Circa1865

Shortly after the Bolshevik revolution and consolidation of power in Russia came the Great Depression and the opportunity for a charismatic American politician to introduce his own version of a planned economy, fiat money and social programs funded by deficit financing.

American Welfare State  

“My father was a true liberal as it was defined prior to World War II. He was also a highly regarded and respected liberal, in the forefront of his profession of journalism. At that time, most of those in the newspaper field were staunch supporters of the Constitution as originally adopted; that is, they believed that the role of the federal government was quite limited. And they also believed in the free enterprise system. There were few leftists in their midst.

Since then the term “liberal” has undergone a radical change in meaning, and now means almost the reverse of what it meant when my father was practicing his profession before World War II. Under the present-day meaning of the word “liberal” my father would now be called a conservative. In addition to his strong views about the superior qualities of the free enterprise system and the need for a diminished role for the federal government, he was a firm believer in high standards of morality for the family, and for the communities in which the families lived and raised their children.

In his later years he was subject to heavy criticism, much of it slanderous, but I never heard anyone questioning his integrity. In his search for the truth as a journalist, he had great respect for all obtainable facts and information required for reaching judgmental decisions.

The passage in 1913 of the Constitutional Amendment to tax income greatly increased the power of the federal government to control and regulate the economy, but the exercise of this power was quite modest until the New Deal and World War II. This power, together with the gigantic demands of the war, resulted in an enormous involvement of the federal government in the total economy of the nation.

And with it came much more sympathy by the general public and the media for socialistic and planned governmental programs. Support for these programs also prospered in colleges, universities, and religious groups. The Welfare State was beginning to get a firm foothold on our shores.”

(Forgotten Lessons: Selected Essays of John T. Flynn, Gregory P. Pavlik, editor, Foundation for Economic Education, Inc., 1996, excerpt pp. v-vi)

To underscore the following excerpts, author George Thayer states that “We live in an age of weapons. Never before in the history of mankind have weapons of war been so dominant a concern as they have been since 1945.” Thayer writes that after the second war to end all wars, the US “had given away $48.5 billion worth of arms and military supplies to 48 nations.” One of these was the Soviet Union of Josef Stalin, who Roosevelt had armed to the teeth and who immediately became the US’s postwar primary adversary.

Prosperity Through Armaments

“In the twenty-four years since 1945, there have been fifty-five wars of significant size, duration and intensity throughout the world. This means that mankind faces a new and violent conflict somewhere in the world slightly more often than once every five months, any one of which is capable of provoking a holocaust.

If one adds to this total all the coups, large-scale riots and clashes of unorganized, low-order violence, then the total of postwar cases of armed conflict that have had significant impact on the course of history would number in excess of fifteen score – more than one per month.

Today we are far along the way to losing our sense of proportion, for by any definition many of these wars have been quite large. For instance, bombing tonnage in the Korean War exceeded all the tonnage dropped by the Allies in the Pacific Theater of World War II. In the “small” six-day Sinai War of 1967, more tanks were committed to battle than by the Germans, Italians and Allies together at the crucial twelve-day battle of El Alamein in 1942. And from July 1965 to December 1967, more bomb tonnage was dropped on Vietnam than was dropped by the Allies on Europe during all of World War II.

Consider some of the political consequences that today’s arms trade have produced:

The fall of Germany’s Erhard government in 1966 can be blamed in large part on Bonn’s purchases of American military equipment which it could not afford and did not need.

The cancellation of the Skybolt missile by the United States in 1962 was one of the contributing factors that led to Prime Minister MacMillan’s resignation in 1963.

The Pakistan-India War of 1965, in which American equipment was used on both sides, produced two results adverse to United States interests: it forced Pakistan to take a more neutral position in world affairs, and it forced India to consider manufacturing nuclear weapons.

Had there been no large infusion of American weapons into the area (ostensibly as a defense against communism), the war would not have taken place.”

(The War Business: The International Trade in Armaments, George Thayer, Simon and Schuster, 1969, excerpts pp. 17-21)

“It is amazing how otherwise intelligent people still imagine that, in our complex modern society, public order can be maintained by having certain elementary rules of conduct appropriate to simple rural communities followed by millions of individuals.

These latter are in fact grossly unequal in economic power, and each individual, or legal person, including the billion-dollar corporation, is left free to interpret the Constitution for himself, and to hire as many lawyers as his means will allow to champion through endless litigation his particular interpretations.

Only the lush opportunities of the opening of the earth’s largest and richest area for appropriation and settlement could furnish enough to be grabbed off by almost everyone to make it possible to maintain public order under such a regime, which Thomas Carlyle once characterized as anarchy plus a constable.

I find the ideal of a classless, stateless, government-less society of workers enjoying social order and material abundance fantastic and unattainable.  It appears unattainable for the reason that social order requires government and administration by a ruling class or power-exercising class which must always be an aristocracy of management, however selected, operating through some set of mechanisms of social control, economic as well as political.

There is something vicious in the wish to impose on future generations our scheme of values. The egotistical wish to define the values of future generations is common both to liberal constitutionalists and the communist believers in the classless society of the future. What right or logical reason can we possibly have to take it for granted that our values or ideals will be acceptable to future generations or appropriate to their material situation?

Only the belief that we have received a revelation of eternal truth can rationalize such a pretentious assumption.”

(The Coming American Fascism: The Crisis of Capitalism, Lawrence Dennis, Harper & Brothers, 1936, excerpts pp. 4; 7-8)

The feudal lord of the manor mentioned below could have been European, Asian, Arab or African owners of serfs or slaves.  A North German serf in Mecklenburg belonged to and worked the land of his lord, owning little more than his clothes and cooking utensils. But he and other serfs were essential to the lord for agricultural production, as in the American South and elsewhere in the world, and thus could not be abandoned.  

Feudal Lords, Modern Capitalists and The Dole

“The feudal lord of the manor was quite as much a property owner as the millionaire under modern capitalism. He had property rights in the tools of production, and often directed the processes of production. But unlike the man of property under modern capitalism, he could never make a decision in respect of his property rights, one of the results of which, would be widespread unemployment and destitution, for, as a practical matter, he could not expel the serf from the land or deny him the use of the land and some elementary capital for the production of food, shelter and clothing.

Modern capitalism is the first important system of property rights to allow property owners to make decisions which result in large scale unemployment. The much vaunted freedom of modern capitalism is largely a matter of the freedom of property owners from social responsibility for the consequences of their economic choices.  It is a matter of the freedom of property owners not to invest their savings if the profit incentive is not considered sufficient.

To say that it is also a matter of the freedom of the worker to abstain from work is to utter a shallow mockery of human necessity. The rich man is, in a practical sense, free to withhold his savings from investment. The poor man is never free in any but a legal sense and absurd sense to withhold his labor from the highest bidder, however low the bid, if, as the principles of sound capitalism require, so to withhold his labor is to starve.

At the present time, one of the fundamental rules of sound capitalism is being violated by the payment of the dole, which prevents a man from starving and thus enables him to withhold his labor from the highest bidder if the bid is not materially higher than the amount obtainable from the dole.”  

 (The Coming American Fascism: The Crisis of Capitalism, Lawrence Dennis, Harper & Brothers, 1936, excerpt pp. 22-23)

Early in the war and with displaced black people migrating northward threatening white northerners jobs, Midwest Republicans proposed the use of federal power to insure that the freedmen would remain in the South, suggesting “that the blacks be colonized in Florida, or placed in the Indian territories of the southwest, or apprenticed on confiscate plantations, or restrained and employed in the South by the government.” Senator Doolittle below was Chair of the Senate Indian Affairs Committee 1861-1866, and carried out the hanging of 38 Sioux in 1862.  

A National Characteristic

Senator [James R.] Doolittle, leading advocate of colonization in the Senate, explained, “The question of race is a more troublesome one than the question of condition [slavery] in the truth.” In August of 1862, President Lincoln reminded a group of colored men that the broad “physical difference” between the two races is “a great disadvantage to us both, as I think your race suffer very greatly, many of them by living among us, while ours suffer from your presence.”

They were just as sure that anti-Negro prejudice was a national characteristic which would not be dispelled by universal emancipation, as some abolitionists thought it would.

A House committee, headed by Albert S. White, an Indiana Republican, endorsed emancipation and colonization, and reported that a belief in the inferiority of the Negro was “indelibly fixed upon the public mind . . . There are irreconcilable differences between the two races which separate them, as with a wall of fire . . . [The] Anglo-American never will give his consent that the Negro, no matter how free, shall be elevated to such equality.” Genuine concern for the welfare of the Negroes, as well as racial antipathy, nourished the deportation movement.

Republican colonizationists knew well that all men aspired to equality, and they truly sympathized with the condition of the Negro, free or slave. They urged – since history and the evidence on every hand indicated that white Americans would not admit black men to full equality – that emancipation be accomplished by the voluntary resettlement of the freedmen in foreign lands where they could enjoy equal rights and govern themselves. Such a course would benefit both races, they said. The whites would profit from the departure of an alien people; the blacks would escape from domination and oppression.”

(Free But Not Equal: The Midwest and the Negro During the Civil War, V. Jacque Voegeli, University of Chicago Press, 1967, excerpts pg. 23)

The Republican party was responsible for creating “unsound money” with its infamous greenbacks, despite a constitutional provision that all money be gold or silver; civil service reform was anathema as much of their power came from political appointees and the selling of government positions in exchange for party support.

On the issue of Chinese immigration, the Republicans passed the Page Act of 1875 which banned the immigration of Chinese women – fearing they might give birth to children in the US.

In 1878, a Republican-dominated Congress proposed a ban on Chinese immigration, though vetoed by President Rutherford B. Hayes. In 1879, California adopted a new constitution which explicitly authorized the State government to determine who would be allowed to reside in the State, and banned Chinese people from employment by corporations, plus State and municipal government.

Had any Southern State adopted a constitution authorizing State government to determine who could reside within its boundaries, blue-clad troops would reappear to overthrow that State government.

Republicans Pacify the South and Expel Mongolians

“The Republican National Convention was called to order by national committee Chairman Edwin D. Morgan of New York promptly at noon on Wednesday, June 14 [1876]. The site was Exposition Hall, at Elm and Fourteenth Streets – the same building which had been the scene of the Liberal Republican revolt against Grant in 1872.

Consideration of the platform [resulted in] a tepid document that declared the United States “a nation, not a league,” congratulated Republicans for saving the Union, promised “speedy, thorough and unsparing” prosecution of corrupt public officials, opposed polygamy and sectarian interference with the public schools, and called for “respectful consideration” of demands for women’s suffrage.

One plank deprecated all appeals to sectional feeling and abominated Democratic hopes for a “solid South,” whereas another pledged anew the party’s sacred duty – eleven years after Appomattox – to achieve “permanent pacification of the Southern section of the Union,” and a third charged the Democratic party with “being the same in character and spirit as when it sympathized with treason.”

The platform contained a firm endorsement of sound money and a wonderfully evasive stand on civil service reform . . . The only plank that stirred controversy was the eleventh: “It is the immediate duty of congress [to] fully investigate the effect of immigration and importation of Mongolians on the moral and material interests of the country.”

Edward L. Pierce of Massachusetts objected bitterly: “The Republican party this year, this centennial year, is twenty years old . . . and this is the first time in all that long period that any attempt has ever been made to put in its platform a discrimination of race.”

The eleventh section was retained, nevertheless, on a roll call vote of 532 to 215, and the entire platform was “unanimously adopted” on a voice vote.”

(The Politics of Inertia: The Election of 1876 and the End of Reconstruction, Keith Ian Polakoff, LSU Press, 1973, excerpts pp. 58-61)

In early March 1861, the new Confederate States government adopted a virtual free tariff, which quickly brought Northern merchants to their economic senses. Moses Kelly of the US Department of the Interior overheard many Southerners state that Southern ports planning direct trade with Europe “promised to deprive northern merchants of their position as middlemen and to eject northern manufacturers from the southern market in favor of European competitors.”

Further, the Philadelphia Press asked rhetorically: “If South Carolina is permitted to establish a free port with impunity, and to invite to her harbor all the ships of foreign nations, would not disaster in that event fall upon all our great northern interests?” It accurately predicted “an early reawakening of the Union sentiment in New York.” Thus true reason for total war against the South and destruction of her economic base was clearly revealed.

“Force of a Most Formidable Character”

“[By March 1861] it was evident that northern businessmen had carefully measured the consequences of disunion and the collapse of central authority and decided that they were intolerable. They had called for appeasement, but when that failed they were soon reconciled to the use of force.

Many of them concluded that property had received about as much damage from the crisis as it could, that “no new phase which the [secession] movement may take can have any further effect.”

Stocks had reached their lowest average quotations in December when the government seemed weakest, and even the approach of war failed to depress them that much again. As one commercial writer saw it, business was already suffering “all it could from a state of actual war.” And when war finally came the northern men of property united behind Lincoln to save the Union and restore the prestige of the national government.

When Yankee capitalists finally endorsed the use of military force against secessionists, they accepted the final remedy for a solemn threat to their property and future profits. Inevitably the holders of government securities looked upon disunion as a menace to their investments.

One conservative nervously declared: “So long as the right of secession is acknowledged, United States bonds must still be denounced as entirely unsafe property to hold . . .” To permit States to leave the Union at will, he warned, would mean that the “United States stocks are really worth no more than old Continental money.” With this in mind, when another government loan was offered in January, an observer shrewdly predicted: “Every dollar [New] York takes binds her capitalists to the Union, and the North.”

A basic tenet of the northern middle classes was that the value of property depended upon political stability. In effect, secessionists had made an indirect attack upon the possessions of every property holder. They had invited property-less Northerners, the revolutionary “sans culottes,” “the unwashed and unterrified,” to precipitate the country into “rough and tumble anarchy.” This “social and moral deterioration” might easily infect the lower classes with the radical idea “that a raid upon property can be justified by the plea of necessity.”

Conservatives looked apprehensively at the “immense foreign element” in northern cities and feared that revolution was “nearer our doors than we imagine.” From these recent immigrants could come the mobs to set aside all law and order and, with “revolver and stiletto,” sink the nation “into confusion and riotous chaos.” The only alternative, it was repeatedly argued, was to enforce respect for the Federal government everywhere.

[Northern] businessmen gradually became convinced that Southern independence would be almost fatal to northern commerce. American maritime power in the Caribbean and Gulf . . . would vanish . . . exclude the North from their trade . . . Even trade with the Pacific would be at the mercy of the South.

The northern monopoly in the coasting trade was a further casualty of the disunion movement. Vowing that he had “an interest and proprietorship in the Union of all these States,” [a] New Yorker concluded that secession would have to be checkmated by “force of a most formidable character.”

(And the War Came: The North and the Secession Crisis, 1860-1861 Kenneth M. Stampp, LSU Press, 1950, excerpts pp. 223-230)

New England rum and Yankee notions were exchanged for African slaves as Boston and Newport rivaled each other for slave trade prominence in the early 1700s. Annually, about 1800 hogsheads of rum were traded to African tribes for their slaves, and this left little for consumption in the colony.

From this profitable trade in human merchandise, “an opulent and aristocratic society” developed in Newport; Col. Thomas Hazard of Narragansett and Mr. Downs of Bristol “were names that loomed large in the commercial and social registers of that day. Their fortunes were accumulated from the slave trade.”

It is worth noting that had there been no transatlantic slave trade carried on by the British and New Englanders, the American South would have had no peculiar institution.

Greatest Slave Carriers of America

“The growth of Negro slavery in New England was slow during the seventeenth century. In 1680, there were only 20 slaves in Connecticut, two of whom had been christened. In 1676, Massachusetts had 200 slaves . . . in 1700 Governor Dudley placed the number at 550, four hundred of whom were in Boston.

In 1730, New Hampshire boasted of but thirty slaves. The Eighteenth Century, however, saw the rise of the New England colonies as the greatest slave-carriers of America. Quick to see the unprofitableness of the Negro slaves as a laborer in such an environment, when the price of a slave was greater than the labor returned, the ingenious Yankee soon found a market in the West Indies for slaves, exchanged for rum, sugar and molasses on the Guinea Coast.

Massachusetts early assumed a commanding position in this trade. The ports of Boston and Salem prospered especially. Their merchants carried on a “brisk trade to Guinea” for many years, marketing most of their slaves in the West Indies.

Peter Faneuil, whose “whole lineage in held in peculiar honor” in Boston, was typical of the many comfortable fortunes amassed from the profits of this traffic. The name Jolley Bachelor, which was carried by one of his ships engaged in the slave trade, typifies the spirit of the time in regard to this profitable business.

As opulence increased, the number of slaves grew proportionately. In 1735, there were 2,600 Negroes in Massachusetts; in 1764 the number had increased to 5,779. In 1742, Boston alone had 1,514 slaves and free Negroes, the number having almost quadrupled in about forty years.

[In 1696] the brigantine Sunflower arrived at Newport with forty-five slaves. Most of them were sold there at thirty to thirty-five pounds a head; the rest were taken to Boston for disposal.

Subsequently, however, the slave trade of Rhode Island outstripped that of Massachusetts. Governor Wood, early in the Eighteenth Century, reported that the colony had one hundred and twenty vessels employed in the trade. Newport rivaled Boston as New England’s premier seaport. It had twenty or thirty stills going full blast to supply rum for the African trade.”

(Slave-Holding in New England and Its Awakening, Lorenzo J. Greene; Journal of Negro History, Vol. XIII, Number 4, October 1928, Carter G. Woodson, editor, excerpts pp. 495-497)

The northeastern United States of the late 1820s were sufficiently prosperous to have a large group of “substantial citizens” . . . manufacturers and journalists interested in the cause of domestic industry, and their purpose was to influence the passage of a new tariff act.” For the most part these men were industrialists and focused on increased profits, not national stability.

The South was in economic distress at the time and the new, higher tariff “seemed to end once and for all any prospect of relief, and many [Southerners] were ready for outright rebellion, even as New England had been in 1814.”

For South Carolina to nullify a federal law it viewed as obnoxious and injurious to its citizens, was a full expression of the Tenth Amendment — inserted into the Constitution for an obvious purpose. The next logical step of an injured State would be peacefully withdrawing from a political union which no longer fulfilled the purposes for which it was formed. And if withdrawal was met with violence, revolution was next.

The American Right of Revolution

“Controversial as Nullification was in the absence of original records before 1828-1833, Americans still continued to believe in federalism and States’ rights. In the words of Alexander Johnston, “Almost every State in the Union in turn declared its own sovereignty and denounced as almost treasonable similar declarations by other States.”

Herman V. Ames in fact compiled a “collection of documents on the relation of the States to the Federal Government” in 1911. They were “selected especially,” he observed, “with a view to illustrate the development of the “compact theory” of the Constitution and the doctrine of “State Rights,’ State opposition to the Federal Judiciary, and the different phases of the slavery controversy, culminating in the secession movement.”

That we believe otherwise today, in Nullification’s unconstitutionality and [John C.] Calhoun’s and the South’s apostasy from the beliefs of the founders and framers, is explained by another and longer era of historical amnesia by which original intentions as described herein in length were not so much forgotten as between 1789 and 1819, but purposely misinterpreted both to nullify the Nullifiers of South Carolina and to establish a mythical history for a new nation in the making that was the central development of the years after the War of 1812 and until the Civil War.

While this more liberal-democratic-egalitarian-nationalist America was yet inchoate as the confused politics of the 1820s and 1830s inform us, it was there nonetheless in Jacksonian Democracy and nationalism and radical abolitionism which were, it is forgotten, minority movements. The union of the States persisted with the 18th century Whig-republican ideology still extant as the core set of beliefs within the misnamed Democratic party that was really republican with a small “r.”

The liberal-in-a-neo-Hamiltonian sense-Whigs of the 19th century co-existed long enough to make party politics interesting and popular and the preserve the old union of the States. If not republicans, most Americans before the Civil War remained at least federalists. Nullification may have come and gone, but the “right of revolution” continued to be accepted as an original intention and the ultimate means to preserve liberty.”

(Nullification, A Constitutional History, 1776-1833, Volume II: James Madison and the Constitutionality of Nullification, 1787-1828, W. Kirk Wood, University Press of America, 2009, excerpts pg. 105)

The American Confederacy’s leadership exploited Northern war-weariness in 1864 by sending agents and money to Canada to open a northern front, increased its destruction of New England’s merchant fleet, and work toward Lincoln’s political defeat in November 1864.

Confederate commerce raiders effectively destroyed the North’s merchant shipping as it caught, burned or sunk hundreds of vessels, made future merchant voyages uninsurable, and forced the North to transfer goods to foreign ships for safety. The CSS Shenandoah of Captain James Waddell targeted New England’s whalers, capturing or sinking 38 vessels in one year.

It is noteworthy that Confederate overseas agent James Dunwoody Bulloch’s half-sister Martha was the mother of Theodore Roosevelt and grandmother of Eleanor Roosevelt.

Turning New England’s Mind to Thoughts of Peace

“Ironically, however, the very success of the Florida, the Alabama and other Confederate cruisers had added one more dilemma to those confronting Bulloch: toward what end would any new raiders be directed?

Earlier cruisers, after all, had succeeded beyond the Confederates’ wildest expectations. Writing to [Secretary of the Navy Stephen] Mallory the previous February [1864], Bulloch had reported, “There really seems nothing for our ships to do now upon the open sea.”

Even in the Pacific, passing mariners noticed a conspicuous absence of US ships. As one correspondent wrote, “The master of a French ship reported not one [Northern] ship at the Guano Islands off Peru, where in 1863, seventy or eighty had waited impatiently for their profitable cargoes.”

By early spring, however, Mallory had a new target in mind. That March, in a letter to Bulloch, he proposed redeploying existing commerce raiders and acquiring new ones for a concerted assault on New England’s globally-dispersed fishing and whaling fleet. The Alabama, the Florida, and other raiders had already made sporadic attacks on New England’s whaling vessels operating off the Azores and other Atlantic islands; likewise, there had been raids on fishing schooners off the New England coast.

What Mallory now envisioned was something on a grander scale. By driving up operating costs and insurance rates for New England’s fishing and whaling industries, he believed, the Confederate Navy would render the region a powerful lobby in Washington devoted to ending the war.

As he put it, “The simultaneous appearance of efficient cruisers on the New England coast and fishing banks, in the West Indies and South Atlantic, in the Pacific among the whalemen, and in the East Indies, would have a decided tendency to turn the trading mind of New England to thoughts of peace.”

(Sea of Gray: The Around-the-World Odyssey of the Confederate Raider Shenandoah, Tom Chaffin, Hill & Wang, 2006, excerpts pp. 24-25)