The Sun.
London, England, 1861-12-26 00:00:00

withstanding its wise economy, must continue to
take some articles of luxury or necessity from
Europe, the exchange will soon rise, and gold will
begin to flow out of the country to Franca and
England. Everything indicates a speedy sus-
pension of specie payments, the issue of a
national unredeemablc currency—the greatest diffi-
culty among the banks. The best informed people
believe that Mr. Chase has no alternative, and that
to the system of Government banking which lie has
already established in issuing Treasury notes pay-
able in gold on demand, but not forced on the people
as legal consideration, he will be compelled to add
a vast issue of paper which shall be made a legal
tender. Just in proportion as he is tempted to
make money out of nothing, and to exceed the actual
wants of the country for such a currency in order
to appear to be rich, must he be prepared for the
depreciation of the issue, and the consequent de-
preciation of all securities with it—not necessarily
on the instant, but nevertheless inevitable. The
security which can be offered i 3 in success; but if
success be attended with the dangers pointed out,
and with future complications, there may be hesi-
tation in accepting it. The Secretary of the Trea-
sury sees these difficulties as clearly as any man,
but he must meet them in some way or other, and
I have reason to think that this scheme will be
ready in a day or two, when the world can judge of
the financial prospects of the United States Govern-
ment. As to their military position, I have little
say in addition to what may be learnt from the
papers and the telegrams. The Federal army on
the Potomac is fast hutting itself, whether the
General intends it to winter there or not. The eight
divisions which sweep in a semicircle on the Vir-
ginia side of the river, from its banks above Drains•
ville to Hunting Creek, below Alexandria, render
the capital secure, and the Confederate General who
attacked the lines directly in force could not fail
to be repulsed by the mere fire of the guns of posi-
tion, unless he were favoured by a panic or singular
want of capacity and ordinary courage on the part
of his opponents more than by any possible display
of steadiness and daring of his own troops. But,
admitting that Banks, higher up the stream, has
25,000 men—an extreme supposition—and that
that Dix and Sickies, in Maryland and the eastern
shore of Virginia, have an adequate force to keep
down insurrection—and to protect their positions
from attack, I cannot see here any force which
could be spared to go into the open and
give battle to the enemy in front of Manassas, or
which could operate against the flanks of his posi-
tion, and still leave a sufficient garrison in the ex-
traordinary series of defensive works in front of
Washington. It is plain enough, I think, that
General M'Clellan and his advisers think the Con-
federate army will be frittered away by contingents
being sent to the defence of the coasts and maritime
cities, and to aid the Secessionists in Kentucky
and Tennessee, and that at last the substance of the
army shall be so far absorbed that the Federalists
can readily pierce the thin crust that remains. The
Confederates, however, must be quite well aware of
a danger so obvious and of a policy so transparent.
If all the expeditions terminate as that to Hatteras
has done, or as that to Port Royal promises to do,
they have little to fear from the seacoast beyond an
aggravation of the evils of the blockade to which
they are gradually becoming either hardened or re-
signed. But from the information I receive as to a
great preparation of large mortars (17,0001 b.
weight) and material, I am inclined to think that
against Fort Pulaski and similar works serious
attempts will be made as soon as the batteries can
be got ready. The combined operations of Confede-
rates and Federalists have rendered the approaches
to the cities by water impracticable, or will speedily
do so. The result seems to be that tho Federalists,
abandoning their advantages by water, will force
themselves to attack the cities by land, where their
enemy will have the advantage of them. Thus if
they take Fort Pulaski they cannot go by water to
Savannah ; the channel is blocked up- They will
soon render Sumter an inland fort by closing up the
entrance to Charleston, unless Mr. Welles has his
cuirassed floating battery in readiness to test the
strength of that redoubtable work and its aide-de-
camp Fort Pinckney. As the railway between
Charleston and Savannah hasbeen left in the hands of
the enemy, they can easily move troops and make
defensive preparations against any inland movement
till the Federalists take heart to march out of their
works at Hilton Head in the search of Union and
cotton. There are more " Rat-hole" squadrons being
fitted out, and the outer coast line of the South will
soon be continuous, and make the inner sea a
mare mortuuni—a delightful way of promoting the
commercial property and sabotage of the Union. If
all be fair in war the United States is acting fairly
in this war for the Union, and we may see it driven
to adopt the same means against its rebellious sub-
jects that were employed by the King of Naples at
Palermo with exactly the same justification. On
the Potomac matters are unchanged, the enemy
still occupy their batteries below the city and hold
the United States squadron in check at Indian
Head above and Mathias below. But now and then
a fleet of little oyster and lumber boats fly up in the
night and run past the batteries, keeping well in to
the Maryland side, and occasionally receiving a
harmless fire. A small steamer is also established
between Sickles' camp and Washington, which
scrapes along the friendly shore up and down twice
a-week. At Fortress Monroe some excite-
ment had been created by the bold appearance of
an iron-plated steamer out of James River, which
engaged the Federal gunboats at long range, and
created a stir in the whole squadron. It was either
an attempt to run the blockade, or to drive away
ennui. At Fort Pickens all is quiet again ; nobody
is hurt ; at least there has been a great deal of
powder and shot wasted, with little or no loss. The
extent of hypothetical damage is great ; if the ac-
tion had gone on many things would have hap-
pened we are assured which have not come to pass.
The magazine at Fort 'Tito (Confederate)
"caved in"—whatever that may be—Warrington
navy yard was not destroyed, and both Brown and
Bragg are quite cool and confident, and ready for
another tussle. The latter accuses the former of
firing on his hospital, but the former points out that
the latter had placed his sick in a building which
was right on a line with his principal battery. The
pretty naval station has, no doubt, suffered deface-
ment, but the range is too long to do any great
mischief. At New Orleans all is quiet, and Cap-
tain Hollins has gone up to direct naval operations
at Memphis and Columbus, against the Federal
flotilla, which is to be ready in three or four weeks.
The correspondent of one newspaper asserts posi-
tively that General Halleck does not intend to go
down the Mississippi at all, but that he is going up
the Tennessee, and that he will thence proceed with
75,000 men in the rear of Columbus and Hickman
towards Memphis. By this bold manoeuvre he will
deprive himself of the aid of his gunboats, and move
down in the heart of the enemy's country with a
strong army on the right flank of his line of
march. The correspondent can scarcely be aware
of the difficulty of moving 75,000 men with bag-
gage, munitions, food, and stores tbrough a hostile
and difficult region. Should General Halleck suc-
ceed, he will then co-operate with General Buell,
who, with an army on paper of 60,000 men, is to
march from Louisville through Kentucky on to
Nashville. At Paducah there has been a very
strange exhibition, which is more significant in its
political aspect than in its military bearings, how-
heard
ever discreditable to discipline the circum_fetgaunietter
md
saonmd se
ma at
nPbaecli
belongs
h -.4 v n
may seem. General Smith, an officer of the
athrmatya, ag to Brigilie7-
General Wallace's command had entered. 'the house
whooffi e e commands osmo
of a reputed Secessionist, and hoisted
sue stars and
stripes, sent his aide-de-camp
to request him to
to General Wallace
-- -e
Gene-1 uraer the removal of the flag.
Wallace refused to obey the order ! adding
that the it
should not be removed while there was