1871 South Carolina 100 Pounds Sterling \"Cotton\" bond Signed By Robert Scott For Sale

1871 Cotton Loan Bond - often called an Erlanger Cotton Bond £100 (A Scarce Denomination)

Signed By the notorious Robert Kingston Scott - where the saying, \"getting off Scott free\" came from!

Scott\'s signature alone goes for $100\'s!

Very nice shape for being 146 years old! 

It is cut cancelled. 

Robert Kingston Scott, (1826-1900). Union Soldier and Governor of South Carolina. During the Civil War he received honorable mention for gallantry in action and commanded a brigade in Sherman\'s march to the sea. Later promoted to Brigadier General and at the end of the war was brevetted a Major General. 

Scott became lieutenant colonel of the 68th Ohio Infantry, and colonel of that regiment in 1862. He served in Tennessee, where he commanded the advance of Major General John A. Logan\'s division on the march into Mississippi. He was engaged at Port Gibson, Raymond, and Champion Hill.

He was afterward at the head of a brigade in the XVII Corps, and was taken prisoner near Atlanta. There are conflicting claims about how he gained freedom. Some claim he was part of a prisoner exchange on September 24, 1864 and was put into Sherman\'s operations before that city and in the march to the sea, while records also indicate that he escaped by jumping from a prisoner train.

Scott was commissioned as a brigadier general of volunteers on January 12, 1865, and also received the brevet ranks of brigadier and major general in the volunteer army, to date from January 26, and December 2, 1865, respectively.

Between 1865–68, General Scott was assistant commissioner of the South Carolina Bureau of Refugees, Freedmen and Abandoned Lands, popularly known as the Freedmen\'s Bureau. In July 1868, he resigned from the Regular Army and entered politics.

Governor of South Carolina

Later that year, he became the first governor of the reconstructed South Carolina as a Republican. In 1870, the South Carolina Constitution of 1868 lifted the rule that had until then prevented a governor\'s re-election until four years had passed since leaving office. This allowed Scott to become the first governor of South Carolina to be elected to two consecutive terms. He was re-elected by a majority of 33,534 votes of a total 136,608. One of the most notable acts of his state legislature was voting itself a full-time saloon and restaurant at taxpayer expense. The state debt tripled during Governor Scott\'s years in office, resulting in an unsuccessful attempt by the General Assembly to impeach him in 1871.

Judge Richard B. Carpenter testified in an 1872 congressional hearing that voter fraud was involved in Scott’s re-election, but Scott remained in office. Ironically, Carpenter not only owed him money at the time, but also continued to ask for more with the promise of political favors in return.

Franklin J. Moses, Jr., the first governor after him, claimed Scott “fraudulently signed state bonds in the St James Hotel in New York under the joint influence of alcohol and burlesque queen Pauline Markham,” known as one of “The British Blondes.” He also regularly borrowed money from Scott.

Wade Hampton III, the third governor after Scott, indicted him for “fraudulently issuing three warrants for $48,645 to non-existent payees in 1871.” At the same time, he sent letters to Scott promising not to extradite him nor force him to stand trial. 

In 1877 Scott returned to Napoleon, Ohio, when Democrats returned to power in the South Carolina executive, possibly out of fear of being prosecuted for misuse of funds during his administration.

He settled down with his family, including his only son, R.K. Scott, Jr., who was known as \"Arkie\" because of his initials. On Christmas Day, 1880, 15-year-old Arkie went missing. He was “inclined to frequent taverns.” Scott suspected he was hiding in the apartment of his friend Warren G. Drury, aged 23. When Drury refused to let him in he was somehow mysteriously shot by a bullet from Scott’s pistol and died the next day.

Scott’s trial, held in a pool hall over Wendt’s Shoe Store in downtown Napoleon, consumed national attention. The former governor, a two-star general who trained men and led soldiers through four years of war, participating in one of the boldest military campaigns in history, claimed his weapon accidentally discharged. He was also a lawyer, passing the South Carolina bar examination after his term as governor. On November 5, 1881, General Scott was acquitted of murder. The case led to public outrage. After his acquittal, a lynch mob from Toledo wanted to see “rough and ready punishment done.” Scott formed a militia from his own employees and volunteers. “The Roughs” boarded the Wabash Railroad bound for Napoleon with an anonymous gift of two barrels of whiskey and all thoughts of justice were washed away.

Scott died in Napoleon and was buried in Henry County, Ohio. He got off Scott free.....

The Bond itself.....

One of the more interesting bonds produced by the Confederacy were the Erlanger bonds which were issued in London in an attempt to raise much needed foreign currency for the Confederacy. 

It’s a story recognizable to anyone who dealt with toxic derivatives in the early 21st century: on Jan. 29, 1863, the Confederate Congress secretly authorized the Paris-based bankers at Erlanger et Cie. – which rivaled Rothschild for European royalty connections – to underwrite $15 million of Confederate bonds, denominated in British pounds or French francs.

But unlike ordinary bonds backed only by the faith and credit of the issuing country, at the option of the holder an Erlanger certificate could be converted into a receipt for a pre-specified quantity of cotton. Furthermore, the conversion rate was fixed at 12 cents a pound, regardless of the commodity’s market price, at the time about 48 cents. On top of that, the bonds paid a handsome 7 percent annual interest rate.

Put another way, a buyer of a £1,000 bond could convert it into 80 500-pound bales of cotton worth almost £4,000. If the price of cotton continued to rise, the underlying bond’s conversion-value would climb in lockstep. European investors flocked to the bonds, including the future British prime ministers William Gladstone and Lord Cecil.

But like any too-good-to-be-true investment, there was a catch: the cotton was located in the Confederacy. Upon conversion, Confederate authorities were obligated only to deliver the bales to a point within “ten miles of a navigable river or railhead,” where the new owner must arrange transport to the final destination.

This arrangement was an obvious boon to blockade runners, a fact that didn’t escape the men at Erlanger. It quickly founded the innocuously named European Trading Company, essentially a blockade-running line for its bondholders. For a fee, the company’s ships would pick up the cotton, slip past Union warships and deliver it to Cuba. Its chief vessel completed 73 round trips between Mobile and Havana before running aground in May 1865.

The service wasn’t cheap, though, and so while a few rich investors made use of it, the majority had to take another avenue: hoping the Confederacy would win the war. Consequently, the market price for the bonds fluctuated in response to the successes or failures of Confederate armies.

Initially, the conversion feature was so attractive that the $15 million offering was oversubscribed with orders for $80 million. But Erlanger’s terms were greedy: it was to earn a commission of 5 percent, in addition to being allowed to purchase the bonds at 77 percent of face value, while reselling the initial issue at 90 percent of face. In other words, nearly a fifth of each investor’s money would be siphoned off by the Erlanger syndicate as middlemen. Despite the immense demand for the bonds, Secretary of State Judah Benjamin accepted the deal only because, he figured, it would make European financiers financially invested in Confederate success.

Upon issuance, the bonds quickly rose from their 90 percent offering price to 95 percent in market trading, but then began to drop. Unfortunately for the Confederacy and its new financial allies, initial buyers were required to deposit only 15 percent of the purchase price, with the balance not due until the settlement date of April 24, 1863.

Meanwhile, Union diplomats in Europe scrambled for ways to discredit the loan. About a week before the settlement date, stories appeared in London newspapers describing how years earlier, Jefferson Davis had publicly defended Mississippi’s default on a bond issue mostly held by Europeans when he was a United States senator from that state.

Erlanger panicked and threatened to cancel the offering – while keeping its commission guarantee – unless the Confederacy agreed to stabilize the price by using some of the deposited funds to buy bonds on the open market. Ultimately about $6 million of the $15 million issue was used in this manner. As always with murky activities involving large sums of money, a full accounting is impossible, but Erlanger and the Confederacy are each estimated to have retained about $3 million of the issue.

While Erlanger is often credited with originating the “cotton bond,” it wasn’t the only one to develop the idea at the time, thereby forcing the company to compete for the business. But it had an advantage: Frédéric Emile d’Erlanger had fallen in love with Mathilde Slidell, a daughter of John Slidell, the Confederate envoy to the Court of Napoleon III. Mathilde was a stunning beauty who grew up on her father’s Louisiana plantation, where French was the lingua franca. (She and Baron d’Erlanger married in 1864.)

The Confederacy used its share of the bond proceeds to purchase munitions and to make deposits on oceangoing ironclads, ships that might have broken the blockade had they ever been delivered. After the war, Erlanger continued to prosper, financing American railroads and international telegraphic communications, among other ventures. In 1869 Mathilde sent the first telegraphic message from France to the United States over an Erlanger-financed facility. The family supported the arts and charitable causes, including the still-operational Erlanger hospital in Chattanooga, Tenn., and the first Paris performance of Richard Wagner’s “Tannhäuser.”

Shortly after the war, President Davis admitted that the Confederacy had misplayed King Cotton. It had encouraged an embargo, hoping to create a “cotton famine” and thus pressure British and French diplomatic recognition. But it should have adopted a March 1861 proposal made by Benjamin, the attorney general at the time: purchase as much cotton as possible and immediately send it to England, where the stockpile might be gradually sold as needed to raise funds. If the plan had been embraced Davis would promptly have become a richer president than Lincoln: more than three million bales rested unused in the Confederacy at the time of secession. If swiftly transported to England, Davis concluded, it could have been converted to enough hard currency to have “more than sufficed all the needs of the Confederacy during the War.”

This large bond will be folded when shipped via Fed Ex directly to your door with tracking information. 

Please ask any questions before offerding!!!

offer with confidence - I have a 100% rating!!!