Circa1865

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)

Assistant Secretary of War Charles A. Dana, testified after the war that the whole power of the war department was used to secure Lincoln’s reelection in 1864. It was essential to obtain the soldier vote and politically-connected Northern officers helped distribute Republican ballots to their commands while Democrat ballots were lost. In cities Republican newspapers spread fear among voters should Democrat George B. McClellan be elected.

Bernhard Thuersam, www.Circa1865.com

Vote for Abraham Lincoln!

[Diary entry] Chicago, November 5, 1864:

“It was one of those amazing [newspaper] appeals to the voters that is half circus poster and half sermon . . . the sort of thing that shows how the Americans excel in catering to the lowest levels of public taste.

It carried this portentous title in large black type: “THE TRUTH!” There followed a long list of the dire consequences that will be sure to follow the election of [George B.] McClellan.

“Twenty million people under the heel of 300,000 slave-owners!” – “A Confederacy of the Northwest!” – “A Democratic insurrection (see the threats in the World and the Chicago Times)!” – “McClellan leading the revolt (see the speeches at the Chicago Convention)!” –“The theatre of war shifted from Atlanta and Richmond to New York, Cincinnati, Philadelphia and Chicago (see the Richmond papers supporting the Copperheads)!” – “Barricades; civil war” — “Our streets drenched with blood – our countryside laid waste – Our country’s credit ruined – Gold at 2,000 and the price of necessities in proportion (see the history of the French Revolution and the Reign of Terror in Paris)!”

Do you doubt any of this? Here is a table comparing “Republican Prices,” Democratic Prices,” McClellan Prices (those that would result from his compromise with Jefferson Davis – that is, guaranteeing the Rebel debt and paying the Southern States for their war costs,” – and finally, “Rebel Prices” such as will be seen “if [August] Belmont succeeds in raising a Democratic insurrection.”

But if, on the contrary, you want the Union’s flag to “float gloriously from the Great Lakes to the Gulf, from the Atlantic to the Pacific, over a hundred free States without a single despot, over fifty million — soon to be a hundred million — people without a single slave, then sweep the country clean, once and for all, of the party that is so greedy . . . this gang of slave-merchants and perpetrators of rebellion, debts and taxes that calls itself the Democratic party! . . . Vote for Abraham Lincoln!”

One must distrust all such accounts of triumphal demonstrations, of “gigantic mass-meetings,” that fill the newspapers of the two parties at this time. People lie as shamelessly in America as in Europe, with the sole difference that since here everyone has the right to lie, no one has the privilege of being believed.”

(A Frenchman in Lincoln’s America, Ernest Duvergier de Huaranne, Donnelly & Sons, 1975, pp. 3-7)

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)

The War Against Reason

“June 7 [1861], Crawfordville [Georgia]:

From present indications it would seem that we did not cut loose from the North too soon. They will go into anarchy or despotism, The only hope for constitutional liberty on this continent is now with us; and whether we shall successfully pass through the ordeal in store for us time alone can determine.”

September 3 [1861]:

“I see no end to the war – not the slightest prospect of peace. So far from it, all the signs of a protracted conflict are more portentous to me than they have even been. The war on the part of the North is founded on no rational principle. It is against principles, against interest, and against reason; and with nations it is as with individuals when they act against reason, there is no accounting for their conduct or calculating upon it on any rational principles.

This is but the beginning. The guillotine, or its substitute, will soon follow. The reign of terror there has not yet fully commenced. The mob, or “wide-awake” spirit, has not the control there yet, but it will have before the end. All the present leaders will be swept from the board. They will be deposed or hung to make way for worse men who are yet to figure in this great American drama . . . We have a great conflict before us, and it will require all our energy, our resources, and patriotism, under a favoring Providence, to bear us safely through it.”

(Life of Alexander H. Stephens, Richard M. Johnston & William H. Browne, J.B. Lippincott & Company, 1883, page 407)

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)

Following the War Between the States, the freedmen were exploited by the infamous Union League to help ensure the election of Northern radical Republicans who exploited and bankrupted the exhausted South.  The emergence of the Ku Klan Klan was a predictable result.

Bernhard Thuersam, www.Circa1865.com

War of Conquest, Not Emancipation  

“Reconstruction” is a curious name to apply to the period following the war. Indeed, the war had left widespread destruction, but the government in Washington had no policy of reconstruction.  The South was left to its own economic devices, which largely amounted to being exploited by Northern interests who took advantage of cheap land, cheap labor, and readily available natural resources. This exploitation and neglect created an economic morass, the results of which endure into the twenty-first century.

Not surprisingly, governments based on the leadership of carpetbaggers, scalawags, and freedmen, groups that represented a minority of the population, met widespread and violent opposition. This attempt to create a government based on racial equality was made even more ludicrous when many of [the] Northern States rejected the Fourteenth and Fifteenth amendments to the U.S. Constitution, creating a situation where the States that said they had worked to free the slaves failed to grant equality to people of color.

(Nathan Bedford Forrest’s Escort and Staff, Michael R. Bradley, Pelican Publishing Company,

“Roosevelt the First,” as Mencken referred to Theodore, seemed unaware that his own party was responsible for the national malady he spoke against – it was the Republican Party’s marriage of government and business in the 1860s that unleashed the Gilded Age as the conservative South was no longer there to resist the government corruption and scandal. As he asserted new powers for the president, Roosevelt was creating new authority beyond what the United States Constitution confers upon the executive branch, his New Nationalism was indeed a refuge for “presidential lawbreakers.”

Bernhard Thuersam, www.Circa1865.com

Roosevelt’s “New Nationalism”

“[Former President Roosevelt] arrived in New York on June 18 [1910], after visiting courts and other interesting scenes in Europe. In all these places he received great honor, and his landing in New York called forth a demonstration worthy a world hero.

The public was curious to see whether Roosevelt would side with his old friend [William H. Taft], now the President . . . Shortly after landing he visited Taft and outwardly all seemed harmonious. In all he said openly he did not criticize Taft, but he did not abate his opposition to big business in politics.

Then suddenly he hurled a thunderbolt. Speaking on August 31 at Osawatomie, Kansas, he announced a political program, which he called “New Nationalism.” Government by the people, he said, was threatened by wealth in national politics, and the power of the nation should be so extended over it that it could not do what it is doing.

To reach this end he would give the federal government all needed power. If the Constitution was not strong enough he would amend it. He denounced what he called the “twilight zone” between federal and State authority, “a refuge for lawbreakers, and especially for lawbreakers of great wealth, who can hire the vulpine legal cunning which will teach the way to avoid both jurisdictions.”

“New Nationalism,” he added, regards the executive power as the steward of the public welfare. It demands of the judiciary that it shall be interested primarily in human welfare, rather than in property, just as it demands that the representative body shall represent all the people rather than one class or section of the people.” From the individualism of [Grover] Cleveland to the “New Nationalism” of Roosevelt was a long step.”

(Expansion and Reform, 1889-1926, John Spencer Bassett, Kennikat Press, 1971 (original 1926), pp. 175-176)

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)

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 Republican Party used freedmen votes to win elections from Grant onward, though the election of Democrat Grover Cleveland demonstrated that more federal election interference in the South was needed to ensure GOP victories. Amid Republican claims that free elections were not being held in the South, Senator Zebulon Vance spoke against the Republican’s 1890 Force Bill and their assertion of electoral purity:

“[t]he supporters of this bill . . . is the same party, which inaugurated Reconstruction. By Reconstruction, it will be remembered one-fifth of the votes in eleven States was suppressed by law. The punishment of disfranchisement was freely inflicted [on Southerners] as a punishment for crime without trial and conviction. Thousands upon top of thousands of other votes were suppressed by fraud . . . [and] there were received and counted the ballots of those who were not entitled to suffrage under any law known to American history or tradition.”

Bernhard Thuersam, www.Circa1865.com

Threats of Federal Interference in Elections

“At the end of Reconstruction period the South, which had lost so much in other ways, gained in its representation in Congress through counting all the Negroes in the apportionment. In 1860 it had 108 representatives, in 1880 it had 135. In the same period the three Middle Atlantic States rose from 66 to 73, and the six New England States declined from 41 to 40.

The Southern gain worked for the advantage of the Democrats and the disadvantage of the Republicans. The Republicans, now controlling both houses of Congress, were indignant at a situation which . . . deprived them of votes in the House. This feeling led them to bring in the Federal Election Bill of 1890 . . . On its face the law applied to all parts of the country, but it was aimed mainly at the South and the city of New York.

Candid Southerners did not deny suppressing the Negro vote, but they justified it by saying a great wrong had been done when Negro suffrage was imposed on the South by military force; and they insisted it was necessary to eliminate that vote in order to have good government. Southerners gave clear warning that it would be impossible to enforce a law to put the South in the hands of the Negroes.

The bill passed the House but came to a halt in the Senate. The more it was considered the greater was the unwillingness to enter upon the stormy course its passage would produce. The proposal was finally killed by an agreement between eight free-silver Senators and a group of Southern senators.

The threat to pass the election bill alarmed Southerners greatly, and the defeat of the bill did not altogether remove their fears; for federal interference might be renewed at any time.

Another source of anxiety to the Southern Democrats was the appearance of the People’s [Populist] Party in their midst with a fair prospect of dividing the white vote. These two things led Southerners to pass certain amendments to several State constitutions, in order to exclude the Negro from voting without incurring penalties for violating the Fifteenth Amendment.

To do this it was necessary to word the alterations so that the Negro was not disenfranchised upon the specified grounds of “race, color, or previous condition of servitude,” the only grounds on which at that time the rights of suffrage might not be denied.

It was natural that these amendments should go to the Supreme Court for interpretation. But that tribunal showed a strong unwillingness to pas upon them in fact. To overthrow them would produce a critical situation in the South, where the whites were more determined that the Negroes should not rule either all or any part of the section. The Court showed a desire to avoid precipitating a sectional conflict.

Nevertheless the Fifteenth Amendment is still a part of the federal Constitution; and when the Negro race comes to have the weight of trained intelligence and the substantial possession of property, it will probably find a way to qualify and vote under the present State amendments.”

(Expansion and Reform, 1889-1926, John Spencer Bassett, Kennikat Press, 1971 (original 1926), pp. 22-24)