among those at the North who held contrary views, there was a prevailing opinion that the Federal government, or more properly the Federal party, would not attempt to coerce the seceded States by a resort to arms.

While the "National Democrats," at the North, were manifesting their opposition to coercive measures on the part of the Federal government, there was also a very respectable minority among the Whigs and the Republicans in that section who had declared against the policy, if, indeed, they had previously advocated the right of coercion. Mr. Seward, in addressing the Senate of the United States, January 12th, of this year, declared his principles to be the "Union before Republicanism." He urged not only the repeal of the personal liberty bill, and the enforcement of the fugitive slave law, but urged the Federal government to prevent the invasion of one State by the people of another. The bitter manner in which this conservative address of the New York Senator was denounced by the radical wing of the Federal party clearly evidenced that it was not the great constitutional question involved in the act of secession, but just such a fanatical zeal as John Brown had shown in his pretended opposition to the institution of slavery, that was forcing the Federal authorities to over-ride the Constitution. The position taken and earnestly maintained in the New York Tribune by Mr. Greeley, was in direct opposition to the spirit of the majority of his party. While he considered the secession of the Southern States an error, he emphatically urged that the "erring sisters be allowed to go in peace." In accord with the expression of the leading Republican journal of the North, the New York News published at the time the names of seventy newspapers, received as exchanges from the different Northern States, opposing all coercive measures on the part of the government as being both unconstitutional and impolitic. Even Mr. Lincoln, the President-elect of the Radical Republicans, in

his Springfield, Illinois, speech, delivered in January, 1861, did not, in more than equivocal terms, indicate a conviction that the Federal government had, or would exercise, the right of forcing a State into submission to the will of his party. He ended this meaningless address by frankly admitting that he had asserted nothing, and had asked a few questions very difficult to answer.

Thus it was that from the assembly of the Provisional Confederate Congress, on the fifth of February, until the delivery at Washington city of the inaugural message of President Lincoln, on the fourth of March, there was nothing to indicate a clearly-defined policy on the part of the Federal government or of the political party that had accidentally come into the possession of its machinery. For these reasons, taken in connection with the further fact already mentioned, that the seceded States were exercising a right of sovereignty asserted and maintained in the highest courts of adjudication known to our government from the foundation of the Union of States, the Provisional Congress of the Confederate States made no further provision for the exigencies of the revolution than was necessary to maintain the government on the basis of a peace establishment.

As soon as the act providing for the loan had become a law, Mr. Memminger began the work of preparing the representatives of our Confederate credit. So exclusively agricultural had been and were the pursuits of the people of the South, and so long accustomed to depend upon the Northern manufacturers, and upon the resources of European nations, that at the very outset of his labors the Confederate Secretary found serious difficulty in providing the coupon bonds, certificates and treasury notes which were to represent the financial resources of his government. In none of the Southern cities could engravers on steel or stone be found. Under these circumstances resort was had to the facilities offered through the active co-operation of Mr. G. B. Lamar,

president of the Bank of the Republic, in New York city. Acting as our agent, Mr. Lamar entered into a contract with the American Bank-Note Company for engraving and printing the bonds and treasury notes authorized by act of Congress. The work was handsomely executed on the best of bank-note and bond paper, but, with all the precaution taken by Mr. Lamar, the entire issue fell into the hands of the vigilant servants of the Federal government and was seized as being contraband of war. Hence we were driven to the expedient of importing engravers from abroad, and were compelled to resort to the use of such appliances and machinery as could be improvised at home.

The few paper-mills in the South were manufacturing only an ordinary grade of newspaper or the common wrapping paper used in the shops. For some time we had to rely upon the bank-note paper that could be obtained through partially closed ports, or that was brought across the frontier of the Confederacy by our trusted agents. The enterprise and skill of Messrs. Evans, Cogswell & Co., of Charleston, S. C., supplied the coupon bonds, but the difficulty of engraving and printing the treasury notes was not solved until after the removal of the Executive departments of the government to Richmond, Va., in the summer of 1861. Here Messrs. Hoyer & Ludwig, skilled engravers, were established by the Secretary of the Treasury, and under the supervision of an officer, specially appointed for the purpose, the first treasury notes were engraved upon old and inferior stones used formerly for common placards, and printed upon paper brought from Baltimore by agents employed in the special service of the Treasury Department. There was a papermill at Richmond, but heretofore it had been manufacturing no better grade than the ordinary newspaper used by the local press and printers. It became obvious to Mr. Memminger, at an early day in his administration, that this want of facilities for producing the material upon which to express

the evidences of credit authorized by acts of Congress would have to be supplied either by the Confederate government or by individual enterprise. Without delay he called to his aid Mr. Montague, president of the Richmond paper-mills, and at once began, with his active co-operation, arrangements for the manufacture of linen and the best quality of bank-note paper possible under the circumstances. In his report to Congress, March 14, 1862, Mr. Memminger thus refers to these difficulties: "At this stage of our progress we were brought to a stand by the difficulty of preparing treasury notes in the Confederate States. We had become so entirely dependent upon the North that but a single banknote engraver could be found in the Confederate States, and none of the material necessary for a bank-note was manufactured amongst us. We were, therefore, compelled to substitute lithographs for steel engravings, and to create the manufacture of bank-note paper. The delays incident to such a state of things produced many difficulties, and rendered it impossible to furnish an amount in notes adequate to meet the daily requisitions of the departments. The banks were applied to for a loan of their notes to meet the exigency. They promptly responded, and the balance due them is set forth in one of the schedules accompanying this report."

This statement will also explain why the Confederate treasury notes were at first so objectionable in appearance. Until the Richmond mills had secured the necessary machinery and stock for the manufacture of bank-note paper our supply was obtained entirely from Northern cities, through friends in Maryland, whose expedients to secure the safe delivery at Richmond of the much-needed paper have furnished to me a story abounding in ingenious device and thrilling adventure.

In perfecting the organization of the several divisions and sub-divisions of the Treasury Department, the system devised

1 See Appendix for Reports.