of
the department on these offers was announced, the assistant treasurer
at New York advised the secretary that certain parties would take
the residue of the $5,000,000 offered, through the Bank of Commerce,
at 12 per cent. This proposition was accepted, on condition that
the amount required to make up the five millions should be deposited
without delay. The whole amount was applied to the payment of
overdue treasury notes and other pressing demands on the treasury.

Secretary Thomas resigned on the 11th of January, 1861, and John
A. Dix became Secretary of the Treasury. In answer to my inquiry
Secretary Dix, in an official letter, dated January 18, 1861, stated
the terms of the sale of treasury notes and that: "The amount
required to meet the outstanding current and accruing dues before
the close of the present fiscal year, besides any additional charges
on the treasury created by legislation during the present session
of Congress, is $44,077,524.63." He recommended a further issue
of $25,000,000 of bonds, and suggested that the states which had
received deposits under the act for the distribution of surplus
revenue in General Jackson's time might be called upon to return
such deposits, and added: "If, instead of calling for these
deposits, it should be deemed advisable to pledge them for the
repayment of any money the government might find it necessary to
borrow, a loan contracted on such a basis of security, superadding
to the plighted faith of the United States that of the individual
states, could hardly fail to be acceptable to capitalists."

In this connection I received the following note:

"Treasury Department, February 6, 1861.
"Hon. John Sherman.

"Dear Sir:--I send a preamble and resolution, and a letter to your
governor. Will you read and send them at once? You, as a Member
of Congress, can say what I cannot with propriety--that no states
which guarantee bonds of the United States to the amount of the
public moneys in its hands, will be likely to be called on to repay
these moneys--at all events during the twenty years the bonds of
the United States will run.

"I am truly yours,
"John A. Dix.
"P. S.--I cannot put out my notice for a loan till your state acts,
and the time is very short."

Subsequently I received the following letter:

"Treasury Department, February 11, 1861, 7 p. m.
"Dear Sir:--My plan for raising money to meet the outstanding
liabilities of the government, and to