Revenues were supplemented by bond issues, mounting in size and interest rate, until in October, at the end of the war, the debt stood at $2,208,000,000.  The total cost of the war was many times the money value of all the slaves in the Southern states.  To the debt must be added nearly half a billion dollars in “greenbacks”—­paper money issued by Congress in desperation as bond sales and revenues from taxes failed to meet the rising expenditures.  This currency issued at par on questionable warrant from the Constitution, like all such paper, quickly began to decline until in the worst fortunes of 1864 one dollar in gold was worth nearly three in greenbacks.

=The Blockade of Southern Ports.=—­Four days after his call for volunteers, April 19, 1861, President Lincoln issued a proclamation blockading the ports of the Southern Confederacy.  Later the blockade was extended to Virginia and North Carolina, as they withdrew from the union.  Vessels attempting to enter or leave these ports, if they disregarded the warnings of a blockading ship, were to be captured and brought as prizes to the nearest convenient port.  To make the order effective, immediate steps were taken to increase the naval forces, depleted by neglect, until the entire coast line was patrolled with such a number of ships that it was a rare captain who ventured to run the gantlet.  The collision between the Merrimac and the Monitor in March, 1862, sealed the fate of the Confederacy.  The exploits of the union navy are recorded in the falling export of cotton:  $202,000,000 in 1860; $42,000,000 in 1861; and $4,000,000 in 1862.

The deadly effect of this paralysis of trade upon Southern war power may be readily imagined.  Foreign loans, payable in cotton, could be negotiated but not paid off.  Supplies could be purchased on credit but not brought through the drag net.  With extreme difficulty could the Confederate government secure even paper for the issue of money and bonds.  Publishers, in despair at the loss of supplies, were finally driven to the use of brown wrapping paper and wall paper.  As the railways and rolling stock wore out, it became impossible to renew them from England or France.  Unable to export their cotton, planters on the seaboard burned it in what were called “fires of patriotism.”  In their lurid light the fatal weakness of Southern economy stood revealed.

[Illustration:  A BLOCKADE RUNNER]

=Diplomacy.=—­The war had not advanced far before the federal government became involved in many perplexing problems of diplomacy in Europe.  The Confederacy early turned to England and France for financial aid and for recognition as an independent power.  Davis believed that the industrial crisis created by the cotton blockade would in time literally compel Europe to intervene in order to get this essential staple.  The crisis came as he expected but not the result.  Thousands of English textile workers were thrown out of employment; and yet, while on the point of starvation, they adopted resolutions favoring the North instead of petitioning their government to aid the South by breaking the blockade.