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lated to draw attention from his own part of the transaction, Mr. Benjamin proposed, as a retaliation upon the perfidy of the North, to discharge our own citizens who were subject to parole; but happily a counsel, which proposed to redress a wrong by an act disreputable to ourselves and in violation of what were the obligations of our own honor in the sight of the civilized world, was rejected alike by the government and the country, who were content to commit the dishonor of their enemy, without attempting to copy it under pleas of retaliation, to the justice of history and the future judgments of the world.


Organization of the permanent Government of the South.-The Policy of England -Declaration of Earl Russell.-Onset of the Northern Forces.-President Davis's Message to Congress.-The Addition of New States and Territories to the Southern Confederacy.-Our Indian Allies.-The Financial Condition, North and South.-Deceitful Prospects of Peace.-Effect of the Disasters to the South.-Action of Congress. -The Conscript Bill.-Provisions vs. Cotton.-Barbarous Warfare of the North.-The Anti-slavery Sentiment.-How it was unmasked in the War.-Emancipation Measures in the Federal Congress.-Spirit of the Southern People.--The Administration of Jefferson Davis.-His Cabinet.-The Defensive Policy.-The NAVAL ENGAGEMENT IN HAMPTON ROADS.-Iron-clad Vessels.-What the Southern Government might have done. The Narrative of General Price's Campaign resumed.-His Retreat into Arkansas.-The BATTLE OF ELK HORN.-Criticism of the Result.-Death of General McCulloch.-The BATTLE OF VALVERDE.-The Foothold of the Confederates in New Mexico.-Change of the Plan of Campaign in Virginia. - Abandonment of the Potomac Line by the Confederates.-The BATTLE OF KERNSTOWN.-Colonel Turner Ashby.→ Appearance of McClellan's Army on the Peninsula.- Firmness of General Magruder. -The New Situation of the War in Virginia.-Recurrence of Disasters to the South on the Water.-The Capture of Newbern.-Fall of Fort Pulaski and Fort Macon.→→ Common Sense vs. "West Point."

THE permanent government of the Confederate States was organized on the 22d day of February, in a season of reverses to our arms and at a dark hour in our national fortunes.

All hopes of foreign interference were positively at an end. On the meeting of the British Parliament in the early part of February, Earl Russell had declared that the blockade of the American ports had been effective from the 15th of August, in the face of the facts that the dispatches of Mr. Bunch, the English consul at Charleston, said that it was not so; and that authentic accounts and letters of merchants showed that any ships, leaving for the South, could be insured by a premium of seven and a-half to fifteen per cent. England had accepted the Treaty of Paris, and yet did not hesitate to violate the principles that had been definitely consecrated by article four of that treaty, by declaring the Federal blockade effective, for no other reason than that "considerable prudence was neces sary in the American question." In the House of Commons, Mr. Gregory asserted that the non-observation of the Treaty of

Paris was a deception for the Confederate States, and an am buscade for the interests of commerce throughout the world.

The Northern army had remained quiet on the Potomac, amusing the Southern people with its ostentatious parades and gala-day sham fights, while the government at Washington was preparing an onset all along our lines from Ilatteras to Kansas. Burnside had captured Roanoke Island in the east, while Fort Henry on the Tennessce and Fort Donelson on the Cumberland had sent the echo back to Albemarle. Buffeting sleet and storm, and by forced marches, the enemy had seized Bowling Green, while Sigel fell suddenly upon Springfield; the enemy's gunboats threatened Savannah, and Gen. Butler hurried off his regiments and transports to the Gulf, for an at tack via Ship Island upon New Orleans.

In his message to Congress, President Davis declared that the magnified proportions of the war had occasioned serious disasters, and that the effort was impossible to protect by our arms the whole of the territory of the Confederate States, seaboard and inland. To the popular complaint of inefficiency in the departments of the government, he declared that they had done all which human power and foresight enabled them to accomplish.

The increase of our territory since the opening of the war was scarcely a cause for boast. The addition of new States and Territories had greatly extended our lines of defence. Missouri had been unable to wrest from the enemy his occupancy of her soil. Kentucky had been admitted into the Confederacy only to becorie the theatre of active hostilities, and, at last, to be abandoned to the enemy. The Indian treaties effected by the Provisional Congress, through the mediation of Gen. Albert Pike, had secured us a rich domain, but a troublesome and worthless ally.* It was possible, however, that

*In December last, Col. James McIntosh was sent from Arkansas into the Cherokee Nation to chastise the rebellious Creek chief Opoth-lay-oho-la, which he did with good effect. The results of the incursion were thus enumerated by Col. McIntosh: "We captured one hundred and sixty women and children, twenty negroes, thirty wagons, seventy yoke of oxen, about five hundred Indian horses, several hundred head of cattle, one hundred sheep, and a great quantity of property of much value to the enemy. The stronghold of Opoth lay-ohio-la was completely broken up and his force scattered in every direction destitute of the simplest elements of subsistence."

ir this domain there might be secured a rich inheritance for posterity. It comprised an area of more than eighty thousand square miles, diversified by mountains filled with iron, coal, and other mineral treasures, and broad-reaching plains, with the Red River running along its southern border, the Arkansas river almost through its centre, and their tributaries reticulat ing its entire surface.

At the time of the inauguration of our permanent government, there was, however, one aspect of our affairs of striking encouragement. It was the condition of the finances of the government. We had no floating debt. The credit of the government was unimpaired among its own people. The total expenditures for the year had been, in round numbers, $170,000,000; less than one-third of the sum expended by the enemy to conquer us, and less than the value of a single article of export-the cotton crop of the year.

In the Federal Congress it was estimated that, at the end of the fiscal year (June, 1862), the public debt of the Northern government would be about $750,000,000, and that the demands on the treasury, to be met by taxation, direct and indirect, would not be less than $165,000,000 per annum.

The problem of the Northern finances was formidable enough. It was calculated that the Federal tax would be from four to six times greater for each State than their usual assessments heretofore, and doubts were expressed, even by Northern jour

The Indian Territory (not including the Osage country-its extent being unknown-hor the $00,000 acres belonging to the Cherokees, which lie between Missouri and Kansas) embraces an area of 82,073 square miles-more than fifty-two millions of acres, to wit:

The land of the Cherokees, Osages, Quapaws, Senecas, and Senecas and Shawnees, 38,105 square miles, or 24,388,800 acres.

That of the Creeks and Seminoles, 20,531 square miles, or 13,140,000 acres. That of the Reserve Indians, and the Choctaws and Chickasaws, 23,437 square miles, or 15,000,000 acres.

Total 82,073 square miles, or 52,528,800 acres.

Its population consists of Cherokees, 23,000; Osages, 7,500; Quapaws, 320; Creeks, 13,500; Seminoles, 2,500; Reserve Indians, 2,000; Choctaws, 17,500; and Chickasaws, 4,700-making an aggregate of 71,520 souls.

This Indian country is, in many respects, really a magnificent one. It is one of the brightest and fairest parts of the great West, and only needs the development of its resources to become the equal of the most favored lands on this continent.

nals in the interest of the government, if it could be raised in any other way than by practical confiscation.

The South, however, had already lingered too long in the delusive promise of the termination of the war by the breaking down of the finances of the Northern government, and had entertained prospects of peace in the crude philosophy and calculations of the newspaper article, without looking to those great lessons of history which showed to what lengths a war might be carried despite the difficulties of finance, the confines of reason, and the restraints of prudence, when actuated by that venom and desperation which were shown alike by the people and government of the North. The very extent of the Northern expenditure should have been an occasion of alarm instead of self-complacency to the South; it showed the tremendous energy of the North and the overpowering measure of its preparation; it argued a most terrible degree of despera tion; and it indicated that the North had plunged so far into the war, that there was but little sane choice between striving to wade through it, and determining to turn back with certain and inevitable ruin in its face.

Fortunately, the lessons of its late disasters were not entirely lost upon the government of the Confederate States. They happily gave fresh impulses to the authorities, and were productive of at least some new and vigorous political measures. The most important of these was a conscript bill for increasing our forces in the field. The enlargement of the proportions of the war demanded such a measure; the conflict, in which we were now engaged, extended from the shores of the Chesapeake to the confines of Missouri and Arizona.

The measures and expressions of the government plainly intimated to the people, who had been so persistently incredu lous of a long war, that it had become probable that the war would be continued through a series of years, and that preparations for the ensuing campaigns should be commensurate with such a prospect. In Congress, resolutions were passed urging the planters to suspend the raising of cotton, and to plant provision crops, so as to provide for the support of the army This change in the direction of our industry, besides increasing the capacity of the South to sustain itself, aimed a blow at the well-known selfish calculations of England to repay herself for

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