the United States, were declared "exempt from taxation by or under State authority," and "all duties on imported goods, which shall be paid in coin or in notes payable on demand heretofore authorized to be received and by law receivable in public dues, and the coin so paid, shall be set apart as a special fund," and was to be applied in the first instance to the payment of interest on the bonds and notes of the United States, and the residue to other specified purposes. The bonds here authorized were those afterward familiarly known as the "five-twenties," or the "five-twenty-sixes." Of these five-twenty bonds there were outstanding on the 30th of June, being the last day of the fiscal year 1862, an aggregate amount of $13,990,600.

"These several measures," said Mr. Chase in his report submitted to Congress December 4, 1862, "have worked well. Their results have more than fulfilled the anticipations of the Secretary. Had other urgent demands on the attention of Congress permitted the consideration and adoption of the suggestions which the Secretary ventured to submit in favor of authorizing the formation, under a general law, of banking associations issuing only uniform notes prepared and furnished by the general Government, and of imposing a reasonable tax on the circulation of other institutions, no financial necessity would perhaps now demand additional legislation for the current fiscal year (1863), except such as experience suggested for the perfection of measures already sanctioned." He then made a statement exhibiting the practical working of the measures already in force: To the 1st day of July, 1862, $57,926,116.57 had been received and were remaining on deposit in the Treasury. United States notes to the amount of $158,591,230 had been issued and were in circulation; $49,881,979.73 had been paid in certificates of indebtedness; and $208,345,291.86 had been paid in cash. Not a single requisition from any department upon the Treasury remained unanswered. Every audited and settled claim on the Government, and every quartermaster's check for supplies furnished, which had reached the Treasury had been met; and there remained an unexpended balance of $13,043,546.81.

The public debt at the same date was $514,211,371.92. The whole income for the year, from all sources, including a balance in the Treasury, on the 1st of July, 1861, was $583,885,247 06,

SUMMARY FOR FISCAL YEAR 1862.

273

and the whole expenditures had been $570,841,700.25. There should be deducted from these figures, however, income and disbursements on account of the permanent and temporary debt, which amounted to $96,096,922.09; so that the total income not applied to repayments was $487,788,324.97, and the total disbursements $474,744,778.16. The Secretary said the average interest upon the whole debt was four and three-fifths per cent., and that it had been his constant care to reduce its cost in the form of interest to the lowest possible figure. But he was not hopeful, he added, that his exhibit for the fiscal year 1863 would show so favorable a rate.

Immediately consequent upon the suspension of cash payments in December preceding, gold and silver had disappeared from circulation; small coins as well as large. Specie began, almost immediately upon suspension, to command a premium; and on the 13th of January, 1862, it was already at three per cent. and fluctuated between one per cent. and nine and one-half to the 30th of June, at which date it had reached nine and one-fourth per cent. Meantime the State banks had entered upon a career of expansion, which had its relative effect upon the price of gold; and, in the absence of small coins, the country began to be flooded with tokens and "shinplasters" in fractional parts of dollars, issued by cities, towns, corporations, brokers, merchants, grocers, bakers, liquor-sellers, and restaurantkeepers, everywhere! With these difficulties to deal with, and in the midst of military discouragements, the Treasury entered upon the second fiscal year of the rebellion, July 1, 1863.

18

CHAPTER XXX.

LETTERS AND EXTRACTS FROM LETTERS WRITTEN IN 1861-OF APPOINTMENTS IN THE TREASURY DEPARTMENT-EMANCIPATION A PROBABLE RESULT OF THE WAR-NATIONAL LOANEMANCIPATION PROCLAMATIONS BY COMMANDING GENERALS— DUTY OF GOVERNMENT TO PROVIDE A NATIONAL CURRENCYWAR DEPARTMENT EXPENDITURES 1861-WHAT MR. CHASE THOUGHT OF MR. CAMERON.

WHA

HATEVER I could do for you consistently with my honest convictions of public duty, I have done. No friend of mine has ever accused me of 'not remembering friends,' except when he found he could not promote some purely personal end through me, in disregard of what I honestly believed public duty to require. Nobody can say that I have preferred my own interests to my friends, or that I ever declined any service to them, except when I felt I must.

"I had not thought, and do not now think, that under the circumstances of the country, as they exist, I ought to recommend you for appointment as collector. What I feel I ought not to do, I shall not do. I cannot see wherein this is unjust to you, or inconsistent with a sincere regard for you, and a sincere wish to serve you. If you do, I cannot help it."

". . . . In making appointments, my rule always has been to give the preference to political friends, except in cases where peculiar fitness and

1 For obvious reasons the name of the gentleman to whom this letter is addressed is omitted.

LETTERS AND EXTRACTS.

275

talents made the preference of a political opponent a public duty. In selecting among political friends, I have ever aimed to get the right man in the right place, without much reference to personal consequences to myself. Of course, I like as much as any man to favor personal friends, but I have never thought it right to appoint a man to office merely because he was such, without a careful consideration of his qualifications for the place. I have ever held my country as my best friend, and value those friends most who serve her most faithfully. Is there any thing blameworthy in all this ?”

To the Hon. Milton Sutliffe, Warren, Ohio.

"June 10, 1861.

. . . . My time is so entirely occupied that it is next to impossible for me to take any part in the political organization of our State. If ours were the Democratic party instead of a Republican party, it would move straight forward, announcing its own principles and supporting its own candidates, claiming the support of members of other parties on patriotic grounds, and giving to such members as should accord that support just consideration. If a spirit like this could be infused into the Republican party, no Union party would be necessary, and no mere Union party could be successfully organized. Under the actually existing circumstances in Ohio, imperfectly known as they must be to me, I must leave to our friends on the spot the task and responsibility of organization. . . . A Republican Convention and Republican nominations, giving recognition among the nominees to the patriotic Democratic element which sustains the Administration in its present position, are best."

...

To Hiram Barney, Collector of the Port of New York.

"July 20, 1861.

... You know my views the public first, our friends next. So far as preferences can be legitimately given so as to aid those who, at considerable sacrifice of time, labor, and money, are engaged in upholding the principles we all deem vitally important to the welfare of the country, I think it a clear political duty that they should be given. But no public interest should be sacrificed, no public duty should be neglected, for any personal or party considerations. . . ."

To General John C. Fremont.

“August 4, 1861.

.... I had before responded promptly, though, in the present condition of the Treasury, not without difficulty, to your calls for money. The energy you are displaying is admirable, and excites the best hopes of the future fulfillment. I am very sanguine. Let me, however, take the privilege of a friend, as well as perform the duty of a Secretar of the

Treasury, in urging you not to allow the pressure of your other cares to withdraw your attention from the expenditures of the army under your command and in your department. This war must necessarily be an expensive war, and there is great danger that, after a brief period, the people, in view of the magnitude of the burdens it is likely to entail, will refuse their support to the measures necessary for its vigorous prosecution. Already, the disgust caused by fraud or exorbitance in contracts, and by the improvidence of quartermasters and commissaries, is beginning to show itself. What is needed is, to satisfy the people that neither time nor means will be needlessly wasted. They ask prompt and vigorous action, and all practicable economy.

To M. D. Potter, Esq., Cincinnati.

“August 22, 1861.

I have always urged action—accepting every man who could be put to real service, and expending every dollar for which a dollar's worth could be shown in results. I never have wanted paper regiments nor paper colonels, and I don't want them now. Active men and useful employment of means are what we need. . . .”

To the Hon. Garrett Davis, of Kentucky.

"August 24, 1861.

Let me assure you that the confidence yoù express in me moves me deeply. That I have been much misunderstood is not at all surprising. It has not been easy to distinguish between constitutional opposition to that slave-power which struck at Clay, and struck down Benton, and now organizes rebellion, and that abolitionism which insisted on immediate and unconditional emancipation, without much regard to means or consequences. I have wished to see popular government vindicate and recommend itself by its demonstrated capacity to probe and redress so great an evil as slavery-first, by the constitutional action of the national Government within its appropriate sphere, and then by the unconstrained action of the States within their several jurisdictions. I do not absolutely despair of the accomplishment of that wish; though I cannot shut my eyes to the possibility that, as extremes often meet, so now the madness of slavery propagandism, organized in rebellion, is likely to accomplish the purposes of abolitionism, pure and simple.

"But enough of this; yet rest assured of one thing. If I ever entertained an unfriendly thought toward Kentucky or Kentuckians, the wise and noble conduct of those who have brought her thus far safely through the fever of the time, loyal to the Union, and faithful to the glorious old flag we all so dearly love, would have banished that thought, and left no sentiment in my heart save one of fervent affection for the men who have accomplished this great work, prompting me to zealous efforts to fulfill all their wishes, so far as my ability allows.