CHAPTER VIII. IN the tempest of war that raged over land and ocean during the months of August and September, 1814, bystanders could not trust their own judgment of the future; yet shrewd observers, little affected either by emotion or by interest, inclined to the belief that the United States government was near exhaustion. The immediate military danger on Lake Champlain was escaped, and Baltimore was saved; but the symptoms of approaching failure in government were not to be mistaken, and the capture of Washington, which was intended to hurry the collapse, produced its intended effect. From the first day of the war the two instruments necessary for military success were wanting to Madison,--money and men. After three campaigns, the time came when both these wants must be supplied, or the national government must devolve its duties on the States. When the President, preparing his Annual Message, asked his Cabinet officers what were the prospects of supplying money and men for another campaign, he received answers discouraging in the extreme. First, in regard to money. In July, Secretary Campbell advertised a second loan, of only six million dollars. He obtained but two and a half millions at eighty. His acceptance of this trifling sum obliged him to give the same terms to the contractors who had taken the nine millions subscribed in the spring at eighty-eight. Barker found difficulty in making his payments, and from both loans the Treasury could expect to obtain only $10,400,000, owing to the contractors’ failures.[314] The authorized loan was twenty-five millions. The secretary could suggest no expedient, except Treasury notes, for filling the deficit. Bad as this failure was,--though it showed Secretary Campbell’s incapacity so clearly as to compel his retirement, and obliged the President to call a special session of Congress,--the Treasury might regard it as the least of its embarrassments. Commonly governments had begun their most desperate efforts only after ordinary resources failed; but the United States government in 1814 had so inextricably involved its finances that without dictatorial powers of seizing property its functions could not much longer be continued. The general bankruptcy, long foreseen, at length occurred.