Circa1865

In the same way victorious Northern armies were followed by political adventurers and reformers backed by Union bayonets in the American South, the multitude of Washington-directed foreign interventions to date have been justified with the intention of spreading what is said to be American democracy, though the founders never intended this nor does the word “democracy” appear in the United States Constitution. In 1821, Secretary of State John Quincy Adams stated that “[America] does not go in search of monsters to destroy. She is the well-wisher to the freedom of freedom and independence to all. She is the champion and vindicator only of her own.” A wise policy that was discarded after 1865. The French intervention in Vietnam mentioned below was financed with American tax dollars.

Bernhard Thuersam, www.Circa1865.com

Reconstructing People in the American Image

“The policies we see today in Washington, DC reflect [a strategy of] the Federal Government [molding and reconstructing] societies at will with no regard for the population’s history, culture or values. Our ongoing meddling in Bosnia, where our advertised intention of forging a multiethnic society out of feuding Croatians, Serbs, and Moslems has only fenced people into a gladiators arena despite their clear preference to go about peaceably building their own communities in their own way.

Only continues military occupation by the United States working through the United Nations keeps this artificial political creation together, taking up the role formerly played by the Ottoman Turks, the Austrians, and [Marshal] Tito.

The United States have a long history of using force to erect and try to hold together artificial regimes. The most costly instance of such interference – so far – was he United States support for South Vietnam. As with every intervention since the War for Southern Independence, the advertised justification was to spread the American idea of freedom throughout the world.

Americans saw no need to ask the Vietnamese if they agreed to having their nation reconstructed in the American image, but the American government believed that their ideas applied to everybody. The Vietnamese, tightly organized and highly motivated to defend their way of life, managed to defeat a superior French force backed by American B-26 bombers.

Once the French decided they had had enough, American forces took up the fight. The assumption that the Vietnamese, like everyone else in the world, secretly wanted to adopt an American identity, led by Washington, DC into a self-manufactured disaster.

Assuming that all differences in world cultures are accidental mistakes and that force is necessary to impose a beneficial order upon uncomprehending and ungrateful recipients, advocates for armed intervention lull themselves to sleep at night with the assurance they have murdered no one but uneducable obstructionists.

By 1967, the US Air Force had dropped more than 1.5 million tons of bombs on the Vietnamese, more than the total dropped on the whole of Europe in World War II. The stimulus did not work, leaving the experts in the Pentagon groping for an answer.

“We anticipated that they would respond like reasonable people,” said one Defense Department official. Instead of responding reasonably, the Vietnamese responded like people, and won.”

(Confederates in the Boardroom: How Principles of Confederation are Rejuvenating Business and Challenging Bureaucracy; Michael C. Tuggle, Traveller Press, 2004, excerpt, pp. 52-55)

In July 1861, Senator James A. Bayard of Delaware spoke in the United States Senate and compared “the language of Lincoln and the Republicans to statements by the British Crown and Parliament during the American Revolution.” He saw it as irrational that after a devastating war between the sections, there would remain no bond to cement the people to one another, and that war would ruin both North and South.

Bernhard Thuersam, www.Circa1865.com

Delaware the Southern State

“In 1861, an optimistic Confederate Secretary of State Robert Toombs stated “all fifteen States of the South will have severed the bonds which have bound them to the late Federal Union and will have joined the Confederate States.” This statement is remarkable for two reasons.

First, Toombs expected, as did many Southerners, that every slave State would bond itself to the new southern Confederacy. Second, Delaware was included in Toombs’ fifteen States of the South. Most Southerners do not view Delaware in this light, but based on historical evidence, Delaware was actually more Southern than middle, and positively more Southern than Northern. Delaware, then, is the perfect case study for what Abraham Lincoln called “the fire in the rear.”

She had a large pro-Southern population, a congressional delegation that favored at minimum peaceful separation if not secession, a State government that was split between pro-war Republicans and pro-South Democrats, and Delaware was occupied by the Union army several times during the war. It would be no stretch to say that if not for military occupation and the inability of Delaware to secede, Delaware may have endeavored to cast its lot with the South.

Both United States Senators from Delaware in 1860 – James A. Bayard the younger and Willard Saulsbury, Sr., were Democrats . . . Delawareans had long supported Southern rights in the United States Congress, but by 1860, the State’s geographic position exposed its property and material well-being to the abuses of the federal government, thus forcing its citizens to adopt a more cautious approach to the sectional conflict.

[In the 1860 presidential election, those] candidates who were diametrically opposed to Lincoln received over seventy-six percent of the total popular vote . . . [and] Democrats retained a five to four majority in the State Senate . . .

In March [1861], the [Delaware] Gazette unleashed its harshest condemnation of the federal government with a stinging editorial supporting State’s rights. The paper thought the impending crisis would settle the issue of location of sovereignty in the republic. “If a government has a right to subjugate a State then freedom must mourn until other countries and other peoples establish what we had hoped had been done by Washington and Jefferson and their compeers.”

On 19 July 1861, Bayard rose in the Senate to deliver a two-hour speech entitled “Executive Usurpation” in response to a joint resolution of Congress . . . to “approve and confirm certain act of the President of the United States for suppressing insurrection and rebellion,” most notably the suspension of the writ of habeas corpus, the raising of troops, and the blockade of Southern ports.

[Bayard stated] “I am attached to the Union as any man who claims a set in this body . . .” But the course of the administration and the Republican Party, Bayard asserted, “was the reduction of the States to “provinces, and the military power to become the dominant power in the representative Republic . . . for the purpose of conquest and subjugation.”

(The Avenger Without Mercy: Delaware Under the Federal Heel; Brion McClanahan; Northern Opposition to Mr. Lincoln’s War, D. Jonathan White, editor, Abbeville Institute Press, 2014, excerpts, pp. 116; 120; 127; 136-137)

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

Bernhard Thuersam, www.Circa1865.com

Consolidating the Northern Triumph

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

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

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

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

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

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

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

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

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

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

The vigilante justice of lynching was not confined to the South as is commonly believed, and race relations in the North, before and after the war, were seldom harmonious.  Black abolitionist Frederick Douglass thought his home in New York was surrounded by the spirit of Klansmen, perhaps attracted by his prewar militant activities which had brought on a war that claimed many Northern lives. Douglass fled to Canada after the State of Virginia wanted him extradited to stand trial as an accessory to John Brown; Brown met with Douglass prior to Harper’s Ferry.

Bernhard Thuersam, www.Circa1865.com

The Spirit of Hate in Rochester

“After his Rochester, New York, home was burned to the ground by incendiary on June 1, 1872, Frederick Douglass expressed his anger in his weekly New National Era: “Was it for plunder, or was it for spite? One thing I do know and that is, while Rochester is among the most liberal of Northern cities, and its people are among the most humane and highly civilized, it nevertheless has its full share of the Ku-Klux spirit . . . It is the spirit of hate, the spirit of murder.”

Race relations were often contentious in Rochester due in part to Douglass’s strong civil rights voice. By 1870, although Rochester’s African-American population was minute – just 427 out of a total population of 62,386 – racial tension, especially over employment, prompted concern by whites.

On Saturday, December 30, 1871, the [Rochester Daily] Union’s third edition published the city’s first report of the rape of an eight-year-old German girl by a black man after she had returned from a church event. News of the crime “spread like wild fire” after the child was returned to her parents. She had been brutally beaten but described her attacker to the police who began a frantic search for him.

Early Monday morning officers arrested William Edward Howard, and he was identified as the rapist by the girl at her home. Her father later “apologized to [a] reporter for not having killed the Negro when he was in the house.” Howard was not a stranger to the city’s police. In early 1871, he was arrested for voting illegally, and he served six months in jail. At the time of his arrest for rape, there was a warrant for his arrest for stealing from a local German woman.

Douglass’s son, Charles, who worked with his father on New National Era, wrote to his father on January 20: “That Howard boy was in my company in the 5^th Cavalry. He came to the regiment as a [paid] substitute, and asked to be in my Co. I had to tie him up by the thumbs quite often. His offence was stealing.”

Outside the jail an agitated mob assembled . . . composed mainly of Germans, was intent on taking the law into its own hands, and the jail became Howard’s fortress. The [Rochester Daily] Union’s reportage was most descriptive: “Threats were made to lynch him and matters looked serious . . . four or five hundred people in the assemblage . . . [and cries of] “kill the nigger, give us the nigger” were loud and frequent.” [Judge R. Darwin Smith pronounced] “The sentence of the Court is that you be confined to Auburn State Prison for the period of twenty years at hard labor. The law formerly punished your crime with death.”

At the prison entrance, Howard turned toward [an angry crowd of several hundred men] and with his free hand placed his thumb on his nose and waved his fingers to mock them. Once in jail, Howard renounced his guilty plea, and professed his innocence.”

(The Spirit of Hate and Frederick Douglass, Richard H. White, Civil War History, A Journal of the Middle Period, Volume 46, Number 1, March 2000, pp. 41-47)

Wartime Republican Lt. Gov. of Ohio, Benjamin Stanton, severely criticized Generals Grant, Prentiss and Sherman after the Battle of Shiloh, concluding that the first two should be court-martialed and shot. Massachusetts-born, Ohio Senator Benjamin Wade was a prewar Whig and one of the most radical of Republicans by 1861. However, they both were of the opinion in early 1861 that the American South’s independence should be recognized.

Bernhard Thuersam, www.Circa1865.com

“I am Disposed to Recognize That Independence”

“Mr. Speaker, when there were fifteen slaveholding States acknowledging allegiance to the Federal Government, and therefore, having in their hands the power to protect themselves against any invasion of their rights on the part of the Federal Government, it was a matter of very little consequence whether such an amendment as that was incorporated into the Constitution or not.

But the state of the country is now radically and essentially changed. Seven or eight States now deny their allegiance to this Government, have organized a separate Confederacy, and have declared their independence of this Government.

If they shall maintain their position, and sustain the authorities there for a year or two to come, so as to show that nothing but a war of subjugation and conquest can bring them back, I, for one, am disposed to recognize that independence.”

(Ohio Republican Lt. Governor Benjamin Stanton (Congressional Globe, February 23, 1861, page 1285)

“You Cannot Hold Men Forcibly in This Union”

“And Southern gentlemen stand here, and in almost all their speeches, speak of the dissolution of the Union as an element of every argument — If they do not feel interested in upholding this Union, if it really trenches on their rights, if it endangers their institutions to such an extent that they cannot feel secure under it, if their interests are violently assailed by means of this Union, I am not one of those who expect that they will long continue in such a Union.

It would be doing violence to the platform of the [Republican] party to which I belong.

We have adopted the old Declaration of Independence as the basis of our political movement, which declares that any people, when their government ceases to protect rights, when it is so subverted from the true purposes of government as to oppress them, have the right to recur to fundamental principles, and if need be, to destroy the government. I hold that they have this right.

I will not blame any people for exercising it, whenever they think the contingency has come. You cannot hold men forcibly in this Union, for the attempt to do so, it seems to me, would subvert the first principles of the Government under which we live.”

(Senator Benjamin Wade of Ohio, Congressional Globe, third session, 34th Congress, page 25)

There was only one “flush of patriotic enthusiasm” in the North after the war began, and Gen. Halleck advised Lincoln in early 1862 that enlistments had virtually ceased and few new volunteers were to be had. A new system of procuring troops was needed, and conscription was contemplated. States, cities and counties feared losing local men to the threatened draft, and therefore raised exorbitant amounts to buy substitutes and anyone who would take the money to fill Lincoln’s troop quotas. As the war wore on, higher bounties had to be offered to attract men.

Ohio’s Governor William Dennison reminded his constituents in mid-May 1861 that the federal government “offers a bounty of one hundred dollars to all who may enlist, payable at the close of service, or to the soldier’s family, if he should not survive.” Dennison was a Whig and Republican like Lincoln, with the latter rewarding him with the cabinet post of Postmaster General.

Bernhard Thuersam, www.Circa1865.com

Ohio Bounties Stimulate Enlistments

“An act of May 1, 1861, exempted from execution the property of any soldier in the militia of Ohio mustered into the service of the United States during the time he was in service, and fro two months thereafter. In February, 1862, the general assembly sought to protect citizen-soldiers charged with criminal offenses by providing that judges should postpone their trials until they were discharged. Still later, in March 1864, certain relief was given to debtors in the armed services who might have judgement rendered against them without defense . . .

After the first flush of patriotic enthusiasm had passed, one of the strong inducements to enlistment was a financial one – a bounty, and, at a later date, the advance of the first month’s pay. During the Civil War, bounties came from three sources – the federal government, local government units, and private subscription. (In Ohio there was no bounty offered directly from State funds.)

Indeed, as the provost marshal wrote, the federal bounty paled into “comparative insignificance” when compared to “the exorbitant bounties paid in advance by local authorities.” These, he believed, were the most mischievous in encouraging desertion, bounty-jumping and other evils connected with the system.

So great was the stigma of the draft that local authorities were highly competitive in the amounts offered to volunteers. Furthermore, they paid all the sum in advance. The primary objective of these payments, as [Provost Marshal] General [James B.] Fry put it, came to be “to obtain men to fill quotas.”

Localities began by offering moderate bounties. In 1862 the average local bounty in Ohio was estimated at $25; in 1863 in advanced to $100; in 1864 it bounded to $400; and in 1865 the average bounty was $500, although in some localities it was as high as $800.

The Hamilton County Board of Commissioners levied a tax of two mills in 1863 to take care of local bounty payments. The next year (1864), however, the city of Cincinnati began to borrow in order to offer city bounty payments, and during the year 1,811 volunteers were paid bounties of $100 each.

After the war the adjutant general of Ohio estimated that $54,457,575 had been paid in local bounties throughout the State, of which amount cities and counties paid about $14,000,000 and private subscribers, $40,457,575.”

(Relief for Soldiers’ Families in Ohio During the Civil War, Joseph E. Holliday; Ohio History, July 1962, Volume 71, Number 2, James H. Rodabaugh, editor, excerpts, pp. 98-100)

Sherman’s army occupied Savannah in late December, 1864 after Gen. William J. Hardee had evacuated his troops into South Carolina. Offshore and awaiting the occupation of the city by Sherman were US Treasury agents and others anxious to seize bales of cotton and other valuables for government or personal enrichment. In addition, presidential-aspirant Edwin M. Stanton presciently coveted the Negro vote in the South as Grant eventually did, and pretended concern for their future.

Bernhard Thuersam, www.Circa1865.com

Grabbing Pennies Off the Southern Corpse

“In making the rounds of the city [in late December, 1864, Sherman] was irritated to find that an agent of the [US] Treasury had arrived in the city ahead of him and seized a large stock of cotton there, estimated at 25,000 bales, later found to amount to 31,000 bales.

His chief annoyance . . . was from outside meddlers, agents from the North, the forerunners of the pestiferous army of carpetbaggers that swarmed into the South in the next few months and years. Some were sincere and fervent, but narrow-minded, zealots determined to impose salvation as decreed by the abolitionists upon the Negroes; many were greedy and unconscionable rascals bent upon seizing political power and grabbing the pennies off the Southern corpse.

[Sherman] . . . divined the developing purpose of the Radicals in Congress. It became apparent in the attitude suggested in hints let out here and there by the chief of the northern agents who descended upon Savannah while Sherman was there.

This was none other than Secretary of War Stanton, who hurried down by boat at the first opportunity to look the ground over. Stanton was fussy about many things, peeking here and there, prying, asking questions, seemingly deeply concerned about the Negro and his future, but in reality carefully measuring the political potentialities in this Southern tragedy, thus foretelling his action, a few months later, in joining the Radicals openly in their desperate and vicious Reconstruction program.

Sherman was most resentful when Stanton revealed his intention to quiz the Negroes about [Sherman’s] own policies . . . [and] witnesses upheld Sherman also in the firm policy he had adopted against recruiting Negroes for his army by State agents who rushed into Savannah and were trying to enlist Negroes right and left.

[Sherman] did not want to enlist any Negro soldiers, not only because of the bother of handling such unseasoned troops, but also because he had smarted under the taunts of Confederate General [John B.] Hood at Atlanta to the effect that the North had to use the South’s own Negro slaves to defeat the Confederacy.”

(The Savannah, More Than the Story of a River, Thomas L. Stokes, University of Georgia Press, 1951, excerpt, pp. 285-288)

Longtime-Democrat and early critic of Lincoln, Edwin M. Stanton, was appointed attorney general during the cabinet crisis by President James Buchanan in December 1860, though at the same time hobnobbing with Charles Sumner and other influential radical Republicans. As noted below, Stanton saw Negro emancipation as a weapon of war rather than a humanitarian policy — in truth a copy of British Lord Dunmore’s emancipation proclamation of 1775, and British Vice Admiral Sir Alexander Cochrane’s similar edict in 1814. All were aimed at inciting race war, denying the South its agricultural workers, and attracting black soldiers to be military laborers or cannon fodder.

Bernhard Thuersam, www.Circa1865.com

Impaling the South’s Agricultural Economy

“Crusades, like politics, sometimes make strange bedfellows. Few antislavery Radicals in 1860 would have guessed that a member of Buchanan’s cabinet, an outspoken critic of Lincoln and the Republican Party, would become, by 1862, a valuable and enthusiastic ally. But then, few men ever were ingenious enough to predict the course Edwin M. Stanton might follow from one day to the next. Even today it is difficult to assess the degree of Stanton’s Radical Republicanism.

Although he had been a Democrat since his college days and had served in a Democratic cabinet . . . He was in complete sympathy the Radical’s demands for a vigorous prosecution of the war and for the emancipation and military employment of Negro slaves. Yet, he never committed himself clearly to the economic program of the Republican Party: the high tariff, the Homestead Act, national banking, and a sound currency.

Though he used the considerable power of the War Department to aid Republican candidates in wartime elections, he used it also to benefit War Democrats, many of whom could never quite believe that he had really deserted the old party.

Stanton, then, was a true Union man, a partisan of any politician who believed, as he did, that the Southern Confederacy was a conspiracy of traitors and that total war was necessary to destroy it. In his hands, emancipation and the military use of Negroes became weapons of war.

Seldom did he consider the long-term implications of the war; his concern centered on the immediate task of defeating the Confederacy with every means at hand. But he had the prescience enough to realize that emancipation, though it would eliminate the problem of slavery, would at the same time create the problem of the freed Negroes. Impetuous and forceful, Stanton could not sympathize with Lincoln’s cautious approach to the problem.

[Horace Greely prophetically predicted that under Stanton], “no General or other officer of the army will more than once return a fugitive slave.” [Stanton’s predecessor, Simon Cameron in his final report stated:] “Can we afford to send them forward to their masters to be by them armed against us, or used in producing supplies to sustain the rebellion?”

Stanton recognized in the Radicals the strongest single bloc in Congress, a group to be cultivated and respected [as they had] worked hard to put him in the War Department.

It was [then] easy for the Radicals to demand publicly a war policy which would include emancipation and the military use of freed Negroes. [General David Hunter was rebuked by Lincoln for arming Negroes and Stanton publicly denied any responsibility, but] General Hunter’s subordinates charged later that Stanton had expressly authorized the action and that he had furnished guns and uniforms for the troops.

In spite of the Hunter affair, and without the President’s consent, he had tolerated isolated instances of using Negroes as soldiers . . . and few obstacles impeded the secretary’s policy of enlisting and arming the fugitives. The entire structure of slavery, he believed, could be transformed from a bulwark of the South agricultural economy into a weapon on which to impale its defenders.

“The power of the rebels rests upon their peculiar system of labor,” he insisted, and it was the duty of the Union to strike down that system, to “turn against the rebels the productive power that upholds the insurrection.” Next to the armed might of the Union, he considered the Emancipation Proclamation, with its military implications, the strongest weapon in the Northern arsenal.”

(Blueprint for Radical Reconstruction, John G. Sproat, Journal of Southern History, Volume XXIII, Number 1, February 1957, excerpts, pp. 25-29, 31-33)

As the Northern armies spread across the Confederacy, newspaper reporters following them sent observations and stories northward. The result was predictable as they wrote of an evil land and emphasized any unfavorable aspects of Southern civilization. In the last year of war, the United States government refused prisoner exchanges while Jefferson Davis and Robert E. Lee pleaded in vain for the starving men in blue held in Southern prisoner of war camps to be saved by their own leaders.

Bernhard Thuersam, www.Circa1865.com

Shaping Northern Opinion Against the South

“[The] years from 1865 to 1880 were dreary years in which there was no peace. The war had only ended on the battlefield. In the minds of men it still persisted. Memories of the past and issues living in the present combined to perpetuate and perhaps enlarge the antagonism that victory and defeat created. One observer made the comment that “it was useless to preach forgiveness and good will to men still burning with the memory of their wrongs.”

Deeply [engraved] on the Northern heart was the conviction that the Confederacy had deliberately mistreated the prisoners of war captured by its armies. The Southern prisons . . . were at best what one Confederate surgeon described as a “gigantic mass of human misery.”

A war-crazed [Northern] public could not dissociate this suffering from deliberate intent of the enemy. Rather it fitted the purposes of propaganda to attribute the barest motives to the Confederates [that] “there was a fixed determination on the part of the rebels to kill the Union soldiers who fell into their hands.” The great non-governmental agencies of relief and propaganda contributed to the spread of similar impressions.

Northern opinion was thus rigidly shaped in the belief that “tens of thousands of national soldiers . . . were deliberately shot to death, as at Fort Pillow, or frozen to death as at Belle Island, or starved to death as at Andersonville, or sickened to death by swamp malaria, as in South Carolina.”

Horror passed into fury and fury into a demand for revenge. And the arch-fiend of iniquity, for so the North regarded him, Major Henry Wirz, was hanged as a murderer [in November 1865] . . . he was the scapegoat upon whom centered the full force of Northern wrath.

Meanwhile the South had no effective way of meeting these charges of brutality [though] it is not difficult to find, however, material in these years that the South received the Northern charge with sullen hatred.

Typical is an article contributed to the Southern Review in January 1867:

“The impartial times to come will hardly understand how a nation, which not only permitted but encouraged its government to declare medicines and surgical instruments contraband of war, and to destroy by fire and sword the habitations and food of noncombatants, as well as the fruits of the earth and the implements of tillage, should afterwards have clamored for the blood of captive enemies, because they did not feed their prisoners out of their own starvation and heal them in their succorless hospitals.

And when a final and accurate development shall have been made of the facts connected with the exchange of prisoners between the belligerents, and it shall have been demonstrated . . . that all the nameless horrors [of both sides] were the result of a deliberate and inexorable policy of non-exchange on the part of the United States, founded on an equally deliberate calculation of their ability to furnish a greater mass of humanity than the Confederacy could afford for starvation and the shambles, men will wonder how it was that a people, passing for civilized and Christian, should have consigned Jefferson Davis to a cell, while they tolerated Edwin M. Stanton as a cabinet minister.”

(The Road to Reunion, 1865-1900, Paul H. Buck, Little, Brown and Company, 1937, excerpts, pp. 45-48)

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)