Circa1865

By June 1862 Lincoln found enlistments near nonexistent, and it was time to find new sources of recruits as Northern men resisted war service.  Bounty money was offered to help solve this, and the Homestead Act had the dark purpose of attracting foreign-born troops promised bounties and public land to subjugate Americans seeking political self-determination.

Bernhard Thuersam, www.Circa1865.com

Lincoln’s Desperate Search for Troops

“The summer of 1862 brought more gloom to the Union cause. Stonewall Jackson’s heroics in the Shenandoah Valley were followed by McClellan’s withdrawal from his lines before Richmond . . . and the North’s setbacks in the field weighed heavily on the secretary of state. [Seward] had [earlier] watched the Army of the Potomac embark at Alexandria; he had considered it united and unbeatable.

In June of 1862 following the collapse of McClellan’s Peninsular Campaign, Lincoln had sent Seward to New York to stimulate recruiting. The secretary carried with him a confidential letter, explaining the danger and noting that the capital itself was once again in danger under the threat from the rebels. Seward, in New York City, contemplated issuing a new call form the president for volunteers.

On reflection, however, he concluded that for Lincoln to initiate the call would have overtones of panic. Instead he prevailed on most of the Northern governors to request that Lincoln issue a new call for volunteers. The upshot was that Lincoln, seemingly in response to appeals from the Northern governors, was able to issue a proclamation calling for an additional three hundred thousand men.

Seward continued his proselytizing on his return to Washington. He persuaded Secretary of War Stanton to offer new recruits an immediate bounty of twenty-five dollars when their regiments were mustered into service.

Congress had just enacted the Homestead Act, providing that any citizen or alien could acquire title to 160 acres of public land by residing on and cultivating the land for a period of five years. This was just the sort of stimulus to immigration that Seward would have favored under any conditions, but now it included a vital military dimension as well.

He sent copies of the legislation to US envoys with the covering memorandum calling the Homestead Act “one of the most important steps ever taken by any government toward a practical recognition of the universal brotherhood of nations.”

The resulting publicity assured a continuing flow of military manpower to the North from Ireland and northern Europe. John Bigelow, the US consul in Paris, would write that Seward’s circular was important for “the light I throws on the mysterious repletion of our army during the four years of war, while it was . . . being so fearfully depleted by firearms, disease and desertion.”

In addition to his military problems, Lincoln had to deal with the touchy question of war aims. Publicly he continued to argue against general emancipation, telling Horace Greeley in his famous letter of August 1862 that if he could save the Union without freeing a single slave he would do it.

Indeed, Lincoln had no authority to confiscate “property” in the North, and no ability to enforce any Federal edict in territory controlled by the Confederacy. [But as] commander in chief, Lincoln argued that he could surely seize slaves belonging to the enemy just as he could capture their railroads.

[Seward thought issuing the] proclamation following a string of defeats on the battlefield . . . would hint of desperation – “the Government stretching forth its hands to Ethiopia, instead of Ethiopia stretching forth her hands to the Government.” He feared a slave uprising would turn the war for the Union into a class war . . . and that emancipation would destroy the South’s economy, raising the specter of intervention boy Britain or France to protect its supply of raw cotton.”

(William Henry Seward, Lincoln’s Right Hand, John M. Taylor, Harper Collins, 1991, pp. 200-202)

To underscore that the war was fought by the North against secession – not to end slavery – Lincoln and his Secretary of State William Seward early sought the capture Southern ports to restore tariff collection and supply slave-produced cotton for starved New England mills. Also, if the ports were opened by force and cotton exported once again, the chance of European recognition of the new American republic was further diminished.

Bernhard Thuersam, www.Circa1865.com

Lincoln’s Cotton Dilemma

“During the winter of 1861-62 Seward assured Britain and France that a significant volume of cotton would soon be exported to Europe through Confederate ports captured by Union forces. Lincoln thought that the United States should “show the world we were fair in this matter favoring outsiders as much as ourselves.”

Although he was “by no means sure that [the planters] would bring their cotton to the port after we opened it, it would be well to show Europe that it was secession that distressed them and not we.”

The Confederates soon demonstrated that they would rather burn their cotton than allow it to fall into Yankee hands. The French consul estimated that about a quarter of a million bales were burned at New Orleans just prior to its capture by Union forces in April 1862. In August of that year the British consul in Charleston estimated that “about 1,000,000 bales have been destroyed at various places to prevent them falling into the hands of Federals.”

The unsuccessful Federal effort to promote cotton exports through captured Confederate ports was described in a pamphlet published in England in 1862:

“No sooner did the Government succeed in regaining possession . . . of cotton markets, than it made provision for reopening of the cotton trade. The blockade . . . was removed from the ports of Beaufort in North Carolina, Port Royal in South Carolina, and New Orleans in Louisiana on the 12^th of May 1862. Cotton agents accompanied the armies of the North, who were licensed to purchase cotton . . . The United States Government assured the British government of their anxiety to grant every facility for the obtaining of cotton, and gave the rebels every facility to sell it. But the net result has been what? Simply an order from Jefferson Davis to burn the cotton and starve the English.”

Seward was delighted by the increased cotton production in other countries: “The insurrectionary cotton States will be blind to their own welfare if they do not see how their prosperity and all their hopes are passing away, when they find that Egypt, Asia Minor and India supplying the world with cotton.”

Nevertheless, cotton exports made a major contribution to the Confederate economy and war effort. Lincoln’s frustration with the Union’s inability to eliminate this trade is indicated in a letter he wrote in December 1864:

“By the external blockade, the [cotton] price is made certainly six times as great as it was. And yet the enemy gets through at least one sixth part as much in a given period . . . as if there were no blockade, and receives as much for it as he would for a full crop in time of peace. The effect . . . is that we give him six ordinary crops, without the trouble of producing any but the first and . . . leave his fields and laborers free to produce provisions . . . This keeps up his armies at home and procures supplies from abroad.”

(One War at a Time, The International Dimensions of the American Civil War, Dean B. Mahin, Brassey’s, 1999, pp. 85-86; 90-91)

By initiating war against his own people, overturning the Constitution, creating fiat money and fusing government with corporations, Lincoln destroyed the Founders’ republic and ushered in the Gilded Age.

Bernhard Thuersam, www.Circa1865.com

The Forces Lincoln Unleashed

“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 the few and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.”   Abraham Lincoln.

(Collective Speeches of Louis T. McFadden, Omni Publications, pg. vi, 1970)

Without resorting to financial trickery, propaganda and suppressed casualty reports Lincoln could not have sustained his destructive invasion of the American South. Unconstitutional paper money and financier Jay Gould provided the money for war — the latter used whatever means necessary to sell war bonds and demonstrated that indeed patriotism is the last refuge of a scoundrel.

Bernhard Thuersam, www.Circa1865.com

Hustling Northerners to Save the Union

“The Credit Mobilier scandal . . . brought on, or at least hastened, the panic of 1873 and turned the greatest American financier of the era into a bankrupt. This was Jay Cooke. At the time of the crash he was engaged in financing the second transcontinental railroad, the Northern Pacific.

[In the past he] showed fine judgment in his promotion of canals, then of railroads. He did well with loans to the government during the Mexican War. Then the Civil War gave him his big chance and he took it famously. In 1861, the State of Pennsylvania wanted to sell a large bond issue to finance its war effort. No banker but Jay Cooke would touch it. He sold the issue quickly, with a rousing appeal to patriotism. It was the first bond issue ever sold in that manner in the United States.

Noting his success, the federal government asked Cooke for his help. Moving his office to Washington . . . Cooke organized a spectacular country-wide campaign to sell federal war bonds to the public. He engaged brass bands. He hired spread-eagle speakers. He caused hundreds of thousands of flags to be displayed at bond rallies.

His salesmen worked on commission and were not turned loose until they had been thoroughly indoctrinated with the equivalent of pep talks and had learned at least ten ways of making non-buyers look and feel like traitors. Jay Cooke, in short, set the American, or rather the Union, eagle to screaming for money. He disposed of the bond issue of 1861, and of many more that followed. They amounted in four years to nearly three billion dollars.

What Cooke had done was to invent and bring to the management of national finance a wholly new technique – the drive. With little modification it has been used ever since. The boys in blue must be supported by fighting dollars.

From his immense commissions on bond sales and his many other activities, Cooke emerged at war’s end as the greatest banker in the country. “On the day Richmond fell, Cooke marked out the lines of a pretentious country house that was to cost one million dollars [with] an Italian garden facing a wall built to resemble “the ruined castle of some ancient nobleman.” This was the fifty-two room palace named Ogontz. Here he entertained, among others, President Grant, on whom he showered fine cigars and a plentitude of whiskey and wine.

Cooke dazzled Grant as he dazzled most contemporary Americans. He exemplified, said a critic, all of the substantial upper middle-class virtues of a people “newly given to the worship of a sterile money economy.”

One might call him also a vulgarian of money; placed in his own era, being a rich vulgarian merely made him a genuine great man. More than once, editorial writers and speakers coupled Cooke’s name with Lincoln and Grant.”

(The Age of the Moguls, Stewart H. Holbrook, Doubleday & Company, 1953, pp. 51-52)

Without resorting to financial trickery, propaganda and suppressed casualty reports Lincoln could not have sustained his destructive invasion of the American South. Unconstitutional paper money and financier Jay Gould provided the money for war — the latter used whatever means necessary to sell war bonds and demonstrated that indeed patriotism is the last refuge of a scoundrel.

Bernhard Thuersam, www.circa1865.org

Hustling Northerners to Save the Union

The Credit Mobilier scandal . . . brought on, or at least hastened, the panic of 1873 and turned the greatest American financier of the era into a bankrupt. This was Jay Cooke. At the time of the crash he was engaged in financing the second transcontinental railroad, the Northern Pacific.

[In the past he] showed fine judgment in his promotion of canals, then of railroads. He did well with loans to the government during the Mexican War. Then the Civil War gave him his big chance and he took it famously. In 1861, the State of Pennsylvania wanted to sell a large bond issue to finance its war effort. No banker but Jay Cooke would touch it. He sold the issue quickly, with a rousing appeal to patriotism. It was the first bond issue ever sold in that manner in the United States.

Noting his success, the federal government asked Cooke for his help. Moving his office to Washington . . . Cooke organized a spectacular country-wide campaign to sell federal war bonds to the public. He engaged brass bands. He hired spread-eagle speakers. He caused hundreds of thousands of flags to be displayed at bond rallies.

His salesmen worked on commission and were not turned loose until they had been thoroughly indoctrinated with the equivalent of pep talks and had learned at least ten ways of making non-buyers look and feel like traitors. Jay Cooke, in short, set the American, or rather the Union, eagle to screaming for money. He disposed of the bond issue of 1861, and of many more that followed. They amounted in four years to nearly three billion dollars.

What Cooke had done was to invent and bring to the management of national finance a wholly new technique – the drive. With little modification it has been used ever since. The boys in blue must be supported by fighting dollars.

From his immense commissions on bond sales and his many other activities, Cooke emerged at war’s end as the greatest banker in the country. “On the day Richmond fell, Cooke marked out the lines of a pretentious country house that was to cost one million dollars [with] an Italian garden facing a wall built to resemble “the ruined castle of some ancient nobleman.” This was the fifty-two room palace named Ogontz. Here he entertained, among others, President Grant, on whom he showered fine cigars and a plentitude of whiskey and wine.

Cooke dazzled Grant as he dazzled most contemporary Americans. He exemplified, said a critic, all of the substantial upper middle-class virtues of a people “newly given to the worship of a sterile money economy.”

One might call him also a vulgarian of money; placed in his own era, being a rich vulgarian merely made him a genuine great man. More than once, editorial writers and speakers coupled Cooke’s name with Lincoln and Grant.”

(The Age of the Moguls, Stewart H. Holbrook, Doubleday & Company, 1953, pp. 51-52)

Robert Hayne of South Carolina followed Jefferson’s admonition that the national debt was not something to be passed on to future generations; it was considered immoral for a president not to pay the debts incurred under their administrations before leaving office. In encouraging an unending public debt, Daniel Webster, on the other hand, Webster was promoting the American System of Whig politician Henry Clay which would give the government an endless supply of money with which to buy influence and power.

Bernhard Thuersam, www.circa1865.org

Spending the Money of Future Generations

“The gentleman from Massachusetts (Webster), in alluding to a remark of mine that before any disposition could be made of the public lands, the national debt (for which they stand pledged) must be first paid, took occasion to intimate (that Southerners desire to pay the national debt) “arises from a disposition to weaken the ties which bind the people to the Union.”

But, adds he gentleman, “so far as the debt may have an effect in binding the debtors to the country, and thereby serving as a link to hold the States together, he would be glad that it should exist forever.” Surely then, sir, on the gentleman’s own principles, he must be opposed to the payment of the debt.

Sir, let me tell that gentleman that the South repudiates the idea that a pecuniary dependence on the Federal Government is one of the legitimate means of holding the States together. A monied interest in the Government is essentially a base interest . . . it is opposed to all the principles of free government and at war with virtue and patriotism. In a free government, this principle of abject dependence if extended through all the ramifications of society must be fatal to liberty. Already we have made alarming strides in that direction.

The entire class of manufacturers, the holders of stocks with their hundreds of millions in capital, are held to the Government by the strong link of pecuniary interests; millions of people, entire sections of the country, interested, or believing themselves to be so, in the public lands and the public treasure, are bound to the Government by the expectation of pecuniary favors.

If this system is carried on much further, no man can fail to see that every generous motive of attachment to the country will be destroyed, and in its place will spring up those low, groveling, base and selfish feelings which bind men to the footstool of despots by bonds as strong and as enduring as those which attach them to free institutions.”

(The Webster-Hayne Debate on the Nature of the Union, Herman Belz, Editor, Liberty Fund, 2000, pp. 42-43. Speech of Robert Y. Hayne of South Carolina, January 25, 1830)

North Carolinian Nathanial Macon opposed the granting of pensions to War of 1812 veterans since the freedom they fought for and retained seemed suffient compensation for military service.  He was aware of the predictable political constituency enabled by a large army, true then as it is today.

Bernhard Thuersam, www.circa1865.org

Grand Army Rights as Conquerors

“The assumption behind the original pension law of 1862 had been that the Federal government . . . was liable only for injuries . . . sustained while in [service]. Mere service as a Union veteran did not entitle a man to any special consideration, even if he happened to be sick, jobless or destitute. By far the most common rebuttal [to pension reform] involved the declaration of a new principle: that the Union veteran had a prior claim on the nation’s treasury, not as a compensation for illness, not as a gratuity, but as an absolute right.

The Service Pension Association’s Frank Farnham, calling the GAR “the representatives of those who saved the country, by the greatest of sacrifices,” argued that “any reasonable demand” of the veterans should receive the public’s “unqualified support.”

Opposition to the Grand Army, he said, came mostly from the ex-Confederates, ex-Copperheads and Mugwumps. New York supporters of the $8 service pension bill were even more blunt. “The GAR,” they proclaimed in 1886, “own this country by the rights of a conqueror.”

[“Nation” editor Edwin] Godkin . . . found service pensions appalling in principle. As Congress was considering a proposal to pension all veterans over the age of sixty, he wrote:

“A large proportion of the half-million people who are added to the pension roll are persons who have no possible claim to consideration. Some of them were worthless as soldiers during the war; others are now “hard up” simply because they have grown shiftless and dissipated since the war; others are well-to-do and in no possible need of any increase to their income. The simple fact about the matter is that any old “bummer” who can establish the fact that he was connected with the Union Army in any way for ninety days, even if he got no further than the recruiting camp, may now have his name placed on the pension roll and draw $8 a month for the rest of his life.”

(Glorious Contentment The Grand Army of the Republic, Scott McConnell, UNC Press, 1992)

The first Democrat president after the War, Grover Cleveland went to work immediately on the “Billion Dollar Congress” which notoriously had handed out extravagant war pensions to the Grand Army of the Republic’s (GAR) veterans. In Cleveland’s second term, 1893 to 1897, his Secretary of the Interior, Hoke Smith of Georgia revealed the depth of pension frauds amid the Republican party’s loyal electorate.

Bernhard Thuersam, www.circa1865.org

Hoke Smith and the Grand Army Pensions

“By 1893 there were almost a million pensioners, receiving over $156 billion annually, or almost a third of the entire expense of operating the government. That inveterate reformer Carl Schurz called the pension system “a biting satire on democratic government. Never has there been anything like it in point of extravagance and barefaced dishonesty.”

The pressure exerted by the GAR and the political dynamite in the pension question had continually precipitated more generous pension legislation. Furthermore, the lax administration of the pension laws allowed applicants with the weakest possible claims, as well as some who were guilty of “wholesale and gigantic frauds,” to be admitted to the rolls.

In May 1893, [Hoke] Smith . . . revoked the notorious “Order No. 164″ [of] 1890 . . . an interpretation [by Republican Commissioner of Pensions Raum] which proved highly advantageous to persons with minor disabilities not of service origin. During the second Cleveland administration, the spiraling cost of the Federal pensions was checked . . . [but] it was in Congress that fundamental pension policy was determined and the Congressmen were in a liberal mood as far as the [Civil War] veterans were concerned.”

(Hoke Smith and the Politics of the New South, Dewey Grantham, Jr., LSU Press, 1958)

The summer of 1864 saw the Union cause in disarray and the Northern public depressed over the appalling battle deaths and worker strikes. Secretary of the Treasury Salmon Chase was a political opponent of Lincoln and presidential aspirant, and soon replaced by Maine Senator William Pitt Fessenden, a radical antislavery Whig. Lincoln appointed him for his close links to prominent northeastern capitalists, and to “find sufficient funds to pay for a vicious and expensive war that showed no signs of ending.”

Bernhard Thuersam, www.circa1865.org

Cash to Finance the Northern War Machine

“It would be easy to condemn Fessenden for his employment of a private banker [Jay Cooke] sell vast amounts of public securities. The secretary himself was uneasy about the idea. The Union was in a desperate financial condition for most of his term in office. [Former Treasury Secretary Salmon Chase] told Jay Cooke in September 1864 that Fessenden’s reluctance to employ the agency system was probably due to his unwillingness to encounter public criticism. “I hardly blame him,” wrote Chase bitterly. “What did I get – what did anybody get prefer[r]ing country and duty to private interests & compliant favor?”

The secretary’s treatment of financial questions was essentially pragmatic – informed by a characteristically Whiggish view of the economy and society but conditioned primarily by the urgent need for cash to finance the Northern war machine . . .

Beginning in July 1861 Congress passed a series of laws heavily restricting trade with areas outside the loyal States and giving the secretary of the Treasury and his network of agents wide-ranging powers . . . The system proved controversial, particularly in border-State communities traditionally reliant on trade with the South, and fostered widespread corruption centered on the smuggling of cotton from the Confederacy.

Cotton prices were increasing dramatically because of the war and a multiplicity of Treasury employees, military officials, and private citizens were soon caught up in the illicit trade. In the summer of 1864 President Lincoln endorsed the view of a Boston businessman, Edward Atkinson, that the government should procure as much Confederate cotton as possible in order to prevent the South from exploiting sales of its valuable staple.

On July 2, the day before Fessenden entered the cabinet, Congress gave the secretary of the Treasury exclusive power over all trade in the Rebel States, the aim being to establish a government monopoly over the cotton trade and thereby increase the national revenue at the enemy’s expense.

On September 24 Fessenden issued new trade regulations . . . These permitted persons claiming to control cotton beyond Union lines to sell their product to an appointed Treasury agent at three-quarters of the current cotton price in New York. A complementary executive order broadened the possibilities for intersectional trade by allowing cotton sellers to purchase goods up to bone-third of the price received and take them back across the lines.

Fessenden had grave reservations about this morally dubious trade . . . [but] Lincoln signed around forty special orders before December 1 authorizing favored individuals to bring out Southern cotton. Vast fortunes awaited those with sufficient political clout to secure the necessary permits or Treasury appointments.”

(The Grave of All My Comforts, William Pitt Fessenden, Robert Cook, Civil War History, John T. Hubbell, editor, Kent State University Press, September 1995, pp. 216-219)

For writing promissory notes and obligations of payment in true money of value, is the only proper use of paper for monetary transactions. The note is then worth the sum it is given for under the law. If the person writing the note is worth nothing, then the promise is worthless. The true value then is not the promissory note, but the man behind it. When persons in government begin printing money and establishing claims to its value, the entire system of value and worth is overturned and apparitions replace reality.

Bernhard Thuersam, www.circa1865.org

The Evils of Paper Money

“The currency provisions of the federal constitution were intended to “shut and bar the door” against the evils of a legal-tender paper money issued by State or national governments. For more than two generations it succeeded in accomplishing that end. Contemporaneous with the establishment of the new government, banks were introduced into the United States and spread everywhere with astonishing rapidity. As a result the American people continued as in former times to use for the most part a paper currency, consisting of the notes of these banks. They were not legal tender, as the old bills of credit had been, and could not be made so; and no one supposed that they could give rise to the evils of depreciated paper currency.

The framers of the Constitution of the United States were deeply impressed with the still fresh recollection of the baneful effects of a paper money currency on the property and moral feeling of the community. It was accordingly provided by our National Charter that no State should coin money, emit bills of credit, make anything but gold and silver coin a tender, in payment of debts, or pass any law impairing the obligation of contracts; and the power to coin money and to regulate the value thereof, and of foreign coin, was, by the same instrument, vested exclusively in Congress.

As this body has no authority to make anything whatever a tender in payment of private debts, it necessarily follows that nothing but gold and silver can be made a legal tender for that purpose, and that Congress cannot authorize the payment in any species of paper currency of any other debts but those due the United States, or such debts of the United States as may, by special contract, be made payable in such paper . . .

The provisions of the Constitution were universally considered as affording complete security against the danger of paper money. The introduction of the banking system met with a strenuous opposition on various grounds, but it was not apprehended that banknotes, convertible at will into specie, and which no person could be legally compelled to take in payment, would degenerate into pure paper money, no longer paid at sight in specie.

Still less it was expected; and it was the catastrophe of the year 1814 which first disclosed not only the insecurity of the American banking system, as then existing, but also that when a paper currency, driving away and superseding the use of gold and silver, has insinuated itself through every channel of circulation and become the only medium of exchange, every individual finds himself, in fact, compelled to receive such currency, even when depreciated more than twenty per cent, in the same manner as if it had been made a legal tender.”

( The Economic History of the United States, 1765-1860, Guy Stevens Callender, Sentry Press, 1965, pp. 564-566)