U.S. Civil War Bonds Found In London Vault

LONDON (AP) _ More than 75,000 bonds issued by the Confederate States of America to raise money during the Civil War have been found in a London vault where they were placed in storage in 1920, it was announced Saturday.

The bonds, which had a total face value of some $60 million when they were issued between 1861 and 1864, will be sold in one lot in London Nov. 24, according to Sotheby’s auction house.

James Morton, the firm’s currency expert, said it is expected the descendants of the original trustees will get something for the bonds at last, and Sotheby’s put a top estimate on the papers at 220,000 pounds - $378,400.

″When the civil war ended in 1865, bondholders tried to obtain repayment from United States authorities,″ Morton said. ″This hoard was assembled in the 1880s in a vain attempt to coordinate and rationalize European claims.

″The last negotiations took place in the 1880s, and with no money ever forthcoming, the trustees by about 1920 regarded the bonds as completely worthless and put them in store.″

He said most of the elaborately engraved bonds are in good condition, carefully rolled into bundles and protected by paper wrappers dated 1883.

″They were stored in 30 cardboard boxes under an old railway arch and narrowly escaped flooding from the river Thames and bombing in the German blitz in World War II,″ Morton said.

The trustees’ descendants remained in possession of the bonds but only recently rediscovered them, according to Morton. He said they asked not to be identified.

The Confederacy floated loans to raise money for the war. Most of the loan certificates took the form of bearer bonds, like those in the hoard, with interest coupons attached that were exchangeable at six-monthly intervals.

Repayments of the principal of each loan were to be made between three and 30 years from the issue dates and the initial interest was an attractive 8 percent. One 1863 loan, known as the Erlanger issue, was intended to be redeemable in bales of cotton as an optional alternative to hard currency.

The earliest bonds in the hoard don’t have their interest coupons, indicating the interest was claimed. But most of the bonds have their post- 1865 coupons intact, showing the owners quickly abandoned hope of receiving anything once the war was lost.