ourse established his character "as an honest
and frank man."

Taking these contradictory estimates as hints of a contradiction in the
man, we are forced to the conclusion that Chase was a professional
in politics and an amateur in finance. Perhaps herein is the whole
explanation of the two characteristics of his financial policy--his
reluctance to lay taxes, and his faith in loans. His two eyes did not
see things alike. One was really trying to make out the orthodox path
of finance; the other was peering along the more devious road of popular
caprice.

The opening of the war caught the Treasury, as it caught all branches of
the Government, utterly unprepared. Between April and July, 1861, Chase
had to borrow what he could. When Congress met in July, his real career
as director of financial policy began--or, as his enemies think, failed
to begin. At least, he failed to urge upon Congress the need of new
taxes and appeared satisfied with himself asking for an issue of
$240,000,000 in bonds bearing not less than seven per cent interest.
Congress voted to give him $250,000,000 of which $50,000,000 might be
interest-bearing treasury notes; made slight increases in duties; and
Prepared for excise and direct taxation the following year. Later in
the year Congress laid a three per cent tax on all incomes in excess of
$800.

When Congress reassembled in December, 1861, expenditures were racing
ahead of receipts, and there was a deficit of $143,000,000. It must not
be forgotten that this month was a time of intense excitability and of
nervous reaction. Fremont had lately been removed, and the attack on
Cameron had begun. At this crucial moment the situation was made still
more alarming by the action of the New York banks, followed by all other
banks, in suspending specie payments. They laid the responsibility upon
Chase. A syndicate of banks in New York, Boston, and Philadelphia had
come to the aid of the Government, but when they took up government
bonds, Chase had required them to pay the full value cash down, though
they had asked permission to hold the money on deposit and to pay it as
needed on requisition by the Government. Furthermore, in spite of their
protest, Chase issued treasury notes, which the banks had to receive
from their depositors, who nevertheless continued to demand specie.
On January 1, 1862, the banks owed $459,000,000 and had in specie only
$87,000,000. Chase defended his course by saying that the fina