e wheels of industry and commerce were moving at full
speed. Prosperity in the North was thus almost as fatal to the Union as
adversity in the South was to the Confederacy. Rather than advertise a
collapse of the federal credit by selling bonds at a discount of twenty
to forty per cent the guiding spirits at Washington decided to issue
notes as legal tender to the amount of $150,000,000, increased to
$300,000,000 a little later. Immediately, bankers and business men who
refused to take bonds protested with such vigor and resolution that
Chase and Lincoln, unlearned in the ways of finance, knew not what
course to take. To sell bonds at enormous discounts and high rates of
interest was bad; to tax the people directly for the needs of the
Government would have ruined the party in power; and to issue fiat money
was equivalent to forcing the poor to lend what the rich refused. But
the emergency was great. It was decided to issue and float "greenbacks"
and also to sell bonds in unprecedented numbers. Though the markets of
the world were open to the North and business was as active as ever in
the history of the country, the Federal Government was thus reduced,
like the Confederacy, to the use of paper money, and, surprising as it
may appear, the securities of the latter sold in Europe at a higher
price than those of the former. Gold and silver disappeared entirely in
both sections.

But the eyes of the public were fixed on military movements, not
finance, and as the winter of 1861-62 wore on an army of a hundred
thousand men gathered around Washington for the second invasion of
Virginia. George B. McClellan, the "young Napoleon," drilled and
organized the raw recruits while public opinion began to urge another
march upon Richmond. Other armies nearly a hundred thousand strong
spread over Kentucky and threatened Tennessee at Cumberland Gap, Bowling
Green, and Forts Henry and Donelson. In February Ulysses S. Grant saw
the strategic importance of the forts on the Cumberland and Tennessee
Rivers, and before the first of March he had captured both, and the
whole of West Tennessee lay open to him. Nashville fell as he moved up
the Tennessee, and Commodore Foote opened the Mississippi River almost
to Vicksburg during the early spring. Meanwhile Albert Sidney Johnston
had retreated to northern Mississippi. Finding Grant in a weak position
on the southern bank of the Tennessee near Shiloh Church, he hastily
gathered his discouraged tro