The 'harbor defenses' were shooting at unarmed merchant ships long before then.
WHEN exactly?
under what circumstances??
POSITIVE proof please.(see, N-S, 2 can play that game.)
free dixie,sw
You asked me why the Federal Treasury was in jeopardy and about to run out of money.
The finances of the Federal Government had been in a very disordered condition due to business downturns resulting from the political disturbances, and which by reducing the imports of overseas goods, had reduced the customs income, the chief source of revenue for the Treasury.
In June, 1860, a loan of twenty million dollars had been authorized by Congress. Of this amount, ten million was offered in October in a five per cent stock, and it had been taken by investors at a small premium.
Before any installments were paid up, the panic that attended the election had affected credit, and many bids were withdrawn.
This so seriously affected the Treasury Department, that as the New Year approached, it seemed likely there would be no funds with which to meet the interest on the National debt.
By the Act of December 17th, 1860, an issue of ten million dollars, in treasury notes, was authorized, to bear such a rate of interest as might be offered by the lowest bidders, but so shaken was credit, few bids were made, and some of them at a rate of thirty six per cent interest per annum.
The capitalists interested in the Government credit finally took one million five hundred thousand dollars of one year treasury notes, at twelve per cent per annum (the amount was subsequently raised to five million dollars), on condition that the money should be applied to paying the interest on the national debt.
This was certainly a dark day in the Capitol, when the Federal Government, which had earned the honor of being the only nation that had ever paid its debts in full—principal and interest—and which in 1856, with an overflowing treasury, had paid twenty-two per cent premium for its own stock, was now reduced to give twelve per cent interest, for a few millions, and to engage to protect its credit with the money.
This, combined with the specter that as soon as the primary cotton and tobacco producing states seceded with the subsequent massive loss in exportable products, that the US Treasury was in great jeopardy.
Domestic banks, investors, and overseas credit sources realized quickly with both the loss of southern goods from the trade business, and the new low tariff system going into Charleston and New Orleans, that unless some sort of action were taken to close these ports, that the Treasury was about to default.
No doubt you will be asking for references on the prior post. You can see from the following the spending that led to the debt.
The Economic Condition of the Federal Government in 1860
The following chart demonstrates the impact on exports and imports of Southern goods.
International Transactions and Foreign Commerce for 1857-1860
(Historical Statistics of the US, section U 187-200, pgs 885-887)
……............Value of ...Duties ….......Value of …Value of …….% of Tot.
Year ……...Imports ....Collected ….Exports …Cotton/Tobacco .Exports
1857 …334,000,000 .....63,876,000 ..279,000,000 152,000,000 ..55%
1858 ...243,000,000 …..41,790,000 …251,000,000 148,000,000 ..59%
1859 ...317,000,000 …..49,566,000 …278,000,000 182,000,000 ..65%
1860 ...336,000,000 …..53,188,000 …316,000,000 208,000,000 ..66%
Thus, it evident that just the exports of cotton and tobacco financed the purchase of the bulk of imports into the country on which tariffs were levied.
Practically the entire US Treasury, and therefore government supported Federal functions, as well as government underwritten public works for the states, were supported by the revenue from tariffs on imported goods.
………. Income of the Federal Government 1857-1860
………(Source: Historical Statistics of the US, Series Y 493-504, pg. 1114)
Total Income of the Treasury (Tariffs, public land sales)
Year …..Total Income …..Income from Tariffs
1857 ……. 68,965,000 .....63,876,000
1858 …….46,655,000 .....41,790,000
1859 …….53,486,000 .....49,566,000
1860 ………56,065,000 .....53,188,000
Federal spending for normal and basic government functions was as follows:
……………Federal Spending by Department
………….(Historical Statistics of the US, pg. 1114)
…………..Dept. of …. Dept. of …… Interest ……..Veterans’
………….The Army .....The Navy .….on public ……Compensation
Year ………(War Dept.) ……….......Debt ……….and Pensions
1857 ……….19,262,000 ..12,748,000 ….1,678,000 …….1,312,000
1858 ……….25,485,000 ..13,985,000 ….1,567,000 …….1,217,000
1859 ……….23,244,000 ..14,643,000 …..2,638,000 …….1,220,000
1860 ……….16,410,000 ..11,515,000 ….3,177,000 ……..1,103,000
Actual total spending of the US Congress far exceeded the amounts for normal and basic government operations.
………………………US Government Spending for 1857-1860
……………………….(Historical Statistics of the US, pg. 106)
…………….Total Fed. ………Total Fed Spending on Army, Navy,
Year ………….Spending ……….Interest on Public Debt., and Pensions
1857 …………. 67,796,000 .....35,400,000
1858 …………..74,185,000 .....34,300,000
1859 ………….69,071,000 .....29,700,000
1860 ………….63,131,000 .....33,100,000
Total Federal spending was not only well beyond its basic responsibilities, but also well beyond its revenue. The government began borrowing large amounts of money to meet its obligations, and had incurred the following debt just prior to the secession of the Southern states:
…………………..Public Debt of the Federal Government 1857-1860
………(Source: Historical Statistics of the US, Series Y-493-504, page 1118)
1857 …………$28,701,000
1858 ………… $44,913,000
1859 …………$58,498,000
1860 …………. $64,844,000
Non-seq:
This may help you understand the emergency as Congress understood it.
The Debt of the United States Government
On February 6, 1861, U.S. Representative Phelps, speaking to the House on this day said:
“At this moment, the outstanding debt of the United States is $69,373,000; comprising the loans authorized by the acts of 1842, 1846, 1847, 1848, 1858, and 1860, the Texas indemnity loan of 1850, together with the outstanding Treasury notes authorized by several acts. ...
“... the existing debt of the United States is nearly seventy million dollars.
“The $10,000,000 Treasury notes recently issued were negotiated, a portion at twelve per cent., and a portion at between ten and eleven. Your ten per cent treasury notes are sold in the market of New York below par; and if you authorize new loans that are not absolutely necessary, you cannot negotiate them except at ruinous rates.
“I have made a computation of the actual debt created and proposed to be created by this Congress.
” The balance of the loan authorized under act of 22nd June, 1860, is $13,978,000. If the amendment of the Senate be concurred in, that loan cannot be negotiated. I am in favor of that amendment.
“The tariff bill, which will probably become a law, authorizes the loan of $21,000,000. The Pacific railroad bill as it passed the House authorized an indebtedness of $96,000,000, and the Senate put on an additional $25,000,000.
“ In other words, the proposed indebtedness of the country is $167,000,000; making with the public debt and the loan already authorized, an aggregate of $250,351,649, With such indebtedness, how can you expect to raise a loan on favorable terms?
“I hope this amendment of the Senate will be concurred in.
The Government will then be enabled to raise the loan of $25,000,000 authorized in this bill [a bill authorizing $25,000,000 in loans], and $21,000,000 authorized in the tariff act.
“The Secretary of the Treasury has told you he will need $25,000,000 between the date of his communication and the 1st of July next, in addition to the current revenues of the country.”