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held to labor or service, under the laws of any State, shall be required or permitted by the person to whom such labor or service is claimed to be due, or by the lawful agent of such person, to take up arms against the United States, or shall be required or permitted by the person towhom such service or labor is due, or by his lawful agent, to work or to be employed in or upon any fort, navy-yard, dock, armory, ship, or intrenchment, or in any military or naval service whatever, against the Government and lawful authority of the United States, then, and in every such case, the person to whom such service is claimed to be due, shall forfeit his claim to such labor, any law of the State or of the United States to the contrary notwithstanding; and whenever thereafter the person claiming such labor or service shall seek to enforce his claim, it shall be a full and sufficient answer to such claim, that the person whose service or labor is claimed had been employed in hostile service against the Government of the United States, contrary to the provisions of this act." This bill passed both branches of Congress. In the House the vote was-ayes, sixty; noes, forty-eight.

The bill, it will be seen, limited within narrow bounds the confiscation of rebel property; it would have been more comprehensive (though probably not so sweeping as the confiscation law of 1862, for neither Congress nor the people were then ripe for that measure), but for the scruples which were entertained by some of the members in regard to the constitutionality of the confiscation of property for treason, without a previous trial and conviction of the traitor. These scruples, though honestly entertained, arose from the error of confounding the action against persons with the action against property, as was very clearly shown some months later by Hon. Henry Winter Davis, of Maryland, in a very elaborate published opinion on the subject.

The action of Congress in making provision for a vigorous prosecntion of the war, had greatly encouraged the people, and the enlistments were made with rapidity, and resulted in securing a very supe rior class of soldiers. There was, however, a pressing necessity for a large amount of financial resources to meet the heavy drain which the war was making on the national treasury. Fortunately for the nation, an accomplished and skilful financier was at the head of the treasury, a man capable of comprehending and providing for the emer

gency.

In December, 1860, when very few supposed war probable, Hon. Howell Cobb, Mr. Buchanan's Secretary of the Treasury, had offered $5,000,000 of United States treasury notes, payable one year from date, and had only received bids for $500,000 at twelve per cent. interest, and this when New York seven per cent. stocks were selling at 101. Secretary Chase needed to borrow by hundreds of millions, and that in the beginning of a great war of uncertain duration; but the capitalists had confidence in him and in the Government for which he acted, and though he had been bound very closely by Congress in regard to the terms on which the loans were to be made, and the amount to be derived from taxation did not promise to yield enough to pay the interest on the loans, he succeeded in negotiating for all the

money he needed at an interest not exceeding an average of seven per

cent.

The loans at this time authorized by Congress were:

Payable.

1. Bonds, Coupons, or Registered*.. After 20 years, sold not less than par....
2. Bonds, Coupons, or Registered... After 20 years, sold in Europe, do....
3. Bonds, Coupons, or Registered...After 20 years, equal to 7 per cent.
4. Bonds, Coupons, or Registered...Within 1 year

5 Treasury Notes..

...At 8 years.

6. Treasury Notes........

7. Treasury Notes....

.At 1 year..........

.In coin on demand, not less than $5.

Interest

per cent.

7

7

6

6

*The difference between a registered stock and cospon bond is, that the former is inscribed upon the books of the Government, in the name of the owner, and is transferred on the books by the owner to the party to whom he sells. The interest is paid to him in whose name the stock stands. The bond is not inscribed, but is transferred by

Limit.

$100,000,000

20,000,000

7.30

8.65

None. 50,000,000

No effort was made to negotiate a loan abroad, as the English capitalists were not inclined to invest in American securities. At a later date they purchased the bonds and treasury notes eagerly, and at a premium. Until he could make arrangements for the issue of his treasury notes at seven and three-tenths per cent., the Secretary obtained a loan for sixty days, on his twenty-year bonds as collateral, of $5,000,000. This sum was taken up in a single half-day in New York. Having visited Philadelphia, New York, and Boston, he succeeded in effecting an arrangement with the banks of the three cities, by which they took $50,000,000 of the seven-thirty notes at par, New York taking $35,000,000, Boston, $10,000,000, and Philadelphia, $5,000,000, the payments to be made about ten per cent. weekly, while interest was payable from the date of issue. The Secretary meantime was to open agencies throughout the country for subscriptions to the loan, and the money so received was to be paid over to the banks, for whose account these sales were made. The banks were to have the option of taking on similar terms two subsequent issues of the treasury notes, each of $50,000,000. The amount of subscriptions on the first issue, bearing date August 19th, 1861, was $38,000,000, leaving but $12,000,000 on the hands of the banks when they had paid in full for the first issue. They then took the second $50,000,000, which bore date October 1st, 1861; but the circulation of demand notes, and the great number of State loans in the market, causing for the time a falling off in the subscriptions for investment, they declined taking the third issue, and took in preference the twenty-year six per cent. stock at 89.322, which was equivalent to a seven per cent. stock at par. The whole subscription outside of banks and moneyed institutions for the seven-thirty treasury notes up to January 1st, 1862, somewhat exceeded $50,000,000. About $24,000,000 of demand notes had been issued up to that time, and $50,000,000 of twenty-year stock, from which there was realized $45,795,478 48. There had also been issued two-year notes (six per cents.) to the amount of $14,019,034 66, and borrowed on sixty-day six per cent. notes $12,877,750, making an ag gregate of $197,242,588 14. Of the subsequent financial measures of

delivery, like a bank note. It has attached to it
small bonds, one for each six months' interest un-
til the maturity of the bond itself. The holder
cuts off the one due, and presents it for payment.
These are called " coupons," from the French
couper, to cut.

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the Government, the new loans, and the tax and tariff bills prescribed at the second (first regular) session of the thirty-seventh Congress, and the steady rise in the value of Government securities, notwithstanding the large amounts issued, we shall have more to say further on. The tax of $20,000,000 on real and personal estate was apportioned to the several States; that portion due from the seceded States was only collectable by means of a law subsequently passed, authoriz ing the seizure of real estate to liquidate those taxes. That due from loyal States was assumed by them, they accounting for it, less fifteen per cent. discount for cost of collection; and as nearly all of them had advanced sums for the equipment of their troops, which the Government had agreed to refund, the tax was generally set off against these sums, and thus, while the money did not come into the United States treasury, the Government debts were liquidated by it.

The energy, determination, and resources of the people of the North, which for a little time had seemed paralyzed at the idea of such a war, were now developed in all their grandeur, and showed that so soon as they realized the magnitude of the struggle they were ready for it. The shock of war had disturbed the usual flow of capital, and deprived the North of more than $200,000,000 due to it from the Southern merchants. Had this large sum been recovered, it would have been subscribed to the Federal loan; on the other hand, the Confederacy took prompt measures to turn it into its own coffers by the act of May 21st already alluded to, directing that money due Northern citizens be paid into the Confederate treasury, and bonds bearing eight per cent. interest be issued therefor. This, in point of fact, compelled Northern creditors to subscribe to the Southern loans.

The rebel States were now beginning to appreciate the financial difficulties and personal hardships which beset the path to independence. Stringent laws punished by banishment and confiscation of property all who did not give in their adhesion to the new government. Those who remained, as well as the Southern citizens, were not exempt from severe assessments in support of the armies in the field. The contributions levied were very onerous in most districts, and the mode of their assessment is indicated in the following notice of General Beauregard's course:

"All classes of citizens of Virginia are called upon to contribute their quota of forage for Beauregard's army, and with those who are forgetful of their obligations, the general says that constraint must be employed.'"

The ranks of the rebel army were filled by means quite as peremptory, as may be seen by the following official notice of the Mayor of Memphis:

"TO THE CITIZENS OF MEMPHIS:-Applications have repeatedly been made to me, as executive officer of the city, for protection against indiscreet parties, who are sent out to impress citizens into service against their will on steamboats. Many of these men have been dragged from their beds, wives, and children, but never has there been a man taken who had on a clean shirt. I hereby notify any citizen who may wish a pass within the city of Memphis to call on me, and I will furnish the same, and will see he will be protected. One poor man being shot yesterday by one of these outlaws, as they may be called, causes me to give the above notice. JOHN PARK, Mayor.

“August 16th."

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The following notice issued in Virginia, is also significant:

"All the militia belonging to the Eighty-ninth Regiment Volunteer Militia are ordered to meet at Oakland, on Monday next, as early as they can, in order to march to headquarters, Winchester, forthwith; and I would make a friendly request of those men that failed to go before, for them to turn out now, like true-hearted Virginians, and what they have done will be looked over, but if they do not regard this call, they will work their own ruin. They can never be citizens of Virginia, and their property will be confiscated. The General will send a troop of horse to Morgan as soon as we leave, and all those men that fail to do their duty will be hunted up, and what the consequence will be I am unable to say.

"SAMUEL JOHNSTON, Col. 89th Regiment, V. M.

"July 24th, 1861."

As an indication of the temper of the times, the following, from a
Southern paper, expresses a degree of ferocity somewhat startling:-

"We unhesitatingly say that the cause of justice, and the cause of humanity itself, demands that the black flag shall be unfurled on every field-that extermination and death shall be proclaimed against the hellish miscreants who persist in polluting our soil with their crimes. We will stop the effusion of blood, we will arrest the horrors of war, by terrific slaughter of the foe, by examples of overwhelming and unsparing vengeance. When Oliver Cromwell massacred the garrison of Drogheda, suffering not a man to escape, he justified it on the ground that his object was to bring the war to a close-to stop the effusion of biood-and that it was, therefore, a merciful act on his part. The South can afford no longer to trifle-she must strike the most fearful blows the war-cry of extermination must be raised."

That this was not mere idle newspaper bluster, numerous occurrences in different parts of the country fully demonstrate. An instance may suffice. The Nashville (Tenn.) Courier says:

"We learn that a squad of twelve men were sent to Franklin yesterday, to arrest some Lincolnites. They had collected to the number of twelve or fifteen at the house of one of their number, one Bell; and defying the party, fired at them, killing one man, said to be Lee, of Louisville, and wounding one or two more. Our men then charged the house, and set fire to it, burning it and all of the men in it, it is believed, but two, who escaped."

John Beman, a watchman employed on a Southern steamboat, who had a family in Boston, was arrested by a committee, for opinions expressed against the Confederacy. The committee proposed to forgive him if he would take an oath to support the Southern States. He indignantly repelled the proposition, and said he would die first, when they immediately hung him. Volumes would not suffice to relate the acts of cruelty perpetrated on unoffending men in what was claimed to be the interests of Southern independence.

Such proceedings, vigorously pressed, stifled all open expression of opinions opposed to the South, and, as a matter of course, no newspapers were tolerated that did not support the Confederate Government. Attempts were made to overawe or purchase the Louisville (Kentucky) Journal, but without success. The Knoxville (Tennessee) Whig was edited by W. G. Brownlow, who steadily advocated the Union cause. He was forced to suspend its publication, and, in his farewell address to his readers, said, that he would neither give a bond to keep the peace, nor take an oath to support the Jeff. Davis

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Confederacy. He was indicted by the grand jury for treason, because, as he said, he refused to publish garbled accounts of skirmishes in Kentucky, and other articles, the insertion of which in his sheet was insisted upon by the rebels. This gentleman, known as Parson Brownlow, after a long imprisonment, was allowed to visit the Northern States, where he addressed large audiences, giving an account of the cruelties inflicted on Union men, and published a narrative of his own sufferings.

Not only were Northern citizens deprived of their property and of all legal redress, but they were banished from the States, and forbidden to return even to look after their rights, under penalty of arrest. Measures were taken also to prevent any further immigration hereafter from the North, in order to prevent the growth of anti-secession sentiments; and not only was no diversity of opinion tolerated among the Southern people, but their personal liberty and property were all at the disposal of the Government to carry on the war for disunion.

The advent of civil war, under the extraordinary circumstances that marked the accession of Mr. Lincoln to power, involved the Federal Executive in proceedings which called up lively discussions in relation to his power, under the Constitution. No Government ever before occupied so singular and trying a position as was forced upon that which came into power March 4th, 1861. The process of breaking up the Union had been going on for many years, and had culminated under the Administration of Mr. Buchanan, whose cabinet contained at least three members who were only waiting the signal to leave the Government of the Union and join the ranks of the Southern Confederacy. Mr. Thompson, Secretary of the Interior, was known to have acted as a secession envoy to North Carolina, even while he held a seat as a member of the Federal Cabinet. Mr. Cobb, Secretary of the Treasury, resigned to assume his seat as a member of the Southern Convention; and Mr. Floyd, Secretary of War, followed in the same direction, after having plundered the Northern armies and arsenals to furnish arms to the South for the anticipated strife. Under the gradual development of the plan of secession, the whole Federal patronage had been designedly so bestowed as to fill the important subordinate offices with men who favored the Southern movement, and who had nothing to expect from the incoming Administration. A large number of the officers of the army and navy were waiting to resign at the signal of secession, and range themselves in opposition to the Government. The patronage of the Government under such an Administration, it was evident, had been used in furthering the views of the leading and active members. The diplomatic corps abroad and the incumbents of office at the North were most of them inclined to thwart the action of the new Administration, and in their train was a large number of active men on whom the Government could not depend, if it had no open opposition to encounter. The new Administration found itself thus comp'etely in the power of the secession party, and all its secrets, from the Cabinet debates to the details of orders, were known to the South. The bureaus of the departments, the judiciary, the army and navy, and the public offices

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