late Civil War. With a million of men on
the muster- and pay-rolls, including several great armies of veteran
troops in the field, while the Confederate army was reduced to a
very small fraction of that number, the Union cause was on the very
verge of failure, because the government could no longer raise
money to pay its troops, purchase supplies, or make any further
use of its magnificent armies. This astounding fact was confided
to the generals of the army in the winter of 1864-5 by the Secretary
of War, who then said the rebellion must be suppressed in the coming
spring campaign, or the effort abandoned, because the resources of
the treasury were exhausted. In corroboration of my recollection
of this subject, I now find the following in a private letter
written by me at that time:

"Washington, February 3, 1865.
"There is much excitement here over the peace rumors, and it would
seem there must be good foundation for it. The President has
actually gone to Fort Monroe to meet the rebel commissioners. I
do not, however, indulge much faith in the result of these
negotiations. We will probably have to beat Lee's army before we
can have peace. There is much commotion among politicians, and
there will be a storm of some kind on the political sea if peace
is made now. On the other hand, if the war continues long, the
treasury will most likely become bankrupt. It has got far behind
already. There is no money to pay the army, and no one can tell
where it is to come from. I have succeeded in getting enough to
pay my troops, which was obtained by special arrangement with the
treasury, and as a special reward for their distinguished services.
No other troops in the country have been paid for five months, and
there is no money to pay them."

The reasons for the deplorable condition of the United States
treasury are understood by all financiers. Yet a very large
proportion of the voting population do not appear to understand
it, or do not know the fact. People engaged in an effort to throw
off their dependency or political connection, and establish their
own independence, or a country defending itself against a powerful
adversary, may be compelled to resort to forced loans, in the
absence of national credit, to carry on the war. But in a great
country with unlimited resources, like the United States, resort
to forced loans would seem to be entirely unnecessary. However
this may be, and whatever may be the nece