7Th. Island No. 10 surrendered, Halleck telegraphed that

Pope had captured 6,000 prisoners in Missouri ; on the 15th

news came to New York that Fort Pulaski, guarding the

entrance to Savannah, had been taken ; and to crown the

month, New Orleans fell into Union hands, in its closing

week. Moreover, the greenbacks, which now, for the first

1 As most of the events referred to in the following review of the course of depre-

ciation are very well known, I have not considered it necessary to insert references

to war histories. The newspapers have been my main reliance, because the premium

was affected rather by what was reported concerning battles, etc., than by what

really happened ; but I have also used the diaries in Harper's Monthly Magazine,

and MOORE'S Record of the Rebellion, besides DRAPER'S Civil War in America, and

J. F. RHODES'S History of the United States.

SPECIE VALUE OP THE PAPER CURRENCY 213

time, began to come into general circulation, were most

favorably received, for it was considered highly patriotic to

accept the government's notes as nearly the equivalent of

gold. Thus, under the stimulus of victories and universal

confidence, the paper money reached the highest value of

the war $98.50, a depreciation of but $1.50.

2. The fall from May, 1862, to February, 1863. In

May military operations turned against the North. The

Confederates quietly slipped out of Yorktown after Mc-

Clellan had made elaborate preparations for a siege, and

McClellan followed so slowly as to lose his advantage. Far-

ragut took Natchez on the 13th, but all the successes of the

month were overshadowed by Jackson's brilliant operations

Iu the Shenandoah valley, where he defeated the Union

forces at Front Royal, drove Banks across the Potomac,

eluded the attempts of McDowell and Fremont to cut off

his retreat, repulsed their attacks at Cross Keys and Port

Republic, and finally effected a junction with Lee. So

great was the consternation at Washington that the gover-

nors were called upon by Stanton to forward all their militia

and volunteers for the defense of the capital. From $97.92

on the 1st of the month the currency declined to $96.04 on

the 27th, when the fright in Washington was at its height

and the average for the month was $1.70 less than it had

been in April.

A further fall of $2.90 came in June. Hanover Court-

House, Seven Pines, and Fair Oaks caused a slight rise in the

last days of May and the first days of June ; Fort Pillow was

taken on the 4th and Memphis two days later. But on the

12th Chase's request for a second issue of greenbacks was an-

nounced. Meanwhile McClellan lay inactive while Stuart's

cavalry rode around his army, capturing prisoners and burn-

ing supplies.

July brought yet greater disasters. McClellan's peninsu-

214 HISTORY OP THE GREENBACKS

lar campaign, which was to have ended with the capture of

Richmond, ended instead with the desperate retreat to Harri-

son's Landing, where he remained quiescent for the rest of the

month. The dream of a prompt close of hostilities was

rudely dispelled, and the president issued a call for 800,000

volunteers. Meanwhile Morgan was raiding in Kentucky, and

Congress passed the second legal-tender act. Under such

depressing influences the currency fell rapidly, and the

average for the month was $7.30 less than in June.

After the 22d of July there was a rally from the extreme

depression that lasted during the first part of August. Hal-

leek's appointment as general-in-chief had a good effect.

Reports were received of a debate in the House of Commons

that was interpreted to mean that the English government

had no intention of intervening in favor of the South.

Such news more than offset the draft of 300,000 nine-

months' militia ordered on the 4th. But after the llth of

August the current set in the opposite direction. Lee forced

Pope into the defenses before Washington, and opened the

way into Maryland, while Bragg was executing a similar

northward movement in Kentucky. About the same time

the Sioux Indians suddenly commenced their outrages in

Minnesota.

During September the depreciation continued. Lee's

advance caused grave fears for the safety of Baltimore, Har-

risburg, and Philadelphia. The public archives of Pennsyl-