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[530] 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 tile effort abandoned, because the resources of the treasury were exhausted. In corroboration of my recollection on 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 this 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

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