it may suit your views to facilitate the wishes of
Messrs. Russell, Majors & Waddell, and thus to advance the interests
of the government,
I am, sir, with great respect, your most obedient servant,
JOHN B. FLOYD,
Secretary of War.
GEORGE NEWBOLD, Esq.,
President Bank of America, New York City.
WAR DEPARTMENT,
WaYshinglon, March 10, 1858.
SIR: The entire transportation of supplies for the army of the
United States from the borders of Missouri and Iowa to the military
posts upon the Great Plains, and to Utah Territory, has been confided to the firm of Russell, Majors & Waddell, who have long been
in the service of this department, and have given entire satisfaction.
An early movement upon the plains and in the mountains having
been resolved upon, a large expenditure of money has become a
necessity. As this department will be indebted to Messrs. Russell,
Majors & Waddell to a far larger amount, I have accepted two orders,
each calling for the sum of one hundred thousand dollars.
These acceptances will be promptly paid, in pursuance of their tenor,
when the War Department is provided with funds, which, probably,
will be before long, though possibly not until towards the close of the
present session. The probabilities are, that funds will be appropriated
in a deficiency bill, in anticipation of the passage of the regular appropriation bills.
Messrs. Russell, Majors & Waddell desire to get an advance of
money upon this paper. If you will accommodate them  you will
promote the wishes and assist the measures of this department. This
firm have been efficient and trusty servants of the government, and were
never more essential to it than at the present time. If you will advance
the money upon their assignment of the orders to you, I will see that
the funds shall be applied to their payment, according to the tenor




304           ABSTRACTED INDIAN TRUST BONDS.
thereof. This is unusual, but as the wants of the contractors are
imperative, as I am informed, and as the department is without funds
with which to pay them for services already rendered, and is in no
condition to make advances to them, I have thought proper to give you
this assurance.
With a hope that it may suit your views to facilitate the wishes of
Messrs. Russell, Majors & Waddell, and thus to advance the interests
of the government,
I am, sir, respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
AUGUST BELMONT, Esq., New York7 City.
WAR DEPARTMENT,
Washington, April 16, 1858.
SIR: I have to acknowledge the receipt of your letter of the 15th
instant, with a duplicate of one addressed to me on the 9th, stating
that you have cashed the draft of Messrs. Russell, Majors & Waddell
on this department for $50,000. Due notice is taken of this statement,
and it can only be said, in addition, that all drafts accepted by the
department will be-duly honored.
I am, sir, very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
S. A. MERCER, Esq.,
President Farmers and Alechanics' Bank,
Philadelphia, Pennsylvania.
WAR DEPARTMENT.
YWas]hington, MIay 1, 1858.
GENTLEMEN: The entire transportation of supplies for the army of
the United States from the borders of Missouri and Iowa to the military posts upon the Great Plains, and to Utah Territory, has been
confided to the firm of Russell, Majors & Waddell, who have long
been in the service of this department, and have given it entire
satisfaction.
As this department will be indebted to these gentlemen to a far
larger amount, I have accepted five orders, two calling for the sum of
one hundred thousand dollars each, and three for fifty thousand
dollars each, all but two orders of the last named amount having
been negotiated.
These acceptances will be promptly paid in pursuance of their tenor.
If you will advance the money upon their assignment of the orders
to you, I will see that the funds shall be applied to their payment.
This is unusual, but as the wants of the contractors are great, as I




ABSTRACTED INDIAN TRUST BONDS.             305
am informed, and as the department is in no condition to make advances
to them, I have thought proper to give you this assurance.
With a hope that it may suit your views to facilitate the, wishes of
Messrs. Russell, Majors & Waddell, and thus to advance the interests
of the government,
I am, gentlemen, very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
The PRESIDENT AND DIRECTORS
Of the Barnk of the State of Missouri, St. Louis, Missouri.
WAR DEPARTMENT, Washington, May 1, 1858.
GENTLEMEN: As this department will be indebted to Messrs. Russell,
Majors & Waddell to a large amount, I have accepted five orders,
two calling for the sum of one hundred thousand dollars each, and
three for fifty thousand dollars each, all but two orders of the last
named amount having been negotiated.
These acceptances will be promptly paid, in pursuance of their
tenor. If you will advance the money upon their assignment of the
orders to you, I will see that the funds shall be applied to their payment.
Very respectfully, your obedient servant,
JOHN B. FLOYD, Secretary of War.
The PRESIDENT AND DIRECTORS
Of the Bank of the Republic, New York City.
The same, mutatis mutandis, to G. B. Carhart, New York city.
WAR DEPARTMENT, Washington, May 5, 1858.
GENTLEMEN: The entire transportation of supplies for the army of
the United States from the borders of Missouri and Iowa to the military posts upon the Great Plains and to Utah Territory, has been
confided to the firm of Russell, Majors & Waddell, who have long
been in the service of this department, and have given it entire satisfaction.
These acceptances will be promptly paid, in pursuance to their
tenor. If you will advance the money upon their assignment of the
orders to you, I will see that the funds shall be applied to their payment. This is unusual, but as the wants of the contractors are great,
as I am informed, and as the department is in no condition to make
advances to them, I have thought proper to give you this assurance.
With a hope that it may suit your views to facilitate the wishes of
Messrs. Russell, Majors & Waddell, and thus to advance the interests
of the' government,
I am, gentlemen, very respectfully, your obedient servant,
JOHN B. FLOYD, Secretary of War.
The PRESIDENT AND DIRECTORS
Of the Bank of the State of Missouri, St. Louis, Missouri.
H. Rep. Comn. 78    20




306           ABSTRACTED INDIAN TRUST BONDS.
WAR DEPARTMENT, Washington, September 2, 1858.
SIR: Messrs. Russell, Majors & Waddell, contractors, have commissioned Mr. L. R. Smoot, of the firm of Smoot, Russell & Co., of
Leavenworth city, Kansas Territory, to negotiate a loan for them,
and have requested the acceptances of this department on account of
moneys becoming due and payable to them under their contract with
the quartermaster general of the 16th January last. I have, accordingly, accepted the drafts presented for that purpose, and placed them
in the hands of Mr. Smoot, as requested.
At the request of Messrs. Russell, Majors & Waddell, I will state
that when the stores now in transitu are delivered, the department is
informed by the officer in charge of that particular business, they
will be entitled to receive under their contract not less than two
millions of dollars. This, no doubt, is a sufficient guarantee, if any
were needed, that the acceptances now offered, like those heretofore
issued, will be promptly met at maturity.
As to the necessity for these additional acceptances, it is sufficient
to say that it was not created by the act of the contractors, nor will
the delay occasioned diminish their ultimate receipts. On the contrary, the department has unabated confidence in their ability and
fidelity as contractors, and intends to afford them every reasonable
facility in the execution of their contract.
Very respectfully, your obedient servant,
JOHN B. FLOYD, Secretary of War.
JAMES T. SOUTTER, Esq.,
President Bank of the Republic, New York.
Same to George Newbold, esq., president of Bank of America, New
York.
WAR DEPARTMENT, Washington, October 20, 1858.
GENTLEMEN: I received this morning your telegraphic despatch in
regard to the payment of a draft for four thousand five hundred and
fifty-nine dollars and twenty cents, drawn by Russell, Majors &
Waddell in favor of A. M. White.
No such draft has been accepted by the Secretary of War, and it
must have been altogether a private transaction between the contractors of this department and a third party, of which the department has no cognizance. Persons who may have contracted with
them must look for the fulfilment of their agreements to them, and
not to the United States. All amounts due the contractors by this
department will be paid as the bills of lading and vouchers are returned; and although I do not doubt that they will meet all their




ABSTRACTED INDIAN' TRUST BONDS.             307
engagements with private parties, this will not become known to, and
is in no way the concern of; the Secretary of War.
Very respectfully, your obedient servant,
W. R. DRINKARD,
Acting Secretary of War.
Messrs. RIDGEWAY & CO.,
308 Walnut street, Philadelphia.
P. S.-I understand that Suter, Lea & Co., bankers, of this city,
are the agents of Russell, Majors & Waddell.
WAR DEPARTMENT, February 15, 1859.
SIR: Messrs. Russell, Majors & Waddell, contractors for the transportation of army supplies, desiring to negotiate a loan in advance of
payments which they will be entitled to receive from this department,
have requested my acceptances on account of moneys becoming due
and payable to them under their contract. I have accordingly accepted the drafts they have presented for that purpose.
I am informed that this negotiation would- have been unnecessary
had a large number of the trains belonging to the firm succeeded in
reaching Camp Floyd, Utah, during the past fall; but they were
stopped at Camp Scott by a violent snow storm, and detained there
all the winter. And as the contractors are not entitled to their
freight until they furnish evidence of its delivery at the point of
destination, a very large amount now, or soon becoming, due to them
cannot be paid for some months to come.
This firm have been efficient and trusty servants to the government, and are entitled to the fullest credit and confidence, and I have
only to add that, if you will advance the money they desire upon the
assignment of these acceptances to you, I will see that the funds are
applied to their payment, according to the tenor thereof.
I have the honor to be, very respectfully, your obedient servant,
JOHN B. FLOYD, Secretary of War.
AUGUSTE BELMONT, Esq., New York City.
WAR DEPARTMENT, April 14, 1859.
SIR: I have to acknowledge the receipt of your letters of the 21st
ultimo and 4th instant, containing notice of discount for a draft of
Messrs. Russell, Majors & Waddell for five thousand dollars, drawn
upon and accepted by this department.
Very respectfully, your obedient servant,
JOHN B. FLOYD, Secretary of War.
W. RUSHTON, Jr., Esq.,
Cashier Farmers and Mechanics' Bank, Philadelphia.




308           ABSTRACTED INDIAN TRUST BONDS.
[Telegram.]
WAR DEPARTMENT, June 17, 1859.
Yours of yesterday was received too late for me to answer by today's mail
The appropriations are made to meet the liabilities you refer to,
and the drafts will be met at maturity.
JOHN B. FLOYD, Secretary of War.
DUNCAN, SHERMAN & CO., New York City.
WAR DEPARTMENT, June 22, 1859.
GENTLEMEN: I have received your letter of the 21st instant, with
the enclosed copy of one addressed to me on the 16th instant, in regard to the payment of certain drafts drawn by Messrs. Russell,
Majors & Waddell on this department.
I enclose herewith, in reply, a copy of a telegram despatch to you
on receipt of your former communication, advising you that the
necessary appropriations had been made, and that the drafts would
be honored at maturity.
Very respectfully, your obedient servant,
JOHN B. FLOYD, Secretary of War.
Messrs. DUNCAN, SHERMAN & CO., Bankers, New York.
WAR DEPARTMENT, September 2, 1859.
GENTLEMEN: In reply to the inquires contained in your letter of the
26th ultimo, I have to inform you that the drafts of Messrs. Russell,
Majors & Waddell, to which you refer, were drawn on account of
moneys becoming due to them under their contract for transporting
military supplies to Utah, and were designed to avoid the inconvenience sustained by the contractors in consequence of being compelled to await payment for work actually done during the length of
time necessarily involved in the return of their bills of lading from
so great a distance. They were accepted as a matter of accommodation, and will, of course, be met at maturity, according to their tenor;
although, up to the present time, this department has never been called
upon for payment, Messrs. Russell, Majors & Waddell, themselves,
having always made timely provision for their discharge.
Very respectfully, your obedient servant,
W. R. DRINKARD,
Acting Secretary of War.
Messrs. POLLARD and RENICK,
St. Louis, Missouri.




ABSTRACTED INDIAN TRUST BONDS.              309
WAR DEPARTMENT, September 3, 1859.
SIR: In reply to your letter of the 1st instant, received this morning, I have to state that the drafts of Messrs. Russell, Majors &
Waddell, to which you refer, are for moneys becoming due to them
under their contract for transporting supplies to Utah, and were
merely designed to avoid the delay in payment for their work involved
in the return of the bills of lading from so great a distance. They
were accepted by this department, as a matter of accommodation to
the contractors, and will, of course, be met at maturity, according to
their tenor; although, up to the present time, this department has
never been called upon for payment, timely provision therefor
having always been made by Messrs. Russell, Majors & Waddell.
Very respectfully, your obedient servant,
W. R. DRINKARD,
Acting Secretary of War.
W. W. SCARBURGH, Esq.,
President of the Bank of the Ohio Valley, Cincinnati.
WAR DEPARTMENT, September 7, 1859.
GENTLEMEN: Messrs. Russell, Majors & Waddell having requested
that the terms on which their drafts have been accepted by this department might be communicated to you, I have to acquaint you that
these drafts were drawn on account of moneys becoming due to those
gentlemen, under their contract for transporting military supplies to
Utah, and were merely designed to avoid the inconvenience sustained
by the contractors in consequence of the delay in payment for their
work, involved in the return of the bills of lading from so great a
distance.  They were accepted by this department as a matter of
accommodation to the contractors, and will, of course, be met at
maturity, according to their tenor; although, up to the present time,
this department has never been called upon for payment, timely provision therefor having always been made by Messrs. Russell, Majors
& Waddell.
Very respectfully, your obedient servant,
W. R. DRINKARD,
Acting Secretary of War.
Messrs. SAMUEL and ALLEN,
132 North 2d Street, St. Louis, Missouri.
WAR DEPARTMENT, December 22, 1859.
SIR: The drafts of Russell, Majors & Waddell, drawn upon, and
accepted by, this department, payable at your bank, are predicated
upon their. contracts with the commissary general of subsistence of the
United States army for supplying the army of Utah with flour and
beef, the appropriation for which was made by the last Congress,




310           ABSTRACTED INDIAN TRUST BONDS.
and payment will be promptly made as they mature, whether held by
your bank or other parties.
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
J. T. SOUTTER, Esq.,
President of the Bank of the Republic, New York.
WAR DEPARTMENT, December 30, 1859.
SIR: The drafts of Russell, Majors & Waddell, drawn upon, and
accepted by, this department, payable at the Bank of the Republic,
New York, are predicated upon their contracts with the commissary
general of subsistence for supplying the army of Utah with flour and
beef, the appropriation for which was made by the last Congress, and
payment will be promptly made as they mature, whether held by you
or other parties.
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
FITZHUGH COYLE, Esq.,
Washington.
WAR DEPARTMENT, January 13, 1860.
GENTLEMEN: I did not open your letter of the 12th instant in time
to give you an answer by return of mail.
In reply to your inquiry, I have the honor to state that the acceptance you refer to, which is herewith returned, is in due form, and will
be promptly paid at maturity; the money to meet it having been
already appropriated by Congress.
I will add that all the drafts of Messrs. Russell, Majors & Waddell,
which have been accepted by me, are predicated upon contracts,
authorizing and making appropriations for the same, and it never has
been my intention to accept any others.
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
Messrs. DUNCAN, SHERMAN & Co., New York.
WAR DEPARTMENT, November 17, 1860.
GENTLEMEN: I have the honor to acknowledge the receipt of yours
of —the 10th and 15th instant, notifying me that you are the owners
of certain drafts of Russell, Majors & Waddell, accepted'by me and
not yet due.




ABSTRACTED INDIAN TRUST BONDS.               311
But for the press of official engagements your first letter would
have been earlier responded to, by the remark that I have no doubt
the acceptances referred to will be promptly paid at maturity.,
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
Messrs. DUNCAN, SHERMAN & CO., New York.
WAR DEPARTMENT, December 24, 1860.
GENTLEMEN: In accordance with the request contained in your letter
of the 12th instant, I have filed with the quartermaster general a
memorandum of the acceptances therein referred to, which, by arrangement between you and Messrs. Russell, Majors & Waddell, are to be
paid out of the first receipts under their contract for transportation.
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
Messrs. PIERCE & BACON,
Boston, Massachusetts.
WAR DEPARTMENT, December 29, 1860.
SIR: I have received your letter of the 26th instant, asking that no
advances or payments may be made to Messrs. Russell, Majors &
Waddell, contractors for transportation, until advised by your department; and have caused the same to be placed on file in the Quartermaster General's office.
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
Hon. J. THOMPSON,
Secretary of the Interior.
Letters addressed to the Secretary of War by bankers, relating to acceptances held by them.
BANK OF THE OHIO VALLEY,
Cincinnati, September 1, 1859.
DEAR SIR: Owing to a severe money pressure in St. Louis, drafts
on your department, made by Messrs. Russell, Majors & Waddell, for
contract of supply of Utah army, and, under your acceptance, have
been offered to us for encashment.




312           ABSTRACTED INDIAN TRUST BONDS.
Mr. Springer, one of our stockholders, wrote to Messrs. Riggs &
Co. upon yesterday in reference to one piece of this paper, of $25,000.
To-day these gentlemen propose to negotiate further sums here, and
request me to write to you direct.
We shall be glad to aid in their negotiation if we can have implicit
dependence upon their punctual payment at Bank of Republic, in
New York. Can we depend upon this?
Very respectfully, your obedient servant,
W. W. SCARBOROUGH, President.
Hon. JOHN B. FLOYD,
Secretary of War, Washington, D. C.
OFFICE OF DUNCAN, SHERMAN & Co., BANKERS,
New York, January 12, 1860.
DEAR SIR: We beg to enclose for your examination a bill drawn
by Russell, Majors & Waddell, at New York, on the Secretary of
War, dated November 19, 1859, for $20,000, begging you to inform
us if the same is in due order, and if such provision has been made by
law as will insure its payment at maturity.
With your advice, have the goodness to return it to us in due course,
and oblige,
Your most obedient servants,
DUNCAN, SHERMAN & CO.
JOHN B. FLOYD, Esq.,
Secretary of War, Washington.
Russell, Majors & Waddell:
On the Secretary of War, for $20,000, dated New York, November
19, 1859, payable five months after date at Bank of the Republic.
OFFICE OF DUNCAN, SHERMAN & Co., BANKERS,
New York, January 16, 1860.
DEAR SIR: We are in receipt of your favor of the 13th instant,
with enclosure as advised, and note your remarks, for which we beg
to thank you, and have the honor to remain,
Your most obedient servants,
DUNCAN, SHERMAN & CO.
Hon. JOHN B. FLOYD,
Secretary of War, Washington.
FRANKLIN SAVINGS ASSOCIATION,
St. Louis, October 4, 1860.
DEAR SIR: This association having become responsible to a considerable amount by indorsing drafts drawn by Messrs. Russell, Majors




ABSTRACTED INDIAN TRUST BONDS.             313
& Waddell on the Secretary of War, and by him accepted, it is important for us to know whether said drafts will be promptly paid at
maturity, and I take the liberty to request you to inform me whether
I can rely on it.
I remain, respectfully, sir, your obedient servant,
F. RINGELING, Cashier.
Hon. JOHN B. FLOYD,
Secretary of War, WVashington City.
BOATMAN'S SAVING INSTITUTION,
St. Louis, October 4, 1860.
SIR: This institution holds your acceptance, No. 13, of Russell,
Majors & Waddell's draft for twenty-five thousand dollars, protested
for non-payment, in the city of New York, on the 28th ultimo.
Respectfully, yours,
C. HIODGMAN, Cashier.
Hon. JOHN B. FLOYD,
Secretary of War, Washington City.
BOATMAN'S SAVING INSTITUTION,
St. Louis, October 5, 1860.
SinR: This institution holds your acceptance, No. 17, of Russell,
Major & Waddell's draft for ten thousand dollars, protested for nonpayment in the city of New York, on the ist instant.
Respectfully, yours,
C. HODGMAN, Cashier.
Hon. JOHN B. FLOYD,
Secretary of War, Washington City.
THE MERCHANTS' BANK OF ST. LOUIs,
St. Louis, October 8, 1860.
SIR: This bank is the owner and holder of your three acceptances
of Russell, Majors & Waddell's drafts, amounting to forty thousand
dollars, twenty-five thousand of which has been protested in New
York for non-payment.
We have a lengthy communication from Mr. Russell, now in New
York, in which he enumerates the causes which have prevented their
being able to provide as usual for the prompt payment of their drafts;
the main cause being the late period at which the freight was given
them for transportation —being some months later than usual. We
understand that some two hundred thousand dollars will be earned
and due them for this transportation in the course of a short time.
I desire to know whether the amount will be first applied upon your




314           ABSTRACTED INDIAN TRUST BONDS.
acceptances, and for what amount you have given your name; also,
in view of their failure, to what extent are you secured; and, in any
contingency, how may we regard the paper.
An early reply will obligeYours, very respectfully,
J. J. BROWNLEE,
President.
Hon. J. B. FLOYD,
Secretary of War, Washington, D. C.
HIDE AND LEATHER BANK,
Boston, October 10, 1860.
DEAR SIR: Your acceptance of Russell, Majors & Waddell's draft
for ten thousand dollars went to protest in New York yesterday.
Will you have the kindness to inform  us vWhen the department
will be in funds for this, and if similar bills, yet to mature, will be
met when due?
Yours, very respectfully,
JOHN S. MARCH, Cashier.
Hon. J. B. FLOYD,
Secretary of War, Washington.
WESTERN BANK OF MISSOURI,
St. Joseph, October 17, 1860.
DEAR SIR: A bill accepted by you as Secretary of War, drawn by
Russell, Majors & Waddell, indorsed by same, dated June 12, 1860,
due January 12 and 15, 1861, for $10,000, and payable at the Bank
of the Republic, New York, was discounted by this bank, and is left
for collection at the Bank of the Republic, (New York,) when due, in the
hands of our agents, the American Exchange Bank, of the same city.
By order.
Yours, respectfully,
B. M. HUGHES, Cashier.
Hon. JOHN B. FLOYD,
Secretary of War.
SHOE AND LEATHER BANK,
New York, October 18, 1860.
DEAR SIR: This bank owns drafts of Russell, Majors & Waddell,
accepted by yourself, amounting to $50,000.
I enclose a copy of each acceptance so held.
Please put them on file and notify us when they will be paid.
Respectfully, yours, &c.,
W. A. KISSAM, Cashier.
Hon. JOHN B. FLOYD,
Secretary of War.




ABSTRACTED INDIAN TRUST BONDS.             315
BRANCH BANK OF LOUISVILLE,
Paducah, Kentucky, October 22, 1860.
DEAR SIR: This bank is the holder of two bills of $10,000 each with
your acceptance. The one due October 7-10, has gone to protest in New
York, at Bank of the Republic, where due. We wish to learn from
you why it went to protest. The bill is drawn by Russell, Majors &
Waddell, and dated Washington, June 7, 1860. We would be
pleased to know what course you desire to be pursued on these bills.
Very respectfully,
J. CAMPBELL, President.
Hon. JOHN B. FLOYD,
Washington, D. C.
SHQE AND LEATHER BANK,
INew York, October 22, 1860.
DEAR SIR: I have received your letter of the 20th instant, and in
reply would state that two of your acceptances of' Russell, Majors &
Waddell's drafts, past due, have not been provided for by the drawers,
viz: one due 16th instant, for $15,000, and the other due 18th, for
$10,000. The former we have agreed to extend thirty days from maturity of the acceptance.
Respectfully,
W. A. KISSAM, Cashier.
HIon. J. B. FLOYD,
Secretary of War.
SHOE AND LEATHER BANK,
New York, November 21, 1860.
DEAR SIR: We now hold your acceptances of drafts drawn by Russell, Majors & Waddell, as stated below. We have given them additional time to provide for the payment of the same, viz:
$25,000, due October 28; $15,000, due October 18.
Respectfully, yours, &c.,
W. A. KISSAM, Cashier.
Hon. J B. FLOYD,
Secretary of War.
SHOE AND LEATHER BANK,
New York, November 22, 1860.
DEAR SIR: On the 21st I advised you of $40,000 of your acceptances with us. I should have stated $35,000 —one of $25,000, due
October 28, and one of $10,000, due October 18.
Respectfully, &c.,
W. A. KISSAM, Cashier.
Hon. J. B. FLOYD,
Secretary of War.




316               ABSTRACTED INDIAN  TRUST BONDS.
WASHINGTON, D. C., December 12, 1860.
SIR: Below we hand you memoranda of your acceptances of Russell, Majors & Waddell's drafts held by us, and for which you have
promised to place an order on file for their payment, as they mature,
from the earnings of the contract upon which these acceptances were
issued, viz:
Your acceptance of Russell, Majors & Waddell's drafts dueSeptember 26-29, 1860, for..................................$.....  $20,000
October 1-4, 1860, for....................................  10,000
October 1-4, 1860, for.....................................   5,000
October 8-11, 1860, for.............................        a.,.,   10,000
October 21-24, 1860, for............................  20,000
November 8-11, 1860, for....................................  10,000
December 14-17, 1860, for............................................  15,000
January 10-13, 1861, for....                It.........  10,000
January 11-14, 1861, for..................    -............. 10,000
January 11-14, 1861, for................I**...... 10,000
January 12-15, 1861, for..............................................  15,000
January 13-16, 1861, for.............................................   15,000
January 18-21, 1861, for..............................................  10,000
January 20-23, 1861, for.................................      10,000
January 23-26, 1861, for.....................................  10,000
February 11-14, 1861, for.............................................  10,000
February 13-16, 1861, for......................................      10,000
February 16-19, 1861, for.............................................  10,000
February 17-20, 1861, fo or...............................    15,000
March 12-15, 1861, for............................    10,000
March 15-18, 1861, for................              5,000
March 17-20, 1861, for...........................         10,000
MSarch 20-23, 1861, for....................................0    10,000
260,000
Now over due........................................   $75,000
Due in December, 1860....................................  15,000
Due in January, 1861...............                       90,000
Due in February, 1861................................. s,  45,000
Due in March, 1861...........................             35,000
260,000
Awaiting advices of appropriations for payments of the above, and
where to present the same for payment,
We are your very obedient servants,
PIERCE & BACON, of Boston.
Hon. J. B. FLOYD,
Secretary of War.




ABSTRACTED INDIAN TRUST BONDS.                              317
EXHIBIT B.
Referred to by Mr. Atkinson, Third Auditor, in his testimony, and containing particulars of payments to Russell, Majors &  Waddell.
No. 1.
Abstract of payments to Messrs. Majors & Russell, on account of transportation,
by Gaptain Stewart Van Vleit, assistant quartermaster United States army, at
Fort Leavenworth, Kansas Territory, during the year 1858.
April 19, 1858..........................................            $2,277 42
May 27, 1858............................................                12 9250 90
June 28, 1858..................................       116 06
Total...........................................    14,644 38
No. 1.
Abstract of payments to Messrs. Russell, Majors &  Waddell, on account
of transportation, by Captain  Stewart Van  Vliet, assistant quartermaster United States army at Fort Leavenworth, Kansas Territory,
during the year 1858.
Date.              Amount..                Date.              Amount.
May 27, 1858                  $50,592 95   August 14, 1858 -. —-           $12, 792 70
Do ----      -15,638 96   August 20, 1858. —-----                     25,389 49
Do -—, —,........ 12, 639 74  Do -------------—.      11,344 83
June 4, 1858. -     -          26,322 12        Do...                   27,968 62
June 28, 1858  -    -          35,832 95   September 6, 1858                53, 330 12
Do  - -15, 958 28    Do —------                                        62, 958 52
Do-..             14,760 49         Do                          2, 575 88
Do  - -                   14, 365 07    Do                 ---          9,596 80
June 30, 1858-                 48, 698 58       Do                          68, 827 01
July 26, 1858-                 20,664 70        Do.                     10, 672 48
Do. —       -            31,634 03         Do -------------           17, 821 25
Do.. ------- --   -       19,397 02   September 20, 1858... 39,445 22
Do —.                    28,984 89  Do-                               40,282 42
Do ---                    19,025 88  Do-                               11,947 25
Do- -                       6, 138 33    Do-_ —---------               14,016 38
July 31, 1858 -     -14,458 22                  Do —-.. ----— 18,001 12
Do-....7,576 34             Do ---------                8,794 17
Do   -       -12,515 12   September 21, 1858..    4, 597 14
August 2, 1858 ----—..        25,586 51   September 22, 1858. - -         10, 678 96
Do --                      14,475 06  Do ---   14, 613 52
Do  -D. —---- -------     18,981 22   September 23, 1858               4, 044 46
Do  -        -1,166 20    Do ---------— 7,447 86
August 6, 1858......... 10,001 87        Do ---     ----            10,839 95
Do  - -                    18,135 32    Do-                            16,778 98
Do -.... 22,697 47   Do.-                                     28,063 53
Do -------- --------        6,093 71        Do-. —-----------         16, 061 06
August 10, 1858 ------             364 04        Do         -                8,955 53
Do — 1,408 49   Do. — -                                                 6, 676'37
August 13, 1858 ---- ----      36,090 48         Do                          8, 884 58
Do ------- ---      -      12, 487 82   September 30, 1858. -..        17,018 82




318              ABSTRACTED INDIAN TRUST BONDS.
No. 1 —Continued.
Date.            Amount.              Date.            Amount.
September 30, 1858        $20,199 94  November 2, 1858     $11,627 17
Do — 8, 706 35  Do —-. 15,015 66
Do ----                17,429 17   Do  ---                    14, 715 20
Do.           9,914 81      Do    - - -              4,623 62
Do.         10,471 19  November 4, 1858 -          11,954 05
Do-                     8,935 25   Do                            928 00
Do.......... 8,454 51  November 15, 1858......     1,008 93
Do       ----          34, 104 60  November 22, 1858 -----       726 51
October 4, 1858......... 18, 026 41  November 26, 1858  -     15,008 26
Do         --— 3, 963 07               Do    - - -            12,594 25
Do — 4,330 47  Do  ---                                        11,870 22
Do. — -- -            13,578 40      Do............- 11,484 42
October 10, 1858..       9, ]189 36    Do --  ----             12,092 43
Do........... — —. 3,634 70          Do- -                    8.586 31
October 14, 1858.... 28,887" 11  Do.                    15,739 84
Do-. -13,374 96  Do — 1,441 16
Do- ----------         13,786 38      Do.                      3,282 70
Do.  -     -12,592 74  November 30, 1858 -                    15,812 35
Do — 14,332 55                        Do-                     14,923 54
Do                      9,889 54      Do --       --          16,624 34
Do -14,250 11  Do ----    17,678 92
Do          - -9, 984 72   Do. —— 12,601 50
Do -       --          14, 152 69     Do. --        -        11,540 51
Do. —-------          14,138 38      Do..- -         -      11,606 22
Do.-                  14,112 21  December 7, 1858. —----    13,979 88
Do -                   13,537 76  Do --                       13,689 40
Do          - -         9,154 69  Do -                         4,730 83
Do. ---                26,784 19      Do-                     13,540 55
Do.-... 3,782 96  Do-                          362 63
Do                     10,960 26      Do. -        -            527 94
October 15, 1858            1,439 49      Do   -      -            1,266 64
Do       --             2,706 55  December 11, 1858-.,   11,139 56
October 23, 1858-          28,295 87      Do                      13,043 17
Do                     14,540 56      Do -        -. 10, 915 08
Do..                  12,597 39      Do   -      -12,017 50
Do -13,368 82  Do — 14,985 45
Do       -             12,891 45      Do.. -    -16,522 87
Do -                   13,312 88      Do   -      -17,126 79
Do -                   10,417 98   Do-                        16,723 27
Do --------               639 22      Do         -11,090 82
Do-.-.- -     -           627 88      Do ----                  8,406 58
October 26, 1858 ---       13,390 51'Do..-                 13,930 38
Do. —------ -         13,485 70      Do   -      -16,683 43
Do. —---—. 13,377 75                Do --------             10,392 77
Do -       -13,170 40  December 20, 1858 ------               11,717 08
Do -13,658 52  Do — 19,101 92
Do-                     9,353 03      Do. —-----------       13,231 88
Do -6,534 24  Do ---                                           9, 661 84
Do- -------------      38,961 95      Do -        -.      18,524 20
Do -                   32,191 08   Do- -                       9,928 41
Do -2,084 21  Do-                                              2,385 61
Do ----     -8,064 35  December 30, 1858                      13,769 43
November 2, 1858           12,564 40      Do                       2,455 38
Do ---                 13,442 19      Do.... —-.             1,238 17
Total --— 2,425,378 35




No. 2.
Statement of payments made by Captain M1. S. Miller, assistant quartermaster at Washington, D. G., to Messrs. Majors
& Russell, and Mfessrs. R1ussell, Majors & Waddell, during the year 1858.
Date.   Number of           On what account.            Amount paid.               To whom paid.                Disallowed.
voucher.
1858.  1st quarter.:
Jan.   25    23    Transportation -                         $37,017 83  Majors & Russell - 
39  29 -,-do -                                         17,326 88    do. —--------------                                 H0
2d quarter.
May 13 37. — do                                             29,019 76  do -                                                 t
38...do -15,925 96    do                                                                                  
39  -— do                                        1,919 58 --       do. 
41 -— do -                                       1,889 93 — do -
42.do -  80 40 — do                                                              --- 
43......do                                     15,171 34 — do -. 
14  44  Demurrage                                      55,437 50 -- do............. — -H 
45  Transportation -------                       4,781 54 --   do._q...-...........
June 29  82...do ------------- - ----  30,533 88 -- do............ —   -H- 
83  -— do-                                       6,420 05  Russell,Majors & Waddell -
84: -do -.... 59,164 06.-.... do.-..... 
85 — do                  --  13,365 89 -...do -......                                               -              ~
86. —do -                                       6,683 88 -...do.-......
87 -— do  — 3,292 31 -...do -......
88...do -------- ---             -      8,675 83.-....do..:.....
89 — do   - -11,439 73    do.-..
30  106 — do   -                    -15,884 44 ----- do 
107 -— do-                   -                   36,369 97 ----- do.......
108 — do --- 5,842 21 -                                             do  -..- -.3d quarter.
July 28 14 — do. -. 38,641 00 ---— do. 
29  15 — do -                                           7.868 89. do.......                                -
16 -— do. - -                                   74545 32 - do.-. —---- -




No. 2-Continued.
o
___..................
Date.    Number of                   On what account.                    Amount paid.                       To whom paid.                        Disallowed.
voucher..............~~~~~~~..._...
1858.   3d quarter.
Aug.  10    36    Transportation -                          -              $50,479 66 Russell, Majors & Waddell' -p —------------
25 39 —. do. —.. 27,734 23. —--- do.-..... 
40 — do  — 19,010 28.do - -—.H
41  --— do   -........ 10,214 66 --- - do -                                                     ---------------------------  ------
42 — do --                                                    12,872 25 ---- do. —-------------- -----
43 -— do. —--------- -                       --- -   8,314 14 ----- do ---------------- -                                     -- ---
30  45 --- do -                                                         3,909 93 ---- do ---------------- ------
46 --- do-                                                    11,567 28 -..... do  -...............
47 -- do    -— 4,983 88 —. do    -                                                                                               -----------—..
48.do -— o 4,548 70 ---- do ---------------- -
49 --  do   -                        -8,433 18 --—. do                                            _. —------------ -         --- -         --
31       60        -- do -------------------.             55,448 78 - -             do -    -------------------—. — -------
Sept. 25  86 --- do -                                                           41,248 71    do.-.....................
4th quarter.                                                                                                                                             H
Nov. 29  74 -— do  - -_  13,912 27 — do.-......... —                                                                                                          --
75 — do -...-   16,769 85 -- do --------------- -                                                                              -------   m
76 --- do ---------- -                        -----    5,734 72 —--- do ------------------ -                                   -H —         - 
77 --- do                                                       1,990 69    do.-.....                                                              t
78 --- do ---------- --------    7,861 70 —     do. —-- -                                                           -         --------------.
79  ---    do ---------------------------—..    12,720 35 -                           do -----------------------
80 -- do    ---                                                6,789 53...... do. —--—.
81 -- do -                                                     3,804 88 -__ —- do -_............
82 -- do -                                                     6,861 63 ----- do
83 -- do -------------  5,471 93 -                                                     do.....-.
84 -- do -                                                    11,055 52 -  do -
Dec. 24  111  Feeding oxen and mules  ---    31,575 00 -- do -... --
30   116    Transportation -                                           37,706 32 -| —. do                                 ---------------
921,318 25




ABSTRACTED INDIAN TRUST BONDS.                             321
No. 3.
Abstract ofpayments to   essrs  Russell,  Iq]jors &  Waddell, on account
of transportation, by Captain Stewart Van Fliet, assistant quartermaster United States army, at Fort Leavenworth, Kansas Territory,
during the year 1859.
Date of  What transported.   Amount.  Date of  What transported.  Amount.
~~~~payments.   ~payments.
1859.                                        1859.
Feb.   12  Sundries       $44 05   Aug.   2   Sundries         -.  $3,848 91
10,423 56.. do --—..    4,143 09
do —            508 51....do --              4,817 33
160 80..              do....X —         6,006 40
May   3   do —          1,444 69...do --              18,953 00
2  -do —- --      4,061 95           11...do ---      --         978 76
28 - --           1,087 55           12.. do -                    919 94
10900          13.... do -.-     8, 10668
June   8     -- 8776 42....do --             15,848 34
9   do -- 8465 91....do --              6,831 16
15  — do — -      1108 54            16  -—.do... 3,070 47
17   — do- - -    1470 70            18....do - -3,421 42
8912 63...do  - -            7,846 70
91 16         19....do - -            13,605 13
22  --            4,484 54           20....do --- -    4, 126 27
25  - do- -     10726 73....do. —-.   11,425 03
7,709 17               --— do ---            20,517 13
30  --—..do —--- -       4,878 04                 —.do —- ----         9,393 70
--— do —--- -        1,965 73           22  -— do   ---- -         37,765 10
2,505 87           29...do —--- -            6,804 97
July     6  --—.do —- ---- 4,143 10                      --— do —--- -         10,968 96
--- d -------      52 40           30  —.do —- ----          1,626 01
7...d     -12,477 69   Sept.   3  --— do —--- -                       2,435 38
9  -— do-                5,962 04               —.o —--- -             9,821 40
14  —.do —--- -          1,370 91               --— do —- ----            475 30
16  --— do —--- -         2,402 55            6  ---- do —--- -          3,984 84
23  -— do — ---— 15,907 34:                   7   — dAo —--- -           8,242 36
15,465 08           12  --—.do — ----- 31,918 64:
—.d -----— 11,188 99                   --— do — ----- 15,937 36
— do -----— 10,063 80                        -.do —--- -            9 508 62
------— 13,226 65              16  -— do. —----            6,207 66
d6 ------- 6,383 55             17  —.do —- ---- 10,229 19
-— do ------- 1,7743 50                 --—.do ------         1,086 74I
-— do ----— 19,3710 78                       -— do ------          14,335 42
-— d -----— 14,915 69               19  --— do ----- -         8,682 97
— d --------       95 17               -— do —- ----          1997916
25.-.~do —--- -         5,083 42.-.o —--- -             3,676 14
— d ------— 28,868 67               24  --— do ----- -         5,729 15
-— o -----— 25,739 75                   --— do —- ---- 10, 143 80
--- d -----— 27,110 58                  -—.do —--- -          8,382 14
Aug.    2  -— do —--- -           2,970 78                -— o —---- -           8,518 39
-— d -----— 49,143 57                   -— do —--- -           9,607 03
3   — o —----    9,347 76                   29  --—.do —--- -         7,940 40
8  --— do- -.....10,197 97                  30  -— do —----           10,520 82
— do -- ---— 15,878 49                       --— do —--- -          6,960 85
-— d -----— 14,597 93                   ---- do —- ----        9,646 26
-— do — ---— 12,414 44                     --— do - -.....        9,712 17
9  ----.do —--- -       6,213 07                 — ~do ----- -        8,479 40
3,689 29   O ct.    6   —.do -------    10,500 46
II. Rep. Corn. 78-~21




322                 ABSTRACTED INDIAN TRUST BONDS.
No. 3- Continued.
Date of  What transported.   Amount.    Date of  What transported.  Amount.
payments.                                 payments.
1859.                                     1859.
Oct.    6  Sundries — $974 97   Oct.  29  Sundries —                      $8,54  82.... do -  --      2,187 69                  do     - -        835239
10.... do              9,578 14                  do     - -        953282
do-9977 99.do     - -        9487 64
13 --—..do ------        520 67              --—..do —------ 13,601 98
22 ---- do ------ 2,770 83   Nov.  5... do ----- -               5,619 52
--- d -----— 13,201 39            15  --—.do ----- -      2,012 60
-— do -------    728 95          26  -— o —---            3, 374 67
— do —---   -   9, 659 90   Dec.   7 --—..do —----            767 18
-— o —---   -   9, 528 89           9   _-...do ------- 10,152 14
---  do —------  9, 840   50
29. —...do ------ 9,669 05                                      1,010,731 84
Of the above, $742 32 was stopped in settlements of 1st, 2d, and 3d quarters. The 4th
quarter's account is unsettled.




No. 4.
Statement exhdeibiting payments made by Captain M. S. Miller, assistant quartermaster, at Washington, D. C., to Messrs.
Majors & Russell; to Messrs. Russell, Majors &  Waddell; to Messrs. Brown, Russell &  Go.; to Brown & Russell; and
to Jones & Russell, during the year 1859; and also the disallowances made thereon.
Date.   Number of                On what account.                  Amount.                      To whom paid.                   Amount disvoucher.                                                                                                                allowed.       d
1859.   1st quarter.
Feb. 11  37  Transportatioa. -          $18,585 14 Majors & Russell -.-                               H
Mar. 18 71 --- do. —.                                                 6,759 43-. —-- do - 
2d quarter. 
April   6       6      Transportation, excess of stores, &c           35,333 50  Russell, Majors & Waddell        ------               $265 28
7    do -do                                           17,390 69 --- do    ---                                           840 82 
15 15 Forage  - -.                                              8,729 90 -- do --
19  18  Transportation  - -                                    11,334 27 --   do   -                      -849 81 
29  24 -— do -13,462 49 — do   - -891 07
May   4   39   Transportation of damaged stores --                    12,873 14 --          do.-              -                    2, 712 90
5     40      Transportation, deductions, &c   — ___          11,426 60  Majors & Russell. --......                   3, 907 07   c
3d quarter. 
July   15      11      Transportation -                               10 074 92  Brown, Russell & Co.; Brown & Russell; Jones                      H
Sept.| ~ 5] ~ 65 - do-6,6~~2880~ j& Russell; and Majors & Russell -------------- 
Sept.   5    65...... do                                       6,628 80  Russell, Majors & Waddell -                      -.       -
~th quarter.
Nov.  15       23  -— do                                               7,687 05             do                     _Dec.    6    100       Deficiencies and damages improperly charged.    2, 339 15 --         do                                          159 49
23    131      Short payments.-...... 10 51                                         do.            ---------
31 142 Demurrage -......... 11, 110 00 — do............                                                                   --
173,745 59                                                       9,626 44
_  _  _  _  _  _  _ _ _ _ _ _ _ A _ _ _ _ _ _ _ _ _ -.~~~~~~~~~~~~~~~~~~~~~~~~~LI




324            ABSTRACTED INDIAN TRUST BONDS.
No. 5.
Abstract of payments to Mlessrs. Russell, Majors    Waddell, on account
of transportation, by Captain Stewart Van Vliet, assistant quartermaster United States army, at Fort Leavenworth Kansas Territory,
during the 1st, 2d, and 3d quarters of 1860
January 9, 1860..........................1    4
Do.14  04e
Do........................4.........                   93 56
March 2, 1860..230.0.....ID..............
3une 1, 1860..                                           11,106 49*X@~~b~@*
June 15, 1860... n.................   1 1..944 86 e
Do......13,138 12
June 29, 1860.............. 10.946..32.
July 19, 1860.......*4...................... 20,911 1(10
July 28, 1860........................... —    16,831 00
July 31, 1860.............................   5,514 20
Do........................................        28,226 10
August 18, 1860........................... 13,023 29
Do.........                                          4,747 69
Do....................43 22
August 20, 1860............................             3,831 69
August 31, 1860........................... 11,193 42
Do...............................                    50 00
September 3, 1860..........................   7,300 02
September 12, 1860.4....................O..    2,180 2 9
September' 20, 1860.......................... 24,316 69
September 26, 1860.............7 5,257 23
Total.............................  252,681 91




No. 6.
Statement exhibiting  the payments made by Captain M. S. Miller, assistant quartermaster, at Washington, D. C., to
Messrs. Russell, Majors &  Waddell, and to Messrs. Majors &  Russell, during the 1st, 2d, and 3d quarters of 1860;
and also the amounts noted for disallowances on the respective vouchers thsreof.
Date.   Number of                    On what account.                   Amount of pay-            To whom paid.            Noted for disvoucher.                                                           ment.                                           allowance.    W
1860.   1st quarter 
Feb.    6      83     Transportation from Nebraska to Utah.-.  $9, 509 30  Russell, Majors & Waddell -----                      $7, 018 94    3
84     Transportation of damaged stores, &c — 2,175 61                               do -                          2,106 71 
85     Transportation. —-------------- -                        7,831 16  Majors & Russell                        7,831 16
86... do    -                       -6,810 38 -     do -------.. 6,810 38
87...do. —----------------—. 1,480 99 -                                           do                 ---
88 -         do                                                  3,623 61...do -                                3,623 61 
2d quarter. 
May   22    127       Property turned over to Captain Turnley at Camp Floyd    54, 250 00  Russell, Majors & Waddell           Not acted on.
3d quarter. 
July   21      17      Additional transportation -                             69,656 09  Majors & Russell ----------------- Not acted on. 
155,337 14.




326            ABSTRACTED INDIAN TRUST BONDS.
EXHIBIT C,
Being letters from the Chairman, Secretary Holt, General Johnston, and
Colonel Taylor.
No. 1.
WASIIINGTON, January 28, 1861.
SIR: Will you be kind enough to furnish the committee appointed
to investigate the fraud recently perpetrated upon the Interior Department by the abstraction of certain Indian trust bonds specific information on the following points:
1st. The amount now due Russell, Majors & Waddell upon their
contracts with the War Department.
2d. The amount of extra allowances claimed by them, and the date
when such claims were made, and for what services.
3d. The amount of extra allowances made to them, the date of said
allowances, and for what services rendered.
Your early reply will oblige the committee, as they are anxious to
bring their labors to a close.
Very respectfully,
I. N. MORRIS, Chairman.
Hon. JOSEPH HOLT,
Secretary of War.
No. 2.
WAR DEPARTMENT, January 29, 1861.
SIR: In answer to the inquiries contained in your letter of yesterday's date, I have the honor to enclose to you reports of the Quartermaster General and Acting Commissary General, communicating the
information desired by your committee touching the amount now due
Messrs. Russell, Majors & Waddell, and of all extra allowances
claimed by or allowed to them.
Very respectfully, your obedient servant,
J. HOLT,
Secretary of War.
Hon. I. N. MORRIS,
Chairman of the Select Committee, &c.,
House of RIepresentatives.
No. 3.
QUARTERMASTER GENERAL'S OFFICE,
Washington, D. C., January 29, 1861.
SIR: I have the honor to acknowledge your reference to this office
of the letter of the Hon. I. N. Morris to you, dated the 28th instant.
In reply to the first question, I respectfully report that, on the 4th




ABSTRACTED INDIAN TRUST BONDS.              327
instant, Captain Van Vliet stated the amount known to be due to
Messrs. Russell, Majors & Waddell to be $23,750 49. Services not
yet reported may have been rendered by them in New Mexico. There
are suspended accounts in the Third Auditor's office amounting to
$27,390 80, of which at least $9,125 62 must be'disallowed," which
"disallowance" the late Secretary of War directed to be charged to
the contractors. That sum is to be deducted from the amount stated
by Captain Van Vliet.
In reply to the second and third questions, I respectfully report that
I can find no accounts of extra allowances paid to or claimed by them.
All payments have been for services performed under contracts.
I was informed, verbally, several months ago, by Mr. Russell, that
he had large claims before Congress for services performed under the
contracts, but do not remember the amount.
I remain, sir, very respectfully, your obedient servant,
J. E. JOHNSTON,
Quartermaster General.
Hon. J. HOLT,
Secretary of War, Washington City.
No. 4.
OFFICE COMMISSARY GENERAL OF SUBSISTENCE,
Washington, January 29, 1861.
SiR: In compliance with your instructions to report upon the communication of the Hon. I. N. Morris, chairman of the select committee on the Indian bond robbery, dated the 28th instant, I have the
honor to state that, at this date, there is nothing due Russell, Majors
& Waddell by the Subsistence department of the army.
No extra allowance has been claimed by Russell, Majors & Waddell
from the Subsistence department of the army, nor has any extra allowance been made them through this office.
The letter of the Hon. I. N. Morris is herewith returned.
Very respectfully, your obedient servant,
J. P. TAYLOR,
Acting Corm. Gen. of Subsistence.
Hon. JosEPH HOLT,
Secretary of War.




328            ABSTRACTED INDIAN TRUST BONDS.
EXHIBIT D,
Containing a copy of Mr. Bailey's appointment, a copy of his bond, and
a letter from Mr. Kelly.
No. 1.
DEPARTMENT OF THE INTERIOR,
Washington, January 25, 1861.
SIR: As requested in your letter of the 24th instant, I have the
honor to enclose herewith a copy of the appointment of Godard Bailey
as a disbursing clerk in this department; also a copy of his official
bond as disbursing clerk, furnished from the office of the First
Comptroller of the Treasury.
Very respectfully, your obedient servant,
MOSES KELLY, Acting Secretary.
Hon. I. N. MORRIS,
Chairrman Committee of Investigation,
U. S. House of Representatives.
No. 2.
DEPARTMENT OF THE INTERIOR,
City of Washington, July 1, 1857.
SIR: You are hereby appointed a disbursing clerk in this department, under the act of March 3, 1853, at a salary of two hundred
dollars in addition to what you now receive, thus making your compensation two thousand dollars per annum.
Under this appointment I desire, particularly, that you should take
charge of the stocks held in trust by the head of the department for
the benefit of the Indians, collect the interest thereon as it may become due, and see that the same is properly paid into the public
treasury.
The law requires a bond from each disbursing, clerk, and you will
be pleased to furnish the same as early as convenient, in the form
herewith furnished.
Very respectfully, your obedient servant,
J. THOMPSON, Secretary.
G. BAILEY, Esq., Present.
No. 3.
DISTRICT OF COLUMBIA, County of Washington:
Know all men by these presents that we, Godard Bailey, of the city
of Mobile, in the State of Alabama, as principal, and Benjamin McCullough, of Galveston, in the State of Texas, and William C. Corrie, of




ABSTRACTED INDIAN TRUST BONDS.              329
Charleston, in the State of South Carolina, as sureties, are held an
firmly bound unto the United States of America in the full and just
sum of five thousand dollars, lawful money, to be paid to the said
United States; for which payment well and truly to be made, we,
jointly and severally, bind ourselves, our heirs, executors, and administrators, and each of them, firmly by these p[)resents. Signed with
our bands, and sealed with our seals, and dated this first day of August, in the year of our Lord one thousand eight hundred and fiftyseven.
The condition of the foregoing obligation is such, that, whereas the
Secretary of the Interior hath, pursuant to law, constituted and aplpointed the said Godard Bailey a disbursing clerk for the Interior
department: Now, therefore, if the said Godard Bailey shall truly and
faithfully execute and discharge all the duties of said office of disbursing clerk for the Interior Department according to the laws of the
nited States, and shall, moreover, truly and faithfully keep safly,
and disburse and pay out, all sums of public money placed or coming
into his hands from time to time, without loaning, using, depositing
in banks, or excangin, for other funds than as allowed by law, and
shall do and perform all other duties as disbursing clerk which may
be imposed on him y any act of Congress, or by any regulation of
the Interior or Treasury Departments made in conformity to law,
then this obligation to be void and of none effect; otherwise it shall
abide and remain in fall force and virtue.
GODARD BAILEY.  [
BEN. McCULLOUGH. IL. S.]
WM. C. CORRIE.         [LS]
Signed, sealed, and delivered in presence ofW. W. LESTER.
W. L. STRIcKLIN.
Personally appeared before me, Moses Kelly, a justice of the peace
in and for the District of Columbia, W. W. Lester, who, being duly
sworn, declares that he saw the above-named Godard Bailey, Btinjamuin
Mcullouh, and Win, C. Corrie, sign, seal, and, as their own act and
deed, deliver the'above instrument of writing, and that he, with W.
L. Striclklin, witnessed the execution of the same.
Witness mny hand and seal of office, at Washington, this eighth day
of September, in the year of our Lord eighteen hundred and.
fifty-seven. 
MOSES KELLY, J. P.
W. W. LESTER.
I certify that the sureties to this bond are good and sufficient for the
penalty thereof.
PHIL. BARTON KEY,
U. S. Attorney.
Approved October 1, 1857.
J. THOMPSON.




330           ABSTRACTED INDIAN TRUST BONDS.
EXHIBIT E.
No. 1.
HOUSE OF REPRESENTATIVES, December 27, 1860.
DEAR SIR: I am directed by the select committee appointed under
the resolution of the House of Representatives of the 24th instant to
investigate alleged frauds in the Department of the Interior, to request
that you will meet said committee at committee room No. 6, (House
of Representatives,) this afternoon, at two o'clock, with such papers
and documents in relation to said fraud as you may have in your possession.
Respectfully yours,
I. N. MORRIS, Chairman.
Hon. JACOB THOMPSON,
Secretary of the interior.
No. 2.
HOUSE OF REPRESENTATIVES, December 28, 1860.
SIR: I am directed by the select committee appointed under the
resolution of the House of Representatives of the 24th instant to inquire into the alleged frauds in the Department of the Interior, to
respectfully request your attendance before said committee at their
room, No. 6, (House of Representatives,) on Saturday, the 29th
instant, at 11 o'clock a. inm.
Yours respectfully,
ISAAC N. MORRIS, Chairman.
Per T. F. ANDREWS, Clerk.
Hon. JOHN B. FLOYD,
Secretary of War.
No. 3.
WAR DEPARTMENT, December 29, 1860.
SIR: I have the honor to acknowledge the receipt this morning of your
letter of the 28th'instant, requesting me to attend before your commnittee at 11 a. m. to-day.
I regret to say that, in consequence of the late hour at which this
notification reached me, and of intervening official engagements of a
pressing character, I shall be unable to comply with the request of




ABSTRACTED INDIAN TRUST BONDS.              331
the committee to-day, but will be happy to appear before them at any
time hereafter that may be named.
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
HoN. ISAAC N. MORRIS,
Chairman Select Committee on alleged frauds
in the Interior Department, louse of Reps.
No. 31.
WASHINGTON, D. C., January 17, 1861.
SIR: I am directed by the select committee appointed by the House
of Representatives to investigate the late abstraction of bonds from
the Interior Department to request that you will attend at their committee room to-morrow at half-past ten o'clock a. m., or as soon thereafter as may suit your convenience.
By inadvertence the subpoena of the Sergeant-at-arms was directed
to be served on you.
I am, very respectfully, your obedient servant,
I. N. MORRIS, Chairman.
I certify that the foregoing is, in substance, a copy of a letter sent
to Hon. HI. M. Rice on the 17th of January, 1861.
FRANCIS H. SMITH,
Clerk of Select Committee.
No. 4.
SENATE CHAMBER, January 17, 1861.
SIR: In reply to your note of this day, I have to say that any questions addressed to me in writing touching the subject named will receive full and prompt answers.
Very respectfully, your obedient servant,
HENRY M. RICE.
Hon. I. N. MoRnIs,
Chairman, &c.
No. 5.
WASHINGTON, D. C., January 1, 1861.
Sin: I am directed by the select committee appointed by the House
of Representatives to investigate the late frauds alleged to have been
made upon the Interior Department to request that you will furnish




332            ABSTRACTED INDIAN TRUST BONDS.
them at your earliest convenience with a copy of all contracts heretofore made by the War Department with Russell, Majors & Waddell.
Also with a copy of any acceptances given by Hon. John B. Floyd,
late Secretary of War, during his term of office, and of memoranda
concerning the same on file in your department.
I am, very respectfully, your obedient servant,
I. N. MORRIS,
Chairman.
lion. JOSEPH IIOLT,
Secretary of War.
No 6.
WASHINGTON, D. C., January 5, 1861.
The condition of the business of the select committee to investigate
the alleged frauds in the Interior Department is such as to render it
highly desirable to have, by the return of the messenger, if possible,
copiesof the papers heretofore requested by the committee on file in
the War Department.
Respectfully, your obedient servant,
I. N. MORRIS, Chairman.
Hon. JOSEPH HOLT, Secretary of War.
No. 7.
WAR DEPARTMENT, January 7, 1861.
SIR: I have received your letter of the 4th instant, enclosing a copy
of a communication addressed to me on the 1st, but which failed to
come to hand.
Several of the papers called for in your letter were sent up to the
committee on Saturday; the others I have the honor to enclose herewith.
Very respectfully, your obedient servant,
J. HOLT,
Secretary of War ad interim.
Hon. I. N. MORRIS,
Chairman Select (Committee, &c., House of Representatives.




ABSTRACTED INDIAN TRUST BONDS.               333
EXHiBIT F,
in    statement of Mr. Russell, as also his letters.
No. 1.
WASHINGTON CITY, January 16, 1861.
SIRy I find that I cannot get m  statement completed as early as I
had expected; a friend whom I obtained to make me a perfect copy
made several omissions, which make it necessary to recopy; I will try
and have it at your room prior to 5 p. m.
Very respectfully,
W. H. RUSSELL.
Hon. I. N. MORRIS, Ghairman, &c.
No. 2.
Statement of William H. Rtussell.
WASHINGTON CITY, D. C.
Wednesday, January 16, 1861.
GENTLEMEN: My responses to the questions put to me on Monday,
the 14th instant, by you in regard to the bonds received by me from,
Mr. Godard Bailey, were accurate as far as they went, but not sufficiently explanatory of the transaction for a perfect understanding of
it. Havi-ng no wish to conceal any fact necessary to convey such
understanding to the committee,- I then expressed a desire to make a
fuller and more satisfactory statement in writing, further respon sive
to the questions put to me, which IL now present, and respectfully ask
that it may be received and recorded.
In January, 1858, the firm of Russell, Majors & Waddell contracted with the quartermaster's department of the United States
army for the transportation of all the military stores or supplies which
were required to be sent from Fort Leavenworth and Fort Riley, in
Kansas; from Fort Union, in New Mexico; from Kansas city, in Missouri; from Fort Laramie, in Nebraska; andl from any other depot that
might be established on. the west bank of the Missouri river., north of
Fort Leavenworth, and south of latitude forty-two; and the delivery
of them at any or all military posts or depots which then were or
might be established in Kansas and New Mexico, including, El Paso
del Norte, and posts in' that vicinity in the territory known as the
Gadsden Purchase, in the Territory of Utlah, south of latitude forty;
at any depot or depots which then were or might be established in
Nebraska, south of latitude forty-four; in the Territory of Oregon,
south of latitude forty-four; in the Territory of Utah, north of latitude
forty, and as far west as longitude one hundred and. thirteen.
At the time of making this contract the government owed the contractors several hundred thousand dollars for services under a similar




334            ABSTRACTED INDIAN TRUST BONDS.
contract in 1857, which was not paid for the want of an appropriation
by Congress.
The performance of this contract on the part of said firm necessarily involved a very heavy expenditure of money, as during its
existence they were required to transport all the supplies necessary
for the army in New Mexico, Arizona, and Utah. During that year
alone the transportation exceeded eighteen millions of pounds.
In executing this contract, and transporting these large supplies, it
became necessary to raise large amountsof money in advance, and, in
order to do so, to obtain from the Secretary of War his acceptances in
advance of the earnings under the contract, so that money could be
raised upon them in order to enable the firm with which I was connected to perform the contract faithfully. Without these facilities we
must have failed to procure the necessary means of transportation
and not only have subjected the government to great inconvenience
and loss, but portions of the army to almost certin starvation.  The
Secretary of War, in view of this necessity, gave to said firm his
acceptances, which from time to time, including those paid and
unpaid, have reached an aggregate of several millions of dollars; the
precise amount I do not know, and have no present means of ascertaining.
In July last upwards of two hundred thousand dollars of these acceptances, upon which our firm had raised money, were about to
mature, and I became apprehensive that they would be protested for
non-payment, which, from declarations made to me by Governor Floyd,
I then feared and believed would bring discredit upon the War Department, resulting in his necessary retirement from the cabinet. At
that timne the government was indebted to the contracting firms of
which I was a member to an amount largely exceeding these acceptances, and independent of the transportation then on the route.
We were at the same time compelled to keep up our immense trains
in order to transport the supplies then necessary; and, having exhausted all our means and credit, the government still withholding
the large sums of money due us, we found it absolutely impossible to
make sufficient negotiations to carry forward our contract, and at the
same time protect the acceptances of the government.
While engaged in making efforts in New York to raise money to
execute this contract, and to meet these acceptances of the Secretary
of War, I casually heard that a man by the name of Baylor, residing
in Washington, had been in New York on several occasions negotiating the sale of Florida bonds in connexion with the Fernandina
railroad, and other stocks and securities, and that he was a dealer in
stocks. Finding that I could not raise the money to meet these accept~~nces in New York, and they maturing in a few days, I came to
Washingoton, in order to get from the government a sufficient amount
of the money due the contractors to protect them from protest, desiring
that the credit of the government should not be in~jured on my account.
On the train from New York to Washington I met Colonel Luke Lea,
with whom I had been long acquainted, and who was and is a partner of mine in the banking business in Leavenworth City, Kansas. I
conversed with him freely about my embarrassed condition, and fully




ABSTRACTED   DIAN TRUST BONDS.            335
revealed to him all the facts in relation to it, and desired to know of
him if e could aid me in procuring a sum necessary to relieve me,
and sufficient to take up the acceptances of the Secretary of War. He
replied that he was unable to do so, but would if he had the ability.
I then asked him if he knew anybody in Washington from whom 1
could borrow either money or securities, and he told me that he did
not think the amount could be obtained there. I then called his attention to the report I had heard in New York about a man by the
name of Baylor, as I supposed, and he said that he knew no such man.
He afterwards remarked that he knew a man by the name of Bailey
in Washinton who  ad dealt in Florida bonds, but thought that he
was unable to aid me, except by influence with others; that he was a
distant relative of Governor Floyd's, a man of high legal attainments,
and possibly could serve me in getting the claims of the contractors
allowed and paid by the departments. I then requested him to see
Bailey as soon as he could after arriving in Washington, and make
known to him the condition of my claim against the government, and
of the acceptances of the Secretary of War, and the danger of their
going to protest, and ask him if he could aid me in any way. The
next or the following day after I arrived in Washington, and while
at the War Department pressing the payment of money due, I was
informed that Mr. Bailey was there and desired to be introduced to
me. I had never seen him before. This was on or about the 13th
day of July. I was then introduced to him by Colonel Drinkard, the
chief clerk, whereupon he inquired of me if the facts he had learned
from Colonel Lea and Colonel I)rinkard, about the probability of the
acceptances of the Secretary of War being protested, were true, and
whether it was my opinion that, if the acceptances were protested, the
S'ecretary would be likely to be disgraced, and have to retire from the
cabinet. I stated to him that the facts were true, and that I feared
that would be the result upon the Secretary. He asked me what
amount would be necessary to protect the acceptances, and when I
could -return it. My reply was that $150,000 would relieve me, and I
could return it in ninety days. To this he replied that his mind was
made up; that he had some State securities, which I could hypothecate, that were at my service, and that he would meet me at my room
at two o'clock with them. At the time appointed he brought me the
State bonds, amounting at par value to $150,000, and required that if
I took them I should only hypothecate them and return the identical
bonds. I did take them upon those terms, having no knowledge
whatever that he was a government officer, or that the bonds belonged
to the government. I supposed that he had a perfect right to control
them, and no questions were asked by me and -nothing said by him in
regard to the ownership of them. These bonds were hypothecated by
myself and my agent, and with the proceeds thereof the maturing acceptances were protected.
Before the time had arrived when these bonds were to have been
returned, stocks declined, and the parties with whom they were,
hypothecated required an additional deposit to secure the payment of
the money raised upon them, or otherwise they would sell them.
Finding our business in this condition, and our facilities for procuring




336            ABSTRACTED INDIAN TRUST BODS
money from the west being cut off by derangement and depression in
the money market, and being still embarrassed in consequence of the
government having failed to pay what was clearly due us, I came to
Washington, and reported to Bailey my inability to protect the stocks
from eale, and desired additional assistance. He then informed me,
for the first time, that the State bonds he had given me were held in
trust by the government for certain Indian tribes. I was astounded
at this disclosure. Difficulties surrounded me on every side. I had
no time to weigh the responsibility of wrecking my firm, discrediting
the government, and losing the bonds already pledged; and on the
other hand, that of making myself aparty, in any way, to a breach
of trust.  I conversed freely with Bailey about the amount thatwas
due us by the government, and he said, substantially, that his letting
me have the bonds was only the use of the means of onedepartment
to protect the credit of another; that it was not a criinal act, but a
mere breach of trust, on his part; and that on mine, it was certainly
not criminal. Driven by the necessity ofprotecting the bonds already
given me, and extricating ourselves from the embarrassments surrounding us, and having other acceptances of the Secretary of War,
exceeding $300,000, then about to mature; relying confidently upo
the government and my own resources for the means to protect all
the bonds I might receive; and being persuaded that the act on my
part was not criminal, although I did not the, and do notow, think
it was fully justifiable; and being also desirous to protect Mr. Bailey
in what he had done, and the credit of the War Department; and
knowing that if I failed to protect these bonds and acceptances, the
credit of our firm would be entirely destroyed, our transportation
thereby defeated, and the supplies of' the army cut off, I did accept
from Bailey additional bonds, to the amount of about $387,000 at par,
upon the same terms and conditions upon which, I had- received the
former ones. These bonds were hypotbecated in the east, and the
money obtained upon them was applied to make good the margin of'
the first lot, and the payment of the other acceptances of the Secretary of WTar.
When I received the first lot of bonds, I gave Bailey the note of
Russell, Majors & Waddell1 for the full amount of the face of' the
bonds; and when I received the second lot I took up that note, and
gave him another covering the whole $537,000.
By the month of' December the monetary crisis, owving to the agitation of the country, became such as to cause increased embarrassment
all over the country, and to render it almost impossible to raise money
upon any kind of stocks or securities. All stocks were running down
so rapidly that I became apprehensive that the holders of the bonds
I bad bypothecated would sell them at a great sacrifice, and thus put
it out of my power to save them to the government; whereupon I again
visited XWashington. about1 the 12th or 13th of December last, and laid
the whole matter before Bailey, and after a full and free conversation
as to the best niode of protecting him and the government, I told him
that it would require an additional amount of about $350,000 to
protect additional acceptances of the Secretary of War then maturing,
and the credit of our firm, so that we could execute our contracts,




ABSTRACTED INDIAN TRUST BONDS.             337
and thus be enabled to restore the bonds. He suggested to me that
if I would procure acceptances of the Secretary of War, drawn against
our transporttion contract, for the amount of bonds that I had already
received, and such additional amount as I might require to protect
additional acceptances of the Secretary of War and the credit of our
firm he would furnish me with the additional amount of bonds necessary for the purposes aforesaid. I did procure firom the Secretary of
War his acceptances, drawn upon our transportation contract, which,
with others then on hand, made the aggregate amount of' $870,000.
then gave him a receipt in the name of our firm for the 870 bonds.
I received these at a time when all stocks were rapidly declining, and
with the distinct understanding that I should take advantage of the
market and dispose of them so that, with other means to be raised
by me from other sources, I could repurchase and restore, at the lowest
market price, bonds equivalent o those I had thus received. It was
further distinctly understood between us, that I should have until
June next to replace thesebonds, or their equivalents, up to which
time he, Bailey, said he would hold me harmless.
aving thus made a full statement of these transactions, I beg
leave to add a word more.
I submit that as our firm was, at the time of this transaction, and
is now entirely responsible and able to execute our contract with the
government, and as our pay therefor will largely exceed the acceptances deposited with Bailey in lieu of the bonds received from him,
there could have been no criminal intent on my part, nor was there
any purpose to defraud the government, but, on the contrary, an
actual deposit of the best possible guarIantee against such a contingency.
There is no other transaction in the course of a long business life,
in which I have had very large operations with a great variety of persons, upon which I cannot look with entire satisfaction, and there is
nothing in my life which has given me such mortification and regret
as this. 1 cannot impress upon the committee the great necessity
which then pressed upon me, and I forbear to enlarge upon it. But
it was a necessity brought on entirely-by the failure of the government
to fulfil its engagements, and if I have thus, without any criminal
intent, used a portion of the stocks held by the government to protect
myself and the government from the most disastrous consequences, I
have the satisfaction to know that they were indebted to me in an
amount far exceeding the sum thus used. And, besides, it is important to add that, in any event, we have property and means with which
we can ultimately protect the government from loss; and as fast as
our just claims are allowed by them, and our earnings under our
present contract, which runs through 1861, shall be passed to our
credit, they shall be withheld by the government until we produce
bonds to an equal amount to replace those which have been thus employed.
It is due to j ustice and fair dealing that I should say further, that
Mr. Bailey has in this matter assisted me, as I have stated, without
any advantage, pecuniary or otherwise, direct or indirect, received or'
promised to him, so far as I know or believe, and that iso, far as I am
H. Rep. Coin. 78 —-22




338            ABSTRACTED INDIAN TRUST BONDS.
able to judge by his words and acts he has been prompted therein by
a sincere desire to protect the Secretary of War and the public interest,
however much he may have been mistaken.
I wish it to be understood that in this statement of conversations
with different persons I do not profess to gie the exact words used
by either, but only the substance and results.
Very respectfully,
The COMMITTEE OF INvESTIGATION, &C.,
House of Representatives, Washington.
i
No. 3.
WASHINGTON CITY, January 24, 1861.
GENTLEMEN: I have had a very limited consultation with my coun
sel in relation to the suggestions made and the questions put to me
on yesterday by your committee, and have not had time to mature my
reply. I therefore beg the indulgence of the committee until to-morrow morning.
Very respectfully,
WM. H. RUSSELL.
Hon. I. N. MORRIS,
Chairman, &C., Investigating Committee,_ dc.
No. 4,
WASIIINGTONV CITY, January 25, 1861.
GENTLEMEN: In reply to your proposition to expunge from the record
of your proceedings all of' my testimony, and to discharge me from
further examination, or if' I declined to withdraw, to go forward and
answer such further questions as you may put to me, I have to say,
that I appeared before the committee in obedience to a subpoena issued
by the Speaker of the House of Representatives, and gave my former
answers to your inquiries, first, because they were "1pertinent to the
mnatter of inquiry in consideration" by you; and, second, because I
was not permitted by law " to refuse to testify to any fact" within the
scope of your inquiries. 
I would respect-fully state to the committee that, having been thus
required to testify to the extent to which my testimony has already
gone, I am still ready to obey said subpoena, and'to answer any additional questions which the committee may put to. me, touching the
Indian trust bonds referred to in the preamble and resolution appointing the committee, and my connexiou with them.
I beg leave further to state that the testimony already given by me




ABSTRACTED INDIAN TRUST BONDS.              339
having been recorded as a part of the proceedings of the committee, no
consent of mine can authorize the committee to expunge it.
Very respectfully,
WM. H. RUSSELL.
The INVESTIGATING COMMITTEE,
House of Representatives.
EXHIBIT G.
Being correspondence between J. Thompson, Dr. Fitch, and G. Bailey.
No. 1.
WASHINGTON, December 28, 1860.
SIR: During the session of 1857-'58, application was made to Congress for an appropriation for the arrears of interest due on five per
cent. stocks of the State of Indiana, held in trust for the Pottawatomie and other Indians. One of the bonds was, with your consent,
delivered to the Hon. G. N. Fitch, to be used as a memorandum before the Senate Committee on Indian Affairs, of which he was a member. Dr. Fitch mislaid the bond, and it has never been returned to
the department. I enclose a letter from Dr. Fitch, explaining the
transaction, and request that it may be filed with this communication.
Very respectfully, your obedient servant,
G. BAILEY.
Hon. J. TnoMPsoN,
Secretary of the Interior.
No. 2.
LOGANSPORT, INDIANA, August 8, 1859.
DEAR SIR: Yours of the 2d instant is received. I have received a
previous letter from you on the same subject, and owe you an apology
for not having answered it. It was laid aside for a search for the
bond, and, amid a multiplicity of engagements, forgotten.
I received the bond of you for the purpose of copying a description,
(this State having issued bonds for more than one fund,) with the view
of writing to the governor upon the subject of some arrangement for
their payment. It has become misplaced. I have, after a search today, tailed to find it, but intend soon moving my library and papers
into a new room preparing for the purpose, and will then overhaul
every package, and can scarce fail to find it. If successful in my
search, it will be immediately forwarded to you.
Respectfuily, yours,
G. N. FITCH.
G. BAILEY, Esq.




340             ABSTRACTED INDIAN TRUST BONDS
No. 3.
DEPARTMENT OF THE INTERIR, December 26, 1861.
SIR: It is ascertained that a certain bond of Indiana State stocks,
of the issue of ]835, is missing from the number now in the custody
of this department; it has been represented to me by Mr. Bailey that
he enclosed said bond to you for the purpose of receiving information
as to whether the unpaid interest on the class to which it belonged
would eventually be paid. I should be pleased to receive at an early
day any information you may have on the subject.
Very respectfully,
J. THOMPSON.
Hon. G. N. FITCH, United States Senate.
No. 4.
WASHINGTON D. C., December 2, 1860.
SIR: Yours of yesterday is before me. You say: It is ascertained
that a certain bond of Indiana State stocks of the issue of 1835 is missing from the number now in the custody of the department. It has
been represented to me by Mr. Bailey that e enclosed said bond to
you for the purpose of receiving information as to whether the unpaid
interest on the class to which it belonged would eventually be paid."
And you add: III should be pleased to receive at an early day any
information you may have on the subject."
I remember the bond to which you doubtless allude; and the purpose for and circumstances under which my attention was called to
it are, to the best of my recollection, as follows: Two or three years
since, a clerk in your department (Mr. Bailey) handed or enclosed me
an Indiana State bond, which he informed me, was one of a class
belonging to the Indian trust fund in charge of your department,
upon which bonds that State had neglected or refused to pay interest,
and asked my advice or opinion as one of the senators from Indiana,
and a member of the Committee ~on Indian Affairs, relative to an application, which he stated you would make, or had made, to Congresis, to appropriate for the benefit of the Indians a sum equal to the
amount of the arrears of interest on the b3nds, and direct suit to be
brought on them against the State. Unwilling to believe that Indiana
had repudiated any just bonds, and unwilling there should be any
congressional action, or any suit relative to the matter, if it could be
amicably arranged otherwise, I stated a wish that such application.
for action or suit should be delayed, and that I would correspond relative to the matter with Governor Willard. Accordingly, I described
or enclosed (I do not remember which) the bond to Governor Willard,
asking, in effect, a'n explanation of the non-payment of interest, and
if some arrangement could not be made for its payment. His answer
was, in substance, that the bond was of a class which the State had




ABSTRACTED INDIAN TRUST BONDS.            341
retired, by what is known in Indiana as the "Butler bill," by which
the Wabash and Erie canal was exchanged for the bonds; that due
notice had been given by the State to the holders to surrender them,
according to the provisions of that bill, and that the State, therefore,
acknowledged no further liability upon the bonds. Discovering from
the governor's answer that no arrangement would be made by the
State for payment, and that consequently the bond was valueless, I
did not use that care I otherwise should have done to see that it was
returned to the department. Some months afterwards the same clerk
wrote me in relation to it, at a time, as I stated in my answer,
(which answer must be on file in the department,) when my library
and papers were soon to be moved, after which a search would be
made for it. Since that time the little importance I attached to
it has prevented that search I then expected to make, and which
will be made at the earliest opportunity.
Very respectfully yours,
G. N. FITCH.
Hon. JACOB THOMPSON
Secretary of the Interior.




EXHIBIT H.
Statement of acceptances, by the Secretary of War, of Russell, Majors &  Waddell's drafts, on account of their contracts 8
for transportation.
Number.                  Accepted.                      Dated.                     Time.            Amount.        Total.
March 25, 1858       -        March 25, 1858 -   -         August 1.....           $50,000 00 
July 1  -    -          100,000 00 
Do. —------ -----    -  September 1. — --       50,000 00 
July 1. —------          100,000 00.... $300,000 00 
April 25, 1858 -                 April 23, 1858 -           May, BL -----             9,000 00                  H
May 1, 1858.-........ May 1, 1858 -. October 1 ------   50,000 00
May 3,1858.- do --                                         May, BL -                 4,500 00
—...... 63,500 00 
May 4, 1858 -.. May 3, 1858                                 August 1 -                5,000 00
May 1, 1858....do   -     -           15,000 00
May 3, 1858. —-----—.        September 1. —-      5,000 00 
~~~~25,0000 0
May 5,1858 -                  May 4, 1858 -October1 -                                25,000 00   2
Do -                     September 1..       25,000 00 
Do...........do -              25,000 00
Do.-.......... October 1                         25,000 00 
100,000 00
May 13, 1858 -------— March 8, 1858               -......... September 1 -- -  3-050 00 
May 31, 1858. —------   May 19, 1858                       May, BL   o-      -      12,000 00
—... 15,050 00 
June 29, 1858 --- June 21, 1858                -       -   Two months -              10,000 00
Do ------ -.-         - -- do -                   10,000 00
-Do —          -     -  August 15                 25,000 00
Do        -    -     -  August 10-.- -.          25,000 00
-_  -_       70,000 00
July 9, 1858.-.. June 28, 1858 ------ --  May, BL -. 16,107 00
Do    --- June, BL -__                            16,107 00
-      32,214 00
August25, 1858 -              August 17, 1858 -------    October 1                   25,000 00




Do.....                      November 1.......... 25,000 00
Do -------                    December 1 -25,.000 00
Do --------------------- --— do ----------------            25,000 00
January 1 ------------        25,000 00
125,000 00
29. —-October 1                                                                    -         ~~~~~~~~~~~~~~~~~~~~25,000 00
30 —-Dectember,1                                                                                                    -25,00  00.....
38 -------— do —----— 25,000ber 2, 185s -----— 00 —— August 21, 1858.00 November I........
320.................                                                                         October 1                     25,00 00
29   --- -- --- -- ---  -- ---  --  --- --  --
30. —---- -------- ------- -------- --------- ------- -------- -2 December  I-  251 5,000 00
33 --------— October 23, 1858 ------— October 21, 1858 ------— Three months. —----                                             25, 000 00                      H34 --------------------------— do ----------— Four months —----- 25, 000 00                                                                          ~
35 ---------------------------------------------------—.do -do-25,000 00
36-do —-------------------— d 125,000 00                                                                                       0 
125,000   00
-3 ----------------- December 10, 1858                       Decemober 10, 1858 -..........do38 —~-Three months   -        25,000.0    250,000 00
39 --------— December 16, 1858 -----— December 16, (?) 1858 —--— Four months —-----                                            10,000 00
40. —-------------------------------— do...... — Five months -1 5,000 00
41-....'.................do-Six months. —                                                                               25,000 00
42              -— do - - Seven months-                                                                                        25,000 00
75,000  00
do                                        5~~~~~~~~~~~~~~~00,000 O
-----------— December 10; 1858 ---------  Decemb~er 10, ()1858 -----— Sinonh  -------                                  5, 00' 00
4do4                           Nine months ---------   -       2     5 000 00
38  ---------—'  -----------------------                                 ----------------
10,00 0    0
45           - -............ January 4, 1859 - -........... January 4, (?) 1859 - -....... Six months-                             12,000 00 
46 —-------—. —-     - January., 1859... —January 8, 1859.... —-  Four months -2 —------    25,000 00
47 - -do. —— do-10,000 00
48 —----------------------— ~ —do —----------— do ---------                                                                    15,000 00
49 ------------------------------------------------------ do- -Five months ----------                                          25,000 00
5 ----------------------------— o —------------ --------.do.-                                   Six months -........ 25,000 00
125,000 00
52 -                     February 10, 1859 -              - February 10, (?) 1859.-......Three months3 — February 15, 1859-February 15, 1859-Five months..........   80,000 00
d4o-Six-mo0..............
130,000 00




EXHIBIT H-Continued.
Number.                      Accepted.                             Dated.                         Time.                Amount.           Total.
55..... February 28, 1859. — February 28, (?) 1859                      -       Four months -$25,000 00
56 -----------------  ------------------------------------ do ---------------------- -~ —-do —--------------                   25,000 00
57 -.... -----------------------—........do- -Five months ----------   25,000 00
58    -— do -- do — 25,000 00
- -.               $100,000 00
59 - -March 18, 1859 -March 18, (?) 1859 -Four months-25,000 00
60........ —           -------------------—.do           - --------    Five months -25,000 00
50,000 00
61   -      -March 25, 1859. March 10, 1859       -do-10,000 00
C. 62 --------------                                          March 12, 1859           --            -do -----                 10,000 00
63......... —---—.-           -          — do  — Six months                                                                  10,000 00
64 --------------- -  -. —------— March 20, 1859  -                                  -Four months ---------                    10,000 00
65 --------------- - ----------------— March 25, 1859  - -do -.... 25,000 00
66    -— do -- do -                                                                                                            10, 000 00
67 ---............... —--  doo..-................ Five months. —-------  25,000 00
68 --                 -                                            do - -Six months25,000 00
69  ----------------—... -- - -- - -..- - -- -  - --  - -  -- -  -do  -- - -- - --  - --  - --  -  -do.- - - -  - - -  -      15,  000    00                   C
69 - — do -0  0      140,000 00
C. 70 -March 31, 1859 -March 27, 1859 -Five months ----------  15,000 00
C. 71 -do -........-  March 28, 1859                                                                 do -25,000 00
72-                                                           March 29, 1859-                    Six months-10,000 00
73- -.. March 31, 1859- - Four months -25, 000 00
C. 74 -...........do                                                            -            - Five months ----------  25, 000 00
75 - --....do -Six months...... 25,000 00
125,000 00
76 ------------------- April 1, (?) 1859           - -April 1, 1859                              Five months -25,000 00
77 -April 2, (?) 1859 -April 2, 1859 — do. —  10,000 00
35,000 00
78 -----------------  April 26, 1859 ---------------- April 26, (?) 1859                         Four months ----------                          21,000 00
79           - -.................May 3, 1859 -       May 3, 1859 -Two months-10,000 00
80 - ---------------- ------------------------ ------ ---— do -------------------------- do -----------------                  150,000 00
81..................................................... do....................-....do-                                5,000 00




82 -—................ I —- — do..... -Three months.-.. 15,000 00
8 -do... —--- -----— do -..20,000 00
~~C~~~~~.. 8    -  -do.. —                                                            do..-.... 25,000 00
-..8-do  - -Four months ----    15,000 00
~~~~~~C. 8 -       -do —....... do.-                                                                           25,000 00
150,000 00
87 —----- -May 7,1859 —-May 7, 1859 ---- ---- - Two months — 7,000 00
88. ------------- -        --— do... —-                                           -- do -                        8,000 00
15t, 00
89 - -Ma~~~~ay -11,  1859............-M 1859......    Threemonths....       10,000 00
90................ —.  -do -......-                                                   _do --                      10,000 00
~91 ---......-do.... -- - — do                                                                                 10,000 00
9do.        -... do..         15,000 00
C. 93*.... -do.do. d-15,000 00
9d ---- do.-...do.   15, 000 00 
C. 95 —. —-do —---------— do                Four months..........  25,000 00
1100,00  00
~~C. 89~~~-95~. -rJune 8, 1859........J............Je                                                                           110,00
~~~~~C. 96-103..~...~- June 9, 1859~                                                                                                _........... -90,000 0( 0
~~~~~~~~C. 104-115 - Ju~lne I______ _...... —                                                                            200,0    00     Z
A-I --                   do~~~~~~ —-------------------------— Blank --------------                                                ---     20000    1
J -       -     - ~~~~~June 13, 1859-..........June 10, 1859-..-do ---------   -------                                            -           25,000 00       3
K-N -.... —......June 18, 1859                   -.-                                             -do -----------------                             150, 000 00    t
O-.X. -      -    ~~~~June 21, 1859..       -..June-.-, 1859.-..-do —-----------                                -      -----        175,000 00    Ci
100,000 00
AE-AF..-...June......................      June 30, 1859.           -Four months.-                           5,000 each          10,000.00
AG-AK.- -July 2, 1859. —~~~~~~~~~~~~~~~~Blank_...                     50,000 00
AL-AU.-                  August 26, 1859          -.  August 12-23, 18-59.. -.    -do --------- ---                     -     -150,00000    z
C. ipatdoddo-150,000 00 
AV-BF -___ —-— September 17, 15.September 1-13, 1859..-..-do -----------              - -150,000-00 —
C. 1.      -.April 26, 1860                      -          -..April 26, 1860.-.                  Four months....10,000 00
C. 2.d —---------   --— do..... —-------— Five months...-...10, 000 00
- -        ~~~20,000 00................do... —----                                               -----------                 20,000 00
1.-~~~~~~(Not noted).. -.May 4, 18 60-Five months. - _..                                                                 10, 000 00
2.-~~~~~~6 —----------                                  May 10, 1860-..........Four months........                         20, 000 00
3.    ~ ~~~~   -------------- ----  May 6, 1860.. -.........  Five months...........                                     10, 000 00
CAL to AU duplicated numbers.                                              jt Duplicated, numbers 1 and 2.




EXHIBIT H-Continued.
Number.                  Accepted.                        Dated.                      Time.             Amount.         Total.
4............-May 8, 1860.Four months..........   $10,000 00
--.................... May 1, 1860.... Six months.......-   15,000 00
6... —May 4, 1860................... Five months......-.... -                                                 10,000 00
7... —-----------------      -May 9, 1860...                   130 days......10,000 00
9....................................               May 9, 1 860....Fv ots......5000 00
9.. —----— May 9, 1860-Five6 months --------                                                                    5,000 00.... ~~$100,000 00.
10-.......'.....May 28, 1860......._        May 18, 1860......             Five months....-15,000 00
11.-................- May 19, 1860-.....   Four months — 15,000 00
12................... May 23, 1860.......-.do --                                                            15,000 00
13.....  May 25, 1860......................do -— 25,000 00
1I.................-..                                    do.                -   Five months...            25, 000 00
15.-.. May 26, 1860...............do — 15,000 00
16...................-do.........................do -- 10,000 00
17..                                    -------- May 28, 1860....                   Four months....   10,000 00
18................. do.- Five months..... -10,000 00
19..-.do..   Six months...__.... 10_- 1000 00
150,000 00
20-28                 June 12, 1860.................. June 1-11, 1860...     Blank.......                             100,000 00
29...........      June 15, 1860.................. June 12, 1860............. Five months........    20,000 00
30..June 13, 1860............. Four months..........    10,000 00                 0
31......... —--—.do..    do_.   15,000 00
32.................................. Juno 14, 1860..        Five months....    10,000 00
33..do.............. —---  Six months............    15,000 00
34.                                                  June 15, 1860...___  Four months..........    10,000 00
35....do.- Six months........ 20,000 00
100,000 00
36-46.            June 19, 1860.June 2-19, 1860.                                 Blank....-.-.. —.-..                  150,000 00
47-54 -July 16, 1860................... July 10-16, 1860...do...    95,000 00
55-71.-  August 15-22, 1860..   August 15-22, 186'0..                         do.................. 175,000 00
72-77.September 10, 1860.                           August 25, 1860.......do                                                 60,000 00
78-89.September 18-22, 1860.......... September 18-22, 1860............do...                    125, 000 00




C. in part, 90-105... October 10, 1860............... October 1-10, 1860....,....do- -150,000 00
106.        - -October 13, 1860.........              October 11, 1860.               Eightmonths..........      7,000 00
107.....-.....-do -......................do -8,000 00
108 -..............................do -...... Nine months........   7,000 00
109...................... —..............do -.....do --------------  8, 0bo 00
110.................-............ — —....do- -Ten months                                               -        7,000 00
111 —                                     I.......................do -do --------------  8,000 00
112 ---------------—.... —------------------------ October 12, 1860......            Eight months..........     5,000 00
113.-      -do -.....do -10,000 00
114....- -  October 13, 1860.....           -do-Nine monthR..........    10,000 00
115 —........-....... —---------— do- -Ten months....5,'000 00
116-_ _do -do -                                                                                                  10,000 00
117                                                   October 13, 1860                Eightmonths..........    10,000 00
118do-                                                                                Nine months                 5,000 00
119...................do... do.............. 10,000 00
120............do..................- Ten months.                                                           10,000 00                    M
120,000 00   e
5,036,127 50
62........cancelled ---. —------  ----       -.                                                              10,000 00,70 ----------—.do-.....................15,000 00
71.do....                                                                                                       25,000 00
74.          do.25,000 00
84-86 ------— do..................................................................................-.. 65,000 00
93.do...15,000 00                                                                                                                            o
95.do-...                                                                                                       25,000 00  *
892-952.......do..110,000 00
96-103........do.... 90,000 00
104-115.......do...                                                                                            300,000 00
AL-AS'.-......do...                                                                                           100,000 00
1 & 2.........do...                                                                                            20,000 00
1 & 20......do..... 20,000 00
104............do...................................... 10,000 00
105.     do —--—..-10,000 00
840,000 00
Total on account transportation contracts........... -                                 4, 196,1127 50
Second issue.                                    NoTz. -Drafts cancelled are marked "C" in the margin.




On account of supplies for the army in Utah.                          c*
[NOTE. -B signifies drafts on beef contract; F on flour contract; and S on contracts for supplies.]
BG-BK..  B.October 13, 1859.. October 4 to 8, 1859........ Blank-....                   $25, 000 00
BL-BN..    F.      October 10, 1859... October 10 to 12, 1859........do. —. - ----    30,000 00
BO-BQ.         F.October 14, 1859........... October 3 to 5, 1859.... do..... -   -          60,000 00
BR-BS.....             do................... October 6 and 7, 1859.............do --      35,000 00
BT.            B & F-.... November 8, 1859..........do...............   73,267 50
BU-CG..         B & F..   November 19, 1859.. November 14 to 19, 1859.    do.-150,000 00
CR-CU............ B & F...... December 19, 1859..   December 12 to 19, 1859....     200,000 00
CV.F.                   December 23, 1859....  December 20, 1859.  Four months.$25,000 00
CW..F...December 21. 1859..    do.....        25,000 00
CX................B....... December 22, 1859.....do.....  25,-000 00
CY................. B  December 23, 1859...... do.............  25,000 00
—.... 100,000 00
CZ................. F.......  December 30, 1859...  November 21, 1859. Five months.........  10, 000 00
DA................F..... November 24, 1859........ do....._    10, 000 00
D)B................ F.......              November 26, 1859       o...do..........  10,000 00
DC.......    November27, 1859.........do...........  10,000 00
DD.. B....November 30, 1859.......do.............   10,000 00
50,000 00  H
DE..   B.November 30, 1859........ November 28, 1859........ Seven months   20, 000 00
DF      B..  B........ November 30, 1859..............do.............  20,000 00
40,000 00  H
DG................ B......... December 5, 1859.......... December 2, 1859..........Eight months........    20, 000 00
DR.           B... December 3, 1859.......... Seven months-.....  15,000 00                             o
DI..-............. B......................................do..,.d......... Eightmonths........ 15,000 00
DJ..    B......    December 4, 1859.Seven months....... 10,000 00
DK.............. December 5, 1859......   Six months..........  10,000 00
DL..... F.............do..........do.    10,000 00
80,000 00
DM....... F.December 12, 1859..December 6, 1859....... Seven months              10,000 00
DN.. F.......                             December 7, 1859.do.10, 000 00
DO..   B... December 8, 1859.......... Six months.........   5,000 00
DP.            B..                           December 12, 1859..............do.  10,000 00
DQ................F........   Eight months    10, 000 00
45,000 00




DR............ B.......... December 30, 1859......... December 23, 1859......... Seven months. —----    15,000 00
DS................-do.Six months -. —-----  5,000 00
DT...                                                 December27, 1859......-..                5,000 00
DU.               B.... - --- - BDecember 29, 1859......... Five months-...._ 5,000 00
DV    B.............. B -.....- December 30, 1859..............do -5,000 00
35,000 00
DW.............. S.......... November 19, f859........ November 19, 1859.   Eight months ------    5, 000 00
DX.... S.do.do ------------   15,000 0
DY...             S.........do                                                 Nine months-.    10, 000 00
DZ..S........do......do — 10,000 00
EA.....-..-..do.do. —    5,000 00
EB..       S.December 9, 1859..........   December 9, 1859....        Eight months..    15,000 00
BC....      - S.......   December 17, 1859..December 17,1859..              do- -20,000 00
ED..S.......   December 20, 1859..                 December 20, 1859..do - -10,000 00
BE.. S.......~  December 24, 1859........ December 24, 1859....       do - -10,000 00
—..............100,000 00
EF.. S..........November 26, 1859....November 26, 1859Nine months. —-. —   10,000 00
EGS....                              do..do.o. Ten months — 10,000 00
1-          20,000 00
BH................ S.......... November 25, 1859.. November 25, 1859............... do..    10, 000 00
El.               S..................do.do.do    10,000 00
EJ............... S.......... November 26, 1859.....   November 26, 1859..do.       20, 000 00
BK..... S..... November 28, 1859. November 28, 1859..do.                                          5, 000 00
EL................ S...................do........................do......................do   5,000 00
EM..                         S  December 17, 1859......... December 17, 1859-.....do-                5,000 00
EN................ S..     December 20, 1859........ December 20, 1859.do.                         5,000 00
EO.S.                       December 21, 1859.December 21, 1859..       do.        20,000 00
BP................ S.......... December 24, 1859......... December 24, 1859.do                 10, 000 00
EQ.               S.......... December 27, 1859-........ December 27, 1859_ —-.do                   10, 000 00
—..... 100,000 00?
Total on account contracts for supplies.1,143,267 50
Total on account contracts for transportation............ 4, 196, 127 50
Aggregate.5,339,395 00
RICH'D B. IRWIN, Correiponding Clerk.  C. ~
WAR DEPARTMENT, December 26, 1860.




350            ABSTRACTED INDIAN TRUST BONDS.
Letter from the Secretary of War in relation to the policy of the War
Department in granting acceptances to the contractorsfor transporta
tion across the plains, d&c.
WAR DIPARTMENT, December 27, 1860.
Sir: So much has been said, very recently, about the policy of this
department in granting acceptances to the contractors for transportation across the plains, that I deem it due alike to Congress, to the
public, and to myself, to make a short, plain statement of the facts
connected with the subject.
At one time, in the year 1858, it became absolutely necessary to
start large trains of transportation across the plains to Utah, when
there was no available means to put those trains in motion. Acceptances were given to the contractors then to enable them to start, and
they did so. The practice, thus begun, was continued for a good while
from necessity, and was afterwards followed to afford accommodation
to the contractors in their very large and extensive work. Their
purport is to give preference to the holder, when filed in the department, out of any moneys due the contractors. These acceptances
have, until the past autumn, been regularly paid to large amounts;
nor has any complaint whatever, until then, been heard that means
were not provided to meet and redeem them. There has never been
the least concealment or mystery about this business. It was perfectly
known to all who have any interest in knowing anything about it.
They have been given only when there was a subsisting contract
out of which the means to meet them would certainly arise, and for
the execution of which there was an existing appropriation. They
are prohibited by no law.
The issue of these acceptances within this month rested upon the
following considerations:- Those given for the last season's work, and
which were held as collateral security in different places,- the con tractors were anxious to postpone until the next season. They represented
that this could be done with acceptances, which on their face represented that they would be paid when the money they called for was.
earned by the contractors for the next season's work. The strongest
assurances were given that this paper was only to go, and certainly to
go, by agreement already made, into the hands alone of those banks
and firms who then held unpaid acceptances, and for which they
were to he substituted and held as collateral security to their own
obligations.
Tbe pay accruing under their contract next season will be mhore than
enough to cover the amount of the acceptances predicated on it.
To insure this stipulation, I consented to issue the paper only in
large amounts, and in a form which would be acceptable, it' at all, to
those who knew perfectly the solvency of the contractors, and who
had already money engagements with them to a large amount, and
who had, as I was informed, and as I believed, already consented to
an~d desired the arraingement. If these promises and fiaithful engagements had been performed, no difficulty could ever have resulted from
the transaction. It could not and would not have misled or deceived




ABSTRACTED INDIAN TRUST BONDS.              351
any one; no expectation based upon it could by any possibility have
been disappointed. But the promises made me were not kept; they
were broken. This paper was, it seems, placed in the hands of a clerk
of the Department of the Interior, who had abstracted a large amount
of the securities belonging to the Indian trust ifund. Finding this to
be the case I have not hesitated to give an order to cancel and annul
all those acceptances. The perversion rendered them void and of no
effect.
I am gratified to assert the confident belief that no one connected
in any way, directly or remotely, in any shape or form, with the duties
of the War Department,  ad any, the least, connexion with or
knowledge of this embezzlement in its inception or its progress.
The issue of this paper resolves itself into a question of administrative consideration alone, I tink; and so regarding it, I will be
pardoned for adverting very briefly to this aspect of the subject.
These contractors have, by a long series of years of faithful, honest,
and most efficient service, won the confidence and good feeling of all
persons having any connexion with the transportation of the army in
the country lying beyond our western settlements. They had never
failed in any of their engagements, and had executed many of
them under circumstances of peculiar embarrassments. They were
men of very large wealth and most extensive means, and possessed
fully the confidence of all who knew them. It has become latterly
pretty evident that but small profits, if any, were likely to be realized
from their operations; and this was put into great danger from recent
reverses in money affairs.
The revulsions which have recently swept over the country have
arisen from no causes which -business men could be fairly called upon
to take the risk of; they have been from political causes, and not from
any violated law of commercial or monetary action. Under this evident fact, I was not unwilling to afford these employe's of the government any assistance, likely to save them fromn selt~ous i:,j ury growing
out of political disturbances, if that could be done without running
any risk of loss to the government. I think such a course can derogate nothing from. a sound administrative discretion, although the
sequel has shown that such a confidence has been misplaced. 
But there is another and higher public consideration connected with
the subject of contracts for transportation, and one which cannot be
overlooked with any just appreciation of good administration. Good
and thoroughly responsible contractors for transportation across our immense plains are extremnely important persons to our little army, and
difficult to obtain. There is no other service like it known in the world,
Nowhere else on the globe would the idea be entertained of subsisting
an armny by transporting its supplies over land a distance of a thousand
or twelve hundred miles through an uninhabited wilderness; and yet
a very large part of our army is furnished and. subsisted by this means.
If the present contractors, who have so long and so faithfully performled their work, should fail, or become so embarrassed as to be
unable to do their work and supply the army, it would result in a loss
to the United States of a vast sum of money-probably a million of
dollars. But the pecuniary loss would be small in comparison with




352            ABSTRACTED INDIAN TRUST BONDS.
the risk and damage which such a failure would subject our troops to
who are stationed in the deserts of New Mexico and Arizona. Should
any accident befall these men, or any serious inconvenience result to
them from a failure of a regular and certain transmission of supplies,
it would be difficult to estimate the just indignation which would be
heaped upon the head of the ignorant or delinquent officer whose inefficiency had allowed it.
The trains necessary for the transportation to be performed by
Russell, Majors & Waddell could not have cost much short of a million of dollars, and would require months of industry and activity to
prepare.
It must be very clear to any one that a wise forecast demanded of
the government to sustain these contractors by all fair and legitimate
means.
I have now nearly brought my administration of the War Department to a close, and I will be excused for adverting to it briefly.
There is not one branch of the military service that is not in perfect
order, as far as any means are afforded of knowing-and they are very
complete. Some have been particularly encouraged, I think improved.
The discipline is excellent, and the accountability to superior authority
in every department could scarcely be excelled. A strict economy is
enforced, and a perfect responsibility in all money expenditures is and
has been successfully carried into effect.
Within the four years since I have presided over this department,
not a dollar, I believe, has been lost to the government by embezzlement or theft, and within that time sixty millions of dollars have been
disbursed. No system of administration, no line of policy, I think,
could reach better results. No system of accountability could be more
perfect.
These facts I confidently assert, and the department is everywhere
full of the proofs of them.
I invite any investigation which the House may think proper to
institute into any or all of my official acts.
Very respectfully, your obedient servant,
JOHN B. FLOYD,
Secretary of War.
Hon. WILLIAM PENNINGTON,
Speaker of the House of Represcntatives.




36T  CONGRESS, HOUSE OF REPRESENTATIVES.  SUPPLEMENTAL
~~~~~~2d Session.                        REPORT 78.
ABSTRACTED INDIAN TRUST BONDS.
MARCH 2, 1861.-Ordered to be printed.
Mr. I. N. MORRIS, from the select committee, made the following
supplemental
REPORT.
The select committee, appointed by the House to ascertain the facts in
relation to the fraudulent abstraction of certain bondsfrom the Interior
Department, submit a supplemental report, embracing the testimony of
the Hon. enry     Rice, of the Senate, Thomas W. Pierce, of Boston,
assachusetts and  on. Thomas P. Akers:
In the first report submitted by your committee Mr. Rice was
referred to as not appearing before them in a manner which somewhat
reflected upon him. Not the slightest suspicion, however, was entertained that e w as in any way implicated in the fraudulent abstraction
of the bonds. Your 6ommittee are also gratified in being able to state
further, that, at a subsequent interview between them and Mr. Rice,
the impression that he intended to treat them and the House with
discourtesy, by proposing to submit his testimony in the form of
answers to written interrogatories, was wholly removed, and his position left honorable and free from just criticism. Any seeming reflection
that may appear to have been cast upon him was entirely' the result
of misapprehension. When the facts came to be known, your committee were satisfied that Mr. Rice labored with energy and zea~l to
aid the government, and is entitled to the thanks of the House and
the country for it.,The evidence of Mr. Pierce will be read with interest, as it sheds
much light upon Governor Floyd's assurances in regard to the payment
of the acceptances, anad the state of allegfed facts under which he was
in the habit of making them.
The testimony, however, which is the most important is that of
Hon. Thomas P. Akers, one of the counsel of William H. Russell.
Mr. Akers is a gentleman of the highest character and integrity, and
none regrets more than himself that Mr. Russell failed to appear
before your committee and testify under the resolution adopted by
the House on the 27t of February, which authorized them to examine
witnesses "Itouching the matter as to whether William H. Russell,
or any person or persons for him, ever, directly or indirectly, paid
any money or other valuable consideration to any officer of the United
States, or any other person or persons, for assisting him, or any firm
H. Rep. Coin. 78-..-23




354           ABSTRACTED INDIAN TRUST BONDS.
with which he has been heretofore or is now connected, in obtaining
contracts or allowances from any of the departments of the government, or assisting him or them in the transaction of business with the
same." After the passage of the resolution Mr. Russell was at once
telegraphed to at New York, where he evidently was and is, by your
chairman, and Mr. Akers, and his attendance requested. No doubt
was at the time entertained, nor was there up to Friday afternoon,
(the 1st instant,) but that he would comply. The character of the
despatches then indicated otherwise; copies of three of which are
given, and will be sufficient to disclose the whole matter in connexion
with Mr. Akers's testimony.
"NEW YORK, February 28, 1861.
"Your despatch to Mr. Russell received to-day. Have not yet seen
him. HIe has not yet been at the office. Will try to reach him.
"A. LOCKWOOD, Pony Express.
" Hon. I. N. MoRRIS, Chairman."
The committee do not know who Mr. Lockwood is, but suppose he
is Mr. Russell's agent in New York.
" NEW YORK, March 1, 1861.
"Did not receive your telegraph until half-past six. Will bring
or send him (Russell) by the early morning train, if I can find him.
If I do not, shall I bring him in the evening train? If he starts in
the morning I will telegraph. Let me know if to-morrow evening
will do if I cannot find him this evening.
" ISAIAH RYNDERS.
"Hon. I. N. MORRIS."
Mr. Rynders, who is the United States marshal, was, in reply to
the above, directed by the chairman to bring Mr. Russell to Washington as soon as he could be found. The following is his answer:
"NEw YORK, March 2, 1861.
" I have been looking for him all last night and to-day. I cannot
get any trail of him. It is said he is in Philadelphia, but I think he
is here hid away. I shall try to get him before to-morrow evening,
and bring him on.
"I. RYNDERS.
"Hon. I. N. MORRIS,' Chairman of Committee."
The despatches would seem to indicate that Mr. Russell has kept
out of the way to avoid an appearance before your committee, notwithstanding his declared willingness to appear previous to the passage of the resolution herein referred to. When it is remembered that
he was not only willing, but anxious, to make a clean breast of it,
and tell the whole story, if he could be relieved from the penalty of
the act of 1853, it is only necessary to say that the public and the




ABSTRCTED INDIAN TRUST BONDS.                355
House will conjecture the reason. Many will conclude that he has
been operated on by other parties. The act of 1853 is as follows
SEC. 6. And be it further enacted, That if any person or persons
shall directly or indirectly, promise, offer, or give, or cause or procure
to be promiseda, offered, or givenany money, goods, right in action,
bribe, present, or reward, or any promise, contract, undertaking, obligation, or security for the payment or delivery of any money, goods,
riht in action, bribe, resent, or reward, or any other valuable thing
whatever, to any member of the Senate or House of Representatives
of the United States, after his election as such member, and either
before or after he shall have qualified and taken his seat, or to any
officer of the United States, or person holding any place of trust or
profit, or discharging any official function under or in connexion with
any department of the government of the United States, after the
passage of this act, with intent to influence his vote or decision in any
question, matter, cause, or proceeding which may then be pending, or
may bylaw, or under the Constitution of the United States, be brought
before him in his official capacity, or in his place of trust or profit,
and shall be thereof convicted, such person or persons so offering,
promising, or giving, or causing or procuring to be promised, offered,
or given, any such money, goods, right in action, bribe, present, or
reward, or any promise, contract, undertaking, obligation, or security
for the payment or delivery of any money, goods, right in action,
bribe, present, or reward, or other valuable thing whatever, and the
member officer or person who shall in anywise accept or receive the
same, or any part thereof, shall be liable to indictment as for a high
crime and misdemeanor'in any court of the United States having
jurisdiction for the trial of crimes and misdemeanors, and shall, upon
conviction thereof, be fined not exceeding three times the amount so
offered, promised, or given, and imprisoned in a p enitentiary not exceeding three years; and the person convicted of so accepting or
receiving the same, or any part thereof, if an officer or person holding
any such place of trust or profit as aforesaid, shall forfeit his office or
place; and any -person so convicted under this section shall forever be~
disqualified to hold any office of honor, trust, or profit under the
"1United States.-(Stat. at Large, vol. 10, p. 171.) Act approved
February 26, 1853.
The following despatch was sent to Governor Floyd, to which nof
reply has been received by your committee:
I            ~~~" WASHINGTON CITY, February 2'7, 1861.
"SIR: The committee appointed to investigate the -facts in regard to,
the abstraction of bonds from the Interior Department, unuder a resolution of the House, will on to-morrow commence the examination of
witnesses as to whether any money or other valuable consideration
has been paid, directly or indirectly, to any officer of the government,
Or other person by William H. Russell, or any one for him, for aiding,
him or his firm in obtaining contracts from or assisting in his or their~




356           ABSTRACTED INDIAN TRUST BONDS.
business with the government. If you should be implicated, you will
be allowed to be present.
"Respectfully,
"I. N. MORRIS.
" Hon. JOHN B. FLOYD, Abingdon, Va."
Your committee will only add that Mr. Akers' believed it to be his
duty, as an honorable man, to detail the facts embraced in his evidence
after the non-appearance of Mr. Russell.
All of which is respectfully submitted.
I. N. MORRIS, Chairman.
MONDAYl March 4, 1861.
WEDNESDAY, February 20, 1861.
Upon consultation, it was concluded by this committee that a personal interview with the Hon. H. M. Rice would be the most satisfactory, as it was difficult to frame in writing all the questions which
they might desire to propound to him. This conclusion of the committee was communicated to Mr. Rice; whereupon he- readily consented to appear, and the following was the result:
By Mr. THOMAS:
Question. You will please state what you know in reference to the
disclosure made by Mr. Bailey concerning the bonds that have been
abstracted from the Indian trust fund, and give a history of your
knowledge upon that subject.
Answer. Had I, in the first place, understood the wish of the committee, as I now understand it, I should have appeared at the earliest
moment consistent with my duties.
Some time in the month of December last Mr. Bailey called upon
me and made inquiries in regard to matters pending in Congress
touching the interests of Russell, Majors & Waddell. After speaking of those, he told me that he was in trouble. He stated that he
had been told some time last summer that Governor Floyd's acceptances were about going to protest; that Governor Floyd had been a
friend of his, and he was anxious to aid him. He was told that if
those acceptances did go to protest Governor Floyd would resign;
that he at once went up to the War Department to see Governor
Floyd; that he was engaged with General Scott; that he waited
some time, and finding it would be late before he could have an
interview, he asked Colonel Drinkard, chief clerk, if the information
he had received in regard to Governor Floyd resigning was correct
that Colonel Drinkard told him that if Governor Floyd's acceptances
were protested he would resign; that in order to protect Governor
Floyd he gave to Mr. Russell Indian trust bonds to a certain amount,
I think it was $150,000; that those bonds were to be returned at
some time specified-I do not recollect what time-and he wanted to
know of me what he should do. I told him he had better communicate the facts at once to the Secretary of the Interior. He said he
was aware that he had committed a great wrong, but that in doing




ABSTRACTED INDIAN TRUST BONDS.            357
what he had he had not done it out of any selfish or pecuniary
motives. Mr. Bailey stated that Mr. Thompson had confided in him
fully, and that he had betrayed his trust, and that he would sooner
sacrifice himself than have  r. Thompson censured for his acts, and
that he should communicate all the facts to him, Mr. Thompson.
He stated that, Owing to the difficulty in monetary affairs, Russell,
Majors & Waddell were unable to return the bonds, or prevent them
from being sold-they having been given to Russell with the express
understanding that they should not be sold, but only hypothecated,
and that the identical bonds should be returned; that he was informed that they ad got to be sold unless further aid was given,
and that he had gone on and had advanced more bonds. I told him
that the matter should be promptly communicated to Mr. Thomson
and the Secretary of War. He informed me that he would make out
a statement in writing of all the facts, and would communicate it to
Mr. Thompson, and, I think, to the Secretary of War; that he
should not attempt to escape; that he would remain here and take
the consequences, as he alone was to blame. He informed me soon
after that he had communicated the statement of facts to the Secretary
of War, and that he would to Mr. Thompson at the earliest moment
-Mr. Thompson then being in North Carolina. On Saturday evening following I returned home between 4 and 5 o'clock from attendance upon the committee of conference of thirteen; I found a package
in my house addressed to Jacob Thompson, Secretary of the Interior.
I also found a note from  Mr. Bailey requesting me to deliver that
package to Mr. Thompson the moment he returned. I took it and
went at once to see Mr. Bailey, and told him that Mr, Thompson was
not here, and that it was not proper for me to keep that package until
he returned. He told me he had written out a full confession of all
the facts and placed it in the hands of a friend who would deliver it
to Mr. Thompson. I told him I knew not what was in the package
which he left ait my house, but that II did not desire to keep it, and,
I wanted hi's permission to deliver it at once to the President of the
United States, if it had any connexion with that matter. He said it
had connexion with the matter, and he gave me permission to deliver
it at once to the President. I went immediately and called upon the
President, gave him the package, and told him that he was authorized
to open it by the person who had written it. -He opened the package
and it contained the acceptances of the Secretary of War to the amount
of $870,000; also a receipt of Russell, Majors & Waddell for the
bonds for the same amount.
During, the conversation the Secretary of State, Mr. Black, and the
Attorney General, Mr. Stanton, came in. While conversing upon
the subject Mr. Thompson, who had returned fromt North Carolina
sooner than expected, came in. A discussion arose then inregard to the
proper course to pursue; Mr. Thompson remarked. that he had left in the
safe some two or three millions more of bonds, and it was important to
ascertain whether they had been disposed of or not, and at his urgent
solicitation I returned to Mr. Bailey's room and asked him for the keys
of the saf~e. Mr. Bailey handed them to me at once. In the room




358            ABSTRACTED INDIAN TRUST BONDS.
was General Wagner, who stated that he had just returned from Mr.
Thompson's house; that his object in going was to deliver a sealed
package from Mr. Bailey, if he had returned. I think Mr. Bailey
suggested that General Wagner should give me the package, as I was
about to return to the Executive mansion. I took the package and
keys, returned to the President's, and there delivered them to Mr.
Thompson. Mr. Thompson then requested that the Secretary of State
and the Attorney General should go down to the Interior Department,
and it was decided that he and myself should call upon Mr. Bailey
and request him to go there also. We returned to Mr. Bailey's house;
Mr. Thompson got cut of the carriage and went in. In a few moments
returned with Mr. Bailey and General Wagner. They got into the
carriage and we went up to the Interior Department. Te chief clerk
was sent for. Prior to the arrival of any others, Mr. Bailey stated to
Mr. Thompson and myself the motives which induced him to do as he
had, which were, in fact, such as he had communicated to me. The
safe was opened, and Mr. Bailey took out the remaining bonds, spread
them out there upon the table, and assisted in counting them to ascertain if all were left which he said were undisposed of. I remained
there, and soon after Mr. Black and Mr Stanton came in.
We had, during the evening, several conversations in regard to the
proper method of proceeding to trace thematter up, and ascertain who
were implicated and who were not. I remained until two o'clock in
the morning. I then asked if I could be of further service, and they
replying that I could not, I went home
Tne next morning Mr. Thompson sent General Wagner with a
special request that I should try to ascertain who was the person who
first mentioned the subject of bonds to Mr. Bailey. I saw Mr. Bailey, and he stated that he had rather' suffer himself than to violate a
breach of confidence, but authorized me to call upon Colonel Luke
Lea. I went down to see Mr. Lea and explained to him my business.
Mr. Lea said that mnost of the trouble brought upon him had been by
trying to aid others; that he had delivered a message to Mr. Bailey
from Mr. Russell, and that Mr. Bailey said that he had nothing but
trust bonds in his hands. Lea said, "Of course you cannot use
those;" he said that when he, Mr. Lea, mentioned Governor Floyd's
name, and that unless his acceptances were met that Governor Floyd
would resign, that Mr. Bailey did not stop to hear any further explanation from him upon the subject; that he seemed distressed at the
idea that Governor Floyd was in the condition that he was, and that
he, Bailey, left him; I told Mr. Lea that the Secretary of the Interior was the person to whom it would be proper to state all the facts.
He grot into the carriage with me, and rode up to Secretary Thompson's; he was, I think,"at dinner; I sent up for him, and he came into
the parlor; about the time he came down Secretary Black came "into
the parlor also. I told Mr. Thompson that Mr. Lea had come up to
give him such information as I believed he desired; I left the three
mentioned together.
In conclusion, I will state that I comm unicated to the President and
the three aforementioned cabinet officers, all the information that




ABSTRACTED INDIAN TRUST BONDS.             359
came to my knowledge, and that the foregoing is, in substance, if not
in detail, all the facts that were in my possession; that until Mr. Bailey, in December, mentioned the subject to me, I had never heard
of the acceptances of Governor Floyd, or of the Indian trust bonds,
and that the parties who received them were entire strangers to me.
THURSDAY, February 28, 1861.
THOMAS W. PIERCE sworn and examined.
By the CHAIRMAN:
Question. Where do you reside?
Answer. In Boston, Massachusetts.
Question. What is the business in which you are engaged?
Answer. The firm I represent is Pierce & Bacon, of Boston; our
business is a general commission financial business, buying paper, accepting on property of all kinds, selling on commission, &c. We
have also several ships which we manage.
Question. Has the house with which you are connected ever at any
time bought any acceptances drawn by Russell, Majors & Waddell
upon the Secretary of War, and accepted by John B. Floyd as such
Secretary?
Answer. Yes, sir.
Question. Have you any of those acceptances now on hand?
Answer. Yes, sir.
Question. To what amount do you now hold those acceptances?
Answer. $260,000; we hold these acceptances not wholly for ourselves; the most of them have been negotiated through us, upon
information which we communicated; we represent that amount
$260,000, about $150,000 of which is our own.
Question. Of whom did you purchase those acceptances?
Answer. I reckon that the most of those we now hold we bought of
Russell, or of his agent in New York, Mr. Simpson; he bought a
great many through Mr. Suter, President of the Bank of the Republic; and that is where we first made inquiry in regard to them.
Question. Did you ever have any conversation with John B. Floyd
in reference to these acceptances?
Answer. Yes, sir; I did.
Question. What was that conversation? please detail it.
Answer. In January, 1860, I came to Washington to inquire specifically about this paper. It had had a currency in the north for
some time before. I was introduced to Mr. Floyd by a letter from Mr.
Toucey, Secretary of the Navy. I told Governor Floyd that the
object of my visit to Washington was to see him and ask him in relation to these acceptances, if such had been issued by his department;
and if they had been issued, then was there authority for their issue,
had there been consideration for them, and would they be paid at maturity. To all of which questions he answered in the affirmative.
He then went into an explanation of the exigencies of his department,
which called for something of that sort. He explained that matter at




360           ABSTRACTED INDIAN TRUST BONDS.
full length, but I cannot give his words; I might give the substance
of them.
Question. Go on and state the substance of what he said.
Answer. The idea was substantially this: that there was an exigency
in the affairs of the department growing out of the Utah war. In the
first place, I think he said to me that there was some little difference
of opinion between him and General Scott. He considered it his duty
to maintain the army there; that it was a bad season when the war
began, and that as the contracts were very large they required a very
large outlay; that there were no contractors with the government
who had money sufficient to make the necessary outlay and perform
the service as promptly as it should be done; that these gentlemen,
Russell, Majors & Waddell, were large contractors, and had been for
years; that they were prompt and reliable; but their outlay was so
managed that the government had to give them some aid. I said to
him, "while your treasury is full of money, why not give them the
money?"  He responded that there was an express law against that,
but there was authority for securities of this character. In reply to
the question if there was any authority for giving these acceptances,
he said that it had been the custom of the department, in certain contingencies, since the organization of the government. After he had
got through with his relation, I said to him —" Governor, these are
very good papers, I should judge, from your relation. I am now a
holder of about $70,000 worth of United States stock, at five per cent.,
and I can dispose of that stock now at a premium, and invest in these
securities if they are safe."  The governor said that he regarded these
acceptances as the best securities extant of the government, because
they did not depend upon any action of Congress, for the appropriations were all made and the money already in the treasury to pay
them as they became due. I therefore thought I better sell my United
States stock, as it was bearing a low rate of interest, and I could dispose of it at a premium, and invest it in these acceptances, which I
could get at 9 or 10 per cent., that being the best rates for commercial
paper. Then it was that he remarked to me that he regarded these
acceptances as the best obligations extant of the government. I
accordingly concluded, after that interview, to go home and sell out
my United States stock, which I did.
Question. Investing your money in these acceptances?
Answer. Yes, sir. Of the $70,000, $40,000 was my own and
$30,000 belonged to our firm. We always had stocks of that kind to
meet any exigency in the money market. They matured in 1865,
and bore a premium, and I sold them at a premium and invested the
proceeds in this paper. And since this interviewiwith Governor Floyd,
whenever we have had any surplus money we have given this paper
the preference. We thought that thirty-one millions of people were
better security than any one or half a dozen individuals could be.
We supposed the government was bound legally by this paper.
Question. Did Governor Floyd state to you to what amount he was in
the habit of accepting? That is, did he state whether he accepted for
moneys due or to become due to the parties?
Answer. The interpretation I put upon his language was this: that




ABSTRACTED INDIAN TRUST BONDS.              361
he made no acceptances until the trains were ready to start, when the
contractor had nothing to do but to perform his service, having incurred all his expenses. When the trains were ready to start he gave
these acceptances for about 50 per cent- "' 40 or 50 per cent.," I think
was his language-upon the amount which would be due when the
full service had been performed.
Question. And for no more?
Answer. That was the impression I got from his language. That
was not in answer to any particular inquiry of mine, but as part of
his explanation of the whole matter, as I regarded it, showing me the
prudence with which he was managing the affairs of his department.
That is the way I regarded it.
Question. Have any of the acceptances which you purchased been
protested for non-payment?
Answer. Yes, sir. I have some of them here. Mine are nearly all
protested. The last one, I think, was protested on the day before
yesterday.
Question. Since your conversation, in January, 1860, with Governor
Floyd, late Secretary of War, and since the first of these acceptances
purchased by you were protested, have you had any conversation with
him in relation to these acceptances? If so, please state what was
said in that conversation.
Answer. I have had a conversation with him at his house. I talked
with him about these matters, and asked him why they were protested.
He said. there was no money in the treasury at that time. The conversation was a very short one, because he agreed to meet me at the
War Department the next morning; but he did not do so. He said
he could not say much until he could see Mr. Russell. I asked Governor Floyd how many of these acceptances were out. He said that
he could not tell without referring to the War Department. I then
told him that Mr. Russell had told me, on my way through New York,
that there was but $85,000 worth out, besides what I had. Then we
made an appointment to meet at the War Department the next morning; but I have not seen him since.
Question. Governor Floyd did not meet you there, according to
appointment?
Answer. No, sir. I went there and waited a couple of hours; but
the excuse was, that there was a cabinet meeting that day. I did not
see him, and that night I left for New Orleans.
Question. Have you seen him and conversed with him since that
time?
Answer. No, sir. I have but just returned from Texas.
Question. When did this last conversation occur that you had with
Governor Floyd?
Answer. It was early in the month of December last.
Question. Can you fix the particular day of the month?
Answer. It was on the night of Friday, the 7th of December, I
think.
Question. How long previous to that was the conversation with Mr.
Russell to which you have referred, in which he stated to you that




362           ABSTRACTED INDIAN TRUST BONDS.
there were only $85,000 of these acceptances out, besides those which
you held?
Answer. That must have been on Wednesday, the 5th of December
last, I think.
SATURDAY, March 2, 1861.
JOSEPH A. MONEIMER sworn and examined.
By the CHAIRMAN:
Question. Do you know where William H. Russell now is?
Answer. No, sir; I know that he is in New York; I do not know
where at particularly.
Question. Have you heard from him since he went there?
Answer. Yes, sir.
Question. When?
Answer. I heard from him this morning.
Question. Do you know whether he is coming here?
Answer. I do not.
Question. How did you hear from him this morning?
Answer. By a letter sent to me by my brother, who lives in New
York.
Question. Whereabouts did he say Mr. Russell was then?
Answer. He did not say; he just enclosed a note to me from Mr.
Russell in a letter from himself.
Question. Do you know what took Mr. Russell to New York?
Answer. I do not, indeed.
Question. Do you know when he expected to return when he left?
Answer. I do not; he told me he would be back in a few days; he
did not state any particular time.
SATURDAY, March 2, 1861.
THOMAS P. ARERS sworn and examined.
By the CHAIRMAN:
Question. Please state to the committee what you stated to the
chairman in reference to Mr. Russell's willingness to appear before
them and respond to interrogatories as to when and to whom he paid
money for assisting him in procuring contracts from, and in the
transactions of his business with, the War Department.
Answer. In reply to your question, I will state that on or about the
20th of February, 1861, I had a conversation with the chairman of the
committee, in the course of which I had occasion to refer to the report




ABSTRACTED INDIAN TRUST BONDS.              363
of the committee submitted to the House of Representatives. I spoke
particularly of that feature of the report which represented Mr. Russell
as declining to answer the question in relation to his having paid
officers of the government money with the view of influencing them in
obtaining contracts and allowances. I then informed the chairman
of the committee that Mr. Russell had no desire to withhold the answer
to that or any other question. On the contrary, when the question
was propounded to him, he had asked permission to confer with his
counsel, which was granted; the result of which conference was a
determination on his part to so respond to the question as to indicate
to the committee a willingness on his part to reply, if they should
obtain power from the House of Representatives to examine him on
that point. I also stated to the chairman of the committee that it
was the opinion of Mr. PRussell's counsel that the committed had no
power to examine witnesses touching that point; and that in framing
Mr. Russell's answer they had intimated so much by quoting a portion
of the statute of 1857, marked as quoted, and emphasized by being
underline1, substantially as follows: "The question propounded to
me by you on the 18th, and upon which you adjourned,'I s not pertinent to the subject under investigation before the committee.'"  I
further informed the chairman of your committee that Mr. Russell was
perfectly willing and anxious to make a clean breast of it in regard
to the matter; and his counsel supposed that the form of his written
reply, to which I have before referred, would point the committee to
the fact that additional power to examine him was necessary.
Question. Did you suggest to the chairman of the committee that
they had better get additional power from the House?
Answer. Yes, sir, I did. And I also suggested, at the same time,
that it was the opinion of Mr. Russell's counsel that the committee
would ask for additional power as soon as the written answer of Mr.
Russell, that I have referred to above, was presented to them.
Question. Did the chairman of the committee state to you that, in
pursuance of the suggestion of Mr. Russell that he was not only willing but anxious to make a clean breast of it, and disclose all the facts
as to whether he had paid money to public officers and other persons
for assisting him in the transaction of his business with the War Department, he would offer a resolution to the House and ask for the
additional power?
Answer. I do not think the chairman at first agreed to it. He was
several days determining in his own mind, I think, whether he would
offer the resolution. I remember distinctly that on one occasion he
remarked to me that the committee was unwilling to assume any
position in regard to this matter different from what they had assumed
in the examination in regard to the Indian bonds, by which I understood the chairman to mean that the committee was unwilling to take
the attitude of compelling Mr. Russell to testify. But afterwards, and
the day after Mr. Russell went to New York, which was Tuesday, the
chairman of the committee informed me that he had determined to
offer the resolution. Whereupon I stated to him that if he did so,
and it was passed, to inform me so, that I might telegraph Mr. Russell,




364            ABSTRACTED INDIAN TRUST BONDS.
as he had gone to New York for papers, and would be gone a few
days.
I think it proper to state, in this connexion, that in a subsequent
conversation between me and the chairman of the committee, I held
that this examination, touching the payment of money to public officers
or other persons, was altogether a different affair from the examination
relating to the abstraction of the Indian bonds. Whereupon the chairman replied that in that view the committee were willing to assume
the attitude of compelling Mr. Russell to answer touching the former
subject.
Question. Please state to the committee what led to the conversation between you and the chairman in reference to the matter you
have detailed here.
Answer. As I before remarked, I was talking to the chairman concerning the report of the committee. I remarked to him that the
report represented Mr. Russell as declining to answer the question in
relation to the payment of money to officers of the government or
other persons; whereas the truth was he had requested the committee, when the question was propounded to him, to give him an opportunity to confer with his counsel, which they accordingly did. He
did confer with his counsel, and the result of that conference was the
preparation of the written response to which I have before referred.
When he returned, with the expectation of delivering his written
answer to the committee, as I learned from him, the committee made
to him substantially this proposition: that they would return to him
the written statement which he had placed in their hands concerning
his connexion with the Indian bond transaction, and expunge from
the record all of his testimony; or if he2 declined that, he might come
forward and answer such additional questions as might be asked him.
Upon this suggestion being made to him, Mr. Russell requested permission to confer still further with his counsel, which was also granted.
When he again returned,' and the committee called up the subject, he
commenced reading his response to that proposition, upon which, as
I learned from him, the chairman of the committee informed him. if
that was his answer he could leave it to be recorded. He then retired,
at the suggestion of the chairman, from the committee room, with the
expectation of being called before the. committtee again at some future,
time, to answer the other question in relation to the payment of money
to officers of the government, but was not afterwards called before the
committee. I stated these facts to the chairman of the committee,
and then added that Mr. Russell was then willing, and had always
been willing, to answer any question that they had the power to ask
him.
It was in this connexion that I made the suggestion above referred
to, that the committee apply to the House of Representatives for
further power, if they desired Mr. Russell to appear before them
again. And I have no doubtu that the application for additional power
which was made to the House of Representatives by the chairman of
the committee was in consequence of what I had then stated to him.
Question. At the time that this conversation occurred, were you




ABSTRACTE IDIAN TRUST BONDS.                365
acting as counsel for Mr. Russell, and are you so acting at the present
time? 
Answer. Yes, Sir.
Question. Have you made exertions, since the passage of the resolution granting the committee additional power, to procure the attendance of Mr. Russell before the committee?
Answer. I have made all that I could make, and I am unable to
state the reason why he has not appeared.