Year: 1861

~ A NsI ashs one sos which they desire %


The Financial Operations of the Lincoln
| Government.


/ The NortherR Journalists have INDUCED in greai


deal Of exultation at the unexpected success Of


their Government Loans, which were arranged


through the instrumentslity of the banks in Boston


New York and Philadelphia, The ability of the
| banks to advance hundred millions of the funds


upon the Government treasury notes, bearing seven


and three-tenths per cent. interest was only an
evidence, says the Richmond Eramiar, that the


usual oubject of bank discounts, to wit, mercantile
paper, was not to be procured in quantities com


mensurated with the capital of the banks. That


capital existed before the war in magnitude adapt


ed to the commercial wants of an enterprising and


prosperous population. numbering twenty millions,


carrying on business which, in the city of New


alone, was represented in the Clearing House at


from six hundred to eight hundred millions of dol


LAYS per month.


The breaking out of war and cessation of all


dealings with the South, of course put stop to


large classes of commercial enterprise and left the


capital of banking institutions usually employed in


those branches Of business, unoecupied. 1t was


therefore, nota remarkable thing to find the banks


willing to invest their idle capital in Government


loans.


They first took fifty millions of treasury notes,
securing the privilege Of being the sole recipients


of those issues of the Government, and of taking


two other instalmens Of fifty millions each at their


option. They have since sYailed themselves of this


option in regard to one of these instalments and


we suppose wiI of course, take the third and last
instament also. There was nothing to prevent this
operation Of the banks from going on swimmiDgly
so long as the current Of specie kept up from C'i
fOrnia, and also continued as usual from Europe


The banks as long IS this state of things cont T.
ued could pay ont their notes. or even specie its
in discharge of treasury dRfs drawn against their
loans to the Government So long as specie tending
to accumulate according to its want in the centres
Of trade at the North, no trouble or inconvenience
could result to the banks in paying the drafts
of the Government. But while there are seasons
during which specie tends to accumulate in the |
commercial centres of this continent there are also
seasons in which it tends to go abroad, and we |
think that will very soon set in; and we find
significant paragraph in the last telegraphic ad-
vices from Europe, in which it is said that the Lon
"don Times thinks it not unlikely that the moment |
'the drain of specie commences in the United
States, the financial community there will regard /
at as disastrous as Bull Rum


The truth is, that the North have endeavored to /
blind themselves to the fact that their trade could
be seriously affected by the loss of the business of
theSouth and in this obstinate infGtuation have /
continued to make large importatiOns from EUROPE,
their loss of the Southern market.
The season of the summer and early autumn are
those in which these impertatiOns have been made;
and they have heretofore been paid for by bills of
exchange drawn against Southern cotton, which
began to go abroad from this time until
March, April, aud May. Up to this time their trade
with Europe has continued to rest upon the cid ba>
sisof cotton and other Southern expectations, the
last crop of which had all gone forward before the
war began and before the blockade was declared.


The season is just now beginning to recur for
those Southern staples, the crops just matured and
to begin to go forward again. But the
Southern ports are bloekaded and our staples will
not 60 forth. Not even their great naval e&pedi-
ton will be abls to tempt them to The sesboard or
to send them abroad. It is land~locked as well as
and will not move.


How then will the North pay for the goods they i
have imported so largely, and for the quantities Of
arms, cannon and military supplies which they have
purchased in such liberal profusion in Europe?
They can pay for them only with Northern exports
consisting of little else than grain or with specie
But in ordinary seasons the North raises but
mail surplus of grain over and above its own con-
sumption. The crops they have recently harvested
Ire very short, and considering the number of Ia
,orers taken away from agriculture by the war, !
md the increased demand for provisions at home, !
,ecasioned by the waste of the armies it is very
doubtful whether the exports of grain from the c
North will be much more than nominal.


1t results that they viii have to pay for their i'm
,Ortations and discharge their old debts to Europe
very large part, with specie. They INDUCED two
lopes from which relief would come to them from !
his necessity. Theyhoped that Europe would take 8


large part of their loans, and that they would
able to pay their Indebtedness abroad by drafts
gainst Government bonds. In this calculation, Z
oweyer, they have wholly failed. European caI- 0
asts have refused even at the solicitation of the
owerfuI RorHscHLDs and BELsoNT, to invest ia this
sper. t
The other hope was from the achievement of the J
rand naval armament sent out against the Southern
cast. This was scheme of the Northern mer- il
hants ra ther than Of the Government; and is said
have been made condition Of the negotiation be-
Ween the Government and the banks. In their s
Opes of procuring cotton by the agency of the ] 8