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will compensate for its inutility or improvi- Rome, be, in virtue of his office, viceroy over dence, and new strength will be added to the the nominal ruler. It is possible that even popular belief that civilization is borne round the world on the wings of the imperial eagles. The new monarchy must necessarily rely on the protecting power of France, as Austria has neither ships nor money to send on crusading errands across the Atlantic. It is said, indeed, that Frenchmen hope to be relieved by an Austrian force from the burden of the Mexican occupation; but even if the Emperor Francis Joseph and the Council of the Empire were disposed to undertake the task, the appearance of a German army in Mexico would be a curious mode of commencing that establishment of a great Latin and Celtic state, which Napoleon III. proposed in his letter to General Forey as the main object of the war. It is not by Austrians that the Teutonic supremecy of the United States can be balanced on the Western Continent. The Archduke or Emperor Maxmilian must be content to acknowledge the patronage of the real founder of the new dynasty.

Mexicans, if they are regularly paid and strictly disciplined, may learn to perform the proper duties of soldiers; but, for the present, it will be necessary to maintain an army either of auxiliaries or of foreign mercenaries. By some means or other, the new Government will almost certainly attain such a condition as to justify the recognition which awaits all established or existing authorities. It is not at all improbable that a monarchy may really suit a semi-barbarous country better than a republic. England can have no special predilection or dislike for either form of government, and the inconveniences which may hereafter result from the arrangement concern France alone. It is, perhaps, irritating to jealous or ambitious tempers that the ancient rival of England should have succeeded in monopolizing the attention or the wonder of the world; but modest politicians are well content with the withdrawal of the English Government from the joint campaign which began as a distraint for debt and ended with the creation of an empire. The retiring partner has the mixed feeling of comfort and humiliation of an ordinary tourist on his return from a walk, after parting with a companion who has suddenly announced that he is on his way to the peak of the Matterhorn.

As soon as the new government is established, there can be no reason for withholding the recognition of England. The machinery by which an invading general causes a conquered province to obey his directions matters little either to natives or to foreigners. Marshal Forey has, it seems, convoked a Council of Notables, or persons of his own Whether Mexico is to be an Austrain monway of thinking, and his nominees have, archy, a Latin empire, or a French depenwith instructive unanimity, coincided in the dency, it will probably be necessary, sooner or judgement which the Emperor Napoleon had later, to deal with the hostility of the United formed two years ago. The Archduke Max- States. For the present, Federal agitators imilian has since accepted their invitation to will doubtless attribute the obnoxious event assume the Government of Mexico, with the to the perfidy, the cowardice, or some other title of emperor and with a constitution bor- of the vicious qualities which are commonly rowed from France. The modern substitute attributed to England. The Americans like for the consecrating oil will be probably sup- the French, because they believe them to be plied by universal suffrage, or, as Frenchmen the natural enemies of their own favorite obpedantically say, by a plebiscite. A salute of ject of hatred; and they also admire the Ema hundred guns would be an equally impos- peror Napoleon, because they know him to ing form, and it would represent public be powerful and despotic, and because they opinion not less accurately; but as the cost believe him to be unscrupulous. Nevertheand trouble of the whole performance have less, they are obliged to affect a regard for fallen on the Emperor Napoleon, it would be the doctrine to which they have attached the hard if the author and paymaster of the fes- name of President Monroe. The protest tivities were not allowed to regulate the dec- against European interference on the Ameriorations. For the future administration of can Continent was first directed, on the sugthe country an efficient army and a regular gestion of Mr. Canning, against the supBudget are the only indispensable requisites. posed projects of the Holy Alliance in South Prefects may be easily found, and laws may America. The doctrine afterwards became be imported in bulk, but the first want of popular because it furnished pretexts for inMexico is a force which will maintain order solence to England, and it was largely used without paying itself for its services by plun- in the obscure negotiations about the Mosder or oppression. The new emperor must quito Coast and the islands in the Bay of have a revenue and an army, and it will be Honduras. The Emperor Napoleon was in well if he insists on re-establishing the credit no way bound to respect an arbitrary rule of Mexico. A French auxiliary force would propounded by a single power, and never yet effectually suppress robbery and violence, but incorporated into the code of international its commander would, like his colleague at law. It is probable, however, that, but for

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the disruption of the Union, he would not have prosecuted his Mexican scheme; and it cannot be denied that he has revived or originated the policy which forty years ago provoked President Monroe's declaration. The Americans are not yet angry, but they feel bound to repeat their challenge, as it has been taken up by a power to which they never intended to address it. For the purpose of cultivating unfriendly feelings to the conqueror of Mexico, France is now not unfrequently bracketed with England in political declamation. On the return of peace, it is highly probable that attempts will be made to overthrow the new Mexican monarchy; nor will there by any serious difficulty in promoting disturbances which may furnish a pretext for intervention. The war which is still nominally carried on by the natives against invaders may linger on for years. Juarez still reigns as president over some of the provinces, and Comonfort and Doblado are at large, with facilities for giving trouble if they are not bought by the French. As no person seriously believes that the Mexicans have any voice in the new arrangement, it is immaterial to inquire whether they prefer a monarchy or a republic. Perhaps their politicians and generals may already look forward with pleasure to a contest in which two foreign powers may hereafter bid against one another for native support.

any terms which he may dictate. His deputy on the throne of Mexico will be in serious danger if the Federal flag once more floats on the left bank of the Rio Grande: but until the peril is imminent, France will probably temporize, and the Federal Americans will not, for the present, be eager to precipitate the contest.

From The Saturday Review, 15 Aug.
AMERICA.

In the midst of their reverses, the Confederates will probably find consolation and hope in the proclamation of the Mexican empire. The task of overthrowing the effete Republic had, as they hoped, been reserved for themselves; but in their present position, a French alliance will be worth more than any acquisition of territory. The Southern States have the means of contributing so effectually to the defence of Mexico that they might negotiate almost on equal terms for the assistance of France. The prospect of foreign support will animate them in their struggle against the advancing legions of the North, and furnish them with an additional encouragement to make a resolute resistance at Charleston. General Lee, moreover, remains in the field at the head of a still powerful army, and appears to have resumed his former position, It is evident that no Mexican Government, whence he is able both to menace Washington even with the aid of a French contingent, and to protect Richmond. General Bragg, could stand against the undivided power of who was said to have retired from Chattanooga the Federal States. As the Emperor Napo- on the approach of Rosecranz, has since been leon must be fully aware of the inequality of reported as having his headquarters still at force, it is naturally supposed that he is pre- that place; and it is further stated that Genpared to form an offensive and defensive alli- eral Johnstone, having received large reinance with the Southern Confederacy. A forcements from Bragg, is fortifying MeridFrench navy and a Confederate army would ian and the Ohio and Mobile Railroad for the render Mexico invulnerable even to the ut- defence of Mobile. On the other hand, the most efforts of the North; and as Spain parts of Western Louisiana which the Conwould probably join the league for the pro- federates had reoccupied during the siege of tection of Cuba, the direct support of France Port Hudson have once more passed under the might, perhaps, he almost superfluous. Yet dominion of the Northern Government. It it would be rash to anticipate that the French is not improbable that the next effort of Genemperor will, under any circumstances, pur- eral Banks will be directed to the conquest sue the most direct course. It is known that of Texas. The numerous German inabitants French agents have been intriguing in Texas, of the State are hostile to slavery, and thereand it is not impossible that hopes may be fore they are probably inclined to rejoin the entertained of the recovery of Louisiana. Union. The majority of the population is Recent events have suggested the possibility loyal to the Southern cause; but its numbers that Texas may be conquered by the Federal are scanty, and since the loss of the Missisarmies, now that the Mississippi forms a bar- sippi, the State is cut off from communication rier between the eastern and western portions with the greater part of the Confederacy. of the Confederacy. On the whole, however, The vicinity of Mexico and the rumored dethe emperor will probably think it better to signs of France will direct the attention of provide Mexico with an ally than to extend the Federal Government to Texas, and New his own conquests. If he has determined to Orleans supplies a convenient base for aggresrecognize the Confederacy, he will not be sive operations. Galveston has already been unlikely to wait until more decisive reverses for a time in the possession of the Federal compel the Southern Government to accept forces, and it might perhaps be easily retaken

by a naval expedition. The chief difficulty combinations, asserts, with questionable acof an invasion would consist in the vast spaces curacy, that General Morgan only intended which an army must necessarily traverse. to influence the forthcoming election. It The Federal victories and the New York might have been supposed that the plunder riots have, for the moment, discredited the of their homesteads would not incline the Democratic party. If a conflict arises be- voters of Ohio to prefer the candidates who tween the State authorities in New York are supposed to favor the cause of the South, and the central Government, it is uncertain nor is it altogether improbable that General whether popular opinion will acquiesce in Morgan may have succeeded in excluding Mr. the suppression of local independence. Gov- Vallandigham from the Governor's seat. ernor Seymour may be unable to resist the Whatever may be the value of General Burnencroachments of Washington, if opposition side's speculations, his own plan for securing is regarded as an impediment to the success- freedom of election is simple and effective. ful progress of the war. The City Council Having proclaimed martial law in Kentucky, has, perhaps, devised the most effective mode he instructs the officers, and even the judges, of baffling the draft, by voting an illegal grant to take care that no disloyal citizen-or, in for the discharge of needy conscripts. Mr. other words, no member of the Democratic Opdyke, the Republican mayor, proves that party-shall be allowed to vote. The same the Corporation has no right to raise money plan has been already tried with partial sucfor the purpose of defeating the law, but the cess in Maryland and Louisiana, and it involves representatives of the New York rabble know the elements of a fiction which may hereafter that they have provided an excuse for resist- be found useful in the administration of tering the draft, and a plausible pretext for an- ritory conquered from the South. In States other riot. If the Irish laborers discovered a which are wholly or partially attached to the grievance in the purchased exemption of the Union, direct interference with the electorial wealthier classes, they will not be disposed to privileges of the party which happens to be acquiesce in the rejection of a tender of three in opposition may prove a dangerous experihundred dollars per head on their own behalf, ment. General Burnside has already done even though the law may have been violated his employers the service of giving importance in the process of raising the money. Their to Mr. Vallandigham, If he undertakes the unfortunate victims, the negroes, are-in conduct of the elections in the North-Western profession at least-more loyal, although, as States, he may prove himself a Persigny on a Mr. Lincoln informed them some months ago, small scale, and may provoke even American they owe little gratitude to the Union. If long-suffering into the vindication of constifine words could frighten the Southern armies, tutional rights. For the present, he may the free colored population have proved that perhaps safely assume that all excesses of even American rhetoric admits of additional power will be tolerated, in the hope that a inflation by African lungs. Their leaders a strong government may succeed in termiand their preachers may possibly be sincere nating the war. in exhorting the negro race to win in the field the equality which has been systematically denied them in civil life; but it is highly improbable that colored patriotism should extend beyond grandiloquent professions. The semi-servile population has neither military aptitude nor sufficient motive for fighting. The free negroes of the North are sufficiently intelligent to know that their services will be despised even when they are accepted. The liberated slaves of the South may possibly be made more available; and the Confederates themselves are threatening, in turn, to bring a negro army into the field. To foreigners, the experiment seems dangerous; but the social relations of the South are still imperfectly understood.

The frequent rumors of unfriendly communications addressed by Mr. Seward to the English Government are probably still premature. It is not at the moment when the subjugatian of the South is confidently expected that it will be gratuitously rendered impossible by forcing England into an alliance with the Confederacy. A rupture at present would save Charleston, it would open Wilmington and Mobile, and it would probably transfer the blockade to the Federal ports. It is when the president and his advisers find themselves involved in hopeless embarrassment that the knot will perhaps be cut by a declaration of war against England. The failure of the conscription, the assertion of independence by the State of New York, the apGeneral Morgan's desperate incursion into proaching meeting of a hostile Congress, might Ohio, ending in his defeat and capture, can induce Mr. Seward to play the card which he only be explained on the assumption that it has long held in reserve. The Alabama, the was intended as a diversion during General Alexandra, the Chief Baron's judgment, and Lee's campaign beyond the Potomac. Gen- the language of the press, would furnish a eral Burnside, who ought to understand the sufficient excuse for a quarrel which was bearing of military movements on political thought in itself desirable. A war with Eng

land would be a better excuse than Caleb | alleged total debt, which is said to be £200,Balderstone's fire for any past or future short-000,000. The motive for this rather transcoming. If the Confederates were not thor- parent piece of cookery is also palpable on oughly beaten, if the restoration of the Union the face of the account. In December Mr. was finally abandoned, the foreign war would Chase had predicted that the debt of all kinds explain the necessity of employing elsewhere would amount in July to rather more than all the energies of the Government. Hopes £200,000,000; and it was a great triumph also would be entertained of obtaining in to be able to announce that the actual figures Canada a territorial equivalent for the States supplied by experience coincided with the eson the Mexican Gulf. The danger is serious, timate within £5,000,000., and that even though not immediate, and it is scarcely in that error was on the right side. the power of England to avert it, although conscientious perseverance in neutrality may deprive the Federalists of a plausible excuse. Nine-tenths of the popular declamation against England may perhaps be empty and insincere, but a feeling of rancor is at the bottom of the endless flow of malignant language. If war should break out, it will be on the American side, the most deliberately wicked aggression which has been attempted by any modern nation.

From the Saturday Review, 15 Aug.
AMERICAN MONEY MATTERS.

THE statement recently issued of the position of the United States Treasury on the 1st of July is, no doubt, extremely satisfactory to Mr. Chase and his friends; and, if its figures are to be trusted, it is in the highest degree creditable to the skill with which the minister has contrived to extract the sinews of war from a people who, after abandoning so many other cherished traditions, still object to give up their prejudice against the payment of taxes. Mr. Chase has never been convicted of publishing figures which could be proved to be false; and, although there are no means of checking the amounts which he sets against the various descriptions of loans, a nominally responsible minister must be supposed to adhere to truth until the contrary is proved. But there are some peculiarities in this last account which justify a little suspicion of its entire accuracy. When Mr. Chase, at the close of 1862, was estimating the present and prospective liabilities of his country, he was careful to include the estimated amount of monies due on current account to soldiers, sailors, contractors, and workmen. It is not suggested that these outstanding bills had been paid up more closely in July than in December; but, in the account now rendered of the debt of the Federal Government, no allowance is made for what cannot be an inconsiderable item. If the casual reports of newspaper correspondents are to be trusted, the amount of this omission cannot be less than £30,000,000, a sum which is not only large in itself, but quite appreciable when compared with the

Yet even after allowing some twenty or thirty millions sterling for the omitted item, the feat which has been performed, assuming the figures to be trustworthy, is very remarkable. A year ago, the Federal States had raised, in the form of regular loans, about £40,000,000, and in certificates of indebtedness, £16,000,000 more. There was no great difficulty in swelling the amount of these I. O.U.'s, as contractors could always be found, at some price or other, to take payment in any shape. It is, therefore, not at all surprising that another £16,000,000 has been added to the total of the certificate debt. But the regular loans have increased during the last twelvemonth from forty to eightythree millions, and at first sight it certainly does seem astonishing that so large a credit should have been commanded. At the beginning of the year, very few persons would have believed it possible that so large a sum could be raised, and Mr. Chase deserves all the honor which belongs to a minister who displays an unusual power of involving his country in boundless liabilities. The large loans which he raised were, however, altogether inadequate to cover the public expenature, which was estimated at £100,000,000, and was no one can say how much. The ultimate resource was, of course, the issue of more paper money; but, even in this, the same skill or the same luck has saved Mr. Chase from the immediate consequences of the hazardous expedient. In July, 1862, there were £33,000,000 of greenbacks afloat. In July, 1863, the paper currency comprises £76,000,000 of the larger notes, and £4,000,000 of the postage-stamp currency. In the face of this increase, the premium on gold is not much higher than it was with less than half the paper circulation, and very far below the point which was reached after the disasters of the spring campaigns. It is curious to inquire how these results have been brought about. We need not say that the American theory, that Mr. Chase can by some legerdemain neutralize the operation of economical laws, will not satisfy English observers. If the natural value of a gold dollar were a dollar and a half of paper money, the laws that were passed to hamper gold speculations, and the

skilful manipulation of a considerable reserve of bullion which is still kept in the treasury, would never bring down the premium to a permanent rate of twenty or thirty per cent. Something may be done by rigging the market to prevent a sudden speculative depression; but whether the minor fluctuations are large or small, the average price must be regulated by the amount of the currency compared with the demand which commerce makes upon 'it. Indeed, we see that the notes have been doubled in quantity without any apparent increase in depreciation, and it is a fact that requires some more satisfactory explanation than marvellous stories of the dexterity of Mr. Chase's broker. The same may be said of the success with which bonds have been placed at times when a public issue to any considerable amount would have been an utter failure. Certainly Mr. Chase does seem to have accomplished a very marvellous feat, and distressed financiers would do well to study his ingenious tactics. The precise history of the growth of the debt, of which the total is officially announced, would no doubt completely solve the mystery; but the order and the extent of many of the operations are not disclosed, and any speculation on the real cause of a startling financial phenomenon must be more or less conjectural.

The method by which the large amount of upwards of £40,000,000. of bonds was got out was simple enough. The loan was not a voluntary, but a compulsory operation. No one, it is true, was forced to contribute gold in exchange for United State's securities, but the bonds were issued on terms which made them decidedly preferable to greenbacks, and the absorption of the permanent security was effectually stimulated by limiting a time after which no more notes would be received at par in exchange for bonds. The fear of being left with a large stock of notes liable to unlimited depreciation by future issues was enough, in the gloomy months of last winter and spring, to create an active demand for bonds, and by the same operation to check the increase of the redundant currency. Still we have it as a fact, that notwithstanding the amount absorbed in the purchase of bonds, the remaining circulation is doubled without any corresponding increase in the premium on gold. It will probably be found that this circumstance is due to the concurrent operation of several causes, some of which it is easy to indicate. In the first place, the growing operations of the war have created an amount of business which absolutely requires a larger circulation than the most extended commerce in times of peace. Cash transactions must have multiplied in a season of uncertainty and in a country of greenbacks, and have taken the place of the credit dealings which

are usual among merchants. Many of the daily adjustments of trade are probably effected with bank-notes, which in other times would have been settled by bills of exchange or entries in account. In other words, the demand for currency has increased, as it always does tend to increase, during war or internal commotion. This will explain why the premium on gold has not fully kept pace with the issue of notes, though it can scarcely be thought to give an adequate account of the large discrepancy which has manifested itself. Another cause appears also to have been in operation. By one of the Acts of the last Session of Congress, a tax was imposed on the issues of private banks, and although no authentic accounts have been transmitted of the extent to which the circulation of local notes has been diminished, it is not unlikely that the large increase in the Federal currency may coincide with a very trifling augmentation of the total paper circulation. If the private notes were withdrawn as fast as the national paper was increased, there would be no marvel in the sustained value of the greenbacks. In other respects, the fluctuations of the market have responded with much regularity to the causes in operation from time to time. At the beginning of the financial year, an issue of thirty millions suffered a depreciation which varied from fifteen to twenty per cent., according to the influence of the military news from day to day. Up to last spring, the circulation was rapidly growing, the machinery for forcing an exchange of notes for five-twenty bonds not having then been brought fully into operation. At the same time, a series of defeats weighed upon the market, and probably exaggerated the natural depreciation.

Since that period it is not at all improbable that notes have been absorbed in exchange for permanent bonds, nearly as fast as they have been issued; and under the influence of military successes, and the temporary demand for currency created by renewed activity and hope, it is intelligible that the premium should have receded to a point not very remote from that at which it stood when the total issues of the Federal notes were so much less. These explanations do not in any way detract from Mr. Chase's merits; indeed, they tend to show that the present recovery is in great part due to the sagacity of his measures. But they may serve to dispel the fancy that great permanent effects upon a circulation of eighty millions can be produced by juggling in the market; and they may check the extravagant expectations which seem to be entertained by the more cager champions of the Federal cause, that the ordinary laws of human action will suspend their operation in

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