The 1862–63 congressional session was among the most productive ever. A number of Republican leaders (including Lincoln) had benefited from western migration. They transformed their personal stories into the Homestead Act that offered 160-acre tracts of public land for a twelve-dollar registration and filing fee. If a homesteader lived on it for five years, built a house, and farmed, he owed an additional six dollars. Owen Lovejoy of Illinois, the “Farmer Congressman,” as his constituents called him, introduced the bill. Over time, the act helped to settle 10 percent of the entire land area of the continental United States. Prior to the Civil War, Americans mainly lived east of the Mississippi with outposts along the Pacific Coast. The Homestead Act helped to “fill in” some of the spaces between the Mississippi and the Pacific, knitting a nation together, providing passenger and freight traffic for the coming transcontinental railroad, contributing to the abundance of food for the rising cities, and running off the Indians. Western settlement also stoked the federal treasury. Horace Greeley, the editor who had supposedly offered the famous advice “Go West, young man,” wrote, “Every smoke rising from a new opening in the wilderness marks the foundation of a new feeder to Commerce and the Revenue.”19
The war sparked an interest in science. Lincoln was the first president to hold a patent for an invention. He received a patent in 1849 for devising a series of bellows located in a ship’s hold to be deployed to loft the boat over shoals or other obstructions in river beds. The purpose of the invention was to enable new and larger cargo vessels to navigate rivers further upstream than accustomed, thereby reviving the prosperity of river towns. Lincoln built a model to secure his patent but could not raise the funding for a prototype. The telegraph, the sewing machine, vulcanized rubber, the mechanization of agriculture, and the introduction of ready-made clothing and shoes fueled the widespread impression that this was the age of invention. Science and scientific inquiry, efficiency, and professionalism all received boosts from the war effort. Venerable Harvard modified its classical education and introduced the nation’s first science curriculum before the war ended.20
The Union became a synonym for “modern,” and a ready counterpoint to the “unmodern” South. Slavery was not a progressive institution. It was a relic from a bygone era that strangled man’s ambition. Herbert Spencer, the British philosopher who would coin the phrase “survival of the fittest,” believed that slavery’s elimination was emblematic of man’s progress. An American admirer wrote to him in affirmation in 1864, “The great slave system … had well nigh paralyzed the mind of the nation, but the war has broken the spell.” Like the Indian, slavery and the slaveholder were stale mementos from a primitive past that must be eliminated if mankind were to progress.21
Congress passed the Morrill Land Grant Act, another measure designed to further science and efficiency. The federal government granted public lands to the states to finance colleges that would offer training in scientific agriculture and the mechanical arts. Justin S. Morrill, a Vermont congressman who had been too poor to attend college, spoke of the bill’s benefits in economic terms: “Science, working unobtrusively, produces larger annual returns and constantly increases fixed capital, while ignorance routinely produces exactly the reverse.”22
Creating the Department of Agriculture fulfilled scientific objectives, too. Lincoln hoped that such a department would generate statistics and publicize best practices that would help not only the farmer but merchants and manufacturers as well. As the Philadelphia Inquirer noted in support of the legislation, armed with statistics, the government could reduce social theories “to a certainty. A nation … with such analytic self-inspection at periodic intervals might mould its growth, and forecast its future with a knowledge of all the resources and all the forces operating to shape its destiny.” Scientific agriculture would also increase crop production to feed the rapidly growing population.23
The Lincoln administration employed lavish grants of public lands to finance a transcontinental railroad. Many Americans had dreamed of a railroad spanning the country. Stephen A. Douglas had acted on that dream with disastrous political consequences for himself and the country. With southerners absent from Washington and slavery no longer a sticking point, Republicans resurrected the vision in the Pacific Railway Act of 1862. The Union Pacific Railroad could not afford to build across the vast and lightly populated Plains unless the government subsidized the project with land grants. Republicans viewed the railroad as a military necessity to move troops quickly against the Indians and secure the West for the Union, as well as to stimulate commerce with Asia. The railroad never realized the Asian trade, but it helped settle the West and, like the telegraph, created a country more closely resembling a national state than a series of disparate regions. As one of its congressional advocates observed, “Unless the relations between the East and the West shall be the most perfect and most intimate which can be established,” the American “empire” would risk “breaking on the crest of the Rocky mountains.” The railroad was part of a broader Republican effort to remake America in the image of the North. “The cultivated valley, the peaceful village, the church, the school-house, and thronging cities”—key elements of northern culture—would spread west, making America “the greatest nation of the earth.” The Lincoln administration gave away 158 million acres to railroads during the war.24
Giving away land, the federal government had to rely on tariffs and taxes for revenue. In wartime, however, these streams were insufficient. Harper’s put the matter succinctly in May 1861. “In modern warfare … success is won not so much by numbers as by money. The longest purse, in the long-run, infallibly wins the day.” While the war on the battlefield tilted toward the Union by the end of 1863, victory was not assured. In finance, however, the federal government was winning handily, as both the ragged Confederate soldiers and the protesting southern women attested.25
Among the ways the Republican administration raised money was the passage for the first time in American history of a progressive income tax, raising $55 million during the war. The government also floated large bond issues, sold not to banks but to the general public. The bonds not only raised money to wage the war but also drew northerners closer to the Union cause by giving them a financial stake in victory.26
The Treasury Department hired Jay Cooke, a Philadelphia banker, to market $500 million worth of bonds at 6 percent interest to the public. The bonds were redeemable after five years and matured after twenty. The so-called five-twenties were wildly successful thanks to Cooke’s effective advertising and his army of agents. At one point, Cooke was selling a million dollars’ worth of bonds per day. One out of four northern households invested in the instruments. The bonds, however, were not enough to cover the war’s mounting expenses. The army spent over $1 million a month just on forage for its horses, or more than the cumulative federal budget for the first two decades of the nineteenth century.
The Lincoln administration resorted to the printing press and churned out $150 million in “greenbacks” (they were printed on green paper). To heighten confidence in the paper money, the government made them convertible to the five-twenties. The increased flow of gold and silver from the West also helped public confidence. After Gettysburg and Vicksburg, there was such a run on the five-twenties that the Treasury Department had to close the sale. By the end of the war, the Lincoln administration had run up a national debt of $2.5 billion, much of it absorbed by northern citizens.
The National Bank Act of 1863 resurrected the Hamiltonian idea of a national banking system. It established a national currency and permitted the creation of a network of national banks. The banks issued federal greenbacks as well as their own “national” banknotes, driving out the confusing array of state-issued money and increasing the stability of financial markets. Lincoln heartily approved these measures, predicting accurately, “Finance will rule the country for the next fifty years.”27
All told, the war’s direct costs amounted to $6.7 bi
llion. If, upon Lincoln’s inauguration, the government had purchased the freedom of four million slaves and granted a forty-acre farm to each slave family, the total cost would have been $3.1 billion, leaving $3.6 billion for reparations to make up for a century of lost wages. And not a single life would have been lost. No one, of course, foresaw the enormous cost of the war in dollars and lives in 1861. Based on the refusal of several border states to agree to a compensation program during the war’s early years, it was also doubtful the Lincoln administration would have found willing partners for such a proposal in other parts of the South.28
With all this money injected into the marketplace, and contracts for clothing, shoes, food, horses, weapons, ammunition, and transportation let at a dizzying pace, several entrepreneurs launched spectacular careers as financial and industrial moguls. John D. Rockefeller was twenty-one years old when he cast his first presidential ballot for Abraham Lincoln in 1860. At that young age he was already a partner in a lucrative commodity business in Cleveland, Ohio. Mature beyond his years, he had assumed responsibility for his family, as his father disappeared for long periods of time. He sold grain, meat, and other foodstuffs, items that soared in price after the war began. When the war shut down the Mississippi River as an artery of commerce for the Old Northwest, the Great Lakes and the railroads became commercial lifelines for the region. By 1862, Rockefeller’s profits topped seventeen thousand dollars annually, a large sum for a small commodity house.
Rockefeller was anxious to invest his profits in other parts of the war-heated economy. Cleveland’s proximity by rail to the Pennsylvania oil fields caught his attention. He invested four thousand dollars in a new refining venture, “a little side issue,” he called it. The war had stimulated numerous uses for oil. Kerosene lit lamps, physicians applied it to wounds, and the Union army used oil as a substitute for turpentine when the South cut off supplies. Kerosene gained in popularity among Union officers when a reporter noted that General Grant drafted his dispatches by the light of a kerosene lamp in his tent. Kerosene generated a bright light that extended daylight in cities and on farms. Manufacturers of arms, ammunition, and heavy machinery discovered that oil served as an excellent lubricant. In 1865, Congressman and former Union officer James A. Garfield remarked to a colleague, “Oil, not cotton, is King now in the world of commerce.” The new greenback currency and the national banking system allowed banks to offer generous credit during the war. Rockefeller took advantage and secured a loan to expand his oil business. By the beginning of 1865, Rockefeller had built Cleveland’s biggest oil refinery, one of the largest such facilities in the world.29
The artisan shop and the small factory employing a dozen or so operatives were characteristic of manufacturing in antebellum America. The war demanded volume and speed, which privileged size and technology. Machinery was more important than artisanal skill, and uniformity more prized than individual handicraft. The Civil War did not create the industrial revolution in America; it accelerated it and gave it the shape of what was to come: large, mechanized factories manned by low-skilled workers turning out products for both domestic and foreign markets.
Triumph Hill, near Tidioute, Pennsylvania (ca. 1870), was at the center of the oil boom that John D. Rockefeller parlayed into the Standard Oil Company. The photo shows buildings, derricks, and storage tanks. (Courtesy of the Library of Congress)
The war also expanded the white-collar middle class: managers, salesmen and clerks to run the railroads, distribute goods, solicit orders, maintain account books, and analyze price trends. The professions, especially medicine and engineering, profited significantly from the war, adding considerably to the knowledge of bridge and railroad construction, surgical practice, and nursing. Union engineers constructed a bridge over the Chattahoochee River near Atlanta more than 740 feet long and 90 feet high in just four days, facilitating General Sherman’s capture of that city in September 1864.
The federal government was an active partner with private enterprise in expanding the economy and generating wealth. Government contracts, generous land grants, financial legislation and policy, and tax and tariff legislation contributed greatly to the economic expansion and to the Union war effort. John D. Rockefeller’s Cleveland office became an important gathering point for colleagues during the war, and not only to receive the latest news from the front off the telegraph. Rockefeller had installed a telegraph connection in order to react quickly to price changes in oil, commodities, and transportation. The federal government helped Western Union string telegraph wires across America, facilitating contact with armies in the field, and also enabling entrepreneurs like Rockefeller to receive timely information to make their businesses more efficient and profitable.
The working class did not benefit from the wartime economic boom. Labor shortages resulted in rising wages, but not enough to keep up with inflation. Prices rose nearly 80 percent in the North during the war years, wages less than two thirds of that figure. The change in scale and the resort to machinery mitigated labor shortages and reduced dependence on skilled operatives. Women whose husbands were in the service and immigrants suffered hardships during the war. The New York City draft riot originated in part from widespread labor discontent among the Irish immigrant working class. The Lincoln administration brooked no opposition from striking workers, dispatching federal troops to quell labor disturbances in a number of locations. When troops broke up a strike in the Parrott cannon factory at Cold Spring, New York, the administration tossed labor leaders into a military prison. Several states enacted anti-union legislation to prevent workers from organizing.
Despite the general prosperity, it is probable that the condition of working-class Americans was worse at the end of the war than at the beginning. Republicans, including Lincoln, believed in the dream of easy upward mobility and of the harmony of interests between capital and labor. Many Republican leaders had experienced that mobility, but they attained adulthood in a different era. Karl Marx hailed the Union war effort as a “matchless struggle for … the reconstruction of a social world.” He may have been correct, but not in the way he intended. Northerners pondered the addition of workers, especially immigrant workers, to the list of those, like the Indian and the slaveholder, who stood in the way of inevitable progress.30
The economic rush fomented by the war had its seedy side, besides the suppression of labor. Corruption and cronyism had existed before the Civil War, but the stakes were relatively low. With sums of money never seen before flowing to contractors, the temptations were great. Quartermaster General Meigs was an individual of impeccable integrity, but he relied on field officers scattered across the country, some of whom developed cozy relationships with contractors.
It is not surprising that the word “shoddy” made its initial appearance in the American lexicon during the Civil War. The term migrated from England, where it described the adulteration of wool textiles with other materials to reduce costs. Americans employed it during the war to denote both inferior goods and shady military contractors. The first appearance of the term came in connection with federal uniforms that disintegrated in the rain in the summer of 1861. The term became a rallying cry for war critics. A popular poem, “Song of the Shoddy,” cited “Coats too large and coats too little / Coats not fitting any body / Jackets, overcoats, and trowsers, / Made of cheap and shameful Shoddy.” Critics referred to the manufacturers who perpetrated such frauds as “the shoddy aristocracy.” A popular novel published in 1863, The Days of Shoddy: A Novel of the Great Rebellion in 1861, by Henry Morford, warned, “The leech has fastened upon the blood of the nation, and it will not let go its hold until the victim has the last drop of blood sucked away.… Every swindling shoddy contractor … has been a national murderer.” The strong language seemed disproportionate to the crime, but the contrast between young men laying down their lives for the Union and merchants profiting exorbitantly from clothing, feeding, and arming those soldiers with inferior goods incensed the public.31
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nbsp; The fabulous wealth and ostentation of some of these contractors also contrasted sharply with the struggles of working-class northerners. Seamstresses who made uniforms for the army worked at low wages and endured difficult working conditions. In 1864, Mary Pratt, a leader of Philadelphia seamstresses, declared, “Shoddy has been set on horseback, and fast as he can do so, shoddy is riding to the devil. In order to get there he must ride over our heads. The only way to save ourselves is to stand erect and maintain our rights.” The sense of injustice was widespread, and even the Republican press remarked pointedly on the contrast between dying and profiting, as if injecting millions of dollars into the American economy should produce a collection of selfless individuals who peddled sterling products with a profit margin sufficient to sustain only a modest lifestyle. Partying and profiting while men were dying for a holy cause did not seem right, as Harper’s suggested:
It is in our large cities especially where this boasted insensibility to the havoc of war is found. It is there in the market-place and exchange, where large fortunes are being made with such marvelous rapidity, and in the haunts of pleasure, where they are spent with such wanton extravagance, that they don’t feel this war. They are at a banquet of abundance and delight, from which they are not to be unseated, though the ghosts of the hundreds of thousands of their slaughtered countrymen shake their gory locks at them.32
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