, but for the ensuing year, during which the
secretary estimated that the expenditures would be $475,331,245.
He proposed to amend the direct tax law, so as to collect under it
$20,000,000; to establish a system of internal revenue as he had
suggested in July, and to increase some of the customs duties.
From these sources, united with the receipts from the public lands,
the revenue would be $95,800,000. With this basis, reliance must
be placed on loans for the enormous sum of $654,980,920, and under
existing laws he could borrow only $75,449,675.

The sale of public lands had furnished some part of the resources
of the nation from an early day. The annual product had not been
large as a rule. In 1834 and 1835 the sales had been abnormal,
amounting in the latter year to $24,877,179, and only about
$10,000,000 less in the preceding year. They were $11,497,049 in
1855, but they had fallen until they were less than $2,000,000 in
1859. It was natural to consider whether any help could be derived
from this quarter in the hour of national necessity. A forced sale
of lands was impossible to any such extent as to affect the receipts
of the Treasury in the ratio of its demands. The pledge of the
domain as security for loans was suggested only to be rejected.
As was natural, purchases of the public domain ceased almost entirely
while the young men of the country were summoned to the national
defense, and the better strength went into the field of battle.
From the public lands therefore the Treasury could hope for little,
and very little was in fact received from them during the Rebellion.
Secretary Chase had estimated in July that $3,000,000 might be
annually derived from this source; but the receipts from the sales
of lands never reached even $1,000,000 a year until two years after
the Rebellion had been suppressed. Practically the public lands
passed out of consideration as a source of revenue. Unfortunately
also the attempt to levy a direct tax was received by the people
with grave manifestations of disapproval. Its enforcement was
likely to prove mischievous. The close of the year 1861 was
therefore heavy with discouragement to the government. The military
reverses at Bull Run and Ball's Bluff had outweighed in the popular
mind the advantages we had gained elsewhere; the surrender of
Slidell and Mason, though on every consideration expedient, had
wounded the national pride; and now the report of the Secretary of