bonds, should have been forced to
purchase new bonds instead of supplying themselves with bonds already
issued, their purchase of which did the Government no good whatever.
Neglect in these regards caused the paper dollar to fall in value. In
July, 1864, it was worth only thirty-five cents in gold.

The finances of the Confederacy went steadily from bad to worse. The
blockade cut off its revenue from import duties. Its poor credit forbade
large loans. The government had to rely mainly upon paper money. This
soon became almost worthless. In December, 1861, it took $120 in paper
money to buy $100 in gold; in 1863 it took $1,900; in 1864, $5,000.
Nearly $1,000,000,000 in paper money was issued in all. The Confederate
debt at the close of the war was $2,000,000,000. Under the combined
influence of depreciated currency and scarcity of goods, prices became
ludicrously high. As early as 1862 flour was $40 a barrel and salt $1 a
pound. Before the war was over, a pound of sugar brought $75, a spool of
thread $20. Toward the end of the war a Confederate soldier, just paid
off, went into a store to buy a pair of boots. The price was $200. He
handed the store-keeper a $500 bill. "I can't change this," "Oh, never
mind," replied the paper millionaire. "I never let a little matter like
$300 interfere with a trade." Of course when the Confederacy collapsed
all this paper money became absolutely worthless.

[Illustration: Portrait.]
Salmon Portland Chase,
Secretary of the Treasury during the Civil War.

Mr. Lincoln and the Republican Party resorted to arms not intending the
slightest alteration in the constitutional status of slavery. But the
presence of Union armies on slave soil led to new and puzzling
questions. What should be done with slaves escaping to the Union lines?
Generals Buell and Hooker authorized slave-holders to search their camps
for runaway slaves. Halleck gave orders to drive them out of his lines.
Butler, alleging that since slaves helped "the rebels" by constructing
fortifications they were contraband of war, refused to return those
fleeing into his camp. Congress moved up to this position in August,
1861, declaring that slaves used for hostile purposes should be
confiscated. But when Fremont and Hunter issued orders freeing slaves in
their military districts, President Lincoln felt obliged to countermand
them, fearing the effect upon slave States that were still loyal.

As the war went on the conviction gre