Browsing "Financing Lincoln’s War"

McFadden and the Federal Reserve

Congressman Louis T. McFadden of Pennsylvania was Chairman of the House Banking and Currency Committee in 1932, and a staunch opponent of the Federal Reserve. Along with Congressman Charles A. Lindbergh, Sr. he fought the Federal Reserve Act in 1913 and conducted one of the first investigations of the banking and money trust in Congress. The path to the Federal Reserve act began with Lincoln who admitted that “as a result of the war, corporations have been enthroned and an era of corruption in high places will follow and the money power of the country will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in the hands of a few and the Republic is destroyed.” Lincoln destroyed the Republic with war, invasion, fiat money and the marriage of business and government.

Bernhard Thuersam, www.Circa1865.com

 

McFadden and the Federal Reserve

“Friday, June 10, 1932

Mr. McFadden: Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve banks. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt.

This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.

Some people think the Federal Reserve Banks are United States Government institutions. They are not Government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.

In that dark crew of financial pirates there are those who would cut a man’s throat to get a dollar out of his pocket; there are those who send money into States to buy votes to control our legislation; and there are those who maintain an international propaganda for the purpose of deceiving us and of wheedling us into the granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.

Those 12 credit monopolies were deceitfully and disloyally foisted upon this country by bankers who came here from Europe and who repaid us for our hospitality by undermining our American institutions. Those bankers took money out of this country to finance Japan in a war against Russia.

They created a reign of terror in Russia with our money in order to help that war along. They instigated a separate peace with Germany and Russia and thus drove a wedge between the allies in the World War. The financed Trotsky’s mass meetings of discontent and rebellion in New York. They paid Trotsky’s passage from New York to Russia so that he might assist in the destruction of the Russian Empire.

They fomented and instigated the Russian revolution and they placed a large fund of American dollars at Trotsky’s disposal in one of their branch banks in Sweden so that through him Russian homes might be thoroughly broken up and Russian children flung far and wide from their natural protectors. They have since begun the breaking up of American homes and the dispersal of American children.”

(Collective Speeches of Congressman Louis T. McFadden, Omni Press, 1970 pp. 298-299)

The War for Tariffs, Taxes and Astonishing Profits

The war commenced by Lincoln in 1861 immediately presented his administration with the problem of a conflict the United States could simply not afford. In April 1861, federal spending was only about $172,000 a day, raised by tariffs and land sales. By the end of July 1861, Lincoln had caused this to increase to $1 million, and by the end of December it was up to $1.5 million per day. Also in December 1861 Northern banks had to stop paying their debts in gold, with the federal government doing the same shortly after and resorting to printing money. The country had gone off the gold standard, Wall Street was in a panic, and Lincoln would lament, “The bottom is out of the tub, what shall I do?” The cost of the war would eventually reach $8 billion, enough to have purchased the freedom of every slave five times over – and provided each with the proverbial 40 acres, and the mule.

Bernhard Thuersam, www.Circa1865.com

 

The War for Tariffs, Taxes and Astonishing Profits

“By May 1864 [financier Jay] Cooke was selling [Northern] war bonds so successfully that he was actually raising money as fast as the War Department could spend it, no mean feat for that was about $2 million a day at this point. Altogether, the North raised fully two-thirds of its revenues by selling bonds. If Abraham Lincoln must always be given the credit for saving the Union, there is also no doubt that the national debt was one of the most powerful tools at his disposal for forging victory.

Although the [Northern] people were willing to endure very high taxes during the war, peacetime was another matter altogether. Immediately after the war the cry for repeal of the wartime taxes became insistent. With military expenses quickly dropping, the problem, was what taxes to cut. American industrialists, who had prospered greatly thanks to wartime demand and wartime high tariffs, naturally did not want the tariffs cut.

Because the Civil War had broken the political power of the South, the center of opposition to the tariff, they got their way. The tariff was kept at rates far above the government’s need for revenue as the North industrialized at a furious pace in the last three decades of the nineteenth century and became the greatest – and most efficient – industrial power in the world.

Of course, no matter how large, efficient, and mature these industries became, they continued to demand [tariff] protection, and, thanks to their wealth and political power, get it.  As Professor William Graham Sumner of Yale explained as early as 1885, “The longer they live, the bigger babies they are.” It was only after the bitter dispute between Andrew Carnegie and Henry Clay Frick caused the astonishing profits of the privately held – and highly protected – Carnegie Steel Company to become public knowledge, in 1899, that the political coalition behind high tariffs began to crack.

Before the Civil War there had been little advocacy of an income tax in this country, at least at the federal level, although by the war six States had implemented such taxes for their own revenue purposes. But once a federal income tax was in place, thanks to the Civil War, it quickly acquired advocates, as political programs always do.

These advocates pushed the idea relentlessly . . . Republican Senator John Sherman . . . said during a debate on renewing the income tax in 1872, that “here we have in New York Mr. Astor with an income of millions derived from real estate . . . and we have along side of him a poor man receiving $1000 a year. [The law] is altogether against the poor man . . . yet we are afraid to tax Mr. Astor. Is there any justice in it? Why, sir, the income tax is the only one that tends to equalize these burdens between the rich and the poor.”

(Hamilton’s Blessing, John Steele Gordon, Penguin Books, 1997, pp. 79-83)

Voodoo Economics, Circa 1864

Lincoln’s choice for the cabinet post of treasury, Salmon P. Chase, was no financial expert yet he was to advise Congress on the framing of financial bills, obtaining money from “keen-minded bankers and investors” like Jay Gould, as well as loans and paper money. The taxes collected were far smaller than expenditures and throughout the war the total amount received in loans was 2621 million dollars, against 667 million dollars obtained from taxation.

Bernhard Thuersam, www.Circa1865.com

 

Voodoo Economics Circa 1864

[Diary Entry] July 2, 1864:

“There is discord in the Cabinet. Mr. Seward represents the moderates, while Mr. Chase, the abolitionist and the inventor of paper money, represents the Radicals. He is regarded here, rightly or wrongly, as the greatest financier in the world. It seems to me that his entire science has consisted of keeping the ship afloat by throwing the provisions overboard. It is easier to borrow than to repay, and I fear Mr. Chase is leaving the difficult task to those who will follow him.

The failure of his financial policy and the defeat of a bill on gold that he recently submitted to Congress have led Mr. Chase to hand in his resignation.”

[Diary Entry] July 5, 1864:

“A financial crisis can, from one day to the next, reduce the value of paper money to virtually nothing. Everything now hangs on the hope of taking Richmond. But because Grant moves this way and that without gaining ground, because Petersburg, a town defended by children and schoolmasters, continues to stand firm against a hundred thousand men, and because the Confederates, far from giving in, are threatening Maryland with an invasion which is forcing the President to call up the militia and because, in a word, nobody sees an end to the war, public confidence is growing weaker.

The government itself, obliged to pay interest on the public debt in gold, is requiring that all customs duties be paid in gold. Nothing depreciates the currency so much as this self-distrust manifested in the Treasury. Until now the “greenbacks” have had more value in actual trading than that indicated by the rates quoted for them on the official gold market. But if ever the small businessmen should refuse to take them and if ever they should cease to circulate freely among the people, the poor Mr. [William P.] Fessenden (who has just succeeded Mr. Chase) will have to take over the direction of the Treasury only to associate his name with the impending national bankruptcy.

Let us return to Mr. Chase. He had a single obsession: to strangle speculation and force down the price of gold. He thought that to do this he needed only to decree an increase in the value of paper money, and that economic interests could be manipulated so easily as the parts of a machine. Thus he proposed a law prohibiting overdraft operations, speculative transactions which result in a paper loss or gain on balance. Judge for yourselves whether the waving of the Treasurer’s wand has had the magical effect he expected it to have.

By the very next day the speculators had taken fright and activity was concentrated in a small number of hands; now it is continued in secret, without competition, and this quasi-monopoly has immediately raised the price of gold by 40 percent. Congress wanted the bill withdrawn. Mr. Chase insisted that it be acted upon, and it was himself who had to withdraw.

If the moment of crisis ever comes when paper money is forced into the hands of only a few holders, the public will think only of getting rid of it, and America will offer to the world in a twofold sense the spectacle of “hideous bankruptcy.”

(A Frenchman in Lincoln’s America, Ernest Duvergier de Hauranne, Donnelly & Sons, 1974, pp. 77-88)

War Profiteering in the North

Published as a textbook well before America’s cultural revolution of the 1960’s, John Hicks “The Federal Union” can be trusted as a fairly accurate source of United States history and free of cultural Marxist revisionism. Below, he touches on the North’s generous government supply contracts, child labor and general wartime prosperity while its bounty-enriched blue-clad soldiers devastated Americans in the South to preserve a territorial Union.

Bernhard Thuersam, www.Circa1865.com

 

War Profiteering in the North

“When the Civil War broke out the North had not fully recovered from the depression that had followed the panic of 1857, and for a time business interests were more frightened than stimulated by the clash of arms. By the summer of 1862, however, a surge of prosperity had put in its appearance that was to outlast the war.

With millions of men under arms the [Northern] government was a dependable and generous purchaser of every kind of foodstuff, and its equally great need of woolen goods and leather strengthened the market also for raw wool and hides. Probably the sales of the farmers made directly or indirectly to the government more than offset the losses sustained by wartime interference with sales to the South.

[And] with the South out of the Union, a homestead law, so long the goal of believers in free land, was speedily enacted (1862). Thereafter any person who was head of a family, or had arrived at the age of twenty-one years, whether a citizen of the united States or an alien who had declared his intention of becoming a citizen, might take up a quarter section of public land, and, after having lived upon it for five years and improved it, might receive full title to it virtually free of charge.

What came in later years to be called “heavy industries” profited enormously from the war. Purchases of munitions abroad practically ceased after the first year because of the rapidity with which American factories supplied the government’s needs . . . the government itself went deeply into the business of manufacturing war materials as public opinion would permit.

High tariffs ensured the northern manufacturers against the dangers of foreign competition. A protectionist policy had been demanded by the Republican national platform of 1860, and a higher schedule of tariffs . . . was placed upon the statute books two days before [President James] Buchanan left office. This speedy answer to the prayers of the protectionists was made possible by the withdrawal from Congress of the delegations from the seven seceding States of the lower South, and by the fact that President Buchanan was no longer unmindful of the wishes of the manufacturers of his home State [of Pennsylvania].

The original Morrill Tariff Act was repeatedly revised upward during the war, until by 1864 the average of duties levied on imports had reached forty-seven per cent, the highest thus far in the history of the nation. The significance of this development can scarcely be overemphasized. A policy which the South had persistently blocked in the years preceding the war became an actuality during it, and as subsequent events were to prove, remained as a permanent fixture in American political and economic life.

The profits of war bred a spirit of extravagance and frivolity among the non-combatants of the north that contrasted oddly with the long casualty lists displayed as a regular part of the daily news. Social life reached a dizzying whirl, with more parties and dances, theaters and circuses, minstrel shows and musicales than ever had been known before.

According to a statement published by the Springfield Republican in 1864, many of the factories whose profits during the war had been “augmented beyond the wildest dreams of their owners” paid their laborers only from twelve to twenty per cent more than before the war. “There is absolute want in many families, while thousands of young children who should be in school are shut up at work that they may earn something to eke out the scant supplies at home.”

(The Federal Union, A History of the United States to 1865, John D. Hicks, Houghton Mifflin Company, 1948, pp. 660-665)

The War to Create Many Large Fortunes

After the departure of conservative Southern congressmen in 1861, the old Whigs in the Republican party went unrestrained in their merger of government and corporations. Historian Charles Beard would later write of the War that it was not easy to tell “where slavery as an ethical question left off and economics – the struggle over the distribution of wealth – began.”

Bernhard Thuersam, www.Circa1865.com

 

The War to Create Many Large Fortunes

“As the election of 1872 approached, the tax and tariff issues were potent enough for [President Ulysses] Grant to take at least some action. Trying to shore up support among farmers and others, Congress approved a 10 percent reduction in tariffs on most items including cotton and wool textiles, iron, steel, paper, glass and other items. But these were baby steps with marginal impact, designed to preserve the whole protectionist system.

Throughout the assault on the [Civil War] income tax, opponents had considered the step of going to court to challenge the tax’s constitutionality. Some suits were filed, and parts of the tax were upheld by various courts, including the Supreme Court. But as the expiration of the tax approached, there did not seem to appear much sentiment in Congress to continue it anyway. Senator [John] Sherman [brother of General Sherman] fought once again to keep the tax alive. He asserted that one of the most solemn obligations of the federal government was to protect the property of Americans. It was therefore only proper “to require property to contribute to their payment.”

Sherman’s appeal was to no avail. Congress was more sensitive to the demands of the growing number of wealthy entrepreneurs, investors, and tycoons, who were at their moment of maximum influence. The power of the new wealthy rested on the newly consolidated railroads and the many large fortunes create by the Civil War.

The landscape of wealth had changed. Whereas New York City had had a handful of millionaires before the conflict, there were hundreds of millionaires afterward. Their fortunes were in the tens of millions of dollars. A.T. Stewart, the dry goods magnate, was worth $50 million, and other millionaires, such as William B. Astor, Cornelius Vanderbilt, and the banker Moses Taylor, were not far behind.

Before Congress abolished the publication of income tax returns, it was reported that Astor had paid more than $1 million in income tax, while Vanderbilt and Taylor had paid more than $500,000. After the war, many millionaires routinely engaged in tax evasion or tricks to hide their income. What they did not bother to hide was their vast influence.

In 1869, Grant’s friend Jim Fisk worked with [Northern financier] Jay Gould to monopolize the market in gold, driving up its price so they could make a killing. Instead, on “Black Friday,” September 24, 1869, a collapse in gold prices engulfed a vast number of speculators and investors.

Fisk and Gould managed to bribe enough officials to avoid prosecution, and Fisk remained close to his trusting friends in the White House. Years later the Credit Mobilier scandal revealed that the construction company owned by stockholders of the Union Pacific Railroad had ensnared many prominent members of the Grant administration and Congress.

As tax the historian Sidney Ratner notes, the Civil War debt “became one of the most powerful instruments in America for the enrichment of the rentier class, the leading capitalists. For the next forty years, farmers, workers, small merchants and other working-class Americans carried this debt burden, to the benefit of the rich.”

(The Great Tax Wars, Lincoln to Wilson, Steven R. Weisman, Simon & Schuster, 2002, pp. 99-101)

The North’s Powerful Pension Attorney Lobby

The North’s war pensions were costly – from 1866 to 1917 the total disbursement for pensions was over $5 billion – though including the negligible amount for the Indian and Spanish Wars. It is said to be the “largest expenditure for pensions of any sort in the history of the world.”

Bernhard Thuersam, www.Circa1865.com

 

The North’s Powerful Pension Attorney Lobby

“Disability pensions for [Northern] Civil War soldiers were authorized on a liberal scale by acts passed in Congress in 1862, 1864, 1865, 1872 and 1873. In 1872, [James A.] Garfield said in the House that the expenditure for pensions, then standing at $27,000,000, had reached its peak, would remain stationary for a few years and then decline.

His prediction might have proved correct but for the activities of the pension attorneys.

These men were numerous in Washington. They helped a soldier file his claim and received a fee fixed by the government. When the claim was good they rendered proper services. But as the good claims became fewer, some attorneys took up bad claims many of which were rejected by the Commissioner of Pensions.

Then grew up the habit of referring such claims, approved by a lenient committee, to Congress as private bills, where they usually passed without inquiry on the floor of either house. In carrying out this process the pension attorneys became a powerful and persistent lobby.

They went further than mere private bills and sought to get laws passed for more liberal pensions. To carry their schemes through they established newspapers and appealed to the soldier vote. They had a strong influence in the Grand Army of the Republic, composed of officers and soldiers of the Civil War.

Their first striking success was in 1879 when the Arrears-Pension Act was passed . . . [and] gave [a lump sum to] any pensioner the arrears from death or discharge to the time a pension was applied for. Under the stimulus of the attorneys the act was passed with the strong support of each party.

Under it the pension bill rose from $27,000,000 in 1878 to $56,000,000 in 1880; and the number of applicants increased from 44,587 to 141,466 in the same period. The pension attorneys were rewarded for their efforts by this vast increase in business, though the legal fee did not exceed $10 for each claim.

When [Democrat Grover] Cleveland was President he adopted the plan of examining carefully the private pension bills sent him for signature. Many of them he signed, and many he vetoed after satisfying himself they were unwarranted. Against him the pension attorneys opened their powerful batteries and reminded the public he was elected by the votes of former Confederate soldiers.

Cleveland did not modify his course and when the lobby got Congress to pass a bill in 1887 to allow pensions to all [Northern] soldiers dependent on their own labor and not able to earn a living he vetoed that bill also. For his entire pension policy he was severely arraigned in [the election of] 1888 and the assault was a strong factor in his defeat.

[Republican] President [Benjamin] Harrison took office pledged to a liberal pension policy. In his first annual message . . . Harrison urged the passage of a dependent pension law [and] Congress complied . . . In its second year of operation, when it was fully acting, the total expenditure for pensions had increased by $68,000,000 a year, and in the course of seventeen years by a total of $1,058,000,000. It was passed as a political measure, with an eye to the old soldier vote.”

(Expansion and Reform, 1889-1926, John Spencer Bassett, Kennikat Press, 1971 (original 1926), pp. 18-21)

Watching Richmond with a Cold Profiteering Eye

“Diamond Jim” Fisk, was a Vermonter who by 1864 had made a fortune through shrewd dealing with army contracts and smuggling cotton northward through Union lines. Allied with the notorious New York political boss Boss Tweed, his buying of judges and bribery of legislatures was the stuff of legend.

Bernhard Thuersam, www.Circa1865.com

 

Watching Richmond With a Cold, Profiteering Eye

[Losing a large sum in stocks, Fisk] saw an opportunity to recoup his losses by capitalizing in a similar way on victory. Confederate bonds had fallen on the London exchange with Southern losses but were still selling at some eighty cents on the dollar. Grant now had Richmond in a vise. Victory seemed certain, and when the Confederacy met defeat her bonds would plummet in value.

Not yet was there an Atlantic cable, so it would take more than a week for news of the war’s end to reach England by fast steamship.  If anyone could get to London before the news, he could sell Confederate bonds short like mad at eighty cents on the dollar and reap a harvest when they sank. Fisk resolved to get there first.

Forming a pool with three capitalists, he furnished the scheme while they supplied the money. Chartering a fast steamer, he sent it to Halifax, the nearest North American port to England with orders to keep up steam for instant departure. Aboard the ship was his agent, a knowing New York broker named Hargreaves, who had instructions to speed to England when given the signal.

One obstacle was the telegraph, which then fell fifty miles short of reaching Halifax. Fisk had the last fifty miles strung at his colleagues’ expense, then watched Richmond with a cold, profiteering eye.

On the historic day when Lee surrendered, the word sped over the wires to Hargreaves: “Go!”  Hargreaves went.

He reached Liverpool in six days and a half — two days ahead of the arrival of the first ship from New York with the news. Speeding to London, he kept mum about defeat and dutifully sold Confederate bonds short to all buyers.

Alas! — one of Fisk’s partners, a conservative man, had privately telegraphed Hargreaves not to sell more than five millions in bonds, so he limited his sales to that amount. When the news of the surrender reached London, the bonds tumbled to $22.  Hargreaves therefore collected the difference between $22 and $80, making a handsome profit for his employers but missing the downright killing that would have been possible.”

(Jim Fisk The Career of an Improbable Rascal, W.A. Swanberg, Scribner’s Sons, 1959, pp. 20-21)

 

 

Lincoln’s Desperate Search for Troops

By June 1862 Lincoln found enlistments near nonexistent, and it was time to find new sources of recruits as Northern men resisted war service.  Bounty money was offered to help solve this, and the Homestead Act had the dark purpose of attracting foreign-born troops promised bounties and public land to subjugate Americans seeking political self-determination.

Bernhard Thuersam, www.Circa1865.com

 

Lincoln’s Desperate Search for Troops

“The summer of 1862 brought more gloom to the Union cause. Stonewall Jackson’s heroics in the Shenandoah Valley were followed by McClellan’s withdrawal from his lines before Richmond . . . and the North’s setbacks in the field weighed heavily on the secretary of state. [Seward] had [earlier] watched the Army of the Potomac embark at Alexandria; he had considered it united and unbeatable.

In June of 1862 following the collapse of McClellan’s Peninsular Campaign, Lincoln had sent Seward to New York to stimulate recruiting. The secretary carried with him a confidential letter, explaining the danger and noting that the capital itself was once again in danger under the threat from the rebels. Seward, in New York City, contemplated issuing a new call form the president for volunteers.

On reflection, however, he concluded that for Lincoln to initiate the call would have overtones of panic. Instead he prevailed on most of the Northern governors to request that Lincoln issue a new call for volunteers. The upshot was that Lincoln, seemingly in response to appeals from the Northern governors, was able to issue a proclamation calling for an additional three hundred thousand men.

Seward continued his proselytizing on his return to Washington. He persuaded Secretary of War Stanton to offer new recruits an immediate bounty of twenty-five dollars when their regiments were mustered into service.

Congress had just enacted the Homestead Act, providing that any citizen or alien could acquire title to 160 acres of public land by residing on and cultivating the land for a period of five years. This was just the sort of stimulus to immigration that Seward would have favored under any conditions, but now it included a vital military dimension as well.

He sent copies of the legislation to US envoys with the covering memorandum calling the Homestead Act “one of the most important steps ever taken by any government toward a practical recognition of the universal brotherhood of nations.”

The resulting publicity assured a continuing flow of military manpower to the North from Ireland and northern Europe. John Bigelow, the US consul in Paris, would write that Seward’s circular was important for “the light I throws on the mysterious repletion of our army during the four years of war, while it was . . . being so fearfully depleted by firearms, disease and desertion.”

In addition to his military problems, Lincoln had to deal with the touchy question of war aims. Publicly he continued to argue against general emancipation, telling Horace Greeley in his famous letter of August 1862 that if he could save the Union without freeing a single slave he would do it.

Indeed, Lincoln had no authority to confiscate “property” in the North, and no ability to enforce any Federal edict in territory controlled by the Confederacy. [But as] commander in chief, Lincoln argued that he could surely seize slaves belonging to the enemy just as he could capture their railroads.

[Seward thought issuing the] proclamation following a string of defeats on the battlefield . . . would hint of desperation – “the Government stretching forth its hands to Ethiopia, instead of Ethiopia stretching forth her hands to the Government.” He feared a slave uprising would turn the war for the Union into a class war . . . and that emancipation would destroy the South’s economy, raising the specter of intervention boy Britain or France to protect its supply of raw cotton.”

(William Henry Seward, Lincoln’s Right Hand, John M. Taylor, Harper Collins, 1991, pp. 200-202)

Lincoln’s Cotton Dilemma

To underscore that the war was fought by the North against secession – not to end slavery – Lincoln and his Secretary of State William Seward early sought the capture Southern ports to restore tariff collection and supply slave-produced cotton for starved New England mills. Also, if the ports were opened by force and cotton exported once again, the chance of European recognition of the new American republic was further diminished.

Bernhard Thuersam, www.Circa1865.com

 

Lincoln’s Cotton Dilemma

“During the winter of 1861-62 Seward assured Britain and France that a significant volume of cotton would soon be exported to Europe through Confederate ports captured by Union forces. Lincoln thought that the United States should “show the world we were fair in this matter favoring outsiders as much as ourselves.”

Although he was “by no means sure that [the planters] would bring their cotton to the port after we opened it, it would be well to show Europe that it was secession that distressed them and not we.”

The Confederates soon demonstrated that they would rather burn their cotton than allow it to fall into Yankee hands. The French consul estimated that about a quarter of a million bales were burned at New Orleans just prior to its capture by Union forces in April 1862. In August of that year the British consul in Charleston estimated that “about 1,000,000 bales have been destroyed at various places to prevent them falling into the hands of Federals.”

The unsuccessful Federal effort to promote cotton exports through captured Confederate ports was described in a pamphlet published in England in 1862:

“No sooner did the Government succeed in regaining possession . . . of cotton markets, than it made provision for reopening of the cotton trade. The blockade . . . was removed from the ports of Beaufort in North Carolina, Port Royal in South Carolina, and New Orleans in Louisiana on the 12th of May 1862. Cotton agents accompanied the armies of the North, who were licensed to purchase cotton . . . The United States Government assured the British government of their anxiety to grant every facility for the obtaining of cotton, and gave the rebels every facility to sell it. But the net result has been what? Simply an order from Jefferson Davis to burn the cotton and starve the English.”

Seward was delighted by the increased cotton production in other countries: “The insurrectionary cotton States will be blind to their own welfare if they do not see how their prosperity and all their hopes are passing away, when they find that Egypt, Asia Minor and India supplying the world with cotton.”

Nevertheless, cotton exports made a major contribution to the Confederate economy and war effort. Lincoln’s frustration with the Union’s inability to eliminate this trade is indicated in a letter he wrote in December 1864:

“By the external blockade, the [cotton] price is made certainly six times as great as it was. And yet the enemy gets through at least one sixth part as much in a given period . . . as if there were no blockade, and receives as much for it as he would for a full crop in time of peace. The effect . . . is that we give him six ordinary crops, without the trouble of producing any but the first and . . . leave his fields and laborers free to produce provisions . . . This keeps up his armies at home and procures supplies from abroad.”

(One War at a Time, The International Dimensions of the American Civil War, Dean B. Mahin, Brassey’s, 1999, pp. 85-86; 90-91)

The Forces Lincoln Unleashed

By initiating war against his own people, overturning the Constitution, creating fiat money and fusing government with corporations, Lincoln destroyed the Founders’ republic and ushered in the Gilded Age.

Bernhard Thuersam, www.Circa1865.com

The Forces Lincoln Unleashed

“As a result of the war, corporations have been enthroned and an era of corruption in high places will follow and the Money Power of the country will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in the hands of the few and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.”   Abraham Lincoln.

(Collective Speeches of Louis T. McFadden, Omni Publications, pg. vi, 1970)

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