Northern Culture Laid Bare – Page 51

That the Union Not be Abandoned to its Enemies

Many Southerners like Georgia’s Benjamin H. Hill wanted to hold out against secession after Lincoln’s election, and labeled the purely sectional Republican Party as disunionist and an enemy of the Constitution. He reasoned that if Andrew Jackson could coerce South Carolina for nullification thirty years prior, why not coerce the guilty Northern States who nullified the federal fugitive slave law?

Bernhard Thuersam, www.Circa1865.com

That The Union Not Be Abandoned To Its Enemies

“On the fifteenth of November [1860], following [Howell] Cobb, [Robert] Toombs and [Alexander] Stephens, Hill appeared before the Assembly and made an eloquent argument against immediate secession or any precipitate action. The speech is primarily a closely reasoned appeal for moderation and a plea that passion and prejudices be discarded in the face of the imminent crisis.

“What are our grievances?” asks Hill; and then he proceeds to enumerate them, outlining the discriminatory policies and propaganda of the Republican party and laying special emphasis on the nugatory action of various free-State legislatures, affecting the fugitive slave laws. Hill represents the Republican Party as the real disunionist party, and quotes from various abolitionists who damn the Union and Constitution because they permit slavery. The grievances, then, are plain, and agreed of all Southern men.

Moreover, Hill believes the redress of grievances is not so hopeless a prospect in the immediate future. But suppose, for the sake of argument, redress of grievances within the Union is impossible, surely it is worth the effort; and all are agreed . . . that if such redress fails, then secession must come. But what are the remedies then, which are proposed within the Union.

First, the demand must be made by all the Southern States that the laws protecting slavery and requiring the rendering up of fugitive slaves must be enforced. The demand can be made as an ultimatum if need be. If necessary, let the federal government enact a force bill against any recalcitrant Northern State refusing obedience, as was done against South Carolina in 1833. Let the wrangling about slavery cease, and the entire machinery of government, if necessary, be put behind the enforcement of existing laws.

And Lincoln must come to this view. His only strength is in the law; he is bound by oath to carry out the law. A Southern president had once coerced a Southern State; now let a Northern president coerce a Northern State, if it comes to that. Hill insists that such a resolute attitude has never been taken by the Southern States, and he pleads that the Union not be abandoned to its enemies without making this effort to save it . . . He asks: “Is this Union good? If so, why should we surrender its blessings because Massachusetts violates the laws of that Union? Drive Massachusetts to the duties of the Constitution or from its benefits . . . Let us defend the Union against its enemies — not abandon it to them.

On December 6, Cobb, in an address to the people of Georgia announcing his resignation from [President James] Buchanan’s cabinet, averred that : “the Union formed by our fathers, which was one of equality, justice and fraternity would be supplanted on the 4th of March by a Union of sectionalism and hatred — the one worthy of the support and devotion of free men, the other only possible at the cost of Southern honor, safety and independence.”

This was followed up on December 23 by Toombs telegram to the Savannah Morning News, after the failure of the Crittenden Compromise: “I will tell you upon the faith of a true man that all further looking to the North for your constitutional rights in the Union ought to be abandoned. It is fraught with nothing but ruin to yourself and posterity.”

(Secession and Reconstruction, Haywood J. Pearce, Jr., University of Chicago Press, 1928, pp. 43-45)

A Union of Willing States, Not Conquered Provinces

Far from being united against Southern independence, the North endured military rule as Lincoln saw fit to silence criticism of his war policy against Americans by arresting newspaper editors and dissenters, including the grandson of Francis Scott Key. Even the Supreme Court feared arrest from a president who clothed himself in powers not granted by the Constitution.

Bernhard Thuersam, www.Circa1865.com

A Union of Willing States, Not Conquered Provinces

“Many [antebellum Northerners] . . . saw the Union in more conditional terms, as an agreed-upon relationship, not one resting upon coercion or compulsion. Millions of Northern Democrats, for example, denied the validity or value of a Union held together by force. Many felt so strongly about the invalidity of a coercive Union that they resisted and defied the Lincoln government during the Civil War in order to proclaim their views.

Even nationalists of an antislavery point of view could have doubts about a Union maintained by force. In 1801 when John Quincy Adams feared that Aaron Burr might break up the recently-created union he was not sure that it ought to held together by force. “If they break us up – in God’s name, let the Union go,” he wrote. “I love the Union as I love my wife. But if my wife should ask and insist upon a separation, she should have it though it broke my heart.”

Sixty years later another son of Massachusetts and an abolitionist, Wendell Phillips, used the wifely metaphor again – this time in confronting an actual breakup of the Union. Phillips spoke after secession had taken place. “A Union is made up of willing States, not of conquered provinces,” he said. “There are some rights, quite perfect, yet wholly incapable of being enforced. A husband or wife who can only keep the other partner within the bond by locking the doors and standing armed before the door had better submit to peaceable separation.”

(The Other South, Southern Dissenters in the Nineteenth Century, Carl N. Degler, Harper & Row, 1974, page 121)

War Fever with Japan, 1913

Without the spreading of American influence to Hawaii and the Philippines under Republican administrations, the tension with Japan mentioned below would probably not have occurred. It is noteworthy that Woodrow Wilson and Secretary of War Jonathan Daniels were both Southerners who exhibited a conservative political nature. Wilson, despite his promise to not send American men to die in Europe, was bullied into intervention by T.R. Roosevelt and his Navy League propagandists, financed by American steelmakers and munitions makers.

Bernhard Thuersam, www.Circa1865.com

War Fever with Japan, 1913

“[The] California Assembly on April 16 [1913] passed an alien land bill that prohibited Japanese landownership in the indirect manner that [Woodrow] Wilson suggested. Underneath the surface, however, an international crisis of the first order was in the making.

The Japanese representatives in Washington and the American Charge’ in Tokyo had repeatedly warned the State Department of the inevitable Japanese reaction; but it was not until public opinion in Japan erupted in full fury around the middle of April that the Washington government awoke to the realization that the two countries might be moving toward a break in relations.

The crisis was made all the more acute, moreover, when the leaders in the California Senate announced on April 21 that they intended to ignore the cautiously worded Assembly bill and to substitute a measure aimed specifically at the Japanese, by prohibiting land ownership by all persons “ineligible to citizenship.” This, and a rising war fever in Japan, impelled [President Wilson] at last to take a hand.

Firstly, on April 22 he addressed a public appeal to Californians, urging them to exclude Japanese from landownership only by polite and indirect means, and not to embarrass the federal government by making the bill openly discriminatory.

Meanwhile, relations with the Japanese government were rapidly approaching the point of tension. On May 9, the day the California legislature passed the alien land bill, the Japanese Ambassador, Viscount Chinda, lodged his government’s protest with the State Department.

The American naval chiefs, fearful of a surprise attack on the Philippines, on May 13 urged the immediate dispatch of three American warships in the Yantze River to those islands. The following day, the Joint Board of the Army and Navy reiterated the recommendation and Admiral Bradley A. Fiske warned that war with Japan was “not only possible, but even probable.”

These recommendations precipitated a spirited discussion in the Cabinet on May 16. Garrison favored strong action and approved the Joint Board’s recommendation, while [Secretary of the Navy Jonathan] Daniels argued that moving the warships would only irritate the Japanese without making it possible to defend the Philippines if war occurred.

The spreading of the First World War to the Far East, a development that Bryan tried unsuccessfully to prevent, brought a new tension in the troubled relations between Japan and America.”

(Woodrow Wilson and the Progressive Era, 1910-1917, Harper and Brothers, 1954, pp. 85-87)

Union Saved for Republican Party Hegemony

With the South out of Congress since 1861 and no Southern leadership to provide a conservative and responsible voice in US government, the predictable occurred. As a soldier Grant was a butcher who sent wave after wave of new recruits to wear down the thin Southern brigades; as a politician, Orville H. Browning of Illinois described Grant as “weak, vain, ignorant, mercenary, selfish and malignant”; that he was surrounded by corrupt and unprincipled men and that his reelection would be a great calamity to the country.” Grant’s election in 1868 was achieved with a few hundred thousand freedmen votes, they herded to the polls by the Republican’s terrorist Union League.

Bernhard Thuersam, www.Circa1865.com

Union Saved for Corrupt Republican Party Hegemony

“The eight years of Grant’s administration rocked with one scandal after another. Citizens defrauded the government in the acquisition of land and in claims for [Northern veteran] pensions; contractors supplying the army and navy were often venal; and unscrupulous lawyers levied toll on ignorant and defenseless Indians.

Members of Congress were bribed and disgraced. Cabinet officers were investigated and impeached. Subordinate officials and employees were revealed in outright betrayal of public trust. Never had the Republic sunk to so low an estate of official morality.

During the 1870s there was both incompetence and dishonesty in the large customhouses; discipline and integrity among the navy-yard labor forces were at a low ebb; the Indian service had been roundly condemned by [James] Garfield; land agents connived at irregularities, and surveyors made fraudulent claims for work not performed.

The tone of the eight years of Grant’s administration was . . . set by a small number of weak and unreliable persons holding seats in Congress and in high executive office. It was during these years that the most resounding scandals occurred, not only in Washington but in many States and cities. When the mighty wandered far from the paths of rectitude, it was not surprising that some of the lesser ranks followed their example.

To a few of the scandals we turn . . . The Credit Mobilier . . . originally organized to finance railroad construction, [it] fell into the control of a group of adventurers, including a member of Congress, Oakes Ames. The corporation was awarded a lucrative but fraudulent contract for the . . . [Union Pacific Railroad and disgraced Grant’s] Vice Presidents Colfax and Wilson.

Laxness or corruption in the award of Indian trading posts had been suspected for some time under General [William] Belknap’s administration of the War Department. [Secretary of the Navy George M. Robeson levied] percentages on . . . contractors’ engagements with the navy, [and] Robeson grew rich. [Secretary of the Treasury John D. Sanborn, a protégé of Benjamin Butler, siphoned money destined for the Internal Revenue Service].

The most dramatic and perhaps the most damaging evidence of corruption during the Grant administration involved the evasion of internal revenue taxes on distilleries. Fraud had long been suspected [and persons involved] included General John A. McDonald, collector of internal revenue in St. Louis . . . other collectors, the chief clerk of the internal revenue division of the Treasury Department in Washington [and] General Orville Babcock, President Grant’s private secretary, who was subsequently indicted but who escaped conviction.”

(The Republican Era, 1869-1901, A Study in Administrative History, Leonard D. White, Macmillan Company, 1958, excerpts pp. 366-373)

Northern Race Riots, Conscription and Substitutes

In mid-1863, Tammany Hall’s Boss Tweed found a way to settle the hated draft issue, give Lincoln his cannon fodder, and buy immigrant votes. Tweed brokered a deal with New York City politicians to find substitute recruits for drafted city residents, use the city treasury to pay whatever signing bonus the market would require, and tap a special $2 million “substitute” fund financed by bonds to be sold on Wall Street. If a New York City resident got caught in Lincoln’s draft, he could either use the fund to buy his way out, or join the army and keep the money. With this deal, Lincoln used Tammany Hall to run his draft in New York.

Author Kenneth Ackerman wrote in his biography of Boss Tweed: “His county recruitment drive for the army would attract scandal: abusive bounty brokers, unqualified soldiers — either prisoners from local jails or immigrants literally straight from New York harbor — and middlemen stealing fortunes in graft. But it hardly raised an eyebrow compared to the epidemic of war profiteering that had infected the country.”

Bernhard Thuersam, www.Circa1865.com

Northern Race Riots, Conscription and Substitutes

“For four days terror reigned [in New York City], marked by a series of grisly lynchings [of black residents]. A mob even swarmed onto a British ship in the harbor, and despite the Captain’s protests, cruelly beat up the foreign Negroes among the crew. The police were barely able to save the Tribune Building from total destruction. Men searched for the Tribune’s editor, singing, “We’ll hang Horace Greeley from a sour apple tree.”

A Negro orphanage on Fifth Avenue was burned to the ground. Looters had a field day, among them screeching women who opposed [military] conscription.

Troops were rushed from Gettysburg [immediately after the battle]; cadets from West Point came to aid the police; the entire naval force in the region was called upon to quell the disturbance. Finally, in desperation, the military raked the streets with cannon fire. But what really stopped the rioting was a posted notice: “the draft has been suspended in New York City and Brooklyn.”

The newspapers carried the word in huge print. Order was finally restored. According to the Tribune of July 25, some 350 people had been killed; but other estimates went much higher. Casualties, including the injured, amounted to 1,000 and private property damage was estimated at $1,500,000.

Republican newspapers claimed the outbreak had been sparked by Confederate agents. But Democratic Party feeling and a sincere desire for peace were mingled with race prejudice and resentment against what the anti-Lincoln papers called the “incompetence” of the Administration. Men resented fighting against their convictions and were indignant at “governmental “frauds and profiteering.”

Apparently, from the magnitude of the outbreak, the London Times had not been far wrong in predicting that if the South won in Pennsylvania, Jefferson Davis and General Robert E. Lee would receive a rousing welcome along Broadway.

Soon after the tumult subsided, the Democratic City Council of New York voted that the exemption [from military service] money of four hundred dollars for impecunious draftees would be paid from the city treasury. To meet Governor Seymour’s charge that the conscription as practiced was “unequal, fraudulent and a disgrace,” President Lincoln reduced the New York quotas [for troops].

When the draft was resumed a month later, he took the precaution of sending 10,000 infantrymen and three artillery batteries from the Army of the Potomac to see that the business went off quietly.

During New York’s bloody pandemonium, [British Colonel Arthur] Freemantle had been surprised to hear everyone talking of the “total demoralization of the Rebels.” To him it sounded absurd, since only a few days previously he had left Lee’s army “as full of fight as ever,” much stronger and more efficient from every military point of view than when it had crossed the Potomac to invade Maryland the previous September.

In the Colonel’s opinion, Lee’s army had “not lost any of its prestige at the battle of Gettysburg, in which it had most gallantly stormed strong entrenchments defended by the whole Army of the Potomac.” Freemantle took ship for England and completed his book of observations at sea. “The mass of respectable Northerners,” he wrote, “though they may be willing to pay, do not very naturally feel themselves called upon to give their blood in a war of aggression, ambition and conquest . . . The more I think of all I have seen in the Confederate States of the devotion of the whole population, the more I feel inclined to say with General Polk — “How can you subjugate such a people as this?”

[And] even supposing that their extermination were a feasible plan, as some Northerners have suggested, I never can believe that in the nineteenth century the civilized world will be condemned to witness the destruction of such a gallant race.”

(Jefferson Davis, Confederate President, Hudson Strode, Harcourt, Brace & Company, 1959, pp. 458-460)

Unstoppable Yankee Avarice

While in the western theater early in the war, Grant observed the brisk illicit traffic passing around his lines as Yankee traders and speculators bribed Northern officers to allow their passage to purchase cotton. Later in the war, General W.H.C. Whiting in command of the Cape Fear District at Wilmington wrote President Davis that blockade runners with Northern goods aboard seemed to pass through the blockade more easily.

Bernhard Thuersam, www.Circa1865.com

Unstoppable Yankee Avarice

“The amount of greed and corruption that attended the business of blockade-running was about what might have been anticipated, and involved not only Southerners and Britons, but some grasping Yankees.

When Gazaway B. Lamar (though born in Georgia, Lamar removed to Brooklyn in 1845 and became successful in business, and for several years president of the Bank of the Republic, New York), a pre-war smuggler of Africans into the South, headed a company that vigorously operated four steamers, and along with Fraser and Company of Charleston, and Fraser, Trenholm of Liverpool reported lucrative returns, it is no wonder that some Northerners watched these traders enviously! The contraband commerce had all the attractions of gambling for high stakes.

More than half the ships and cargoes tried in the New York prize court were British, but the British name too often concealed Northern interests. Some Yankees were as ready to evade trading-with-the-enemy laws as their fathers had been in 1812. Northern goods, their labels altered to flaunt famous English names, passed through Boston or New York on long roundabout trips, Boston-Bermuda-Wilmington, or New York-Nassau-Mobile, and sometimes were even shipped with bold directness to Charleston or Matamoros.

At its height, the New York trade with Bermuda, Nassau and Havana was scandalously large. A “ring” of dealers, shippers, and blockade-runners helped organize the traffic and made arrangements with the Custom House for shipments. In the autumn of 1864, information was given Naval Officer William E. Dennison that blockade-runners had been heard to boast of ease with which they could clear outward-bound goods through the [New York] Custom House. Several men swore that one employee, the son of H.B. Stanton the noted Abolitionist orator, had taken bribes, and he and his father were dismissed.

[As for Yankee cotton-buying in the West, Grant] . . . “in private conversations to the end of the war, he always spoke of them as a gang of thieves.” As Lincoln crisply put it, “The army itself is diverted from fighting the rebels to speculating in cotton.” Rear Admiral Porter said of the Treasury agents sent down by [Treasury Secretary Salmon P.] Chase to control the situation: “A greater pack of knaves never went unhung.”

Yet his own gunboat crews were equally unscrupulous, one Senator later declaring that they had made a hundred millions during the war. Charles A. Dana wrote: “Every soldier dreams of adding a bale of cotton to his monthly pay.” And David Perry of the Fifth Illinois Cavalry, son of a mayor of Bloomington, Illinois, made a yet graver charge.

“Many lives have been sacrificed during the past summer and fall, he informed his father as the year 1862 ended, “that certain high officers might make their fortunes with cotton-trade, and many a poor darkey who had fled to us has been traded off, by officers holding high positions in the army and before the world, for cotton. The truth is, when an impartial history of this war shall be written, it will expose a greater amount of fraud and corruption than the world has ever before seen. Even your Bloomington general, Hovey, traded Negroes for cotton and sacrificed many lives . . . for the sole purpose of making money.”

By Autumn [1862], a correspondent of the New York Tribune was asserting flatly, “One of the causes of the want of discipline, energy and military power in the army of the Southwest is the mania for cotton speculation which has seized upon the officers of the Army, from generals down to quartermasters and lieutenants.”

Loyal Union planters saw their cotton pounced upon by greedy [Northern] officers who waved papers, talked of the violation of obscure military orders, and shipped the crop away with almost no concealment of the fact of private interest.

The ebullient “Russ” Jones of Chicago, close friend of both Grant and Elihu Washburne, made no secret of his activities. He wrote Congressman Washburne at the beginning of 1863 from Holly Springs, Mississippi, that Grant had treated him kindly.

He hoped the army would push farther South, “as I want to get as far into the enemy’s country as possible. If we get out safely with what cotton we have bought, I shall clear four or five thousand for my share . . .” Jones, former Galena businessman and Republican politician, continued to serve in his patronage post of Marshal. In 1869 he was named Minister to Belgium by Grant, and was very active in Republican politics and Chicago street railroads. At one time he managed some property and investments for Grant.”

(The War for the Union, Allan Nevins, Charles Scribner’s Sons, 1971, excerpts, pp. 342-353)

Northern Vandals Liberate Wilmington Furniture

Considered one of Wilmington, North Carolina’s antebellum architectural treasures, the Dr. John D. Bellamy mansion was seized by Northern General Joseph R. Hawley in February 1865 for use as his headquarters while occupying the city — ironically, Hawley was a native North Carolinian. Bellamy’s daughter Ellen was a young girl at the time and later recalled vivid memories of the enemy invasion.

Bernhard Thuersam, www.Circa1865.com

Northern Vandals Liberate Wilmington Furniture

“The Federal troops captured Wilmington on February 21, 1865; they took possession of our home, which we had temporarily vacated, and it remained General Hawley Headquarters a long time, even after Lee’s surrender. It was very galling . . .”

[Mother] came up to own dear house, accompanied by a friendly neighbor . . . who was related to General Hawley, and had offered to introduce her. It was most humiliating, and trying, to be entertained by Mrs. Hawley, in her own parlor. Mrs. Hawley showed her raising by “hawking and spitting” in the fire, a most unlady-like act. During the call she offered Mother some figs (from Mother’s own tree) which Aunt Sarah had picked — our own old cook, who had been left there in charge of the premises.

My father made several trips to . . . Washington City before they would grant him his “Pardon.” For what? For being a Southern Gentlemen, a Rebel, and a large Slave Owner! The slaves he had inherited from his father, and which he considered a sacred trust. Being a physician, he guarded their health, kept a faithful overseer to look after them (his home being a regular drug store), and employed a Methodist minister, Rev. Mr. Turrentine, by the year, to look after their spiritual welfare.

Although the war was practically over seven months, we did not get possession of our home ‘till September. [T]he beautiful white marble mantles in the two parlors were so caked with tobacco spit and garbs of chewed tobacco, they were cleaned with great difficulty; indeed, the white marble hearths are still stained . . . No furniture had been left in the parlors . . . On leaving here, the Yankees gave [the] furniture to a servant . . .” In our sitting room, our large mahogany bookcase was left, as it was too bulky for them to carry off; but from its drawers numerous things were taken, among them an autograph album belonging to me brother Marsden.

A number of years later, when my brother John was in Washington as a member of Congress, this same Hawley, then a senator from Illinois, told him of the album “coming into his possession” when he occupied our house, and said he would restore it to him. However, he took care not to do it, although repeatedly reminded.”

(Back With The Tide, Memoirs of Ellen D. Bellamy, Bellamy Mansion Museum 2002, pp. 5-8)

Vandals Pickax the Pews Again

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)

“They Have Made a Nation”

Lincoln appointed no men to his cabinet who were familiar with Southern sentiment or sensitivities – an act which might have avoided a collision and perhaps have truly “saved the Union.” The Republican Party won the contest and would not be denied the fruits of victory no matter the cost. Charles Francis Adams was appointed minister at London by Lincoln, somewhat appropriate as Adam’s grandfather himself viewed the presidency as monarchical. More important, Adams was a Republican politician with little regard for the American South and put party above the welfare of the country.

Bernhard Thuersam, www.Circa1865.com

“They Have Made a Nation”

“For the post at London Lincoln had made one of his best appointments. As a boy [Charles Francis Adams] had witnessed stirring events in Europe; in the company of his mother he had taken the long and arduous winter journey by carriage from St. Petersburg to Paris to join his father John Quincy Adams. Passing through the Allied lines, he reached Paris after Napoleon’s return from Elba.

By 1861 he had served as legislator in Massachusetts, had become prominent as a leader of the “conscience” Whigs and the Free-Soilers, and had achieved the position of an influential leader of the national House of Representatives where his main contribution was as a moderate Republican earnestly engaged in the work of avoiding war.

Though depressed at the nomination of Lincoln, whom he never fully admired, he accepted appointment as minister to England and gave of his best as a loyal servant of the Lincoln administration.

Through all the diplomatic maneuvers there ran the central question of recognition of the Confederacy and the related questions of mediation, intervention and the demand for an armistice. Had the South won on any of these points, victory would have been well-nigh assured. By September of 1862 [Lord] Palmerston and Russell’s deliberations had reached the point where, in view of the failures of McClellan and Pope and the prospects of Lee’s offensive, Palmerston suggested “an arrangement upon the basis of separation” (i.e., Southern victory); while Russell, the foreign minister, wrote in answer that his opinion the time had come “for offering mediation . . . with a view to the recognition of the independence of the Confederates.”

[Just] at this juncture there came a bombshell in the speech of the chancellor of the exchequer, W.E. Gladstone, at Newcastle (October 7) in which he said:

“Jefferson Davis and other leaders of the South have made an army; they are making, it appears, a navy; and they have made what is more important than either, — they have made a nation . . . We may anticipate with certainty the success of the Southern States so far as regards their separation from the North.”

(The Civil War and Reconstruction, James G. Randall, D.C. Heath & Company, 1937, pp. 461-462; 468-469)

The Anticipated Profits of Next Year’s Pay Checks

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)