Founded in a crucible of anti-centralism, the Confederacy was trapped in a static (and slave-based) agrarian economy without federal taxing power or other means of government financing, save for its overworked printing presses. While the Union became self-sustaining, the South plunged into financial free fall, having failed to leverage its cotton wealth to finance the war. It established a progressive income tax and created the greenback-paper money. The activist 37th Congress legislated for homesteads and a transcontinental railroad and involved the federal government in education, agriculture, and eventually immigration policy.
And while the Union and rebel armies fought increasingly savage battles, the Republican-led Congress enacted a blizzard of legislation that made the government, for the first time, a powerful presence in the lives of ordinary Americans. Salmon Chase, Lincoln’s vanquished rival and his new secretary of the Treasury, waged war on the financial front, levying taxes and marketing bonds while desperately battling to contain wartime inflation. Lincoln believed this agenda would foster the economic opportunity he had always sought for upwardly striving Americans. With Lincoln at the helm, the United States would now govern “for” its people: it would enact laws, establish a currency, raise armies, underwrite transportation and higher education, assist farmers, and impose taxes.
But amid unprecedented troubles, Lincoln saw an opportunity: the chance to legislate in the centralizing spirit of the “more perfect union” that had first drawn him to politics. The government had no authority to raise taxes, no federal bank, and no currency. Even before the Confederacy’s secession, the U.S.
Join us for a lunchtime talk with renowned journalist and master storyteller Roger Lowenstein, as he discusses his revelatory financial investigation into how President Abraham Lincoln and his administration used the funding of the Civil War as the catalyst to centralize the government and accomplish the most far-reaching reform in the country’s history.
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