THE DEPLETED CONDITION OF THE TREASURY WHEN MR. CHASE TOOK OFFICE.—PREPARATIONS FOR WAR AND GREAT EXCITEMENT IN WASHINGTON.—CHIVALROUS SOUTHERNERS IN A FERMENT.—OFFICIALS UP IN ARMS IN DEFENCE OF THEIR MENACED POSITIONS.—MISCALCULATION WITH REGARD TO THE PROBABLE DURATION OF THE WAR.—A VISIT TO WASHINGTON AND AN INTERVIEW WITH SECRETARY CHASE.—DISAPPOINTMENT ABOUT THE SALE OF GOVERNMENT BONDS.—A PANIC PRECIPITATED IN WALL STREET.—MILLIONAIRES REDUCED TO INDIGENCE IN A FEW HOURS.—MIRACULOUSLY SAVED FROM THE WRECK.—HOW IT HAPPENED. Soon after Mr. Chase came into the Treasury he found that money was seriously needed. In fact the Treasury was empty. The expenditure for the fiscal year ending June, 1861, was 62 millions, and there were only 41 millions of revenue to meet them, and even this amount was threatened with a serious reduction on account of the traitorous and rebellious attitude of the South. After President Lincoln had called upon Congress to provide for the enlistment of 400,000 men, the expenses of the Government were soon advanced to the enormous amount of a million dollars a day. The Secretary of the Treasury made a calculation, which he submitted to the President, showing that the probable expenditures would amount to 318 millions for the ensuing year. He advised that 80 millions be provided for by taxation, 240 millions by loan, and that 50 millions of Treasury notes, redeemable in coin on demand, should be issued. The Secretary was authorized by Congress to borrow a sum not exceeding 250 millions, on the credit of the United States, and as a part of this loan he was, in the words of the Act, “to issue in exchange for coin, or pay for salaries or other dues from the United States, not over 50 millions of Treasury notes, bearing no interest, but payable on demand at New York, Philadelphia or Boston.” When Mr. Chase advertised for bids on the bonds known as the 81 issue all bids at 94 and above were accepted, and those under 94 were rejected. I got up a syndicate immediately to take the entire balance of the loan at 94, and went on to Washington to see the Secretary. This syndicate comprised a number of New York banks and many large capitalists. I called upon Secretary Chase when I arrived, informed him of the object of my visit and made him an offer of 94 for the entire balance of the loan. He was in favor of the proposition, but requested me to leave the matter open until the following morning for him to consider. It was a question with him whether he ought not to give those whose bids had been rejected an equal opportunity with the parties I represented.