Page:Cambridge Modern History Volume 7.djvu/648

 616 The gold premium. [i 862-4 The gold premium in the South rose most rapidly in the spring of 1862, in the midsummer of 1863, in the first months of 1864, and in the first months of 1865, namely at the times when the affairs of the Confederacy were approaching a crisis. The spring of 1862 brought the first decisive Northern victories after the long period of inaction following the battle of Bull Run; in the interior Forts Henry and Donelson fell; the hopes of the Confederate navy were dashed by the Monitor. Above all, the Mississippi valley was opened by Farragut; New Orleans was lost; and the trans-Mississippi States were cut off from the rest of the Confederacy. These desperate straits led to the suspension of the writ of habeas corpus, the proclamation of martial law, and to the passage of the first conscription law. These brilliant successes of the North were not, however, successfully followed up. Vicksburg continued to resist; the Peninsular campaign was a disastrous failure ; the second battle of Bull Run, General Bragg's operations in Kentucky, and General Lee's first advance into Maryland followed. These events depressed the feelings of the North, and corre- spondingly raised those of the South. The gold premium in the Con- federacy rose less rapidly. A change occurred in the summer of 1863, and the gold premium rose more rapidly, when the capture of Vicksburg by General Grant and General Lee's withdrawal from Pennsylvania after the battle of Gettysburg depressed the hopes of the South. They were raised, however, during the autumn of 1863, and the hopes of the North correspondingly depressed, by the successes of General Bragg near Chattanooga and General Lee in Virginia; but after the Republican victories at the polls in the North in November, and after the decisive Federal victory of Chattanooga, the gold premium in the South rose more rapidly than before. During this crisis in the affairs of the Confederacy a second Conscription Act, an Act for heavy taxation, and the notorious Funding Act were passed all on the same day, February 17, 1864. During the following months the Federal army made little progress, and the hopes of the South rose again, till Sherman's advance and General Grant's successes outside Richmond raised the gold premium to unheard-of heights. The inflation of the currency raised the prices of all commodities. In the case of those whose supply was wholly or largely derived from abroad in times of peace, the relative scarcity during the war added a further upward impetus. For instance, coffee rose to four times its usual price before the end of 1861 ; a year later to 25 times;, in December, 1863, to 80 times ; and in December, 1864, it was selling for 125 times the price that it commanded in time of peace. Cut off by the blockade from their customary supply of salt, the Southerners tried to obtain that article by the evaporation of sea-water and by working the few inferior natural salt springs in the interior. The quantity thus obtained was meagre, and did not prevent the price of salt from rising nearly as high