Circa1865

At North Carolina’s 1867 State convention at Raleigh, Northerners were actively creating Republican Party organizations in every county, and all featured the revival of secret political societies like the Heroes of America and the infamous Union League. White Republicans were quick to realize that mobilizing the black vote was the key to dominating and controlling Southern politics. As Joseph G. de R. Hamilton wrote in “Reconstruction in North Carolina (1914, pg. 242), “In a spectacular way the colored delegates were given a prominent place in the convention. Most of the white speakers expressed delight at the advancement of the Negroes to the right of suffrage.”

Bernhard Thuersam, www.Circa1865.com

Consolidating the Northern Triumph

“With the adoption of the Thirteenth Amendment and the elimination of slavery, every African-American was counted as one person and not three-fifths of a person for purposes of congressional representation.

If the white and black voters of the South united, the southern and Northern Democrats could possibly control both houses of Congress. The Republican Party went into panic mode – what was to be done?

The answer was simple: export racial hatred from the North to the South with a little twist. Instead of white people being taught to hate black people, as was so common in New England, Republicans would teach Southern black voters to fear and hate Southern white voters.

It should be pointed out that most Northern States at that time still prohibited African-Americans from voting. By mobilizing a large bloc of angry black voters and prohibiting large numbers of white Southern voters from exercising the right to vote, the Republican Party insured its rule in Washington.

The Republican Party’s fear of a racially untied South was made even more frightening when former Confederate leaders spoke out in favor of black/white unity. Just a few months after the close of the War, from New Orleans, General [PGT] Beauregard stated:

“The Negro is Southern born; with a little education and some property qualifications he can be made to take sufficient interest in the affairs and prosperity of the South to insure an intelligent vote.”

No one can question the Confederate General who is slandered the most as an evil racist is Nathan Bedford Forrest. In a speech to a group of black voters, Forrest reflected the goodwill that had existed before Republican Reconstruction, He states:

“We were born on the same soil, breathe the same air, live in the same land, and why should we not be brothers and sisters . . . I want you to do as I do – go to the polls and select the best men to vote for . . . although we differ in color, we should not differ in sentiment . . . do your duty as citizens, and if any are oppressed, I will be your friend.”

The use of race-hatred became a very successful Republican tool to divide the South into warring parties. These warring parties, both black and white, failed to realize that in the process of enriching Republican industrialists, bankers and politicians, they were at the same time impoverishing themselves.”

(Punished with Poverty: The Suffering South, Prosperity to Poverty & the Continuing Struggle; James & Walter Kennedy, Shotwell Publishing, 2016, excerpts, pp. 65-66)

South Carolinian Robert Y. Hayne (1791-1839) followed Jefferson’s admonition that the national debt was not something to be passed on to future generations, and most presidents of his era and until the War endeavored to pay the debts incurred by their administrations before leaving office. In encouraging a perpetual public debt, Daniel Webster promoted the American System of Hamilton and Henry Clay which provided the government a perpetual supply of money with which to buy influence and power.

Bernhard Thuersam, www.Circa1865.com

Binding Men to the Footstools of Despots

“The gentleman from Massachusetts [Webster], in alluding to a remark of mine that before any disposition could be made of the public lands, the national debt (for which they stand pledged) must be first paid, took occasion to intimate [that Southerners desire to pay the national debt] “arises from a disposition to weaken the ties which bind the people to the Union.”

But, adds the gentleman, “so far as the debt may have an effect in binding the debtors to the country, and thereby serving as a link to hold the States together, he would be glad that it should exist forever.”

Surely then, sir, on the gentleman’s own principles, he must be opposed to the payment of the debt. Sir, let me tell that gentleman that the South repudiates the idea that a pecuniary dependence on the Federal Government is one of the legitimate means of holding the States together.

A monied interest in the Government is essentially a base interest . . . it is opposed to all the principles of free government and at war with virtue and patriotism. In a free government, this principle of abject dependence if extended through all the ramifications of society must be fatal to liberty. Already we have made alarming strides in that direction.

The entire class of manufacturers, the holders of stocks with their hundreds of millions in capital, are held to the Government by the strong link of pecuniary interests; millions of people, entire sections of the country, interested, or believing themselves to be so, in the public lands and the public treasure, are bound to the Government by the expectation of pecuniary favors.

If this system is carried on much further, no man can fail to see that every generous motive of attachment to the country will be destroyed, and in its place will spring up those low, groveling, base and selfish feelings which bind men to the footstool of despots by bonds as strong and as enduring as those which attach them to free institutions.”

(Speech of Robert Y. Hayne of South Carolina, January 25, 1830; The Webster-Hayne Debate on the Nature of the Union, Herman Belz, Editor, Liberty Fund, 2000, pp. 42-43.)

To Jefferson, the Revolution meant “not merely independence from British rule but also escape from the British system of government into republicanism.” He also abhorred political parties, or what he called sects,” and saw that all Americans as “federalists” – i.e., supporters of the Constitution and virtually all republicans, i.e., “believers in a republic rather than a monarchy.” And the States were the line of defense against government tendencies to consolidate power around itself.

Bernhard Thuersam, www.Circa1865.com

Consolidation Generates Monarchy

“On the eclipse of federalism, although not its extinction, [New England] leaders got up the Missouri question, under the false front of lessening the measure of slavery, but with the real view of producing geographical division of parties, which might ensure them the next President.

The people of the north went blindfolded into the snare, followed their leaders for awhile with a zeal truly moral and laudable, until they became sensible that they were injuring instead of aiding the real interests of the slaves, that they had been used merely as tools for electioneering purposes; and that trick of hypocrisy then fell as quickly as it had been got up.

To that has now succeeded a distinction, which, like that of republican and federal, or Whig and Tory, being equally intermixed through every State, threatens none of those geographical schisms, which immediately go to a separation.

The line of division now is the preservation of State rights as reserved in the Constitution, or by strained constructions of that instrument, to merge all into consolidated government. The Tories are for strengthening the Executive and General Government; the Whigs cherish the representative branch, and the rights reserved by the States, as the bulwark against consolidation, which must immediately generate monarchy.

Although this division excites, it is well understood, and will be a principle of voting at the ensuing election, with the reflecting men of both parties.”

(Thomas Jefferson, to Marquis Lafayette, November 1823, Jeffersonian Cyclopedia, John P. Foley, editor, Funk & Wagnalls Company, 1900, excerpt, pp. 760)

It did not take long after Fort Sumter for Northern war expenditures to reach staggering proportions. James Randall in his “Civil War and Reconstruction” (1937, DC Heath) wrote: “With the treasury nearly empty, financial markets shaken, foreign bankers unsympathetic, taxation inadequate, and loans unmarketable except at a discount, the door of escape by way of paper money seemed most tempting.” Lincoln resorted to the printing press to create money.

Bernhard Thuersam, www.Circa1865.com

Lincoln’s Inflationary Finances

“The classic study of Union inflation was Wesley Clair Mitchell century-old “History of the Greenbacks.” Initially the war was to be financed with the use of government bonds, tax revenues would be used to pay the normal expenditures of government, and the gold standard would be retained. However, this system quickly collapsed in late 1861 and the first of three legal tender acts was passed in February 1862 with a total of $450 million in greenbacks authorized for issue.

When an economy has two types of money, such as gold and paper, and they are both defined in the same units, such as dollars, Gresham’s Law states that bad money will drive good money out of circulation. And in accordance with Gresham’s Law, greenback dollars quickly displaced gold dollars as the circulating medium of exchange.

The value of greenbacks quickly depreciated in terms of gold and fell to a low point of only 35 cents worth of gold on July 11, 1864. Amazingly, the Union currency had depreciated as much in three short years as the dollar has in the thirty years since the United States went off the gold standard. The prices of goods appreciated in terms of greenbacks from an index value of 100 in 1860 to a maximum of 216.8 in 1865.

Citizens tended to blame higher prices on business, speculators, and foreigners. Some government officials believed that speculators in the gold market were somehow causing the value of greenbacks to fall, but the real culprit for inflation was the government itself.

In addition to an ever-increasing supply of greenbacks, Mitchell showed that the value of greenbacks in terms of gold would change on the basis of expectations that in turn were based on peoples’ estimated probability that the greenbacks would be redeemed for gold after the war. Battlefield losses were associated with declines in value while victories meant higher values for the greenback.

Higher prices also meant that the Union government would have to issue more greenbacks in order to purchase war supplies and pay its soldiers [and pay enlistment bounties]. Because the Union government would eventually have to pay its war debts and redeem the greenbacks in gold, Mitchell . . . calculated that greenbacks had increased the real cost of the war to the government itself by $528 million. Of course, the politicians who borrowed and spent the money during the war were not necessarily the same ones who had to pay off the debt and redeem the greenbacks after the war.

Mitchell also found that the switch from gold to paper . . . [created] an illusory increase in property values, an increase in extravagance and the purchase of luxury goods, a crippling of economic efficiency, and a decrease in real wages for farmers, laborers, professionals, teachers and soldiers. As expected, the Union’s inflationary finances created an illusion of general prosperity that greatly upset the ability of entrepreneurs, workers, consumers, and bureaucrats to make accurate economic calculations.”

(Tariffs, Blockades and Inflation: The Economics of the Civil War; Mark Thornton and Robert Ekelund, Jr., Scholarly Resources Books, excerpts, pp. 68-69)

Abraham Lincoln was a devotee of the Alexander Hamilton/Henry Clay “American System” of public debt, tariff protectionism, government subsidies and a national bank. To finance his war in 1861, Lincoln turned to an income tax, and then succumbed to printing money. Nowhere in the United States Constitution is the federal government authorized to make paper money legal tender. By 1865, the public debt was $2.6 billion, and the direct/indirect cost of Lincoln’s war would reach $8 billion by 1900.

www.Bernhard Thuersam, www.Circa1865.com

Public Debt, Then and Now

“Contrary to official capitalist wisdom, debt does not create economic growth. This idea is a swindle. Interest to the very rich . . . does not produce anything. It does not multiply creatively into new enterprises and jobs; it merely diverts ever-greater proportions of earning that might be fruitfully invested.

The proof is all around us. How could the vast unpayable federal debt, which absorbs much of the government’s income just for the interest bondholders, foreign and domestic, possibly be an economic stimulus? How can the immense and near universal burden of personal mortgage and credit card debt possibly indicate a healthy economy and commonwealth?

The matter is simple, obvious to anybody except a politician, a captive economist, or a media flack, and it ought to be conveyed to the people at every opportunity. Debt is killing us. Every wise man in recorded history has affirmed that debt is not a good thing. Debt can destroy a family, a government, a society.

Alexander Hamilton, an upwardly mobile immigrant bastard with a Napoleon complex, declared that “a public debt is a public blessing.” Troubled, but not surprised, Jefferson noted a connection between debt cruel taxation that undermined the independence of the citizens, warning that “we must not let our rulers load us with perpetual debt.”

Weighed down by government debt, the people would have to labor ever harder to pay the debt-holders, leaving them “no time to think, no means of calling the managers to account.” Jefferson avowed as a core principle that “the earth belongs in usufruct to the living,” but the living had no right to consume the earnings of posterity.

Antebellum statesmen like John Taylor of Caroline and John C. Calhoun and economists like William Gouge and Condy Rageut made the same case. After the War Between the States, so did William Graham Sumner, Thomas E. Watson and countless other public men and thinkers.

Republicans (and their predecessors) have always been the party of bankers and bondholders, service to the rich being for them a natural and essential function of the federal government. Opposition to the federal debt was long a plank in the Democratic platform, but Democrats today are just as guilty as the Republicans in regard to the issue.

Lip service to the virtue of “low public debt” continued until Franklin Roosevelt discovered Keynes and declared that debt is no problem “because we owe it to ourselves” – “ourselves” being a conveniently vague and collective being.

The bipartisan bailout of misbehaving bankers and brokers that we saw a few years ago, and the failure of a multitude of presidential candidates to mention the matter, is not promising.”

(It’s the Debt, Stupid, Clyde N. Wilson, Chronicles, February 2016, excerpt pg. 16)

April, 1865 witnessed the victory of Northern industrial capitalism over the conservative, agrarian South – no longer could Southern statesmen restrain the North in the halls of Congress. Post-1865 America saw the rise of corporations, the completion of Manifest Destiny and near-extermination of the Indians, and the gilded age of “evil robber barons.”

Bernhard Thuersam, www.Circa1865.com

Unproductive Republican Economic Policies

“Historians have tended to treat the Civil War as a boon to industry and the American economy. Thomas C. Cochrane cites several prominent historians . . . who variously praised the impact of the conflict on wartime production and its stimulating effect on postwar economic and industrial development.

Cochrane . . . examined statistical data on industrial production and found that, in general, there was not a strong case for a positive impact and that the war had a retarding effect on industry and the economy. Cochrane also found little support for the claims of beneficial effects of the Civil War on postwar development. He concludes with this speculation:

“From most standpoints the Civil War was a national disaster, but Americans like to see their history in terms of optimism and progress. Perhaps the war was put in a perspective suited to the culture by seeing it as good because in addition to achieving freedom for the Negro it brought about industrial progress.”

[Charles and Mary] Beard’s claim that the Civil War was a spur to industry and the rise of the American economy is based on the lasses-faire philosophy of the Republican Party and its success in implementing its major policy goals, such as subsidies to the intercontinental railroads, the establishment of a national currency and the protective tariff.

The Republican’s economic philosophy was not truly laissez-fair. In fact, their policy agenda was the opposite . . . in that it advocated special treatment for big business and a much larger role for the federal government. This can be seen in Republican policies to subsidize railroads, provide protective tariffs [for select private industries], and increase government debt and government control over money and banking as well as in their attitude toward labor.

Their policies [of tariffs and subsidies] . . . are now considered economically wasteful . . . and considered nothing more than special interests seeking a handout from the taxpayer through the government. [That Republican policies were productive] ignores the negative effects on the agriculture, service and cultural sectors. The Republicans’ policy would be better labelled as mercantilist in that it facilitated rent-seeking behavior.

Capital diverted to railroad building would surely have been put to good use elsewhere in the economy . . . [and] Moreover, had railroads not been highly subsidized, a better built, lower cost, and more timely system could have been put in place.

Tariffs were a centerpiece of Republican policy. They reversed a relatively free-trade policy . . . [and] protectionism forced consumers to pay higher prices for both imported and domestically produced goods protected by the tariff – that is, they purchased fewer of these products, used less desirable substitutes, and had a lower standard of living.

On net, the losses to consumers and the overall economy are greater than the gains to the protected producers and the tax revenue that accrues to the government.”

(Tariffs, Blockades and Inflation, the Economics of the Civil War; Mark Thornton and Robert B. Ekelund, Jr., Scholarly Resources Books, 2004, excerpts, pp. 84-87)

Few, if any, Gilded Age tycoons were expert economists – but all understood theories of supply and demand, the law of diminishing returns, and assumed that every man was motivated by the selfish love of gain. Most also believed in unfettered competition, theoretically, unless bribed government officials could be used to handicap competitors. U.S. Grant’s notorious administration of corrupt and bought politicians helped pave the way into the Gilded Age – the predictable outcome of Lincoln’s revolution.

Bernhard Thuersam, www.Circa1865.com

Corporate Tricks and Devices

“Nobody expounded the folly of tampering with the laws of economics more eloquently than Yale’s great teacher of political economy, the dynamic William Graham Sumner. In his book What Social Classes Owe to Each Other, published in 1883, he had put the reformers to rout.

“The yearning after equality,” he had written, “”is the offspring of envy and covetousness, and there is no possible plan for satisfying that yearning which do aught else than rob A to give to B; consequently all such plans nourish some of the meanest vices of human nature, waste capital, and overthrow civilization.”

This emphatically did not mean that Sumner was opposed to a better life for everybody. On the contrary, as a man of high and generous principle – he had begun his working life as a clergyman – he was heartily in favor of it. But he believed in the wider extension of opportunity, not in changing the rules under which business was conducted. He argued that:

“[Instead] of endeavoring to redistribute acquisitions which have been made between the existing classes, our aim should be to increase, multiply, and extend the chances. Such is the work of civilization. Every improvement in education, science, art or government expands the chances of man on earth. Such expansion is no guarantee of equality. On the contrary, if there be liberty, some will profit by the chances eagerly and some will neglect them altogether. Therefore, the greater the chances, the more unequal will be the fortune of these two sets of men. So it ought to be, in all justice and right reason.”

Sumner would not have argued that there were not some ways in which legislation could protect the economically helpless. But he thought that most reform legislation was conceived in ignorance and drafted in folly.

“You need not think it necessary,” he would tell his Yale classes, “to have Washington exercise a political providence over the country. God has done that a good deal better by the laws of political economy.”

The irony of the situation lay in the fact that for generations men have been tinkering with economic law to their own advantage, and in the process had produced institutions which were emphatically not God’s work – as most of Sumner’s hearers presumably supposed them to be – but man’s.

The corporation, for instance, was not an invention of God’s. It was an invention of man’s. It was a creature of the state . . . [and] one of the great inventions of the nineteenth century . . . Yet be taking adroit advantage of the legislative acts which defined its privileges, one could play extraordinary tricks with it. Corporate devices could be used to permit A to rob B – or, let us say, more charitably, to permit A to drain off all the gravy in sight and leave none for B.

It was largely as a result of the discovery of tricks that could be played with corporations, and particularly with their capital stock, that the wealth produced in such a tremendous spate at the turn of the century flowed in large proportion into a few well-placed hands.”

(The Big Change, America Transforms Itself, 1900-1950, Frederick Lewis Allen, Harper & Brothers, 1952, pp. 67-69)

Like other conquered Southern States, South Carolinians at the close of the war found themselves within a Union not of their choosing, yet they we not “of” this Union. Their governor was a prisoner of war, they were under martial law, and would be soon under the rule of their former servants.  The Robert Small (or Smalls) mentioned below is credited with the theft of the steamer Planter during the war, and delivering it to the Northern fleet which was aiding and abetting the enemy, and treason against South Carolina.

Bernhard Thuersam, www.Circa1865.com

South Carolina’s Legislature of Crooked Aliens

“In the [postwar South Carolina] Senate Chamber sat Major Corbin . . . a captain of Vermont troops badly wounded in the war and for a time in Libby prison, he had remained in military service until the end of the war and was then ordered to Charleston in charge of the Freedmen’s Bureau.

In the same body with Major [David T.] Corbin sat Robert Small, who while still a slave had won national fame as a pilot by running the Planter out of Charleston harbor to the Federal fleet. Some of the local black folk said that he did this in fear and trembling at the mouth of a loaded pistol leveled by a braver and more determined slave, one who never shared in the fame of the Planter exploit and was big enough not to care to.

Another of those South Carolina Senators was Beverly Nash. Black as charcoal . . . he was the perfect type of the antebellum ideal of a “white gentlemen’s colored gentleman.”

Besides those three . . . Senators, there was Leslie, once a member of the New York legislature, shrewd, crooked and cynical. And there was  [B.F.] Whittemore [of Massachusetts], who had got national notoriety while in Congress by selling a West Point cadetship for money instead of the customary price which was influence.

For the rest, the Senate floor was occupied by whites and blacks . . . But there was nobody of the old romantic type of South Carolina aristocrat. At the president’s desk sat a Negro, Lieutenant-Governor A.J. Ransier, who presided with dignity . . . A year or two before he died and [he was] working as a street cleaner in Columbia . . .

In the [House] chamber at the other end of the capitol building . . . were a great body of members, mostly Negroes. The body as a whole was in a legislative atmosphere so saturated with corruption that the honest and honorable members of either race had no more influence in it than an orchid might have in a mustard patch.”

(A “Carpetbagger” in South Carolina, Louis F. Post; Journal of Negro History, Carter G. Woodson, editor, Volume 10, January 1925, excerpts, pp. 15-17)

As asserted below, Americans in general seem unaware of the enormity of the Southern experience 1861-1865 and the aftermath of devastating defeat and subjugation. The author’s analogy brings needed perspective to an unnecessary war and death of a million Americans, counting military and civilian casualties.

Bernhard Thuersam, www.Circa1865.com

Suppressing the Consent of the Governed

“Imagine America invaded by a foreign power, one that has quadruple the population and industrial base. Imagine that this enemy has free access to the world’s goods as well as an inexhaustible supply of cannon fodder from the proletariat of other countries, while America itself is tightly blockaded from the outside world.

New York and Cincinnati have been taken. For months, Boston and Chicago have been under constant siege, the civilian population driven from their homes. Enemy forces roam over large parts of the country burning the homes, tools and food of the noncombatants in a campaign of deliberate terrorism.

Nearly eighty-five percent of the nation’s able-bodied men (up to 50 years of age) have been called to arms. Battlefield casualties have run to 39 percent and deaths amount to half of that, far exceeding those from any other war.

On the other hand, the enemy, though its acts and domestic propaganda indicate otherwise, is telling the American population that it only wants peace and the restoration of the status quo antebellum. Lay down your arms and all will be as before. What would be our state of morale in such conditions? Americans have never suffered such misfortune, have they?

Alas, they have. This was the experience of the Southern people from 1861-1865 in their lost War for Independence.

How hard the Southerners struggled for independence from the American Empire has been, and continues to be, suppressed by a nationalist culture that can only wonder: How could any group possibly have dissented from the greatest government on earth? But a very large number of Americans did no consent that government (the regime, after all, was supposed to be founded on the consent of the governed).

They were willing to put their dissent on the line in a greater sacrifice than any large group of Americans has ever been called on to make. Until finally, as a disappointed Union officer quoted by [author Gary] Gallagher remarked: “The rebellion [was] worn out rather than suppressed.”

(An Honorable Defeat, Clyde Wilson, Chronicles, October 1998, pg. 28)

Author M.E. Bradford wrote that in America, “race (at last as far as the Negro is concerned) has proved to be an almost indestructible identity,” and has led to us stepping away from cherished liberties. He goes on that despite its ill-effect upon our original principles, it was predictable “that liberty, as our tradition understands the term, should begin to reassert its original hegemony, that the oldest of liberties honored among us – rights grounded in the fundament of English inheritance” shall return to favor, “though in new disguises.”

Bernhard Thuersam, www.Circa1865.com

Millennialism’s Fresh Set of Insoluble Dilemmas

“Jefferson’s fire bell sounded in the legislative darkness, tolling the “knell” of the Union he had so much helped to shape. After Missouri, States achieved full membership in the federal compact only after meeting federally determined prescriptions concerning the status of blacks within their boundaries – conditions not imposed upon the original thirteen and without real precedent in the Northwest Ordinance.

Predictably, Jefferson’s Union did die – in 1861. And in the latter stages of its ruin, the connection between blacks and American millennialism intensified. With Equality (capital E) the new Republic played some verbal and opportunistic games. I leave aside for the moment the merits and demerits of this “second founding.”

For, once completed . . . the Trojan horse of our homegrown Jacobinism was rolled away to some back stall within the stable of received American doctrines. Emancipation appeared to have changed nothing substantial in the basic confederal framework. Neither did it attempt any multiracial miracles.

Most certainly, New England has had its high expectations of a City on a Hill; likewise, even the South owed, from its earliest days, some inertia to a hope of Eden over the sea. Moreover, in company with the frontier States, both regions drew comfort from the idea of a “manifest destiny.” Yet the total nation has, characteristically, despised and rejected who or whatever aspired to dragoon its way to such beatitudes through the instruments of Federal policy.

The only full exception to this rule, I insist, is the “civil rights revolution” of the past thirty years. In connection with the difficult question of the Negro’s place within our social compact, an imperative was discovered, stronger than any ever pressed upon us before: there discovered because the Negro’s lot within that compact was so difficult (and so slow) to improve.

With it we have made fair to force the issue, even if liberty (and its correlatives: law, localism and personalism) loses much of its authority as a term of honor: is diminished especially insofar as it applies to that nondescript but substantial many who captain, man and propel the ship of state.

Of course, as Lenin wrote, the only way to make men equal is to treat them unequally. And Lenin’s advice does not function inside our curious native dialect. The only equality Americans can universally approve is accidental, a corollary of liberty or simple equality before a law with limited scope.

In 1820 . . . we took an initial step away from liberty; in 1861-1877, a few more. And from these examples, from our uneasiness at the – to the millennialist sensibility — greatest of built-in American “scandals,” in the post-World War II era we arrived at converting at least one feature of millennialism into a positive goal. To use the late William Faulkner’s idiom we set out to “abolish” the Negro we knew, both as a presences and a problem. The results begin to speak for themselves, the fresh set of insoluble dilemmas which, with each dawning day, cry out for more potent magic than the cures for yesterday’s injustice which spawned them into existence in the first place.”

(Remembering Who We Are; Observations of a Southern Conservative, M.E. Bradford, UGA Press, 1985, excerpts pp. 47-48; 50-51)