the passengers or crew of the barque, but they had all taken shelter; not a soul was on deck or to be seen.

The men were stationed to secure the ship, and the lieutenant descended to the cabin. A sailor, who had been at the wheel and had come down in the general evacuation of the deck, was the only person visible, and he looked sadly puzzled at such goings-on.

"Where is the captain of this ship?" asked the Confederate officer. The sailor pointed in silence to a state-room. "Very well," said the lieutenant; "get on deck and go to the wheel."

"Captain," knocking at the state-room door, "come out and give us the pleasure of making your acquaintance."

The door was opened, and the captain appeared. "What does this all mean?" he exclaimed, in great alarm.

"Only that your vessel is a prize."

"I hope you'll spare our lives.".

"What nonsense you are talking! Of course you will not be hurt. Bring me your papers."

The Confederate was about as much thrown aback as his prisoner had been, barring the fright of the latter. He had captured a vessel with a British register, from Halifax. The good prize which he had hoped to enjoy slipped out of his calculations, and he saw that he must content himself with a supply of his immediate necessities.

"Why, you are a British vessel! Why in the devil's name did you tell me you were of New York?"

"I said from New York; and who ever suspected a cruiser in such a yacht-looking craft as yours! Will you tell me who you are?"

Explanations followed, and the Blue-Nose was rejoiced to find himself safe from plunder. The Confederates had quenched their thirst at his water-cask, and he furnished them with a fresh barrel, and, what was about as welcome, gave them information of their latitude and longitude. They were about seventy miles northeast of the Hole-in-the-Wall. Indeed they could hardly have made a better course, considering the weather, had they been fully provided. The captain of the barque sold a chart, sextant, and a lot of bottled cider and small stores, taking payment in soft felt-hats and ladies' boots from the cargo. He wanted a cabin-boy, and the little negro on board the Happy-go-Lucky was made over to him. He was a remarkable specimen of quasi-humanity, so peculiar that his name was the "What is it?" He would have been a splendid present to query make to Professor Darwin. The Nova Scotian was glad to get him, and promised to turn him over to the American consul at Matamoros, or return him to New York, as the boy might choose. There were four passengers on board the barque, who proved to be Southerners who were trying to get into the Confederacy by the roundabout way of Mexico and the Rio Grande.

When the barque started from New York she was conducted on strict temperance principles, but for some reason or other, probably the unusual excitement of the capture and escape, when it was found that whiskey was to be got from the Happy-go-Lucky, her people readily accepted a barrel. They did not treat it so judiciously as the Confederates when in the hold of their own vessel, and were very jolly before they parted company.

.

No news was got from the barque, as she had left New York before the schooner had got out of the Chesapeake, and had met with no ships with later dates. Both vessels continued on through the Hole-in-the-Wall passage, and the next morning the Happy-goLucky anchored at Abaco. The solitary representative of Her Britannic Majesty, a dusky magistrate, soon boarded her, and in accordance with usual custom, on learning that she was a Confederate prize, ordered her to sea. The object of touching had been accomplished. It was found that the Federal cruisers, since the capture of so many Confederate ports, had been generally withdrawn, and the way was clear to Nassau. The schooner made a quick run to that port, lay off it the next night, and on the morning of the 18th of April anchored at Salt Key, the quarantine station outside the harbor. The custom-house and health officers on boarding her were surprised to find a Confederate vessel; it had been supposed that the flag was entirely swept off the ocean. The lieutenant addressed a letter to the Colonial government, asking permission to enter the port to refit and repair, as his mainmast was sprung and he was short of water. The usual forty-eight hours were granted, and the Queen's pilot came off to take the vessel in. The harbor was full of Yankee craft, and as the little schooner swept in flying the American flag below the Confederate colors, she created no little excitement. Execrations and exclamations of astonishment were heard from many sides as she glided to her anchorage, but the congratulations and cheers of the blockade-runners were almost as frequent.

It was especially annoying to the Yankee sailors to see a Confederate prize in the port, for they had been celebrating Federal victories for some weeks; and with the ordinary inconsistency of their class, they feared that the appearance of the prize was the omen of the end of their triumph. The business of the blockade-runners was over, and as they had stood any amount of chaffing from the Yankees, they were glad of anything, however unimportant, which gave them a chance to reply, and they would have well liked to make the little schooner out a fully-equipped line-of-battle ship. The port was full of idle seamen, and all fell to discussing the new arrival. Her probable future course, how long she would keep afloat, how long she would be allowed to stay, what she was worth, what sort of a crew she had, what manner of a man commanded her, what he intended to do were questions asked and answered in dialects as varied as the complexions of the parties who frequented the harbor. Repairs were immediately commenced, and water was taken aboard in quantities to preclude the necessity of using the Yankee cook-stove as a distillery. The lieutenant communicated with the Confederate agents ashore, and drew money enough for his immediate wants. No disposition of the cargo could be made in Nassau, a neutral port, and his stay was only on sufferance; so he made an arrangement with a person who may be called Mr. H. This individual was a trader from Savannah who had been doing business in the blockade-running which had made Nassau lively for some years previous. He had a smart brigantine called the Petrel, just then "available." He agreed to take on board a gun and ammunition and other supplies which the

Confederates had need of, but could not obtain in a neutral port, and meet at a rendezvous on the high seas or at an uninhabited island. The manifest of the prize was overhauled, and the Petrel was to clear for Cape Haytien and a market, with her papers made out to include all such portions of the cargo as the captor chose to dispense with. It was arranged that this portion was to be disposed of by Mr. H., and the moiety of the proceeds paid over to the captors as prize-money, while Mr. H. took the rest as payment for his commission and trouble. It was not a bad arrangement for Mr. H., and the best perhaps that the inconveniences of international law, or whatever law there is in such cases, permit for the benefit of captors. The necessary supplies were specified and procured for Mr. H. to take with him.

Repairs were pushed rapidly, but forty-eight hours were not enough to complete them. On application, and after a survey ordered by Captain Talbot of H. M. S. Fawn, the senior British naval officer, the time of remaining in port was extended to the Confederate vessel for forty-eight hours more, which gave an opportunity for a little rest on shore.

[CONCLUDED IN OUR NEXT NUMBER.]

THE SINEWS OF WAR.

An Historical Sketch of the United States Debt and Currency, from 1860 to 1874.

WH

HEN on the 14th of April 1861, after the bombardment of Fort Sumter, Major Robert Anderson accepted, under the pressure of necessity, General Beauregard's terms of evacuation, and marched out of that dismantled stronghold of the Union with colors flying and drums beating, it may be safely assumed that none, either in the Northern or the Southern States, foresaw the mighty and longprotracted struggle that would follow the event; in the course of which gold would soon become demonetised both North and South, and in the darkest days of the war command, in the city of New York, a premium over United States legal-tender notes as high as 185 per cent.; or, in other words, the dollar greenback was only worth 54 1-20 cents. The election of Abraham Lincoln to the Presidency in 1860 proved the prelude to the tragedy of the war, and that to the subordinate drama of gold.

Although the war began thus early, it was not until the evening of the 30th of December in the same year that the New York banks, at

a Clearing House meeting called to consider the subject, resolved to suspend specie payments at the opening of business on the following morning- an example which all the other banks in the country immediately followed-and from that time to this, as we all know, the suspension has continued unbroken. The Secretary of the Treasury, Mr. Salmon P. Chase, had, meanwhile, been making strenuous efforts to provide the sinews of war. His only resource thus far for raising money, beyond the income of the Government from customs duties and other ordinary sources, had been the issue of Treasury notes bearing seven and three-tenths per cent. interest, which Congress had authorised by the Act of July 17, 1861, to the amount of two hundred and fifty millions, with the privilege of issuing fifty millions of the amount, payable in coin on demand at the sub-treasuries in New York, Boston, and Philadelphia without interest, to be used as currency. These Treasury notes he had disposed of to the banks of New York, Boston, and Philadelphia to the amount of a hundred and fifty millions of dollars up to that time; an operation which had so far drained them of coin as to necessitate the suspension referred to; for Mr. Chase withdrew nearly the whole of the proceeds of the loan the latter having been made in three instalments, namely, on the 19th of August, the 1st of October, and the 2d of November - bodily from the banks to the Treasury and sub-treasury vaults. This was detrimental to the monetary interests of the nation, as well as unnecessary, Congress on the 5th of August 1861 having suspended the act of August 6th 1846, "providing for the better organisation of the Treasury, and for the collection, safe-keeping, transfer, and disbursements of the public revenue," so far as to allow the Secretary of the Treasury to deposit any of the money obtained on authorised loans in such solvent specie-paying banks as he might select. As a natural consequence, the disappearance of coin from circulation through. hoarding and exportation rapidly followed the suspension of specie payments, and Mr. Chase resorted to the issue of the before-mentioned fifty millions of non-interest-bearing United States demand-notes (authorised by the act of the 17th of July 1861) to supply the place of the demonetised gold and silver, as well as to assist in defraying current public expenditures, and to supersede the necessity for fresh issues of State Bank notes. After a while, however, some of the banks threw out the demand-notes, and Mr. Chase saw what he deemed the necessity for enforcing their circulation, and accordingly asked Congress to make them a legal tender for the payment of all debts public and private, except customs duties and interest on the debt of the United States, payable in coin. Congress took action in the matter on the 25th of February 1862 by passing the Legal-tender Act, making United States notes lawful money, and authorising the issue of a hundred and fifty millions of these, fifty millions of which were to be substituted": as rapidly as practicable " for the demand-notes authorised by the act of July 17, 1861. The clause providing for the payment in coin of customs duties and interest was a wise one, as the former furnished means for the latter; and the fact of the interest on the Government bonds being payable in gold created a demand for them both at home and abroad, which would have been wanting had the interest been payable in the paper promises called lawful money.

The campaign in the Peninsula proved prolific of disaster, and on the 11th of July 1862, Congress authorised a further issue of a hundred and fifty millions of United States notes; and on the 17th of January 1863, by a joint resolution of both houses, an additional hundred millions. On the 3d of March 1863 it passed a supplementary act authorising fifty millions more, making a total of four hundred and fifty millions. This was the maximum issue of greenbacks, or non-interest-bearing legal-tender notes, at any time during the war; and on the 30th of June 1864 an act was passed limiting their issue to four hundred millions, exclusive of fifty millions to be held as a Treasury reserve for the redemption of the Temporary Loan Certificates. A still later act, that of the 28th of January 1865, restricted the whole issue to four hundred millions, at which it remained until Mr. Hugh McCulloch, the successor of Mr. Thomas Fessenden, him? self the successor of Mr. Chase at the head of the Treasury department, began to contract it, and continued to contract until he had cancelled forty-four millions of the amount, when Congress interfered, in response to a popular outcry against it, and prohibited any further curtailment of the volume of greenbacks. From that time until the occurrence of the crisis of 1873, the greenbacks in circulation remained undisturbed at the sum of three hundred and fifty-six millions, following, but not during, which, Mr: Richardson, who had succeeded Mr. Boutwell, the successor of Mr. McCulloch, as Secretary of the Treasury, encroached for the first time on the so-called reserve of forty-four millions left by Mr. McCulloch, to the extent of twenty-six millions, owing to heavy drafts on the Treasury resulting from largely diminished receipts from customs and internal revenue consequent on the panic, and extraordinary naval expenditures in preparation for a possible war with Spain arising from the capture of the Virginius. This unauthorised issue was, however, legalised by the Currency Bill approved on the 22d of June 1874, which provided that the greenbacks in circulation should neither be raised above nor reduced below three hundred and eighty-two millions, the amount then outstanding. The same act abolished the National Bank reserve previously required to be kept in circulation, substituting therefor a provision that the banks were to deposit five per cent. in legal tenders of the amount of their circulation with the Treasurer of the United States at Washington, to be used for the redemption of their notes. The establishment of this Redemption Bureau has resulted in a considerable sum of mutilated bank-notes being sent in daily for redemp tion in greenbacks, which mutilated notes are as fast as possible replaced by new notes to a corresponding amount. The five per cent. reserve thus deposited is counted by the banks as a part of their reserve against deposits. The act also, without altering the previous limit of the National Bank circulation, provided for the issue of fiftyfive millions of notes to banks in the States and Territories having less than their proportion of circulation, under an apportionment made on the basis of population and wealth as shown by the census of 1870, the amount so issued to be withdrawn from the States having more than their proportion. Much of the work of contraction which took Mr. McCulloch years to accomplish was unfortunately undone