A Winter of Crises [DECEMBER 9, 1861-MAY 1, 1862]
CHASE seems to have kept no diary during either the secession winter of 1860-61 or during his first nine months in the Treasury Department. Events moved so rapidly that the harassed Secretary probably had little time for journalizing. As the diary begins in December, 1861, the panic caused by Union defeat at First Bull Run had subsided, but major crises impended.
The Treasury faced its worst winter. In August Chase had made arrangements with the associated bankers of New York, Boston, and Philadelphia for a loan, which finally totaled $150,000,00, paid in three installments. Agreeing to furnish coin to the government at once, the banks were to be repaid by the sale to the public, through subscription agents and through the banks themselves, of three-year Treasury notes bearing 7.30 per cent interest. From the beginning the bankers complained that the Secretary's insistence upon hard money was draining their specie reserves. They had little confidence in the national banking system which Chase urged in his first annual report to Congress ( December, 1861), and his failure to recommend heavy taxation increased their distrust of his