The New Nation

CHAPTER I. The Civil War

THE CIVIL WAR

The military successes of the United States in its Civil War maintained the Union, but entailed readjustments in politics, finance, and business that shifted the direction of public affairs for many years. In the eyes of contemporaries these changes were obscured by the vivid scenes of the battlefield, whose intense impressions were not forgotten for a generation. It seemed as though the war were everything, as though the Republican party had preserved the nation, as though the nation itself had arisen with new plumage from the stress and struggle of its crisis. The realities of history, however, which are ever different from the facts seen by the participant, are in this period further from the tradition of the survivor than in any other stage of the development of the United States. As the Civil War is viewed from the years that followed it, the actualities that must be faced are the facts that the dominant party saved neither the nation nor itself except by changing its identity; that economic and industrial progress continued through the war with unabated speed, and that out of the needs of a new economic life arose the new nation.

The Republican party, whose older spokesmen had been trained as Whigs or Democrats, had by 1861 seasoned its younger leaders in two national campaigns. It had lost the first flush of the new enthusiasm which gave it birth as a party opposed to the extension of slavery. The signs of the times had been so clear between 1856 and 1860 that many politicians had turned their coats less from a moral principle than from a desire to win. When Lincoln took up the organization of his Administration, these clamored for their rewards. There was nothing in the political ethics of the sixties that discountenanced the use of the spoils of office, and Lincoln himself, though he resented the drain of office-seeking upon his time, appears not to have seen that the spoils system was at variance with the fundamentals of good government.

It was a Republican partisan administration that bore the first brunt of the Civil War, but the struggle was still young when Lincoln realized that the Union could not stand on the legs of any single party. To develop a general Union sentiment became an early aim of his policy and is a key to his period. He was forced to consider and reconcile the claims of all shades of Republican opinion, from that of the most violent abolitionist to that of the mere unionist. In the Democracy, opinion ranged from that of the strong war Democrat to that of the Copperhead whose real sympathies were with the Confederacy.

To conciliate a working majority of the voters of the Union States, a majority which must embrace many Union Democrats, Lincoln steadily loosened the partisan bonds. The congressional elections of 1862 showed that he was still far from success. His overtures to the Democrats of the border States fell into line with his general scheme. His tolerance of McClellan and his support of Stanton, both of whom by sympathy and training were Democrats, reveal the comprehensive power of his endurance. As the election of 1864 approached to test the success of his generalship, he had to fight not only for a majority in the general canvass but for the nomination by his own party.

There were many men in 1864 who believed that the war was a mistake and that Lincoln was a failure. The peace Democrats denounced him as a military dictator; to the radical Republicans he was spineless and irresolute. Within his own Cabinet there was dissension that would have unnerved a less steady man. Chase, the Secretary of the Treasury, wanted to be President, and had allowed his friends to intrigue in his behalf, yet had not withdrawn from the counsels of his rival. At various times he had threatened to resign, but Lincoln had shut his eyes to this infidelity and had coaxed him back. Not until after the President had been renominated did he accept the resignation of Chase, and even then he was willing to make the latter Chief Justice of the Supreme Court.

Chase, in the Cabinet and in touch with dissatisfied Republicans outside, was a menace to impartial administration. Less distressing, but noisier than he, was John C. Frémont, the first nominee of the party, who had sulked in the midst of admiring friends since Lincoln had removed him from important military service in 1861. About him the extreme abolitionists were gathered, and in his favor there was held a convention in May, 1864. But this dissenting movement collapsed upon itself before the elections in November.

The Republicans went into convention at Baltimore, on June 7, 1864. The candidacy of Chase had faded, that of Frémont was already unimportant, and the renomination of Lincoln was assured. But the party carefully concealed its name and, catering to loyalists of whatever brand, it called itself "Union," and invited to its support all men to whom the successful prosecution of the war was the first great duty. It was a Union party in fact as well as name. Delegations of Democrats came to it from the border States, and from one of these the convention picked a loyal Democrat for the Vice-Presidency. With Lincoln and Andrew Johnson on its ticket, with a platform silent upon the protective tariff, and with an organization so imperfect that no roll of delegates could be made until the convention had been called to order, the Administration party of 1864 was far from being the same organization that had, in 1856, voiced its protest against the Kansas-Nebraska Bill.

The excesses of the Democrats aided Lincoln almost as much as the efforts of the party which nominated him. A convention at Chicago, in August, presided over by Governor Seymour, of New York, and under the dominance of Clement L. Vallandigham, did not need to denounce the war as a failure in order to disappoint the Union Democrats. Not even the nomination of McClellan, nor his repudiation of the platform, could undo the result of such leadership. It was far from certain which ticket would receive the greater vote in November, but it was clear that union against disunion was the issue, and that men would vote according to their hopes and fears. The former were in the ascendant when the polls were opened, for Sherman had gained a decisive victory in his occupation of Atlanta, while Farragut had gained another at Mobile Bay. On the strength of these successes the Union ticket carried every State but Delaware, Kentucky, and New Jersey.

Chase, who left the Treasury during the presidential campaign, had by that time finished the work which carried the financial burdens of the Civil War and provided party texts for another generation. He had come to his task without special fitness, but had speedily mastered the essentials of war finance. In his reports he outlined the policy which Congress followed, more or less closely. Taxes ought to be increased, he urged, to meet all the costs of civil administration, interest on the debt, and sinking fund for the same. These were current burdens which the country ought not to try to escape. But the extra cost of the war, which was to be regarded as a permanent investment by the Union for its own defense, might fairly be made a charge upon posterity. To meet these he urged the creation of a sufficient bonded debt.

The Thirty-seventh Congress (1861-63) had been more ready to borrow than to tax. In all its experience until 1861 the United States had met no crisis in which large revenues had been required. In the thirty preceding years its total annual receipts had ranged from $20,000,000 to $81,000,000, while in the fiscal year in which the war began the total had reached $83,000,000, of which $41,000,000 were loans rather than revenue. Since the panic of 1857 the Treasury had faced a deficit at the end of each year, and had been compelled not only to spend its accumulated surplus on current needs, but to borrow heavily. The tariff duties, collected at the custom-houses, were, as they always had been, the mainstay of the revenue. But these had not met the needs of the three lean years before the war.

Had there been no war, the disordered finances of the United States might, in 1861, have called for corrective measures and new taxes, and these could not have become effective before 1862 or 1863. As it was, loans were resorted to for first-aid. In 1862 they alone were more than six times as great as the total receipts of 1861; in 1865 they were nearly three times as great as in 1862. Taxes were authorized more reluctantly than loans, they became profitable more slowly, and did not, until the last year of war, reveal the fiscal capacities of the United States.

The favorite national tax of the United States had always been the tariff. Supplemented by miscellaneous items which included no internal revenue after 1849, and no direct tax after 1839, it carried most of the financial burdens. Whether parties preferred it high or low, or levied it for protection or for revenue, they had continued to cherish it as a fiscal device, and had acquired no experience with alternate sources of supply. Like the army of the United States, which in time of war had to break in its volunteer levies before it could win victories, the Treasury and Congress had to learn how to tax before they could bring the taxable resources of the United States to supplement the loans.

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