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[676] this constantly-increasing debt. The measures adopted on the 28th of May for the purpose of collecting funds in those districts where the two armies were contending proved altogether insufficient. On the 6th of June, Congress inaugurated an entire system of excise laws under the name of the internal revenue act, long prepared by Mr. Chase, which secured some important sources of revenue to the government, although at the cost of great discomfort to those branches of industry affected by it. These means not yet proving sufficient, the whole custom-house tariff was increased by the law of July 14th, being raised to the utmost limits of fiscal protection.

The enormous rise in the prices of all articles manufactured in Europe was added to the depreciation of paper currency and to the ruin of all branches of industry, caused by the want of manual labor, and from this period may be dated the real sufferings which the war inflicted upon the population of the North. A new and sudden reaction took place in the movements of gold, which, as we have said, had been imported in considerable quantities during the year 1861. Its exports from the port of New York for the month of August amounted to one million two hundred and fifty thousand dollars per week. Moreover, the customhouse duties, which yielded two millions per week, and the interest on the debt, being paid in gold, the importers on one hand, and the government on the other, entered the market as competitors, which caused the premium on gold in October, 1862, to rise thirty-nine per cent.1

Consequently, when Congress again met, in the month of December, the financial situation, as described in the message of the President, presented a very gloomy aspect. The amount of expenditures for the fiscal year closing on the 30th of June, 1862, had reached the sum of $474,744,778.16, and the unavoidable redemption of certain provisional bonds and scrip carried it up to $570,841,500.25; the following fiscal year was nearly half through, and it was easy to foresee that the next budget would exceed six hundred millions. The Secretary of War had expended $394,368,407.36, and the Secretary of the Navy $42,674,569.69.

1 The Bankers' Almanac gives the maximum premium in this month as 37 per cent.; Secretary Chase says 37 5/8 per cent.—Ed.

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