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limited to the French Emperor alone; it had not progressed further at this time than an invitation to England and Russia made in November, 1862, to unite in proposing an armistice to the Washington government, which should merely give an of portunity for discussion, without affecting in any way the pres ent military interests and positions of the belligerents. Mild as the French proposition was, it was rejected by Russia and England. Lord Russell replied for his government that the time was not ripe for such mediation as was proposed, and that it would be better to watch carefully the progress of opinion in America, and wait for some change in which the three Courts could offer their friendly counsel with a prospect of success. The British statesman had nothing to plead for the mass of suffering humanity in his own land, which the war he was implored to stop or to ameliorate had occasioned; for humanity was easily outweighed by political reasons, which are as often worked out through the blood and tears of its own people as through the misfortunes of others.*

* In a letter of Mr. Cobden, published during the early winter in an English iournal, he declares that in travelling from Manchester to Blackburn, over a country covered with snow, he found hundreds of wasted victims of cold and want. He says: “Hitherto the distressed population have felt little more than the want of food. Now and from henceforth blankets, fuel, and clothing are as essential to health as bread and soup.” He argues that it is useless to savo people from dying by hunger, only that they may perish by fever, or by the exhaustion consequent on cold and insufficient food.

The early advent of winter enhanced the misery of the suffering. In many districts there was no fuel, po means of warmth except the scanty allowance of coals distributed in some places by the Relief Committees. Everywhere the people had too little to eat, and that little was not sufficiently nutritious; everywhere they suffered from cold yet more cruelly than from hunger; and nowhere was there a fund sufficient to provide for their necessities.

The humane shuddered with horror as they read the frightful accounts of the suffering of the poor published day after day in the London Times. A letter from Stockport described the people there as “suffering all the horrors of a protracted famine.” The same writer says: “One poor man upon whom I called this morning, having stripped the walls of every little ornament to purchase bread for his wife and three little children, took the fender and sold it for a shilling.” The cases of distress reported in the newspapers merely represented the average condition of the unemployed. An aged couple, we are told, had saved thirty-six pounds; this is gone, their furniture is pawned, the husband is in the infirmary, and the old woman living on a charitable dole of half a crown per week, with some soup and bread. In another case five per800 3, among them a sick woman, are living on seven shillings a week. One family of six--considered to be particularly well off-have seven shillings, an allowance of coals and some soup and bread from their former employer. Another family of six or seven had lived for twelve months on six shillings a week.

But while the prospect of an early peace dissolved before the eyes of Congress, a subject of instant and practical impor. tance was sorely pressing upon its attention. The vast volume of Treasury notes issued by the government had occasioned a rapid depreciation of our currency, inflated prices, and produced serious financial difficulties. So crude and short-sighted had been our notions of public finance, that at the meeting of Congress in August, 1862, we find President Davis recommending to it that the public creditors should not be paid in bonds, but that unlimited issues of currency should be made. He then said in his written message to Congress : “ The legislation of the last session provided for the purchase of supplies with the bonds of the government, but the preference of the people for Treasnry notes has been so marked, that legislation is recommended to authorize an increase in the issue of Treasury notes, which the public service seems to require. No grave inconvenience need be apprehended from this increased issue, as the provision of law by which these notes are convertible into eight per cent. bonds, forms an efficient and per. manent safeguard against any serious depreciation of the currency.

The University of Oxford had subscribed about £4000 towards the relief of the suffering people. A meeting was held to promote further action, at which the following facts were stated by the Hon. E. L. Stanley of Baliol College :

“They received from America before the blockade five-sixths of their cotton ; five days of the week they worked on what came from America ; only one day on what came from other countries. That supply was now practically at an end. The few ships that ran the blockade made no noticeable difference, and even if other countries should double their production, we should be only sup plied with material for one-third of our usual work. The country, then, was losing two-thirds of the industry engaged in this trade, and two-thirds of the capital were making no return. And this trade was such a main part of the industry of the nation, that what affected it must affect all. A Parliamentary return gave the persons actually engaged in the mills at near 500,000. If they reckoned their families, the traders who supplied them, the colliers, machinists, builders, and shipping interest engaged in supplying cotton, they would proba. bly not overstate the number of dependents on cotton only at 3,000,000. Thesa people were now deprived of fully two-thirds of their subsistence.”

Such is a picture of the “Cotton Famine” in England. The most remark. able circumstance in connection with it was the profound indifference of the English Ministry to the distress of near a million of those for whose lives and happiness they were responsible.

The consequences of this ignorant and wild financial policy were, that, by the next meeting of Congress, the volume or currency was at least four times what were the wants of the community for a circulating medium; that prices were inflated more than an equal degree, for want of confidence in the paper of the government had kindled the fever of speculation; that the public credit, abused by culpable ignorance and obstinate empiricism, had fallen to an ebb that alarmed the country more than any reverse in the military fortunes of the war; and that the government was forced to the doubtful and not very honorable expedient of attempting to restore its currency by a system of demonetizing its own issues.

The redundancy of the currency was the chief cause of its depreciation. The amount of money in circulation in the South, in time of peace, was $80,000,000. In January, 1863, it was $300,000,000. In September, 1861, Confederate notes were about equal to specie; before December, specie was at 20 per cent. premium; before April, 1862, it was at 50 per cent.; before last September, at 100; before December, at 225; before February, at 280; and in the spring of 1863, at the frightful premium of 400 per cent., while bank bills were worth 190 cents on the dollar.

Since the foundation of the Confederate government, its finances had been grossly mismanaged. The Treasury note was a naked promise to pay; there was no fund pledged for its redemption; and the prospect of the rigid liquidation of the enormous debt that this class of paper represented six months after the restoration of peace, depended solely on the speculative prospect of a foreign loan to the amount of many hundred millions of dollars. At the commencement of the war the South had the elements for the structure of one of the most successful and elastic schemes of finance that the world had seen. The planters were anxious to effect the sales of their cotton and tobacco to the Confederate States; these would have supplied the government with a basis of credit which would have been extended as the prices of these staples advanced, and therefore kept progress with the war; but this scheme was opposed by the Secretary of the Treasnry, Mr. Memminger, and defeated by his influence. He was anfortu nately sustained by an Executive grossly incompetent on sub jects of finance; which was ignorant of the principle of political economy, that there are no royal ways of making money out of nothing, that governments must raise money in the legitimate way of taxation, loans, &c.; which relied upon the manufacture of a revenue out of naked paper obligations; and which actually went to the foolish extremity of recommending that the creditors of the government should take their payment in currency rather than in the public stocks.

It appears, indeed, that our government was ignorant of the most primitive truths of finance, and that it had not read in history or in reason the lesson of the fatal connection betroeen currency and revenue.

It is true that some appreciation of this lesson was at last shown by Congress in its new tax-bill; for the theory of that bill was, by an enormous weight of taxation, to pay, at least measurably, the expenses of the war as it progressed, and to risk no further connection between the two distinct financial concerns of revenue and currency. But on the other hand, its system of forcing the funding of treasury notes by arbitrary reductions of interest, betrayed the ignorance of Congress; left incomplete and embarrassed a system of finance which might have otherwise been carried to a point of extraordinary success; and aimed a direct blow at the integrity of the public credit.

It was easy to see that slight differences in rates of interest would afford but feeble inducements for the conversion of the treasury note into the bond, when money was easily doubled or quadrupled in the active commercial speculations peculiar to the condition of the South in the war, unless the bond could be readily used as a medium of exchanges; and in that event there would only be a change in the form of the paper, the volume of the currency would be undiminished, and its depreciation therefore remain the same. But while the analysis of this system of funding shows it to be a transparent juggle, it was by no means certain that it did not contain the


of many positive evils. The right of a government to make arbitrary changes in any of the terms of its obligations which uffe t their value, is questionable, and the commercial honor of such an expedient is more than doubtful. While it intrín duced the shadow of repudiation only to weak and suspicious minds, it is yet to be regretted that even whispers on that subject were ever heard in the South. But as far as our foreign credit was concerned, there is no doubt that the empirical action of Congress, which involved, even to the smallest extent, the integrity of our obligations, was of serious prejudice. It might indeed have been logically and certainly expected that the general confidence in Enrope in the military fortunes of the Confederacy would have been productive of unlimited credit to us abroad, had the faith of Europe in the management of our finances eqnalled that in the success of our arms.*

On the subject of the financial management of the new Confederacy, one general reflection at least admits of no doubt. The attentive reader will recognize as the most remarkable circumstance of this war, that within two years the public finances of the Confederacy should have been brought to the brink of ruin. The sympathy of the people with the revolution was unbounded. The disposition of all classes towards the government was one of extreme generosity. The property of the States of the Confederacy was greater per capita than that of any community on the globe. No country in the world had export values comparable in magnitude to those of the South, and the exports of all other countries were produced at a cost in labor four tiines that of ours. In such circumstances it is highly improbable that the government of the Confederacy

* It is true that a small foreign loan has been negotiated in Europe; but it affords no test of our credit in present circumstances, as it was made on a pledge of cotton. It shows, however, what might have been done, if the cotton had been purchased by the government and mobilized, for the whole crop might have been secured in 1861 at seven cents a pound. But against this scheme the government had set its face as flint, and when it did become distrustful of its former conclusion, it had only the nerve to make a very limited experiment in the application of this staple to support a credit almost hopelessly abused by paper issues.

It was estimated that there remained in the States of the Confederacy at this time 3,500,000 bales of cotton, which could be exported in the event of the port being opened to trade. This estimate is made after deducting from the crop of 1961 and 1862 the quantity of cotton which had run the blockade, the amount destroyed to prevent capture by the Yankees, and the quantity used for home consumption, which, since the commencement of the war, had enormously in creased, being now fully 500,000 bales per annum.

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