THE AMERICAN RACE TO RUIN.

Nelson Examiner and New Zealand Chronicle, Volume XXII, Issue 18, 25 February 1863, Page 4

THE AMERICAN RACE TO RUIN.

[From the Saturday Review.]

Every fresh account of bloody and indecisive conflicts along a border line of a thousand miles only adds strength to the belief which has long been freely expressed in England, that the American civil war, like most coutests which elicit strong passions, will only terminate when the exhaustion of material resources shall have prostrated one or both of the combatants. It is probably more to the purpose to speculate on the prospects of this race to ruin than to build any hopes of peace on the possible consequences of military sucsesaes. The very conditions which render the conquest of the* South a chimera make it equally impossible for the most heroic achievements of the Confederates to put an end to the strife by force of arms. Until the supply of conscripts and the means of arming and supporting them begin to fail, no amount of fighting is likely to lead to a decisive result, except in the sense that the absence of a result is, in fact, the triumph of those who stand upon the defensive, and are fighting merely for their own independence. If we turn from the muster rolls of the rival armies, and the accounts of alternate victories and reverses, to a comparison of the financial resources and policy of the North and South, the contrast is even more astonishing than the equality with which, the struggle has been maintained in the field. At the commencement of the war, everything seemed in favour of the North. If they could not overwhelm the seceders with their numbers, they could, it was thought, infallibly wear them out if the war should become serious or protracted. Almost all the confidence of the Federalists at the outset of the conflict was founded on the belief that a comparatively poor nation, without manufacturing appliances at home, or the possibility of access to foreign ports, with abundance of cotton which could not be used, and but an indifferent supply either of food or money, must give way from utter exhaustion long before the wealthy North would begin to feel the pinch of pecuniary difficulty. This was a plausible calculation enough, and would have been sound if it had not left but two important considerations — the endurance of a people fighting for their existence, and the extravagance with which a war of conquest is certain to be conducted. The statesmanship of the Southern leaders and the recklessness of the Northern Cabinet have still further increased the proportion between the expenses of the Federal and Confederate Governments, uutil the original prospects seem to be almost reversed, and it is for the Confederates to wait as patiently as they may until the time when the exhaustion of Northern wealth shall leave them undisputed masters of their own territories.

If there is any truth in the figures which have been recently published as the balancesheet of the Confederate Government, it is certain that their economy in administration has more than counterbalanced their original inferiorityin wealth. Familiar as we are with the enormous sums which the Washington Government prides itself on spending, it is difficult to credit the assertion that the whole cost of the war to the Southern States has been £77,000,000. Never since nations first took to fighting, have such results been achieved with so small an expenditure ; and if " Stonewall" Jackson's troops have had to march and fight without shoes, and without a commissariat, it must be some compensation to them to know that the resources of their country have been so well husbanded as to afford the means of carrying on the war with effect until the accumulated hordes of the Northern traders shall have finally disappeared. Perhaps, after all, the severe economy attributed to the South may not be so astounding as it appears at first sight. Their troopß in the field have probably not been, on an average, much more than half as numerous as those which drew pay from Mr. Lincoln's Government, although a central position and superior generalship have generally equalized the forces at every critical point. The equipments of the Southern army have certainly been much less costly than those of the Northern forces ; the pay has been very much less ; and, from the first, scarcely anything hai been spent upon bounty money, which has contributed so largely to the drain on the Northern treasury. If we add to this the not improbable assumption that a country fighting for existence has suffered but little* from the organized system of plunder which has enriched the contractors and hampered the generals of the Federal army, it becomes intelligible that the South should have maintained at least an equal fight with not more than one-third of the expenditure which has already begun to cripple their adversaries.

There is, undoubtedly, an air of truth about the statement of the Southern finances. No pretence is made of a large revenue, the whole receipts from this source being set down at less than £3,000,000. Of the rest, £20,000,000 ia said to have been raised by loans, which is by no means improbable, and the paper currency figures for the handsome sum of £49,000,000. A deficit of £4,000,000 is admitted to remain, but the heavy income and property tax which the Richmond Congress has voted, will probably more than suffice to cover this deficiency. Except by way of comparison with the position of their enemies, the balance-sheet of the Confederates would be adverse enough. On both sides of the border the displacement of gold must have been substantially completed, and it is not to be supposed that Mr. Davis' s paper will escape depreciation auy more than Mr. Lincoln's. But it is something that the finances of the weaker section of the old Union should have stood the Strain of war with leaa signs of collapse than the advices from New York disclose from day to day. "Money abundant and gold advancing," is now the stereotyped report from Wallstreet, The constant rise in the prices of all commodities aud most securities, so far from being a set-off against less cheerful symptoms, is only a further proof of the rapidity with which Mr. Chase is leading his countrymen on the road to ruin. It is not that the goods or the investments have become more valuable, but that the paper which pays for them is losing its purchasing power. France was not rich when a dinner cost a thousand francs in Mtignats ', but at no time were her markets

more buoyant in the sense in which New York financiers apply that term to their own position.

The most formidable, though not the most surprising, feature of the financial affairs of the North, is the enormous extent to which the rate of expenditure goes on increasing. When the war began, the estimated annual cost was £6*0,000,000. The first year was admitted to have consumed more thau £\ 00,000,000, and the last financial statement of Mr. Chase puts the rate of expenditure at £155,000,000 per annum. Even if this should not be exceeded, as it cannot but be from the constant depreciation of the paper currency, if from no other cause, the North would seem to be nearing the goal of bankruptcy more rapidly than their opponents. They had further to go, but their pace more than made up for the original start, and, if pecuniary exhaustion is to decide the contest, few unbiassed foreigners would hesitate to say on which side the catastrophe is the more threatening. The comparison is scarcely exhausted even when this conclusion is accepted. The entire collapse of the monetary system of a country does not of necessity incapacitate it for military efforts. Men may live and fight long after the last dollar has disappeared from their pockets ; but to do so calls for an amount of patriotism and unanimity which is far more likely to be found in the South than in the compound of conflicting interests which makes up the existing remnant of the Federal Union. After a certain point of progressive depreciation is reached, paper money practically ceases to perform the functions of money at all. The essence of a currency is fixity of value ; and when a dollar has no longer any definite meaning, and may signify one value to-day and half as much a few months hence, all the operations of trade are as much paralysed as if the primitive machinery of barter were restored. In the comparatively simple organization of Southern society, it is possible that even this amount of inconvenience might be endured, in preference to submission ; but without a circulating medium sufficient to sustain the large commercial operations by which New York and Boston are connected with the Western States, it is inconceivable that the Federal States should long continue united in the prosecution of a hopeless war. The thirst for conquest and revenge may do much to delay the abandonment of the war ; but it cannot permanently keep the East and the West united, after the failing link that binds them together shall have finally given way.

Whether it will be a question of few or many months, or even of years, may not be easy to pronounce, but this at least is certain, that the financial crash which must end the war is approaching every day with more and more rapid strides. The first stage in the depreciation of a currency is always the most sluggish, and already the Federal money has lost from a quarter to a third of its value. At what point in the progress of events the speculators of New York will open their eyes to the fact that the money whose " abundance " they quote so cheerfully has lost all its commercial virtue as a standard of exchange, cannot be predicted ; but, sooner or later, the truth will come home even to them, and the false animation which pervades their markets will subside at once into stagnation and panic. When this comes, the least sanguine friends of peace may reasonably look for the end of the ruinous struggle. Until the contest has worked itself out to this conclusion, there is little to encourage any hopes of its termination. If patriotic Federalists could see the real interests of their country, they would fervently pray that the crash might come before all the strength and energy of the North had been exhausted by a fruitless war.

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