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Disruptive and Inharmonious Boston Abolitionists

The aristocratic cotton manufacturers who supported Henry Clay’s “American System” organized the Massachusetts Whig party out of the chaos of Andrew Jackson’s reelection in 1832. They and their allies saw high tariffs as job insurance, and resented Jackson’s appeal to immigrant labor, farmers and urban workers. These Massachusetts Whigs had grown wealthy from Eli Whitney’s invention and slave-produced cotton from the South, and considered abolitionists as enemies of the Constitution and peace. Both Whitney and the mill owners were responsible for perpetuating slavery in the South as they made cotton production highly profitable.

Bernhard Thuersam, www.Circa1865.org

 

Disruptive and Inharmonious Boston Abolitionists

“The leaders of the Whig party, for a number of reasons, were particularly responsive to the abolitionist threat. Several members of their class, including Sewall, Edmund Quincy, Ellis Gray Loring, Francis Jackson, James Russell Lowell, William Ellery Channing, and Wendell Phillips, had entered abolitionist ranks and so threatened the newly-restored [upper Boston] class unity.

Although the aristocrats were engaged in a great many reforms, abolitionism never became fashionable or even acceptable to the social elite as a whole, and aristocrats who associated with the abolitionists were quickly ostracized. Consequently, many of the leading abolitionists came from less socially-distinguished families and were most successful in their appeals to the middle class.

The Whig leaders, who regarded abolitionism as a disruptive influence in American society and deplored the abolitionists’ opposition to harmony with the South and the maintenance of the Union, seldom distinguished the moderate abolitionists from the Garrisonian extremists.

Worst of all, from the Whig point of view, the abolitionists, in their demand for immediate, uncompensated emancipation, had attacked property right which the conservative Whigs regarded as fundamental to every other right.

The Whig leaders opposed all denunciations of slavery and slaveholders, many of whom were personal friends, business associates, and political allies. They considered slavery a redundant issue in Massachusetts politics and anti-slavery propaganda worse than meaningless in the North. Although most of them, to be sure, considered slavery an evil, they emphasized that it was an institution wholly controlled by the States, and as such was protected by the Constitution, which was no to be tampered with.

Anti-slavery agitation in the North would only bring about sectional disharmony and, in addition, worsen the condition of the slave in the South. Abbott Lawrence summed up the conservative Whig position when he wrote:

“I am in favor of maintaining the compact as established by our fathers. I am for the Union as it is. I have no sympathy with the abolition party of the North and East. I believe they have done mischief to the cause of freedom in several States of the Union. The abolition of slavery in the States is exclusively a State question and one with which I do not feel that I should meddle or interfere in any shape or form.”

(Cotton Versus Conscience: Massachusetts Whig Politics and Southwestern Expansion, 1843-1848, Kinley J. Brauer, University of Kentucky Press, 1967, excerpts pp. 22-24)

Lincoln’s War Department

Lincoln’s initial choice to lead his War Department was Senator Simon Cameron, described as “the Pennsylvania opportunist, and successively Democrat and Know Nothing before affiliating with the Republicans.” Lincoln was under intense pressure from Pennsylvania Republicans to appoint Cameron to the cabinet, though the latter’s troubled past warned against it. In 1838, Cameron was appointed to settle claims of the Winnebago tribe in Wisconsin and “besides other irregularities Cameron had given to the red men depreciated notes on his own bank – all of which brought against him the first of many charges of dishonorable dealing and earned for him the derisive sobriquet of the “Great Winnebago Chief.” Indeed, “Cameron” and “corruption” became synonymous terms.”

Bernhard Thuersam, www.Circa1865.org

 

Lincoln’s War Department

“The most flagrant malfeasance was in the War rather than Navy Department, for the War office had at its disposal many fat army contracts. Conditions in this department were made even worse by the fact that the code of political ethics of Secretary of War Simon Cameron made it impossible for him to play the role of crusader in eliminating sharp practices.

Indeed, his handling of the financial affairs of the department were scandalous in the extreme. The most glaring favoritism was shown. Some manufacturers could get contracts while others could not. Middlemen abounded and easily obtained lavish contracts, which they sold to manufacturers at high profit.

One gun manufacturer endeavored in vain to secure business from the War Department, but got orders for 200,000 guns from middlemen who, though unable to manufacture the guns, knew how to get contracts. Many contracts went to subcontractors.

Either through criminal negligence or criminal collusion on its part, the War Department under Cameron permitted and even encouraged fraud of the grossest character. Moreover, contractors frequently besieged Republican leaders with appeals to intercede for them with Cameron in the award of contracts.

Cameron conducted the War Department as if it were a political club house; he used contracts freely to pay off old political debts and to shower additional favors upon his henchmen.

Representative Henry L. Dawes, of Massachusetts . . . declared that Cameron used fat contracts to win political support at meetings “where the hatchet of political animosity was buried in the grave of public confidence and the national credit was crucified between malefactors.”

(Lincoln and the Patronage, Harry J. Carman and Reinhard H. Luthin, Peter Smith, 1964, excerpts pp. 147-148; 150)

Factions Combine to Battle a Common Foe

Lincoln was the consummate politician at the head of a minority party made up of warring factions, whose only commonality was deep hatred of Democrats and the interests of the American South. He realized after his plurality victory that public jobs, i.e., the patronage, had to be wisely distributed to these factions to cement the fragile party together. In the Fort Sumter crisis, though common sense and peace demanded wise leadership and diplomacy, Lincoln instead put party above country – fearing that any action appearing conciliatory toward the South would cause his Republican party of many faces to disintegrate.

Bernhard Thuersam, www.Circa1865.org

 

Factions Combine to Battle the Common Foe

“The groups who contributed to Lincoln’s triumph in 1860 almost defy analysis, so numerous and varied they were. Among the more important were:

  1. the antislavery Whigs, who seized upon the sectional issue for political reasons or because they sincerely believed that the Southern planter interests would either politically ruin the nation or cause disunion.
  2. Free-Soil Democrats, particularly in the Northwest, who feared extension of Negro slavery into their territory or who had severed their allegiance with the Democratic party when [both Presidents Pierce and] Buchanan disregarded their section’s interest in favor of the South.
  3. Disgruntled Democrats, with no pronounced opinions on the sectional controversy . . . disappointed in their many quests for public office or else detested Buchanan and other Democratic chieftains . . .
  4. Certain Know-Nothing who disliked the Democrats for party reasons or because of the latter’s coddling of the Irish vote.
  5. German-born naturalized citizens who hated the Southern slave-plantation system, feared competition with Negro labor, and wanted free land.
  6. Homestead and internal improvement people in general.
  7. Protective tariff advocates, particularly in Pennsylvania, who opposed Democrats because of their free-trade [and low-tariff] tendencies.
  8. Groups in favor of the Pacific railroad [to increase Northeastern trade with the Orient].
  9. Those who wanted daily overland mail and who believed that the Buchanan administration was favoring [a Southern railroad route].
  10. Certain Union-minded conservative men in the border States, who believed that the regular Democratic party under Pierce and Buchanan was becoming an instrument of pro-slavery interests and a force for secession and who hoped to conservatize the Republican party from within.

Only a few years before these numerous factions had hewn at each other’s heads; they had come together in the recent campaign like Highland clans to battle the common foe. The leaders of these various factions were still jealous of one another and often openly hostile.”

(Lincoln and the Patronage, Harry J. Carman & Reinhard H. Luthin, Peter Smith, 1864, excerpts pp. 9-10)

 

Creating Engines for Political Security

The “glittering prize” of political party victory was control of the distribution of political offices, and Lincoln astutely arranged the patronage to control his party as well as keep jealous competitors at bay. The Collectors of Customs posts were most important, and were decisive in Lincoln’s decision for war rather than lose his tariff money and appointing powers.  Count Gurowski, the Polish immigrant and political gadfly mentioned below, believed in the European tradition that “treason” was simple opposition to royalty. In the United States, however, Article III, Section 3, defines treason only as waging war against “them,” the States, or adhering to their enemies.

Bernhard Thuersam, www.Circa1865.org

 

Creating Engines for Political Security

“The arduous task of cabinet-making was far from completed before Lincoln was beset with a swarm of office-seekers. Indeed, Washington was a veritable mecca for patronage mongers bent upon securing consulships, Indian agencies, postmaster-ships, or anything else in the gift of the appointing power [of the President].

Those who witnessed the rush of job hunters could not easily forget the spectacle. Wrote home a Michigan Congressman: “The City is overwhelmed with a crowd of rabid, persistent office-seekers – the like never was experienced before in the history of the Government.”

An Indiana member reminisced later: “I met at every turn a swarm of miscellaneous people, many of them looking as hungry and fierce as wolves, and ready to pounce upon members [of Congress] as they passed, begging for personal intercessions, letters of recommendations, etc. . . . the scuffle for place was unabated.”

And the eccentric Count Adam Gurowski, viewing the scene, confided to his diary in this same month of March 1861 his impressions:

“What a run, a race for offices. This spectacle likewise new to me. The Cabinet Ministers, or, as they call them here, the Secretaries, have old party debts to pay, old sores to avenge or to heal, and all this by distributing offices, or by what they call it here, the patronage. They, the leaders, hope to create engines for their own political security, but no one seems to look over Mason and Dixon’s line to the terrible and with lightning-like velocity spreading fire of hellish treason.”

Politically and financially, the collectors of customs posts were among the most important at the disposal of the Administration. That at the metropolis of the Empire State was the most lucrative. “There is no situation in the U. States which enables the incumbent to exert such influence . . . as the Collectorship of New York,” one political observer had written in the 1840’s; to another this position was second only in influence to that of Postmaster-General.”

Under the caption “Fat Offices of New York,” Horace Greeley’s Tribune informed its readers in 1860 that ranking first in importance and revenue was the collectorship, with its fixed salary of $6,340, and some $20,000 more in the form of “pickings and fees.” Before Lincoln’s first administration had run its four years, the Surveyor of the Port estimated the number of employees in the New York Custom House at 1,200 and the assessment on their salaries for political party purposes at 2 percent.”

(Lincoln and the Patronage, Harry J. Carman & Reinhard H. Luthin, Peter Smith, 1864, excerpts pp. 53-54; 59-60)

 

Postwar Corruption and Thievery in Washington

The war waged against the American South was more about destroying it’s political and economic power in the Union, so that Northern political and economic interests could prevail nationally. The resulting carnival of political vice and scandal is best summarized with: “The festering corruptions of the post-war period sprang up in every part of America and in almost every department of national life. Other loose and scandalous times . . . had been repellent enough; but the Grant era stands unique in the comprehensiveness of its rascality.”

Bernhard Thuersam, www.Circa1865.org

 

Postwar Corruption and Thievery in Washington

“The Civil War had severed the Southern checks on the exploitation of natural resources, had supplanted an old, experienced ruling class for a new, inexperienced one, had released the dynamic energies of the nation, and had ushered in the Era of Manipulation.

Under President Grant, pliant and politically naïve, the government had fallen into the hands of dishonest and incapable men . . . politics under the cloak of Radicalism more and more had become identified with manipulation for economic favor. Hordes of lobbyists had swarmed over the land, seeking railroad subsidies, mining concessions, and thousands of other government handouts.

The West was being plundered by railroad and mining corporations, the South by Carpetbaggers and Scalawags. The cities and the State legislatures, in North and South alike, were infested with rings, lobbyists, bribe-givers, and bribe-takers. Even the national Congress had become a tool of predatory business interests. Machine politics, firmly founded on patronage, economic privilege, the bloody shirt, and the soldier vote, prevailed everywhere.

The new ruling classes, flushed with prosperity, had lost their sense of responsibility, and corruption had kept pace with the upward swing of the business cycle. Political morality had sunk to its lowest level in American history.

In the closing days of the last Congress, [Grant’s self-styled House floor leader] Ben Butler and a few others had slipped through a measure increasing the salaries of the President, members of Congress, and other high officials. Tacked onto the unpopular measure was a retroactive feature which in effect gave each member a $500 bonus for his service the last two years.”

(John A. Kasson, Politics and Diplomacy from Lincoln to McKinley; Edward Younger, State Historical Society of Iowa, 1855, excerpts pp. 250-252)

A Superior Race of Yankee Employers

The land seized, sold and leased in occupied South Carolina by the North’s Direct Tax Commission was dominated by Northern philanthropists and others who had acquired their wealth by exploiting free labor. They developed Northern support for the “Port Royal Experiment” by convincing manufacturers that successful black farmers would become ravenous purchasers of Yankee goods. In a June 15, 1864 letter to the Edward S. Philbrick mentioned below, Northern General Rufus Saxon wrote: “What chance has [the Negro] to get land out of the clutches of the human vulture, who care for him only as they can gorge themselves upon his flesh? If you had seen the hungry swarms gathered here at the land sales in February . . .”

Bernhard Thuersam, www.Circa1865.org

 

A Superior Race of Yankee Employers

“[In the occupied South Carolina’s Sea Islands], the first purchasers were principally the New England wing of the planter-missionaries [who] welcomed more favorable circumstances in which to prove their theory that free labor could grow more cotton, more cheaply, than slave labor. The largest buyer [of land] was Edward S. Philbrick, backed by wealthy Northern philanthropists . . .

Federal authorities were reluctant to lease or sell subdivided plantation tracts to the freedmen [though some] managed to purchase several thousand acres . . . but the acreage they acquired was always well below that purchased by Northern immigrants, and this result was intended by a majority of the tax commissioners.

The truth is, not many of the liberators had boundless faith in the freedmen’s capacity for “self-directed” labor so soon after their emancipation. When in January 1865 General William T. Sherman set aside a strip of land along the southeastern seaboard for the exclusive occupancy of the thousands of slaves who followed his army to the sea, the news was generally greeted in the North with lamentation and deep foreboding.

It was a great mistake in statesmanship, the New York Times said, for what the ex-slaves needed was not isolation and complete independence, but “all the advantages which the neighborhood of a superior race . . . would bring to them. And what they needed even more was the good example and friendly guidance such as Yankee employers could largely provide. Few doubted, after emancipation, that the freedmen had some promise, provided that Yankee paternalism was allowed full scope.

When the old masters talked of free labor, they really meant slave labor, “only hired, not bought.” And how could men whose habits and customs were shaped by the old order readily grasp the requirements of the new order? The case seemed plain to all who had eyes to see. If the freedmen were ever to be transformed into productive free laborers within the South, the New York Times argued with unintended irony, “it must be done by giving them new masters.”

(New Masters: Northern Planters During the Civil War and Reconstruction, Lawrence N. Powell, Yale University Press, 1980, excerpts, pp. 4-5)

Profiteering in Arkansas

With Lincoln’s approval, former Illinois Congressman William Kellogg advanced a cotton-trading scheme at Northern occupied Helena, Arkansas, which would reap millions for himself and provide slave-produced cotton for hungry Northern mills. Though Secretary of the Treasury Salmon Chase opposed the idea, Kellogg was later appointed chief justice of the Nebraska Territory in early 1865 for his patriotic efforts.

Bernhard Thuersam, www.Circa1865.org

 

Profiteering in Arkansas

“Upon occupying Helena, Arkansas, in mid-July 1862, Union General Samuel Curtis complained that his camp was “infested with Jews, secessionists and spies.” By issuing orders that restricted trade to a few people he could control under military law as sutlers, Curtis adopted a policy that made him vulnerable to charges of improper monopolization.

Shortly, a steady stream of rumored abuses percolated up to Chicago and the department headquarters for Curtis’s army at St. Louis. Illinois Senator Orville Browning’s diary records Chicago rumors that Curtis deposited $150,000 with a Chicago financier less than three months after occupying Helena. By October 1862, [an] officer said, Curtis had already seized several million dollars worth of [cotton] and “converted it to his own use.”

Later, Curtis wrote Lincoln directly to explain that the complaints originated out of envy from unsavory characters who were unworthy of trade privileges. Nonetheless, within a few months, the general was transferred to St. Louis to become the new department commander, and rumors of his possible fraud trailed along.

An investigating Treasury agent concluded that Helena’s trade “diverted soldiers to become agents and brokers of cotton buying [and had] thrown thousands of dollars into the hands of our enemies.” Corruption flourished at Helena, where the army had little to do during twelve months of idle occupation before invading central Arkansas in late summer of 1863.

Federal soldiers even purchased cotton from slaves with counterfeit Confederate money.

Lincoln’s military governor of Arkansas complained late in 1862 that the idle troops at Helena were principally engaged in profiting from cotton trade. They raided neighboring plantations to confiscate whatever cotton they could get. As an afterthought, they would often destroy the plantation homestead.

Helena’s steady occupation led to deplorable sanitary conditions, particularly among the freed slaves . . . [and] disease, malnutrition, and lack of clothes and shelter took a toll on the blacks who sought refuge in the town.

Before the end of 1862, the inland navy began to get involved. [Admiral David Dixon Porter’s] crews became covetous of cotton as a prize of war . . . [and] 50 percent of a captured cargo was subject to a reward for the crew of the ship making the capture. By the end of the war, Porter had become so aggressive at stealing cotton . . . [he was dubbed] “Thief of the Mississippi.”

His sailors would seize bales and stencil “C.S.A” on them, thereby falsely representing the cotton as property of the Confederate government and therefore subject to prize law.”

(Trading With the Enemy: The Covert Economy During the American Civil War, Philip Leigh, Westholme Publishing, 2014, excerpts pp. 65-66)

The Seeds of Sectionalism and War

Both Jefferson and Hamilton recognized that sectionalism had been a part of American politics since colonial days, and the emerging West was adding a third section to the political landscape. The political problem facing Federalists and Republicans was “how to win the allegiance of the absconding swindlers, murderers, fugitive slaves, bankrupts, brigands and failures” who settled the wild areas of the West. And certainly those Westerners would give their political allegiance to whomsoever got them what they wanted. Therein lay the seeds of future war.

Bernhard Thuersam, www.Circa1865.org

 

The Seeds of Sectionalism and War

“[Jefferson] saw that factions were forming in the United States, and the political parties were emerging. This was something the Founding Fathers had not envisioned when they wrote and agreed upon the Constitution. But it was clear enough to Jefferson that, on one side, there was a Federalist Party, led by Hamilton.

This party, he felt, had made a virtual prisoner of Washington . . . and was hiding behind his prestige to effect its nefarious scheme of converting the United States into a monarchy for the specific benefit of Northern financiers. Hamilton, Jefferson somewhat wildly wrote, “was not only a monarchist, but for a monarchy bottomed on corruption.”

Jefferson saw the Federalists as aristocrats who were the enemies of natural law and the rights of man. They interpreted the Constitution to mean the Federal government could seize any rights not specifically denied it, in order to destroy liberty. They were hand in hand with the financiers of Great Britain, and their opposition to slavery was not humanitarian, but just a hypocritical way of seeking to undermine the economy, and hence the power, of the agricultural Southern States.

On the other side, in Jefferson’s view, there ought to be the “anti-Federalist” party, which would stand for strict construction and the rights of States in order to safeguard the rights of man. As he saw them, the anti-Federalists were those who feared the creation of a national bank as another Federalist plot to destroy these rights; they were the true revolutionaries, whereas the Federalists represented the forces of reaction.

As revolutionaries, the republicans were therefore the enemies of monarchical Great Britain and the friends of revolutionary France. If they believed in slavery, it was because – well, of course nobody could really believe in slavery; the South was at heart republican and of course someday slavery would be abolished, but not right now. It was not the time to raise that question: the times now demanded opposition to the anti-revolutionary Federalists.

The anti-Federalists should form a party.”

There was meanwhile a nation to govern – one whose destiny lay clearly in the West. Here, between the Appalachians and the Mississippi, were two-hundred thousand American settlers whose political opinions could be decisive. Both saw opportunities to speculate in western lands [but] both feared that the balance of political power might shift from the East Coast to these broad western lands with the swift growth of population there. It was a possibility that occurred to western politicians as well.”

(Eminent Domain: the Louisiana Purchase and the Making of America, John Keats, Charterhouse, 1973, excerpts pp. 242-244; 247-248)

 

Bounties Fill Lincoln’s Armies with Patriots

In mid-1862 volunteering in the North had all but stopped after the carnage and high casualty numbers to date, though Lincoln desperately needed more troops to continue his war. He threatened conscription as a whip to encourage governors to fill the “troop quotas” he demanded, and the governors rightly feared retaliation from their constituents who had little interest in the war. Bounties were used to buy the services of paupers, indigents, immigrants and recently-released criminals to fill the ranks and keep Northern working men at home. Massachusetts Governor John Andrew found a workable solution in sending State agents to the occupied South to enlist captured black men who would be counted toward his State quota – and approved by Lincoln.

Bernhard Thuersam, www.Circa1865.org

 

Bounties Fill Lincoln’s Armies with Patriots

“After the first flush of patriotism had passed, one of the strong inducements to enlistment was a financial one – a bounty, and, at a later date, the advance of the first month’s pay. During the Civil War, bounties came from three sources – the federal government, local governmental units, and private subscription. (In Ohio there was no bounty offered directly from State funds.)

The federal government, at the beginning of hostilities, offered a bounty of $100, payable upon honorable discharge . . . [but] by action of Congress in July 1862, one-fourth of this sum was to be paid upon muster and the balance at the expiration of the term of enlistment.

By later acts of Congress the bounty was increased to as much as $400 in some cases, payable in installments at certain periods during the soldier’s service as well as upon his being mustered in and mustered out. By 1863, the volunteer could expect $75 from the federal government at the time he was mustered in, $13 of the amount being his first month’s pay.

To the federal bounty there came to be added bounties provided by local governmental units and private subscription. Indeed, as [Provost Marshal General James Fry] wrote, the federal bounty paled into “comparative insignificance” when compared with the “exorbitant bounties paid in advance by local authorities.”

These, he believed, were the most mischievous in encouraging desertion, bounty-jumping, and other evils connected with the system. So great was the stigma of the draft that local authorities were highly competitive in the amounts offered to volunteers. Furthermore, they paid all the sum in advance. The primary objective of these payments, as General Fry put it, came to be “to obtain men to fill quotas.”

Localities began by offering moderate bounties. In 1862 the average local bounty was estimated at $25; in 1863 it advanced to $100; in 1864 it bounded to $400; and in 1865 the average bounty was $500, although in some localities it was as high as $800. The Hamilton County Board of Commissioners levied a tax of two mills in 1863 to take care of local bounty payments. On a tax duplicate of $128,432,065 this levy yielded about $256,864. The next year the city of Cincinnati began to borrow in order to offer city bounty payments, and during that year 1,811 volunteers were paid bounties of $100 each.

After the war the adjutant-general of Ohio estimated that $54,457,575. Had been paid in local bounties throughout the State, of which amount cities and counties had paid about $14,000,000 and private subscribers, $40,457,575.

The private subscriptions represented ward or township bounties, offered to encourage volunteering to avoid the draft in a city ward or township. [Political] Ward military committees were very active in securing private contributions for this purpose, as well as in securing volunteers.”

(Relief for Soldiers’ Families, Joseph E. Holliday; Ohio History, Vol. 71, Number 2, July 1962, James H. Rodabaugh, editor, excerpts pp. 98-100)

The True Result of Appomattox

Lincoln’s war administration and deficit financing ushered in the modern American state which remains in existence today. The various Bureaus, Departments and revolutionary measures created for the purpose of increasing federal power were all linked to his total war-effort, including the restructuring of currency and banking. Author Bruce D. Porter (War and the Rise of the State, Free Press, 2002) wrote that “Appomattox thus represented not just the defeat of the South, but the defeat of the whole Southern economic and political system, and the triumph of a state-fostered industrial and financial complex in the North.”

Bernhard Thuersam, www.Circa1865.org

 

The True Result of Appomattox

“[in Herman Melville’s postwar] poems he recognized the tremendous costs, especially through the loss of freedom and the end of the founders’ dream for America as a result of the North’s victory. He viewed the construction of the new iron dome on the Capitol in Washington, DC, which replaced the wooden one, as a symbol of America’s future.

Bruce Porter’s well-documented study [of the war] relates some of the economic costs of the Civil War:

In connection with the war the Lincoln administration attempted to intervene in areas of the national life that the federal government had never touched before . . . Prior to 1861, the national government had been a minor purchaser in the American economy. During the war, it became the largest single purchaser in the country, a catalyst of rapid growth in key industries such as iron, textiles, shoe manufacturing, and meat packing . . .

The Civil War spawned a revolution in taxation that permanently altered the structure of American federalism and the relationship of the central government to the national economy. Prior to the war, over 80 percent of federal revenue had come from customs duties, but despite several upward revisions of the tariffs during the war, those could provide only a fraction of what was needed to sustain the union armies.

On August 5, 1861, the first income tax in US history came into effect, followed by the Internal Revenue Act of 1862, which levied a whole series of new taxes: stamp taxes, excise taxes, luxury taxes, gross receipt taxes, and inheritance tax, and value-added taxes on manufactured goods. The latter Act created the Bureau of Internal Revenue, perhaps the single most effective vehicle of federal power ever created . . .

Neither taxes nor paper dollars, however, came close to covering the enormous costs of the war. Dire fiscal straits forced the federal government to borrow over 80 percent of its cost, or more than $2.6 billion. [The] Lincoln administration created a captive source of credit by granting a monopoly on issuance of the new national currency to banks that agreed to purchase large quantities of federal bonds . . . [and] agree to accept federal regulation and federal charters. Thus, almost overnight, a national banking system came into being.

[Author] Eric Foner writes that the fiscal measures represented in their “unprecedented expansion of federal power . . . what might be called the birth of the modern American state . . .”

(The Costs of War, America’s Pyrrhic Victories, John V. Denson, Transaction Publishers, 1999, excerpts pp. 28-29)

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