ere was much more financial legislation in 1862; but Chase continued
to stand aside and allow Congress the lead in establishing an excise
law, an increase in the income tax, and a higher tariff--the last of
which was necessitated by the excise law which has been described as a
bill "that taxed everything." To enable American manufacturers to bear
the excise duties levied upon their business, protection was evoked
to secure them the possession of their field by excluding foreign
competition. All these taxes, however, produced but a fraction of the
Government's revenue. Borrowing, the favorite method of the Secretary,
was accepted by Congress as the main resource. It is computed that
by means of taxation there was raised in the course of the war
$667,163,247.00, while during the same period the Government borrowed
$2,621,916,786.00.

Whatever else he may think of Chase, no one denies that in 1862 he had
other interests besides finance. Lincoln's Cabinet in those days was
far from an harmonious body. All through its history there was a Chase
faction and a Seward faction. The former had behind them the Radical
Republicans, while the latter relied upon the support of the moderates.
This division in the Republican party runs deep through the politics
of the time. There seems to be good reason to think that Chase was not
taken by surprise when his radical allies in Congress, in December,
1862, demanded of Lincoln the removal of Seward. It will be remembered
that the elections of the autumn of 1862 had gone against Lincoln. At
this moment of dismay, the friends of Chase struck their blow. Seward
instantly offered his resignation. But Lincoln skillfully temporized.
Thereupon, Chase also resigned. Judging from the scanty evidence we have
of his intention, we may conclude that he thought he had Lincoln in
a corner and that he expected either to become first minister or the
avowed chief of an irresistible opposition. But he seems to have gone
too fast for his followers. Lincoln had met them, together with his
Cabinet, in a conference in December, 1862, and frankly discussed the
situation, with the result that some of them wavered. When Lincoln
informed both Seward and Chase that he declined to accept their
resignations, both returned--Seward with alacrity, Chase with
reluctance. One of the clues to Lincoln's cabinet policy was his
determination to keep both these factions committed to the Government,
without allowing himself to be