Third Session of the XIIIth Congress — State of the Treasury — The President's Message — Dallas appointed Secretary of the Treasury — His scheme and that of Eppes for the relief of the country — Our Commissioners at Ghent — Progress of the negotiations — English protocol — Its effect on Congress and the nation — Effect of its publication on the English Parliament.

Sept. 19.

During the agitation and excitement preceding the bombardment of Fort McHenry, and the battles of Champlain and Plattsburg, the members of Congress were slowly gathering to the ruined Capital, and two days after Brown's gallant sortie from Fort Erie, assembled in the Patent Office, the only public building left standing by the enemy.

Notwithstanding the glorious victories that had marked the summer campaign, a gloom rested on Congress. The Government, indeed, presented a melancholy spectacle, sitting amid the ashes of the Capital, while the fact could not be disguised that the Commissioners at Ghent gave no hope of peace. The war seemed far as ever from a termination, while England, released from the drains on her troops, navy and treasury, by the Continental war, was evidently making preparations for grander and more terrible exhibitions of her power. Her forces were gathering and her fleets accumulating upon our coast for the avowed purpose of demolishing our seaports, burning up our shipping, destroying our cities, and carrying a wide-spread desolation along our shores. To meet the expenses required to resist these attacks, a vast accession of funds was necessary, and yet the Treasury was worse than empty. The effort to borrow, in August, the paltry sum of six millions, a part of the $25,000,000 voted, had proved unsuccessful, not half the amount being taken and that at less than 80 per cent. In May previous over nine millions and a half had been obtained at from 85 to 88 per cent, and yet while victories were illustrating our arms, not $3,000,000 would now be taken, and the offers for that all below 80 per cent.

As the Treasury accounts stood at the close of the second quarter of the year 1814, Mr. Campbell, the Secretary, estimated that nearly twenty-five millions of dollars would be necessary to meet the expenditures of the remaining two quarters. The public revenue during that time would be nearly five millions, which the two loans and four millions of Treasury notes would swell to a little over thirteen millions, leaving about eleven millions to be obtained by some process or other. A foreign loan of six millions was recommended.

Added to this the currency was thoroughly deranged. New banks had set a vast amount of paper afloat, while the specie was all drained off to pay for British goods, which surreptitiously got into the country. The banks of the District of Columbia suspended payment with the British invasion, and the panic spreading northward, there commenced a run upon the banks which in turn stopped payment, until out of New England, a large bank could scarcely be found that had not suspended.

The expense of maintaining such a vast army of militia as was kept on foot, called for enormous disbursements, and many saw national bankruptcy in the future should the war continue.

The burning of Washington furnished the President, in his message, an excellent occasion for making an appeal to the people. He was not constrained to fall back on the justice of the war, and persuade the nation that the invasion of Canada was both right and politic. The war had become defensive—men must now fight, not for maritime rights, not march to distant and questionable ground, but standing on their own hearth-stones, strike for their firesides and their homes. The Indian barbarities at the west, which inflamed to such a pitch of rage the Kentuckians, had been repeated by a civilized nation, and in speaking of them and the enemy, the President said: "He has avowed his purpose of trampling on the usages of civilized warfare, and given earnest of it in the plunder and wanton destruction of private property. *** His barbarous policy has not even spared those monuments of the arts and models of taste with which our country had enriched and embellished its infant metropolis. From such an adversary, hostility in its greatest force and worst forms may be looked for. The American people will face it with the undaunted spirit, which in our Revolutionary struggle, defeated his unrighteous projects. His threats and barbarities instead of dismay, will kindle in every bosom an indignation not to be extinguished but in the disaster and expulsion of such cruel invaders."

The ardor and indignation of the people were easily roused, but these did not bring what just then was most needed, money.

Sept.

Campbell having resigned his place as Secretary of the Treasury, immediately after sending in his report, Alexander Dallas was appointed in his place, who brought forward a scheme for relieving the Government. Eppes, from the Committee of Ways and Means, also offered a project. He proposed to lay new taxes to the amount of eleven and a half millions, and make a new issue of Treasury Notes, redeemable after six months. Dallas agreed with him in the amount of taxes, but recommended also the creation of a National Bank with a capital of fifty millions, five of it in specie and the residue in government stock. This would regulate the currency by furnishing a circulating medium, and constitute a basis on which loans could be obtained.

Bills were also brought in regulating the army.

In the mean time unfavorable news arrived from our embassy at Ghent. They had been compelled to wait some time for the English Commissioners, spending the interval in a round of amusements and entertainments furnished by the people of Ghent and General Lyons, commanding the British troops in that place. At length, on the 7th of August, the Secretary of the English legation called at the American hotel, to arrange the place and day for commencing negotiations. No one but Mr. Bayard was in at the time, and he seeing no breach of diplomatic etiquette in the proposal of the English Secretary to meet next day at the hotel of the English legation, assented. But the other members when they returned and were told of the arrangements that had been made, were indignant. "What!" said Mr. Adams, "meet the English Ministers who have kept us here so long waiting the condescension of their coming, in the face of all Ghent—meet them at their bidding at their own hotel, to be the laughing stock of the city, of London, and of Europe?" "Never!" added Mr. Gallatin, "never!" Mr. Bayard replied, that the promise had been made, and they stood pledged. "No," said Mr. Adams, "you may be, but we are not."

Aug. 8.

Another place was therefore agreed upon, and the negotiations commenced. The city was filled with men, watching their progress, not only statesmen, but speculators eager to take advantage of the change in the price of stocks, which rose and fell with the wavering character of the proceedings.

After expressing the pacific feelings of their government, the English ministers stated the three points which would probably arise, and on which they were instructed:

1. The right of search to obtain seamen, and the claim of his Britannic Majesty to the perpetual allegiance of his subjects, whether naturalized in America or not.

2. The Indian allies were to have a definite boundary fixed for their territory.

3. There must be a revision of the boundary line between the United States and the adjacent British colonies.

The question of the fisheries, it was intimated, would also come up. The American legation replied, that they had instructions upon the first and third propositions, but not on the second, nor on the subject of the fisheries. They also were instructed to obtain a definition of blockade, and to consider claims for indemnity in certain cases of seizure. After some discussion, the American embassy inquired if the pacification and settlement of a boundary for the Indians was a sine qua non. The reply was, yes. It was then asked if it was intended to preclude the United States from purchasing lands of the Indians, whose possessions clearly lay within the limits of their territory. An affirmative answer was given. The native tribes were to be kept simply as a barrier between the possessions of the two countries. On being told that no instructions had been given on this point, the English embassy expressed great surprise, and declared that they could do nothing until farther advices from their government. A messenger was therefore despatched to England that night, and the two embassies, after meeting next day to arrange a protocol, adjourned till the decision of the English cabinet could be received.

Nine days after, Lord Castlereagh, elated with his success as English minister to the headquarters of the allied armies, on their way to Paris,—exulting over the downfall of Napoleon, and representing in himself the intoxication of the English people at the overthrow of their rival—haughty, unscrupulous, and overbearing, swept into Ghent with a train of twenty carriages, on his way to the great Congress of Vienna, where European diplomacy, in all its monstrous deformity and rottenness, was to be exhibited to the world.

The next day the embassies met, and the reply of the English government was rendered. In the first place, the Indian boundary question was declared a sine qua non. The question then arose, what would become of the hundreds of American citizens residing at that time within the limits thus to be drawn. The reply was, they must shift for themselves.

In the second place, the entire jurisdiction of the northern lakes, extending from Lake Ontario to Lake Superior, where our squadrons were riding victorious, must be surrendered to the British government, the United States not being permitted to erect even a military post on the southern shore, on their own soil, nor keep those already established there. As a backer to this insolent demand, the legation affirmed that the United States ought to consider it moderate, since England might justly have claimed a cession of territory within the States. Beyond Lake Superior, the question of boundary was open to discussion. Another item in this protocol required the surrender of that part of Maine over which a direct route from Halifax to Canada would necessarily pass. When asked what they proposed to do with those islands in the Passamaquoddy Bay, recently captured by the English, they replied, these were not subjects of discussion, belonging, of course, to Great Britain. They farther informed the American Legation that this extraordinary and magnanimous offer, on the part of his majesty, was not to remain open for any length of time—that if delay was demanded till instructions could be received from across the ocean on the one single question of Indian boundary, it would be considered withdrawn, and the English government feel itself at liberty to make other and less generous demands, as circumstances might indicate.

To such arrogant claims but one answer could be given, and Gallatin, in sending them home, wrote that all negotiations might be considered at an end, and that no course was left for the United States but "in union and a vigorous prosecution of the war." Mr. Clay accepted an invitation to visit Paris, and Mr. Adams prepared to return to St. Petersburgh.

While this news was slowly traversing the Atlantic in the cartel John Adams, the victories of Brown, Macomb, and Macdonough, were electrifying the nation.

Oct. 10.

On the 10th of October the President transmitted a message to Congress, with the despatches received from Ghent, and the protocol of the English legation. Their reading was listened to with breathless silence, and as the extraordinary claims set forth by England became one after another clearly revealed, the astonishment of the members exceeded all bounds, and they gazed at each other incredulously. The Federalists were paralyzed with disappointment. The party had never received such a blow since the commencement of the war. Their arguments were prostrated. They had always represented England as desirous of peace, fighting only because she was forced to by a reckless, unprincipled administration and party. Towards the nation at large she cherished no hostile feelings, and entertained no ultimate sinister designs. But the mask was now snatched away, and she stood revealed in all her arrogance and injustice. If any thing more than the ravages on our coast was needed to bind the nation together in one determined effort, it was furnished in these despatches. As the news spread on every side, the passions of men were kindled into rage. What, burn up our victorious war-ships on those great mediterraneans, the command of which had been gained by such vast expenditures and such heroic conduct—abandon forts standing on our own soil, around which such valiant blood had been shed? "Never, never," responded from every lip.

Scarcely less excitement was produced by the discussion of the Indian boundary question. Stripped of its false pretences, it looked solely to the prevention of all settlement on our part, of the North-western territory, and designed to bar us forever from acquiring possessions in that quarter. To give some show of fairness to the transaction, it was proposed that both countries should be restricted from purchasing the land of the Indians, but leave the market open to the whole world beside. In short, that vast territory, including a large portion of Ohio, all of Michigan, Illinois and Indiana, must not only be surrendered by us, but placed under the complete control of the British government, whose ships of war were alone to sail the waters that washed its northern limits, and whose fortifications were to awe the inhabitants that occupied it. Never before had the cry of war rung so loudly over the land, and the nation began to prepare for the approaching conflict with an earnestness and determination that promised results worthy of itself and the cause for which it struggled. The Federalist journals came at last to the rescue, declaring that the terms offered were too humiliating and degrading to be entertained for a moment. Only one paper in Boston was besotted enough to assert that they were honorable and ought to be accepted.

Congress, after the reception of this protocol and the accompanying despatches, took a different tone, and when the question of ways and means for the coming year was taken up, a spirit was exhibited, that since the declaration of war, had never been witnessed in its deliberations. The fear and hesitation which were weighing it down, vanished, and it began to assume the character and exhibit the qualities belonging to it, but which the spirit of faction had kept in abeyance. The Legislatures of the different states responded to the sentiments of the commissioners—declaring that the terms proposed were insulting and disgraceful, and called for a vigorous prosecution of the war. New York voted a local force of 12,000 men, and Virginia followed her example.

It was a grand stroke of policy, on the part of the administration, to fling those despatches at once into Congress and thus before the nation. Their sudden publication took the British Ministry by surprise, for it exposed their extraordinary demands to the whole realm, and they remonstrated against such undiplomatic conduct.

Before the Convention of Ghent the English press ridiculed concessions, declaring that punishment must be inflicted on the Americans, and they be chastised into humility and supplication. The war with us was a Lilliputian affair compared to the struggles out of which England had come victorious, and the Convention was not looked upon so much as the meeting of Commissioners to adjust things amicably, as furnishing the opportunity for the American government to make a request to have hostilities cease. But the disasters to Drummond, at Fort Erie, to Prevost at Plattsburgh, and the utter demolition of the British fleet on Champlain, together with the repulse from Baltimore, acted as a condenser on much of this vapor. Nov. 4. The vast expenditures wasted on the Canadian frontier were now all to be renewed, newer and stronger armies were to be transported to our shores, and when the Prince Regent opened Parliament he plainly hinted that it would be well to avoid all this, if possible. The arrival of the despatches which the President had laid before Congress, containing the protocol of the English Embassy, created a deep sensation in both houses of Parliament. The claims set up by the English government were loudly denounced by many of the members, and it was soon apparent that if the war was pressed to make them good, a large opposition party would be formed, not only in Parliament but in the country. Sixty manufacturing towns sent in petitions for peace. Cobbett, who had all along defended the conduct of the United States, was unsparing in his flagellations of the British government, and of those papers that advocated the war.

While the war question was passing through these phases in England, and on the continent, Congress was preparing to call out the whole resources of the country. But a second despatch received from Ghent, stating that negotiations were resumed and that the British government had receded from the Indian boundary question, awakened lively hopes that peace would be secured.

But the energy with which Congress had entered on the question of ways and means, began to expend itself in party strife. Monroe's plan for raising a standing force of 80,000 men to serve for two years; a bill authorizing the enlistment of minors; and Dallas' National Bank scheme, to relieve the finances of the country, after fierce discussions and many modifications, one after another fell to the ground. In the mean time, the treasury was compelled to subsist on the issue of Treasury notes, which as business paper were worth only 78 per cent.

Dec. 15.

New tax bills were soon after passed—laying taxes on carriages according to their value; 20 cts. per gallon on distilled spirits; increasing a hundred per cent. the tax on auction duties, and 50 per cent. on postage. Heavy duties were also placed on most goods of domestic manufacture, with the exception of cotton, and a direct tax of six millions was levied on the nation.

As time passed on, and no farther tidings was received from Ghent, Congress again took up and finally passed the bill for the enlistment of minors. The Legislatures of Connecticut and Massachusetts immediately passed acts requiring the judges of these respective states to discharge on habeas corpus all enlistments made under the provisions of the bill, and to punish with fine and imprisonment all who engaged in it, and removed minors out of the state to prevent their discharge.

These acts of Congress, however, did not avail to help the government out of the troubles that were once more gathering thick about it. Everything was at a stand still for lack of funds—even the recruiting service got on slowly. In the mean time, negotiations for peace did not wear a very encouraging aspect, while the gain of the Federalists in some of the states, in the recent elections, and the Hartford Convention, helped to swell the evils under which the administration labored.

The conscription scheme would not work in many of the states, and resort was had to the old system of raising 40,000 volunteers for twelve months, and the acceptance of as many more for local defence.

PAINFUL MARCH OF VOLUNTEERS.