popular in England that
the bonds of the United States. The world's treasures were closed
against us. The bankers of Europe, with the Rothschilds in the
lead, would not touch our securities. Their united clientage
included the investors of Great Britain and the Continent, and a
popular loan could not be effected without their aid and co-operation.
We were engaged therefore in a threefold contest,--a military one
with the Confederacy, and diplomatic and moral one with the
governments of England and France, a financial one with the money
power of Europe.

These causes threw us upon our own resources. The problem to be
solved was the utilization of our wealth without the aid which
comes from the power to borrow foreign money. Congress had obviously
failed at the extra session of July to use the taxing power to the
extent which financial wisdom demanded, and though it was now
willing to correct the error, there was not enough time to wait
the slow process of enactment, assessment, and collection. Our
need was instant and pressing. The banks of the country, many of
them in reckless, speculative hands, were freed by the suspension
of specie payment from their just responsibility, and might flood
the country with worthless paper which would entail great distress
upon the people. The Treasury notes not being paid in coin on
demand, as promised on their face, became discredited to such a
degree that the banks of the leading commercial cities would receive
them only as a special deposit, and not as money of account. So
entirely were these notes distrusted in the opening month of 1862
that in more than one instance State banks exchanged their own
bills for them as an act of patriotism, in order that the bounty
due to soldiers just recruited might be paid before they left their
State rendezvous to join the armies in the field. Troops already
in the service had seen more than one pay-day go by without sight
of the paymaster, and tens of millions were overdue to them.
Discontent in all the camps was the natural result.

With no power to exchange our bonds for coin except at such rates
as would destroy national credit, with only a hundred millions of
coin in all our banks when the war began, and a hundred and fifty
millions hoarded among the people, with the lavish products of our
mines transferred to Europe to pay for articles which it would have
been wiser to manufacture at home, our situation was not merely
one of an