in their possession and had disposed of some of them,
calling them "cotton warrants." The difficulties which might arise from
separate action in the market were at once perceived and following a
conference with Mason all cotton obligations were turned to Fraser,
Trenholm & Company. Spence now had in his hands the "money bonds" but no
further attempt was made to dispose of these since the "cotton warrants"
were considered a better means of raising funds.

It is no doubt true that since all of these efforts involved a
governmental guarantee the various "certificates" or "warrants" partook
of the nature of a government bond. Yet up to this point the Richmond
authorities, after the first failure to sell "money bonds" abroad were
not keen to attempt anything that could be stamped as a foreign
"government loan." Their idea was rather that a certain part of the
produce of the South was being set aside as the property of those who in
England should extend credit to the South. The sole purpose of these
earlier operations was to provide funds for Southern agents. By July,
1862, Bullock had exhausted his earlier credit of a million dollars. The
L60,000 loan secured through Lindsay then tided over an emergency demand
and this had been followed by a development on similar lines of the
"cotton certificates" and "warrants" which by December, 1862, had
secured, through Spence's agency, an additional million dollars or
thereabouts. Mason was strongly recommending further expansion of this
method and had the utmost confidence in Spence. Now, however, there was
broached to the authorities in Richmond a proposal for the definite
floating in Europe of a specified "cotton loan."

This proposal came through Slidell at Paris and was made by the
well-established firm of Erlanger & Company. First approached by this
company in September, 1862, Slidell consulted Mason but found the latter
strongly committed to his own plans with Spence[1051]. But Slidell
persisted and Mason gave way[1052]. Representatives of Erlanger
proceeded to Richmond and proposed a loan of twenty-five million
dollars; they were surprised to find the Confederate Government
disinclined to the idea of a foreign loan, and the final agreement, cut
to fifteen millions, was largely made because of the argument advanced
that as a result powerful influences would thus be brought to the
support of the South[1053]. The contract was signed at Richmond, January
28, 1863, and legalized b