McRae wanted £200,000 on government account, and applied to D'Erlanger, whose terms will be seen from the following extract from McRae's letter:—
"Your proposition amounts to this: That the government should pay 100 per cent for the use of £200,000, for probably less than six months, with no risk on the part of the lenders, as the £650,000 of bonds deposited, and the lien on the boats purchased with the sum lent, would protect them against loss in any event. My proposition was to pay 33-1/3 for £200,000, for a period of probably ten or twelve months. This I considered sufficiently favorable for the lenders, as they would have been secured by the deposit of £333,333 of bonds, and a lien on the boats."
The American people, doubtless, care very little who among Rebel agents and manipulators of the loan, or who of the bondholders, made or lost money, and I pass over the details of the interesting correspondence. That D'Erlanger managed it shrewdly for his own benefit is very evident. He charged interest, commission, and exchange on all the stock passing through his hands. In the transaction £140,000, raised from the sale of bonds, was set aside as "caution money" by Mason and Slidell, who wished, for political considerations, to keep the stock at par. D'Erlanger charged commission on the repurchase of this stock, although he held it in his own name, and received interest on the same! McRae was not then in Europe, but upon arriving he refused to ratify the act of Mason and Slidell, but made a proposition to D'Erlanger that the banker should place £704,000 of unsold stock. It is not stated what commission he was to receive. The agreement was verbal, and D'Erlanger was to forfeit £140,000 if the stock was not placed at the end of six months. The months rolled away, and the stock was not placed, and D'Erlanger, instead of paying his forfeiture, held on to the £140,000 of caution money, and helped himself to the interest from government funds in his hands! McRae had no redress except to appeal to Memminger. D'Erlanger wrote a honeyed letter to the Rebel Secretary of Treasury, and offered to "compromise" by giving up one half! McRae finally accepted terms from D'Erlanger; what they were is not stated, but McRae writes a doleful letter to the banker, saying that he is afraid Memminger and Davis will censure him. D'Erlanger seems to have wound McRae round his finger at will.
Schroeder & Co. were in the "ring" with D'Erlanger, and received commission and brokerage on the entire amount of the loan, £3,000,000. D'Erlanger, Schroeder, and McRae each took £50,000 of stock in the "Franco-English Steam Navigation Company," which was to bring out cotton on government account. D'Erlanger fixed the date of issuing the bonds, and thus brought advantage to himself. Among the payments made through Mr. Mason were £55,000 to Captain Crenshaw, £26,000 to Captain North, £38,000 to Captain Maury, £31,000 to Captain Bullock and Mr. Spence. A portion of these sums went into the hands of the Lairds for the rams which they were building. Isaac Campbell & Co. received £515,000 ($2,575,000). This firm took £150,000 of the loan. Bonds to the amount of £117,000 were converted into cotton. It appears that D'Erlanger endeavored to sweep these into his drag-net, and obtain commission and brokerage wholly unauthorized.
Since the close of the war the British holders of the loan have called upon D'Erlanger for an account of his operations, but can obtain no satisfaction. They have despatched an agent to the United States, appealing to the magnanimity of the Federal government for an adjustment and payment of their claims! Such insolent audacity has been promptly rebuked by Mr. Seward. Marvellous their stupidity and effrontery,—to ask pay for the coals on which they sought to roast us, for the rope that was to strangle the young giant of the West, whose growth they had beheld with alarm, and whose power they feared! As is evident from the correspondence in my possession, the whole scheme was well contrived and manipulated by Slidell and D'Erlanger for the benefit of themselves, and also of Campbell & Co., Schroeder & Co., Spence, the Lairds, and McRae, who, by the aid of the London Times, and "all the papers," were able to fleece the English aristocracy out of fifteen million dollars.
From mercenary motives they enlisted in the cause of slavery to destroy a friendly republican government. They had persistently asserted that a constitutional democracy like ours must ultimately fail to secure the rights and liberties of the people,—that internal war would crumble it into ruins like the ancient republics; and now they thought the fulfilment of their prophecy so near at hand it was unnecessary longer to disguise their hatred, and openly gave their "aid and comfort" to the enemy, jeering at our efforts and denouncing our measures to maintain our existence among the nations. They ventured their money on the doubtful issue and lost, and now so lugubriously bewail their folly as to make themselves ridiculous in the eyes of the world, and the laughing-stock of the American people.
Patriot orphan home, flushing, L. I.