had been such
gross mismanagement of the Treasury, either from incompetency or
design, under the administration of Howell Cobb, that the credit
of the government was injured. There was embarrassment when there
should have been security; there was scarcity when the most ordinary
prudence would have insured plenty. So much depended at that moment
on the ability of the government to raise money by pledging its
faith, that Mr. Cobb perhaps thought he was dealing the deadliest
blow at the nation by depriving it of the good name it had so long
held in the money markets of the world. With unblemished credit
at the opening of the war, the government could have used its
military power with greater confidence, and consequently with
greater effectiveness.

THE NATIONAL CREDIT INJURED.

At the beginning of the year 1861 it was necessary for the government
to raise about $10,000,000 to meet Treasury notes outstanding and
the interest secured upon them. Congress had passed, on the 17th
of December, 1860, a law authorizing the issue of new Treasury
notes for this amount, bearing interest at the rate of six per
cent., and redeemable after one year; but the Secretary of the
Treasury was authorized to issue them, upon public notice, at the
best rates of interest offered by responsible bidders. Before the
close of the month negotiations were completed, after unusual
effort, and it was found that the notes were issued at various
rates, only $70,200 at six per cent., $5,000 at seven per cent.,
$24,500 at eight per cent., $355,000 at rates between eight per
cent. and below ten per cent., $3,283,500 at ten per cent. and
fractions below eleven per cent., $1,432,700 at eleven per cent.,
and by far the larger share, $4,840,000 at twelve per cent. The
average for the whole negotiation made the rate of interest ten
and five-eighths per cent.

The Treasury was empty, for the nominal balance was only $2,233,220
on the 1st of January. Obligations were accruing to such an extent
that General John A. Dix, as Secretary of the Treasury, informed
the Committee on Ways and Means of the House of Representatives,
that the revenue exhibited, on the 1st of February, a deficit of
$21,677,524. The committee estimated that the sum needed to carry
on current operations was at least $5,000,000 in addition. A loan
of $25,000,000 was proposed, to meet these demands. Secretary Dix,
who felt the pulse of th