THE

CONTINENTAL MONTHLY:

DEVOTED TO

LITERATURE AND NATIONAL POLICY.



VOL. III.—FEBRUARY, 1863.—No. II.



OUR NATIONAL FINANCES.

Our national finances are involved in extreme peril. Our public debt exceeds $720,000,000, and is estimated by the Secretary of the Treasury, on the 1st of July next, at $1,122,297,403, and on the 1st of July, 1864, at $1,744,685,586. When we reflect that this is nearly one half the debt of England, and bearing almost double the rate of interest, it is clear that we are approaching a fatal catastrophe. Nor is this the most alarming symptom. Gold now commands a premium of thirty-two per cent., as compared with legal tender treasury notes, and, with largely augmented issues, must rise much higher, with a correspondent increase of our debt and expenditures. Indeed, should the war continue, and there be no other alternative than additional treasury notes, they will, before the close of the next fiscal year, fail to command forty cents on the dollar in gold, and our debt exceed several billions of dollars. This would result from an immense redundancy and depreciation of currency, and from the alarm created here and in Europe, as to the maintenance of the Union, and the ultimate solvency of the Government. Indeed, our enemies, at home and abroad, the rebels, and their allies in the North and in Europe, already announce impending national bankruptcy and repudiation, and there are many devoted patriots who fear such a catastrophe.

That the danger is imminent, is a truth which must not be disguised. Here lies the great peril of the Government. It is not the rebel armies that can ever overthrow the Union. It is the alarming increase of the public debt and expenditures, and the still more appalling depreciation of the national currency, that most imperil the great Republic.

And is the Union indeed to fall? Are we to be divided into separate States or many confederacies, each warring against the other, the sport of foreign oligarchs, the scorn of humanity, the betrayers of the liberty of our country and of mankind? Can we yet save the Republic? This is a fearful and momentous question, but it must be answered, and answered NOW. Inaction is syncope. Delay is death. The life of the Republic is ebbing fast, and the approaching Ides of March may toll the funeral words, It is too late!

What then must be done to avert the dread catastrophe? Action, immediate and energetic action, in the field and in Congress. Winter is the best season for a campaign in the South. On—on—on with the banner of the Republic, by land and sea, and with all the reinforcements, from the Ohio and Potomac to the Gulf. On, also, with the necessary measures in Congress to save our finances from ruin, arrest the depreciation of our national currency, and restore the public credit. We are upon the verge of ruin. We are hanging over the gulf of an irredeemable paper system, and its spectral shade, repudiation, is seen dimly in the dark abyss. The present Congress may save us; but what of the next? Would they, if they could? Who can answer? Can they, if they would? No! no! It will then be too late. Never did any representative assembly encounter so fearful a responsibility as the present Congress. Each member must vote as if the fate of the Union and of humanity depended upon his action. He must rise above the passing clouds of passion and prejudice, of State, local, or selfish interests, into the serene and holy atmosphere, illumined by the light of truth, and warmed by the love of his country and of mankind. His only inquiry must be, What will save the nation? The allegiance to the Union is paramount, its maintenance 'the supreme law,' the lex legum, of highest obligation, and he who, abandoning this principle, follows in preference any real or supposed State policy, is a secessionist in action, and a traitor to his country and mankind. Should the catastrophe happen, no such paltry motives will save him from disgrace and infamy; and, if he be snatched from oblivion, his only epitaph will be: Here lies a destroyer of the American Union. He did not destroy it by bullets, but by votes. He did not march against it with armed battalions; but, a sentinel, he slept on the post of duty, and—his country fell.

What, then, can Congress do? They can consider at once this great financial question, uninterrupted by any other measure, until there shall have been action complete and decisive. But two months more remain of the session. Not another day nor hour must be lost. All admit that something must be done, and done quickly.

What then is the remedy for our depreciated and depreciating national currency? The Secretary of the Treasury anticipated the disaster, and proposed a remedy in 1861. I gave his bank plan then my earnest and immediate support. Well would it have been for our country if it had then been adopted, and gold would not now command a premium of thirty-two per cent. After a year's experience and deliberation, the Secretary reiterates his former recommendation, with words of solemn import, and arguments of great force. His is the chief responsibility. To him is mainly intrusted the custody of the public credit. His is now the duty of saving us from national bankruptcy. At such a time, I would differ from him on such a question, only on the clearest convictions, and then only upon the condition that I had a better plan as a substitute, and that mine could become a law now, and be carried now into practical execution. If all this could not be done, I would support the plan of the Secretary, as all admit that delay or inaction is death. If my words be too bold or earnest, let them be attributed to my profound conviction that the American Union is in extreme peril, and that its downfall involves the final catastrophe of our country and of our race. Let no man talk of a separation of the Union in any contingency. Let none speak now of peace or compromise with armed treason. Let none think of constructing separate nationalities out of the broken and bleeding fragments of a dismembered Union. No; far better that our wrecked and blasted earth should swing from its orbit, disintegrate into its original atoms, and its place remain forever vacant in the universe, than that we should survive, with such memories of departed glory, and such a burning sense of unutterable infamy and degradation. Fallen—fallen—fallen! from the highest pinnacle to the lowest depth, to rise no more forever! What American would wish to live, and encounter such a destiny? And why fallen? From a cause more damning than our fate. Fallen, let the truth be told, as history would record, because faction was stronger than patriotism, and the degenerate sons of noble sires extinguished the world's last hope, by basely surrendering the American Union to the foul coalition of slavery and treason. This rebellion is the most stupendous crime in the annals of our race, and its projectors and coadjutors, at home or abroad, individual or dynastic, are doomed to immortal infamy. With its demoniac passions, its satanic ambition, desecrating the remains of the slain, making goblets of their skulls, and trinkets of their bones, this revolt is a heliograph of Dahomey, and Devildom daguerreotyped more vividly than by Dante or Milton.

The plan of the Secretary is clear, simple, comprehensive, practical, and effective. It is the plan of an uniform circulation, furnished by the Federal Government to banking associations organized by Congress, securing prompt redemption by the deposit of the same amount of U.S. six per cent stock in the Federal custody, the principal and interest of this stock being payable in gold. This plan, with me, is a necessity, and not a choice. It is the plan of the Secretary, and not mine, and is therefore supported by me from no vanity of authorship. Nay, more, it required me to overcome strong prejudices against any bank circulation, and especially any connected in any way with the Government. It is, however, a strong recommendation of the plan of the Secretary, that the proposed connection of the banks with the Government is not political, and attended with none of the formidable objections to the late Bank of the United States. Ever since the bank suspension of 1837, I have been a bullionist, and sustained that doctrine in the Senate of the United States, and as Secretary of the Treasury. The act establishing the independent treasury in 1846, was drawn by me, avowedly as a 'specie receiving and specie circulating' institution, and to restrain excessive issues by the banks; but it is impossible now to carry that system into practical execution. The suspension of specie payment by the banks and the Government, has been forced by the enormous expenditures of the war, and the sub-treasury, which never was designed for the custody or disbursement of paper, has been so far virtually superseded. In acceding now, as in December, 1861, to the Secretary's plan of a bank circulation, I must be understood as having changed my views in no respect as to banks, but that I yield to the great emergency, which renders the support of the war and of the Union paramount to any question of coin or currency.

The national disbursements for the present and succeeding fiscal year, as stated by the Secretary, together with his remarks on that subject, supersede the necessity of any further argument in proof of the absolute impossibility of specie payments now by the Government. We are compelled to resort to paper, and the only question is as to the character and extent of the issue. It is my opinion that we should limit this paper currency, as far as practicable, that it may be as little depreciated now as possible; so that when the rebellion is crushed, the banks and the Government may resume specie payments at the earliest moment. I favor the plan of the Secretary mainly because, by arresting depreciation, it would furnish a currency approaching specie now more nearly than can be accomplished in any other way, and because, when the war is over, it provides the best means for a return, in the shortest possible period, to specie payments. An irredeemable paper currency dissolves contracts, violates good faith, and its history here and in Europe is a record of financial ruin, bankruptcy, and repudiation, of frauds, crimes, and demoralization, which no friend of his country or race can desire to witness. The issue of treasury notes as a legal tender was favored by me as a necessity super-induced by the rebellion, and as a substitute for the present bank issues. Such notes would be depreciated much less when made a legal tender, and, to that extent, our expenditures would be diminished, and specie payments could, therefore, be resumed eventually at a much earlier period. Why, then, it is asked, not continue and extend that system, rather than adopt the plan recommended by the Secretary? Because, Congress refusing to prohibit a bank circulation, such increased issues of treasury notes would cause a further great depreciation of such notes, to that extent augment our expenditures, and postpone, perhaps indefinitely, the resumption of specie payments. Gold now commands a premium of thirty-two per cent., payable in treasury notes; but, if such issues be increased one half, they would fall to fifty per cent., and, if doubled, to at least sixty per cent. below specie. At the last rate, if our yearly expenditures, paid in paper, reached $700,000,000, this would command but $280,000,000 in gold, thus subjecting the Government to a loss of $420,000,000 per annum, and at thirty-two per cent. discount, $224,000,000 per annum. These notes, it is true, bear no interest, which at six per cent. on $280,000,000, would save $16,800,000 a year. But as under the Secretary's plan (hereafter developed) the Government would only pay an annual interest of four per cent. on this loan, the saving would only be $11,200,000. Deduct this interest thus saved from the $420,000,000 of increased annual expenditures, arising from such depreciation of treasury notes, and the result is a net loss of $408,800,000 per annum to the Government, from the use of such redundant and depreciated currency. Surely, such a system would soon terminate in bankruptcy and repudiation, repeating the history of French assignats and Continental money.

Nor is it the Government only that suffers from such a disaster, but the ruin extends to the people. There is no law more clearly established than this: that the currency of a country bears a certain fixed proportion to its wealth and business. If we expand the currency beyond this proportion, we violate this law, and will surely suffer the terrible penalties of this disobedience. This law is so certain and invariable, that, if the expansion beyond this proportion should be even in specie, the result would still be disastrous.

This was illustrated during the reign of Ferdinand and Isabella, when Spain, having opened the virgin mines of America, brought the precious metals in countless millions within her limits, and restricted their exportation by the most stringent penalties. And what was the consequence? Mr. Prescott, of Boston, tells us in his great history, that 'the streams of wealth, which flowed in from the silver quarries of Zacatecas and Potosi were jealously locked up within the limits of the Peninsula.' 'The golden tide, which, permitted a free vent, would have fertilized the region through which it poured, now buried the land under a deluge, which blighted every green and living thing. Agriculture, commerce, MANUFACTURES, every branch of national industry and improvement, languished and fell to decay; and the nation, like the Phrygian monarch who turned all that he touched into gold, cursed by the very consummation of its wishes, was poor in the midst of its treasures.' Such was the effect of violating the law which regulates the ratio of money to wealth; such the consequence of a superabundant currency, even in specie. The result was that Spain, which had been the most prosperous nation of Europe, and whose products and manufactures had supplied the markets of the world, lost nearly all her exports, and was forced to resort to the prohibitory system. The cost of living, of working farms, of manufacturing goods, of making and sailing ships, became so high in Spain, from her superabundant currency, that she was unable to compete with any other nation, was reduced to poverty, and never began to recover until 'Spain changed her system, encouraged the exportation of the precious metals, and thus brought down her superabundant currency and inflated prices, and thus enabled Spanish industry to supply the markets of the Peninsula and of the world.' Then, the distinguished historian tells us, 'the precious metals, instead of flowing in so abundantly as to palsy the arm of industry, only served to stimulate it, the foreign intercourse of the country was every day more widely extended;' 'the flourishing condition of the nation was seen in the wealth and population of its cities,' etc. It is a redundant currency, even if gold or convertible into gold, that produces these evils, although depreciation adds to the disaster.

What is the effect here of a redundant currency, is ascertained by reference to our exports. By Treasury Tables 20 and 21, our foreign imports consumed here in 1836-'7 rose to $168,233,675, being largely more than double what they were in 1832 ($76,989,793), and nearly double the consumption, per capita, which was $5.61 in 1832, and $10.93 in 1836. This was our great year of a redundant, although still a convertible currency, when our imports consumed exceeded our exports of domestic produce, $61,662,733; and so enhanced was the cost of living and production here, that we actually imported breadstuffs that year of the value of $5,271,576. (Table 1, Com. and Nav.) Our bank currency that year was as follows: Circulation, $149,185,890; deposits, $127,397,185; circulation and deposits, $276,583,075; loans, $525,115,702. (Treasury Report, 1838, Doc. 79, tables K. K.) The legitimate result of this expansion of loans and currency was the great bank suspension of May, 1837, and general bankruptcy throughout the country.

Now our bank circulation in 1860 was $207,102,477; deposits, $253,802,129; circulation and deposits, $460,904,606; loans, $691,495,580. (Table 34, Census of 1860.) Yet our population in 1860 was more than double that of 1837, and our wealth (the true barometer, marking the proper rise and fall of our currency) had much more than quadrupled. (Census Table 35.) The proportion of the currency to wealth in 1837 was more than double the ratio of 1860. It was not the tariff that produced the suspension of 1837, for it was much lower in 1860, than at the date of the bank suspension of 1837.

By Treasury Table 24, our total exports abroad of domestic produce, exclusive of specie, from the 30th of September, 1821, to 30th June, 1861, were $5,060,929,667; and, in the year ending the 30th June, 1860, were $316,242,423. At the same rate of increase from 1860 to 1870, as from 1850 to 1860, our domestic exports exclusive of specie in the decade ending the 30th June, 1870, would have exceeded five billions of dollars, had peace continued and the currency been no more redundant in proportion to our wealth than in 1860. But with a redundant and depreciated currency our exports must have been reduced at least one fourth. What would be the effect on every branch of our industry, may be learned by looking at Treasury Table 40, showing our domestic exports for the year ending 30th June, 1861. These exports were, of the products of our fisheries, $4,451,515; of the forest, $10,260,809; of agriculture, exclusive of cotton, rice, and tobacco, $100,273,655, and of our manufactures, $35,786,804. This was mainly from the loyal States. Now if the foreign markets for our products are reduced only one fourth by the effect of a redundant currency, inflating here the cost of production and of living, the result would be most disastrous to our industry. The reduction would be equal, as we have seen, to $125,000,000 per annum, and $1,250,000,000 in the decade. Our imports would be reduced in the same proportion, and our revenue from customs in a corresponding ratio. Supposing the average rate of duties of the present tariff to be equal to 40 per cent. ad valorem, this would make a difference in our revenue from customs of $500,000,000 in the decade, and, including interest not compounded, $635,000,000. And here I deem it a duty to say to the financial portion of our peace party, especially in New York, that our redundant and depreciated currency, with our failure to crush the rebellion, and a consequent dissolution of the Union, would make repudiation inevitable. We are forced, then, by a due regard to our material interests, as well as by the higher obligations of honor and duty, to subdue the revolt and restore the supremacy of the Government in every State. This we can and must do. It is due to our country and to the world. It is due to the wounded and mutilated survivors of the bloody conflict, and to our martyred dead, murdered by the foulest treason, and in the accursed cause of slavery. No! all this blood and treasure must not have been poured out in vain. It is a question mainly of money and persistence. Our armies can and will conquer the rebellion, if we can and will supply the sinews of war. Our success is much more a financial than a military question. As regards the result, the Secretary of the Treasury holds now the most important post in this contest: he is the generalissimo; and as he is right on this question, and the fate of the Union is involved, I deem it my duty to give him my earnest and zealous support.

Ruinous as must be the effect of a redundant and depreciated currency upon all industrial pursuits, the injustice to our gallant army and navy, regulars and volunteers, would be attended with extreme peril. Upon their courage and endurance we must rely for success. We have pledged to our brave troops, who are wounded or dying by thousands that the Union may live, such pay as to enable them while fighting our battles to make allotments of portions of their money for the support of their families during their absence. We have promised pensions also. These are all solemn pledges on the part of our Government, and our faith is violated if this pay or these pensions are reduced. But there is no difference between a law directly reducing this pay and these pensions, and the adoption by Congress of the policy of a redundant and depreciated currency which will produce the same result. Every vote then in Congress for such a policy, is a vote to reduce the pay and pensions for our troops, and to annihilate the allotments made by them for the support of their families. What effect such a policy must have on our troops and the maintenance of the Union is but too palpable. It is disbandment and dissolution. Every such vote is given also to reduce the value of the wages of labor, and for increased taxation, to the extent, as we have seen, of $408,800,000 per annum. It is a vote also to reduce our exports and revenue from customs, to paralyze our industry; and finally, in its ultimate results, it is a vote against the war, for repudiation and disunion, and hence every disunionist will oppose the plan of the Secretary.

To what extent this redundancy and depreciation will go, by enlarged issues of legal tender treasury notes, we may learn from the fact that the banks substitute them for coin for the redemption of their paper. Now, just in proportion as the issue of treasury notes becomes redundant and depreciated, will the bank circulation, redeemable in such notes, augment and depreciate also. This is the law of bank circulation as now forced upon us by Congress. It is the law of redundancy and depreciation. If this policy is adopted by Congress, an enlarged issue made of treasury notes, and the plan of the Secretary discarded, our bank and treasury note circulation, with the war continued, will very largely exceed one billion of dollars before the close of the next fiscal year, and both will be depreciated much more than sixty per cent. Thus, if we should enlarge our issues of legal demand treasury notes to $500,000,000, and these be made the basis of bank issues, in the ratio of three to one, our total paper circulation would be $2,000,000,000, such treasury notes inflating the bank issues, and both depreciating together. And yet this is the currency in which it is proposed to conduct the war and the business of the country. The banks alone, by excessive loans and issues, would grow rich apparently, on the ruin of their country. But there would be a terrible retribution. The result would be general insolvency and repudiation, the debts due the banks would become worthless, and they be involved in the general ruin. It is then the interest of the banks to sustain the Government and the Secretary, and to transfer their capital to the new associations. This is especially the case with the New York banks, which, under a provision of their State constitution, HAVE NO LEGAL EXISTENCE. When repudiation and bankruptcy become general, the cry, like that of a routed army in a panic flight, would be raised, Sauve qui peut; we may have again an old and a new court party, especially under our miserable system of an elective judiciary; and the banks be crushed by wicked legal devices, as they were in the West and Southwest in 1824 and 1838.

Referring to bank issues, the Secretary says, in his last report: 'It was only when the United States notes, having been made a legal tender, were diverted from their legitimate use as a currency, and made the basis of bank circulation, that the great increase of the latter began.' At the present depreciation of these treasury notes, it is better for the banks, by one third, to redeem their circulation in these notes, rather than in specie; and they need keep only one dollar of treasury notes for three of bank circulation. This is the policy forced upon the banks by Congress. But the more redundant and depreciated this currency becomes, the easier will it be for the banks to provide the basis of redemption, and expand their circulation in the ratio, like that of specie, of three dollars of bank currency for each dollar of treasury notes held by them. Thus it is that the enlarged issue of treasury notes necessarily increases the bank circulation, in the ratio of three to one, and thus also, that the circulation of bank and treasury notes becomes redundant and depreciated. Under such a policy, every bank then, however loyal its stockholders or officers, becomes a citadel, whose artillery bears with more fearful effect upon the Government than all the armies of the rebellion. This will soon become obvious, and the odium will rest upon the banks, their officers and stockholders. But the real responsibility will be with Congress, who, by such a system will have arrayed the banks in necessary and inevitable hostility to the Government. Such, we all know, is not the intention of Congress; but as this result will necessarily flow from their measures, upon them, in the end, will fall the terrible responsibility of the disaster. It is this appalling condition of our finances that gives the rebellion its only hope of success, and invites foreign intervention. But if Congress will adopt the policy of the Secretary, they will render certain the triumph of the Union, and the rebels, from despair and exhaustion, must soon abandon the contest.

We have seen how dreadful is the disaster which the banks would bring on the country by pursuing the present system, and how terrible the odium to which they would be subjected. But now let us look at the result, if the plan of the Secretary is adopted. The new banks would become fiscal agents of the Government. Their circulation would be uniform, furnished by the Government, and based on U. S. stocks, the principal and interest of which would be payable in gold. The interest of labor and capital, of the banks, the Government, and the people, would for the first time become inseparably united and consolidated. This is a grand result, and fraught with momentous consequences to the country. Every citizen, whether a stockholder of the banks or not, would have a direct and incalculable interest in their success and prosperity. They, the people, would have this interest, not merely as holding the notes of the banks, which would become our currency, but because the banks would hold the stock of the Government, would have loaned it in this way the money to suppress the rebellion, and thus have saved us from a redundant and depreciated currency, from inevitable bankruptcy and repudiation, and have prevented the overthrow of the Union. Each bank would then become a citadel over which should float the flag of the Union, for each bank would then become a powerful auxiliary for the support of the Government and the overthrow of the rebellion.

The bill divorcing the banks and the Government was drawn by me, as Secretary of the Treasury, in 1846, to enlarge the circulation of specie, and restrain excessive issues of bank paper. I go for the reunion now, as proposed by the Secretary, to enable the Government to effect loans upon their stock, to prevent a redundant and depreciated paper currency, with a correspondent increase of expenditures, and to provide the means, when the war is over, to resume specie payment at the earliest practicable period. I was for restraining excessive paper issues then, and so am I now, as far as possible. I carried into full effect then the divorce of the Government and the banks, against a terrible opposition from them and the great Whig party. I made the divorce complete, a vinculo matrimonii: so now I would make the union complete, so far as proposed by the Secretary, for the interest of the banks and the Government would be united, and just as you strengthened the banks and increased their capital and profits, would you fund more and more treasury notes, and save us from the ruin of a redundant and depreciated currency.

The Secretary proposes to make these banks depositories of treasury notes, received by the Government for all dues except customs. This is well; for to use the sub-treasury to receive and circulate treasury notes, is against the object for which it was created. Such deposits should be secured by U. S. stocks with the Government, and thus largely increase the demand for this stock. During nearly my first two years as Secretary of the Treasury, the public moneys were deposited by me in the State banks, secured by United States and State stocks, and there was no loss. Nor, indeed, was there any loss or default by any officer, agent, or employe of the Treasury Department during my entire term of four years, notwithstanding the large loans and war expenditures.

Disbursing officers should also deposit with the banks, and pay as formerly by checks on them, with the same guarantee by them of U. S. stocks. How far, and to what extent, and under what special provisions the gold received for customs might be deposited with these banks, may be the subject of discussion hereafter.

If this system were adopted in its entirety, the process of absorbing treasury notes would commence at once, and also a correspondent rise in their market value. The system of loans and funding saved England from bankruptcy during her long wars with France, and we must resort to similar expedients. But as loans, in the usual way, except at ruinous discounts, for any large amounts, are impracticable, we are left to the alternative of the Secretary's system, or bankruptcy, repudiation, and disunion.

I have another suggestion to make as regards these notes furnished by the Government to the banks, secured by U. S. stocks. These notes are guaranteed not only by the stock of the Government, but, in addition, by the whole capital and property, real and personal, of the banks, and a prior lien on the whole to the Government, to secure the payment of these notes. These notes are receivable by the Government for all dues except customs. These notes are a national currency, furnished by the nation and secured by its stock.

These notes then, as in England, should be a legal tender in payment of all debts, except by the banks. As the banks can redeem these issues in legal tender treasury notes, these issues of the new banks ought to be a legal tender also, except by the banks.

There is another reason why this currency should be made a legal tender. Our two last suspensions of specie payments by the banks, viz., in 1857 and in 1860, were based upon panics, yet they had the same disastrous effect, for the time, as if arising from short crops, overtrading, or a currency greatly redundant. Such panic convulsions are caused mainly by the call for the redemption of bank notes in specie, based on the fear of suspension and depreciation. But if such notes, as in European government banks, were a legal tender, except by the banks, such panics would be far less frequent here, and less injurious. The present system, as compared with that of Europe, discriminates most unjustly against our country. As a general rule, the American creditor cannot demand gold from the foreign debtor, but such foreign or domestic creditor could always demand gold from the American debtor. This discrimination has produced here the most disastrous consequences, and, independent of the present condition of the country, our whole banking system requires radical reform. We have had eight general bank suspensions under our present bank system, many of them continuing for years, and producing ruin and desolation. Under our present system, to talk, as a general rule, of well-regulated banks, is to talk of a well-regulated famine or pestilence, or of a well-regulated earthquake or tornado. And even the few banks that are claimed to be well managed, have no appreciable effect on the system. It is the system that knows no uniformity or security, and never can have, as now organized. That a system so perilous and explosive, should have even partially succeeded is proof only of the intelligence and integrity, generally, of the bank officers and directors, but no recommendation of the system itself.

The want of uniformity as to commercial regulations, led to the adoption of our Federal Constitution; and yet we have no uniformity as to money, which represents commerce and effects its interchanges. In this respect, we are still suffering all the evils of the old confederacy, and have thereby so weakened the Government as to have invited this rebellion. Indeed, the State banks in the revolted States were the main auxiliaries of treason and secession, and supplied, to a vast extent, the sinews of war. By Census Table 34, there were in 1860, 1,642 banks, incorporated by thirty-four States, with no uniformity of organization, issues, or security. Thus is it that the States have usurped the power to regulate commerce and currency, and to emit bills of credit, in defiance of the prohibition of the Federal Constitution. The Egyptians abandoned their folly after seven plagues; but we have had eight bank convulsions, and yet we adhere to the wretched system.

I believe it was slavery caused the rebellion, but, in the absence of powerful aid from the Southern banks, the revolted States could never have maintained so prolonged a contest. Organized as now proposed, these new banks, and all who held their notes, must have sustained the Government. Nations expend millions yearly in erecting forts and maintaining, even in peace, large armies and navies to preserve the Government. But necessary as these may be, they would not be more important than the system now proposed as a security for the preservation of the Government.

My last suggestion is, that as regards all such United States loans, as during the war shall become the basis of this system, the time of payment shall be made twenty years instead of five, so as, with the modifications above proposed, to insure the cooperation of the banks, and the success of the system. As this plan is deemed essential to save our finances, to suppress the rebellion, and maintain the Union, why incur any hazard on such a question as this? In all our wars, including the present, we have issued bonds running twenty years to maturity, and the bonds, redeemable in 1881, are scarcely at par. Why, then, issue a stock of less value, which may fail to accomplish the great object, when a better security would certainly succeed? I fully agree in the opinion expressed by the Secretary, against 'a fixed interest of six per cent. on a great debt, for twenty years,' if it can be avoided; but I also concur in that portion of his report in which he says: 'No very early day will probably witness the reduction of the public debt to the amount required as a basis for secured circulation.' To that extent, then, would I enlarge the time for the maturity of the bonds. Surely, if this be necessary to secure the cooperation of the banks, and the capital of the country, there should be no hesitation. Even if the system, based only on the bonds of short date, should ultimately succeed, the loss, in the interim, from a redundant and depreciated currency, would far exceed any benefit derived from the substitution of five-twenties for twenty year bonds. By Census Table 35, our wealth in 1850, was $7,135,780,228, and in 1860, $16,159,616,068, the ratio of increase during the decade being 126.45 per cent.; at which rate, our wealth in 1870 would be $36,583,450,585, and in 1880, $82,843,222,849. Surely, then, at these periods, it would be much easier to liquidate this debt than in 1867. But, were it otherwise, the immediate gain from decreased expenditures, arising from funding more rapidly our treasury notes, thus rendering our currency less redundant and depreciated, with the revival of the public credit, and its immediate happy influence, North and South, here and in Europe, would far more than compensate for any contingent advantage arising from short loans. Our twenty years' loan is now barely at par, and the five-twenties below par. The difficulty of inducing bank and other capital to invest hundreds of millions of dollars under the new system is very great. Is it wise to commence the effort, confined to our weakest securities, now below par? Besides, considering the old and new debts, and constantly increasing responsibilities, is there any prospect that we will have liquidated all these before the end of five years, and the five-twenty loan also? Surely, upon a benefit so doubtful, and a contingency so improbable, we ought not to risk the fate of a measure on which depends the safety of the Union. But if we could pay off the five-twenty loan held by the new banks, is it prudent to assume that so many hundred millions of capital will be withdrawn from the present banks and other business for investment in the new banks, which may cease at the end of five years by payment of the bonds? The change from the old to the new banks may involve some loss at first, but, if the system may be arrested at the end of five years, just when profits might be realizing, the plan could scarcely succeed. When the Secretary first proposed this system in December, 1861, he probably would have succeeded with the five-twenties, in the condition at that date of the public credit. But the disastrous fall of our securities since that date, seems now to require bonds of a higher value.

I would then provide a twenty years loan, for all that may be made the basis of the new bank circulation. But it is not a six, but only a four per cent. twenty years' loan that is proposed, by deducting one per cent. semi-annually from the interest of the bonds made the basis of this bank circulation. This deduction would only be a fair equivalent for the expenses incurred by the Government in furnishing the circulation, for the release of taxes, for the deposit of public moneys with these banks, for making their notes a legal tender, and receiving them for all dues except customs. The tax on all other bank circulation should be one and a half per cent. semi-annually, secured by adequate penalties.

If, under this system, during this stupendous rebellion, involving the existence of the Government, with armies and expenditures unexampled in history, the Secretary (as, with the aid of Congress and the banks, I believe he can) should secure us a sound and uniform currency, and negotiate vast loans, running twenty years, at par, the Government paying only four per cent. interest per annum, he will have accomplished a financial miracle, and deserved a fame nearest to that of the first and greatest of his predecessors, the peerless Hamilton.

The bill organizing the new system, presented in Congress by Mr. Hooper last summer, is drawn with great ability, and it is much to be deplored, that (with some amendments) it had not then become a law, when it could have been much more easily put in operation, and would have saved hundreds of millions of dollars to the Government.

But the fifty-fifth section of that bill provides that all the banks organized under it are to become 'depositaries of the public moneys,' excepting those in 'the city of Washington.' Why this discrimination? If there be any place where banks, organized under a national charter, issuing a national currency, and receiving national deposits, should be encouraged, it is here. With no discrimination against them, such banks would be established here with considerable capital. And why not? It cannot be intended to discourage the establishment of such banks here, and thus defeat, to that extent, the success of the system. It is here, if anywhere, that such banks should receive the public deposits, where they could be constantly secured from day to day under the immediate supervision of the Government. Besides, the only effect of such a discrimination would be to drive such banks to Georgetown, Alexandria, or some other speculative site outside the city or District. This city has just been consecrated to freedom by Congress, and it is hoped that, in commencing its new career, no discrimination will be made against it. Indeed, I think it would be wise, in order to insure the success here of the new system, to allow the district banks organized under this law to receive the same rate of interest as is permitted in New York.

I have contended, during the last fourth of a century, that all State bank currency is unconstitutional. This rebellion will demonstrate the truth of that proposition, and the question ultimately be so decided by the Supreme Court of the United States. This, it is true, might require some of those Judges, if then living, to change their opinion on some points; but this has been done before, and even on constitutional questions; and State banks will fall before judicial action, as well as nullification, State allegiance, secession, and the whole brood of kindred heresies.

A republic which cannot regulate its currency, or which leaves that power with thirty-four separate States, each legislating at its pleasure and without uniformity, abandons an essential national authority, and this abdication has furnished one of the main supports of the rebellion. With nothing but a national currency, the revolted States never could have successfully inaugurated this war, and we must deprive them in all time to come of this terrible ally of treason. To permit the States to provide the circulating medium, the money of the country, is to enable them to furnish the sinews of war, and clothe them with a power to overthrow the Government.

With only such a national currency as is now proposed, issued by the Government to these banks, organized by Congress, and based on the deposit in the Federal treasury of United States stock, the rebellion would have been impossible. Our Government was so mild and benignant, that we deemed it exempt from the assault of traitors; but this revolt has dissipated this delusion, and warned us to provide all the safeguards indicated by experience as necessary to maintain the Union. Among the most important is the resumption by the Government of the great sovereign function of regulating the currency and giving to it uniformity and nationality. Such was clearly the intention of the Constitution. The Government has, by the Constitution, the exclusive power 'to regulate commerce with foreign nations, and among the several States.' But commerce is regulated mainly by money, and by it all interstate and international exchanges of products are made. If the currency is redundant, prices rise, exports are diminished; and the reverse follows with a contracted circulation. But banks inflate or restrict the currency at their pleasure, and thus control prices, commerce, exports, imports, and revenue. But they also destroy or depreciate the money of the Government, and deprive it of a vital power. Thus, the nation issues treasury notes, and makes them a legal tender: the banks immediately make such notes the basis of bank issues, in the ratio of three to one, and the whole currency necessarily becomes redundant and depreciated; and thus this essential power of the Government is controlled by the States, and, for all practical purposes, annihilated.

Chief Justice Marshall, in delivering the unanimous opinion of the Supreme Court of the United States (4 Wheaton 193), said: 'Wherever the terms in which a power is granted to Congress, or the nature of the power require that it should be exercised exclusively by Congress, the subject is as completely taken from the State Legislatures as if they had been forbidden to act on it.' Now, it has been decided by the Supreme Court of the United States (9 Wheaton 1) that, this power to regulate commerce extends to the land, as well as to the water, that it includes intercourse and navigation, and vessels, as vehicles of commerce, that it includes an embargo which is prohibitory, that this power is 'EXCLUSIVELY vested in Congress,' and 'no part of it can be exercised by a State.' Now, the question, whether the notes of a State bank, issued on the authority of a State, and designed to circulate as money, conflicts with this clause of the Constitution, has never been decided by the Supreme Court of the United States. This is a new and momentous question, never yet adjudicated by the Supreme Court; but how they would now decide that point, with the light thrown upon it by this rebellion, I cannot doubt.

The Government also has the sole power to lay and collect duties, which 'shall be uniform throughout the United States,' and the States are prohibited from exercising this authority. But this power also is in fact controlled by the banks, and the revenue from imports increased or diminished, according to their action. Indeed, they can modify or repeal tariffs at their pleasure, for, they have only to inflate the circulation, and prices rise here to the extent of the duties, and the tariff becomes inoperative. Of all the branches of our industry, the manufacturing is injured most by a redundant currency, limiting our fabrics to a partial supply at home, and driving them from the foreign market. Give us a sound, stable, uniform currency, sufficient but not redundant, and our skilled, educated, and intelligent labor will, in time, defy all competition. But the banks, as now conducted, are the great enemies of American industry.

The Government has also the sole power 'to coin money, regulate the value thereof,' etc. But the banks now regulate its value by controlling prices, by substituting their money for coin, and by expelling it from the country at their pleasure. Recollect, these powers over commerce and money are exclusive, not concurrent, so adjudicated, and the Constitution, in delegating them exclusively to the Government, withheld them altogether from the States. The conceded fact that these powers are exclusive, proves that the States cannot, by any instrumentality, directly or indirectly, control their exercise. An exclusive authority necessarily forbids any control or interference. But there are express prohibitions in the Constitution as well as grants. That instrument declares that 'no State shall emit bills of credit.' The State itself cannot emit circulating paper: how then can it authorize this to be done by a State corporation, which is the mere creature of a State law? The State cannot authorize its Governor to issue such paper: how then can it direct a cashier, deriving all his power only from a State law, to do the same thing? Qui facit per alium, facit per se, and this fundamental maxim of law and reason is violated when a State does through any instrumentality, created by it, what the State cannot do itself.

It is true that a majority of the Supreme Court of the United States, in 11 Peters 257, did decide that the Bank of the Commonwealth of Kentucky did not violate that clause of the Constitution forbidding States to 'emit bills of credit,' but Justice Story, in his dissenting opinion, said: 'When this cause was formerly argued before this court, a majority of the judges who then heard it were decidedly of opinion that the act of Kentucky establishing this bank was unconstitutional and void, as amounting to an authority to emit bills of credit, for and on behalf of the State, within the prohibition of the Constitution of the United States. In principle, it was thought to be decided by the case of Craig v. the State of Missouri (4 Peters 410). Among that majority was the late Chief Justice Marshall.' This decision, then, in the case of the Bank of Kentucky, is overthrown, as an authority, by the fact that it was against the decision of the Supreme Court in a former case, and against the opinion of a majority of the court in that very case before the death of Chief Justice Marshall. In delivering the opinion of the court in the Missouri case (4 Peters 410), Chief Justice Marshall defined what is that bill of credit which a State cannot emit. He says: 'If the prohibition means anything, if the words are not empty sounds, it must comprehend the emission of any paper medium by a State Government, for the purpose of common circulation.' And he also says: 'Bills of credit signify a paper medium, intended to circulate between individuals, and between Government and individuals, for the ordinary purposes of society.' That the notes of the Bank of Kentucky came within this definition and decision, is clearly stated by Justice Story. In that case also it was expressly decided, that if the issues be unconstitutional, the notes given for the loan of them ARE VOID. It is said, however, that the bills are issued by a bank, not by the State; but the bank is created by the State, and authorized by the State to issue these notes, to circulate as money. In the language of Chief Justice Marshall, in this case, 'And can this make any real difference? Is the proposition to be maintained that the Constitution meant to prohibit names and not things?' On this subject, Justice Story says: 'That a State may rightfully evade the prohibitions of the Constitution by acting through the instrumentality of agents in the evasion, instead of acting in its own direct name, is a doctrine to which I can never subscribe,' etc. I am conscious that Justice Story also said in the same case, arguendo: 'the States may create banks as well as other corporations, upon private capital; and, SO FAR AS THIS PROHIBITION IS CONCERNED, may rightfully authorize them to issue bank bills or notes as currency, subject always to the control of Congress, whose powers extend to the entire regulation of the currency of the country.' It will be observed, that Justice Story gives no opinion as to whether the issues of such banks are constitutional, whether they conflict or not with the power of Congress to regulate coin or commerce. He only says (and the limitation is most significant), they do not violate the prohibition as to bills of credit (from which I dissent); but he does declare that to Congress belongs 'the entire regulation of the currency.' Now this power must rest on the authority of Congress to regulate coin and commerce. But these powers, we have seen, were not concurrent, but exclusive; and, in the language of Chief Justice Marshall, in delivering the unanimous opinion of the Supreme Court in the case before quoted from 4 Wheaton 193, as to any such power that 'should be exercised exclusively by Congress, the subject is as completely taken from the State Legislature as if they had been forbidden to act on it.' All then who agree that Congress has 'the entire regulation of the currency,' must admit that all banks of issue incorporated by States are unconstitutional, not because such issues are bills of credit, but because they violate the exclusive authority of Congress to regulate commerce, coin, and its value. I repeat, that while this question has never been adjudicated by the Supreme Court, yet, if their decision in fourth and ninth Wheaton is maintained, such bank issues are clearly unconstitutional. It is clear, also, whatever may be the case of bank issues, based only 'upon private capital,' or, in the language of Judge Story, 'if the corporate stock, and that only by the charter, is made liable for the debts of the bank,' yet, if the bank issues are based on the 'funds' or 'credit' of the State, such issues do violate the prohibition against bills of credit. Such bank issues, then, as are furnished and countersigned by State officers, acting under State laws, and are secured by the deposit with the State of its own stock, are most clearly unconstitutional.

In No. 44 (by Hamilton) of the Federalist, the great contemporaneous exposition of the Constitution (prepared by Hamilton, Madison, and Chief Justice Jay of the Supreme Court of the United States), it is said: 'The same reasons which show the necessity of denying to the States the power of regulating coin, prove with equal force that they ought not to be at liberty to substitute a paper medium instead of coin.' Such was the opinion of the two great founders of the Constitution (Hamilton and Madison), and its first judicial expositor, the eminent Chief Justice Jay. Justice Story quotes and approves this remarkable passage, and says 'that the prohibition was aimed at a paper medium which was intended to circulate as money, and to that alone.'

In his message of December 3, 1816, President Madison, referring expressly to a bank and paper medium, said: 'It is essential that the nation should possess a currency of equal value, credit, and use, wherever it may circulate. The Constitution has entrusted Congress exclusively with the power of creating and regulating a currency of that description.'

This rebellion proves the awful danger of State violations of the Federal Constitution. The rebellion is the child of State usurpation, State supremacy, State allegiance, and State secession. And now the Government is paralyzed financially, in its efforts to suppress the rebellion, by a question as to State banks, depreciating the currency, and State banks based on State stocks. The Government wishes a currency, not redundant, and to borrow money to save the Union. But one State says, we have placed all our surplus money in State banks, and another State (as in the case of New York) says, we have based the circulation of these banks, mainly on our own State bonds, and you must do nothing which will injuriously affect their value. It is true the Union is in danger, but are not the credit of State banks and State bonds of higher value than the Union? The State first, the Union afterwards. Our paramount duty is to our State, and that to the Union is subordinate. Why, this is the very language of rebellion—the echo of South Carolina treason. But it is not the language of the Constitution, which declares that "This Constitution, and the laws of the United States which shall be made in pursuance thereof, and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land: and the judges in every State shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding."

The supremacy then, is with the Federal Constitution and laws; otherwise there could be no uniformity or nationality. And does New York suppose that she can tear down the temple of the Union, and that the principal pillar which supported the arch will stand firm and erect? No! if the Union falls, New York will only be the most conspicuous among the broken columns.

But New York knows that the path of interest is that of honor and of duty. It is the Union only that has made her great. It is the concentration by the Union of interstate and international commerce in her great city, that was consummating its imperial destiny. Before the Union of 1778 and 1787, New York city was the village of Manhattan: destroy the Union, and she will again become little more than the village of Manhattan. The trident of the ocean, the sceptre of the world's commerce would fall from her grasp, and London be left without a rival. Deprive the Government of the power to regulate commerce, and the fall of New York will be as rapid as her rise. Each State then, as before the Constitution, would control its own commerce, and the railroads and canals of New York would cease to be the vehicles of the trade of the nation and of the world. Each State, as under the old Confederacy, would force commerce into her own ports by prohibitory or discriminating statutes. No, when New York takes from the Union the exclusive control of commerce, she commits suicide. One uniform regulation of commerce, and one uniform currency, are more essential to the prosperity of New York than to that of any other State. New York represents interstate and international commerce. There are concentrated our imports and exports, and there three fourths of our revenue is collected. There, if the Union endures, must be the centre of the commerce of the nation and of the world. If the rebellion succeeds, the separation of the East and West is just as certain as that of the North and South. Discord would reign supreme, and States and parts of States become petty sovereignties, mere pawns, to be moved on the political chess board by the kings and queens of Europe.

As New York has derived the greatest benefits from the Union, so would she suffer most from its fall. It is New York to whom the Union transferred the command of her own commerce, and ultimately that of the world. It is New York to which England looks as the future successful rival of London, and it is New York at whom England chiefly aims the blow in desiring to overthrow the Union. The interest of New York in the price of bank or State stock is insignificant compared with her still greater stake in the success of the Union. Indeed, if the Union should fall, State and bank stock and all property will be of little value, and bank debts will generally become worthless.

But if the war continues, we have seen that a redundant and depreciated currency would increase our expenditures $408,800,000 per annum. This would require a like addition to our annual tax, of which the share of New York would be over $50,000,000, and the share of every other State in like proportion to its population.

By Treasury Table 35, the stocks, State and Federal, held by the New York banks in 1860, was $29,605,318, the circulation $28,239,950, and the capital $111,821,957. Thus it appears that the increased tax to be paid annually by New York, as the consequence of a redundant and depreciated currency, would be nearly double her whole bank circulation, and that thirteen months of this increased tax to be paid by the nation, would largely exceed the whole capital of all the banks of the United States in 1860. (Census Table 35.) These are the frightful results of an irredeemable, redundant, and depreciated currency.

Such a course, on the part of a Government, which must make large purchases, resembles that of an individual who wishes to buy largely on his own credit and paper, but depreciates it so much as to compel him to pay quadruple prices, the result being bankruptcy and repudiation.

There is great hope in the fact that New York takes no contracted view of this great question. She knows that her imperial destiny is identified with the fate of the Union. Realizing this great truth, she has more troops in the field than any other State, she has expended more money and more blood than any other State to suppress this rebellion, and she will never array State stocks or State banks in hostility to the safety of the Union.

And what of Pennsylvania, that glorious old Commonwealth, so many of whose noble sons, cut off mostly in the morning of life, now fill graves prepared by treason? Is she to become a border State, and her southern boundary the line of blood, marked by frowning forts, by bristling bayonets, by the tramp of contending armies, engaged in the carnival of slaughter, and revelry of death? Is New England to be re-colonized, and the British flag again to float over the chosen domain of freedom? What of the small States, deprived of the secured equality and protective guarantees of the Constitution, to be surely crushed by more powerful communities? What of the West? Is it to be cut off from the seaboard, and rendered tributary to the maritime power? What of the States of the Pacific? Are they to lose the great imperial railways destined, under the Union, to connect them with the valley of the Mississippi and the Atlantic? But alas! why look at any of the bleeding and mutilated fragments, when all will be involved in a common ruin?

May a gracious Providence give us all, the wisdom to discern what is best for our beloved country, in this her day of fearful trial, and the courage and patriotism to adopt whatever course is best calculated to save us from impending ruin!



A TRIP TO ANTIETAM.

The great battle of the Antietam had been fought, and a veteran army was gathered around Harper's Ferry recruiting for fresh campaigns. Here was a chance to see a battle field and warriors to be celebrated for all time. From childhood up we have been taught history; and all history, except some few dry constitutional treatises, has been accounts of great commanders, of the marches and retreats of bronzed soldiers, of empires won by the sword, of dynasties established by conquests. Our hymn book, our clergymen, and our Bible have exhorted us to be soldiers of the cross, to buckle on our armor, and to fight the good fight, even when turning the other cheek when smitten on the one. Now this opportunity to see actual history, a battle field, and veteran troops, and great leaders whose names are to be household words, could not be resisted; so, taking a couple of blankets apiece, and a few clothes, and money wherewith to pay our way, we started by rail for Baltimore, and thence for the army.

Around Baltimore were several regiments. Those that we visited were of the recent levies, and were improving fast in discipline and drill. They were placed in strong positions to prevent a rebel attack from the west, and to command the city. The stars and stripes floated over houses in all parts of the town. We met a little company of boys seven miles out playing soldier, with the star-spangled banner, a cheering sign of the loyalty of the place.

At Baltimore my friend and I took seats in the car for Harper's Ferry. The train was crowded with a most miscellaneous set of passengers, officers of all grades, from general with stars to second lieutenant with plain bands, common soldiers, sutlers, Jews, and country people. Some of the Jews, after a time, became the most noisy part of the crowd, and belied their proverbial reputation for shrewdness by imbibing from bottles, which they circulated very freely, becoming very talkative, and most decidedly drunk. The most interesting companion we met was a member of the Maryland House of Representatives, a very sensible man, and of course a strong Unionist. He did not approve of the President's emancipation proclamation; thought it would alienate Union men in the Border States, and made other objections to it. He informed us that his negroes were of no profit to him; that the proclamation had made them believe they would all be free; that they did pretty much what they chose; and that Maryland would have to accede to the President's advice to the Union Border States to emancipate their slaves and receive compensation for so doing.

The railroad, after leaving the Relay House, runs along the Patapsco river, amid most beautiful scenery. We passed numerous trains with Government stores—one of baggage cars fitted up with rough seats and crowded inside and on the top with a regiment of Uncle Sam's bluecoats, cheering and singing as new troops only do. There were no signs of the devastations of war until we approached the Monocacy river. During their campaign in Maryland, the rebels at one time made this river their line of defence: it was supposed that they would make here a stand against McClellan's advance from Washington. They had burnt the woodwork of the bridge, twisted the long iron rods of the structure to one side, destroyed all the railroad building, engines, and cars they could lay hands on, and had done everything to retard our force. A new bridge had now been recently built, over which we were obliged to pass slowly. Immediately after leaving the river, the road branched, one track leading to Frederick, then an immense hospital containing seven thousand wounded soldiers, the other keeping on and striking the Potomac at the Point of Rocks. We saw soldiers and sentries at several places, but were surprised that we did not see more. The road keeps close to the river for some miles to Harper's Ferry. On the other side the ground was frequently occupied by the enemy's pickets; the difficulty of approaching the river being the only impediment to the shelling of trains on our side. The Potomac was unusually low; there had been a long season of dry, beautiful weather, rendering it fordable in many places.

At the Point of Rocks we enter upon the mountains of the Blue Ridge, and the railroad winds in the deep valley worn by the river, amid the most picturesque and beautiful scenery. The canal is between the railroad and river: its locks had been destroyed and the water drained out by the rebel hordes; for it is a great artery of life to Washington, and invaluable to an army encamped along its borders, furnishing economically the transportation of the great supplies necessary for the soldiers' subsistence. At this time it seemed of no use except as a depository for the carcasses of dead horses.

With the exception of this dismal empty canal, there were very few signs of the ravages of the armies which had lately swept through these charming valleys. A few miles from Harper's Ferry, by the side of the railroad, were great hayricks, and the barns were full to overflowing. As we approached Sandy Hook, a village of a few houses on the north side of the Potomac, about a mile from Harper's Ferry, we saw on the road, which ran close to the railroad track, thousands of the blue-bodied, white-topped army wagons. In the most crowded thoroughfare of London one would not see so many teams. From this neighborhood the great army of the Potomac drew the most of its supplies. The ninth army corps was moving this day to its camp, two or three miles northward; and part of its cannon, their brazen throats still tarnished by sulphurous smoke, added to the throng. It is surprising how large a portion of the army is composed of these baggage trains, and of the camp followers, teamsters, servants, and sutlers. A regiment of infantry, under the little shelter tents is crowded, into a small space; but the bulky baggage trains cover much ground. We spent the best part of a day, in going to and returning from the army, in the neighborhood of a small wayside tavern in this little village of Sandy Hook, with no other amusement than watching the moving of the teamsters, chatting with stray officers and soldiers, and seeing what may be called the back-stair life of the army. And we wish here to protest against the abuse which has been so abundantly heaped upon the teamsters: we found them, as a class, a respectable body of men, quite skilful in the management of their animals, comparing well with those in the same occupation in our great cities: there was certainly not so much swearing, and not so much abuse of their mules and horses, as one sees in New York. I remember their kind attention to me, some days afterward, when, in my impatience to get by a long train of teams filling up a little country road, I had imprudently urged my horse on to a ledge of rocks, where he, not being an old warhorse, hesitated, slipped, and fell flat on his side, among the mules of one of the wagons; and, as the horse, with my leg under him, was rolling to recover himself, the anxiety of the teamsters as to whether I was hurt, and then as to my horse, a fine animal, who had cut himself a little on the rocks. Their proffered assistance was very different from the oaths I should have met under similar circumstances in some Northern cities.

The army wagons are large, with great white cotton coverings, and generally drawn by six mules: the driver, usually a colored man, rides the first nigh mule, and has one rein, called the 'jerky rein,' running over the head of the mule before him, through a ring fastened to his headstall, and dividing on the back of the leader, and fastening to his bit. The mule is directed to one side or another by the driver twitching the rein and shouting. There were some few wagons driven from the box, but in all these cases that we noticed, the animals were horses, four in number, and their drivers were white. The mules and horses were generally in good condition, and quite a contrast to those in the cavalry service, which, even in a crack regiment, like the sixth regular, presented a most sorry appearance of overwork and terribly hard usage. The baggage trains and camp followers are a necessary portion of every army, and its efficiency depends in a great measure upon the perfect organization of this essential part. In the French army this organization is carried to a high degree of perfection. A small army of ten or twenty thousand men can get along with a fewer proportional number of followers, as it lives more upon the country, than a great army of one hundred thousand.

Every regiment has its own baggage wagons to carry its tents, cooking apparatus, officers' mess chests, and personal baggage. At the beginning of the war, each of the Massachusetts regiments was fitted out with from fifteen to twenty-four wagons. A recent United States regulation has limited the number to six for one regiment. The personal baggage of the regiments, however, forms a small part of the great transportation of an army. The spare ammunition is no small matter; every cannon having a supply of round shot, shell, canister, and grape: all these may be needed by each piece in a battle, as the shot used depends upon the distance of the foe. A full regiment of infantry may fire in one battle sixty thousand rounds of ammunition, weighing nearly three tons. The pontoon trains, the baggage of the staff, the forage for the horses of the artillery and of the generals, field officers, and their staffs, the food of the army, and the food and forage for this further army of camp followers—all have to be transported. The cavalry are expected to forage for their horses from off the country; all the rest have to be provided for. To carry the subsistence of a regiment of nine hundred men for one day, requires one of the six-mule teams: for a march of twenty days there must be twenty wagons. One will see from this that, next to the general, the quartermaster has the great post of responsibility. He has to see that all the supplies are obtained and forwarded to the right place. He commands all these countless wagons with their teamsters. It is also his duty, when on the march, to pick out the camp, unless the general may take it from out of his hands. The army, as a general thing, will not fight well unless it is well fed and well cared for. To assist him, the quartermaster has his necessary clerks, for he carries on a large business, with Uncle Sam as his principal, and he must account to him for every pound of coffee, bacon, flour, and hay, barrel of vinegar, keg of nails, tent or tent pin that he receives, and finally return them, or tell him satisfactorily where they have gone, and produce his vouchers; or he and his bondsmen must pay their value. All this is done by system and rule: there are mounted wagonmasters to look out for every small string of wagons, and some sort of discipline prevails among these non-enlisted men. A great army must be a moving city, capable of subsisting itself in the uncultivated and desert regions through which it often passes. Every cavalry soldier carries his spare horseshoes and nails; and every cavalry regiment and every battery of artillery has its own forge, tools, and materials for shoeing its horses and making repairs: even the quartermaster's train must have its blacksmiths and their supplies.

In travelling down the Rhone during the Crimean war, I was vainly trying to make out the meaning of the letters on the military button of an officer sitting before me; when one of his companions, who happened to be at my side, a well-educated, intelligent man, good-naturedly informed me that they indicated that the wearer belonged to the bureau of the post. He and several others on the boat had been educated for this branch of the service at a military school in Paris, and were en route for the sole purpose of taking charge of this department. We have not arrived at this perfection; for ours, after all, in many respects, is an army of volunteers; but still a messenger had to go every day to Washington for the letters of the army corps, and the telegraph and its wires travel with the camp. The officers' servants alone, in an army of a hundred and fifty thousand men, number more than the thirty-nine hundred soldiers the city of Boston has to raise for her proportion of the levy of nine-months men. The number of servants and horses of an officer depends upon his rank; he draws subsistence for the number allowed to him. A mere cavalry captain can draw for and usually has two horses. His horses and trappings, his mess, must be cared for by others; and hence the thousands of servants that must go with the thousands of officers.

But let us pass from this, which is common to every army, and proceed on our journey. The easily pulverized, light, clayey soil around Sandy Hook was raised in huge clouds by the countless wagons and the hoofs of the horses of the squads of cavalry officers, couriers, and wagonmasters. The little tavern was once, the old woman who kept it assured us, surrounded by a pretty fence, and a garden with grass and flowers: now the fence was half gone, and to its pickets were tied the horses of officers, quartermasters, baggagemasters, and orderlies, and the flowers were trampled into light dust. The provisions in the house had been eaten by hungry travellers, who were supplied with very scanty fare, and were thankful to get that. The old woman, having dealt out to us the little she had left, for which she demanded most abundant compensation, amused us with her tales. Her house had been alternately the home of Unionists and rebels. It was not many days since divisions of rebels had gone by and encamped there, both before and after the surrender of Harper's Ferry. The shells fired in that fight had passed over her tavern. Her description of the hungry, tired troopers, arriving in the evening, and surrounding the house, the men falling down asleep under their horses' bellies, horses and men packed in together as thick as a swarm of bees, was quite graphic. Her accounts of her conversations with the great rebel leaders were interesting, but I feared were apocryphal, as she ended by assuring us that General Lee had to sleep supperless on her woodpile. If it were not for this last tale, kind reader, you would have been entertained with the conversations of the great chiefs of rebeldom, as related by a reliable witness. We did hear from her, and from officers who saw the rebel soldiers at Harper's Ferry, of the pitiable condition of some of the infantry, of their naked, bleeding feet, and their gaunt looks. Our landlady affirmed that we could not find a dog in the neighborhood; for they had gone before the rebel hordes in the way that such flesh disappears before the Chinese and Pacific Islanders. It is probably true that at times they were hard pressed for food, and many badly off for shoes; but we were told by officers who saw the dead at Antietam that, though not so well shod as our men, they were shod, and they had provisions in their haversacks. The rebels have flour dealt out to them as rations on the march, and they have to cook it. Our troops have hard biscuit, called 'tack;' it is made in squares, and some which was fresh was very good; but it often comes to the regiments with maggots. This is not so much objected to; but when, in addition, it is mouldy, the men grumble. By the side of the fresh tack were some Sandy Hook veteran biscuit, that had been through the Peninsular campaign, and had come last from Harrison's Landing; the outside of the boxes was enough to condemn them, and the commissary was saying that he must get Uncle Sam's inspector-general to examine and pass upon them. When we saw this hard, mouldy old tack, we appreciated the joke of the Western boys, who declared they found the date of the baking on their biscuit in the letters 'B. C.,' 'Before Christ.' The luxury of soft bread is prized by the troops. Near Baltimore, where the 38th Massachusetts were stationed for some weeks, nice ovens were built, after the fashion of the French army, and fresh bread, meats, and the Yankee Sunday beans cooked. With the army in the field this cannot be done, but the ovens could have been built during the weeks our soldiers were resting on the banks of the Potomac. Our troops at this time were fed on the hard tack and fresh beef; and some of the men in a camp near Sharpsburg complained of the want of salt provisions. This seemed unreasonable, until we heard that they had no salt, the long distance it had to be teamed being the excuse given for the unpardonable want of it. This hard tack is doing one good thing: it is giving the men white teeth; you can tell an old soldier by his polished ivory; his teeth approach the appearance of the Italian and Swiss peasantry, who also chew hard bread. Reader, did you ever try to work your way through the hard loaf of the peasant's fare? The army regulations require tooth brushes for the men; it is supposed that the proper use keeps off ague and disease; still many regiments were without one to a company.

But to return to our old woman at the little tavern of Sandy Hook. She had tales, too, of our officers. That morning she had seen our handsomest and our most splendid-looking general—in appearance the ideal of the brigand of the romance—Burnside, riding by, with his black, tall, army felt hat, without plume or gilt eagle, brim turned down, his dark blue blouse covered with dust. 'Why,' said she, 'he looked, in his dusty blue shirt, with two old tin dippers strung by the handle at his belt, like any farmer; but I suppose he had some better clothes.' Her lament for the gallant fellows who had fallen by disease, torn by the cannon shot, or struck by the deadly rifle ball; for the sufferings of the poor, sick, lame, and mutilated soldiers; and her solemn asseverations that there was something wrong in the hearts of the leaders on both sides, to permit this suffering and loss of so many good men, was truly touching. We could not reason it out with her; logic had to give place to her pathetic lamentation. I do not, however, intend to keep my readers so long a time at this little wayside inn as I was; and will pass on to Harper's Ferry, a mile beyond.

But before we part, we certainly should not fail to notice a modern addition to the camp follower that Napoleon did not have in his grand armies—the newsboy—the omnipresent, the irrepressible gamin of the press. New York, Philadelphia, Baltimore, Washington, all had contributed their quota, and what a glorious harvest they were reaping! Baltimore Americans, at five cents each; New York Heralds, Tribunes, and Times, at ten cents; and everything sold early. One little fellow was strutting around with a pair of spurs on, and styled himself 'colonel;' the others he introduced as his staff. The day's work was over, and larking had begun. I found the spurs were for use. The colonel had bought an old condemned brute, which his companions were trying to buy at the advanced price of ten dollars. The camps were at a distance, from two miles upward, and a mounted boy could bring his wares to market first. And so the whole afternoon every rider of a particularly bad horse was pestered by an offer of five or ten dollars, from a throng of dirty, noisy, scampish ragamuffins. Later in the evening, the guard went by with some three or four of the boys, for once without a grin on their faces, under arrest. We asked the colonel, who had the reputation of being an honest fellow, what was the matter with his suite. He only replied that it was hard times for newsboys, if that was the way things were going; and walked off, clanking his long spurs over the stones.

The railroad and road from Sandy Hook to Harper's Ferry run under the Maryland Heights, the rocks having been blasted away for a passage. The railroad bridge had been rebuilt, not permanently, but so that trains could again cross. Lower down the river were the remains of the pontoon bridge destroyed by the rebels. Higher up on the other side of the railroad was a new pontoon bridge, built on boats, painted with Uncle Sam's light blue color. Farther up, the wagons were fording the stream. As you crossed the pontoon bridge, you came directly to the little stone engine house, with its belfry, where John Brown held the power of the great State of Virginia at bay. All else of the Government buildings are in ruins. The long lines of brick and stone walls blackened by fire, and the picturesque broken arches of the engine-house windows, were a fit greeting to one's entrance upon the ruined grandeur of the Old Dominion. Through the clouds of dust and the noise and confusion of the village upon the hill rising immediately above the river, we rode, noting the signs of the recent contest, or looking down on the blue Potomac, flowing peacefully below. One large brick house had a breach in the basement story large enough for us to ride in, caused by some bursting shell. Dead horses still lay in the road; the tailpiece of a broken cannon was yet there. As we emerged out of the dust at the top of the hill beyond, toward the afternoon sun, rose Bolivar Heights, and the innumerable white tents of General Sumner's large army corps. The soldiers were out for drill or dress parade. The distant sounds of the bands and bugles and drums, sometimes succeeding each other, then mingling together, fell softened but constantly on the ear, and everywhere was the gleam of the declining sun on glistening sword or bright musket barrel. Behind us to the east, and beyond the Shenandoah, which flowed at the foot of the village, arose the high Loudon Mountains; on the north, on the other side of the Potomac, were the Maryland Heights, with the road to Sharpsburgh and Williamsport winding along its wooded base. The tops of these mountains were lighted up and wreathed with the smoke of the fires kindled to destroy the thick woods that might afford shelter to approaching enemies. It was most charming mountain scenery. We enjoyed the view long, but had to turn our backs at last; and as we recrossed the pontoon bridge we wiped off from the soles of our feet a large portion of the sacred soil of Virginia. Yes, the sacred soil of Virginia, the mother of presidents, the home of Washington, Patrick Henry, Jefferson, and Madison, and of how many others famous in our history. O Virginia, what a contrast is there now! the blood of thy boasted chivalry struggling manfully stains the ground; thy soil is ground to powder under the heel of the hated mudsils of the North; thy fertile plains and beautiful valleys are trodden down by armed men; the fierce contest, and desolation and want have come to every household; and the cry arises for thy sons that are not!

The headquarters of Gen. McClellan were two or three miles north of Knoxville, a little village on the Potomac, about three miles below Harper's Ferry. The day that we were there, the General was absent on his way to meet Mrs. McClellan, and though the telegraph wires ran to headquarters, nothing was there known of the foray Stuart had begun early that morning from Hancock, in the rear of our forces; not till evening, and until his arrival at Chambersburg did the news arrive. If the telegraph wires had been laid, or the signal corps so stationed as to have given warning of the inception of this movement, these bold rebels could not have advanced so far, but would have been compelled to retreat as they came. Between the General's headquarters and the river were the famous sixth cavalry of regulars and some batteries of artillery. He had no guard in the direction of Pennsylvania toward the northeast, where Stuart's cavalry passed on their way to the Potomac. The camp itself was not well placed, and was soon changed. In going from it we rode through a most beautiful country by the side of an officer of the sixth cavalry, and listened to his enthusiastic account of scouting in front of our lines, in the footsteps of the retreating enemy, over the very roads we were travelling safely and without concern; and yet we were not many miles from the foe, and within reach of the marvellous flight of the minie ball, which some lurking rifleman might aim from the other side of the Potomac. These cavalry soldiers and horses have had a terribly hard time of it. The horses of the sixth were more broken down and thinner than in the artillery or baggage trains. Two squadrons had lately been part of the force sent on a reconnoisance to Leesburg; and upon the return of our troops it had been the duty of our companion, then in command, to bring up the rear and drive in the infantry stragglers. Some two hundred had fallen out of the ranks from mere exhaustion. To leave any of these soldiers behind would be giving them up as prisoners, and affording the enemy the opportunity of obtaining information which it was of the utmost importance for the safety of the expedition to keep back. The troopers had therefore to drive them on with their swords—not a pleasant duty, when the poor fellows were faint and used up by fatigue—still it must be done. This service creates quite a dislike between the two arms. The infantry man hates the horseman, and the cavalry man despises the foot soldier. At this time straggling was quite prevalent: we saw on byroads many who had left the ranks, almost invariably having thrown away their arms, and subsisting on plunder. The cavalry were scouring the roads for them, and were bringing them in as prisoners for punishment. This sixth cavalry, like all the old regiments which had been through the Peninsular campaign and the disastrous retreat under Pope, was frightfully reduced in numbers: only three hundred and seventy were around the standards out of the eleven hundred who first took the field. Many had fallen on picket or been cut off singly, more by disease, but alike doing their duty, unmentioned and unnoticed. A larger number were yet suffering from overwork and sickness; and the regiment would in time recruit to seven hundred, from men now disabled, if there should be no more casualties.

A few days in camp, in a good-sized tent—none of the two-feet-high shelter affairs—in pleasant summer weather, is, on the whole, something new and exhilarating. The ground, to be sure, is rather hard, particularly when you have no straw; and a soldier's table is not always the most luxurious in the world. Now that we are safe, dry, and warm, at home, we can venture to declare that we were very unfortunate in losing the sensation of going without food, of sleeping in the mud and in the rain—our arms girded on—any moment to be aroused by the whistle of the bullet or the roll of the drum calling us to the deadly strife.

To us, however, it was all couleur de rose. In the early morn, at break of day, it was not the crow of the cock, or the jarring rattle of the wheels of the city baker or milkman, but the reveille that waked us from our martial dreams. The drum of the infantry, the bugles of the cavalry and artillery would begin; some early riser would rouse up his regiment; then another would take it up; until the call had gone through every corps. The old staid rub-a-dub of the English drummer is giving place to the stirring French rat-a-plan. And there was one band that generally led off in a splendid style. They did beat their drums lively and sharply. Not being obliged to be up with the sun and cook our own breakfast, we generally contrived to get a little more sleep. After breakfast, the bands were playing for guard-mounting; and we sat gazing down into the valley from our tent upon the large army corps encamped below. We were on the western slope of the Blue Ridge, through whose gaps not many days before, a few miles farther north, Franklin had successfully fought his way. Still farther up, Burnside, with Reno and Hooker under him, had at South Mountain driven the enemy in—that battle which came to us so welcome, the first victory after Pope's disasters, and the retreat from the Peninsula. The valley below us was Pleasant Valley. The opposite side to our tent was a short spur of the Blue Ridge; the southern extremity of which is the Maryland Heights, so well known in the history of the surrender of Harper's Ferry. The valley between is fertile and highly cultivated, full of mountain springs and brooks, emptying into one stream of sufficient size to turn the wheels of a large mill; the water is delicious; the prevailing limestone does not reach this valley. In the morning before the army moved there, the little river was clear as crystal; at night it was changed into an opaque white color, a stream of soapy water; a pleasing witness to the cleanliness of our men. There were no clothes lines, however, but many of the washers were so scantily off for clothing that they put their garments on to dry. The farmhouses in the valley are mostly of stone. It is a most charming and beautiful place, and appropriately called 'Pleasant Valley.' The farmers are prosperous; and the land so rich that it sells for the high price of seventy and eighty dollars an acre. The mountains rising on the sides of the valley are thickly wooded; and in the cultivated fields between were crowded the tents of the ninth army corps. With the exception of one or two new regiments who had wall tents, the soldiers were under little shelter tents, of which each man carries a piece. The infantry were encamped in divisions and brigades; the cavalry generally picketed along a fence; the horses and men, except the officers, without shelter. The encampments of the artillery and cavalry with their horses, forges, and wagons, covered much ground; but the infantry were thickly crowded together; and it was surprising to see how many men a small encampment would turn out.