Benson J. Lossing, Pictorial Field Book of the Civil War. Volume 1.

[115] monetary crisis was impending, and then commenced business restrictions and the withdrawal of capital from investment. Manufacturers and importers became anxious to get rid of their stocks on hand, and the markets, in commercial centers, were soon crowded.

By the middle of November, remittances from the South had almost entirely ceased, partly on account of the dishonesty of a large class who had resolved not to pay, partly because of the absolute inability of others to do so, and partly because of the high rates of exchange on the Northern commercial cities and the depreciation of Southern bank-notes, the Legislatures of several States having authorized the banks to suspend specie payments. The consequence was the subjection of large business houses, and, indeed, whole communities in the North, to great financial straits. Added to this was the sad condition of the National exchequer, and consequent distrust of Government paper. Howell Cobb, the treacherous Secretary of the Treasury, who found the coffers of the Government so overflowing when they came into his custody, in 1857, that the treasury notes next due were bought in, had so adroitly managed his scheme for the paralysis of this strong arm of the Republic, for the benefit of the conspirators, that it was empty in the summer of 1860; and in the autumn of that year he was in the market as a borrower of money to carry on the ordinary operations of the Government and to pay the interest on its loans. His management had created such distrust in financial circles, that he was compelled to pay ruinous premiums at a time when money was never more abundant in the country. Even bids on this loan were not all paid in; and early in December he left the treasury greatly embarrassed, to the delight of his fellow-conspirators.

The cereal crop of the West had filled the granaries to repletion, and operators were pushing heavy quantities to the sea-board cities for exportation; while the cotton-growers, anticipating great trouble ahead, were in equal haste to press the heavy crop of their staple on the market.¹ But capital had hidden in fear of danger, and could not be found to assist in the movement of these materials of national wealth. Doubt and uncertainty everywhere prevailed, and a desolating panic seemed inevitable.

Fortunately for the Republic and the cause of free government, the country was never really so rich as at that moment. Never were the people generally in such easy circumstances. The banks in the North were in a very healthy condition. The exports had greatly exceeded the imports. The exportation of cotton and grain had been very large, and the tide of trade and exchange was running so heavily in our favor toward the close of November, that coin soon came flowing into the country from Europe in immense volume. The pressure on the market, in the mean time, of unsalable foreign exchange, was so great, and the wants of commission merchants had become so pressing, that the banks of New York City, to give relief, purchased two millions five hundred thousand dollars of foreign exchange, upon which gold might be realized in thirty days. They also resolved upon a liberal line of discounts, by a consolidated fund arrangement with the Clearing-house, and thus they set