baffled, there occurred the one brief space in Confederate history that
was pure sunshine. In this period took place the splendid victory of
Second Manassas. The strong military policy of the Administration
had given the Confederacy powerful armies. Lee had inspired them with
victory. This period of buoyant hope culminated in the great offensive
design which followed Second Manassas. It was known that the Northern
people, or a large part of them, had suffered a reaction; the tide
was setting strong against the Lincoln Government; in the autumn, the
Northern elections would be held. To influence those elections and at
the same time to drive the Northern armies back into their own section;
to draw Maryland and Kentucky into the Confederate States; to fall upon
the invaders in the Southwest and recover the lower Mississippi--to
accomplish all these results was the confident expectation of the
President and his advisers as they planned their great triple offensive
in August, 1862. Lee was to invade Maryland; Bragg was to invade
Kentucky; Van Dorn was to break the hold of the Federals in the
Southwest. If there is one moment that is to be considered the climax
of Davis's career, the high-water mark of Confederate hope, it was the
moment of joyous expectation when the triple offensive was launched,
when Lee's army, on a brilliant autumn day, crossed the Potomac, singing
"Maryland, my Maryland".

Chapter III. The Fall Of King Cotton

While the Confederate Executive was building up its military
establishment, the Treasury was struggling with the problem of
paying for it. The problem was destined to become insoluble. From the
vantage-point of a later time we can now see that nothing could have
provided a solution short of appropriation and mobilization of the whole
industrial power of the country along with the whole military power--a
conscription of wealth of every kind together with conscription of men.
But in 1862 such an idea was too advanced for any group of Americans.
Nor, in that year, was there as yet any certain evidence that the
Treasury was facing an impossible situation. Its endeavors were taken
lightly--at first, almost gaily-because of the profound illusion which
permeated Southern thought that Cotton was King. Obviously, if the
Southern ports could be kept open and cotton could continue to go to
market, the Confederate financial problem was not serious. When Davis,
soon after his first inauguration, sent Yan