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Before any installments were paid up, the panic that attended the election had affected credit, and many bids were withdrawn.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.
Incorrect. You stated, "Besides, the US Treasury would default within two months of any interruption of the tariffs." My question was why didn't that happen? The tariff from the South was most certainly halted, and for a lot longer than 2 months. Congress wasn't in session again until July so you have a period of 6 months without tariff, without congressional action, and the treasury didn't default. So please address the original question and explain why it didn't.