of 1863, as high as 35 per cent. In January of that year, the rapid increase of the public debt and the premium on gold had begun to very seriously alarm the professional statesmen and ablest financiers of the country. Mr Robert J. Walker, a gentleman who had been Secretary of the Treasury in the halcyon days of President Polk, when there was no debt worth speaking of, and when the Federal treasury suffered under an overflow of cash, was one of the first to sound the warning voice against the dangers which he saw in the future. "Our national finances," said he, are involved in extreme peril. Our public debt exceeds 720,000,000 dollars, and is estimated by the Secretary of the Treasury, on the 1st of July next, at 1,122,291,403 dollars, and on the 1st of July 1864 at 1,744,685,586 dollars. When we reflect that this is nearly onehalf the debt of England, and bearing almost double the rate of interest, it is clear that we are approaching a fatal catastrophe. Nor is this the most alarming symptom. Gold now commands a premium of 32 per cent as compared with legal-tender Treasury notes, and with largely augmented issues must rise much higher, with a corresponding increase of our debt and expenditure. Indeed, should the war continue, and there be no other alternative than addi tional Treasury notes, they will, be. fore the close of the next fiscal year, fail to command 40 cents on the dollar in gold, and our debt will exceed several billions of dollars. This would result from an immense redundancy and depreciation of currency, and from the alarm created here and in Europe as to the maintenance of the Union and the ultimate solvency of the Government. Indeed, our enemies at home and abroad, the rebels and their allies in the North and in Europe, already announce impending national bankruptcy and repudiation, and there are many devoted patriots who fear such a catastrophe. That the danger is imminent is a truth which must not be disguised. Here lies the great peril of the Government. It is not the rebel armies that can ever overthrow the Union. It is the alarming increase of the public debt and expenditure, and the still more appalling depreciation of the national currency, that most imperil the great Republic. We are upon the verge of ruin. We are hanging over the gulf of an irredeemable paper system, and its spectral shade, repudiation, is seen dimly in the dark abyss. The present congress may save us, but what of the next? Would they if they could? Who can answer? Can they if they would? No, no; it will then be too late." Mr Walker was not at fault in his predictions; for within three months after he had warned his countrymen of what was coming, gold had gone up to 85 per cent premium, and for a long time afterwards oscillated between that high figure and 65. But the war went on as joyously as ever for the contractors; the debt increased daily; and fresh issues of greenbacks afforded scope for the wildest speculation and the most reckless extravagance. Towards the end of the year, Governor Seymour, the then newly-elected Democratic Governor of New York, harped vigorously on the string on which Mr Walker had sounded the first note; but the Governor, like many others who had less courage than himself, was opposed to the war- thought it both a mistake and a crime, and augured no good of it, whether it should reward the North with victory or punish it with defeat. Consequently his words, if they did not fall unheeded, were received with angry denunciation by the war zealots as the treason of a "Copperhead." "The weight of annual taxation," he said, "will severely test the loyalty of the people. Repudiation of our financial obligations would cause disorder and endless moral evils; but pecuniary rights will never be held more sacred than personal rights. Repudiation of the Constitution involves the repudiation of national debts, and of the guarantees of rights of property of person and of conIf we begin a war upon the compromises of the Constitution, we must go through with it. It contains many restraints upon our natural rights. It may be asked by what right do the six small New England States, with a population less than that of New York, enjoy six times its power science. in the Senate, which has become the controlling branch of the Government? By what natural right do these six States, with their small population and limited territories, balance the power of New York, Pennsylvania, Ohio, Illinois, Indiana, and Michigan? The vast debt growing out of this war will give rise to new and angry discussions. It will be held almost exclusively in a few Atlantic States. Look upon the map of the Union, and see how small is the territory in which it will be owned. We are to be divided into debtor and creditor States, and the last will have a vast preponderance of power and strength. Unfortuately there is no taxation upon this national debt, and its share is thrown off upon other property. It is held where many of the Government contracts have been executed, and where, in some instances, gross frauds have been practised. It is held largely where the Constitution gives a disproportionate share of political power. With all these elements of discord, is it wise to assail Constitutional laws, or bring authority into contempt?" To keep down the debt, and provide at least a portion of the ways and means necessary for carrying on the war out of the annual produce of the people's trade and industry, the Government introduced a system of taxation-new to America-exceedingly oppressive in its incidence, and labouring under the flagrant demerit of a productiveness utterly incommensurate with the extent and cost of the machinery employed to collect it. In order that the masses of the people the adult males in possession of votes-might not complain, an income and property tax of five per cent was imposed upon all incomes above six hundred dollars per annum; of seven per cent upon all incomes between five and ten thousand dollars, and of ten per cent on those above ten thousand. Every person liable to the tax was allowed to deduct six hundred dol lars, and the price he actually paid for his house-rent, out of his total income, and was only chargeable on the remainder; so that if the average amount of house-rent paid by the working classes and the great bulk of the people was one hundred dollars per annum, nobody with an income of less than seven hundred dollars, £140 per annum, was liable to the impost. The duty of 33 per cent ad valorem upon foreign manufactured goodsa duty levied not so much for revenue as for supposed "protection to native industry," was increased to 49 per cent, payable in gold; a tax upon alcoholic liquor of 60 cents per gallon, which it was anticipated would prove highly productive, was also imposed for the first time; while everybody engaged in any trade, occupation, or pursuit, except that of the day-labourer, was compelled, under a heavy penalty for neglect or disobedience, to take out an annual licence at a cost of ten dollars, and in some businesses, such as that of the hotel-keeper, of a hundred dollars. The tailor, the shoemaker, the hatter, the milliner, the hosier, the baker, the butcher, the fishmonger, the grocer, the greengrocer, and the butterman; the merchant, the trader, and the manufacturer; even the merchants', the manufacturers', and the bankers' clerks, all had to take out licences to pursue their several callings, so that the Americans enjoyed a luxury of taxation which even our old and experienced England had never tasted. There was a talk of taxing servant girls*- -"helps," as they are called and negro waiters; but the idea was abandoned. A very elaborate system of stamp-duties upon bills of exchange, bankers' cheques, receipts, trade - circulars, and even upon photographic or album por When William Pitt, in England, imposed a tax on maid-servants, a bookseller in Fleet Street shut up his premises in disgust, and emigrated to the United States, after affixing the following distich to his shutters. He must have been an Irishman! "These are those dreadful taxing times of yore, Which our forefathers never saw before!" at once collected. Under the circumstances, there was nothing for it but loans in the shape of "five twenties,' "ten thirties," " seven forties;" and "greenbacks"-continuous, never-ceasing greenbacks -some bearing interest and some not, but none of them convertible into gold on demand, or into gold at all, except at such a premium on the real article as made the paper dollar worth, upon the average, about 2s. 3d. sterling instead of 4s. 2d. As the working classes, taxed heavily upon their favourite whisky, though untaxed upon their incomes, found that their six or seven hundred dollars per annum of wages represented a purchasing power of little more than half its amount in the blessed days of peace, they too, for the first time in American history, began to strike for higher wages. traits (stupidly called cartes-de-visite in England, but not in America), was devised; and all sorts of imposts, which Great Britain had for thirty years been busily engaged in getting rid of, were revived in America. The people, however, were new to taxation; the taxgatherers, of whom about fifty thousand were appointed, did not understand their business; and after an experiment of eighteen months, it was found necessary to devise other and better means for raising a revenue. Mr Chase, the Secretary of the Treasury, had estimated that he would receive, during the financial year, 150,000,000 dollars from the Internal Revenue alone, exclusive of the Income and Property Tax and the Customs Duties. But from the 1st of July 1862 to the close of 1863, the actual receipts amounted to no more than 47,641,000 dollars, Their demands were very geneor at the annual rate of 31,740,000 rally complied with-for there was dollars-little more than one-fifth not only a plethora of paper-money, of the sum expected. The In- but a scarcity of labourers in every come and Property Tax was large- department of industry, in consely evaded; and the Customs Duties quence of the drain made upon the brought less into the coffers of youth of the country by the inthe State than they put indirectly exorable demands of war. Thus into the pockets of the native manu- the working classes were kept in facturers, by affording them a pre- good humour on all questions extext to put up the price of their cept that of the whisky bottle. To untaxed commodities to that of the pay twenty cents for a drink that foreign article which had paid duty. had formerly cost but five was not A revision of the whole scheme of satisfactory; but even on this sore taxation was ordered, the chief re- point there was relief in store for sults of which were that the duty them. The illicit distiller came to upon whisky and other alcoholic the rescue, and smuggling over the liquors was raised to two dollars long Canadian frontier of fifteen per gallon, and that the Income and hundred miles developed itself so Property Tax was ordered to be rapidly into a regular, a safe, and more stringently collected. The a highly profitable business, that estimate for the year 1864 from the the intemperates who could not rethree great sources of revenue, the frain from their usual alcohol, were Income and Property Tax, the Cus- enabled to indulge themselves altoms Duties, and the Internal Rev- most as freely, and at little more enue, was no more than 285,000,000 cost than in the bygone days, when dollars-a sum which, as the war the hand of brother was not raised expenses of the Government were against brother in mortal strife, upwards of three millions of dollars and Government, throughout the per diem, was barely sufficient to length and breadth of more than carry on affairs for three months, thirty prosperous States, rested upeven if the money could have been on the consent of the governed. Though victory did not reward the efforts of the Northern people at this time, and seemed as if it never would, there was very little real discontent with the state of public affairs among the Northern people. The profuse expenditure of the Government kept trade busy in every department. Never were there such luxury and extravagance in any country in the world as in the Northern States during the years 1863 and 1864. The "shoddy" aristocracy, the knavish contractors, the speculators in gold and stocks -everybody was, or seemed to be, growing rich; and Mr Sewardthe amiable and impulsive, but not very wise, Secretary of State-took it upon himself to assert publicly that not only had the war not impoverished anybody, but "that it had largely augmented the national resources." But all the statesmen of America were not so foolish. Mr Chase knew better; and a gentleman of the name of M'Culloch, then unknown to European fame, whom Mr Chase appointed to the office of "Comptroller of the Currency," took it upon himself, at the very outset of his official career, to address a circular to the directors and managers of the new National Banks, which, to the number of more than two hundred, had been instituted to carry on business, not on the basis of gold or real property, but solely on that of Government paper-money and indebtedness, in which he warned them against such absurdities as Mr Seward had uttered. "You should bear constantly in mind," he wrote to these gentlemen, "although the loyal States appear superficially to be in a prosperous condition, that such is not the fact; that while the Government is engaged in the suppression of a rebellion of unexampled fierceness and magnitude, and is constantly draining the country of its labouring and producing population, and diverting its mechanical industry from works of permanent value to the construction of implements of warVOL. CIL-NO. DCXXI. fare; while cities are crowded, and the country is to the same extent depleted, and waste and extravagance prevail as they never before prevailed in the United States, the nation, whatever may be the external indications, is not prospering. The war in which we are involved is a stern necessity, and must be prosecuted for the preservation of the Government, no matter what may be its cost; but the country will unquestionably be the poorer every day it is continued. This seeming prosperity of the loyal States is owing merely to the large expenditure of the Government and the redundant currency which these expenditures seem to render necessary." He wound up this sound doctrine by declaring broadly that "splendid financiering was not legitimate banking," and that, in his opinion, "splendid financiers were either humbugs or rascals." When Mr Chase was appointed to the Chief-Justiceship of the Supreme Court, this gentleman succeeded him in the Treasury department, where he still remains, the right man in the right place, though powerless to undo the mischief done by his predecessor-mischief which was forced upon that eminent functionary by the necessities of a false position and the passions of his countrymen. At this time it was not so much the increase of the debt as the deficiency of men to supply the waste of war that alarmed everybody in the North. Mr Lincoln was continually calling for men; but the men did not appear. He was told, if he would but issue a proclamation for the abolition of slavery, that the highways and byways of the North and West would swarm with enthusiastic volunteers-that the ploughman would leave the plough, the weaver the loom, the smith the forge, the clerk the desk, and the clergyman the pulpit, to take up arms in this new crusade, this holy war, this sacred battle for the rights of man; that America would pre sent a spectacle the like of which was never seen since the world began, and which, recorded in the page of history, would render him, his age, and his country, illustrious for evermore. Mr Lincoln was no enthusiast; he was not even a philosopher, but a politician in the American sense of the word. As a politician, and to some small extent as a philanthropist, he had his doubts. He did not in his heart believe the negro to be the equal of the white man, unless his spoken and published words belie his convictions; and his opinion of slavery was, that bad as it might be for the blacks, it was still worse for the whites. But he was open to persuasion and to influence. He was no bigot to his own views; and ultimately, after much oscillation and misgiving, he yielded up his judgment to that of others, and launched his proclamation. The pulpits, and a portion of the press, called upon God to bless Abraham Lincoln for the great work he had undertaken; but the volunteers did not rush to battle as was predicted. It is doubtful whether one hundred men, or even half the number, were moved by the proclamation to shoulder the musket in "the holy cause." Volunteers, it is true, did at this time and afterwards swarm in the highways and byways of New York, New England, and Ohio; but they were the volunteers of an earlier day, who had served out their year, or their two years, and were hastening home, disheartened with the incompetency and unsuccess of their generals, and resolved to turn their swords into pruning-hooks and to study war no more. At this time, although there were scarcely 500,000 men in the roll of the army, pay and rations were is sued for upwards of 700,000. Who received the difference was never stated, and how long the overplus was paid was never ascertained. Somebody, or several somebodies, must, however, have grown rich upon the plunder. Men were urgently required; and the bounty of one hundred dollars, paid by the Government to each recruit who would undertake to serve for the whole duration of the war, however long that period might be, failed to keep up the ranks to the full complement required for such stupendous operations as were in progress before Richmond and in the valley of the Mississippi. Persuasion, even though backed by twenty pounds' worth of greenbacks, not being adequate, it was resolved, at first timidly, but afterwards more boldly, to try what compulsion would effect; and a conscription was ordered. The attempt to carry out this plan, new to a free country, and utterly antagonistic to every democratic principle which for three generations had been instilled into the heart of the youth of America, speedily led to the riots of New York ;-riots that, if there had been a man at their head capable of a great deed and of a great purpose, might well have proved the commencement of a counter-revolution; but which, being without plan or leader, remained riots and nothing more, and were chiefly remarkable for the cruel and almost insane hatred which the rioters, for the most part Irishmen of the lowest and most savage class, exhibited towards the inoffensive negroes, whom they believed to be the sole cause of the war, and consequently of the conscription. These riots, however, had their effect upon the Government. Without abandoning in plain terms its intention to force men into the army against their will, the Government postponed the conscription; and the owners of house property, and other wealthy persons in the great cities and towns of the Union, alarmed at the but too probable consequences of popular insurrections, resolved with remarkable unanimity to double, to treble, and to quadruple the bounty offered by the Government. |