At daylight on the September 23, 1863, Commander John J. Almy of the USS Connecticut discovered a blockade runner when about 55 miles E. by N. of New Inlet having probably come out of Wilmington just after the moon had set according to Almy. The ship was about 6-8 miles away. Commander Almy gave chase at top speed. The blockade runner, after being discovered, altered their course to the west. After a four hour chase the blockade runner ran onto shore near Rich Inlet where Captain Porter and his crew lowered their boats and all hands fled to shore after setting fire to the ship. The USS Connecticut anchored close by and sent a boat in the charge of Lieutenant Kempff to see what could be done to extinguish the fire and get the steamer off. He boarded her and discovered her name was Phantom, a screw steamer of about 500 tons. In his report the Commander stated she was leaving Wilmington bound to Bermuda. Lieutenant Kempff and the men could not put out the fire and given the high surf and position of the Phantom, could not get her off. The Phantom never at any time hoisted a flag and none was found on board, which led Commander Almy to think that she belonged to the Confederates. In a second trip to the wreck by Lieutenant Kempff and a party of men, a group of rebels from behind the sand hills fired at them and killed Thomas I. Donahoe (landsman). No one else was injured. The full report from the Official Records of the Union and Confederate Navies, as well as a short article from a local Wilmington newspaper, is shown in the Sources at the end of the post.

David Stallman and Harry Montgomery’s Story of the Lost Treasure

Ok, but where’s the lost treasure? I first became aware of that from a book published by David Stallman, an Ohio native and former IBM employee who decided to relocate to the Topsail Island area. He developed an interest in the history of the area and wrote several books including “Echoes of Topsail: Stories of the Island’s Past” published in 1996 (link) and cofounded the Missiles and More Museum in Topsail Beach. In part 2 of that book in a chapter entitled “Blockade Running and Lost Ships” he tells the story of the treasure on the Phantom. He states “Harry Montgomery, an old salt and crew member, later told his personal story about the Phantom.” Montgomery stated “She would cruise at sixteen knots and could do eighteen if pressed. Not bad for 1863. Phantom, with Captain Porter commanding, was on her third trip, running for Wilmington from Bermuda. There was a mysterious passenger aboard who had stayed close to his cabin most of the four-day trip. He seemed like a Confederate agent returning on a special mission.” Realizing that they may need to abandon the ship and burn it, Captain Porter placed some papers in a leather dispatch case.

He called Montgomery to his side, and instructed him to secure a line around the dispatch case and lower it to the water’s edge. The Confederate agent came to him with a small, heavy strongbox. Montgomery attached it to the same line as the dispatch case and lowered them both. If the gunboat caught up with them before they beached, Montgomery was to cut the line and send the valuables to the bottom. Montgomery was standing on the starboard quarter of the Phantom with a fire ax in his right hand while his left hand held the line. He said: “The Phantom grounded before she was caught. She hit the shoals head on at eighteen knots. It was one hell of a jolt. The crew soon had fires burning fore and aft. A direct hit from the Connecticut struck one of Phantom’s stacks. It exploded and fragments of steel showered everywhere. All three men were knocked to the deck.” In the process the line with the strongbox and dispatch case sunk to the bottom of the sea. After the men reached shore the agent told Montgomery “Well, my man, you just let forty-five thousand in gold slip through your bungling fingers.” The book chapter left me with many questions, who was Harry Montgomery, where did Stallman find Montgomery’s story and how did he get this information, were there any other witnesses?

The 2017 David Stallman interview

In 2017 Stallman was interviewed by Benjamin Schachtman from the Port City Daily two years before he died. The article entitled “The Phantom: does Topsail’s little known shipwreck hide a multi-million dollar treasure?” was published on November 8, 2017 (link). In the interview Stallman tells the same story of Harry Montgomery, one of the Phantom’s crew members and the lost gold. Schachtman states “Stallman tracked down the first-hand account of Harry Montgomery, one of the Phantom’s crew members.” Schachtman raises the important point that “To be clear, there’s no verification of a treasure beyond Montgomery’s account.” He also makes an interesting calculation in his article “If Montgomery was correct, and he was talking about $45,000 in 1863 United States dollars- and not the comparatively devalued Confederate dollars- that would work out to a lot of gold. Figuring out how much takes a little math. From 1833 to 1918, Gold was valued by the United States Government at $18.93 per troy ounce (12 troy ounces per pound), or $227.16 per pound. That means Montgomery’s $45,000 dollars works out to about 198 pounds of gold. And how much is that worth? At a very conservative market value- $1,000 per troy ounce- gold is currently worth about $12,000 per pound. That would make the Phantom’s treasure worth at least $2.4 million dollars- and potentially more. Gold recently traded as high as $1,400 per troy ounce, which would make the treasure worth closer to $3.4 million dollars.” That calculation was done in 2017, as of today the price of gold is 4 times higher at about $5,400 per troy ounce. I still had the same questions, chiefly where was the source. The references listed at the end of Stallman’s chapter were: Shipwrecks of the Civil War by Donald G. Shomette; Civil War Naval Chronology 1861-1865. Naval History Division, Navy Dept.; The Blockade Runners by Dave Horner; Graveyard of the Atlantic by David Stick; Bill Reaves Collection. New Hanover Public Library; and Rose O’Neale Greenhow and the Blockade Runners. George Johnson, Jr.

The Original Harry Montgomery Reference

I found the story of Harry Montgomery in Dave Horner’s book “The Blockade Runners” first published in 1968. It was a very detailed account of the wreck of the Phantom that answered some of my questions. Dave Horner, an amateur historian and accomplished diver, had gone to Bermuda to shoot some underwater footage of a sunken Spanish galleon but ran into some bad weather. While waiting for the weather to clear he passed time in a small pub near the harbor at St. George’s. There he met George Winston, a boatswain on a British freighter. During their conversation Winston learned of Horner’s interests in shipwrecks and diving and insisted on bringing him back to his freighter to meet the first mate, Mr. Gamble, an expert on shipwrecks, stating “you’ve no idea the information the man carries in his head.” Horner never did get Gamble’s first name. After a while when Gamble learned Horner was from Virginia their conversation turned to shipwrecks off the coast of North Carolina. Mr. Gamble stated “I have no authentic knowledge, of course. But as a lad I knew an old sailor in Liverpool who had run the blockade many times in 1863 and ’64. His name was Harry Montgomery. When I knew him he was almost blind. He lived in a row house not far off Lime Street, and in good weather he would sit out on the steps and spin sea stories by the hour. Much as I’m doing now.” This is the first we learn, third hand, of Mr. Montgomery. Montgomery had told Gamble many stories over the years which he had been able to verify. Gamble stated “Now as to the gold. Montgomery claimed to have run the blockade in several ships, but he was particularly fond of one called Phantom. Nearly as I can recall he described her as a screw steamer of about five hundred tons. She would cruise at sixteen knots and could do eighteen if pressed. Not bad for 1863. This rust bucket we’re aboard now makes only fifteen. Like all the blockade-runners, Phantom was long and low, and was painted a gray-white shade (all true).” As Montgomery told it, “Phantom with a Captain Porter commanding (true) was running for Wilmington from Bermuda. Somewhere off the North Carolina coast she was spied by a United States gunboat and pursued. It was still a long way to Wilmington and the cruiser was fast (Commodore Ames felt the ship was headed for Bermuda from Wilmington in his Official Report).” “Now it seems there was a passenger aboard, a little bloke in a stovepipe hat, who had stayed close to his cabin for most of the four-day trip. Montgomery thought he was a Confederate agent returning to Dixie on some special mission. Anyhow, when things were looking desperate for the Phantom, he grew much alarmed and buzzed about the captain, gesturing frantically.”

The following quotes from the book explain how the gold fell into the sea. “Calling Montgomery to his side, Captain Porter gave instructions to secure a line around his dispatch case and lower it to the water’s edge. About that time the Confederate agent returned topside, staggering under the weight of a small, but obviously heavy, strongbox. The Captain ordered Montgomery to make the line fast to the box and both units were lowered away. If the gunboat caught up with them before they beached, Montgomery was to cut the line” “Old Harry Montgomery always enjoyed telling this part of his story. In fact, he’d go into great detail about the way he stood on that starboard quarter, shot and shell whistling past his ears, with his right hand wielding a fire ax and his left grasping that most important line which strained in a rusty cleat against a hastily made half hitch.” “The commander ordered all boats off save the one close to Montgomery, still standing by with his ax. Then they lowered, with six seamen and the Confederate passenger inside. Porter, Montgomery, and another sailor were the last to abandon Phantom.” “The idea was to get the boat directly under the dangling items and then swing them aboard. Montgomery had let loose the heavy line and was paying it over the gunwale. Then two things happened at once. A breaker struck the ship-shoving the lifeboat off its position- and a direct hit from the Yankee cruiser struck one of Phantom’s stacks. It exploded and fragments of steel showered everywhere. The three men were knocked to the deck. Montgomery said his head cleared just in time to see the end of the line snaking over the side. Strongbox and dispatch case went to the bottom like so many stones.” “The Confederate chap, he said, sat in the boat wringing his hands and shaking his head. He would look back at Phantom and say, over and over, ‘Lord help me now? But here’s the good part. When they were safely on dry land he turned to Montgomery and said in a voice quivering with emotion: “Well, my man, you’ve just let forty-five thousand in gold slip through your bungling fingers.” When Horner asked Gamble whether he thought the story was true he answered “I just don’t know.”

Subsequently, Horner was able to learn that the Phantom came out of a Liverpool shipyard in late 1862 painted a dull gray-white with her hull showing only five feet above water. She weighed 500 tons, was 190 feet long and 22 feet wide. She drew only eight feet six inches of water and carried a crew of 33, with a top speed of 18 knots. Her boats were carried square with the gunwales to decrease visibility. She even “blew her tubes” underwater to keep from making noise. He also discovered that Captain Porter gave his crew several days liberty before he sailed on September 19th for Wilmington. “He was so anxious to depart with the appropriate tide and moon that he refused to delay his schedule for his full load of gunpowder and left with only half of it. His cargo consisted of “nine cases whiskey, two cases gin, one case wine, 200 pigs lead, two Blakely guns, 50 cases leather, 50 cases Austrian rifles, 135 barrels pork, 150 barrels gunpowder, one case merchandise.” In May of 1864 Horner dove on the site of the wreck after his friend Hall Watters had located it from the air. It was about 250 yards offshore, and 32 feet below the surface. The currents were rough limiting their dive. They recovered several lead ingots and found an octopus living in the ship’s boiler. Two of the ingots shown below are in the Missiles and More Museum on Topsail Island.

Archaeological Studies

From Stallman’s book “The Phantom site was investigated by archaeological divers, in 1975. Some excerpts from this investigation: The Phantom lies off-shore near New Topsail Inlet. The Phantom site is located approximately 200 yards south of the southern extremity of New Topsail Inlet in 16 to 18 feet of water. The Phantom site is the remains of a mid-nineteenth century iron hull double screw steamer. Although little of the wreck is exposed, aside from the steam machinery, remote sensing indicates that a considerable amount of additional material lies below the surface. It is quite possible that the remains are those of the blockade runner Phantom, which was lost in the area on September 23, 1863. The method of propulsion, twin screw, of the Phantom conforms to that found at the wreck site. It is also possible that this was one of the wreck sites that was salvaged at least partially by US Navy divers working for the North Carolina Division of Archives and History during the early 1970s.”

Stallman later was able to track down an official record of the wreck, in the log books of the Underwater Archaeological Field School, a program run at the time by the North Carolina Department of Archives and History and UNC Wilmington. On July 29, 1975, Tracy McKinnion’s dive notes included a compelling case that they had found the Phantom.

I can find no evidence that Dave Horner ever returned to the site. It’s apparently a very tricky and dangerous area to dive in. The story also is odd in that the Confederate agent could barely carry the box filled with gold and based on the agent’s statement of the worth of the gold Schachtman in his 2017 article calculates that the box would have weighed about 198 pounds (this part seems consistent). How could Montgomery possibly have held a rope with the box on the end, dangling off the side of the ship, in one hand and an ax in the other? So that when the Phantom is hit by a Union shell he loses his balance, the rope slips out of his hand, and the box falls into the ocean. As they say in Texas “That dog won’t hunt.”

Sources

The Official Records of the Union and Confederate Navies, Series I, Volume 9, pages 216-217,

The Daily Journal, September 24, 1863, page 2

Echoes of Topsail Stories of the Island’s Past

The Blockade Runners by Dave Horner Copyright 1992 (link)