The Era of Civil War: Treasury and Burkesville

It was with this purpose in view that Mr. Davis sent Mason and Slidell to Great Britain and France; but the failure was as complete as was an appeal to the Pope at Rome, who made the abolishment of slavery a sine qua non of recognition. This of course was impossible. The Confederacy first resorted to loans guaranteed by cotton, and for a time their loans sold well; but when cotton was no longer allowed to leave the country except as captured by the Federals, there was difficulty in making loans on any good basis. The Confederate expenses were enormous, because of the great risk in getting in supplies from abroad. There were few good mechanics in the South, and few foundries; the Tredegar Iron Works, at Richmond, was the only first-class establishment of its kind in the Confederacy. When loans from the States and bond sales failed to raise money, resort was had to paper currency, which was issued in large amounts. Just how much was current will never be known. The workmanship on the notes was poor, and counterfeits in the North were easily made, so that the South was swamped with paper money. It declined steadily with the fortunes of the Confederate arms, and after the war it became, along with the bonds, entirely worthless. Many of these bonds were held abroad. In fairness it can be said that the finances of the Confederacy were never well handled, even considering all the difficulties involved.

The Federal Government was more fortunate. After a short period of gloom and despair the Northern people resolved to stick together. A meeting of the leading bankers was held and money was furnished for a time almost as called for. The Treasury also issued interest-bearing notes for small denominations, but even these were not sufficient for the strain. When it was found that there was to be a long and bloody war, entirely original measures were taken. The National Banking system, substantially as it now is, was established. This had the two-fold effect of marketing bonds and providing currency for the needs of the people. Income and internal revenue taxes were laid on many articles. Specie payments were suspended, but no great disaster came. Finally, non-interest-bearing Treasury notes to the amount of nearly $450,000,000 were issued to pay war expenses. They were never on a par with gold, falling to about 40 per cent at one time, but fluctuating according to the success of the Federal arms. After the war they rose in value rapidly, but did not reach par until 1878. During the most trying part of the war Mr. Chase was at the head of the Treasury, but, on the death of Chief Justice Taney, succeeded him and Hugh McCullough became Secretary. During the war most of the bonds were sold through the agency of Jay Cooke, of Philadelphia -- the fourth man from that city to finance our Government in a war. By August, 1865, the National debt, which was only about $80,000,000 in 1860, had reached $2,845,000,000. About $800,000,000 was raised during the war by customs duties, internal revenue, and direct taxes.

General Grant's account of how he heard the news of Lincoln's assassination is characteristically succinct:

"After I left General Lee at Appomattox Station, I went with my staff and a few others directly to Burkesville Station on my way to Washington. The road from Burkesville back having been newly repaired and the ground being soft, the train got off the track frequently, and, as a result, it was after midnight of the second day when I reached City Point. As soon as possible I took a despatchboat thence to Washington City.

"While in Washington I was very busy for a time in preparing the necessary orders for the new state of affairs; communicating with my different commanders of separate departments, bodies of troops, etc. But by the 14th I was pretty well through with this work, so as to be able to visit my children, who were then in Burlington, New Jersey, attending school. Mrs. Grant was with me in Washington at the time, and we were invited by President and Mrs. Lincoln to accompany them to the theatre on the evening of that day. I replied to the President's verbal invitation to the effect, that if we were in the city we would take great pleasure in accompanying them; but that I was very anxious to get away and visit my children, and if I could get through my work during the day I should do so. I did get through and started by the evening train on the 14th, sending Mr. Lincoln word, of course, that I would not be at the theatre.

"At that time the railroad to New York entered Philadelphia on Broad Street; passengers were conveyed in ambulances to the Delaware River, and then ferried to Camden, at which point they took the cars again. When I reached the ferry, on the east side of the City of Philadelphia, I found people awaiting my arrival there; and also despatches informing me of the assassination of the President and Mr. Seward, and of the probable assassination of the Vice-President, Mr. Johnson, and requesting my immediate return.