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 bonds and treasury notes during the said period amounted to 111,378,625 dollars. Before closing the financial review of this year, we must mention a project which was warmly discussed in the South, and from which some persons anticipated wonderful results. The blockade having interrupted the exportation of cotton, there remained about three million five hundred thousand bales in the territory of the Confederacy. Instead of confining itself to receiving subscriptions depending upon the sale of this commodity, which were becoming more and more uncertain, the government was to purchase the whole supply and use it as a guarantee to negotiate loans in Europe. The Secretary of the Treasury very properly rejected such a proposition, which began by obliging it to purchase what he could only pay for in paper, and, consequently, to increase still further the issue of treasury notes, whilst the credit which the ownership of cotton would have secured him in Europe still depended upon the raising of the blockade. The certainty that on the raising of this blockade the export duties on cotton would fill the coffers of the treasury, should be sufficient to secure subscriptions to his loan on the part of English speculators the following year; and he was satisfied, two years later, by the monopoly of the cotton trade carried on by running the blockade. The second year of the existence of the Confederacy, which began the 18th of February, 1862, was ushered in under gloomy auspices, which Mr. Davis' optimism sought in vain to disguise. The hope of speedy recognition had vanished, and with it all confidence in the credit of the government. The Confederate armies, defeated in the West, decimated by sickness in the East, threatened everywhere with being abandoned by the twelve-month volunteers, could not be revived again except at the price of great sacrifices. It was at this period that the real depreciation of treasury notes commenced, and increased gradually and without interruption from day to day. The laws passed in 1861 having authorized the executive power to issue treasury notes to the amount of one hundred millions, and one hundred and thirty millions of loan scrip, and to receive subscriptions for the produce-loan, which, according to Mr. Davis,
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