Page:Cambridge Modern History Volume 7.djvu/600

 CHAPTER XVIII. THE NORTH DURING THE WAR. (1) FINANCE. WHILE following the development of the Civil War through the fluctuations of military campaigns, the reader should also note some of the more important events of civil administration. It was an anomalous state of affairs that, prior to the beginning of President Lincoln's term of office, while the public debt was less than $70,000,000, with the business of the country in normal activity, and money abundant in private banks, the national treasury was absolutely empty ; and that small government six per cent, loans were with difficulty negotiated at from ten to twelve per cent, discount. The Secessionist movement was of course largely responsible for this depreciation, for upon Lincoln's announcement that he would maintain the Union, Salmon P. Chase, the new Secretary of the Treasury, borrowed his first three millions at 94, and a few days later five millions at par. But the actual outbreak of hostilities and the Act of the special session of 1861, authorising a loan of $250,000,000, revolutionised the whole financial position. The contrast with what had hitherto existed was almost bewildering. Fortunately the patriotism of the country was by this time fully roused, and the people of the loyal States had reached a determination to make whatever sacrifices were necessary in men and in money to maintain the government and put down rebellion. Congress cheerfully imposed heavy additional taxes, and made ample appropriations for the military service; and Secretary Chase exhibited both great ability and courage in his financial management. For a while, public opinion was sustained by the hope that the war would be short; and before this hope was destroyed by the heavy reverses in McClellan's campaign against Rich- mond, the people of the North, quick both in perception and intuition, had already begun to take an enlarged view of the great crisis and its needs, and steeled their nerves to the acceptance of financial burdens which a year earlier they would have looked upon as irretrievable ruin.