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[664] leaving its personnel disorganized, the public treasury exhausted and the national credit impaired, and thus bequeathed to his successors, against whom he was about to take up arms, all the difficulties he had been able to accumulate in their path. A serious scandal, which brought the personnel of Mr. Buchanan's government into great disrepute, occurred about this time, to increase the anxiety of the public in regard to the condition of the public treasury. The contract for military transportation in the West had been given to the house of Russell; Mr. Floyd, during his administration as Secretary of War, had the culpable weakness to endorse drafts of this house without guarantee of any kind, or regular accountability for sums not yet due, which had finally reached the enormous figures of nearly if not quite a million dollars. The irregularity of these drafts being well known, they could not be negotiated; and in order to realize upon them, Russell induced a Mr. Bailey, a relative of the Secretary of War and treasurer of the Indian funds, to become a party to a fraudulent transaction. The funds entrusted to his keeping embraced government bonds, the interest on which was paid by the Indian bureau, as the guardian of the tribes who were the owners of these bonds. Mr. Bailey successively remitted eight hundred and seventy thousand dollars' worth of these bonds to Russell, in exchange for the drafts which he had failed to get cashed elsewhere, and the latter hastened to sell them. This transaction, which commenced in July, 1860, was discovered when the January coupons became due.1 Mr. Bailey made his escape after confessing everything; the Secretary of War soon followed; and when they were both indicted before the grand jury as peculators, they were safe on the soil of insurgent States.2

The financial enactments of the Thirty-sixth Congress, at their last session, were of little importance, like all those which marked the latter months of Mr. Buchanan's administration. They were mere palliatives intended to cover the deficit caused by a bad administration,

1 The acceptance of the drafts was so well known that their propriety was discussed in the newspapers at the time of the transaction. When, however, the bonds were taken from the department, the January coupons were cut off, so that the disappearance of the bonds themselves might not have been discovered for months but that suspicions were excited by other circumstances.—Ed.

2 See Note G at the end of this volume.

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