Circa1865

As Lincoln was unable to finance his war with the traditional tax and customs revenue sources, he turned to paper fiat money to be printed as needed, though the Constitution permits only gold and silver as legal tender. The predictable speculation in the value of greenbacks versus gold prices caused murky markets to emerge. In New York’s “Gold Room,” decisions were guided not so much by patriotic motives as the desire for profit. It was said that “Sectional feeling often entered largely into bull and bear contests in the Gold Room, and Union men and rebel sympathizers fought their battles sometimes, as much to gratify this as to make money.”

Bernhard Thuersam, www.Circa1865.com

Financing the War with Inflation

“To help finance the Civil War, the federal government began issuing “demand notes” in July 1861. These government obligations were not a legal tender currency and were freely convertible into gold upon presentation to a federal depository. During the course of 1861, the Union’s financial condition deteriorated, and in December the Treasury issues a very bleak report on the budgetary situation.

In the face of such news, bankers concluded that investors would lose confidence in the demand notes and the banks would soon experience a massive outflow of gold. On December 30, the banks suspended specie payments of gold [for greenbacks]. The government followed suit almost immediately.

Soon thereafter, in February 1862, Congress passed the first of the Legal Tender Acts. These acts authorized the government to issue “greenbacks” – a currency that was to be legal tender for both public and private debts. Of course, since demand notes were no longer convertible into gold, neither were greenbacks . . . [though] all available evidence indicates that the public believed that at some future date convertibility would be reinstated and all greenbacks would be redeemed in gold.

[Because Lincoln] was unable to finance the war with the available tax revenues . . . Greenbacks were a way of using inflation to pay for the war. Speculators knew that the degree to which the Union would have to rely on future greenback issues depended on just how much the war would ultimately cost. A long, expensive war would require more greenback issues and make it less likely that greenbacks would ever be exchanged for gold dollars on a one-for-one basis.

Not surprisingly, a formal market for buyers and sellers to trade gold came into existence within two weeks of the suspension of convertibility. The first organized dealings took place at the New York Stock Exchange on January 13, 1862. At about the same time a second market formed . . . in New York City . . . known as the Gold Room.

An important question for our purposes is how the gold market used the [political and war] information coming to it. Did the financial market react quickly to news that was available, or did it take several days to digest it? A closely related question is whether news of battles . . . reached all participants at the same time.

In a report on the burning of Chambersburg, Pennsylvania, on July 31, 1864, the New York Herald explicitly noted that the government frequently withheld information from the public to minimize alarm and protect intelligence and sources.

The daily registry of the Gold Room was a quicker messenger of successes and defeats than the tardier telegrams of the Associated Press. A private secretary of a high official, with no capital at all to save his position, which gave him authentic information of every shaping of the chess game of war a full twenty hours in advance of the public, simply flashed to the words “sell, buy” across the wires, and trusted the honor of his broker for the rest.

If there was a sufficiently large number of “insiders” competing with each other, then the market would quickly transform war news into changes in the price of greenbacks, despite the fact that the news was not coming through published sources.

The observation of [New York Herald writer] Kinahan Cornwallis are consistent with this notion: “Almost every individual speculator in the Gold Room, whose transactions were large enough to make it of consequence, had a correspondent in the national capital, who sent him a telegraphic dispatch as occasion required . . .”

(Greenback Prices as Commentary on the Union Prospects, Guinnane, Rosen and Willard, Civil War History, The Journal of the Middle Period, Kent State University Press, December 1995, Volume XLI, No. 4, excerpts, pp. 315-318)

Prior to 1861, the New York Associated Press was playing an important role in transforming American journalism by centralizing a network of like-minded newspapers to distribute news to the country. After commencing hostilities, the Lincoln administration began censoring news stories regarding the war almost immediately and what followed was a constant suppression of stories regarding war financing in Congress, the imminent bankruptcy of the government, Northern casualties figures, and war profiteering by war materiel contractors.

Bernhard Thuersam, www.Circa1865.com

Censorship and Favorable Publicity

“At the outset of the Civil War – and for the first time in American history – the federal government created an apparatus to censor news stories. For the first ten months of the war, responsibility for the Washington censorship shifted among cabinet officials. Given this arrangement, the censorship imposed on correspondents during the crucial early phase of the conflict was as much political as military.

In December 1861, the House of Representatives authorized the Judiciary Committee “to inquire if a telegraphic censorship of the press has been established in this city; if so, by whose authority, and by whom is it now controlled.” The committee held hearings during January and February before submitting its fourteen-page report to the House in February 1862.

On April 19 . . . reporters gathered details from the battered [6^th Massachusetts Regiment returning from Baltimore] and hurried to the Washington telegraph office to file their stories for Northern newspapers. When they arrived, however, they found the office guarded by a militia squad . . . no one quite accepted responsibility for the decision to ban the transmission of news, though [William] Seward mentioned that the cabinet had been discussing the need for some type of telegraphic censorship.

[News organization owners were told that] Messages about military operations were to be detained, as was anything “injurious to the interest of the Government.” The circular closed with the admonition, “Of course the strictest secrecy must be observed in respect to these instructions.” Near the end of April, the War Department assumed control of the telegraph and the censorship program.

Telegraphic reports about the outcome of [First Manassas] on July 21 damaged the credibility of both the government and the press and prompted changes in censorship. Early accounts of the battle telegraphed to Northern newspapers suggested an imminent Union victory . . . [and] left the public unprepared for the news that followed: the battle ended in an ignominious rout of the Union army.

Only days after Gen. George B. McClellan assumed command of the Army of the Potomac, he met with reporters and proposed a code that governed news sent by telegraph . . . “that may furnish aid and comfort to the enemy.” Eleven correspondents representing leading newspapers in New York, Philadelphia, Boston, Cincinnati, and Washington signed, as did General McClellan.

The ultimate arbiter of what could pass over the wires from Washington, Secretary of War Simon Cameron, was well-positioned to cultivate favorable publicity. He directed the censor to let the “despatches of Mr. [Samuel] Wilkeson, of the New York Tribune, go over the wires as written . . . as Wilkeson enjoyed the latitude to offer comments, even editorialize, in his reports from Washington. “The privilege was to be used wholly in [reference] to the policy of sustaining the govt – sustaining the War Dept.,” Wilkeson testified.

Wilkeson’s reports to the Tribune regularly defended Cameron and the War Department from the many charges of scandal and mismanagement in awarding military contracts.”

(The Telegraph, Censorship and Politics; Richard B. Kielbowicz, Civil War History, Vol. XL, 1994, Kent State University Press, excerpts, pp. 96-101)

In the following mid-1864 letter to Charles Sumner of Massachusetts, General E.W. Gantt of Arkansas questions the revolutionary logic of the radical Republicans in Congress who claimed sovereign States had become mere territories after unsuccessfully seeking political independence — he expected the North to live up to its alleged aim of preserving the Union as it was. Gantt was a Confederate brigadier who decided by 1863 that Arkansas could not achieve independence and should return to the Union — he became the only Southern general to commit treason.  Historian Bruce S. Allardice suggests that Gantt’s behavior was the result of insobriety, cowardice, opportunism or immorality.

Bernhard Thuersam, www.Circa1865.com

Readmission a Legal Impossibility

Secession and Readmission; Letter to Hon. Charles Sumner from Gen. E. W. Gantt, of Arkansas.

FIFTH-AVENUE HOTEL, June 1, 1864.

Hon. Chas. Sumner:

SIR: But for your resolution and action in reference to Arkansas politics, I feel sure that I should not have appeared before the public again. The subject which calls forth this letter being entirely of a public character, induces me to address you through the columns of the New-York TIMES.

Upon the application of the State of Arkansas to resume her relations — temporarily disturbed — with the National Government, by sending her constitutionally-chosen representatives for that purpose, you have seen fit to introduce the following resolution, to wit:

Resolved, That a State pretending to secede from the Union, and battling against the National Government to maintain their position, must be regarded as a rebel State, subject to military occupation, and without representation on this floor, until it has been readmitted by a vote of both Houses of Congress; and the Senate will decline to entertain any application from any such rebel State until after such a vote of both Houses.

From this I infer that you intend to oppose our peace offering, and to break up, if possible, our loyal State organization, effected as it has been at immense personal hazard, and wonderful exertions and determination upon the part of our loyal people.

When you say that a “State pretending to secede” must be “readmitted” by a vote of both Houses of Congress, what are we to understand you to mean? Do you mean that the State really did secede? That is, that it got out of the “compact?” If that be so does it not occur to you that it went out as a State and became a separate sovereignty? If this be so, “readmission,” it strikes me, is a legal impossibility. The Sovereign Government of Arkansas should apply for “annexation” and not “readmission.” But do you mean that it only pretended it was out, while in point of fact it was in the Union? Then how could you “readmit” that which never was out? It would place the Government in the awkward attitude, it seems to me, of fighting against the people of a State because they “pretended to secede,” and yet had not, and at the same time declaring that they did go out and must be “readmitted.”

But do you mean that the secession ordinances passed by certain legislatures and conventions reduced the States in which the same were passed to Territories? If so, how? If the ordinances referred to put the States out, why they went out as States. It won’t do to say they had just enough sovereignty to scramble out of the Government, and that then they rumbled into Territories.

The sovereignty reserved that could take them out, could hold them up as States. As such, they could form compacts with other Governments, or new combinations of their own. They could not possibly work their way out of the Government, and being out, fall back to the Government as a part of its territory — no more than they could merge into the Russian possessions. A doctrine so dangerous might destroy the Government in a month. Secession ordinances passed by twenty States, reducing them to Territories, would stop the wheels of Government.

But you may intend this as a punishment because our State “pretended to secede.” If so, we are already punished enough. But why discriminate? Missouri pretended to secede, and so did Kentucky. There was no question raised over them. And Mr. BOULINEY, of Louisiana, remained in the Congress of the United States more than one year after Louisiana pretended to secede.

But, then, your opposition may arise from want of regularity in the reorganization. That it was without precedent I admit. That the people, groaning under anarchy, oppression and despair, wrought out a government from the wreck around them, with no beaten path to follow, is true.”

(New York Times, June 3, 1864)

The resistance to Lincoln’s conscription law became violent on July 13, 1863 as mobs fought New York City police and soldiers in the streets. With that State having predominantly Democratic voters, Lincoln seemed to levy a higher draft quota there and poor Irish immigrants would bear the brunt of forced military service — and feared freed blacks flooding North and taking all laboring jobs held by Irish. The author below relates that “Negroes had been hunted down all day, as though they were so many wild beasts, and one, after dark, was caught, and after being severely beaten and hanged to a tree, left suspended there until [police took] the body down. Many [blacks] had sought refuge in police stations and elsewhere, and all were filled with terror.”

Bernhard Thuersam, www.Circa1865.com

New Yorker’s Resist Conscription

“The ostensible cause of the riots of 1863 was hostility to the draft, because it was a tyrannical, despotic and unjust measure – an act which has distinguished tyrants the world over, and should never be tolerated by a free people. Open hostility to oppression was more than once hinted in a portion of the press – as not only a right, but a duty.

Even the London Times said: “It would have been strange, indeed, if the American people had submitted to a measure which is a distinctive mark of the most despotic governments of the Continent.”

It might as well be said, that because settling national difficulties by an appeal to arms has always been a distinctive feature of despotic governments, therefore the American people should refuse to sustain the government by declaring or prosecuting any war; or that because it has always been a distinctive feature of despotic governments to have naval and military schools, to train men to the art of war, therefore the American people should not submit to either.

[If troops] enough can be raised on a reasonable bounty, it is more expedient to do so; but the moment the bounty becomes so exorbitant as to tempt the cupidity of those in whom neither patriotism nor sense of duty have any power, volunteering becomes an evil. We found it so in our recent war.

The bounty was a little fortune to a certain class, the benefit of which they had no idea of losing by being shot, and hence they deserted or shammed sickness, so that scarce half the men ever got to the front, while those who did being influenced by no higher motive than cupidity, became worthless soldiers.

If a well-known name, [or] that of a man of wealth, was among the number [conscripted], it only increased the exasperation, for the law exempted every one drawn who would pay three hundred dollars towards a substitute. This was taking practically the whole number of soldiers called for out of the laboring classes.

A great proportion of these being Irish, it naturally became an Irish question, and eventually an Irish riot. It was in their eyes the game of hated England over again – oppression of Irishmen.”

(The Great Riots of New York, 1712 to 1873; Joel Tyler Headley, editor, Dover Publications, 1971, excerpts, pp. 137; 139; 149. Original published by E.B. Treat in 1873)

Foremost in the minds of Southerners by 1860 was the incessant abolitionist agitation that had wrought Nat Turner’s murderous rampage in 1831, and most recently then, John Brown’s in 1859. The memory of brutal slave uprisings and massacres in Santo Domingo and what may lay ahead for them had much to do with separating the South from the North. Rather than work toward a practical and peaceful compromise to end the labor system inherited from Britain, the abolitionists and Lincoln himself allowed the drift to war and the end of the republic.

Bernhard Thuersam, www.Circa1865.com

Self-Preservation Compelled Secession

“What mighty force lay back of this Southern movement, which by the beginning of February, 1861, had swept seven States out of the Union?

An explanation early accepted and long held by the North made it simply the South’s desire to protect slavery. Forty years of wrangling over this subject, fortified by many statements Southerners had made about it . . . [and] South Carolina in her secession declaration had made the North’s interference with slavery her greatest grievance, and the subject appeared equally large in other seceding States.

Yet simple answers are never very satisfying, and in this case it was too simple to say that Southerners seceded and fought a four-year war for the surface reason of merely protecting their property in slaves. Had not the South spurned the Corwin Amendment, which guaranteed slavery in the States against all interference by Congress? And what happened to the subject of slavery in the territories, which had loomed so big in the 1850’s? Now it was forgotten by both the North and the South.

Slavery was undoubtedly a potent cause; but more powerful than slavery was the Negro himself. It was the fear of what would ultimately happen to the South if the Negro should be freed by the North, as the abolitionists seemed so intent on doing – and Southerners considered Republicans and abolitionists the same.

This fear had worried [John C.] Calhoun when he wrote in 1849 “The Address of Southern Delegates in Congress to their Constituents.” It was not the loss of property in slaves that the South feared so much as the danger of the South becoming another Santo Domingo, should a Republican regime free the slaves.

And it is no argument to say that Lincoln would never have tried to do this. The South believed his party would force him to it if he did not do so of his own volition. If he were not himself an abolitionist, he had got his position by abolition votes. A friend of Salmon P. Chase, Secretary of the Treasury, told him that the South’s knowledge of what happened in Santo Domingo and “Self-preservation had compelled secession.”

(A History of the South, Volume VII, The Confederate States of America, 1861-1865, E. Merton Coulter, LSU Press, 1950, excerpts, pp. 8-10)

The electoral college system erected by the Founders worked best when limited to two candidates, but became what was described as a “fearful danger” when multiple candidates emerged in 1860. New Yorker Samuel Tilden’s dark prophesy of a purely sectional candidate becoming president was realized in 1860; when the Gulf States began to go out of the Union he stated that “The situation was unprecedented, and it is worse than idle, it is presumptuous, to rail at [President James] Buchanan for his failure to act.” The latter is scapegoated for failure, though the Founder’s failed to foresee such a calamity.

Bernhard Thuersam, www.Circa1865.com

Fearful Danger and Political Menace in 1860

“The election of Abraham Lincoln has been studied from every angle. It is well to disregard the providential aspect of the outcome. Seventeen years ago, Mary Scrugham made a careful examination of the returns. Her “Peaceable Americans of 1860-1861” shows how ridiculously the machinery of the electoral college misrepresented American opinion in this critical campaign.

To question the constitutionality of Lincoln’s election is absurd, but to criticize the system by which one of four candidates could carry the electoral college decisively with a large third of the popular vote is pertinent.

At the first two meetings of the electoral college, Washington was chosen without contest. Thereafter, as everyone knows, the growth of parties put an end to the deliberative character of the body, for each political organization put up its own list of electors in every State – where the legislatures did not choose them. Reporting the popular result became automatic.

Polling not a vote in almost one-third of the States, obtaining not a single elector from the South, and receiving a noticeable minority of the popular suffrage, a sectional candidate was chosen President of the United States – and all this according to the Constitution. What may happen in the future can only be imagined – should this dangerous system survive.

Miss Scrugham’s analysis of the election of 1860 should open our eyes. Lincoln had no votes in ten States of the Union; while [Vice President John] Breckinridge received more that 6,000 in Maine, 2,000 in Vermont, and 14,000 in Connecticut.   According to the “acid test of geographical membership,” the Republican was the only “out and out sectional party.”

Some accused the Southern Democrats of splitting their party for the sake of forcing the election of Lincoln and thus finding a compelling excuse for secession.

If the entire opposition to Lincoln, however, had been united on one candidate, the electoral college would still have given him the presidency “regardless of the fact that popular vote against him was a million more than that for him.”

In 1860, then, according to the returns, it would have been impossible for a majority of the American people to choose a president even if they had been united on a single hypothetical candidate.

In the face of the vote which both [Stephen] Douglas and [John] Bell received in the Southern States, “it is folly to assert,” continues Miss Scrugham, that the South was “aggressively pro-slavery and bent on maintaining slavery” even at the cost of the Union.”

[New York Governor Samuel] Tilden saw the fearful danger of the victory of Lincoln before it had occurred. Laying his finger on the political menace of any man’s being made President without one electoral vote from the South, he urged his fellow citizens to defeat [Lincoln] by any means possible.”

(Horatio Seymour of New York, Stewart Mitchell, Harvard University Press, 1938, excerpts, pp. 219-220)

Referring to the proposed Thirteenth Amendment in early 1861, offered by the Lincoln’s party and approved by him, Southern Commissioners Yancey, Rost and Mann wrote to British Lord John Russell on August 14, 1861: “The very [Republican] Party in power has proposed to guarantee slavery in the States, if the South would remain in the Union.” This underscored that their cause was not a defense of slavery, but the high price of protecting Northern manufacturers. Even with Lincoln’s support of slavery, the South chose political independence from the North.

Bernhard Thuersam, www.Circa1865.com

Senator Wigfall on the Cause of Discontent

“Said Senator Louis Wigfall, of Texas, March 4th 1861 in the United States Senate, only a few hours before Mr. Lincoln’s inauguration:

“It is early in the morning and I hope I shall not say anything that may be construed as offensive. I rise merely that we may have an understanding of this question.  It is not slavery in the Territories, it is not expansion, which is the difficulty.

If the resolution which the Senator from Wisconsin introduced here denying the right of Secession, had been adopted by two-thirds of each branch of this department of the Government, and had been ratified by three-fourths of the States, I have no hesitation in saying that, so far as the State in which I live and to which I owe my allegiance is concerned, if she had no other cause for a disruption of the Union taking place, she would have undoubtedly have gone out.

The moment you deny the right of free government to the free white men of the South, they will leave the Government. They believe in the Declaration of Independence.

In the “address of the People of South Carolina, assembled in convention . . . to justify the passage of the South Carolina Secession Ordinance of 1860, it is declared that (excerpted): “The one great evil from which all other evils have flowed is the overthrow of the Constitution of the United States. The Government of the United States is no longer the Government of Confederated Republics, but of a consolidated Democracy. It is no longer a free Government, but a Despotism. It is, in fact, such a Government as Great Britain attempted to set over our Fathers; and which was resisted and defeated by a seven years struggle for Independence. The Revolution of 1776 turned upon one great principle, self-government — and self-taxation, the criterion of self-government.”

The Southern States now stand exactly in the same position towards the Northern States that the Colonies did towards Great Britain. The Northern States, having the majority in Congress, claim the same power of omnipotence in legislation as the British Parliament.

“The General Welfare” is the only limit of legislation of either; and the majority in Congress, and in the British Parliament, are the sole judges of the expediency of the legislation this “General Welfare” requires. Thus the Government of the United States has become a consolidated Government; and the people of the Southern States are compelled to meet the very despotism their fathers threw off in the Revolution of 1776.

The consolidation of the Government of Great Britain over the Colonies, was attempted to be carried out by the taxes. The British Parliament undertook to tax the Colonies to promote British interests . . . Our fathers resisted this pretension. And so the Southern States, toward the Northern States, in the vital matter of taxation.

They are in a minority in Congress. Their representation in Congress is useless to protect them against unjust taxation; and they are taxed by the people of the North for their benefit, exactly as the people of Great Britain taxed our ancestors in the British Parliament for their benefit. For the last forty years, the taxes laid by the Congress . . . have been laid with a view of subserving the interests of the North.

The people of the South have been taxed by duties on imports, not for revenue, but for an object inconsistent with revenue — to promote, by prohibitions, Northern interest in the productions of their mines and manufactures.

The people of the Southern States are not only taxed for the benefit of the Northern States, but after the taxes are collected, three-fourths of them are expended at the North. This cause . . . has made the cities of the South provincial. Their growth is paralyzed; they are mere suburbs of Northern cities.

The agricultural productions of the South are the basis of the foreign commerce of the United States; yet Southern cities do not carry it on. Our foreign trade is almost annihilated . . . by gradual and steady encroachments on the part of the people of the North, and acquiescence on the part of the South, the limitations in the Constitution have been swept away; and the Government of the United States has become consolidated, with a claim of limitless powers in its operations.

A majority in Congress, according to their interested and perverted views, is omnipotent. Numbers with them, is the great element of free Government. A majority is infallible and omnipotent. “The divine right to rule in Kings,” is only transferred to the majority.

The very object of all Constitutions, in free popular Government, is to restrain the majority. Constitutions, therefore, according to their theory, must be the most unrighteous inventions, restricting liberty. None ought to exist; but the body politic ought simply to have a political organization, to bring out and enforce the will of the majority. This theory is a remorseless despotism.

In resisting it, as applicable to ourselves, we are vindicating the great cause of free government, more important, perhaps to the world, than the existence of all the United States.”

(The Great Conspiracy, Its Origin and History, John A. Logan, A.R. Hart & Company, 1886, excerpts, pp. 226-227; 231-234)

Though a duplicitous and scheming politician, William Seward understood that any action to reinforce Fort Sumter would be an act of war, as was Major Anderson’s movement from Moultrie to Sumter. He further recognized that war on the North’s part would cause disunion.

Bernhard Thuersam, www.Circa1865.com

Seward’s Analysis of Fort Sumter

“The question submitted to us, then, practically, is:

Supposing it to be possible to reinforce and supply Fort Sumter. Is it wise to attempt it, instead of withdrawing the garrison? The most that could be done by any means now in our hands would be to throw two hundred and fifty to four hundred troops into the garrison, with provisions for supplying it five or six months.

In this active and enlightened country, in this season of excitement, with a daily press, daily mails, and an incessantly operating telegraph, the design to reinforce and supply the garrison must become known to the opposite party in Charleston as soon at least as preparation for it should begin. The garrison then would almost certainly fall by assault before the expedition could reach the harbor of Charleston; suppose it to be overpowered and destroyed, is that new outrage to be avenged, or are we then to return to our attitude of immobility? Moreover in that event, what becomes of the garrison?

I suppose the expedition successful. We have then a garrison at Fort Sumter that could defy assault for six months. What is it to do then? Is it to make war by opening its batteries and attempting to demolish the defenses of the Carolinians? Can it demolish them if it tries? If it cannot, what is the advantage we shall have gained? If it can, how will it serve to check or prevent disunion?

In either case, it seems to me that we have inaugurated a civil war by our own act, without an adequate object, which after reunion will be hopeless, at least under this administration, or in any other way than by a popular disavowal both of the war and the administration which unnecessarily commenced it.

Fraternity is the element of union; war is the element of disunion.

Fraternity, if practiced by this administration, will rescue the Union from all its dangers. If this administration, on the other hand, take up the sword, then an opposite party will offer the olive branch, and will, as it ought, profit by the restoration of peace and union.”

(Life of William H. Seward, Frederic Bancroft, Volume II, Harper & Brothers, 1900, excerpt, pp. 99-100)

Though popular histories portray Lincoln as a simple and self-educated man who rose from a lowly background to become president, he was in reality a shrewd politician and wealthy corporate attorney. His clients before 1860 included the Illinois Central Railroad, then the largest railroad in the world, and an annual income of about $5000, more than triple that of the Illinois governor. After the War, Lincoln’s heavy-handed policy of military might was continued by his generals sent to eradicate the Plains Indians in the way of government-subsidized transcontinental railroads.

Bernhard Thuersam, www.Circa1865.com

Lincoln’s Pecuniary Interests at Council Bluffs

“A year prior to his nomination to the presidency — to be exact, in August, 1859 — he had visited Council Bluffs, Iowa, to look after his real estate holdings there and incidentally see the country.

A contemplated railroad to extend westward from the Missouri River to the Pacific coast was a live, but no new topic. For years such a possibility had been discussed, and in the first national campaign conducted by the Republican Party in 1856, a Pacific railroad was made a rather prominent issue. Shortly before his trip to Council Bluffs, Abraham Lincoln had purchased several town lots from his fellow [Illinois Central] railroad attorney, Norman B. Judd, who had acquired them from the Chicago and Rock Island Railroad. Council Bluffs at this time was a frontier town, containing about fifteen hundred people.

General [Grenville] Dodge . . . relates that “during Lincoln’s visit, some of the citizens of Council Bluffs took him to a high bluff known as Cemetery Hill, just north of the town. He was greatly impressed with the outlook; and the bluff from that time has been known as Lincoln’s Hill . . .

From here he looked down upon the place, where by his order, four years later, the terminus of the first trans-continental railway was established.”

The platform of the Republican National Convention that nominated Abraham Lincoln for president in May 1860 at Chicago, declared in the sixteenth plank:  “That a railroad to the Pacific Ocean is imperatively demanded by the interests of the whole country; that the Federal Government ought to render immediate and efficient aid in its construction . . . ”

General Dodge [said]: “There is great competition from all the towns on both sides of the Missouri River for fifty miles above and below Council Bluffs, Iowa, for the distinction of being selected as [the] initial point. President Lincoln, after going over all the facts that could be presented to him, and from his own knowledge, finally fixed the eastern terminus of the Union Pacific Railroad where our surveys determined the practical locality — at Council Bluffs, Iowa.”

(Lincoln and the Railroads, John W. Starr, Jr., Arno Press, 1981 (original 1927), excerpts, pp. 196-202)

The “Big Four” of Central Pacific Railroad fame included Charles Crocker and Leland Stanford, both of New York. While the War Between the States raged in the East, they made a fortune through generous government subsidies usually obtained by bribery or special treatment for Republican Party donors. While that party claimed to be waging war against the American South to eradicate slavery, the government-supported railroad companies used virtual slave labor for construction crews. The railroad crews used white supervisors of Chinese laborers in the same manner as Northern regiments of colored troops were led by white officers.

Bernhard Thuersam, www.Circa1865.com

Chinese Labor for the Central Pacific Railroad    

“Early in January 1865 Crocker’s agents scoured Sacramento, Stockton, and San Francisco for laborers . . . [but many] quit when they had earned enough money to pay stage fare to Virginia City. But children, too, were scarce in the foothills and for months the labor shortage remained acute. In the company’s new San Francisco office [Leland] Stanford . . . petitioned the War Department to send out five thousand Rebel prisoners to be put to work under the guard of a few companies of Union soldiers. But the war ended and the scheme had to be shelved.

A plan of importing, under contract, thousands of peons from Sonora and other Mexican states never got beyond the discussion stage . . . [but another] dubious possibility remained – the lowly Chinese. There were already thousands of them on the Coast . . . crowded into the wretched warrens of a score of “Chinatowns.”

A threatened strike of his white crews proved the deciding point. [Fifty] Chinese were herded on freight cars in the Sacramento yards and hauled to the end of the track. By sunrise they went to work with picks, shovels, and wheelbarrows. At the end of their first twelve hours of prodding industry Crocker and his engineers viewed the result with gratified astonishment.

Another gang of fifty was hired at once, then a third. Finally all doubt vanished and the Chinatowns of the state were searched for every able-bodied male who could be tempted by the bait of steady work and forty dollars a month.

Of course the white laborers of the Coast resented the affront. To counteract this injury, railroad spokesmen were presently referring to the Chinese as “the Asiatic contingent of the Grand Army of Civilization,” and Stanford was incorporating into company reports long defense for them . . . To charges that the Chinese were held in a state of virtual serfdom by the labor contractors with whom the company dealt, Stanford stated: “No system similar to slavery . . . prevails . . . Their wages . . . Paid in coin at the end of each month, are divided among them by their agents . . . in proportion to the labor done by each . . . These agents are generally American or Chinese merchants, who furnish them with supplies of food, the value of which they deduct monthly . . .”

By the end of 1865 the company was committed to the use of Chinese for most of their labor, and Stanford was hopeful that the force might be increased to fifteen thousand during the coming year. Of course no such supply was available in California . . . [but accordingly] boats from Canton were presently tying up at San Francisco piers, their rails swarming with yellow faces, while labor leaders predicted economic ruin for the Coast and threatened reprisals.

The advent of the Chinese relieved white men of pick and shovel work; many became gang foremen, others were promoted to teamsters, powdermen, or stone-workers. Moreover, the Chinese lived in their own camps, cooked their own meals, and knew their place. Thus the superiority of the Caucasian was undiminished, his dignity enhanced. Harmony reigned in the Sierra canyons and real progress began to be made.”

(The Big Four, The Story of the Building of the Central Pacific, Oscar Lewis, Borzoi Books, 1938, excerpts, pp. 69-72)