Browsing "Aftermath: Despotism"

Fiasco of Radical Reconstruction

The study of the postwar Republican party often reveals a political organization seeking power at any cost, and an abolitionist movement that was simply an expedient for the destruction of the American South politically and economically. The transcendentalists and Unitarian radicals drifted off after the war without a cause to embrace; the Republicans had their desired political hegemony which would only be interrupted by Grover Cleveland and Woodrow Wilson.

Bernhard Thuersam, www.circa1865.org

 

Fiasco of Radical Reconstruction

“By 1867, [Wendell] Phillips and “a little band of abolitionists he represented, like Robespierre and the Jacobins, believed that their will was the General Will” and looked for the federal government to establish and maintain an equal political and social position for the Negro in the South, by as much force as proved necessary. They were groping for something like the modern welfare state – foreshadowed as it was by pragmatic programs of the time like the Freedmen’s Bureau – but their intense hatred of the white South prevented a rational approach.

As a result, “Radical Reconstruction,” as it finally emerged from the Congressional cauldron, was a set of half-measures. Not faced was the problem of how a despised, impoverished, and largely illiterate minority was to maintain its rights in the face of a determined majority in full possession of economic and social power. The fiasco of Radical Reconstruction had begun.

Republican opportunism was important [in this fiasco]. There was the desire to get the Southern States readmitted to the Union under Republican control in time to deliver critical votes in 1868 and thereafter.

While idealists like Carl Schurz, Charles Sumner, Charles Francis Adams, and Horace Greeley were deserting the Republican party and the Reconstruction program to set up the abortive Liberal Republican movement of 1872, that cause of the Southern Negro was taken up and further discredited by political opportunists of the regular party organization.

The issues of the war were kept alive in the seventies and eighties as a Republican campaign technique – a way of recalling the “disloyalty” of the Democrats by “waving the bloody shirt.” In the character of Senator Dilworthy in The Gilded Age, Mark Twain has provided an unforgettable portrait of the Republican politician making unscrupulous use of the “Negro question” for his own ends.

The Reconstruction era was a perplexing time for intellectuals who had been antislavery militants before and during the war. Unable to support the sordid Grant administration and filled with doubts about the form that Radical Reconstruction was taking in the South, they had little to offer in the way of insight or inspiration.

William Dean Howells, who had once been a fervent abolitionist, intimated as editor of the Atlantic Monthly in 1869 that he was tired of the Negro question. Howell’s diminishing interest in the Negro, which reflected the disenchantment of the New England literary community in general, was further manifested in subsequent issues of the Atlantic.”

(The Inner Civil War, Northern Intellectuals and the Crisis of the Union, George M. Frederickson, Harper & Row, 1965, excerpts, pp. 191-196)

Changing Masters Rather Than Systems

Author Walter Prescott Webb saw in 1937 a world of people in chains, stating that: “Wherever I turn in the South and the West I find people busily engaged in paying tribute to someone in the North.” Henry Ford then ran a feudal chain that gave him a great private fortune, making him lord and master over millions of people across the country.

Bernhard Thuersam, www.circa1865.org

 

Changing Masters Rather Than Systems

“History tells us that the position of the serf on the feudal manor was a humble one and that he had little to show for his labor. History adds with emphasis, however, that he enjoyed an unalienable security. He was attached to the land that nourished him and he could not be separated from it. His children inherited his security.

When we compare his lot with that of the clerks in a chain store (leaving aside what they have to show for their labor) we find that in point of security the serf had the better of it. Though the land was not his, he was the land’s, and from it he could make a livelihood. The chain or corporate employee does not own the store and is not owned by it. He can be kicked out at any time. He has no contract, either by law or by custom, and he enjoys no security.

With our theory of equality between a real and corporate person, the tie between them can be broken by either at will. What the law loses sight of is that the tie is as strong as the chains of necessity for one and as weak as a distant, impersonal will for the other.

The feudal world set great store by symbols, insignia and uniforms. Every man’s station was announced by what he wore. The jester had his cap and the fool had his bell. The knight was distinguished by his armor, the king by his crown. A member of the high orders of chivalry was known by the fraternity pin he wore.

As I look out upon the South and the West I not only see men everywhere in chains, but I see thousands wearing the insignia of their allegiance to their overlords. Boys clad in blue or brown and wearing caps with the symbols of the telegraph companies are hurrying along on bicycles. In oil stations young men in puttees and jackets exhibit the insignia of Standard Oil, Texaco, Humble, and Andy Mellon’s Gulf.

Tire punctures are recommended by men in long dusters which have Goodyear or Firestone woven in bright red letters across the back. Most of these are doubtless conscious that they are under unseen control; to a man, they must long for independence, for something they can call their own.

Some of them do not conceal their resentment. “These damn corporations dont give a man a chance,” says one. “I’m through with these oil companies,” said another. “I am doing my best to get a job with the International Business Machine Corporation.” Thus they exchange masters, but rarely systems.

(Divided We Stand, The Crisis of a Frontierless Democracy, Walter Prescott Webb, Farrar & Rinehart, 1937, pp. 114-116)

Republicans Steal a North Carolina Election

Postwar federal election supervision in the South purportedly ensured fair and impartial elections, but in reality only ensured Radical Republican political control. The slim margin of Grant’s 1868 victory was not to be repeated and Republicans took no chances in 1872. Below former North Carolina legislator and Confederate General Thomas Clingman noted their strategies.

Bernhard Thuersam, www.circa1865.org

 

Republicans Steal a North Carolina Election

“On 9 July 1872 twenty delegates from the Old North State assembled in Baltimore to attend the eleventh quadrennial Democratic convention. Clingman was selected to serve on the Committee on Resolutions. Shortly after the convention adjourned, Clingman dropped a bombshell on the North Carolina Republicans in the form of a letter ostensibly written by former Democratic congressman James B. Beck of Kentucky.

The letter, which was addressed to Clingman, pointed out that the August State elections in North Carolina were widely regarded as a barometer for the presidential election in November. For that reason, the Grant administration had determined to use every corrupt means possible to carry the Old North State. Large sums had been raised for that purpose, including funds illegally drawn from the Justice Department.

Clingman played a leading role in the [post-election investigation] movement. In a letter published in the New York World and copied by numerous North Carolina newspapers, he presented a cogent summary of the Conservative argument.

The election, he said, had been managed “by an army of . . . [federal] revenue officers and deputy marshals,” who had been “liberally supplied” with money.” Those federal managers had practiced massive fraud, importing black voters from other States into the eastern counties and inducing native blacks to vote several times in different townships.

In the white-majority counties of the west, they had mobilized violators of the revenue laws and those under indictment for Klan activity with promises of immunity from prosecution “if they voted the Radical ticket.” Others, who refused to cooperate, had been arrested in order to prevent them from voting. [North Carolina gubernatorial candidate Augustus] Merrimon shared in the widespread belief that the Republicans had stolen the election.

In several eastern counties, the number of voters did exceed the number of adult males reported in the census. Moreover, a large number of indictments for Klan activity were in fact made just before the election, and many of them were dropped soon after the campaign had ended.”

(Thomas Lanier Clingman, Fire Eater From the Carolina Mountains, Thomas E. Jeffrey, UGA Press, 1998, pp. 207-209)

 

No Sanity in Reconstruction

Raised in poverty in Reconstruction North Carolina, Thomas Dixon became a State legislator before he was old enough to vote, practiced law, was a noted minister, and author of “The Clansman” at age thirty-eight. He was determined to one day write the story of Reconstruction to let the truth be known.

Bernhard Thuersam, www.circa1865.org

 

No Sanity in Reconstruction

“[Many] corrupt [Northern] leaders sought means to give vent to hatreds that had been aroused by the war. William G. Brownlow, better known as “Parson Brownlow,” a preacher who became Governor of Tennessee during the Reconstruction era, had declared in a speech to a convention in New York in 1862:

“If I had the power, I would arm every wolf, panther, catamount and bear in the mountains of America, every crocodile in the swamps of Florida, every Negro in the South, every fiend in hell, clothe them all in the uniforms of the Federal army and turn them loose on the rebels of the South and exterminate every man, woman and child south of the Mason Dixon line. I would like to see especially the Negro troops, marching under Ben Butler, crowd the last rebel into the Gulf of Mexico and drown them as the Devil did the hogs in the Sea of Galilee.”

Such fanaticism from influential leaders was not conducive to soothing the wounds of the war. In Dixon’s native State of North Carolina, as a result of proceedings brought by Dixon’s uncle, Colonel [Lee Roy] McAfee, William W. Holden became the first governor to be impeached in an American commonwealth when his corrupt practices could no longer be borne by the people.

Many sane, responsible men, such as Dixon’s father and Colonel McAfee, took part in the Ku Klux Klan in an effort to bring some sort of order out of the tragedy of Reconstruction. These men did not tolerate injustice, and when they saw that the Klan had served its purpose, they immediately wanted to disband it.

In later years, Dixon wondered how any person could have lived through Reconstruction and still have retained his sanity. Lawlessness was, for a period of many months, the rule rather than the exception.

One of the brightest periods in Thomas’s childhood began on the day a young Negro boy, bloody, unconscious and almost dead, was brought to the home of the Dixon’s. The boy’s father, in a drunken fit, had tried to kill him with an axe. [The Dixon’s legally adopted him] and from that day forward young Dixon and little Dick were inseparable companions.”

(Fire from the Flint, The Amazing Careers of Thomas Dixon, Raymond Allen Cook, John F. Blair, Publisher, 1968, pp. 13-14)

Executive Orders a Form of Extremism

The last of the conservative news magazines was the US News & World Report under the leadership of Editor David Lawrence. In 1962 he wrote about the illegality of the presidential executive order which circumvented the United States Constitution, the people, Congress, and the rule of law.

Bernhard Thuersam, www.circa1865.org

 

Executive Orders a Form of Extremism

“We hear a good deal nowadays about “extremists” – those who brand as Communists other persons who are not Communists. Name-calling, while deplorable, doesn’t do as much harm to the American people as a whole as do the “extremists” in public office who would disregard the Constitution.

For there is a trend today toward circumvention of the Constitution. Scarcely a month goes by that some new legislative measure or executive order isn’t proposed which seeks to “get around” the Constitution. The argument recently espoused in all seriousness as an alibi by some people inside and outside Government is that amending the Constitution is a laborious and slow process. The point is made that “times have changed” and that some of the doctrines of past decades in the field of law have become obsolete.

Oddly enough, that‘s exactly the excuse Nikita Krushchev gives for abrogating the allied agreements made in 1945 to insure unrestricted access to Berlin. He says these agreements are outmoded. Is it right for one party to an agreement to declare arbitrarily that he will no longer abide by its terms because he decides it is obsolete?

The people of the 13 original States, by a compact with each other, gave up certain rights and delegated them to a central government. All powers not enumerated in the Constitution as having been delegated to the Federal Government were specifically “reserved to the States respectively, or to the people.” This is the language of the Tenth Amendment. Why is this agreement so persistently violated?

If the people at any time wish to change the Constitution, it can be amended by a two-thirds vote of Congress followed by acts of ratification by three-fourths of the States. But we hear today that this is “too cumbersome” a method and that “it takes too much time.” Yet some amendments have gone through from congressional action to State ratification in less than a year. The truth is that where there is substantial opposition to an amendment, it naturally isn’t approved.

Unfortunately, our record as a nation is not clean. The Fourteenth Amendment was not legally inserted in the Constitution. The same Southern States which were considered eligible members of the Union when – after the Civil War was over – they ratified the Thirteenth Amendment abolishing slavery were then punished by Congress for refusing to ratify the Fourteenth Amendment. “Ratification” was accomplished by legislative coercion of the States by Congress and at the point of a bayonet by armed forces stationed in the State legislatures.

Yet this same Fourteenth Amendment is the basis of most of the executive orders on “civil rights” today. The Supreme Court has never consented to pass upon the validity of the method used to “ratify” the Fourteenth Amendment, though the Court has accepted cases challenging the validity of other amendments.

Recently a new trend toward usurpation of power has arisen. It seeks by executive order, or by the passing of new laws, to thwart or ignore the plainly written provisions of the Constitution. President Kennedy sent a bill to Congress a few weeks ago proposing a far-reaching change in the handling of tariffs. The Executive would fix the duties and commodity quotas – a power granted by the Constitution only to Congress.

The bill, now before the House Ways and Means Committee, provides, moreover, that presidential determinations “shall be final and conclusive and shall not be subject to review by any court.” Why should the people be deprived of judicial review when they are the victims of illegality in the application of trade laws?

Also the Kennedy Administration has just signed treaties with 24 countries on trade relations, but does not intend to submit these agreements to the Senate for ratification by a two-thirds vote. Executive orders have been issued, moreover, in “civil rights” matters, on many of which Congress itself has refused to pass laws. Thus, by executive order, purchase contracts for goods and services can be withheld by the Government from any business which refuses to accept the Government’s dictation as to the number of employees of a particular color that the contractor or subcontractor may hire. It certainly is a form of “extremism” to substitute executive orders for the laws of Congress.

Extremism is bred by extremism. We would have less trouble with the malcontents in our midst if the spirit and letter of the Constitution were observed.

If the method of amending the document is too cumbersome, let the people by the constitutional method change it. But let’s face the fact that new “extremists” have arisen who believe that the executive order can circumvent the Constitution if the stated objective merely has “popular appeal.” This is government by emotion – by extremism. It is not a government by a written Constitution.”

(US News & World Report, Editorial, David Lawrence, April 2, 1962, page 108)

Republicans Instilled Lessons of Hatred and Hostility

Acclaimed historian Dr. Clyde Wilson has written that the Republican party was solely responsible for carrying out the bloodiest war in American history against the American South, to destroy self-government. In South Carolina, a Republican-rigged postwar convention erected a corrupt political regime kept in power by Northern bayonets, carpetbaggers and freedmen.

Bernhard Thuersam, www.circa1865.org

 

Republicans Instilling Lessons of Hatred and Hostility

“When the war came to an end, and the Southern States lay prostrate at the feet of their conqueror, they experienced the bitterest consequences of the humiliation of defeat. There were no revengeful prosecutions (a few judicial murders in the flush of the victory excepted). The Congress devoted itself to the work of reconstruction . . . on the principle of equal rights to all men . . . there seemed to be no reason why the States should not proceed harmoniously in the career of peaceful progress.

But there was an element in the population which rendered such a principle fatal to all peaceful progress. In many of the States, and in South Carolina particularly, a majority of the people had been slaves. All these were suddenly elevated to the rank of citizens. Were this all, even then there might have been hope.

The slaves had always lived well with their masters, bore no resentment for past injuries, and if they were let alone in their own mutual relations, the two races might, and doubtless would have harmonized and soon discovered the art of living together in peace. But this was not to be.

With the progress of Northern arms grew up an institution founded ostensibly, perhaps really, for the protection of the rights of the newly emancipated slaves. This institution, known as the Freedmen’s Bureau, became for the time the ruling power in the State. It interfered in all the concerns of whites and blacks, its officers were generally men who not only had no love for the South, but who made it their mission to foster in the minds of the blacks a bitter hatred and mistrust of the whites.

They were, on all occasions, the champions of the Negroes rights, and never failed to instruct them that it was to the Republicans that they were indebted for all the rights which they enjoyed. In the train of the Bureau came the schoolmistresses who instilled into the minds of their pupils the same lessons of hatred and hostility.

The consequence was, that though the personal relations between the races were friendly, though the blacks invariably addressed themselves to the whites as to true friends for all offices of love and kindness, of which they stood in need, they would never listen to them, if the latter wished to talk about politics.

This feeling was intensified by the introduction of the Union League, a secret society, the members of which were solemnly bound never to vote for any but a Republican. By such means, the Negro presented a solid phalanx of Radicalism . . . a new business arose and prospered in Columbia, a sort of political brokerage by which men contracted with speculators to buy the votes of members when they were interested in the passage of any measure. Here was a corruptible Legislature under the influence of men utterly corrupt.

In South Carolina . . . Society was divided into the conquered whites, who were destined to satisfy the voracious appetites of the carpetbagger, and the needy and ignorant Negro, directed by his hungry teachers. The whites had no rights which they were bound to respect; if they paid the enormous taxes which were levied upon him, the Negro was satisfied; he had done all that it was necessary for him to do in the degenerate State.”

(Last Chapter of Reconstruction in South Carolina, Professor F.A. Porcher, Southern Historical Society Papers, Volume XIII, pp. 76-79)

Republican Political Bosses and Layers of Graft

Accidental presidents like Chester Alan Arthur were the result of the war, the marriage of government and big business, the predictable Gilded Age, and rampant political corruption in the North. Conservative Southern statesmen in prewar Congresses were an impediment to the Republican revolutionaries bent on power.

Bernhard Thuersam, www.circa1865.org

 

Republican Political Bosses and Layers of Graft

“Chester [Alan] Arthur was an accidental president at an inopportune time, but he is part of the tapestry of who we are more than most ever have been or most of us will ever be. He was president in an un-ideological era. The Senate would shortly be dubbed the “Millionaires’ Club,” and the House of Representatives was an unruly place of loose coalitions and influence trading.   State and local politics were controlled by party machines that prized loyalty. Politicians genuflected to the concept of the public good, and they occasionally spoke of public service. But they didn’t seem to hold either very dear.

The politicians of the Gilded Age, perhaps mirroring the mood of the public, turned away from troubling intractable like freedom, democracy, equality, and attended instead to order, stability and prosperity.

Though the Republican party continued to “wave the bloody shirt” at each presidential convention, hoping to dredge up Civil War passions and eke out an advantage against the better-organized though less popular Democrats, that yielded diminishing returns. In a Gilded Age version of what-have-you-done-for-me-lately, the voting public demanded more than nostalgia for the glorious battles of Gettysburg and Antietam.

Cities were kept together by political machines, which were tight-knit organizations that corralled votes, collected a percentage of profits, and kept the peace. The machine was epitomized by Tammany Hall in New York City and its majordomo, William Marcy Tweed, a Democrat boos surrounded by a sea of Republicans. More than any mayor, “Boss” Tweed ran New York.

His men greeted immigrants as they stepped ashore in lower Manhattan, offered them money and liquor, found them work, and in return demanded their allegiance and a tithe. Supported by Irish Catholics, who made up nearly a quarter of New York’s population, Tweed held multiple offices, controlled lucrative public works projects (including early plans for Central Park), chose aldermen, and herded voters to the polls, where they drunkenly anointed the Boss’s candidates.

Tweed was gone by 1872, forced out and prosecuted, but the system kept going. Every [Northern] city had its machine, and counties did as well. National politics was simply the apex of the pyramid that rested on local bosses and layers of graft.”

(Chester Alan Arthur, Zachary Karabell, Henry holt and Company, 2004, pp. 5-6)

Making the South a Political and Social Inferno

Famed historian Douglas Southall Freeman edited the Richmond News Leader from 1915 to 1949 and lived by the maxim prominently displayed in his office: “Time alone is irreplaceable. Waste is not.” He lived to regret supporting Woodrow Wilson’s war in 1917, feeling that he had been swept up in the psychosis of war hysteria. In his commentary on the Republican party below, Freeman mentions the notorious GOP method of ballots being “distributed wholesale to rascals who were divided into “blocks of five” and paid to cast them illegally.”

Bernhard Thuersam, www.circa1865.org

 

Making the South a Political and Social Inferno

“On the political front, Freeman was writing his first partisan editorials on behalf of [Woodrow] Wilson’s reelection. Virginia was reliably Democratic . . . [and] Freeman lashed the Republicans with gusto and turned loose his most vicious attack with a history-laden philippic. “Yes, the country knows” about the Republican party he wrote:

“It knows that during the forty-seven years and more of power of their party since the close of the war between the States the Republicans, in 1876, stole the presidency, and in 1880 bought it with their “blocks of five.” It knows that they forced upon the South the reconstruction additions to the Constitution in violation of that instrument; it knows that they turned loose upon the South an army of alien cormorants to prey upon what little substance was left us after the wreck of the war.

It knows that they made parts of the South political and social infernos, and that in malice and envy they aimed to uproot and destroy the very foundations of Southern civilization. The country also knows that they, the Republicans . . . retarded Southern industrial recuperation and Development . . . bound the nation to a juggernaut of robber protection . . . and perpetuated a banking and currency system that entrenched a currency monopoly.”

Freeman tended to be more restrained in his attacks on the Republican nominee for president, former Supreme Court justice Charles Evans Hughes. “We have had in previous years a high respect for Mr. Hughes,” he wrote, “and we have believed him a man of courage and capacity.” Now that he was the leader of “the party responsible for the most criminal class legislation the United States has ever seen,” Freeman dismissed him as a “camp-following wagon-driver.”

(Douglas Southall Freeman, David E. Johnson, Pelican Publishing, 2002, pp. 120-121)

Lincoln's Party of White Supremacy

The freedmen did not receive the franchise because of their political maturity and judgment as the clear intent was to simply keep the Republican party in power. The Republican party’s Union League organization taught the Southern black man to hate his white neighbor, and to vote for Northern men whose own States had initiated Jim Crow laws. An excellent source for Northern antebellum racial views is “North of Slavery: The Negro in the Free States, 1790-1860,” Leon Litwack, Chicago, 1961.

Bernhard Thuersam, www.circa1865.org

 

Lincoln’s Party of White Supremacy

“The Republican leaders were quite aware in 1865 that the issue of Negro status and rights was closely connected with the two other great issues of Reconstruction – who should reconstruct the South and who should govern the country. They were increasingly conscious that in order to reconstruct the South along the lines they planned they would require the support and the votes of the freedmen.

And it was apparent to some that once the reconstructed States were restored to the Union the Republicans would need the votes of the freedmen to retain control over the national government. While they could agree on this much, they were far from agreeing on the status, the rights, the equality, or the future of the Negro.

The fact was that the constituency on which the Republican congressmen relied in the North lived in a race-conscious, segregated society devoted to the doctrine on white supremacy and Negro inferiority.

“In virtually every phase of existence,” writes Leon Litwack with regard to the North in 1860, “Negroes found themselves systematically separated from whites. They were either excluded from railway cars, omnibuses, stagecoaches, and steamboats and assigned to special “Jim Crow” sections; they sat, when permitted, in secluded and remote corners of theaters and lecture halls; they could not enter most hotels, restaurants and resorts, except as servants; they prayed in “Negro pews” in the white churches . . . Moreover, they were often educated in segregated schools, punished in segregated prisons, nursed in segregated hospitals, and buried in segregated cemeteries.”

Ninety-three per cent of the 225,000 Northern Negroes in 1860 lived in States that denied them the ballot, and 7 per cent lived in the five New England States that permitted them to vote. Ohio and New York had discriminatory qualifications that practically eliminated Negro voting.

Ohio denied them poor relief, and most States of the old Northwest had laws carrying penalties against Negroes settling in those States. Everywhere in the free States the Negro met with barriers to job opportunities, and in most places he encountered severe limitations to the protection of his life, liberty and property.

[Many Republican leaders], like Senator Lyman Trumbull of Illinois, the close friend of Lincoln, found no difficulty in reconciling antislavery with anti-Negro views. “We, the Republican party,” said Senator Trumbull in 1858,” are the white man’s party. We are for free white men, and for making white labor respectable and honorable, which it can never be when negro slave labor is brought into competition with it.” [And] William H. Seward, who in 1860 described the American Negro as “a foreign and feeble element like the Indians, incapable of assimilation”; [and], Senator Henry Wilson of Massachusetts, who firmly disavowed any belief “in the mental or intellectual equality of the African race with this proud and domineering race of ours.”

(Seeds of Failure in Radical Race Policy, C. Vann Woodward, New Frontiers of the American Reconstruction, Harold M. Hyman, editor, pp. 125-12”

 

Revolutionary War Financing Precedes the Federal Reserve

With his war bankrupting the national treasury and consuming available gold reserves, Lincoln’s solution was to create a national banking system controlled from Washington, claiming military necessity as the reason for printing paper currency of questionable value and legality. Radical Ohio Senator John Sherman knew national banking “would centralize power in Washington” and he urged congressional colleagues to “nationalize as much as possible,” even the currency, so as to “make men love their country before their States.” All private interests, all local interests, all banking interests, the interests of individuals, everything, should be subordinate now to the interest of the Government.”

Bernhard Thuersam, www.circa1865.org

 

Revolutionary War Financing Precedes the Federal Reserve

“At the time of the Civil War the [United States did not have a nationalized] system of banking and banknote currency, and one of the important matters of [Northern] war finance was the creation of such a system.

“[Treasury Secretary Salmon P. Chase] . . . in his report of December, 1862 . . . outlined his plan for national banks and national bank currency. What Chase proposed was a system of national banking associations under Federal supervision, which would issue bank notes based upon United States bonds and guaranteed by the Federal government.

It became law on February 25, 1863; but this law had certain defects, so that Congress faced the whole problem afresh and reframed the statute. It is therefore to the law of June 3, 1864, that one must turn for the legislative basis of the national banking system as it emerged from the Civil War. Other provisions of the act were concerned with the maintenance of a required reserve against both banknotes and deposits; the depositing of such reserve in “reserve cities” (which permitted the concentration of bankers’ funds in New York City); . . . and the use of banks as depositaries and financial agents for the government.

As a method of stimulating, or rather forcing, the sale of United States bonds, the national bank act became an essential feature of Civil War finance. After the war (1866) a tax was placed on State banknotes in order to tax them out of existence, so that national banks possessed a monopoly of banknote currency.

To think of the national banking system as a purely fiscal measure innocent of politics and free from exploitation would indeed be a naïve assumption. Investigation shows that it soon “developed into something that was neither national nor a banking system.

Instead it was a loose organization of currency factories designed to . . . [serve] commercial communities and confined…almost entirely to the New England and Middle Atlantic States.” One of the chief injustices of the system as actually administered was the favoritism shown after the war to the eastern States which received the lion’s share of the $300,000,000 of banknote circulation assigned by law as the maximum for the whole country.

As explained by George LaVerne Anderson, each State in the New England and Middle Atlantic regions obtained an amount of banknotes in excess of its quota, while not a State in the South received an amount equal to its quota.

“Massachusetts (writes Anderson) received the circulation which would have been necessary to raise Virginia, West Virginia, North and South Carolina, Louisiana, Florida and Arkansas to their legal quotas . . . The little State of Connecticut had more national bank circulation than Michigan, Wisconsin, Iowa, Minnesota, Kansas, Missouri, Kentucky and Tennessee . . . Massachusetts had more than the rest of the Union exclusive of New England and Middle Atlantic States.

[An] interesting comparison [he continues] can be made between comparatively small New England towns and the Southern States. Thus Woonsocket, Rhode Island, had more national bank circulation than North and South Carolina, Mississippi and Arkansas; Waterville, Maine, had nearly as much as Alabama; New Haven, Connecticut, had more than any single Southern State.

If it be said in answer to these facts that distributing according to population is absurd . . . it should be kept in mind that not a single Southern State had obtained, by October 1869, its legal share of the $150,000,000 which was to have been apportioned according to existing banking capital, wealth and resources.”

With some modification [this] national banking system continued for half a century. Though it had some merit, it created an inelastic currency, tended toward the concentration of bank resources in New York, opened the way for serious abuse in the speculative exploitation of bank funds, and contributed to the sharp financial flurry of 1907. Proving inadequate as a nationwide control of currency and banking, it was tardily superseded by an improved plan in the federal reserve act of 1913.”

The Civil War and Reconstruction, J.G. Randall, D.C. Heath and Company, 1937, pp. 455-458)