Confederates at Newtonia. On the 22d Blunt came upon Cooper at Old Fort Wayne and routed him completely. With the command of Francis J. Herron, Schofield marched over the White River Mountains but found the enemy in flight. In November Schofield resigned his command. A month later the contest was resumed in northwestern Arkansas. On November 27 Blunt set out with 5,000 men and 30 pieces of artillery to attack Marmaduke's force of 8,000 men at Cane Hill. By a rapid march he came up with the enemy and opened the attack upon their position on one of the heights of the Boston Mountains, but Marmaduke retreated toward Van Buren and Blunt returned to Cane Hill. There the latter received information that Hindman, with a force of over 11,000 men, was advancing northward to enter Missouri, and immediately summoned General F. J. Herron and his two divisions, then near Springfield, Mis

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souri, to his aid. Herron reached Elkhorn, about 12 miles from Blunt's position, on the evening of December 6, at which time the Confederates lay between the two Union camps. Early on the morning of the 7th Hindman moved against Herron with his cavalry, but Herron's entire force having come up, the Confederates were driven back. Hindman then took up a strong position and awaited attack. Meanwhile Blunt hastened to Herron's aid and Hindman thus faced a force superior to his own in both numbers and equipment. The battle, known as the battle of Prairie Grove or Crawford's Prairie, lasted the greater part of the day and the Confederates were finally forced to retreat. Their loss in killed, wounded and missing was 1,317 and the Union loss 1,251. The battle was of importance chiefly as checking the further. advance of the Confederates into Missouri.*

given serious consideration. He stated that the receipts into the Treasury for

* William M. Wherry, The Battle of Prairie Grove, Arkansas, in Journal of the Military Service Institute, vol. xxxiii., pp. 176–189; Battles and Leaders, vol. iii., pp. 448-450; Confederate Military History, vol. ix., pt. ii., pp. 107– 111; vol. x., pt. ii., pp. 144-150.

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the year ending January 30, 1862, had been $583,885,247.06, of which more than $525,000,000 had come from loans. The disbursements had been $570,841,700.25, leaving a balance in the Treasury of $13,043,546.81. Of the expenditures naturally the greatest portion had gone to the War Department (nearly $400,000,000), while $43,000,000 had been spent for the navy. As expenses would be enormous during the coming year, Congress was urged to provide money to meet them.*

Hardly had the message been read when the opposition began to denounce the course of the Government. Resolutions were introduced criticizing the Government for suspending the writ of habeas corpus and for arbitrarily arresting persons suspected of dealings with the Confederacy.

Nu

bined with private capital." Its advantages in absorbing public securities, providing a home market and giving steadiness to their value were obvious, while the measure was free from the objection of government interference, formerly alleged against the National bank. In 1862 E. G. Spaulding, of New York, and Samuel Hooper, of Massachusetts, had prepared a National bank act in accordance with the views of Secretary Chase, but Congress was so busy at that time with internal revenue bills and other important work that it was laid aside. This bill was introduced by John Sherman from the Senate Committee on Finance on February 2, 1863, with several suggested amendments. Ten days later it passed the Senate by a vote of 23 to 21 and on the 20th passed the House by a vote of 78 to 64. The act was approved by the President on February 25, 1863.*

On January 17, 1863, an issue of $100,000,000 in United States legal tender notes was authorized for the immediate payment of the army and navy, such notes to be a part of the amount provided for in any bill that might be passed during the session. In approving this act Lincoln said:

For text see Appleton's Annual Encyclopedia (1863), pp. 296-304; United States Statutes-atLarge, vol. xii., p. 665. This act proved so unsatisfactory in many details that during the next nine months only 134 banks were organized under it. Accordingly in June of 1864 the act was revised and the extension of the new system went on rapidly. See the note in Rhodes, United States, vol. iv., p. 239.

Spaulding explained to the House that during the next eighteen months the Government must borrow $1,000,000,000. The expenses of the Government were $2,500,000 a day (including Sundays) and as the receipts from customs, taxes and other sources would not exceed $600,000 daily the balance ($1,900,000) must be obtained by loans of some kind. Accordingly, by an act approved March 3, 1863, a loan of $300,000,000 was authorized for the current fiscal year and a loan of $600,000,000 for the next fiscal year, for which bonds were to be issued running not less than 10 nor more than 40 years, principal and interest payable in coin bearing interest at a rate not exceeding 6 per cent. per year, payable on bonds not exceeding $100 annually and on all others semi-annually. The secretary was authorized also to issue $400,000,000 of 6 per per cent. Treasury notes to run not more than three years and to be legal tender for their face value, excluding interest, and exchangeable for and redeemable by United States notes, for which purpose alone an issue of $150,000,000 of the latter was authorized. Further

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more, if necessary for the payment of the army, the navy, and other creditors of the Government, another issue of $150,000,000 in United States notes including the $100,000,000 voted in January was authorized, besides which authority was granted to issue $50,000,000 in special currency in lieu of postage or other stamps exchangeable for United States notes in sums not less than $3 and receivable for any dues to the United States less than $5, except duties on imports. Authority was given also to receive deposits of gold coin and bullion and to issue certificates therefor; and to issue certificates representing the coin in the Treasury, in payment of interest, which, with the certificates of deposits issued, were not to exceed by more than 20 per cent. the amount of coin and bullion in the Treasury. A semi-annual tax of 1 per cent. was imposed on the circulation of State banks.

Meanwhile a crisis had arisen in the Cabinet. Seward and Chase had become the Cabinet representatives of the more conservative and the more radical elements of the Republican party.

Seward throughout had worked without regard to his own. future, being absolutely free from any ambition for higher office. Chase on the other hand, while doing everything possible to insure the success of the Treasury operations, never became convinced that the Republicans had not made a great mistake at Chicago in nominating Lincoln. He