the Treasury tended to damp the ardor of those who had with sanguine
temperament looked forward to an easy victory over the Rebellion.

SUSPENSION OF SPECIE PAYMENT.

It was felt by all that the National credit, which had been partially
restored under Mr. Chase's administration of the Treasury, could
not be maintained except from the pockets of the people, and that
every man must expect to contribute of his substance to the support
of the government in the great task it had assumed. Happily all
considerate and reflecting men saw that, desperate as the struggle
might be, it must be accepted with all its cost and all its woe.
They could at least measure it and therefore could face it. On
the side of defeat they could not look. That was a calamity so
great as to be immeasurable, and it left to the loyal millions no
choice. If the struggle then in progress had been with a foreign
power, popular opinion would have overthrown any administration
that would not at once make peace. But peace on the basis of a
dissevered Union, a disintegrated people, a dishonored nationality,
could not be accepted and would not be endured.

The discouragement in financial circles produced by the Treasury
report of Mr. Chase, hastened if it did not cause the suspension
of specie payment by the banks of New-York City. Many country
banks had ceased to pay specie some time before; indeed, many had
been only on a nominal basis of coin since the financial crisis of
1857. So long however as the specie standard was upheld by the
New-York banks, the business of the country was securely maintained
on the basis of coin. It was therefore a matter of serious moment
and still more serious portent that the financial pressure became
so strong in the last days of the year 1861 as to force the banks
of the metropolis to confess that they could no longer maintain a
specie standard. It had been many years since the government had
paid any thing but coin over its counters, but Treasury notes had
just been issued payable on demand, and many millions were already
in circulation. They would now be presented for redemption, and
if promptly met, the Treasury would be rapidly drained of its
specie. There were twenty-five millions less of gold coin in the
government vaults than Secretary Chase had expected. This fact of
itself enforced a larger issue of demand notes than would otherwise
have been called for, and