The Indian Trust Fund Fraud

Washington, Dec. 24. The entire extent of Bailey's opera tious is unknown. Ha had ia charge fivc raillions iu State bonds, Anothci loss was discovered in the Interior Dopartmèr.t: $80,000 in cash is reported to be missing. Secretary Thompson promiscs to restore the Ios8 from his private fortune. Bailey is reported to bo a nephew or otherwise relation of Secretary Floyd. It appears from the facts in connectiou with the late abstraction of the bonds of the Lidian trust fund that, about five monthsago, Wm. E. Russell, of the firm of Majors, llusaell & Waddell, held about one million dollars of the official acceptances of the Secretary of War. These acGCptances had boen given conditionally, in accordance with the usual course of business, for transportaron of supplies for the aruiy, under contraet with the government. Mr. ltussell, not finding himself able to ncgotiate these acceptances, and bcing grcatly erobarassed pecuniarily, and ascortaining froni Godard Bailey, with whom he was iuti inatoly acquaínted, that the latter had control of over three millions of Indian trust f'unds inveated in bonds of different States arrauged with him to let him have about half a million of these bonds to be ypothecatcd in New York, and as security for which he gave Bailey the aceeptances of the War Depajtmeut which Bailey placed iu the safe where the bonds wei-o kept. Eecently theso bouds li:ivo graatij depreciftted, aud the bankers in Xew York who mada advances on ihem therefore callcd for additiona seeurity. Bailey, in order to save the bond,"di'livercd over 8300,000 worth o them additional, in all $S80,000. Oi the ISth inst. he addressed a letter to the Secretary of the Interior frankly impar tiiiíí these facts, aud requesting on in vesiigation. This letter lic gave to a Senator to be delivered to the Secretary on hi return from North Qarolina vrbicli requesí "ffag cmnplied witli. The investigation yeaterday proved the truth of these statements. Sater. Lea & Cc. i composo the banfeing firm through which ' thenegótiation was tráusacted. ïiothing either in the papar, nor 011 the invostigation, shows that any of the parties, oxoept thosc immediatelv conoerned in tliia bnaiiieg as above nlate'l, are in the slighiest inanner concerned in the trau■aotioD. It may bc statcd that the acceptauces of the Secretary of War hava been jfiven from timo tu timo in i pliance vtitb a oontnict with Itusscll, Majors & Co., and until rueently that : fiün bas had no difficHTty in negotiating ! tliem. To-day Bailcy w:i arrested at thu instanoo of Lrweriinent, and required to givo buil in tke suin of $8,000 for nppearanoo at the nuxt term of thu Criminal Court It is thought the government is protected, as tho acceptances more tlian cover the aiuount of bonds abstraeted The special committee ofi the HU8C to which an invostigation of the subject is referred consista of -Messrs. Horris of 111.; Oonkling, of N. Y.; 3ocock, of Va.; Harris, of Md., and !ase, of Ind.