Was The Secretary Of War A Traitor?

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“You tell me,” he protested on one occasion, “that if any attempt is made to do what under ordinary circumstances is done every day, you will be unable to restrain your people. Suppose you are not able to restrain them now , am I bound to leave those garrisons unprotected, to the mercy of a mob; am I not bound to enable them to resist an unlawful violence which you cannot control?”

This was a sound stand, but he receded from it when two fellow Cabinet members, Jacob Thompson of Mississippi and Howell Cobb of Georgia, warned him of its perils. Floyd now said that rather than cause violence he “would not consent that a man nor a gun” be sent to Charleston. When President Buchanan, growing worried about Anderson’s position, talked of sending reinforcements, Floyd opposed it vehemently and with success. The Army chief, General Winfield Scott, who was strongly in favor of bolstering the garrison, got nowhere because Floyd had pushed him out of control and was handling all correspondence with Anderson himself.

Floyd’s next move was to send Major Don Carlos Buell to confer with Anderson and give him confidential instructions. On December 11 Buell told Anderson he would have to get along with his seventy-odd officers and men, but that if he were attacked or felt attack imminent, he could move his command across the channel to Fort Sumter, a far stronger bastion that was as yet unfinished and ungarrisoned. These instructions were put on paper, a copy of them being approved later by Floyd.

Possibly by this time the Secretary was so beset by woe that he did not know what he was doing. For two years he had been sponsoring financial irregularities that could not much longer be hidden. In 1858 he had started playing Santa Claus to the firm of Russell, Majors & Waddell, a transportation company holding government contracts to deliver supplies by horse and wagon to army posts on the western frontier. When William H. Russell, the Vermont-born head of the firm, came to him and admitted financial distress, Floyd was sympathetic. He later explained that he thought the Vermonter a man of vast resources whose embarrassment was only temporary. He also believed the company the only one equipped to deliver supplies across the plains, so that unless it survived, the army garrisons in the West would go hungry. Floyd thereupon hatched a scheme to keep Russell solvent.

He began accepting drafts drawn by Russell in anticipation of future work. These drafts were not in the form of money but were negotiable paper, signed by the Secretary of War, and Russell used them as security in borrowing cash from banks and individuals who believed the drafts to be legitimate and backed by the government. The contractor, delighted at this magic solution to his troubles, soon beat a path to Floyd’s door, asking for more drafts.

Floyd was remarkably accommodating. Russell meanwhile was being paid in full—in cash—for work his company had actually performed. The theory was that he would use this cash to pay oft and retire the outstanding drafts, but nothing of the sort happened. Since these transactions were unauthorized by law, the least the Secretary could have done, once he had entered into such a rubbery arrangement, was to make sure that Russell was paying off the earlier drafts and thus climbing out of the hole. Instead, Floyd just kept turning the crank, issuing more drafts, while Russell sank deeper into the red. In 1859 Senator Judah P. Benjamin of Louisiana heard about the practice through a legal client and spoke to Floyd, warning him it was risky. Floyd said he would cease, but did not. Early in 1860 Buchanan got wind of Floyd’s dealings, though he had no conception of the magnitude of the Secretary’s paper edifice, and ordered him sharply to stop it. Floyd agreed—and kept right on turning the crank.

But as Russell kept skidding closer to bankruptcy, Floyd’s own honor and reputation became deeply involved. If Russell’s drafts were allowed to go to default, those holding them, in the belief that they were guaranteed by the government, would cause an investigation and bring the whole business to light. Floyd now had to keep Russell from bankruptcy not only to feed the Army but to save himself from exposure and disgrace. By the summer of 1860 Russell was against the wall, unable to pay off some of the drafts. He had to have cold cash, and fast.

It happened that an Alabamian named Godard Bailey, a clerk in the Interior Department, was a connection of Floyd’s, his wife being a cousin of the Secretary. Bailey had got his job through Floyd’s influence. Although he was as poor as a churchmouse, Bailey was caretaker of a gold mine—$2,500,000 in negotiable bonds held in trust by the government for several Indian tribes. He knew of Floyd’s peril and wanted to help his benefactor. In July of 1860, Bailey met Russell in the War Department. They had a quick chat, after which Bailey returned to his office, took out $150,000 in Indian bonds and delivered them to Russell. In return Russell gave him his note for the same amount, which was valueless. In “helping” his friend Floyd, Bailey had come near outright theft on the strength of Russell’s promise that his embarrassment was only temporary and that he would return the bonds in ninety days.