ached. Of all the arguments with which
protectionists have arraigned free-traders, perhaps the most
difficult to answer is that which holds them responsible for the
weak financial condition of 1860-61 in that they had deliberately
driven our specie from the country for the ten preceding years.

CHAPTER XIX.

The Legal-tender Bill.--National Finances at the Opening of the
Year 1862.--A Threefold Contest.--The Country thrown upon its own
Resources.--A Good Currency demanded.--Government takes Control of
the Question.--Authorizes the Issue of $150,000,000 of Legal-tender
Notes.--Mr. Spaulding the Author of the Measure.--His Speech.--
Opposed by Mr. Pendleton.--Position of Secretary Chase.--Urges the
Measure upon Congress.--Speeches by Thaddeus Stevens, Mr. Vallandigham,
Mr. V. B. Horton, Mr. Lovejoy, Mr. Conkling, Mr. Hooper, Mr. Morrill,
Mr. Bingham, Mr. Shellabarger, Mr. Pike and Others.--Spirited and
Able Debate.--Bill passes the House.--Its Consideration by the
Senate.--Speeches by Mr. Fessenden, Mr. Sherman, Mr. Sumner, Mr.
Bayard, Mr. Collamer and Others.--Bill passes the Senate.--Its
Weighty Provisions.--Secretary Chase on State Banks.--Policy of
the Legal-tender Bill.--Its Effect upon the Business and Prosperity
of the Country.--Internal Revenue Act.--Necessity of Large Sums
from Taxation.--Public Credit dependent on it.--Constitutional
Provisions.--Financial Policy of Alexander Hamilton.--Excises
Unpopular.--Whiskey Insurrection.--Resistance by Law.--Supreme
Court Decision.--Case of Hylton.--Provisions of New Act.--Searching
Character.--Great Revenue desired.--Credit due to Secretary Chase.

At the opening of the year 1862, from causes narrated in the
preceding chapter, the government finances were in an embarrassed
and critical situation. In Europe the general opinion--founded in
many influential quarters on the wish--was that the Union would be
dissolved; that with the success of the South, there would be still
further division between the East and the West; and that the only
compact power would be the Confederacy founded on slavery, with
the world's great staples as the basis of its wealth and its assured
development. We had but recently and narrowly escaped war with
England on account of the Trent affair, and in the crafty and
adventurous Emperor of France we had a secret enemy who saw in our
downfall the possible extension of his power and the strengthening
of his throne. Confederate bonds were more