War of the Rebellion: Serial 021 Page 0476 Chapter XXVII. CORRESPONDENCE, ETC.-UNION.

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These are in no sense of language special deposits. They were held in general account, went into the funds of the bank, were paid out in the discounts of the bank, and if called upon to-day for the identical notes put into the bank, which is the only idea of a special deposit, the bank would be utterly unable to produce them.

As well might my private banker, which whom I have deposited my neighbor's check or drafts at a discount and pay them to me instated of money upon the ground that I had made a special deposit.

The respectability of the source from which this claim of the bank proceeds alone saves it from ridicule.

The United States can in no form recognize any of the sequestrations or confiscation of the supposed Confederate States; therefore the accounts with the Bank of Kentucky will be made up, and all its property will be paid over and delivered as if such attempted confiscation had never been made.

The result is therefore upon the showing of the bank by its return that there is due and payable to the Confederate States, and therefore now to be paid to the United States, the sums following:

Confederate States Treasurer's account............ $219,090 94

Special accounts ................................... 12,465 00

Deposits by officers ...............................

J. M. Huger, receiver .............................. 106,812 60

G. M. Ward, receiver ............................... 72,084 90

J. C. Manning, receiver ............................ 1,120 00

M. L. Smith ........................................ 16,026 52

S. Macklin ......................................... 6,814 57

Richard ............................................ 497 30

Total .............................................. 434,911 83

This is the legal result to which the mind must arrive in this discussion; but there are other considerations which may apply to the first item of the account.

Only the notes of the Confederate States were deposited by the Treasurer in the bank, and by the order of the ruling authority then here the bank was obliged to receive them.

In equity and good conscience the Confederate States could call for nothing more than they had compelled the bank to take.

The United States succeed to rights of the Confederate States ought to take. But the United States, not taking or recognizing Confederate notes, can only leave them with the bank to be held by it hereafter in special deposit as so much worthless paper.

Therefore I must direct all the items but the first to be paid to my order for the United States in gold, silver, or United States Treasury notes at once. The first item of $219,090.94 I will refer to the home Government for adjudication, and in the mean time the bank must hold as a special deposit the amount of Confederate Treasury notes above mentioned and a like amount in bullion to await the decision.

SPECIAL ORDERS,

HDQRS. DEPARTMENT OF THE GULF, No. 98.

New Orleans, June 18, 1862.

William M. Clary, late second officer of the United States steam-