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[692] advantageous terms, in proportion as the opportunity offered, in conformity with the system adopted in the North. They were sold at par, but in small quantities, for on the 1st of January, 1863, the treasury had not been able to dispose of one-tenth of them. Consequently, on the 16th of April, new financial measures were adopted by Congress. The conflict had commenced; the Confederacy had received the addition of several new States, and its expenses had increased as rapidly as its resources. A second loan was authorized for a similar sum of fifteen million dollars in the form of treasury notes, bearing seven and thirty one-hundredths per cent. interest, redeemable at sight in paper, with the privilege of being exchanged for bonds at eight per cent.

The small success which had attended the first issue of bonds, however, did not justify the placing of any reliance upon this second issue as a means for defraying the immediate expenses of the war budget. Recourse was had to a speedier means of relief, which, however, on that very account gradually involved the financial affairs of the Confederacy in great difficulties. It was the same expedient resorted to by all States who have neither real resources nor solid credit to cover their expenses — the manufacture of treasury notes bearing no interest. This time, however, the amount issued was not extravagant, for it was limited to ten millions, while the amount of circulating medium in the Southern States was estimated at no less than eighty millions, counting both specie and private bank-notes. The provision making them a legal tender, however, disguised in the law under a form which did not in any way change its effects in a financial point of view, had from the very outset a tendency to depreciate the value of these notes. The measure was indispensable, for the precious metals were rapidly disappearing, and the Confederate treasury had neither the necessary bullion to sustain the currency of the paper nor the means of obtaining it. The resources upon which the government counted could not be realized until the raising of the blockade should enable it to sell its staple agricultural products, cotton, sugar and tobacco, in Europe. Its notes were made redeemable at sight two years after ‘a treaty of peace’ between the Confederacy and the United States. This was a very

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