Circa1865

Lincoln’s war administration and deficit financing ushered in the modern American state which remains in existence today. The various Bureaus, Departments and revolutionary measures created for the purpose of increasing federal power were all linked to his total war-effort, including the restructuring of currency and banking. Author Bruce D. Porter (War and the Rise of the State, Free Press, 2002) wrote that “Appomattox thus represented not just the defeat of the South, but the defeat of the whole Southern economic and political system, and the triumph of a state-fostered industrial and financial complex in the North.”

Bernhard Thuersam, www.Circa1865.org

The True Result of Appomattox

“[in Herman Melville’s postwar] poems he recognized the tremendous costs, especially through the loss of freedom and the end of the founders’ dream for America as a result of the North’s victory. He viewed the construction of the new iron dome on the Capitol in Washington, DC, which replaced the wooden one, as a symbol of America’s future.

Bruce Porter’s well-documented study [of the war] relates some of the economic costs of the Civil War:

In connection with the war the Lincoln administration attempted to intervene in areas of the national life that the federal government had never touched before . . . Prior to 1861, the national government had been a minor purchaser in the American economy. During the war, it became the largest single purchaser in the country, a catalyst of rapid growth in key industries such as iron, textiles, shoe manufacturing, and meat packing . . .

The Civil War spawned a revolution in taxation that permanently altered the structure of American federalism and the relationship of the central government to the national economy. Prior to the war, over 80 percent of federal revenue had come from customs duties, but despite several upward revisions of the tariffs during the war, those could provide only a fraction of what was needed to sustain the union armies.

On August 5, 1861, the first income tax in US history came into effect, followed by the Internal Revenue Act of 1862, which levied a whole series of new taxes: stamp taxes, excise taxes, luxury taxes, gross receipt taxes, and inheritance tax, and value-added taxes on manufactured goods. The latter Act created the Bureau of Internal Revenue, perhaps the single most effective vehicle of federal power ever created . . .

Neither taxes nor paper dollars, however, came close to covering the enormous costs of the war. Dire fiscal straits forced the federal government to borrow over 80 percent of its cost, or more than $2.6 billion. [The] Lincoln administration created a captive source of credit by granting a monopoly on issuance of the new national currency to banks that agreed to purchase large quantities of federal bonds . . . [and] agree to accept federal regulation and federal charters. Thus, almost overnight, a national banking system came into being.

[Author] Eric Foner writes that the fiscal measures represented in their “unprecedented expansion of federal power . . . what might be called the birth of the modern American state . . .”

(The Costs of War, America’s Pyrrhic Victories, John V. Denson, Transaction Publishers, 1999, excerpts pp. 28-29)

By 1860, the immigrant floods which spread westward in the 1840s and 1850s had changed the United States into two distinct cultures and political views. The South maintained its ties to the 1776 generation and its republican political character; the North had become a conglomerate of immigrant ethnic groups controlled by machine politicians eager for power and beholden to industrialists eager for cheap labor. Immigrant voters, wholly unfamiliar with American political concepts and traditions, were easily led by demagogues and money.

Bernhard Thuersam, www.Circa1865.com

Northern Prosperity at the South’s Expense

“The festering corruptions of the post-war period sprang up in every part of America and in almost every department of national life. Other loose and scandalous times – in [James] Buchanan’s day, in [Mark] Hanna’s, in [Warren] Harding’s – have been repellent enough; but the Grant era stands unique in the comprehensiveness of its rascality.

The cities, half of which had their counterparts in [New York’s Boss] Tweed; the legislatures, with their rings, lobbyists and bribe-takers; the South, prey of unscrupulous Carpetbaggers and Scalawags; the West, sacked by railway and mining corporations; Congress with its Credit Moblier’ [scandal], its salary-grab, its tools pf predatory business; the executive departments, honeycombed with thievery; private finance and trade, with greedy figures like Jay Cooke and Collis P. Huntington honored and typical – everywhere the scene was the same. Why?

The war explained much: its terrible strain upon all Ten Commandments; the moral exhaustion it produced; the waste and jobbery which it bred; its creation of vast new Federal responsibilities. Washington became an irresistible lodestone for crooked men.

The fecund war contracts, the tariffs, the subsidies, and [enlistment] bounties, huge appropriations for speculators and [pension] claim-agents, the opportunities for theft in both collecting and spending the swollen Federal revenues, drew them as honey draws flies.

The South was ruined, and the fine principles and traditions of its aristocracy were engulfed. The industrial revolution in the North wrought the roughest, most aggressive business elements to the front. As the West was settled with amazing rapidity, a more extensive and influential frontier than ever before gave manners a cruder cast.

Cities were filling up with immigrant communities, subservient to machine politicians. Everywhere tested standards, restraints of public opinion, the cake of custom, were broken down. Co0nditions of the day produced a new and flashier political leadership. They brought demagogues and pushing brigadiers into office; generals like Ben Butler and “Black Jack” Logan, vote getters like Oliver P. Morton and Zach Chandler, speculators like Oakes Ames.

But one fact must be emphasized. Contemporaneous with this corruption, geared to it as a motor is geared to the conglomerate machinery of a factory, was the tremendous industrial boom which followed the war. For eight years Northern business rollicked amid a flush prosperity.

With money easy, with fortunes rising on every hand, with the temptation to speculate irresistible, the whole tendency of American life conduced to greed.”

(Hamilton Fish, the Inner History of the Grant Administration, Allan Nevins, Dodd, Mead & Company, 1937, excerpts pp. 638-639)

As Lincoln was unable to finance his war with the traditional tax and customs revenue sources, he turned to paper fiat money to be printed as needed, though the Constitution permits only gold and silver as legal tender. The predictable speculation in the value of greenbacks versus gold prices caused murky markets to emerge. In New York’s “Gold Room,” decisions were guided not so much by patriotic motives as the desire for profit. It was said that “Sectional feeling often entered largely into bull and bear contests in the Gold Room, and Union men and rebel sympathizers fought their battles sometimes, as much to gratify this as to make money.”

Bernhard Thuersam, www.Circa1865.com

Financing the War with Inflation

“To help finance the Civil War, the federal government began issuing “demand notes” in July 1861. These government obligations were not a legal tender currency and were freely convertible into gold upon presentation to a federal depository. During the course of 1861, the Union’s financial condition deteriorated, and in December the Treasury issues a very bleak report on the budgetary situation.

In the face of such news, bankers concluded that investors would lose confidence in the demand notes and the banks would soon experience a massive outflow of gold. On December 30, the banks suspended specie payments of gold [for greenbacks]. The government followed suit almost immediately.

Soon thereafter, in February 1862, Congress passed the first of the Legal Tender Acts. These acts authorized the government to issue “greenbacks” – a currency that was to be legal tender for both public and private debts. Of course, since demand notes were no longer convertible into gold, neither were greenbacks . . . [though] all available evidence indicates that the public believed that at some future date convertibility would be reinstated and all greenbacks would be redeemed in gold.

[Because Lincoln] was unable to finance the war with the available tax revenues . . . Greenbacks were a way of using inflation to pay for the war. Speculators knew that the degree to which the Union would have to rely on future greenback issues depended on just how much the war would ultimately cost. A long, expensive war would require more greenback issues and make it less likely that greenbacks would ever be exchanged for gold dollars on a one-for-one basis.

Not surprisingly, a formal market for buyers and sellers to trade gold came into existence within two weeks of the suspension of convertibility. The first organized dealings took place at the New York Stock Exchange on January 13, 1862. At about the same time a second market formed . . . in New York City . . . known as the Gold Room.

An important question for our purposes is how the gold market used the [political and war] information coming to it. Did the financial market react quickly to news that was available, or did it take several days to digest it? A closely related question is whether news of battles . . . reached all participants at the same time.

In a report on the burning of Chambersburg, Pennsylvania, on July 31, 1864, the New York Herald explicitly noted that the government frequently withheld information from the public to minimize alarm and protect intelligence and sources.

The daily registry of the Gold Room was a quicker messenger of successes and defeats than the tardier telegrams of the Associated Press. A private secretary of a high official, with no capital at all to save his position, which gave him authentic information of every shaping of the chess game of war a full twenty hours in advance of the public, simply flashed to the words “sell, buy” across the wires, and trusted the honor of his broker for the rest.

If there was a sufficiently large number of “insiders” competing with each other, then the market would quickly transform war news into changes in the price of greenbacks, despite the fact that the news was not coming through published sources.

The observation of [New York Herald writer] Kinahan Cornwallis are consistent with this notion: “Almost every individual speculator in the Gold Room, whose transactions were large enough to make it of consequence, had a correspondent in the national capital, who sent him a telegraphic dispatch as occasion required . . .”

(Greenback Prices as Commentary on the Union Prospects, Guinnane, Rosen and Willard, Civil War History, The Journal of the Middle Period, Kent State University Press, December 1995, Volume XLI, No. 4, excerpts, pp. 315-318)

Prior to 1861, the New York Associated Press was playing an important role in transforming American journalism by centralizing a network of like-minded newspapers to distribute news to the country. After commencing hostilities, the Lincoln administration began censoring news stories regarding the war almost immediately and what followed was a constant suppression of stories regarding war financing in Congress, the imminent bankruptcy of the government, Northern casualties figures, and war profiteering by war materiel contractors.

Bernhard Thuersam, www.Circa1865.com

Censorship and Favorable Publicity

“At the outset of the Civil War – and for the first time in American history – the federal government created an apparatus to censor news stories. For the first ten months of the war, responsibility for the Washington censorship shifted among cabinet officials. Given this arrangement, the censorship imposed on correspondents during the crucial early phase of the conflict was as much political as military.

In December 1861, the House of Representatives authorized the Judiciary Committee “to inquire if a telegraphic censorship of the press has been established in this city; if so, by whose authority, and by whom is it now controlled.” The committee held hearings during January and February before submitting its fourteen-page report to the House in February 1862.

On April 19 . . . reporters gathered details from the battered [6^th Massachusetts Regiment returning from Baltimore] and hurried to the Washington telegraph office to file their stories for Northern newspapers. When they arrived, however, they found the office guarded by a militia squad . . . no one quite accepted responsibility for the decision to ban the transmission of news, though [William] Seward mentioned that the cabinet had been discussing the need for some type of telegraphic censorship.

[News organization owners were told that] Messages about military operations were to be detained, as was anything “injurious to the interest of the Government.” The circular closed with the admonition, “Of course the strictest secrecy must be observed in respect to these instructions.” Near the end of April, the War Department assumed control of the telegraph and the censorship program.

Telegraphic reports about the outcome of [First Manassas] on July 21 damaged the credibility of both the government and the press and prompted changes in censorship. Early accounts of the battle telegraphed to Northern newspapers suggested an imminent Union victory . . . [and] left the public unprepared for the news that followed: the battle ended in an ignominious rout of the Union army.

Only days after Gen. George B. McClellan assumed command of the Army of the Potomac, he met with reporters and proposed a code that governed news sent by telegraph . . . “that may furnish aid and comfort to the enemy.” Eleven correspondents representing leading newspapers in New York, Philadelphia, Boston, Cincinnati, and Washington signed, as did General McClellan.

The ultimate arbiter of what could pass over the wires from Washington, Secretary of War Simon Cameron, was well-positioned to cultivate favorable publicity. He directed the censor to let the “despatches of Mr. [Samuel] Wilkeson, of the New York Tribune, go over the wires as written . . . as Wilkeson enjoyed the latitude to offer comments, even editorialize, in his reports from Washington. “The privilege was to be used wholly in [reference] to the policy of sustaining the govt – sustaining the War Dept.,” Wilkeson testified.

Wilkeson’s reports to the Tribune regularly defended Cameron and the War Department from the many charges of scandal and mismanagement in awarding military contracts.”

(The Telegraph, Censorship and Politics; Richard B. Kielbowicz, Civil War History, Vol. XL, 1994, Kent State University Press, excerpts, pp. 96-101)

FDR’s Secretary of Labor, Francis Perkins, belief that more Southerners wearing shoes would spark a consumer tsunami, is on par with New England’s early wartime belief that much good would come from giving former slaves land to cultivate on occupied Hilton Head and the Sea Islands. The logic was that the new-found wealth of the freedmen would be spent on Yankee notions and manufactured goods, and Northern industry would benefit.

Bernhard Thuersam, www.Circa1865.com

Veritable Social Revolution in the South

“Some years ago Secretary of Labor Francis Perkins raised the temperature of many Southerners to fever height by suggesting that if the people of that section could be persuaded to wear shoes a veritable “social revolution” would result. The mass-production system of the United States, the secretary told a welfare council in May, 1933, depends upon purchasing power, the proper development of which would lead to prosperity beyond anything we “have ever dared to dream of.”

If the wages of the millworkers of the South could be raised to such a level that they could afford shoes, a great demand for footwear would result. Indeed, said the secretary, when it is realized that “the whole South is an untapped market for shoes” it becomes clear that great “social benefits” and “social good” would inevitably come from the development of our “mass-production system” to meet this latent consuming power.

Southern editors and speakers indignantly denied the canard that Southerners bought no shoes and retorted that such comments were only what might have been expected from a woman, especially one who knew nothing about the South.

It was even suggested that should all the inhabitants of the South suddenly wake to wearing shoes the resultant wear and tear on streets, sidewalks, and hotel carpets might cause grave financial loss to the area.

That was in 1933 . . . [and it was maintained that] Markets can only exist where there is demand; demand comes close upon the heels of knowledge. Knowledge, or education in the ways of the West, has therefore been considered essential if “backward” peoples are to be induced to purchase western goods. [Henry M.] Stanley, the African explorer, in an address before the Manchester Chamber of Commerce, published in 1884 [asserted] that if Christian missionaries should clothe naked Negroes of the Congo, even in one dress for use on the Sabbath, “320,000,000 yards of Manchester cotton cloth” would be required . . . Should they become sufficiently educated in the European moral code to feel the necessity for a change of clothing every day, cloth to the value of [26 million pounds] a year would be necessary.

When the natives have been educated they would abandon their idleness and sloth, [John Williams, missionary to Tahiti said in 1817], and become industrious workers. Then, he asserted, they will apply to our merchants for goods . . . “

[When FDR called for a New Deal in the South] He certainly must have been aware of the implications of the thesis that the poorly housed, undernourished, and ill-clad Southerner must be given greatly increased purchasing power to enable him to better his economic condition, thus strengthening the demand for manufacture products and consequently improving the economy of the nation as a whole.

It is also certain that the concern which Secretary Perkins felt for the shoeless Southerner was not without precedent. When the armies of Grant and Sherman liberated the Southern Negro, the economic implications were not lost on the people of the victorious section. Following in the wake of the Union armies a host of teachers and missionaries flocked to the South, determined to Christianize and educate the freed Negro . . . with a decidedly abolitionist tinge, to be sure.

[These] people, their robes of self-righteousness wrapped firmly around them . . . carried with them the New England school, complete with curriculum, texts and method, but they also took with them the attitudes and beliefs of the social reformer and, specifically, the militant abolitionist. Politically, the teachers and missionaries became the tools of the [Republican] Radicals in their program of reconstruction . . .

Sensing in the alphabet and the book the key to the white man’s position of dominance, the open-sesame which would unlock the magic door of equality and wealth, the Negro, like the Polynesian, flocked to the church and the school. As one observer wrote, the “spelling book and primer” seemed to them Alladin’s [sic] lamp, which will command over all the riches and glory of the world. In brief, they believed that education was “the white man’s fetish,” which would guarantee wealth, power, and social position.

Some of the teachers [and missionaries] understood the inevitable result of the extension of freedom, Christianity, and education to the Negro – the development of a vast new market for northern goods, which would result in great profits to northern mills.”

(Northern Interest in the Shoeless Southerner, Henry L. Swint; Journal of Southern History, Volume XVI, Number 4, November 1950, excerpts, pp. 457-462)

A question seldom raised about the War Between the States and Southern defeat is the amount of economic indemnity paid to the North, economic reparations if you will, and forcing the defeated to pay the victor the costs of defeating them, as in the aftermath of the Franco-Prussian and World Wars.

Bernhard Thuersam, www.Circa1865.com

Southern Indemnity to the North

“In the wake of wartime devastation, moreover, Southern taxpayers had to help pay the interest and principal on the $2.5 billion federal debt taken on by the North to beat the South, although nearly all of the bond payments went to Northerners.   Taxpayers below the Mason-Dixon Line also had to help support the huge cost of pensions to federal veterans and their widows and dependents, though no such pensions were paid to Confederate veterans.

Such disbursements, obviously, were spent in the North. In these various ways . . . Southerners paid approximately $1.2 billion to the rest of the Union over a period of a half century — more than the indemnity Prussia levied on France after the Franco-Prussian War of 1870-1871.”

(A History of the American Economic System, Robert R. Russel, New York, Appleton-Century-Crofts, 1964), pp. 273-274

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)

Abraham Lincoln was a devotee of the Alexander Hamilton/Henry Clay “American System” of public debt, tariff protectionism, government subsidies and a national bank. To finance his war in 1861, Lincoln turned to an income tax, and then succumbed to printing money. Nowhere in the United States Constitution is the federal government authorized to make paper money legal tender. By 1865, the public debt was $2.6 billion, and the direct/indirect cost of Lincoln’s war would reach $8 billion by 1900.

www.Bernhard Thuersam, www.Circa1865.com

Public Debt, Then and Now

“Contrary to official capitalist wisdom, debt does not create economic growth. This idea is a swindle. Interest to the very rich . . . does not produce anything. It does not multiply creatively into new enterprises and jobs; it merely diverts ever-greater proportions of earning that might be fruitfully invested.

The proof is all around us. How could the vast unpayable federal debt, which absorbs much of the government’s income just for the interest bondholders, foreign and domestic, possibly be an economic stimulus? How can the immense and near universal burden of personal mortgage and credit card debt possibly indicate a healthy economy and commonwealth?

The matter is simple, obvious to anybody except a politician, a captive economist, or a media flack, and it ought to be conveyed to the people at every opportunity. Debt is killing us. Every wise man in recorded history has affirmed that debt is not a good thing. Debt can destroy a family, a government, a society.

Alexander Hamilton, an upwardly mobile immigrant bastard with a Napoleon complex, declared that “a public debt is a public blessing.” Troubled, but not surprised, Jefferson noted a connection between debt cruel taxation that undermined the independence of the citizens, warning that “we must not let our rulers load us with perpetual debt.”

Weighed down by government debt, the people would have to labor ever harder to pay the debt-holders, leaving them “no time to think, no means of calling the managers to account.” Jefferson avowed as a core principle that “the earth belongs in usufruct to the living,” but the living had no right to consume the earnings of posterity.

Antebellum statesmen like John Taylor of Caroline and John C. Calhoun and economists like William Gouge and Condy Rageut made the same case. After the War Between the States, so did William Graham Sumner, Thomas E. Watson and countless other public men and thinkers.

Republicans (and their predecessors) have always been the party of bankers and bondholders, service to the rich being for them a natural and essential function of the federal government. Opposition to the federal debt was long a plank in the Democratic platform, but Democrats today are just as guilty as the Republicans in regard to the issue.

Lip service to the virtue of “low public debt” continued until Franklin Roosevelt discovered Keynes and declared that debt is no problem “because we owe it to ourselves” – “ourselves” being a conveniently vague and collective being.

The bipartisan bailout of misbehaving bankers and brokers that we saw a few years ago, and the failure of a multitude of presidential candidates to mention the matter, is not promising.”

(It’s the Debt, Stupid, Clyde N. Wilson, Chronicles, February 2016, excerpt pg. 16)

Lee was not alone in seeing the masked reasons for the war prosecuted by the North and the opportunity seen in reducing the American South to a politically-weak economic colony. The bounty-enriched foreign mercenaries and displaced slaves used to fight its war of conquest were expendable tools for the task, and later employed to eradicate Indians.

Bernhard Thuersam, www.Circa1865.com

The Dollar Invades and Conquers

“Certainly he must have sensed that in the future “those people,” as he called his Northern adversaries, were determined to push aside “his people” with their aristocratic prerogatives and privileges. Despite his determination to stay out of politics both during and after the war, Lee could see the handwriting on the wall as plain as anyone, and plainer than most.

He understood that in addition to the sharp odor of gunpowder, there was the sweet smell of profits in the balmy spring air. Lincoln’s Secretary of the Treasury, visiting New York earlier that spring, had noted that many people there paid more attention to the stock market than to the casualty reports. To this a New York editor added: “Real or professed patriotism may be made to cover a multitude of sins. Gallantry in battle may be regarded as a substitute for all the duties of the Decalogue.”

In the Northern States, the rapid transformation from a conglomeration of farmers to a nation of industrialists had been hastened by the war. The exclusion of Southern planters from the halls of government made the change considerably easier. Astronomical profits on wartime speculation and gouging encouraged rapid expansion. While the brave boys in [blue] shed blood on the battlefields, the crafty made profits back home.

If the drama of collapse and surrender centered in the South, the drama of growth and expansion focused on the West. Hundreds of millions of dollars would go there; the receding frontier would be whittled down by systematic attacks of the Yankee investor. The Federal government would help by showering the railroads and settlers with land and services. Mines, cattle and farming would boom. Where bayonet had never been, the dollar would invade and conquer.”

(Lee After the War, Marshall W. Fishwick, Dodd, Mead & Company, 1963, pp. 39-40)

Beyond eliminating Negro slavery in the South, the war “hastened the transformation of the North from a country of farmers and small manufacturers to a highly organized industrial region.” The North had no shortage of those who saw no need to carry a rifle, as great profit awaited those supplying war materiel.

Bernhard Thuersam, www.Circa1865.com

The North’s Extended Payday

“With the war, too, came what moral philosophers have said was moral decay in wholesale volume, an apparently illimitable increase in man’s cupidity. Scandals uncorked during and right after the fighting showed that [Northern] soldiers had been given clothing and blankets made of shoddy, technically a material of reclaimed wool, such as old rags, which gave a new term to our language.

Soldiers also got boots made largely of paper; they were fed meat that had come from diseased cattle and hogs; they rode hags that had been doctored to make a sale to the cavalry. Only too often the very guns put into their hands would not shoot. One big order for such weapons, refused by ordnance offices in the East, was sold and shipped to General [John] Fremont in the West.

Likely the moral condition of the country was lower than usual. Perhaps the moral philosophers should take into account the possibility that man’s inherent cupidity fluctuates, like a thermometer, with the number and quality of opportunities to commit theft, legal or otherwise; that the honesty of too few men is constant.

The decade after 1865 in the United States appears in retrospect to be an extended payday for the vast military exploit just concluded. Somebody observed it was as if Booth’s bullet had released all the chicanery and cupidity of thirty-five million people. Pastor’s warned that God’s hand would smite the Republic. And yet, the more numerous and grosser sort continued to admire the “smart” man.

The most notoriously smart figures of the postwar period in the United States were three characters who without too much exaggeration were also known as the men of disaster. They were Daniel Drew, Jay Gould, and Jim Fisk. Many called them wreckers, “Foul hyenas,” said an editorial writer of the time, “who when their prey was full rotten came to sink their slavering jaws into the carrion.”

As a big herd of anywhere from six hundred to a thousand head of Ohio beef approached New York City, Drew had his drovers salt them well, then, just before reaching the market place, let them drink their fill. Cattle were sold live-weight. Drew’s processing with salt and water added many tons to the average herd [and] “Watered stock” soon became a term in Wall Street.

Jim Fisk was a genial, handsome fellow . . . Both men and women liked him. He could sell them stuff they did not want before they realized they had bought it. When New Orleans fell into federal hands, Fisk took off to buy cotton for a Boston syndicate, which made a mint of money quickly.

(The Age of the Moguls, Stewart H. Holbrook, Doubleday and Company, 1953, excerpts, pp. 20-24)