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 1863-85] Foreign loans. 611 accomplished in that direction. Early in the war Confederate foreign agents, among whom Caleb Huse, J. D. Bullock, C. J. McRae, and James Spence were conspicuous, were despatched to purchase supplies abroad. As the growing scarcity of cotton drove up its price in the Liverpool market, from 7d. a Ib. at the outbreak of the war to nearly twice that amount in the early months of 1862, and to 2s. Id. before the end of that year, the desire of the Confederate government to realise upon its accumulated stock of cotton led it to approach some foreign bankers who might be willing to enter into the speculation involved. The banking firm of Erlanger agreed in January, 1863, to guarantee a loan of ,3,000,000 at 77. Interest at 8 per cent., as well as an annual amortisation of -fa of the principal, was payable in gold and in Europe. The bonds were payable in cotton at 6d. a Ib.; delivery to be made within the Confederacy. Six months after the declaration of peace this exchange was to cease; and the bonds were thereafter payable at their face value in gold. The bonds were favourably received and subscribed for at 90, but they soon began to decline, and continued to fall till the end of the war. The news of Federal victories drove them down, the rumours of repulses of the blockading fleet temporarily drove them up. The bonds were quoted at a much higher figure than were other Confederate issues, owing to the mistaken notion of the security offered by the large amount of cotton held by the Confederate govern- ment. After the war they continued to be quoted, and there was talk of urging the United States government to assume the debt. So late as 1876 and even 1884-5 the hopes of the unlucky bondholders were revived ; but of course neither the Federal government nor those of the States felt bound to assume the obligations of the defunct Confederacy. The loss to the bondholders was not balanced by a corresponding gain to the Confederate government. The commission charged by Erlanger for floating the loan and paying the interest charges was large ; moreover, $6,000,000 were wasted by the Confederate agents in a futile effort to "bull 11 the bonds in the foreign market. The loan netted for the government about $6,000,000, which were spent in buying ships and war supplies, a large part of which never reached their destination. The issue of bonds by the Confederate government was difficult, owing to the insignificant revenue at its command, and the consequent derangement of its finances. The government met with little success in obtaining voluntary loans from the lending public, and was driven to adopting forced loans, primarily by means of the issue of paper money. During the first five months of its existence the Confederate government borrowed eight times as much by issuing bonds as by issuing notes ; thereafter the relative importance of bond issues declined rapidly. During the four months ending November, 1861, $4*47 in notes were issued to every $1 in bonds; during the following three months the CH. xix. 39 2