"It was a charge often repeated at the North against General Floyd, that, as Secretary of War, he had with traitorous intent abused his office by sending arms to the South just before the secession of the States. The transactions which gave rise to this accusation were in the ordinary course of an economical administration of the War Department. After it had been determined to change the old flint-lock muskets which the United States possessed to percussion, it was deemed cheaper to bring all the flint-lock arms in store at Southern arsenals to the Northern arsenals and armories for alteration, rather than to send the necessary machinery and workmen to the South. Consequently, the Southern arsenals were stripped of their deposits, which were sent to Springfield, Watervliet, Pittsburg, St. Louis, and other points. After the conversion had been effected, the denuded Southern arsenals were again supplied with about the same number, perhaps slightly augmented, that had formerly been stored there. The quota deposited at the Charleston Arsenal, where I was stationed in 1860, arrived there full a year before the opening of the war."
The charge was made early in the war that I was slow in procuring arms and munitions of war from Europe. We were not only in advance of the Government of the United States in the markets of Europe, but the facts presented in the following extracts from a letter of our agent, Caleb Huse, dated December 30, 1861, and addressed to Major C. C. Anderson, will serve to place the matter in its proper light:
"London, December 30, 1861.
"Dear Major: We are all waiting with almost breathless anxiety for the arrival of the answer from the United States to the unqualified demand of England for the captured commissioners. Will Mr. Lincoln disregard the international writ of habeas corpus served by Great Britain? We shall soon know. If the prisoners are given up, the affair will result in great inconvenience to us in the way of shipping goods.
"I have now more than enough to load three 'Bermudas,' and can not ship a package, though I have a steamer off the wharf, all ready to receive her cargo. We are literally fighting two governments here. Government watchmen guard the wharf where our goods are stowed and others in the neighborhood, night and day—and the wharfinger has orders not to ship or deliver, by land or water, any goods marked W. D., without first acquainting the honorable Board of Customs. I have applied myself to ship to Bermuda, offering to give bonds to double the amount of value of the goods, that they should be held in Bermuda, subject to the direction of her Majesty's representative in Bermuda. I ... has applied for permission to ship to Cardenas, agreeing to hold the goods subject to the order of the Spanish authorities—but all without avail, and our army must suffer for the want of blankets, overcoats, shoes, socks, field forges, arms, and ammunition, which have been collected to an amount more than double that I have yet received.
"It is miserable to have to look at the immense pile of packages in the warehouse at St. Andrews Wharf, and not be able to send anything—only read the following: twenty-five thousand rifles; two thousand barrels of powder; five hundred thousand caps; ten thousand friction-tubes; five hundred thousand cartridges; thirteen thousand accoutrements; thirteen thousand knapsacks; thirteen thousand gun-slings; forty-four thousand three hundred and twenty-eight pairs of socks; sixteen thousand four hundred and eighty-four blankets; two hundred and twenty-six saddles; saddlers' tools; artillery-harness; leather, etc. Very truly yours,
"Caleb Huse."
CHAPTER XIII.
Extracts from my Inaugural.—Our Financial System: Receipts and Expenditures of the First Year.—Resources, Loans, and Taxes.—Loans authorized.—Notes and Bonds.—Funding Notes.—Treasury Notes guaranteed by the States.—Measure to reduce the Currency.—Operation of the General System.—Currency fundable.—Taxation.—Popular Aversion.—Compulsory Reduction of the Currency.—Tax Law.—Successful Result.—Financial Condition of the Government at its Close.—Sources whence Revenue was derived.—Total Public Debt.—System of Direct Taxes and Revenue.—The Tariff.—War-Tax of Fifty Cents on a Hundred Dollars.—Property subject to it.—Every Resource of the Country to be reached.—Tax paid by the States mostly.—Obstacle to the taking of the Census.—The Foreign Debt.—Terms of the Contract.—Premium.—False charge against me of Repudiation.—Facts stated.
In my inaugural address in 1862 I said:
"The first year of our history has been the most eventful in the annals of this continent. A new Government has been established, and its machinery put in operation over an area exceeding seven hundred thousand square miles. The great principles upon which we have been willing to hazard everything that is dear to man, have made conquests for us which could never have been achieved by the sword. Our Confederacy has grown from six to thirteen States; and Maryland, already united to us by hallowed memories and material interests, will, I believe, when enabled to speak with unstifled voice, connect her destiny with the South. Our people have rallied with unexampled unanimity to the support of the great principles of constitutional government, with firm resolve to perpetuate by arms the rights which they could not peacefully secure. A million of men, it is estimated, are now standing in hostile array and waging war along a frontier of thousands of miles. Battles have been fought, sieges have been conducted, and, although the contest is not ended, and the tide for the moment is against us, the final result in our favor is not doubtful.... Fellow-citizens, after the struggles of ages had consecrated the right of the Englishman to constitutional representative government, our colonial ancestors were forced to vindicate that birthright by an appeal to arms. Success crowned their efforts, and they provided for their posterity a peaceful remedy against future aggression.
"The tyranny of an unbridled majority, the most odious and the least responsible form of despotism, has denied us both the right and the remedy. Therefore, we are in arms to renew such sacrifices as our forefathers made to the holy cause of constitutional liberty."
The financial system which had been adopted from necessity proved adequate at this early period to supply all the wants of the Government and of the people. An unexpected and very large increase of expenditures had resulted from the great enlargement of the necessary means of defense. Yet the Government entered on its second year without a floating debt and with its credit unimpaired. The total expenditures of the first year, ending February 1, 1862, amounted to one hundred and seventy million dollars. A statement of the Secretary of the Treasury, comprising the period from the organization of the Government to August 1, 1862, presents the following results:
| War Department Expenditures | $298,376,549 |
| Navy Department Expenditures | $14,605,777 |
| Civil and Miscellaneous | $15,766,503 |
| Total | $328,748,830 |
| Outstanding requisitions | $18,524,128 |
| Total expenditures | $347,272,958 |
| Total receipts | $302,482,096 |
| Deficient Treasury notes authorized | $16,755,165 |
| Deficient Treasury notes to be provided | $28,035,697 |
| Total | $44,790,862 |