Circa1865

Undoubtedly the cause of the 1861 war was the purely sectional Republican party which emerged from the ashes of the Whig party, anti-immigrant Know Nothings, and Transcendentalists. Though it lost the 1856 national election, it would win in 1860 by a plurality with the addition of a high protective tariff which pleased the protectionist New England States. Though several Southern States which had not departed before February 1861 attended the Washington Peace Conference in an attempt to save the federal union, Lincoln had instructed his Republican attendees to avoid compromise.

War Millionaires of America

“The [Civil] war, author Charles Beard held, was an important determinant of industrial change after 1865 because of the manner in which industrial interests made use of the political power they had won. In Beard’s view, the ascendant Republican party was the tool of the new capitalist class. These capitalists were united in subscribing to the basic proposition that the government ought to foster industrial expansion. Successive Republican congresses duly accomplished this by enacting the national banking law, a high protective tariff, a contract labor law, lavish land grants to railroads, and the Homestead Act which in addition to giving land to settlers also expanded the domestic market.

One of the [Civil] war’s main effects was its contribution to “the extraordinary growth of heavy industry (iron, machinery, agricultural implements, lumber, clay products)” – a trend which characterized the whole period 1850-1880. While economic forces generated by the war worked to the advantage of heavy industry, [Louis] Hacker wrote [Triumph of American Capitalism, 1940], “the young industrial capitalism had by 1860 already formulated its political program for continued growth – “protectionism, a well-guarded banking system, and adequate labor supply, and expanding domestic market made possible by a federally-supported public works program.”

By the time the war had ended in 1865, Congress had virtually enacted this program, taking “a long step forward in placing the services of the state at the command of private enterprise.” The economic legislation of the war and Reconstruction periods comprised “a new and vital force” that shaped the course of postwar change. “The progress of industrial capitalism was at last being rendered secure,” Hacker concluded, and it was being done in the halls of Congress.

Mechanization was undertaken in response to heavy demands generated by the war, and in order to do this successfully, ever larger capital outlays were necessary for industrialists. This came from large-scale organizers who could tap “the reservoir of credit” produced by wartime profits and flotation of federal securities.

The result was a basic structural transformation – “the concentration of manufacturing capital in fewer hands than before, the construction of larger plants, and the appearance of a new class of war millionaires.”

(Economic Change in the Civil War: An Analysis of Recent Studies. Harry N. Scheiber. Civil War History, Vol. 11, No. 4, December 1965. pp. 398-400)