Circa1865

Wilmington, North Carolina’s St. James Parish was violated and ransacked twice in eighty-five years by foreign invaders, first in 1780. In 1865, Rector Dr. Alfred A. Watson wrote Northern General Hawley, demanding his church back and citing it as an infringement on the great Constitutional principle of religious freedom. Dr. Watson refused Hawley’s order to offer prayers for Abraham Lincoln, stating that “Because to ask it of me is to ask me to mock my Maker. What is proposed is not to restrain the Church from uttering prayers hostile to the government, but to require the Church to offer prayers specifically in its favor.”

Bernhard Thuersam, www.Circa1865.com

Vandals Pickaxe the Pews Again

“After the capture of Wilmington this venerable church, established in 1738, was seized by order of General Hawley for a military hospital, and in giving an account of it the rector, Dr. Watson (afterward Bishop of the Diocese) reported to the Diocesan Convention of 1866 as follows:

“This was not the first calamity of the sort in the history of the Parish Church of St. James. In 1780, during the occupation of Wilmington by British troops the church was stripped of its pews and furniture, and converted, first into a hospital, then into a blockhouse, and finally into a riding school for Tarleton’s dragoons.

In 1865 the pews were once again torn out with pickaxes . . . There was sufficient room elsewhere, more suitable for hospital purposes. Other hospitals had to be emptied to supply even half the beds in the church which were indeed, never more than half filled.”

(Some Memories of My Life, Alfred Moore Waddell, Edwards & Broughton, pp. 58-59)

Lincoln instituted a national banking system which “developed into something that was neither national nor a banking system” and more represented a loose organization of currency factories “designed to . . . [serve] commercial communities and confined . . . almost entirely to the New England and Middle Atlantic States.” This system was more concentrated in New York and fraught with abuses, and superseded by the even more abusive Federal Reserve Act of 1913.

Bernhard Thuersam, www.Circa1865.com

The Anticipated Profits of Next Year’s Pay Checks

“July 3, 1930

Mr. McFadden: “Mr. Speaker and gentlemen, time and events have arrived at a point where we should no longer deceive ourselves concerning the business situation. Continued statements of unfounded optimism will have only an unhappy effect upon the minds of millions of our citizens who are now unemployed and who, in the circumstances, must continue to be unemployed for many months to come. The economic condition in which we find ourselves is too sustained and deeply seated to be met by pronouncements that it does not exist.

Let us face the truth – that we and the world are undergoing a major economic and business adjustment which is and will be both drastic and painful. These consequences will be particularly severe in the United States, because they will force many people to recede from the standards of living and expenditure attained during the past 14 years.

Some part of this condition is the natural consequence of the operation of basic economic laws which function with little regard for human legislation. A large part is due to mismanagement of our national affairs. A still larger part is due to a deliberately contrived and executed program which has as its object the impoverishment of the people of the United States.

The end of the World War found us with a greatly expanded industrial and credit structure, to large, by far for the requirements of our national needs as the latter existed before the beginning of the war period of abnormal consumption. It was clearly a time to halt and to analyze fundamental economic facts. We did not do this.

Rather we chose to proceed with our abnormal production and to stretch the limits of credit still further. War production and its profits had made Americans drunk with power, and ambition for more power. Luxuries developed in the disorganization of war became necessities with the reestablishment of peace.

The American peop0le entered upon a decade in which the whole structure of their lives was to be passed upon the principle of discounting the future. A vast system of installment credit sprang into life almost overnight, aided by the optimism of the Federal Reserve system. The automobile industry expanded more rapidly and to greater size than any industry had expanded in history.

The public was encouraged by advertising and propaganda to buy beyond its immediate means. Further industrial expansion was financed by the same expansion of credit which made installment buying possible. Consumption was expanded and financed upon the consumer’s promise to pay and production was expanded upon by capitalizing the producer’s hope that the consumer would keep that promise.

In the period between 1920 and the present time we experienced the full use and purpose of the credit machinery built up with the Federal Reserve system. It was but a logical development that anticipated profits should be capitalized as anticipated production and consumption had been capitalized – and that the Federal Reserve system should in turn finance tis capitalization of anticipated profits.

The entry of millions of Americans of moderate means into stock-market speculation [was] a natural consequence of the policy of expansion to which we had committed ourselves. It was also a logical development that the Federal Reserve should expand broker’s loans to make possible a huge inflation of the business of speculating in securities on margins.

All this brought the country to a point where the individual was living beyond his personal means, buying more than he could afford on his hope that he could afford to pay for it in the future and then speculating in the hope that he could make enough profit to pay his debts when they came due. In brief, the greater part of the American business structure was built upon the anticipated profits of next year’s pay checks.”

(Basis of Control of Economic Conditions, the Collective Speeches of Congressman Louis T. McFadden, Omni Press, 1970 pp. 64-66)

Congressman Louis T. McFadden of Pennsylvania was Chairman of the House Banking and Currency Committee in 1932, and a staunch opponent of the Federal Reserve. Along with Congressman Charles A. Lindbergh, Sr. he fought the Federal Reserve Act in 1913 and conducted one of the first investigations of the banking and money trust in Congress. The path to the Federal Reserve act began with Lincoln who admitted that “as a result of the war, corporations have been enthroned and an era of corruption in high places will follow and the money power of the country will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in the hands of a few and the Republic is destroyed.” Lincoln destroyed the Republic with war, invasion, fiat money and the marriage of business and government.

Bernhard Thuersam, www.Circa1865.com

McFadden and the Federal Reserve

“Friday, June 10, 1932

Mr. McFadden: Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve banks. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt.

This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.

Some people think the Federal Reserve Banks are United States Government institutions. They are not Government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.

In that dark crew of financial pirates there are those who would cut a man’s throat to get a dollar out of his pocket; there are those who send money into States to buy votes to control our legislation; and there are those who maintain an international propaganda for the purpose of deceiving us and of wheedling us into the granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.

Those 12 credit monopolies were deceitfully and disloyally foisted upon this country by bankers who came here from Europe and who repaid us for our hospitality by undermining our American institutions. Those bankers took money out of this country to finance Japan in a war against Russia.

They created a reign of terror in Russia with our money in order to help that war along. They instigated a separate peace with Germany and Russia and thus drove a wedge between the allies in the World War. The financed Trotsky’s mass meetings of discontent and rebellion in New York. They paid Trotsky’s passage from New York to Russia so that he might assist in the destruction of the Russian Empire.

They fomented and instigated the Russian revolution and they placed a large fund of American dollars at Trotsky’s disposal in one of their branch banks in Sweden so that through him Russian homes might be thoroughly broken up and Russian children flung far and wide from their natural protectors. They have since begun the breaking up of American homes and the dispersal of American children.”

(Collective Speeches of Congressman Louis T. McFadden, Omni Press, 1970 pp. 298-299)

The victorious North installed a native proconsul in 1865 to rule North Carolina, who acceded to the various constitutional fictions emanating from the radical Northern Congress. That proconsul acted as if no military overthrow of free government had taken place in his own State, and committed treason by adhering to the enemy. North Carolina and the South were ruled by “Vichy” regimes emanating from Washington, as France later be ruled from Berlin.

Bernhard Thuersam, www.Circa1865.com

Vichy Rule in North Carolina

“In obedience to the proclamation of Provisional Governor [William] Holden, the State Convention met at noon on Monday, the 2^nd instant [2 October 1865]. The permanent President is Honorable E.G. Reade, of Person County. He is regarded as one of the best jurists in the State, was a Whig and an opponent of secession and State rights, and is now provisional judge of the eighth circuit by appointment of the Governor.

The Governor’s message came in on the second day. He takes it for granted that the Convention will recognize the abolition of slavery, provide that it shall not be re-established, and submit the amended Constitution to a vote of the people. [Governor Holden stated:]

“North Carolina attempted, in May 1861, to separate herself from the Federal Union. This attempt involved her, with other slaveholding States, in a protracted and disastrous war, the result of which was a vast expenditure of blood and treasure on her part, and the practical abolition of domestic slavery. She entered the Rebellion a slaveholding State, and emerged from it a non-slaveholding State. In other respects, so far as her existence as a State and her rights as a State are concerned, she has undergone no change.

Allow me to congratulate you, gentlemen, upon the favorable circumstances which surround you, while engaged in this great work of restoring the State to her former and natural position. It is my firm belief that the policy of the President in this respect, which is broad, as liberal, and as just as the Constitution itself, will be approved by the great body of the people of the United States . . . our State will enjoy, in common with the other States, the protection of just laws under the Constitution of our fathers.”

(The South Since the War: As Shown by Fourteen Weeks of Travel and Observation in Georgia and the Carolinas, Sidney Andrews, Ticknor and Fields, 1866, pp. 133-134)

Senator John C. Calhoun classified communities into taxpayers and tax-consumers – the former favoring lower taxes, the latter favoring increased taxes, and a wider scope of government power. He wrote of “spoils” in its narrow sense as consisting of bounties and appropriations flowing directly from the public treasury. In the wider sense, he viewed spoils as advantages derived, directly or indirectly, from government action.

Bernhard Thuersam, www.Circa1865.com

A Vigilant Corps of Government Dependents

“When [government] offices, instead of being considered as public trusts, to be conferred upon the deserving, were regarded as the spoils of victory, to be bestowed as rewards for partisan services, without respect to merit; when it came to be understood that all who hold office hold [it] by the tenure of partisan zeal and party service, it is easy to see that the certain, direct and inevitable tendency of such a state of things is to convert the entire body of those in office into corrupt and supple instruments of power, and to raise up a host of hungry, greedy, and subservient partisans, ready for every service, however base and corrupt.

Were a premium offered for the best means of extending to the utmost the power of patronage, to destroy the love of country, and to substitute a spirit of subserviency and man-worship: to encourage vice and discourage virtue, and, in a word, to prepare for the subversion of liberty and the establishment of despotism, no scheme more perfect could be devised; and such must be the tendency of the practice, with whatever intention adopted, or to whatever extent pursued.

[Add to this] the greater capacity, in proportion, on the part of government, in large communities, to seize on and corrupt all the organs of public opinion, and thus to delude and impose on the people; the greater tendency in such communities to the formation of parties on local and separate interests, resting on opposing and conflicting principles . . . Among them, the first and most powerful is that active, vigilant and well-trained corps which lives on the government, or expects to live on it, which prospers most when the revenue is greatest.

The next in order – when the government is connected with the banks, when it receives their notes in its dues, and pays them away as cash, and uses them as its depositories and fiscal agents – are the banking and other associated interests, stock-jobbers, brokers, and speculators; and which, like the other profit the more in consequence of the connection – the higher the revenue, the greater its surplus and the expenditures of the government.”

(The Life of John C. Calhoun, Gustavus M. Pinckney, Bibliolife (original 1903), excerpts, pp. 106-110)

Virginians in 1861 deliberated on continuing their voluntary relationship with the federal government created by the States, remembering Jefferson’s words his Kentucky Resolutions of 1798:

” . . . reserving, each State to itself, the residuary mass of right to their own self-government; and that whensoever the General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force: that to this compact each State acceded as a State, and is an integral party, its co-States forming, as to itself, the other party: that the government created by this compact was not made the exclusive or final judge of the extent of the powers delegated to itself; since that would have made its discretion, and not the Constitution, the measure of its powers; but that, as in all other cases of compact among powers having no common judge, each party has an equal right to judge for itself, as well of infractions as of the mode and measure of redress.”

Bernhard Thuersam, www.Circa1865.com

Virginian’s Choose Self-Determination

“James W. Sheffey, speaking five days before President Lincoln’s inauguration said:

“We love the Union, but we cannot se it maintained by force. They say the Union must be preserved — she can only be preserved through fraternal affection. We must take our place — we cannot remain neutral. If it comes to this and they put the question of trying force on the States which have seceded, we must go out . . . We are waiting to see what will be defined coercion. We wait to see what action the new President will take.”

Thomas Branch, speaking the day after President Lincoln’s inaugural address said:

“My heart had been saddened and every patriotic heart should be saddened, and every Christian voice raised to Heaven in this time of our trial. After the reception of Mr. Lincoln’s inaugural, I saw gentlemen rejoicing in the hotels. Rejoicing for what sir? For plunging ourselves and our families, our wives and children in civil war? I pray that I may never rejoice at such a state of things. But I came here to defend the rights of Virginia and I mean to do it at all hazards; and if we must go to meet our enemies, I wish to go with the same deliberation, and with the same solemnity that I would bend the knee in prayer before God Almighty.”

George W. Brent, speaking on the 8th of March said:

“Abolitionism in the North, trained in the school of Garrison and Phillips, and affecting to regard the Constitution as “a league with Hell and a covenant with death,” has with a steady and untiring hate sought a disruption of this Union . . . Recognizing as I have always done, the right of a State to secede, to judge of the violation of its rights and to appeal to its own mode for redress, I could not uphold the Federal Government in any attempt to coerce the seceded States to bring them back in the Union.”

(Virginia’s Attitude Toward Slavery and Secession, Beverley Munford, L.H. Jenkins Printer, 1909, pp. 265-267)

The war commenced by Lincoln in 1861 immediately presented his administration with the problem of a conflict the United States could simply not afford. In April 1861, federal spending was only about $172,000 a day, raised by tariffs and land sales. By the end of July 1861, Lincoln had caused this to increase to $1 million, and by the end of December it was up to $1.5 million per day. Also in December 1861 Northern banks had to stop paying their debts in gold, with the federal government doing the same shortly after and resorting to printing money. The country had gone off the gold standard, Wall Street was in a panic, and Lincoln would lament, “The bottom is out of the tub, what shall I do?” The cost of the war would eventually reach $8 billion, enough to have purchased the freedom of every slave five times over – and provided each with the proverbial 40 acres, and the mule.

Bernhard Thuersam, www.Circa1865.com

The War for Tariffs, Taxes and Astonishing Profits

“By May 1864 [financier Jay] Cooke was selling [Northern] war bonds so successfully that he was actually raising money as fast as the War Department could spend it, no mean feat for that was about $2 million a day at this point. Altogether, the North raised fully two-thirds of its revenues by selling bonds. If Abraham Lincoln must always be given the credit for saving the Union, there is also no doubt that the national debt was one of the most powerful tools at his disposal for forging victory.

Although the [Northern] people were willing to endure very high taxes during the war, peacetime was another matter altogether. Immediately after the war the cry for repeal of the wartime taxes became insistent. With military expenses quickly dropping, the problem, was what taxes to cut. American industrialists, who had prospered greatly thanks to wartime demand and wartime high tariffs, naturally did not want the tariffs cut.

Because the Civil War had broken the political power of the South, the center of opposition to the tariff, they got their way. The tariff was kept at rates far above the government’s need for revenue as the North industrialized at a furious pace in the last three decades of the nineteenth century and became the greatest – and most efficient – industrial power in the world.

Of course, no matter how large, efficient, and mature these industries became, they continued to demand [tariff] protection, and, thanks to their wealth and political power, get it.  As Professor William Graham Sumner of Yale explained as early as 1885, “The longer they live, the bigger babies they are.” It was only after the bitter dispute between Andrew Carnegie and Henry Clay Frick caused the astonishing profits of the privately held – and highly protected – Carnegie Steel Company to become public knowledge, in 1899, that the political coalition behind high tariffs began to crack.

Before the Civil War there had been little advocacy of an income tax in this country, at least at the federal level, although by the war six States had implemented such taxes for their own revenue purposes. But once a federal income tax was in place, thanks to the Civil War, it quickly acquired advocates, as political programs always do.

These advocates pushed the idea relentlessly . . . Republican Senator John Sherman . . . said during a debate on renewing the income tax in 1872, that “here we have in New York Mr. Astor with an income of millions derived from real estate . . . and we have along side of him a poor man receiving $1000 a year. [The law] is altogether against the poor man . . . yet we are afraid to tax Mr. Astor. Is there any justice in it? Why, sir, the income tax is the only one that tends to equalize these burdens between the rich and the poor.”

(Hamilton’s Blessing, John Steele Gordon, Penguin Books, 1997, pp. 79-83)

Horatio Seymour of New York always refused to consider any aspect of African slavery as a paramount issue in the country; He felt that “for seventy years the Union had existed with slavery; it need not perish overnight because of it.” He rightly saw anti-slavery rhetoric against the South as designed to divert attention from speculation and corrupt politics in the North.

Bernhard Thuersam, www.Circa1865.com

Virtue More Dangerous Than Vice

“As one looks back at the antics of the abolitionists – Garrison burning a copy of the Constitution in a public square; Gerrit Smith playing “possum” at an asylum while the John Brown he had encouraged was found guilty of treason and hauled out to be hanged; self-righteous ranters pleading from their pulpits for the export of rifles to Kansas; industrious Mrs. Stowe embalming the slippery sentimentality of her half-truths in the lachrymose pages of Uncle Tom’s Cabin; even Democratic David Wilmot trying to repair with his famous proviso the political fences he had broken down with his vote for a lower tariff . . .

[T]here comes to mind the words of the ancient philosopher which a president of Yale was always happy to remember”: “Virtue is more dangerous than vice because the excesses of virtue are not always subject to the restraints of conscience.”

(Horatio Seymour of New York, Stewart Mitchell, Harvard University Press, 1938, pp. 229-230)

Lincoln’s choice for the cabinet post of treasury, Salmon P. Chase, was no financial expert yet he was to advise Congress on the framing of financial bills, obtaining money from “keen-minded bankers and investors” like Jay Gould, as well as loans and paper money. The taxes collected were far smaller than expenditures and throughout the war the total amount received in loans was 2621 million dollars, against 667 million dollars obtained from taxation.

Bernhard Thuersam, www.Circa1865.com

Voodoo Economics Circa 1864

[Diary Entry] July 2, 1864:

“There is discord in the Cabinet. Mr. Seward represents the moderates, while Mr. Chase, the abolitionist and the inventor of paper money, represents the Radicals. He is regarded here, rightly or wrongly, as the greatest financier in the world. It seems to me that his entire science has consisted of keeping the ship afloat by throwing the provisions overboard. It is easier to borrow than to repay, and I fear Mr. Chase is leaving the difficult task to those who will follow him.

The failure of his financial policy and the defeat of a bill on gold that he recently submitted to Congress have led Mr. Chase to hand in his resignation.”

[Diary Entry] July 5, 1864:

“A financial crisis can, from one day to the next, reduce the value of paper money to virtually nothing. Everything now hangs on the hope of taking Richmond. But because Grant moves this way and that without gaining ground, because Petersburg, a town defended by children and schoolmasters, continues to stand firm against a hundred thousand men, and because the Confederates, far from giving in, are threatening Maryland with an invasion which is forcing the President to call up the militia and because, in a word, nobody sees an end to the war, public confidence is growing weaker.

The government itself, obliged to pay interest on the public debt in gold, is requiring that all customs duties be paid in gold. Nothing depreciates the currency so much as this self-distrust manifested in the Treasury. Until now the “greenbacks” have had more value in actual trading than that indicated by the rates quoted for them on the official gold market. But if ever the small businessmen should refuse to take them and if ever they should cease to circulate freely among the people, the poor Mr. [William P.] Fessenden (who has just succeeded Mr. Chase) will have to take over the direction of the Treasury only to associate his name with the impending national bankruptcy.

Let us return to Mr. Chase. He had a single obsession: to strangle speculation and force down the price of gold. He thought that to do this he needed only to decree an increase in the value of paper money, and that economic interests could be manipulated so easily as the parts of a machine. Thus he proposed a law prohibiting overdraft operations, speculative transactions which result in a paper loss or gain on balance. Judge for yourselves whether the waving of the Treasurer’s wand has had the magical effect he expected it to have.

By the very next day the speculators had taken fright and activity was concentrated in a small number of hands; now it is continued in secret, without competition, and this quasi-monopoly has immediately raised the price of gold by 40 percent. Congress wanted the bill withdrawn. Mr. Chase insisted that it be acted upon, and it was himself who had to withdraw.

If the moment of crisis ever comes when paper money is forced into the hands of only a few holders, the public will think only of getting rid of it, and America will offer to the world in a twofold sense the spectacle of “hideous bankruptcy.”

(A Frenchman in Lincoln’s America, Ernest Duvergier de Hauranne, Donnelly & Sons, 1974, pp. 77-88)

Assistant Secretary of War Charles A. Dana, testified after the war that the whole power of the war department was used to secure Lincoln’s reelection in 1864. It was essential to obtain the soldier vote and politically-connected Northern officers helped distribute Republican ballots to their commands while Democrat ballots were lost. In cities Republican newspapers spread fear among voters should Democrat George B. McClellan be elected.

Bernhard Thuersam, www.Circa1865.com

Vote for Abraham Lincoln!

[Diary entry] Chicago, November 5, 1864:

“It was one of those amazing [newspaper] appeals to the voters that is half circus poster and half sermon . . . the sort of thing that shows how the Americans excel in catering to the lowest levels of public taste.

It carried this portentous title in large black type: “THE TRUTH!” There followed a long list of the dire consequences that will be sure to follow the election of [George B.] McClellan.

“Twenty million people under the heel of 300,000 slave-owners!” – “A Confederacy of the Northwest!” – “A Democratic insurrection (see the threats in the World and the Chicago Times)!” – “McClellan leading the revolt (see the speeches at the Chicago Convention)!” –“The theatre of war shifted from Atlanta and Richmond to New York, Cincinnati, Philadelphia and Chicago (see the Richmond papers supporting the Copperheads)!” – “Barricades; civil war” — “Our streets drenched with blood – our countryside laid waste – Our country’s credit ruined – Gold at 2,000 and the price of necessities in proportion (see the history of the French Revolution and the Reign of Terror in Paris)!”

Do you doubt any of this? Here is a table comparing “Republican Prices,” Democratic Prices,” McClellan Prices (those that would result from his compromise with Jefferson Davis – that is, guaranteeing the Rebel debt and paying the Southern States for their war costs,” – and finally, “Rebel Prices” such as will be seen “if [August] Belmont succeeds in raising a Democratic insurrection.”

But if, on the contrary, you want the Union’s flag to “float gloriously from the Great Lakes to the Gulf, from the Atlantic to the Pacific, over a hundred free States without a single despot, over fifty million — soon to be a hundred million — people without a single slave, then sweep the country clean, once and for all, of the party that is so greedy . . . this gang of slave-merchants and perpetrators of rebellion, debts and taxes that calls itself the Democratic party! . . . Vote for Abraham Lincoln!”

One must distrust all such accounts of triumphal demonstrations, of “gigantic mass-meetings,” that fill the newspapers of the two parties at this time. People lie as shamelessly in America as in Europe, with the sole difference that since here everyone has the right to lie, no one has the privilege of being believed.”

(A Frenchman in Lincoln’s America, Ernest Duvergier de Huaranne, Donnelly & Sons, 1975, pp. 3-7)