his total was swollen to
$211,000,000. Like the tariff, the income, excise, and direct taxes were
often revised and raised, and many of the tariff increases were
dependent upon them. When the American manufacturer, who already
declared that he could stay in business only because the tariff
protected him from European competition, found himself burdened with a
tax on his income and with others upon his commercial transactions and
his output, he complained bitterly of the disadvantage at which he was
placed. To equalize his burdens, the import rates were repeatedly raised
against the foreigner. By the end of the war, the tariff exceeded
anything known in American experience, and was fixed less with the
intention of raising revenue than of enabling the American producer to
pay his internal tax. Less than $85,000,000 were collected from the
customs in 1865; while $211,000,000 came from internal sources.

By taxing and borrowing the United States accumulated $88,000,000 in
1861, $589,000,000 in 1862, $888,000,000 in 1863, $1,408,000,000 in
1864, and $1,826,000,000 in 1865. The Treasury, unimportant in the
world's affairs before 1861, suddenly became one of the greatest dealers
in credit. Its debt of $2,808,000,000, outstanding in October, 1865,
affected the interests and solidity of international finance, and
indicated, as well, resources of which even boastful Americans had been
unaware in 1861. One item in the debt, however, was a menace to the
security of the whole, which was but little stronger than its weakest
part.

The physical currency in which the debt was to be created and the
expenses paid was as difficult to find in 1861 as the wealth which it
measured. After Jackson destroyed the second Bank of the United States
there had been no national currency but coin, and too little of that.
Gold and silver had been coined at the mint, and the former had given
the standard to the dollar. In intrinsic worth the gold dollar, as
defined in 1834 at the ratio of sixteen to one, was slightly inferior to
its silver associate, and by the law of human nature, which induces men
to hold the better and pass the cheaper money, the value of the gold
coin had become the measure of exchange.

The coined money did not circulate generally. It was devoted to a part
of the business of government, and to the needs of the banks which
provided the actual circulating medium. Scattered over all the States,
hundreds of state and private banks is