rnment early the next year. England and Russia had both declined to
participate in Napoleon's scheme, and their refusal marks the beginning
of the end of the reign of King Cotton.

At Paris, Slidell was even more hopeful than Mason. He had won over
Emile Erlanger, that great banker who was deep in the confidence of
Napoleon. So cordial became the relations between the two that it
involved their families and led at last to the marriage of Erlanger's
son with Slidell's daughter. Whether owing to Slidell's eloquence,
or from secret knowledge of the Emperor's designs, or from his own
audacity, Erlanger toward the close of 1862 made a proposal that is one
of the most daring schemes of financial plunging yet recorded. If the
Confederate Government would issue to him bonds secured by cotton,
Erlanger would underwrite the bonds, put the proceeds of their sale to
the credit of the Confederate agents, and wait for the cotton until
it could run the blockade or until peace should be declared. The
Confederate Government after some hesitation accepted his plan and
issued fifteen millions of "Erlanger bonds," bearing seven percent, and
put them on sale at Paris, London. Amsterdam, and Frankfort.

As a purchaser of these bonds was to be given cotton eventually at a
valuation of sixpence a pound, and as cotton was then selling in
England for nearly two shillings; the bold gamble caught the fancy of
speculators. There was a rush to take up the bonds and to pay the first
installment. But before the second installment became due a mysterious
change in the market took place and the price of the bonds fell. Holders
became alarmed and some even proposed to forfeit their bonds rather
than pay on May 1, 1863, the next installment of fifteen percent of the
purchase money. Thereupon Mason undertook to "bull" the market. Agents
of the United States Government were supposed to be at the bottom of the
drop in the bonds. To defeat their schemes the Confederate agents bought
back large amounts in bonds intending to resell. The result was the
expenditure of some six million dollars with practically no effect on
the market. These "Erlanger bonds" sold slowly through 1863 and even
in 1864, and netted a considerable amount to the foreign agents of the
Confederacy.

The comparative failure of the Erlanger loan marks the downfall of King
Cotton. He was an exploded superstition. He was unable, despite the
cotton famine, to coerce the English workingmen int