Circa1865

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)

At the height of Southern success in September 1862, French banker Emile Erlanger suggested a $25 million loan to the Confederacy through John Slidell, Confederate commissioner in Paris. Erlanger would raise the money in gold, in exchange for Confederate bonds at eight percent interest. For every dollar received the Confederate government would pledge its only source of wealth – cotton. Erlanger and his investors envisioned themselves upon Confederate victory the owners of $10 million worth of cotton, acquired for only one-fifth that amount.

Bernhard Thuersam, Circa1865.com

French Bankers Fleece the Confederacy

“Cotton on Southern plantations or in Southern warehouses hardly possessed the value that inhered in the same material deposited in Europe – that fact was recognized; yet the proffered security was very real and, at a sufficiently low price, might tempt adventurous foreigners. On this basis arose the so-called cotton bonds.

The plan was simply one to borrow money, giving as mortgage cotton lying un-transported in Southern States, owned by the Confederate Government. The plan met with indifferent success. Still, this distant cotton, — distant, that is, in European eyes, — even though it found little favor with conservative investors, presently made a strong appeal to the speculator.

A combination of events in the fall and winter of 1862-1863 gave zest to this gambling instinct. The first of these was the high price of cotton in Europe and the comparatively low price in the Confederacy. Textile areas in in Lancashire and in the northern region of France had reached an appalling depth of unemployment and misery, and millions of English workers were . . . in a state of impending or actual starvation.

The “famine” had forced cotton up to fifty cents a pound, or $200 a bale in the European market. Yet in the Southern States this same product was offered at ten or twelve cents a pound. Such possible profits would obviously justify great risks.

One preeminent fact, in the winter of 1862-1863 . . . Europe confidently believed that the war was approaching its end. The military events of 1862 . . . soon turned the balance in favor of the South. The collapse of McClellan’s Peninsular campaign, the second battle of [Manassas], and the tragedy of Fredericksburg indicated to the average Englishman and Frenchman a quick Confederate victory.

Lord Palmerston openly joked about the discomfiture of the Yankees; Gladstone made his famous speech, declaring Jefferson Davis had “created a nation”; and now, for the first and, as it proved, the only time, Great Britain seemed to be planning to recognize the Davis Government.

At this crisis – 1862 and the early part of 1863 – the Confederacy stood at its peak. If money was to be made in cotton speculation, the time to act had come. If the Union, as English observers said, was as dead as the Anglo-Saxon Heptarchy, its end would bring to the lucky holders of cotton a great increase in wealth. The eyes of European speculators dazzled at the prospect.

Out of this combination of circumstances – Federal defeats, the impending recognition of the Confederacy by Great Britain and France, the anticipated early end to the war, the low price of cotton in the South, and its extremely high price in Europe – came into being the celebrated Erlander loan. For the important fact to be kept in mind is that this was not a loan, as such governmental transactions are usually understood, but a huge speculation in cotton.”

(French Bankers Fleece the Confederacy; Statesmen of the Lost Cause: Jefferson Davis and His Cabinet, Burton J. Hendrick, Literary Guild of America, Inc., 1939, excerpts, pp. 217-219)

John Taylor of Caroline said that “the great weakness of the Constitution is that its meaning is never unequivocal,” and that its misinterpretation was due to the loss of power by the agrarians.  Though the Constitution was designed to guarantee local self-government for the farmers, “a mode of construction is introduced to advance the interest of mercenary combinations.” The mercenary combinations helped form the Federalist, Whig and Republican parties.

Bernhard Thuersam, www.Circa1865.com

Guardians of the Constitution

“Certainly, the States never intended to give to the Federal Government the power of veto over their own laws. It is absurd to suppose that an agency brought into being by the several States can have exclusive power to construe the instrument which grants its power, for this is equivalent to the assertion that the States can make a constitution but are without power to prevent its infringement.

If the Federal Government has the last word even on the constitutionality of its own laws, then federalism is at an end. If the Supreme Court can dominate State matters, then all the heroic efforts of the Founding Fathers to set up a system of mutual checks and secure wise and responsible State government were futile.

In the event of a controversy between the two spheres [State and federal], the Supreme Court would be an interested party and consequently partial. Such a conflict cannot be settled by a court. The correct remedy, as stated in the Constitution, is amendment by the people. Further, the dispensation of justice is an inherent attribute of sovereignty. Hence, the people of the States, since they are sovereign, can be denied no judicial power over their own affairs.

Nonetheless, the Court is prone to ignore the idea of the sovereignty of the people of the States and to place it instead in the governments of the States or even the in the government of the Union on the hypothesis that the Union is the supreme government of an American Nation. And since the powers reserved to the States far exceed those delegated, this entitles the States to priority in all controversies over fundamental issues of government.

Liberty is lost if the States are deprived of a direct and final voice in the interpretation of the Constitution of their Union. Hence, the sweeping powers assumed by the Supreme Court are a direct violation of the basic liberties of the States and of the people. The idea of a court dictating to the States runs counter to the basic idea of federalism and makes the Constitution a rope of sand. If State powers are limited by any supreme federal department, the situation is like the one that [John] Locke described: “no man has a right to that which another has a right to that which another has a right to take from him.”

Hence, the States, not the justices of the Supreme Court, are the guardians and guarantors of the Constitution. A jury composed of the parties that originally contracted to form the Union is better qualified to perform the task of maintaining it than the federal justices whose power extends merely to cases in law and equity involving individual and private affairs, not to issues that affect any of the departments or spheres of the government of the United States.”

The Social Philosophy of John Taylor of Caroline, A Study in Jeffersonian Democracy, Eugene T. Mudge, Columbia University Press, 1939, excerpts, pp. 133-135)

Vice President William R. King (under Presidents Millard Fillmore and Franklin Pierce) was born a North Carolinian in April, 1786, his father William King being a Revolutionary War veteran and member of the convention in which North Carolina ratified the U.S. Constitution. A United States Representative for North Carolina, and later a Senator representing Alabama, King was a fine complement to the presidency of Franklin Pierce of New Hampshire, the latter known as a “Northern man with Southern principles” – more correctly considered American principles.  He died on April 18, 1853.

Bernhard Thuersam, www.Circa1865.com

Eulogizing a Vice President with American Principles

(Remarks of Milton S. Latham of California, 8 December 1853)

“Mr. Speaker:

William Rufus King was a noble specimen of an American statesman and gentleman. The intimate friend of John C. Calhoun, and the contemporary of Webster, Clay, Cass and Benton, he maintained a proud position in the Senate of the United States by his strong, practical good sense, his experience and wisdom as a legislator, the acknowledged rectitude of his intentions, and that uniform urbanity of manner which marked, not so much the man of conventional breeding, as the true gentleman at heart.

He never knew what it was to speak, act or legislate by indirection. He was frank and loyal to his colleagues, as he was devoted to his own State, and sincerely attached to the Union. He was from principle and conviction a States’ Rights man; but he did not love the Union less because he loved Alabama more. While he was serving his own State with fidelity and honor, he was not remiss in his duties to the whole American Confederacy.

Like his illustrious prototype, John C. Calhoun, he battled for the rights of his State, in order to secure that harmony between Federal and State power, which is the essence of the Union, and without which it is impossible to preserve our system of self-government.

In the memorable session of 1849-1850, Mr. King voted for nearly all the compromise measures as an act of devotion to the National Union, without surrendering a single cardinal point of the political faith which had guided him through life, and had secured to him the affection and attachment of the citizens of his own State.”

(Obituary Addresses for Hon. William R. King, Vice President of the US, 8-9 December 1853, Robert Armstrong Printer, 1854, excerpt)

Beginning in 1804, Dr. Moses Waddel’s Willington School in South Carolina produced great American leaders which included political giant John C. Calhoun, distinguished Charleston attorney James L. Pettigru, future US Congressman George McDuffie, future governor of Georgia George R. Gilmer, classical scholar Hugh Swinton Legare, and Augustus Baldwin Longstreet — noted preacher, editor and writer, author of ‘Georgia Scenes.” Dr. Waddel was born in Rowan County, North Carolina and licensed by the Presbytery of Hanover to preach in Virginia.

Bernhard Thuersam, www.Circa1865.com

Statesmen are Schoolboys First

“Willington School, so named from a nearby settlement, got its character from its founder, Dr. Moses Waddel . . . [who] later became an outstanding educator in the South as president of the University of Georgia.

Dr. Waddel was a Presbyterian minister who first entered the educational field as a side line. He was a born educator, a veritable champion of learning in a community still emerging from the pioneer stage. It was in the year 1801 that he started his Willington School and at a time when education was not generally regarded in those parts as an essential. Most of the local farmers’ families had more practical uses for strong youngsters with sturdy arms and legs.

Despite obvious financial handicaps from the poor economy of the region, students came flocking to Dr. Waddel’s school, some at great sacrifice. In time there were two hundred and fifty students . . . Many were from poor families who somehow made provision for educating their sons.

The school consisted of a central hall, or “academy,” built of logs. About it were several other cabins, also built of logs and chinked with clay against the chill winds that blew off the river now and then in the winter season. The food was plain, mostly corn bread and bacon. Plain living, devotion to study, and high thinking formed the credo of Dr. Waddel.

[The] boys were turned loose in good weather along the river for study periods. There, scattered about under the oak and hickory trees, singly or in groups, they conned their Latin and Greek. The classics were the bases of Dr. Waddel’s curriculum, which seems to have been an innovation in educational methods for a secondary school. His formula and methods attracted interest among educators all over the country.

The routine was simple. In the early years of the school Dr. Waddel used a horn to arouse the students in the morning . . . [for] changing classes, and as a signal for shutting out lights. These were provided by pine knots rather than candles, then a rarity. [Dr. Waddel would often] step out of the central schoolroom and call the boys from their sylvan study periods with a loud “Books, books young men!” He inculcated a certain amount of self-rule and democracy by holding court every Monday morning to try offenders of the previous week. He acted as judge but the jury was made up of a panel of five students.

To this school here in the woods there came from the Long Cane section of Abbeville [South Carolina] . . . the almost equally austere John Caldwell Calhoun, a humorless sort of fellow, straight out of the rugged, God-fearing Calhoun clan of Scotch Covenanters. At nineteen he was a grown-up young man for those times. To prepare for entrance to Yale it was decided that he should go to Dr. Waddel’s school. Just after John Calhoun had left the school for Connecticut, the same neighborhood sent another promising youngster in James L. Pettigru . . . [though] His homespun clothes and rusty, rural manners were ridiculed by students from wealthier homes who sported broadcloth and fine linen.

Thus, Dr. Waddel’s school, with its emphasis on mental discipline, on the classics, and on history and philosophy, provided a cultural incubation for the politicians and statecraft to which some of its more promising students turned in after years. Its curriculum was conducive to the development of fine, flowing oratory, to the elaboration of closely drawn distinctions about the rights of the States versus the federal government. Its graduates went naturally from the law into politics.”

(The Savannah, Thomas L. Stokes, University of Georgia Press, 1951, excerpts, pp. 252- 260)

What General Enoch Crowder warned of below was reminiscent of Reconstruction’s political control in the South, as Washington-recognized Northern carpetbag governors and legislators gained official recognition and were free to engage in fraudulent political methods and elections to remain in power. Under Lincoln and the Republican Radicals, the US government became “a blind instrument for fastening an undesirable or fraudulent government upon a people” – 50 years later the Cuban people were assured of fraudulent government fastened by Washington.

Bernhard Thuersam, www.Circa1865.com

Liberator and Imperial Protector

“The conditions imposed on Cuban independence at the end of the American military occupation in 1902 had effectively subjected Cuban sovereignty to U.S. supervision. “The Government of Cuba,” Article III of the Platt Amendment stipulated, “consents that the United States may exercise the right to intervene for the preservation of Cuban independence, the maintenance of a government adequate for the preservation of life, property and individual liberty, and for discharging the obligations with respect to Cuba imposed by the Treaty of Paris on the United States.

By virtue of the Platt Amendment, Washington assumed ultimate responsibility for underwriting the solvency of national administration. The very conduct of [Cuban] national politics emerged as a source of policy concern in Washington. The American presence in Cuba loomed pervasively, functioning always as the understood coefficient of all political strategies.

Specifically, the Platt Amendment, as the understood basis of U.S. Cuban policy, encouraged outright an incumbent party, assured of American support, to embark on a course of partisan excesses, including reelection through illegal, if ostensibly constitutional, methods.

As early as 1912, General Enoch H. Crowder, the U.S. legal advisor during the second intervention, caution Washington against becoming captive to the political maneuvers of any single faction in Cuba. With a sober understanding of . . . U.S. – Cuban treaty relations, Crowder warned:

“Having once gained the official recognition of this government, and so become “the duly constituted authority,” . . . it could by fraudulent practices as was undoubtedly done in the last election for President prior to the election of 1906, secure its apparent reelection, and if the protest became too violent to overcome, such government would only have to notify the President of the United States and request assistance. The right of a people to change their rulers, and in fact change their form of government when it becomes subversive of the principle for which it is instituted . . . is essential to the preservation of a free government . . . Provision should be made that the United States will not be made the blind instrument for fastening an undesirable or fraudulent government upon a people whom we profess to be preserving a free government.”

Crowder’s plea went unheeded. On the contrary, within a year, Woodrow Wilson proclaimed constitutionality as the cornerstone of US Latin American policy . . . “We are the friends of constitutional government in America, Wilson averred, “We are more than its friends, we are its champions.”

(Intervention, Revolution and Politics in Cuba, 1913-1921; Louis A. Perez, Jr., University of Pittsburgh Press, 1978, excerpts pp. 11-12)

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)

The port city of Wilmington, North Carolina, was the most successful and lasting entry for blockade-running during the war, not falling until mid-January 1865. Though Governor Zeb Vance had created State-owned runners to bring in military supplies, the Richmond government forced private runners into limiting luxury items and carrying government cotton and goods – thus reducing their profits. The “Captain Roberts” mentioned below was in fact Augustus Charles Hobart Hampden, a British sailor of fortune who wrote “Never Caught” in 1867, a personal account of his 27 trips through the Northern blockade. The home he rented is passed on the “Confederate Wilmington” walking tour, see: www.cfhi.net.

Bernhard Thuersam, www.Circa1865.com

“Rhett Butler” and the Other Runners Speak

“Shortly after the various features of the 1864 legislation were put into effect, Captain Roberts, one of the most successful blockade-runners, ceased all activities, saying:

“The game, indeed, was fast drawing to a close. Its decline was caused in the first instance by the impolitic behavior of the people at Wilmington, who, professedly acting under orders from the Confederate Government at Richmond, pressed the blockade-runners into their service to carry cotton on Government account in such an arbitrary manner, that the profit to their owners, who had been put to enormous expense and risk in sending vessels in, was so much reduced that the ventures hardly paid.”

Another of the most famous blockade-runners – often believed to have been the real-life model for Margaret Mitchell’s character of Rhett Butler . . . was Thomas Taylor, who made twenty-eight trips through the blockade. Unlike Captain Roberts, Taylor continued to run the blockade because he had negotiated a secret profit arrangement with the Confederate Commissary-General that compensated him for the 1864 legislation.

Late in the war, despite his best efforts to the contrary. Taylor accurately predicted the downfall of the Confederacy. Writing to his superiors on January 15, 1865 [the date of the Northern attack on Fort Fisher], he said, “I never saw things more gloomy, and I think spring will finish them unless they make a change for the better.”

As he had put it, had blockade-running been encouraged, “instead of having obstacles thrown in the way, I am convinced that the conditions of affairs would have been altered very materially, and perhaps would have led to the South obtaining what it had shed so much blood to gain, viz., its independence.”

It appears that the blockade-runners could adjust to the advances of the Union blockade, but not to the economic constraints of the Confederate legislation. As Captain Roberts explained, “the enterprise had lost much of its charm; for, unromantic as it may seem, much of the charm consisted in money-making.”

Economic motives, however much we support or reject them ethically, morally, or philosophically, appear to have determined the outcome for the lifeline of the Confederacy.”

(Tariffs, Blockades and Inflation, the Economics of the Civil War; Mark Thornton and Robert B. Ekelund, Jr., Scholarly Resources Books, 2004, excerpts, pp. 53-54)

The Northern failure at Ream’s Station in late August, 1864 took a personal toll on Northern General Winfield S. Hancock, whose men panicked under the assault by A.P. Hill and Henry Heth. By the end of the day, triumphant Southern troops took captured 12 stands of enemy colors, 9 cannon, 3,100 small arms, and sent Hancock’s two divisions fleeing northward.  It was Northern Gen. Nelson Miles who later manacled President Jefferson Davis at Fortress Monroe, by order of Lincoln’s Assistant Secretary of War Charles A. Dana, a confidante of Karl Marx.

Bernhard Thuersam, www.Circa1865.com

Union Panic Fever at Ream’s Station

“Major-General Henry Heth arrived on the field with two fresh Confederate brigades and assumed tactical control of the operation. He conferred briefly with the stricken [Gen. A.P.] Hill, who told him that he “must carry the position.” With Heth came Colonel William J. Pegram and twelve artillery pieces. While Pegram arranged his cannon to bombard the Federals, Heth deployed a three-brigade assault force aimed at the northwest corner of the enemy perimeter. Pegram opened fire at 5:00 P.M.

Henry Heth moved to signal the advance by calling for a regimental flag to be brought to him. The standard of the 26^th North Carolina arrived, along with its young color-bearer. Heth asked for the flag, but the color-bearer insisted on carrying it himself. Heth smiled and took the soldier by his arm. “Come on then, we will carry the colors together,” he said.  This was the signal to begin the third assault on Reams Station.

The [Southerners] were blasted from the moment they came into view, and the heavy fire was kept up as the leading Rebel elements scattered the Federal pickets . . . A few more minutes of this punishment, [Gen.] Nelson Miles thought, and the [Confederates] would have to withdraw.

Suddenly, three of his regiments near the northwest angle panicked, and their once neat battle lines dissolved into a welter of fleeing men. At the same moment, triumphant [Southern] soldiers began to clamber over the breastworks. Other units along the upper western section of the [federal] line began to break apart. “This was the turning point of the fight,” one of the frightened Federals later recalled, “and here we failed.”

Rebel rifle fire ripped into the battery covering the gap . . . [and the enemy cannons were captured].  A New York battery posted [nearby] twisted its gun around to fire into the lost lines even as the regiments supporting it began to catch the panic fever.  Once their infantry help fled, the gunners had to run as well, leaving their pieces for the enemy.

The Union lines below the Depot Road gave way at about the same time Miles counterattacked . . . Union cannoneers . . . fought their guns to the last, then had to leave them behind as they raced for cover; many of the horses whose task it was to pull the guns out of harm’s way had become early victims of [Southern] sharpshooters.

[With Gen. Wade] Hampton’s cavalrymen and horse batteries pressing the southern face of Hancock’s line, some of the [federals] were in fact getting hit from three sides. Once the western face of the perimeter collapsed, dismounted Confederate troopers poured into [Hancock’s] earthworks.

The possibility of encirclement decided the matter: at 8:00 P.M., [Northern Gen. Winfield S.] Hancock issued orders to withdraw.  By 9:00 P.M., the Federals had disengaged and pulled back to the east. In the confusion of this night movement, Hancock’s devoted adjutant and postwar biographer, Francis Walker, was captured when he rode into an enemy picket line.

It had been a hard-won victory for Confederate arms, so much so that A.P. Hill decided not to pursue Hancock’s retreating corps. His troops, and Hampton’s, were kept busy rounding up prisoners and captured weapons. Then nature closed the scene with some artillery of its own: a heavy thunderstorm rumbled across Reams Station, bringing vivid flashes of light in the heavens along with a pelting rain that washed over the weary, wounded and dead alike.”

(The Last Citadel, Petersburg, Virginia, June 1864-April 1865, Noah Andre Trudeau, Little, Brown and Company, 1991, excerpts pp. 186-189)

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)