Financial fered default. This half-financial, half-patriotic CHAP. XV. exertion of a few leading banking firms saved the national credit from dishonor; and the newspapers once more sharply contrasted from what Dec. 29, 1860. height to what depth it had sunk by recalling the fact that at the beginning of Buchanan's Administration, Secretary Cobb bought up the six per cents of 1868 at sixteen per cent. premium, in order to get rid of the surplus in the treasury. Seeing the resolute action of these bankers in the crisis, other capitalists so far recovered from their panic that they now came forward and by private agreement upon twelve per cent. interest took the balance of the five millions for which, a few days Jan. 1, 1861. before, they had been too timid to bid at all. In the new Cabinet complications at this juncture Secretary Thomas in turn resigned, and on January 11, 1861, President Buchanan, upon financial compulsion as related, appointed John A. Dix, then postmaster at New York, to succeed him. Personally acquainted with New York merchants and bankers, Mr. Dix could make a stronger appeal to their interest to support the Government with financial aid. A new five million offer of treasury notes (the remainder authorized by the act of December 17, 1860) had been advertised before Thomas's resignation. Dix meanwhile assumed the duties of the Treasury Department, and inspired public confidence by his personal worth and openly declared loyalty. The bids were opened January 19, 1861, and exhibited a decided improvement of financial credit. More than twelve millions were bid for, at rates of interest ranging from 8 to 20 per cent., the bulk being from 10 VOL. III.-16 Ibid., CHAP. XV. to 12 per cent. Dix awarded $3,230,000 at rates Financial of interest under 11, and the remainder at 11 Article, "Tribune," per cent. Jan. 21, 1861. Ibid., Feb. 25, 1861. The public liabilities, maturing and current, were now, however, accumulating with such rapidity that he was compelled to recommend a new loan. An act of February 8, 1861, authorized him to issue twenty-five millions of six per cent. ten to twenty years' bonds. Eight millions were advertised and awarded to bidders on February 23. Financial courage had so far returned that fourteen millions were bid for and at rates which enabled him to sell the whole eight millions at an average of a trifle over 9 per cent. discount.1 These financial struggles of the Government, which occurred before the revolutionary crisis had fairly set in, are related to show that a measure of legislation grew out of them which had an important influence in sustaining its power when the storm of war soon after burst. The free-trade doctrines of the Democratic party had, with the success of that party in electing Presidents Pierce and Buchanan, also resulted in the enactment by Congress of the low tariff of March 3, 1857. The Republicans had long alleged that the policy of this act would impoverish the treasury, and now when the Government revenues had steadily fallen behind its expenditures, at the rate of about twenty millions a year, their complaint appeared to be well founded. Whatever difference of views might exist about financial cause and effect, there could be none that 1 In exact figures the bonds were sold at an average of 90.47%. See Bayley, "U. S. National Loans, Tenth Census,” p. 151. some radical measure to replenish the treasury was CHAP. XV. imperative. The Morrill Tariff Bill, as it was called, was pending in Congress. A year before it was passed by the House, but defeated in the Senate. It was now urged by its friends with new zeal. The members from the seceding States had been among its sturdiest opponents; but when in January they retired from their seats in the House and Senate, the adoption of the measure became practicable. The Morrill Tariff Act was accordingly passed and signed by President Buchanan on March 2, 1861. It was a comprehensive measure, raising the duties. on imported merchandise from an average of nineteen to an average of thirty-six per cent., and had the double effect of materially increasing the customs receipts and stimulating the productive energies of the country. It went into operation on the 1st of April, and thus its quickening and strengthening help came just at the opportune moment, when the nation was compelled to gird up its loins for a gigantic war. 1861. Bayley, But the law was not alone confined to the subject of the tariff. Two important financial provisions were embodied in it: one gave the President authority to borrow ten millions additional, either in the form of bonds or treasury notes, and another permitted him to "substitute treasury notes for the whole, or any part of the money which he was authorized to borrow by previous acts." When sus," p. 77. a few days later Lincoln became President, and Chase Secretary of the Treasury, they could look with a little less dizziness into the financial gulf already open, and constantly widening before their vision, remembering that by the terms of this act CHAP. XV. they had power to issue about forty millions of treasury notes without further legislation, namely, a balance of $13,000,000 under the act of June 22, 1860; a balance of $17,000,000 under the act of February 8, 1861; and the $10,000,000 directly provided for in the Morrill Tariff Act. CHAPTER XVI THE PRESIDENT-ELECT AMON MONG the first congratulations which poured CHAP. XVI. in upon Mr. Lincoln after his election was a terse greeting from ex-Governor Chase, dated November 7, that admirably expressed the prevalent feeling. "You are President-elect. I congratulate you and thank God. The great object of my wishes and labors for nineteen years is accomplished in the overthrow of the slave power. The space is now clear for the establishment of the policy of free- R. B. War dom on safe and firm grounds. The lead is yours. The responsibility is great. May God strengthen you for your great duties." Day after day confirmed the completeness of the Republican victory, and two weeks after election the city of Springfield was in the blaze and glory of a great celebration to signalize the result. Projected merely as a local jubilee, it called to the city crowds of rejoicing strangers. Though he had not said a public word during the campaign, Mr. Lincoln could not on this occasion refuse the sound of his voice to the huge torch-light procession and the crowds of his neighbors and friends whose shouts called him to the door of his modest home. Chase to Lincoln, Nov. 7, 1860. den, "Life of S. P. Chase," p. 364. |