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The Anticipated Profits of Next Year’s Pay Checks

Lincoln instituted a national banking system which “developed into something that was neither national nor a banking system” and more represented a loose organization of currency factories “designed to . . . [serve] commercial communities and confined . . . almost entirely to the New England and Middle Atlantic States.” This system was more concentrated in New York and fraught with abuses, and superseded by the even more abusive Federal Reserve Act of 1913.

Bernhard Thuersam, www.Circa1865.com

 

The Anticipated Profits of Next Year’s Pay Checks

“July 3, 1930

Mr. McFadden: “Mr. Speaker and gentlemen, time and events have arrived at a point where we should no longer deceive ourselves concerning the business situation. Continued statements of unfounded optimism will have only an unhappy effect upon the minds of millions of our citizens who are now unemployed and who, in the circumstances, must continue to be unemployed for many months to come. The economic condition in which we find ourselves is too sustained and deeply seated to be met by pronouncements that it does not exist.

Let us face the truth – that we and the world are undergoing a major economic and business adjustment which is and will be both drastic and painful. These consequences will be particularly severe in the United States, because they will force many people to recede from the standards of living and expenditure attained during the past 14 years.

Some part of this condition is the natural consequence of the operation of basic economic laws which function with little regard for human legislation. A large part is due to mismanagement of our national affairs. A still larger part is due to a deliberately contrived and executed program which has as its object the impoverishment of the people of the United States.

The end of the World War found us with a greatly expanded industrial and credit structure, to large, by far for the requirements of our national needs as the latter existed before the beginning of the war period of abnormal consumption. It was clearly a time to halt and to analyze fundamental economic facts. We did not do this.

Rather we chose to proceed with our abnormal production and to stretch the limits of credit still further. War production and its profits had made Americans drunk with power, and ambition for more power. Luxuries developed in the disorganization of war became necessities with the reestablishment of peace.

The American peop0le entered upon a decade in which the whole structure of their lives was to be passed upon the principle of discounting the future. A vast system of installment credit sprang into life almost overnight, aided by the optimism of the Federal Reserve system. The automobile industry expanded more rapidly and to greater size than any industry had expanded in history.

The public was encouraged by advertising and propaganda to buy beyond its immediate means. Further industrial expansion was financed by the same expansion of credit which made installment buying possible. Consumption was expanded and financed upon the consumer’s promise to pay and production was expanded upon by capitalizing the producer’s hope that the consumer would keep that promise.

In the period between 1920 and the present time we experienced the full use and purpose of the credit machinery built up with the Federal Reserve system. It was but a logical development that anticipated profits should be capitalized as anticipated production and consumption had been capitalized – and that the Federal Reserve system should in turn finance tis capitalization of anticipated profits.

The entry of millions of Americans of moderate means into stock-market speculation [was] a natural consequence of the policy of expansion to which we had committed ourselves. It was also a logical development that the Federal Reserve should expand broker’s loans to make possible a huge inflation of the business of speculating in securities on margins.

All this brought the country to a point where the individual was living beyond his personal means, buying more than he could afford on his hope that he could afford to pay for it in the future and then speculating in the hope that he could make enough profit to pay his debts when they came due. In brief, the greater part of the American business structure was built upon the anticipated profits of next year’s pay checks.”

(Basis of Control of Economic Conditions, the Collective Speeches of Congressman Louis T. McFadden, Omni Press, 1970 pp. 64-66)

An 1830 View of Slavery in the South

The former slave-trading and slave-holding North forgot it was theirs and British ships which brought the African to America, a Massachusetts inventor who perpetuated slavery with his gin, and Massachusetts mills which sought large supplies of slave-produced cotton. Had New Englanders wished to end slavery, they had only to end their demand for slave-produced cotton. The extract below is from Mr. Hayne’s 1830 debate with Daniel Webster on the nature of the federal union, and Hayne clearly delineates the origin of African slavery in the Southern States, who profited from the nefarious trade, and who did their Christian best with what they had inherited.

Bernhard Thuersam, www.Circa1865.com

 

An 1830 View of Slavery in the South

“Sir, when arraigned before the bar of public opinion on this charge of slavery, we can stand up with conscious rectitude, plead not guilty, and put ourselves upon God and our country. We deal in no abstractions. We will not look back to inquire whether our fathers were guiltless in introducing slaves to this country. If an inquiry should ever be instituted in these matters, however, it will be found that the profits of the slave trade were not confined to the South.

Southern ships and Southern sailors were not the instruments of bringing slaves to the shores of America, nor did our merchants reap the profits of that “accursed traffic.” But, sir, we will pass over all this.

If slavery, as it now exists in this country be an evil, we of the present found it ready made to our hands. Finding our lot cast among a people, whom God had manifestly committed to our care, we did not sit down to speculate on abstract questions of theoretical liberty. We met it as a practical question of obligation and duty.

We resolved to make the best of the situation in which Providence had placed us, and to fulfill the high trust which had developed upon us as the owners of slaves, in the only way in which such a trust could be fulfilled without spreading misery and ruin throughout the land.

We could not send them back to the shores from whence their fathers had been taken; their numbers forbade the thought, even as we did not know that their condition here is infinitely preferable to what it possibly could be among the barren sands and savage tribes of Africa . . .

[With the false philanthropy of Northern abolitionists and the] shedding of tears over sufferings which had existence only in their own sickly imaginations, these “friends of humanity” set themselves systematically to work to seduce the slaves of the South from their masters. By means of missionaries and political tracts, the scheme was in great measure successful. Thousands of these deluded victims of fanaticism were seduced into the enjoyment of freedom in our Northern cities. And what has been the consequence?

Go to these cities now, and ask the question. Visit the dark and narrow lanes, and obscure recesses, which have been assigned by common consent as the abodes of those outcasts of the world — free people of color. Sir, there does not exist, on the face of the whole earth, a population so poor, so wretched, so vile, so loathsome, so utterly destitute of all the comforts, conveniences and comforts of life as the unfortunate blacks of Philadelphia, and New York and Boston.

Sir, I have had some opportunities of making comparisons between the condition of the free Negroes of the North and the slaves of the South . . . Sir, I have seen in the neighborhood of one of the most moral, religious and refined cities of the North, a family of free blacks, driven to the caves of the rock, and there obtaining a precarious subsistence from charity and plunder.”

(The Webster-Hayne Debate on the Nature of the Union, Herman Belz, Editor, Liberty Fund, 2000, pp. 44-46. Speech of Robert Y. Hayne of South Carolina, January 25, 1830)

 

Virginians Choose Self-Determination

Virginians in 1861 deliberated on continuing their voluntary relationship with the federal government created by the States, remembering Jefferson’s words his Kentucky Resolutions of 1798:

” . . . reserving, each State to itself, the residuary mass of right to their own self-government; and that whensoever the General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force: that to this compact each State acceded as a State, and is an integral party, its co-States forming, as to itself, the other party: that the government created by this compact was not made the exclusive or final judge of the extent of the powers delegated to itself; since that would have made its discretion, and not the Constitution, the measure of its powers; but that, as in all other cases of compact among powers having no common judge, each party has an equal right to judge for itself, as well of infractions as of the mode and measure of redress.”

Bernhard Thuersam, www.Circa1865.com

 

Virginian’s Choose Self-Determination

“James W. Sheffey, speaking five days before President Lincoln’s inauguration said:

“We love the Union, but we cannot se it maintained by force. They say the Union must be preserved — she can only be preserved through fraternal affection. We must take our place — we cannot remain neutral. If it comes to this and they put the question of trying force on the States which have seceded, we must go out . . . We are waiting to see what will be defined coercion. We wait to see what action the new President will take.”

Thomas Branch, speaking the day after President Lincoln’s inaugural address said:

“My heart had been saddened and every patriotic heart should be saddened, and every Christian voice raised to Heaven in this time of our trial. After the reception of Mr. Lincoln’s inaugural, I saw gentlemen rejoicing in the hotels. Rejoicing for what sir? For plunging ourselves and our families, our wives and children in civil war? I pray that I may never rejoice at such a state of things. But I came here to defend the rights of Virginia and I mean to do it at all hazards; and if we must go to meet our enemies, I wish to go with the same deliberation, and with the same solemnity that I would bend the knee in prayer before God Almighty.”

George W. Brent, speaking on the 8th of March said:

“Abolitionism in the North, trained in the school of Garrison and Phillips, and affecting to regard the Constitution as “a league with Hell and a covenant with death,” has with a steady and untiring hate sought a disruption of this Union . . . Recognizing as I have always done, the right of a State to secede, to judge of the violation of its rights and to appeal to its own mode for redress, I could not uphold the Federal Government in any attempt to coerce the seceded States to bring them back in the Union.”

(Virginia’s Attitude Toward Slavery and Secession, Beverley Munford, L.H. Jenkins Printer, 1909, pp. 265-267)

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)

Virtue More Dangerous Than Vice

Horatio Seymour of New York always refused to consider any aspect of African slavery as a paramount issue in the country; He felt that “for seventy years the Union had existed with slavery; it need not perish overnight because of it.” He rightly saw anti-slavery rhetoric against the South as designed to divert attention from speculation and corrupt politics in the North.

Bernhard Thuersam, www.Circa1865.com

 

Virtue More Dangerous Than Vice

“As one looks back at the antics of the abolitionists – Garrison burning a copy of the Constitution in a public square; Gerrit Smith playing “possum” at an asylum while the John Brown he had encouraged was found guilty of treason and hauled out to be hanged; self-righteous ranters pleading from their pulpits for the export of rifles to Kansas; industrious Mrs. Stowe embalming the slippery sentimentality of her half-truths in the lachrymose pages of Uncle Tom’s Cabin; even Democratic David Wilmot trying to repair with his famous proviso the political fences he had broken down with his vote for a lower tariff . . .

[T]here comes to mind the words of the ancient philosopher which a president of Yale was always happy to remember”: “Virtue is more dangerous than vice because the excesses of virtue are not always subject to the restraints of conscience.”

(Horatio Seymour of New York, Stewart Mitchell, Harvard University Press, 1938, pp. 229-230)

Reconstruction, the Most Shameful Period of Our History

The following is an excerpt from an 1892 address by Lt. Col. Alfred Moore Waddell to the Alumni Association of the University of North Carolina. He served as a United States Congress 1871-1879.

Bernhard Thuersam, www.Circa1865.com

 

Reconstruction, the Most Shameful Period of Our History

“[Reconstruction] constitutes the one indelible and appalling disgrace of the American people — the one chapter of their history which contains no redeeming feature to relieve it from the endless execration of the civilized world.

A distinguished orator from a Northern State declared in Congress in 1872 that one-third of the boundaries of this Republic had been filled “with all the curses and calamities ever recorded in the annals of the worst governments known on the pages of history,” and attacking the [radical Republican] authors of these calamities, he exclaimed,

“From turret to foundation you tore down the governments of eleven States. You left not one stone upon another. You rent all their local laws and machinery into fragments, and trampled upon their ruins. Not a vestige of their former construction remained.”

And again he said:

“A more sweeping and universal exclusion from all the benefits, rights, trusts, honors, enjoyments, liberties, and control of government was never enacted against a whole people, without respect to age or sex, in the annals of the human race. The disgraceful disabilities imposed against the Jews for nearly eighteen hundred years by the blind and bigoted nations of the earth were never more complete or appalling.”

Those old enough to remember that most shameful period of our history will readily recall the degradation, the crimes against civilization, and the terrorism which then prevailed, and how, amidst the general dismay, the faint-hearted stood helpless and silent before the arbitrary and reckless power exercised over them.”

(The Life and Character of William L. Saunders, address to the Alumni Association of the University of North Carolina, Tuesday, May 31, 1892, Col. Alfred Moore Waddell of Wilmington)

Publish the Truth in a Thousand Forms

Wilmington Mayor Alfred Moore Waddell welcomed the United Daughters of the Confederacy annual convention to his city in 1901 and lauded that organization for its efforts to preserve an accurate record of the war. A prewar Whig opposed to secession, he honorably served as a lieutenant-colonel of the Third North Carolina cavalry.

Bernhard Thuersam, www.Circa1865.com

 

Publish the Truth in a Thousand Forms

“In November, 1901 the annual convention of the United Daughters of the Confederacy was held in Wilmington, North Carolina and Mayor Alfred Moore Waddell, welcomed them to this historic city. In his address, he said that “As one who bore a humble part in the service of the Confederacy I reverently salute you the wives, sisters, and daughters of my comrades, the noblest army of heroines and patriots that ever trod the earth.” He went on to say that:

“Your organization is unique in human annals, as was the struggle whose memories you seek to preserve. The dreamer and sentimentalist may fold his hands, and with a sigh exclaim that history will do justice between the parties to that struggle; but experience has shown that history, like Providence, helps those only who help themselves, and will honor only those who help her to record the truth.

You will readily admit that if the Southern people had remained silent, and had used no printer’s ink after the war, they would have been pilloried in history as Rebels and traitors who had, causelessly and without a shadow of excuse, drenched the land with the blood of unoffending patriots.

But the Southern people did not remain silent; they published in a thousand forms the truth, both as to the causes which impelled them to assert their rights and as to the battles in which they maintained them, and have thus made a partial, unjust and one-sided history impossible.

In this work the Memorial Association first, and after them the United Daughters of the Confederacy, have been the most heroic and devoted, and they may justly claim a large share of the credit for successfully vindicating before the world the causes which their Southern countrymen engaged, and in which thousands of them sacrificed their lives.”

(Confederate Veteran Magazine, November 1901, page 485-486)

 

Wading Through Blood of Men, Women and Children

Major Henry W. Conner (1793-1866) of Lincoln County, North Carolina was a democrat of the Nathaniel Macon type, and observed the growth of fanatic abolitionism in the North with great trepidation. His son, Lt. Charles T. Conner, was killed by Northern soldiers in 1865.

Bernhard Thuersam, www.Circa1865.com

 

Wading Through Blood of Men, Women and Children

“The following excerpts from the address made by Major [Henry W.] Conner in his campaign for reelection to Congress in 1839 show how the smoldering fires of anti-slavery sentiment were beginning to blaze in the North. Referring to it he said:

“Abolitionism, when I last addressed you seemed to be confined to a few fanatics only, and so absurd seemed their views and pretensions that serious apprehension could not reasonably be entertained, but such has been their rapid growth in a short time, that in several of the States they hold the balance of power in politics, and abolitionism has, therefore, become a political question with the avowed object of striking at the rights and property of the South, and there is reason to believe they will not be particular in the mode of carrying out their plans, whether peacefully, or by wading through blood of men, women and children.

The desks of abolition members (especially John Quincy Adams and Slade) are loaded with thousands of antislavery petitions which have be presented within the last two years, asking Congress to interfere with your rights and property. This heartless and unjustifiable policy must and will be met by the South at the proper time with manly determination to protect and defend our rights and privileges at all hazards.”

(The Annals of Lincoln County, North Carolina, William L. Sherrill, Regional Publishing, 1972, pp. 188-189)

 

 

 

 

War — Even if Slavery Were Removed as an Issue

Abolitionist Moncure Conway saw deeper into the question of immediate emancipation than most of his contemporaries. He rightly sensed that the more fierce the North’s desire to subjugate the South became, the more the black man would be used as a weapon to achieve their goal of political supremacy. The postwar Union League which incited Southern blacks against their white neighbors followed this stratagem, against which the Ku Klux Klan became the predictable antidote.

Bernhard Thuersam, www.Circa1865.com

 

War – Even if Slavery Were Removed as an Issue

“Conway’s disenchantment with the Northern cause began in 1862 when his deep-seated hatred of war came again to the fore, overcoming his bellicosity of the previous year. In April, he wrote to Charles Sumner on his recent lecture tour “a growing misgiving that a true peace cannot be won by the sword in an issue of this nature.” His second book, The Golden Hour, which was published that same year, displayed an increasing concern with the evils of war.

“The moralization of the soldier,” Conway now wrote, “is the demoralization of the man. War is the apotheosis of brutality . . . Should we continue this war long enough, we shall become the Vandals and Hessians the South says we are.”

Complaints about the low morale of the troops meant to him simply that the Northern soldier was still civilized and under the influence of Christian morality. The inescapable conclusion was that the longer the war continued, the more savage and brutalized the North would become. Here he generalized the insight at the end of The Rejected Stone that if emancipation did not come before it became a “fierce” necessity, it would reflect war passions rather than benevolence.

After the President did take up his pen and sign the [proclamation], Conway felt that it was too little and too late. In part this may have reflected his disappointment that the war continued as fiercely as ever; for he had refused as an optimistic humanitarian to believe that the eradication of one evil might require acceptance of another. A case can be made for the theory that Lincoln framed and enforced his edict in such a way that the fewest possible slaves would be freed – while at the same time taking the bite out of antislavery criticism of the administration.

By April 1863, when he sailed for England as an unofficial envoy of the American abolitionists, Conway was completely fed up with the bloody conflict which e saw as inflicting terrible damage on the South without adequate justification . . . and in any case, war was a worse evil than slavery.

Soon after arriving in England, Conway stirred up a hornet’s nest by making a peace offer to James M. Mason, the Confederate envoy, which he innocently misrepresented as coming from the American abolitionists. Conway proposed to Mason that if the South would abolish slavery on its own, the antislavery men of the North would “immediately oppose the further prosecution of the war . . . ”

The storm that broke over the head of poor Conway was something from which he never fully recovered. Almost to a man the abolitionists condemned and repudiated his offer. Conway now understood, apparently for the first time, that many of the abolitionists were devoted to a war which would crush the South even if slavery were removed as an issue.”

(The Inner Civil War, Northern Intellectuals and the Crisis of the Union, George M. Frederickson, Harper & Row, 1965, pp. 123-125)

Carpetbaggers in the Philippines

The entrance of the United States into the game of imperialism came after an unnecessary war with Spain and the seizure of the latter’s former imperial possessions of Cuba and the Philippines. The promise of independence for the natives was soon realized to be empty, and the standard procedure of installing US-friendly regimes in conquered regions began — and continues today.

As articulated below, it is worth pondering if exploitation by the dominant Tagalogs after the US military departed was worse than exploitation by American carpetbaggers. The latter believed, and still seem to believe, that all people of the world are really hard-working New England Puritans in native clothing and if taught to master the art of democratic town hall meetings they could be left alone.

Bernhard Thuersam, www.Circa1865.com

 

Carpetbaggers in the Philippines

“The problem of giving self-government to the Filipinos was made difficult by the existence of several distinct tribes speaking different languages and cherishing race enmities among themselves. The most important tribe was the Tagalogs, numbering 1,466,000 out of a population of nearly 8,000,000. They exceeded the others in culture and in the will to dominate the islands. If left to themselves it was believed that they would establish supremacy over the islands both political and economic. This policy has weighed down our policy in the islands.

Whatever the reasons why the United States should withdraw from the conduct of government there, it would be against the spirit of our promises to all the people if by so doing the large majority of the natives were left to the exploitation of the Tagalogs.

[In 1900], a governmental commission was appointed, with William H. Taft at the head, with instructions to introduce civil government as far and as rapidly as possible. The commission itself was at the top of the system with wide executive and law-making powers. It was directed to establish schools and create courts of justice.

Provision was made that the language of the United States should be taught in the schools, and that the officials should be taken from the natives as far as possible. These instructions were written by Secretary of War [Elihu] Root after a careful study of conditions in the Philippines.

The next step in developing government for the Philippines was McKinley appointing Taft Governor] and made him with the other members of his commission a Council to assist him in governing. At the same time three of the ablest natives were added to the membership of the Council, in which they were a minority.

Taft’s first care was to establish local self-government in the provinces . . . The suffrage for this process was awarded to persons who had held office in the islands, or owned a specified amount of property, or who spoke, read, and wrote Spanish or English. Elections were held in 1907, and the Assembly fell at once into the hands of a nationalist party.

The natives, that is, the Tagalog ruling class, were disappointed that no larger share of the government of their own country was given them, and they likened themselves to the [American] South when it was ruled by carpetbag officials from the North.

When President [Warren] Harding came into authority he sent General [Leonard] Wood and Lieutenant-Governor General Forbes to investigate and give advice on the withdrawal of the United States from the islands. They reported, in 1921, that the natives were not ready for self-government and advocated the continuance of the existing system. The natives were disappointed at the decision of the commissioners and continued to protest against the continuance of United States authority over them.”

(Expansion and Reform, 1889-1926, John Spencer Bassett, Kennikat Press, 1971 (original 1926), pp. 103-107)