Five days thereafter, I received notice that our army was in retreat, and replied as follows:

"Richmond, Virginia, March 15, 1862.

"General J. E. Johnston, Headquarters Army of the Potomac.

"General: I have received your letter of the 13th instant, giving the first official account I have received of the retrograde movement of your army.

"Your letter would lead me to infer that others had been sent to apprise me of your plans and movements. If so, they have not reached me; and, before the receipt of yours of the 13th, I was as much in the dark as to your purposes, condition, and necessities as at the time of our conversation on the subject about a month since.

"It is true I have had many and alarming reports of great destruction of ammunition, camp-equipage, and provisions, indicating precipitate retreat; but, having heard of no cause for such a sudden movement, I was at a loss to believe it.

"I have not the requisite topographical knowledge for the selection of your new position. I had intended that you should determine that question; and for this purpose a corps of engineers was furnished to make a careful examination of the country to aid you in your decision.

"The question of throwing troops into Richmond is contingent upon reverses in the West and Southeast. The immediate necessity for such a movement is not anticipated.

"Very respectfully yours,

"Jefferson Davis."

On the same day I sent the following telegram:

"Richmond, Virginia, March 15, 1862.

"General J. E. Johnston, Culpepper Court-House, Virginia.

"Your letter of the 13th received this day, being the first information of your retrograde movement. I have no report of your reconnaissance, and can suggest nothing as to the position you should take except it should be as far in advance as consistent with your safety.

"Jefferson Davis."

To further inquiry from General Johnston as to where he should take position, I replied that I would go to his headquarters in the field, and found him on the south bank of the river, to which he had retired, in a position possessing great natural advantages. An elevated bank commanded the north side of the river, overlooking the bridge, and an open field beyond it, across which the enemy must pass to reach the bridge, which, if left standing, was an invitation to seek that crossing. Upon inquiring whether the south bank of the river continued to command the other side down to Fredericksburg, General Johnston answered that he did not know; that he had not been at Fredericksburg since he passed there in a stage on his way to West Point, when he was first appointed a cadet. I then proposed that we should go to Fredericksburg, to inform ourselves upon that point. On arriving at Fredericksburg, a reconnaissance soon manifested that the hills on the opposite side commanded the town and adjacent river-bank, and therefore Fredericksburg could only be defended by an army occupying the opposite hills, for which our force was inadequate. In returning to the house of Mr. Barton, where I was a guest, I found a number of ladies had assembled there to welcome me, and who, with anxiety, inquired as to the result of our reconnaissance. Upon learning that the town was not considered defensible against an enemy occupying the heights on the other side, and that our force was not sufficient to hold those heights against such an attack as might be anticipated, the general answer was, with a self-sacrificing patriotism too much admired to be forgotten, "If the good of our cause requires the defense of the town to be abandoned, let it be done." The purposes of the enemy were then unknown to us. If General Johnston's expectation of a hostile advance in great force should be realized, our course must depend partly upon receiving the reenforcement we had reason to expect from promises previously given and renewed, as was announced to General Johnston in my telegram of 10th of March, 1862, in these words:

"Further assurance given to me this day that you shall be promptly and adequately reenforced, so as to enable you to maintain your position, and resume first policy when the roads will permit."

No immediate decision could therefore be made, and I returned to Richmond, to wait the further development of the enemy's plans, and to prepare as best we might to counteract them.

The feeling heretofore noticed as arousing in Virginia a determination to resist the abandonment of her northern frontier, and which caused the assurance of reenforcements, bore fruit in the addition of about thirty thousand men, by a draft made by the Governor of the State. These, it is true, were not the disciplined, seasoned troops which were asked for by the generals in the conference at Fairfax Court-House, but they were of such men as often during the war won battles for the Confederacy. The development of the enemy's plans, for which we had to wait, proved that, instead of advancing in force against our position at Centreville, he had, before the retreat of our army commenced, decided to move down the Potomac for a campaign against Richmond, from the Peninsula as a base. The conflagration at Centreville gave notice of its evacuation, and an advance was made as far as Manassas, but, as appears by General McClellan's report, with no more important design than to attack our rear guard, if it should be encountered. In the report on the conduct of the war by a committee of the United States Congress, evidence is found of much vacillation before the conclusion was finally reached of abandoning the idea of a direct advance upon Richmond for that of concentrating their army at the mouth of the Chesapeake. Whatever doubt or apprehension continued to exist about uncovering the city of Washington by removing their main army from before it, was of course dispelled by the retreat of our army, and the burning of bridges behind it. In this last-mentioned fact, General McClellan says he found the strongest reason to believe that there was no immediate danger of our army returning.

There was an apparent advantage to the enemy in the new base for his operations which was sufficiently illustrated by the events of the last year of the war. Had we possessed an army as large as the enemy supposed, it would have been possible for us at the same time to check his advance from the East and to march against his capital, with fair prospect of capturing it, before the army he had sent against Yorktown could have been brought back for the defense of Washington. On this as on other occasions he greatly magnified the force we possessed, and on this as on other occasions it required the concentration of our troops successfully to resist a detachment of his. Accepting as a necessity the withdrawal of the main portion of our army from northern Virginia to meet the invasion from the seaboard, it was regretted that earlier and more effective means were not employed for the mobilization of the army, a desirable measure in either contingency of advance or retreat, or at the least that the withdrawal was not so deliberate as to secure the removal of our ordnance, subsistence, and quartermasters' stores, which had been collected on the line occupied in 1861 and the early part of 1862.

A distinguished officer of our army, who has since the war made valuable contributions to the history of its operations—especially valuable as well for their accuracy as for their freedom from personal or partisan bias—writes thus of the retreat from Centreville:

"A very large amount of stores and provisions had been abandoned for want of transportation, and among the stores was a very large quantity of clothing, blankets etc., which had been provided by the States south of Virginia for their own troops. The pile of trunks along the railroad was appalling to behold. All these stores, clothing, trunks, etc., were consigned to the flames by a portion of our cavalry left to carry out the work of their destruction. The loss of stores at this point and at White Plains on the Manassas Gap Railroad, where a large amount of meat had been salted and stored, was a very serious one to us, and embarrassed us for the remainder of the war, as it put us at once on a running stock."

The same officer—and the value of his opinion will be recognized by all who know him, wherefore I give his name, General J. A. Early—in a communication subsequent to that from which I have just quoted, writes, in regard to the loss of supplies:

"I believe that all might have been carried off from Manassas if the railroads had been energetically operated. The rolling-stock of the Orange and Alexandria, Manassas Gap, and Virginia Central Railroads ought to have been sufficient for the purpose of removing everything in the two weeks allowed, if properly used."

The enemy's plans, the development of which, as has been already stated, was necessary for the determination of our own movements, were soon thereafter found to be the invasion of Virginia from the seaboard, and the principal portion of our army was consequently ordered to the Peninsula, between the York River and the James. Thus the northern frontier of Virginia, which, in the first year of the war, had been the main field of skirmishes, combats, and battles, of advance and retreat, and the occupation and evacuation of fortified positions, ceased for a time to tremble beneath the tread of contending armies.

To the foregoing narration of events immediately connected with the efforts of the Confederate Government to maintain its existence at home, may here be properly added an incident bearing on its foreign relations in the first year of the war.

Our efforts for the recognition of the Confederate States by the European powers, in 1861, served to make us better known abroad, to awaken a kindly feeling in our favor, and cause a respectful regard for the effort we were making to maintain the independence of the States which Great Britain had recognized, and her people knew to be our birthright.

On the 8th of November, 1861, an outrage was perpetrated by an armed vessel of the United States, in the forcible detention, on the high-seas, of a British mail steamer, making one of her regular trips from one British port to another, and the seizure, on that unarmed vessel, of our Commissioners, Mason and Slidell, who with their secretaries were bound for Europe on diplomatic service. The seizure was made by an armed force against the protest of the Captain of the vessel, and of Commander Williams, R.N., the latter speaking as the representative of her Majesty's Government. The Commissioners only yielded when force, which they could not resist, was used to remove them from the mail-steamer, and convey them to the United States vessel of war.

This outrage was the more marked because the United States had been foremost in resisting the right of "visit and search," and had made it the cause of the War of 1812 with Great Britain.

When intelligence of the event was received in England, it excited the greatest indignation among the people; and her Majesty's Government, by naval and other preparations, unmistakably exhibited the purpose to redress the wrong.

The Commissioners and their secretaries had been transported to the harbor of Boston, and imprisoned in its main fortress.

Diplomatic correspondence resulted from this event. The British Government demanded the immediate and unconditional release of the Commissioners, "in order that they may again be placed under British protection, and a suitable apology for the aggression which has been committed."

In the mean time, Captain Wilkes, commander of the vessel which had made the visit and search of the Trent, returned to the United States and was received with general plaudit, both by the people and the Government. The House of Representatives passed a vote of thanks, an honor not heretofore bestowed except for some deed deserving well of the country. In the midst of all this exultation at the seizure of our Commissioners on board of a British merchant-ship, came the indignant and stern demand for the restoration of those Commissioners to the British protection from which they had been taken, and an apology for the aggression. It was little to be expected, after such explicit commendation of the act, that the United States Government would accede to the demand; and therefore the War and Navy Departments of the British Government made active and extensive provision to enforce it. The haughty temper displayed toward four gentlemen arrested on an unarmed ship subsided in view of a demand to be enforced by the army and navy of Great Britain, and the United States Secretary of State, after a wordy and ingenious reply to the Minister of Great Britain at Washington City, wrote: "The four persons in question are now held in military custody at Fort Warren, in the State of Massachusetts. They will be cheerfully liberated. Your lordship will please indicate a time and place for receiving them."

There was a time when the Government and the people of the United States would not have sanctioned such aggression on the right of friendly ships to pass unquestioned on the high way of nations, and the right of a neutral flag to protect everything not contraband of war; but that was a time when arrogance and duplicity had not led them into false positions, and when the roar of the British lion could not make Americans retract what they had deliberately avowed.

[Footnote 191: Thoroughfare Gap was the point at which the Commissary-General had placed a meat-packing establishment]



CHAPTER XII.

Supply of Arms at the Beginning of the War; of Powder; of Batteries; of other Articles.—Contents of Arsenals.—Other Stores, Mills, etc.—First Efforts to obtain Powder, Niter, and Sulphur.—Construction of Mills commenced.—Efforts to supply Arms, Machinery, Field-Artillery, Ammunition, Equipment, and Saltpeter.—Results in 1862.—Government Powder-Mills; how organized.—Success.—Efforts to obtain Lead.— Smelting-Works.—Troops, how armed.—Winter of 1862.— Supplies.—Niter and Mining Bureau.—Equipment of First Armies.—Receipts by Blockade-Runners.—Arsenal at Richmond.—Armories at Richmond and Fayetteville.—A Central Laboratory built at Macon.—Statement of General Gorgas.— Northern Charge against General Floyd answered.—Charge of Slowness against the President answered.—Quantities of Arms purchased that could not be shipped in 1861.—Letter of Mr. Huse.

At the beginning of the war the arms within the limits of the Confederacy were distributed as follows:

Rifles. Muskets. At Richmond (State) about 4,000 Fayetteville, North Carolina " 2,000 25,000 Charleston, South Carolina " 2,000 20,000 Augusta, Georgia " 3,000 28,000 Mount Vernon, Alabama " 2,000 20,000 Baton Rouge, Louisiana " 2,000 27,000 ————- ————— Total 15,000 120,000

There were at Richmond about sixty thousand old flint-muskets, and at Baton Rouge about ten thousand old Hall's rifles and carbines. At Little Rock, Arkansas, there were a few thousand stands, and a few at the Texas Arsenal, increasing the aggregate of serviceable arms to about one hundred and forty-three thousand. Add to these the arms owned by the several States and by military organizations, and it would make a total of one hundred and fifty thousand for the use of the armies of the Confederacy. The rifles were of the caliber .54, known as Mississippi rifles, except those at Richmond taken from Harper's Ferry, which were of the new-model caliber .58; the muskets were the old flint lock, caliber .69, altered to percussion. There were a few boxes of sabers at each arsenal, and some short artillery-swords. A few hundred holster-pistols were scattered about. There were no revolvers.

There was before the war little powder or ammunition of any kind stored in the Southern States, and this was a relic of the war with Mexico. It is doubtful if there were a million of rounds of small-arms cartridges. The chief store of powder was that captured at Norfolk; there was, besides, a small quantity at each of the Southern arsenals, in all sixty thousand pounds, chiefly old cannon-powder. The percussion-caps did not exceed one quarter of a million, and there was no lead on hand. There were no batteries of serviceable field-artillery at the arsenals, but a few old iron guns mounted on Gribeauval carriages fabricated about 1812. The States and the volunteer companies did, however, possess some serviceable batteries. But there were neither harness, saddles, bridles, blankets, nor other artillery or cavalry equipments.

To furnish one hundred and fifty thousand men, on both sides of the Mississippi, in May, 1861, there were no infantry accoutrements, no cavalry arms or equipments, no artillery and, above all, no ammunition; nothing save arms, and these almost wholly the old pattern smooth-bore muskets, altered to percussion from flint locks.

Within the limits of the Confederate States the arsenals had been used only as depots, and no one of them, except that at Fayetteville, North Carolina, had a single machine above the grade of a foot-lathe. Except at Harper's Ferry Armory, all the work of preparation of material had been carried on at the North; not an arm, not a gun, not a gun-carriage, and, except during the Mexican War, scarcely a round of ammunition, had for fifty years been prepared in the Confederate States. There were consequently no workmen, or very few, skilled in these arts. Powder, save perhaps for blasting, had not been made at the South. No saltpeter was in store at any Southern point; it was stored wholly at the North. There were no worked mines of lead except in Virginia, and the situation of those made them a precarious dependence. The only cannon-foundry existing was at Richmond. Copper, so necessary for field-artillery and for percussion-caps, was just being obtained in East Tennessee. There was no rolling-mill for bar-iron south of Richmond, and but few blast-furnaces and these, with trifling exceptions, were in the border States of Virginia and Tennessee.

The first efforts made to obtain powder were by orders sent to the North, which had been early done both by the Confederate Government and by some of the States. These were being rapidly filled when the attack was made on Fort Sumter. The shipments then ceased. Niter was contemporaneously sought for in north Alabama and Tennessee. Between four and five hundred tons of sulphur were obtained in New Orleans, at which place it had been imported for use in the manufacture of sugar. Preparations for the construction of a large powder-mill were promptly commenced by the Government, and two small, private mills in East Tennessee were supervised and improved. On June 1, 1861, there was probably two hundred and fifty thousand pounds only, chiefly of cannon-powder, and about as much niter, which had been imported by Georgia. There were the two powder-mills above mentioned, but we had no experience in making powder, or in extracting niter from natural deposits, or in obtaining it by artificial beds.

For the supply of arms an agent was sent to Europe, who made contracts to the extent of nearly half a million dollars. Some small-arms had been obtained from the North, and also important machinery. The machinery at Harper's Ferry Armory had been saved from the flames by the heroic conduct of the operatives, headed by Mr. Armistead M. Ball, the master armorer. Of the machinery so saved, that for making rifle-muskets was transported to Richmond, and that for rifles with sword-bayonets to Fayetteville, North Carolina. In addition to the injuries suffered by the machinery, the lack of skilled workmen caused much embarrassment. In the mean time the manufacture of small-arms was undertaken at New Orleans and prosecuted with energy, though with limited success.

In field-artillery the manufacture was confined almost entirely to the Tredegar Works in Richmond. Some castings were made in New Orleans, and attention was turned to the manufacture of field and siege artillery at Nashville. A small foundry at Rome, Georgia, was induced to undertake the casting of the three-inch iron rifle, but the progress was very slow. The State of Virginia possessed a number of old four-pounder iron guns which were reamed out to get a good bore, and rifled with three grooves, after the manner of Parrott. The army at Harper's Ferry and that at Manassas were supplied with old batteries of six-pounder guns and twelve-pounder howitzers. A few Parrott guns, purchased by the State of Virginia, were with General Magruder at Big Bethel.

For the ammunition and equipment required for the infantry and artillery, a good laboratory and workshop had been established at Richmond. The arsenals were making preparations for furnishing ammunition and knapsacks; but generally, what little was done in this regard was for local purposes. Such was the general condition of ordnance and ordnance stores in May, 1861.

The progress of development, however, was steady. A refinery of saltpeter was established near Nashville during the summer, which received the niter from its vicinity, and from the caves in East and Middle Tennessee. Some inferior powder was made at two small mills in South Carolina. North Carolina established a mill near Raleigh; and a stamping-mill was put up near New Orleans, and powder made there before the fall of the city. Small quantities were also received through the blockade. It was estimated that on January 1, 1862, there were fifteen hundred seacoast-guns of various caliber in position from Evansport, on the Potomac, to Fort Brown, on the Rio Grande. If their caliber was averaged at thirty-two pounder, and the charge at five pounds, it would, at forty rounds per gun, require six hundred thousand pounds of powder for them. The field-artillery—say three hundred guns, with two hundred rounds to the piece—would require one hundred and twenty-five thousand pounds; and the small-arm cartridges—say ten million—would consume one hundred and twenty-five thousand pounds more, making in all eight hundred and fifty thousand pounds. Deducting two hundred and fifty thousand pounds, supposed to be on hand in various shapes, and the increment is six hundred thousand pounds for the year 1861. Of this, perhaps two hundred thousand pounds had been made at the Tennessee and other mills, leaving four hundred thousand pounds to be supplied through the blockade, or before the beginning of hostilities.

The liability of powder to deteriorate in damp atmospheres results from the impurity of the niter used in its manufacture, and this it is not possible to detect by any of the usual tests. Security, therefore, in the purchase, depends on the reliability of the maker. To us, who had to rely on foreign products and the open market, this was equivalent to no security at all. It was, therefore, as well for this reason as because of the precariousness of thus obtaining the requisite supply, necessary that we should establish a Government powder-mill. It was our good fortune to have a valuable man whose military education and scientific knowledge had been supplemented by practical experience in a large manufactory of machinery. He, General G. W. Rains, was at the time resident in the State of New York; but, when his native State, North Carolina, seceded from the Union and joined the Confederacy, true to the highest instincts of patriotism, he returned to the land of his birth, and only asked where he could be most useful. The expectations which his reputation justified, caused him to be assigned to the task of making a great powder-mill, which should alike furnish an adequate supply, and give assurance of its possessing all the requisite qualities. This problem, which, under the existing circumstances, seemed barely possible, was fully solved. Not only was powder made of every variety of grain and exact uniformity in each, but the niter was so absolutely purified that there was no danger of its deterioration in service. Had Admiral Semmes been supplied with such powder, it is demonstrated, by the facts which have since been established, that the engagement between the Alabama and the Kearsarge would have resulted in a victory for the former.

These Government powder-mills were located at Augusta, Georgia, and satisfactory progress was made in the construction during the year. All the machinery, including the very heavy rollers, was made in the Confederate States. Contracts were made abroad for the delivery of niter through the blockade; and, for obtaining it immediately, we resorted to caves, tobacco-houses, cellars, etc. The amount delivered from Tennessee was the largest item in the year's supply, but the whole was quite inadequate to existing and prospective needs.

The consumption of lead was mainly met by the Virginia lead-mines at Wytheville, the yield from which was from sixty to eighty thousand pounds per month. Lead was also collected by agents in considerable quantities throughout the country, and the battle-field of Manassas was closely gleaned, from which much lead was collected. A laboratory for the smelting of other ores was constructed at Petersburg, Virginia, and was in operation before midsummer of 1862.

By the close of 1861, eight arsenals and four depots had been supplied with materials and machinery, so as to be efficient in producing the various munitions and equipments, the want of which had caused early embarrassment. Thus a good deal had been done to produce the needed material of war, and to refute the croakers who found in our poverty application for the maxim, "Ex nihilo nihil fit."

The troops were, however, still very poorly armed and equipped. The old smooth-bore musket was the principal weapon of the infantry; the artillery had mostly the six-pounder gun and the twelve-pounder howitzer; and the cavalry were armed with such various weapons as they could get—sabers, horse-pistols, revolvers, Sharp's carbines, musketoons, short Enfield rifles, Holt's carbines, muskets cut off, etc. Equipments were in many cases made of stout cotton domestic, stitched in triple folds and covered with paint or rubber varnish. But, poor as were the arms, enough of them, such as they were, could not be obtained to arm the troops pressing forward to defend their homes and their political rights.

In December, 1861, arms purchased abroad began to come in, and a good many Enfield rifles were in the hands of the troops at the battle of Shiloh. The winter of 1862 was the period when our ordnance deficiencies were most keenly felt. Powder was called for on every hand; and the equipments most needed were those we were least able to supply. The abandonment of the line of the Potomac and the upper Mississippi from Columbus to Memphis did somewhat, however, the pressure for heavy artillery; and, after the fall of 1862, when the powder-mills at Augusta had got into full operation, there was no further inability to meet all requisitions for ammunition. To provide the iron needed for cannon and projectiles, it had been necessary to stimulate by contracts the mining and smelting of its ores.

But it was obviously beyond the power of even the great administrative capacity of the chief of ordnance, General J. Gorgas, to whose monograph I am indebted for these details, to add, to his already burdensome labors, the numerous and increasing cares of obtaining the material from which ammunition, arms, and equipments were to be manufactured. On his recommendation a niter and mining bureau was organized, and Colonel St. John, who had been hitherto assigned to duty in connection with procuring supplies of niter and iron, was appointed to be chief of this bureau. A large, difficult, and most important field of operations was thus assigned to him, and well did he fulfill its requirements. To his recent experience was added scientific knowledge, and to both, untiring, systematic industry, and his heart's thorough devotion to the cause he served. The tree is known by its fruit, and he may confidently point to results as the evidence on which he is willing to stand for judgment. Briefly, they will be noticed.

Niter was to be obtained from caves and other like sources, and by the formation of niter-beds, some of which had previously been begun at Richmond. These beds were located at Columbia, South Carolina, Charleston, Savannah, Augusta, Mobile, Selma, and various other points. At the close of 1864 there were two million eight hundred thousand feet of earth collected, and in various stages of nitrification, of which a large proportion was presumed to yield one and a half pound of niter per foot of earth. The whole country was laid off into districts, each of which was under the charge of an officer, who obtained details of workmen from the army, and made his monthly reports. Thus the niter production, in the course of a year, was brought up to something like half of the total consumption. The district from which the most constant yield could be relied on had its chief office at Greensboro, North Carolina, a region which had no niter-caves in it. The niter was obtained from lixiviation of nitrous earth found under old houses, barns, etc. The supervision of the production of iron, lead, copper, and all the minerals which needed development, as well as the manufacture of sulphuric and nitric acids (the latter required for the supply of the fulminate of mercury for percussion-caps), without which the firearms of our day would have been useless, was added to the niter bureau. Such was the progress that, in a short time, the bureau was aiding or managing some twenty to thirty furnaces with an annual yield of fifty thousand tons or more of pig-iron. The lead- and copper-smelting works erected were sufficient for all wants, and the smelting of zinc of good quality had been achieved. The chemical works were placed at Charlotte, North Carolina, to serve as a reserve when the supply from abroad might be cut off.

In equipping the armies first sent into the field, the supply of accessories was embarrassingly scant. There were arms, such as they were, for over one hundred thousand men, but no accoutrements nor equipments, and a meager supply of ammunition. In time the knapsacks were supplanted by haversacks, which the women could make. But soldiers' shoes and cartridge-boxes must be had; leather was also needed for artillery-harness and for cavalry-saddles; and, as the amount of leather which the country could furnish was quite insufficient for all these purposes, it was perforce apportioned among them. Soldiers' shoes were the prime necessity. Therefore, a scale was established, by which first shoes and then cartridge-boxes had the preference; after these, artillery-harness, and then saddles and bridles. To economize leather, the waist and cartridge-box belts were made of prepared cotton cloth stitched in stitched in three or four thicknesses. Bridle-reins were likewise so made, and then cartridge-boxes were thus covered, except the flap. Saddle-skirts, too, were made of heavy cotton cloth strongly stitched. To get leather, each department procured its quota of hides, made contracts with the tanners, obtained hands for them by exemptions from the army, got transportation over the railroads for the hides and for supplies. To the varied functions of this bureau was finally added that of assisting the tanners to procure the necessary supplies for the tanneries. A fishery, even, was established on Cape Fear River to get oil for mechanical purposes, and at the same time food for the workmen. In cavalry equipments the main thing was to get a good saddle which would not hurt the back of the horse. For this purpose various patterns were tried, and reasonable success was obtained. One of the most difficult wants to supply in this branch of the service was the horseshoe for cavalry and artillery. The want of iron and of skilled labor was strongly felt. Every wayside blacksmith-shop accessible, especially those in and near the theatre of operations, was employed. These, again, had to be supplied with material, and the employees exempted from service.

It early became manifest that great reliance must be placed on the introduction of articles of prime necessity through the blockaded ports. A vessel, capable of stowing six hundred and fifty bales of cotton, was purchased by the agent in England, and kept running between Bermuda and Wilmington. Some fifteen to eighteen successive trips were made before she was captured. Another was added, which was equally successful. These vessels were long, low, rather narrow, and built for speed. They were mostly of pale sky-color, and, with their lights out and with fuel that made little smoke, they ran to and from Wilmington with considerable regularity. Several others were added, and devoted to bringing in ordnance, and finally general supplies. Depots of stores were likewise made at Nassau and Havana. Another organization was also necessary, that the vessels coming in through the blockade might have their return cargoes promptly on their arrival These resources were also supplemented by contracts for supplies brought through Texas from Mexico.

The arsenal in Richmond soon grew into very large dimensions, and produced all the ordnance stores that the army required, except cannon and small-arms, in quantities sufficient to supply the forces in the field. The arsenal at Augusta was very serviceable to the armies serving in the south and west, and turned out a good deal of field-artillery complete. The Government powder-mills were entirely successful. The arsenal and workshops at Charleston were enlarged, steam introduced, and good work done in various departments. The arsenal at Mount Vernon, Alabama, was moved to Selma, in that State, where it grew into a large and well-ordered establishment of the first class. Mount Vernon Arsenal was dismantled, and served to furnish lumber and timber for use elsewhere. At Montgomery, shops were kept up for the repair of small-arms and the manufacture of articles of leather. There were many other small establishments and depots.

The chief armories were at Richmond and Fayetteville, North Carolina. The former turned out about fifteen hundred stands per month, and the latter only four hundred per month, for want of operatives. To meet the want of cavalry arms, a contract was made for the construction in Richmond of a factory for Sharp's carbines; this being built, it was then converted into a manufactory of rifle-carbines, caliber .58. Smaller establishments grew up at Asheville, North Carolina, and at Tallahassee, Alabama. A great part of the work of the armories consisted in the repair of arms. In this manner the gleanings of the battle-fields were utilized. Nearly ten thousand stands were saved from the field of Manassas, and from those about Richmond in 1862 about twenty-five thousand excellent arms. All the stock of inferior arms disappeared from the armories during the first two years of the war, and were replaced by a better class of arms, rifled and percussioned. Placing the good arms lost previous to July, 1863, at one hundred thousand, there must have been received from various sources four hundred thousand stands of infantry arms in the first two years of the war.

Among the obvious requirements of a well-regulated service was one central laboratory of sufficient capacity to prepare all ammunition, and thus to secure the vital advantage of absolute uniformity. Authority was therefore granted to concentrate this species of work at Macon, Georgia. Plans of the buildings and of the machinery required were submitted and approved, and the work was begun with energy. The pile of buildings had a facade of six hundred feet, was designed with taste, and comprehended every possible appliance for good and well-organized work. The buildings were nearly ready for occupation at the close of the war, and some of the machinery had arrived at Bermuda. This project preceded that of a general armory for the Confederacy, and was much nearer completion. These, with the admirable powder-mills at Augusta, would have been completed, and with them the Government would have been in a condition to supply arms and ammunition to three hundred thousand men. To these would have been added a foundry for heavy guns at Selma or Brierfield, Alabama, where the strongest cast iron in the country had been made.

Thus has been briefly sketched the development of the resources from which our large armies were supplied with arms and ammunition, while our country was invaded on land and water by armies much larger than our own. It will be seen under what disadvantages our people successfully prosecuted the (to them) new pursuits of mining and manufacturing. The chief of ordnance was General J. Gorgas, a man remarkable for his scientific attainment, for the highest administrative capacity and moral purity, all crowned by zeal and fidelity to his trust, in which he achieved results greatly disproportioned to the means at his command. He closes his excellent monograph in the following words:

"We began in April, 1861, without an arsenal, laboratory, or powder-mill of any capacity, and with no foundry or rolling-mill, except in Richmond, and, before the close of 1863, or within a little over two years, we supplied them. During the harassments of war, while holding our own in the field defiantly and successfully against a powerful enemy; crippled by a depreciated currency; throttled with a blockade that deprived us of nearly all the means of getting material or workmen; obliged to send almost every able-bodied man to the field; unable to use the slave-labor, with which we were abundantly supplied, except in the most unskilled departments of production; hampered by want of transportation even of the commonest supplies of food; with no stock on hand even of articles such as steel, copper, leather, iron, which we must have to build up our establishments—against all these obstacles, in spite of all these deficiencies, we persevered at home, as determinedly as did our troops in the field, against a more tangible opposition; and in that short period created, almost literally out of the ground, foundries and rolling-mills at Selma, Richmond, Atlanta, and Macon; smelting-works at Petersburg, chemical works at Charlotte, North Carolina; a powder-mill far superior to any in the United States and unsurpassed by any across the ocean; and a chain of arsenals, armories, and laboratories equal in their capacity and their improved appointments to the best of those in the United States, stretching link by link from Virginia to Alabama."

The same officer writes:

"It was a charge often repeated at the North against General Floyd, that, as Secretary of War, he had with traitorous intent abused his office by sending arms to the South just before the secession of the States. The transactions which gave rise to this accusation were in the ordinary course of an economical administration of the War Department. After it had been determined to change the old flint-lock muskets which the United States possessed to percussion, it was deemed cheaper to bring all the flint-lock arms in store at Southern arsenals to the Northern arsenals and armories for alteration, rather than to send the necessary machinery and workmen to the South. Consequently, the Southern arsenals were stripped of their deposits, which were sent to Springfield, Watervliet, Pittsburg, St. Louis, and other points. After the conversion had been effected, the denuded Southern arsenals were again supplied with about the same number, perhaps slightly augmented, that had formerly been stored there. The quota deposited at the Charleston Arsenal, where I was stationed in 1860, arrived there full a year before the opening of the war."

The charge was made early in the war that I was slow in procuring arms and munitions of war from Europe. We were not only in advance of the Government of the United States in the markets of Europe, but the facts presented in the following extracts from a letter of our agent, Caleb Huse, dated December 30, 1861, and addressed to Major C. C. Anderson, will serve to place the matter in its proper light:

"London, December 30, 1861.

"Dear Major: We are all waiting with almost breathless anxiety for the arrival of the answer from the United States to the unqualified demand of England for the captured commissioners. Will Mr. Lincoln disregard the international writ of habeas corpus served by Great Britain? We shall soon know. If the prisoners are given up, the affair will result in great inconvenience to us in the way of shipping goods.

"I have now more than enough to load three 'Bermudas,' and can not ship a package, though I have a steamer off the wharf, all ready to receive her cargo. We are literally fighting two governments here. Government watchmen guard the wharf where our goods are stowed and others in the neighborhood, night and day—and the wharfinger has orders not to ship or deliver, by land or water, any goods marked W. D., without first acquainting the honorable Board of Customs. I have applied myself to ship to Bermuda, offering to give bonds to double the amount of value of the goods, that they should be held in Bermuda, subject to the direction of her Majesty's representative in Bermuda. I ... has applied for permission to ship to Cardenas, agreeing to hold the goods subject to the order of the Spanish authorities—but all without avail, and our army must suffer for the want of blankets, overcoats, shoes, socks, field forges, arms, and ammunition, which have been collected to an amount more than double that I have yet received.

"It is miserable to have to look at the immense pile of packages in the warehouse at St. Andrews Wharf, and not be able to send anything—only read the following: twenty-five thousand rifles; two thousand barrels of powder; five hundred thousand caps; ten thousand friction-tubes; five hundred thousand cartridges; thirteen thousand accoutrements; thirteen thousand knapsacks; thirteen thousand gun-slings; forty-four thousand three hundred and twenty-eight pairs of socks; sixteen thousand four hundred and eighty-four blankets; two hundred and twenty-six saddles; saddlers' tools; artillery-harness; leather, etc. Very truly yours,

"Caleb Huse."



CHAPTER XIII.

Extracts from my Inaugural.—Our Financial System: Receipts and Expenditures of the First Year.—Resources, Loans, and Taxes.—Loans authorized.—Notes and Bonds.—Funding Notes.—Treasury Notes guaranteed by the States.—Measure to reduce the Currency.—Operation of the General System.—Currency fundable.—Taxation.—Popular Aversion.—Compulsory Reduction of the Currency.—Tax Law.—Successful Result.—Financial Condition of the Government at its Close.—Sources whence Revenue was derived.—Total Public Debt.—System of Direct Taxes and Revenue.—The Tariff.—War-Tax of Fifty Cents on a Hundred Dollars.—Property subject to it.—Every Resource of the Country to be reached.—Tax paid by the States mostly.—Obstacle to the taking of the Census.—The Foreign Debt.—Terms of the Contract.—Premium.—False charge against me of Repudiation.—Facts stated.

In my inaugural address in 1862 I said:

"The first year of our history has been the most eventful in the annals of this continent. A new Government has been established, and its machinery put in operation over an area exceeding seven hundred thousand square miles. The great principles upon which we have been willing to hazard everything that is dear to man, have made conquests for us which could never have been achieved by the sword. Our Confederacy has grown from six to thirteen States; and Maryland, already united to us by hallowed memories and material interests, will, I believe, when enabled to speak with unstifled voice, connect her destiny with the South. Our people have rallied with unexampled unanimity to the support of the great principles of constitutional government, with firm resolve to perpetuate by arms the rights which they could not peacefully secure. A million of men, it is estimated, are now standing in hostile array and waging war along a frontier of thousands of miles. Battles have been fought, sieges have been conducted, and, although the contest is not ended, and the tide for the moment is against us, the final result in our favor is not doubtful.... Fellow-citizens, after the struggles of ages had consecrated the right of the Englishman to constitutional representative government, our colonial ancestors were forced to vindicate that birthright by an appeal to arms. Success crowned their efforts, and they provided for their posterity a peaceful remedy against future aggression.

"The tyranny of an unbridled majority, the most odious and the least responsible form of despotism, has denied us both the right and the remedy. Therefore, we are in arms to renew such sacrifices as our forefathers made to the holy cause of constitutional liberty."

The financial system which had been adopted from necessity proved adequate at this early period to supply all the wants of the Government and of the people. An unexpected and very large increase of expenditures had resulted from the great enlargement of the necessary means of defense. Yet the Government entered on its second year without a floating debt and with its credit unimpaired. The total expenditures of the first year, ending February 1, 1862, amounted to one hundred and seventy million dollars. A statement of the Secretary of the Treasury, comprising the period from the organization of the Government to August 1, 1862, presents the following results:

Expenditures: War Department $298,376,549 41 Navy " 14,605,777 86 Civil and miscellaneous 15,766,503 43 ———————- Total $328,748,830 70 Outstanding requisitions 18,524,128 15 ———————- Total expenditures 347,272,958 85 Total receipts 302,482,096 60 ———————- Deficient Treasury notes authorized 16,755,165 00 " " " to be provided 28,035,697 25 ———————- $44,790,862 25

The receipts were derived as follows:

Customs $1,437,399 96 War-tax 10,539,910 70 Miscellaneous 1,974,769 33 $13,952,079 99 Loans, bonds, February, 1861 15,000,000 00 Bonds, August, 1861 22,613,346 61 Call certificates, December, 1861 37,515,200 00 Treasury notes, April, 1861 22,799,900 00 Demand notes, August, 1861 187,130,670 00 One and two dollar notes 846,900 00 Due banks 2,645,000 00 $288,551,016 61 ———————- Total receipts $302,503,096 60

Such was the result presented by the Treasury of a Government that had been in existence only eighteen months. It commenced that existence without a treasury, and, without the sinews and the munitions of war, was in less than two months invaded on every side by an implacable foe. Its ways and means consisted in loans and taxes, and to these it resorted. On February 28th I was authorized by Congress to borrow, at any time within twelve months, fifteen million dollars, or less, as might be needed. It was to be applied to the payment of appropriations for the support of the Government, and for the public defense. Certificates of stock or bonds, payable in ten years at eight per cent. interest, were issued. For the payment of the interest and principal of this loan a tax or duty of one eighth of one per cent. per pound was laid on all cotton exported. On March 9th an issue of one million dollars in Treasury notes of fifty dollars and upward was authorized, payable in one year from date, at 3.65 per cent. interest, and receivable for all public debts except the export duty on cotton. A reissue was authorized for a year. On May 16th a loan of fifty million dollars in bonds, payable after twenty years at eight per cent. interest, was authorized. The bonds were "to be sold for specie, military stores, or for the proceeds of sales of raw produce or manufactured articles, to be paid in the form of specie or with foreign bills of exchange." The bonds could not be issued in fractional parts of a hundred dollars, or be exchanged for Treasury notes or the notes of any bank, corporation, or individual. In lieu of any amount of these bonds, not exceeding twenty million dollars, an equal amount of Treasury notes, without interest, in denominations of five dollars and upward, was authorized to be issued. These notes were payable in two years in specie, and were receivable for all debts or taxes except the export duty on cotton. They were also convertible into bonds payable in ten years at eight per cent. interest. On August 19th another issue of Treasury notes, amounting with those then issued to one hundred million dollars, was authorized. They were of the denominations of five dollars and upward. They were receivable for the war-tax and all other public dues except the export duty on cotton. These notes were convertible into twenty-year bonds, bearing eight per cent. interest, of which the issue was limited to one hundred million dollars. Thirty millions were to be a substitute for the same amount, authorized by the act of May 16, 1861. These bonds could be exchanged for specie, military and naval stores, or for the proceeds of raw produce and manufactured articles. On December 19th ten million dollars in Treasury notes were issued to pay the advance of the banks. On December 24th an additional issue of fifty millions of Treasury notes like those of the act of August 19th was authorized. An additional issue of thirty millions of bonds was also authorized. On April 12, 1862, an issue of Treasury notes, certificates of stock and bonds, as the public necessities might require, to the amount of two hundred and fifteen millions, was authorized. Of these, fifty millions in Treasury notes were issued without reserve, ten millions in Treasury notes retained as a reserve fund to pay any sudden or unexpected call for deposits, and one hundred and sixty-five millions certificates of stock or bonds. Bonds to the amount of fifty million dollars, payable in ten years at six per cent. interest, were authorized and made exchangeable for any of the above Treasury notes. All these notes and bonds were subject to the same conditions as those of the acts of August 19 and December 24, 1861. On April 17th five millions of Treasury notes were authorized to be issued in denominations of one and two dollars, which were receivable for all public dues except the cotton duty. An amount of Treasury notes bearing interest at two cents per day on each hundred dollars, as a substitute for as much of the one hundred and sixty-five millions of bonds authorized, was also authorized to be issued. On September 19, 1862, three million five hundred thousand dollars in bonds was authorized to be issued to meet a contract for six iron-clad vessels of war. On September 23, 1862, the amount of Treasury notes under the denomination of five dollars was increased from five million to ten million dollars, and a further issue of bonds or certificates of stock, to the amount of fifty million dollars, was authorized.

On March 23, 1863, an effort was made to remove from circulation some of the issues of Treasury notes by funding them. For this purpose it was provided that all Treasury notes, not bearing interest, issued prior to December, 1862, should be fundable in eight per cent. bonds or stock during the ensuing thirty days, and during the succeeding three months in seven per cent. bonds or stock, after which they ceased to be fundable. All Treasury notes not bearing interest, and issued after December 1, 1862, until ten days after the passage of the act, were made fundable in seven per cent. bonds or stock during the ensuing four months, and afterward only in four per cent. thirty years bonds. Call certificates were made fundable in thirty years bonds at eight per cent., and all outstanding on the ensuing July 1st were deemed bonds at six per cent., payable in thirty years. A monthly issue of Treasury notes, without interest, to the amount of fifty million dollars, was also authorized. These were made fundable during the first year of their issue in six per cent. thirty years bonds, and after the expiration of the year in four per cent. thirty years bonds. The further issue of call certificates was suspended; but Treasury notes fundable in the six per cent. bonds might be converted, at the pleasure of the holder, into such certificates at five per cent. interest, which were reconvertible into like notes within six months, or afterward exchanged for thirty years six per cent. bonds. Treasury notes fundable in four per cent. bonds were convertible in like manner at four per cent. All disposable means in the Treasury were to be applied to the purchase of Treasury notes, bearing no interest, until the amount in circulation did not exceed one hundred and seventy-five millions. The issue of five million dollars, in notes of two dollars, one dollar, and fifty cents, was also authorized. It was further provided in this act that six per cent. bonds, as above mentioned, might be sold to any of the States for Treasury notes, and, being guaranteed by any of the States, they might be used to purchase Treasury notes. The whole amount of such bonds could not exceed two hundred million dollars. Treasury notes so purchased were not to be reissued. The issue of six per cent. coupon bonds to the amount of one hundred million dollars, which were to be applied only to the absorption of Treasury notes, was also authorized. The coupons were payable either in the currency in which interest on other bonds was paid, or in cotton certificates pledging the Government to pay the same in cotton of New Orleans middling quality, delivered at the rate of eight pence sterling per pound.

An important measure was adopted on February 17, 1864, the object of which was to reduce the currency and to authorize a new issue of notes and bonds. All Treasury notes above the denomination of five dollars, and not bearing interest, were, if offered within a short period, made fundable in registered twenty years bonds at four per cent. At the same time a new issue of Treasury notes was authorized, and made receivable for all public dues, except customs duties, at the rate of two dollars for three of the old. The issue of other Treasury notes, after the 1st of the ensuing April, was prohibited.

To pay the expenses of the Government an issue of five hundred million dollars in six per cent. bonds was authorized. For the payment of interest the receipts of the export and import duties, payable in specie, were pledged.

A review of this statement of the legislation of Congress will clearly present the financial system of the Government. The first action of the Provisional Congress was confined to the adoption of a tariff law, and an act for a loan of fifteen million dollars, with a pledge of a small export duty on cotton, to provide for the redemption of the debt. At the next session, after the commencement of the war, provision was made for the issue of twenty million dollars in Treasury notes, and for borrowing thirty million dollars in bonds. At the same time the tariff was revised, and preparatory measures taken for the levy of internal taxes. After the purpose of subjugation became manifest by the action of the Congress of the United States, early in July, 1861, and the certainty of a long war was demonstrated, there arose the necessity that a financial system should be devised on a basis sufficiently large for the vast proportions of the approaching contest. The plan then adopted was founded on the theory of issuing Treasury notes, convertible at the pleasure of the holder into eight per cent. bonds, with the interest payable in coin. It was assumed that any tendency to depreciation, which might arise from the over-issue of the currency, would be checked by the constant exercise of the holder's right to fund the notes at a liberal interest, payable in specie. The success of this system depended on the ability of the Government constantly to pay the interest in specie. The measures, therefore, adopted to secure that payment consisted in the levy of an internal tax, termed a war tax, and the appropriation of the revenue from imports.

The first operation of this plan was quite successful. The interest was paid from the reserve of coin existing in the country, and experience sustained the expectations of those who devised the system.

Wheat, in the beginning of the year 1862, was selling at one dollar and thirty cents per bushel, thus but little exceeding its average price in time of peace. The other agricultural products of the country were at similarly moderate rates, thus indicating that there was no excess of circulation. At the same time the premium on coin had reached about twenty per cent. But it had become apparent that the commerce of our country was threatened with permanent suspension by reason of the conduct of neutral nations, who virtually gave aid to the United States Government by sanctioning its declaration of a blockade. These neutral nations treated our invasion by our former limited and special agent as though it were the attempt of a sovereign to suppress a rebellion against lawful authority. This exceptional cause heightened the premium on specie, because it indicated the exhaustion of our reserve, without the possibility of renewing the supply.

At the inauguration of the permanent Government, in February, 1862, a popular aversion to internal taxation had been so strongly manifested as to indicate its partial failure. This will be further explained presently in our statement of the system of taxation.

Under all these circumstances the effort was made to avoid the increase in the volume of notes in circulation, by offering inducements to voluntary funding. The measures adopted for that purpose were but partially successful. Meanwhile the intervening exigencies from the fortunes of war permitted no delay. The issues of Treasury notes were increased until, in December, 1863, the currency in circulation amounted to more than six hundred million dollars, or more than threefold the amount required by the business of the country. The evil effects of this financial condition were but too apparent. In addition to the difficulty presented to the necessary operations of the Government, and the efficient conduct of the war, the most deplorable of all its results was, undoubtedly, its corrupting influence on the morals of the people. The possession of large amounts of Treasury notes led to a desire for investment; and, with a constantly increasing volume of currency, there was an equally constant increase of price in all objects of investment. This effect stimulated purchase by the apparent certainty of profit, and a spirit of speculation was thus fostered, which had so debasing an influence and such ruinous consequences that it became our highest duty to remove the cause by prompt and stringent measures.

I therefore recommended to Congress, in December, 1863, the compulsory reduction of the currency to the amount required by the business of the country, accompanied by a pledge that, under no stress of circumstances, would the amount be increased. I stated that, if the currency was not greatly and promptly reduced, the existing scale of inflated prices would not only continue, but, by the very fact of the large amounts thus made requisite in the conduct of the war, these prices would reach rates still more extravagant, and the whole system would fall under its own weight, rendering the redemption of the debt impossible, and destroying its value in the hands of the holder. If, on the contrary, a funded debt, with interest secured by adequate taxation, could be substituted for the outstanding currency, its entire amount would be made available to the holder, and the Government would be in a condition, beyond the reach of any probable contingency, to prosecute the war to a successful issue.

This recommendation was followed by the passage of the act of February 17, 1864, above mentioned. One of its features is the tax levied on the circulation. Regarding the Government when contracting a debt as the agent of the people, its debt is their debt. As the currency was held exclusively by ourselves, it was obvious that, if each person, held Treasury notes in exact proportion to the valuation of his whole estate, each would in fact owe himself the amount of the notes held by him; and, were it possible to distribute the currency among the people in this exact proportion, a tax levied on the currency alone, to an amount sufficient to reduce it to its proper limits, would afford the best of all remedies. Under such circumstances, the notes remaining in the hands of each holder after the payment of his tax would be worth quite as much as the whole sum previously held, for it would have an equal purchasing capacity.

After this law had been in operation for one year, it was manifest that it had the desired effect of withdrawing from circulation the large excess of Treasury notes which had been issued. On July 1, 1864, the outstanding amount was estimated at two hundred and thirty million dollars. The estimate of the amount funded under this act, about this time, was three hundred million dollars, while new notes were authorized to be issued to the extent of two thirds of the sum received under its provisions. The chief difficulty apprehended in connection with our finances, up to the close of the war, resulted from the depreciation of our Treasury notes, which was to be attributed to the increasing redundancy in amount and the diminishing confidence in their ultimate redemption.

The financial condition of the Government, near its close, is very correctly represented in the report of the Treasury Department. The total receipts of the Treasury for the two quarters ending on September 30, 1864, amounted to $415,191,550, which sum, added to the balance, $308,282,722, that remained in the Treasury on April 1, 1864, formed a total of $723,474,272. Of this total, not far from half, that is to say, $342,560,327, were applied to the extinction of the public debt; while the total expenditures were $272,378,505, leaving a balance in the Treasury on October 1, 1864, of $108,435,440. The sources from which this revenue was derived were as follows:

Four per cent. registered bonds, act of February 17, 1864 $13,363,500 Six per cent. bonds, $500,000,000 loan, act of February 17, 1864 14,481,050 Four per cent. call certificates, act of February 17, 1864 20,978,100 Tax on old issue of certificates redeemed $14,440,566 Repayments by disbursing officers 20,115,830 Treasury notes, act of February 17, 1864 277,576,950 War-tax 42,294,314 Sequestrations 1,338,732 Customs 50,004 Export duty 4,320 Coin seized by the Secretary of War 1,653,200 Premium on loans 4,822,249 Soldiers' tax 908,622

The total amount of the public debt on October 1, 1864, on the books of the Register of the Treasury, was $1,147,970,208, of which $530,340,090 were funded debt, bearing interest, and $283,880,150 were Treasury notes of the new issue, and the remainder consisted of the former issue of Treasury notes which were converted into other forms of debt, and ceased to exist on December 31st. In consequence, however, of the absence of certain returns from distant officers, the true amount of the debt was less by $21,500,000 than appeared on the books of the Register; so that the total public debt, on October 1st, might have been fairly considered to have been $1,126,381,095. Of this amount, $541,340,090 consisted of funded debt, and the balance unfunded debt, or Treasury notes. The foreign debt is omitted in these statements. It amounted to L2,200,000, and was provided for by about two hundred and fifty thousand bales of cotton collected by the Government.[192]

The aggregate appropriations called for by the different departments of the Government for the six months ending on June 30, 1865, amounted to $438,416,504. It was estimated that the remains of former appropriations would, on January 1, 1865, amount to a balance of $467,416,504. No additional appropriations were therefore required for the ensuing six months.

A system of measures by which to obtain a revenue from direct taxes and duties was commenced at the first session of Congress under the provisional Government. The officers who, at the time of the adoption of the provisional Constitution, held any office connected with the collection of the customs, duties, and imposts in the several States of the Confederacy, or as assistant treasurers intrusted with the keeping of moneys arising therefrom, were continued in office with the same powers and subject to the same duties. The tariff laws of the United States were continued in force until they might be altered. The free list was enlarged so as to embrace many articles of necessity; additional ports and places of entry were established; restrictive laws were repealed, and foreign vessels were admitted to the coasting-trade. A lighthouse bureau was organized; a lower rate of duties was imposed on a number of enumerated articles, and an export duty of one eighth of one cent per pound was imposed on all cotton exported in the raw state. At the second session, in May, a complete tariff law was enacted, with a lower scale of duties than had previously existed. On August 19, 1861, a war-tax of fifty cents on each hundred dollars of certain classes of property was levied for the special purpose of paying the principal and interest of the public debt, and of supporting the Government. The different classes of property on which the tax was levied were as follows: real estate of all kinds; slaves; merchandise; bank-stocks; railroad and other corporation stocks; money at interest, or invested by individuals in the purchase of bills, notes, and other securities for money, except the bonds of the Confederate States, and cash on hand, or on deposit; cattle, horses, and mules; gold watches, gold and silver plate, pianos, and pleasure-carriages. There were some exemptions, such as the property of educational, charitable, and religious institutions, and of a head of a family having property worth less than five hundred dollars. An act was passed for the sequestration of the property of alien enemies, as a retaliatory measure, to offset the confiscation act of the United States.

On April 24, 1863, a new act was passed relative to internal or direct taxes. It was designed to reach, as far as practicable, every resource of the country except the capital invested in real estate and slaves, and, by means of an income-tax and a tax in kind on the produce of the soil, as well as by licenses on business occupations and professions, to command resources sufficient for the wants of the country. On February 17, 1864, an amendment to this last-mentioned act was passed. It levied additional taxes on all business of individuals, of copartnerships and corporations, also on trades, sales, liquor-dealers, hotel-keepers, distillers, and a tax in kind on agriculturists. On June 10, 1864, an act was passed which levied a tax equal to one fifth of the amount of the existing tax upon all subjects of taxation for the year.

Within six months after the passage of the war-tax of August 19, 1861, the popular aversion to internal taxation by the General Government had so influenced the legislation of the several States that only in South Carolina, Mississippi, and Texas were the taxes actually collected from the people. The quotas of the remaining States had been raised by the issue of bonds and State Treasury notes. The public debt of the country was thus actually increased instead of being diminished by the taxation imposed by Congress.

At the first and second sessions of Congress in 1862 no means were provided by taxation for maintaining the Government. The legislation was confined to authorizing further sales of bonds and issues of Treasury notes. An obstacle had arisen against successful taxation. About two thirds of the entire taxable property of the Confederate States consisted in land and slaves. Under the provisional Constitution, which ceased to be in force on February 22, 1862, the power of Congress to levy taxes was not restricted by any other condition than that "all duties, imposts, and excises should be uniform throughout the States of the Confederacy." But in the permanent Constitution, which took effect on the same day (February 22d), it was specially provided that "representatives and direct taxes shall be apportioned among the several States according to their respective numbers, which shall be determined by adding to the whole number of free persons—including those bound to service for a term of years, and excluding Indians not taxed—three fifths of all slaves." According to the received construction of the Constitution of the United States, which had been acquiesced in for sixty years, taxes on lands and slaves were direct taxes. In repeating, without modification, in our Constitution this language of the United States Constitution, our Convention necessarily seems to have intended to attach to it the meaning which had been sanctioned by long and uninterrupted acquiescence—thus deciding that taxes on lands and slaves were direct taxes. Our Constitution further ordered that a census should be made within three years after the first meeting of Congress, and that "no capitation or other direct tax shall be laid, unless in proportion to the census or enumeration hereinbefore directed to be taken."

So long as there seemed to be a probability of being able to carry out these provisions of the Constitution fully, and in conformity with the intentions of its authors, there was an obvious difficulty in framing any system of taxation. A law which should exempt from the burden two thirds of the property of the country would be as unfair to the owners of the remaining third as it would be inadequate to meet the requirements of the public service. The urgency of the need, however, was such that, after great embarrassment, the law of April 24, 1863, above mentioned, was framed. Still, a very large proportion of these resources was unavailable for some time, and, the intervening exigencies permitting of no delay, a resort to further issues of Treasury notes became unavoidable.

The foreign debt of the Confederate States at the close of the war was twenty-two hundred thousand pounds. The earliest proposals on which this debt was contracted were issued in London and Paris in March, 1863. The bonds bore interest at seven per cent. per annum, in sterling, payable half-yearly. They were exchangeable for cotton on application, at the option of the holder, or redeemable at par in sterling, in twenty years, by half-yearly drawings, commencing March 1, 1864. The special security of these bonds was the engagement of the Government to deliver cotton to the holders. Each bond, at the option of the holder, was convertible at its nominal amount into cotton at the rate of sixpence sterling for each pound of cotton—say four thousand pounds of cotton for each bond of a hundred pounds, or twenty-five hundred francs; and this could be done at any time not later than six months after the ratification of a treaty of peace between the belligerents. Sixty days after the notice, the cotton was to be delivered, if in a state of peace, at the ports of Charleston, Savannah, Mobile, or New Orleans; if at war, at points in the interior of the country, within ten miles of a railroad, or a stream navigable to the ocean. The delivery was to be made free of all charges, except the export duty of one eighth of one cent per pound. The quality of the cotton was to be the standard of New Orleans middling. An annual sinking fund of five per cent. was provided for, whereby two and a half per cent. of the bonds unredeemed by cotton should be drawn by lot half-yearly, so as finally to extinguish the loan in twenty years from the first drawing. The bonds were issued at ninety per cent., payable in installments. The loan soon stood in the London market at five per cent. premium. The amount asked for was three million pounds. The amount of applications in London and Paris exceeded fifteen million pounds.

Great efforts had previously been made by agents of the United States Government to reflect upon the credit of the Confederate States, by resuscitating an almost forgotten accusation of repudiation against the State of Mississippi, and especially by an emissary sent to Great Britain, than whom no one knew better how false were the attempts to implicate my name in that charge. The slanderous tongues of Northern hatred even went so far as to style me "the father of repudiation." How unjust all such assertions were, will be manifest by a simple statement of the case.[193]

We should not omit to refer once more to the most prolific source of sectional strife and alienation, which is believed to have been the question of the tariff, or duties upon imports. Its influence extended to and affected subjects with which it was not visibly connected, and finally assumed a form surely not contemplated in the original formation of the Union. In the Articles of Confederation, the first Constitution of the United States, the theory was that of direct taxation, and the manner was to impose upon the States an amount which each was to furnish to the common Treasury to defray expenses for the common defense and general welfare.

During the period of our colonial existence, the policy of the British Government had been to suppress the growth of manufacturing industry. It was forcibly expressed by Lord North in the declaration that "not a hobnail should be made in the American colonies." The consequence was that in the War of the Revolution our armies and people suffered so much from the want of the most necessary supplies that General Washington, after we had achieved our independence, expressed the opinion that the Government should by bounties, encourage the manufacture of such materials as were necessary in time of war.

In the Convention which framed the Constitution for a "more perfect Union," one of the greatest difficulties in agreeing upon its terms was found in the different interests of the States, but, among the compromises which were made, there prominently appears the purpose of a strict equality in the burdens to be borne, as well as the blessings to be enjoyed, by the people of the several States. For a long time after the formation of the "more perfect Union," but little capital was invested in manufacturing establishments; and, though in the early part of the present century the amount had considerably increased, the products were yet quite insufficient for the necessary supplies of our armies in the War of 1812. Government contracts, high prices, and to some extent, no doubt, patriotic impulses, led to the investment of capital in the articles required for the prosecution of the war. With the restoration of peace and the renewal of commerce, prices naturally declined, and it was represented that the investments made in manufacturing establishments were so unprofitable as to involve the ruin of those who had made them. The Congress of the United States, in 1816, from motives at least to be commended for their generosity, enacted a law to protect from the threatened ruin those of their countrymen who had employed their capital for purposes demanded by the general welfare and common defense. These good intentions, if it be conceded that the danger was real which it was designed to avert, were most unfortunate as the beginning of a policy the end of which was fraught with the greatest evils that have ever befallen the Union. By the Constitution of 1789 power was conferred upon Congress—

"To lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States."

In the exercise of this delegated trust, tariff laws were enacted, and had been in operation to the satisfaction of all parts of the Union, from the organization of the Government down to 1816; but throughout that period all of those laws were based upon the principle of duties for revenue. It was true, and of course it was known, that such duties would give incidental protection to any industry producing an article on which the duty was levied; but, while the money was collected for the purposes enumerated, and the rate kept down to the lowest revenue standard, the consumer had no cause to complain of the indirect benefit received by the manufacturer, and the history of the time shows that it produced no discontent. Not so with the tariff law of 1816: though sustained by men from all sections of the Union, and notably by so strict a constructionist as Mr. Calhoun, there were not wanting those who saw in it a departure from the limitation of the Constitution, and sternly opposed it as the usurpation of a power to legislate for the benefit of a class. The law derived much of its support from the assurance that it was only a temporary measure, and intended to shield those whose patriotism had exposed them to danger, thus presenting the not uncommon occurrence of a good case making a bad precedent. For the first time a tariff law had protection for its object, and for the first time it produced discontent. In the law there was nothing which necessarily gave to it or in its terms violated the obligation that duties should be uniform throughout the United States. The fact that it affected the sections differently was due to physical causes—that is, geographical differences. The streams of the Southern Atlantic States ran over wide plains into the sea; their last falls were remote from ocean navigation; and their people, almost exclusively agricultural, resided principally on this plain, and as near to the seaboard as circumstances would permit. In the Northern Atlantic States the highlands approached more nearly to the sea, and the rivers made their last leap near to harbors of commerce. Water-power being relied on before the steam-engine had been made, and ships the medium of commerce before railroads and locomotives were introduced, it followed that the staples of the Southern plains were economically sent to the water-power of the North to be manufactured. This remark, of course, applies to such articles as were not exported to foreign countries, and is intended to explain how the North became the seat of manufactures, and the South remained agricultural. From this it followed that legislation for the benefit of manufacturers became a Northern policy. It was not, as has been erroneously stated, because of the agricultural character of the Southern people, that they were opposed to the policy inaugurated by the tariff act of 1816. This is shown by the fact that anterior to that time they had been the friends of manufacturing industry, without reference to its location. As long as duties were imposed for revenue, so that the object was to supply the common Treasury, it had been cheerfully borne, and the agriculture of one section and the manufacturing of another were properly regarded as handmaids, and not unfrequently referred to as the means of strengthening and perpetuating the bonds by which the States were united. When duties were imposed, not for revenue, but as a bounty to a particular industry, it was regarded both as unjust and without warrant, expressed or implied, in the Constitution.

Then arose the controversy, quadrennially renewed and with increasing provocation, in 1820, in 1824, and in 1828—each stage intensifying the discontent, arising more from the injustice than the weight of the burden borne. It was not the twenty-shilling ship-money tax, but the violation of Magna Charta, which Hampden and his associates resisted. It was not the stamp duty nor the tea-tax, but the principle involved in taxation without representation, against which our colonial fathers took up arms. So the tariff act in 1828, known at the time as "the bill of abominations," was resisted by Southern representatives, because it was the invasion of private rights in violation of the compact by which the States were united. In the last stage of the proceeding, after the friends of the bill had advocated it as a measure for protecting capital invested in manufactures, Mr. Drayton, of South Carolina, moved to amend the title so that it should read, "An act to increase the duties upon certain imports, for the purpose of increasing the profits of certain manufacturers," and stated his purpose for desiring to amend the title to be that, upon some case which would arise under the execution of the law, an appeal might be made to the Supreme Court of the United States to test its constitutionality. Those who had passed the bill refused to allow the opportunity to test the validity of a tax imposed for the protection of a particular industry. Though the debates showed clearly enough the purpose to be to impose duties for protection, the phraseology of the law presented it as enacted to raise revenue, and therefore the victims of the discrimination were deprived of an appeal to the tribunal instituted to hear and decide on the constitutionality of a law.

South Carolina, oppressed by onerous duties and stung by the injustice of a refusal to allow her the ordinary remedy against unconstitutional legislation, asserted the right, as a sovereign State, to nullify the law. This conflict between the authority of the United States and one of the States threatened for a time such disastrous consequences as to excite intense feeling in all who loved the Union as the fraternal federation of equal States. Before an actual collision of arms occurred, Congress wisely adopted the compromise act of 1833. By that the fact of protection remained, but the principle of duties for revenue was recognized by a sliding scale of reduction, and it was hoped the question had been placed upon a basis that promised a permanent peace. The party of protective duties, however, came into power about the close of the period when the compromise measure had reached the result it proposed, and the contest was renewed with little faith on the part of the then dominant party and with more than all of its former bitterness. The cause of the departure from a sound principle of a tariff for revenue, which had prevailed during the first quarter of a century, and the adoption in 1816 of the rule imposing duties for protection, was stated by Mr. McDuffie to be that politicians and capitalists had seized upon the subject and used it for their own purposes—the former for political advancement, the latter for their own pecuniary profit—and that the question had become one of partisan politics and sectional enrichment. Contemporaneously with this theory of protective duties, arose the policy of making appropriations from the common Treasury for local improvements. As the Southern representatives were mainly those who denied the constitutional power to make such expenditures, it naturally resulted that the mass of those appropriations were made for Northern works. Now that direct taxes had in practice been so wholly abandoned as to be almost an obsolete idea, and now that the Treasury was supplied by the collection of duties upon imports, two golden streams flowed steadily to enrich the Northern and manufacturing region by the impoverishment of the Southern and agricultural section. In the train of wealth and demand for labor followed immigration and the more rapid increase of population in the Northern than in the Southern States. I do not deny the existence of other causes, such as the fertile region of the Northwest, the better harbors, the greater amount of shipping of the Northeastern States, and the prejudice of Europeans against contact with the negro race; but the causes I have first stated were, I think, the chief, and those only which are referable to the action of the General Government. It was not found that the possession of power mitigated the injustice of its use by the North, and discontent therefore was steadily accumulating, and, as stated in the beginning of this chapter, I think was due to class legislation in the form of protective duties and its consequences more than to any or all other causes combined. Turning from the consideration of this question in its sectional aspect, I now invite attention to its general effect upon the character of our institutions. If the common Treasury of the States had, as under the Confederation, been supplied by direct taxation, who can doubt that a rigid economy would have been the rule of the Government; that representatives would have returned to their tax-paying constituents to justify appropriations for which they had voted by showing that they were required for the general welfare, and were authorized by the Constitution under which they were acting? When the money was obtained by indirect taxation, so that but few could see the source from which it was derived, it readily followed that a constituency would ask, not why the representative had voted for the expenditure of money, but how much he had got for his own district, and perhaps he might have to explain why he did not get more. Is it doubtful that this would lead to extravagance, if not to corruption? Nothing could be more fatal to the independence of the people and the liberties of the States than dependence for support upon the public Treasury, whether it be in the form of subsidies, of bounties, or restrictions on trade for the benefit of special interests. In the decline of the Roman Empire, the epoch in which the hopelessness of renovation was made manifest was that in which the people accepted corn from the public granaries: it preceded but a little the time when the post of emperor became a matter of purchase. How far would it differ from this if constituencies should choose their representatives, not for their integrity, not for their capacity, not for their past services, but because of their ability to get money from the public Treasury for the benefit of their local interests; and how far would it differ from a purchase of the office if a President were chosen because of the favor he would show to certain moneyed interests?

Now that fanaticism can no longer inflame the prejudices of the uninformed, it may be hoped that our statesmen will review the past, and give to our country a future in accordance with its early history, and promotive of true liberty.

[Footnote 192: These bales were the security for the foreign cotton bonds, and were seized by the United States Government. Was it not liable to the bondholders?]

[Footnote 193: The facts with regard to the Mississippi "Union Bank" bonds may be briefly stated as follows:

The Constitution of Mississippi required that no law should ever be passed "to raise a loan of money on the credit of the State, or to pledge the faith of the State for the payment or redemption of any loan or debt," unless such law should be proposed and adopted by the Legislature, then published for three months previous to the next regular election, and finally reenacted by the succeeding Legislature. The object was to enable the people of the State to consider the question intelligently, and to indicate and exercise their will upon it by the election of representatives to the ensuing Legislature, whose views upon the subject would be known, and with such instructions, express or implied, as they might think proper to give.

In 1837 a law was passed by the Legislature for incorporating the "Union Bank of Mississippi," with a capital of fifteen million five hundred thousand dollars, "to be raised by means of a loan to be obtained by the directors of the institution." In order to secure this loan, the stockholders were required to give mortgages on productive and unencumbered property, to be in all cases of value greater, by a fixed ratio, than the amount of their stock. When the stock had been thus secured, as a further guarantee for the redemption of the loan, the Governor was directed to issue bonds, in the name and behalf of the State, equal in amount to the stock secured by mortgage on private property. No bonds as thus directed were ever issued.

This act was duly promulgated to the people, and duly reenacted by the succeeding Legislature on the 5th of February, 1838, in strict accordance with the Constitution.

Ten days afterward, however, viz., on the 15th of February, the Legislature passed an act supplemental to the act chartering the Union Bank, which materially changed or abolished the essential conditions for the pledge of the credit of the State. By this supplemental act the Governor was instructed, as soon as the books of subscription should be opened, to "subscribe for, in behalf of the State, fifty thousand shares of the stock of the original capital of said bank, to be paid for out of the proceeds of the State bonds to be executed to the said bank, as already provided for in the said charter." This act was passed in the ordinary mode of legislation, and was not referred, published, nor reenacted, as prescribed by the Constitution. As soon as the directory was organized and the books of subscription were opened, and before the mortgages required by the charter were executed, the Governor, in behalf of the State, subscribed for fifty thousand shares of the stock, and issued the bonds of the State for five million dollars, payable to the order of the bank.

These bonds were sold to Nicholas Biddle, President of the United States Bank of Pennsylvania, and by him sent to Great Britain as collateral security for a loan previously made. None of the money received for them went into the Treasury of the State of Mississippi, nor was any of it used for a public improvement. All the consideration ever received by the State was its stock in the Union Bank. The bank soon failed, and the stock became utterly worthless.

Before the bonds became due, the Governor of the State had declared them to be null and void, among other causes, in consequence of the failure to sell them at par, as required by the "supplemental act," under which they were issued.

It is not necessary here to discuss the question of the validity or nullity of the bonds. The object is merely to state the principal facts.

While these events were occurring, and until a period several years subsequent to their consummation, I, who had just resigned my commission in the army, was a private citizen, had never held any civil office, and took no part in political affairs. Indeed, I have never at any time before, during, or since those events, held any civil office under the State government, and neither had nor could have had any part in shaping the policy of the State. When brought out as a candidate for office, my nomination was opposed by that section of my party which advocated "repudiation," on account of my opinions in favor of the payment of the bonds.

As a private citizen, it may be stated that I held that the question of the validity of the bonds should be decided by the courts. The Constitution of Mississippi authorized suit to be brought against the State in such cases in her own courts, and this I regarded as the proper course to be pursued by the bondholders, holding that the State would be bound by the judicial decision, if it should sustain the validity of the claim. This course, however, was not adopted until long afterward, when the question had become complicated with political issues, which rendered the effort to obtain a settlement entirely nugatory.

When I was a member of the Senate of the United States, my official influence was exerted to promote the objects of a citizen of Mississippi, who, with quasi-credentials from the United States Secretary of State, Mr. Buchanan, went to London to propose to the bondholders an arrangement by which the claim, or the greater portion of it, might be paid by private subscription, on consideration of the cancellation of the bonds. This effort failed, from a mistaken estimate on the part of some of the principal bondholders, to whom the proposition was made, of the extent to which State pride would induce our citizens to contribute, and to the belief in a power to coerce payment. The gentleman who bore the proposal, indignant at the offensive manner of its rejection, and conscious of the disinterestedness of his motives, abandoned the negotiation in disgust, and the opportunity was lost.]



CHAPTER XIV.

Military Laws and Measures.—Agricultural Products diminished.—Manufactures flourishing.—The Call for Volunteers.—The Term of Three Years.—Improved Discipline.—The Law assailed.—Important Constitutional Question raised.—Its Discussion at Length.—Power of the Government over its own Armies and the Militia.—Object of Confederations.—The War-Powers granted.—Two Modes of raising Armies in the Confederate States.—Is the Law necessary and proper?—Congress is the Judge under the Grant of Specific Power.—What is meant by Militia.—Whole Military Strength divided into Two Classes.—Powers of Congress.—Objections answered.—Good Effects of the Law.—The Limitations enlarged.—Results of the Operations of these Laws.—Act for the Employment of Slaves.—Message to Congress.—"Died of a Theory."—Act to use Slaves as Soldiers passed.—Not Time to put it in Operation.

The agricultural products were diminished every year during the war. Its demands diminished the number of cultivators, and their labors were more extensively devoted to grain-crops. The amount of the cotton-crop was greatly reduced, and numbers of bales were destroyed when in danger of falling into the hands of the enemy.

The manufacturing industry became more extensive than ever before, and in many branches more highly developed. The results in the ordnance department of the Government, stated elsewhere in these pages, serve as an illustration of the achievements in many branches of industry.

During the first year of the war the authority granted to the President to call for volunteers in the army for a short period was sufficient to secure all the military force which we could fit out and use advantageously. As it became evident that the contest would be long and severe, better measures of preparation were enacted. I was authorized to call out and place in the military service for three years, unless the war should sooner end, all white men residents of the Confederate States between the ages of eighteen and thirty-five years, and to continue those already in the field until three years from the date of their enlistment. But those under eighteen years and over thirty-five were required to remain ninety days. The existing organization of companies, regiments, etc., was preserved, but the former were filled up to the number of one hundred and twenty-five men. This was the first step toward placing the army in a permanent and efficient condition. The term of service being lengthened, the changes by discharges and by receiving recruits were diminished, so that, while additions were made to the forces already in the field, the discipline was greatly improved. At the same time, on March 13, 1862, General Robert E. Lee was "charged with the conduct of the military operations of the armies of the Confederacy" under my direction. Nevertheless, the law upon which our success so greatly depended was assailed with unexpected criticism in various quarters. A constitutional question of high importance was raised, which tended to involve the harmony of cooeperation, so essential in this crisis, between the General and the State governments. It was advanced principally by the Governor of Georgia, Hon. Joseph E. Brown, and the following extracts are taken from my reply to him, dated

Executive Department, Richmond, May 29, 1862.

"I propose, from my high respect for yourself and for other eminent citizens who entertain opinions similar to yours, to set forth somewhat at length my own views on the power of the Confederate Government over its own armies and the militia, and will endeavor not to leave without answer any of the positions maintained in your letters.

"The main, if not the only, purpose for which independent states form unions, or confederations, is to combine the power of the several members in such manner as to form one united force in all relations with foreign powers, whether in peace or in war. Each state, amply competent to administer and control its own domestic government, yet too feeble successfully to resist powerful nations, seeks safety by uniting with other states in like condition, and by delegating to some common agent the use of the combined strength of all, in order to secure advantageous commercial relations in peace, and to carry on hostilities with effect in war.