5th cross-interrogatory. How do you know whether said bonds carried accumulated interest or not? Can you now tell exactly how this was without seeing one of said bonds?

Answer. Such bonds were sold with the unmatured coupons attached thereto, and thus the price paid embraces the accrued interest.

1860.

M. MORGAN.

Subscribed and sworn to before me this 24th day of October,
S. D. LAW,
Notary Public.

[L. S.]

Depositions of witnesses produced, sworn, and examined before S. D. Law, esq., of the city of New York, a notary public, on the sixth day of November, 1860, by virtue of the consent of parties hereto annexed, marked Exhibit Q, in a cause depending and at issne in the Court of Claims, between Hugh B. Sweeny and others, trading and doing business under the name and firm of Sweeny, Rittenhouse, Fant & Co., and the United States of America, defendants, such witnesses being examined upon the written. interrogatories and cross-interrogatories hereto annexed.

Watts Sherman, a witness produced on the part of the plaintiffs, being first duly sworn, testified as follows:

1st interrogatory. State your name, age, residence, and occupation, and whether any person or persons are engaged with you in said occupation; and if yea, their names, and the name of your firm, and how long said firm has existed, and especially whether it existed in the years 1858 and 1859.

Answer. My name is Watts Sherman; my age is forty years; my occupation that of a banker and dealer in foreign and domestic exchange; am one of the firm of Duncan, Sherman & Co., of New York city; such firm has existed since 1851, and was in existence in the years 1858 and 1859; such firm is composed of Alexander Duncan, Watts Sherman, William Butler Duncan, Charles H. Dabney, and David Duncan.

2d interrogatory. Have you or your firm any interest in this cause? Answer. None that I am aware of.

3d interrogatory. State if you are acquainted with the plaintiffs in this cause, or any of them, and how long you have known them, and whether you have any recollection of either of the plaintiffs having called on you at the banking-house of your firm, in New York, the latter part of January, 1859? If you have, state the name of such plaintiff, and whether said visit related to any arrangement to be entered into between your firm and that of the plaintiffs for payment of money at San Francisco, California, on account of any United

States loan awarded to the plaintiff's by the Secretary of the Treasury. State, to the best of your knowledge, whether your firm was willing and ready to enter into the said arrangement, and able to carry the same into effect.

Answer. I know Mr. Fant, one of the plaintiffs, and have some acquaintance with Mr. Sweeny also. My acquaintance with each of them commenced nearly two years ago. Mr. Sweeny, I think it was, called on me some time in January, 1859, at our banking-house in New York. His visit related to, or was to ascertain from us upon what terms our firm would undertake to pay money to the assistant treasurer of the United States at San Francisco, California, on account of that portion of the United States loan awarded to the plaintiffs by the Secretary of the Treasury. We were ready and willing to enter into an arrangement with the plaintiffs to so pay money for them, which we would have carried into effect on our part if any had been agreed upon.

4th interrogatory. Please examine the printed paper here shown you, being the advertisement of the Secretary of the Treasury, dated December 17, 1858, for sealed proposals for ten millions of stock of the United States to be issued under the act of Congress of June, 1858, and state whether any profits would have accrued to the plaintiffs, the accepted bidders for three millions of said stock, at a premium of $2 89 on the $100, had they been allowed to deposit said amount, according to said advertisement, at San Francisco, instead of New York, or any depository on the Atlantic coast, and had so deposited; and if any profits would so have accrued to the plaintiffs, what the same would have been. If you say there would have been a profit, state fully your means of knowing the same, and the extent of such profits.

Answer. I have examined the printed proposals, or advertisement, issued by the Secretary of the Treasury December 17, 1858, inviting sealed proposals until the 24th January, 1859, for ten millions of stock of the United States, bearing 5 per cent. interest, which advertisement is now before me. If the taker of that loan, or any portion of it, at a premium of $2 89 (or $102 89 for each $100 of stock) had been allowed to make payınent of the same in San Francisco, I think it a safe estimate to say, that for the premium he could have realized in San Francisco, for sight exchange on New York, and the gain in interest, from date of payment of the money to the assistant treas urer in San Francisco, to the date of payment in New York of the bills of exchange drawn in San Francisco, a profit on said exchange could have been realized quite equal to the premium of $2 89 on the United States stock. My means of knowing what I have already stated in regard to this profit arise from the circumstance that our firm, Duncan, Sherman & Co., were at that time, and for some years previous, and ever since, largely interested in the sale of exchange in San Francisco on New York, frequently selling from two to three hundred thousand dollars by each steamer's mail, or twice that amount per month.

5th interrogatory. Was your firm employed by the plaintiff's to sell

to the best advantage any portion of the three millions of stock awarded to them under the advertisement shown you? If yea, when were you so employed, and did you sell any of said stock, and how much? File a particular account of said sales, showing the net amount realized by the plaintiffs on said stock sold by you, when and where, and state whether the same were made to the best advantage. Did the bonds so sold by you carry the accumulated interest from January and July, respectively?

Answer. We were so employed by the plaintiffs. In September, 1859, Duncan, Sherman & Co. made an arrngement with the plaintiffs to make certain advances on said United States stock and to endeavor to effect sales of the same. Under which arrangement we sold in London, through our agents there, $229,000 of such stock, as per account hereto annexed, marked Exhibit O. We also sold in New

York $70,000 of such stock, as per statement also hereto annexed, marked Exhibit P. All of said sales were made at the best possible advantage. The bonds sold by us carried the accumulated interest to the purchaser, in accordance with custom.

Interrogatory 6th. State any other matter within your knowledge that may be advantageous to the plaintiffs in this cause.

Answer. I do not know of any other matter.

Interrogatory 7. State the true construction of the advertisement of the Secretary of the Treasury, shown you, as to the place of deposit by successful bidders.

Answer. I do not know that I can state the true construction. I can only state my own. When I first read the Secretary's advertisement referred to, for the proposals of the loan, which was immediately after it was published, I was struck with the fact that its language might fairly be construed to authorize any successful bidder of the loan referred to, to make payments in San Francisco, or any other point which he might indicate as most convenient to him.

And in answer to cross-interrogatories, the witness said as follows:

1st cross-interrogatory. How are you enabled to fix the date when one of said plaintiffs called upon you in your banking-house to make the arrangement referred to in the third direct interrogatory?

Answer. By reference to the date of the advertisement of the Secretary of the Treasury referred to, and to correspondence between the plaintiffs and our firm.

2d cross-interrogatory. How do you know that the money which the plaintiffs wanted at San Francisco was wanted on account of a loan awarded to them; and do you know anything further than he told you, and if so, what further did you learn, and how, and when, and of whom?

Answer. I know nothing more than the plaintiffs told me on that point.

3d cross-interrogatory. If you answer the fifth interrogatory affirmatively, then state whether you made any, and what, agreement, and the terms thereof; and if the same was reduced to writing or is speci

fied or referred to in letters passing between you or your firm and the plaintiffs, or either of them, give copies thereof at length, and copies of all papers and letters relating to the execution of said agreement.

Answer. Our arrangements with the plaintiffs were to make cash advances on the bonds, and sell them at the best market prices that could be obtained for them; our compensation for so doing depending upon the prices obtained, and being conditional thereon. The agreement between us was in writing, which has no other bearing on this subject than as to the facts already stated by me.

4th cross-interrogatory. Had you any interest in said loan with the plaintiffs, or how were you compensated for your services, or that of your firm in relation to the plaintiffs' interest or control therein, or concerning the same?

Answer. We had no interest in said loan with the plaintiffs. We were not compensated any further than as already stated.

5th cross-interrogatory. How do you know whether any, and what, profits could have been made on said loan if the money had been deposited in San Francisco; and do you know that any money was deposited there under said loan; and if so, by whom, when, and how much; and what profit was actually made, and how do you know that fact?

Answer. I know by the rates of exchange current at that time between San Francisco and New York, and the cost of transporting gold from San Francisco to New York. I do not know that any money was deposited at San Francisco under that loan.

6th cross-interrogatory. How do you know what profit could have been made by the plaintiffs on said loan if they had deposited in San Francisco. Did they in fact deposit any there, and do you know anything personally of your own knowledge concerning said profits, except that you estimate the same at so much; and if you do know, state how you know, when and how you acquired your knowledge, and of whom?

Answer. I have already answered what profit, in my opinion, could have been made if the plaintiffs or any taker of said loan had deposited in San Francisco. And I have already answered that I do not know whether they made any deposit there. And I have also already stated how I estimate what profits might have been realized by such. deposits there, and how I acquire my knowledge on the subject.

7th cross-interrogatory. Can those who subscribe for stock without money to pay for the same make the same profits with those who have money to pay for them?

Answer. Much would depend upon the condition of the money market. If the market was easy, takers without money could borrow it, and probably realize as much profit as those who had money without borrowing. In many of the late issues of United States loans, some of the largest takers were those without money, and who, it is well known, had to borrow to pay for them.

8th cross-interrogatory. Had the plaintiffs any, and what, money in San Francisco and in New York at the time of this transaction, and

did not one of the plaintiffs tell you, in substance, that they had no funds in San Francisco, and that they wanted the aid of your firm to carry out their subscription, or proposed subscription? Had your firm at the time said loan was taken by the plaintiffs any, and what, amount of money in San Francisco, and in whose hands was the same, and how long had it been there, and how long did it remain there? Answer. I do not know if the plaintiffs had any money in San Francisco or New York at the time of this transaction. They did not pretend to me they had any in San Francisco. The object of their first application to me appeared to be to obtain the aid of our firm to make payments in San Francisco for them on account of their subscription to said loan. At the time said loan was taken our firm may have had more or less money in San Francisco, in the hands of our agents there. What particular amount may have been, I do not recognize the right of either of the parties in this case to inquire.

9th cross-interrogatory. If affairs had taken an unfavorable turn in the money market, might not the plaintiffs have lost by their subscription if they had been permitted to deposit in San Francisco?

Answer. Any serious unfavorable turn in the money market might undoubtedly have subjected the plaintiffs to loss on their subscription, whether they made the deposit in San Francisco or elsewhere.

10th cross-interrogatory. If you state that you were employed by the plaintiffs to sell any portion of the three millions of stock referred to in the 5th interrogatory, then state when and what that agreement was fully and particularly; and if it was in writing, or evidenced or described in letters, then give copies thereof, and of all letters concerning the execution of said agreement. Give full copies of accounts of sales, stating when sold, to whom, at what price, and the amount of such sales, and whether for cash or on credit.

Answer. I have already stated fully the nature of the arrangement between the plaintiffs and our firm for the sale of a portion of the stock referred to in the 5th interrogatory, and have already furnished copies of the account of all sales of said stock made by or through us for the plaintiffs. All of which sales were for cash.

11th cross-interrogatory. Do you know that the plaintiffs received. any stock under the advertisement shown you, and how do you know that fact; and might not their stock have been received otherwise without your knowledge?

Auswer. I know that plaintiffs received a portion of the stock referred to under the advertisement shown me, because my firm paid. the treasury of the United States for a portion thereof under the order of the plaintiffs on the Secretary of the Treasury to deliver to us a portion of said stock, and which was delivered accordingly to us. 12th cross-interrogatory. Do you know of your own personal knowledge that the expenses charged in said account of sales filed or produced by you were actually incurred? If the plaintiffs had transacted their own business, and sold their own stocks, would said expenses all accrued, and which of them? State particularly. Answer. There are no expenses in account of sales rendered by us incurred, other than the usual broker's commission and necessary