When the competent historian shall at last undertake a thoughtful work upon our great struggle, there can be little doubt that he will rank among the primary causes of the Confederacy's dissolution the grave errors of its financial system.

These errors he will find not only in the theory and framework of that system—founded upon a fallacy, but also in the detailed workings of its daily management; and in persistent adherence to a line of policy, each day proved more fatal.

In a previous chapter, allusion has been made to the feeling of conscious superiority, pervading all classes of government and people at the inception of the struggle, at Montgomery. This extended to all classes of the people; and the universal belief in the great dogma of secession—"Cotton is king!"—was doubtless the foundation of that cardboard structure of Confederate finance, which the first rude shock toppled to pieces, and the inexorable breath of demand shriveled into nothingness.

At Montgomery, the promises of ease in money matters were all that could have been asked. The people, everywhere, had come forward with frank, unanimous selflessness. They had faith in the cause—faith in the Government—faith in themselves; and they proved it by their works, giving with lavish hand from their substance. It was felt that the great prosperity of the North had, in a great measure, come from the South; that the looms of New England were fed with southern cotton; that the New York custom house was mainly busied over southern exports; that the soil of the South was, by the alchemy of trade, transmuted annually into three-fifths of the gold in the Federal treasury.

"Egad, sir!—money is our last trouble, sir!" my old friend, the colonel, had cried with enthusiasm. "The country teems with riches—actually teems, sir! with gold. We have only to stretch out our hands to gather it in—more than we want, egad! Men we need, sir!—but money, never!"

And the colonel was right in theory. But that very overweening confidence in her strength proved the South's greatest weakness; and where was needed the strong, nervous grasp of a practical and practiced hand, to seize at once the threads of gold, and weave them into a solid cord of system—weak and shifting fingers were allowed to tangle and confuse them, till each in turn was snapped and rendered worse than worthless. Mr. C. G. Memminger, whom the President elevated to the Treasury Department, was untried and unknown out of his own State; but so great was the confidence of the people in their financial power—so simple did the problem of its development seem to them—that they were trustful and satisfied, until the stern grasp of necessity roughly shook them from their golden dream. And they awoke, like the sleeper of German legend, to find their hands filled with worthless yellow leaves and grains of chaff, where they had dreamed of treasure beyond compare.

Immediately upon his appointment, thoughtful men—who could look a little beyond the rose-colored clouds of the present—had pressed upon Secretary Memminger the necessity for establishing heavy foreign credits, to draw against in case of future need. The currency of the southern banks was comparatively nothing, in view of increased expenditures. The cotton which was gold—food—clothing—everything to the South, with the open ports of the North, would be more worthless than the wampum of the Indians, so soon as the threatened blockade might seal up her ports and exclude the European purchaser. But, on the contrary, if that cotton were bought on the faith of the Government—and planters would willingly have sold their last pound for Confederate bonds; if it were shipped to Europe at once and sold in her market, as circumstances might warrant, the Confederacy would, in effect, have a Treasury Department abroad, with a constantly accruing gold balance. Then it could have paid—without agencies and middlemen beyond number, who were a constant moth in the Treasury—in cash and at reduced prices, for all foreign supplies; those supplies could have been purchased promptly and honestly, and sent in before the blockade demanded a toll of one-half; but above all, the interest and principal of such bonds to the planters could have been paid in coin, and a specie circulation thus been made, instead of the fatal and endless paper issues that rendered Confederate credit a scoff, and weakened the confidence of the southern people in the ability and integrity of that department.

In this sense—and this sense alone—Cotton was king! But the hands that could have lifted him safely upon a throne and made every fiber a golden sinew of war, weakly wrested the scepter from his grasp, and hid him away from the sight and from the very memory of nations.

It was as though the youngest of the nations aped the legendary traditions of the oldest. After the potent and vigorous King Cotton was killed by starvation, Confederate finance treated him as Jewish myth declares dead King Solomon was treated. In his million-acred temple, he stood—cold, white and useless—leaning upon his broken staff; while timorous leadership gaped at his still majesty—

"Awed by the face, and the fear, and the fame

Of the dead king standing there;

For his beard was so white and his eyes so cold,

They left him alone with his crown of gold!"

Had the Government bought—as was urged upon it in the fall of '61—all the cotton in the country, at the then prices, and paid for it in Confederate bonds at six per cent., that cotton—according to calculations of the best cotton men of the South—would have produced in Liverpool, during the next three years, at rapidly-increasing prices, over one thousand millions of dollars in gold! Granting this erroneous, even by one-half, it follows that the immense specie balance thus held, would—after paying all accruing interest—have left such a surplus as to have kept the currency issue of Confederate States' notes merely nominal, and even then have held them at a par valuation.

The soldier, who freely bared his breast to the shock of a hundred battles for his country, his fireside and his little ones, could then have sent his pittance of eleven dollars a month to that fireside, with the consciousness it might buy those dear ones bread at least. But long before the darkest days fell upon the South, his whole month's pay would not buy them one pound of bacon!

Secretary Memminger would seem to have had some theory, or reasons of his own, for refusing to listen to the plain common sense in these suggestions from practical sources. With a strictly agricultural population to supply, he insisted on the issue of Confederate notes in such volume that the supply far exceeded the demand. For, had there been a large manufacturing population actively employed in the South, as there was in the North, the inflation of currency might have been temporarily concealed by its rapid passage from hand to hand. But with no such demand—with only the daily necessities of the household and of the person to relieve—the plethora of these promises to pay naturally resulted, first in sluggishness, then in a complete break-down of the whole system.

Still, from the joyous days of Montgomery, and the triumphant ones after Manassas—through the doubtful pauses of the next winter and the dark days of New Orleans—............