Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War

[Xan]

I've just finished "Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War" and enjoyed it greatly. It would be of interest to a lot of folks here. It mostly focuses on US Treasury Secretary Salmon P Chase and the things that both sides were doing from a financial perspective.

Both sides started issuing fiat currency, although it was theoretically to be payable in gold at a later time. What interesting is to track the "price of gold" as denominated in those currencies as the fortunes of the war ebbed and flowed. The Confederate money actually says that it's payable six months after a treaty of peace with the US is signed. And the larger Confederate notes paid interest! Each one has a date handwritten on it in order to track the interest. I actually have some of these notes from my grandfather's grandfather, which is pretty cool. Can't spend them at the grocery store.

The book also describes how fiat money, a large national debt, and the general philosophy of looking to the federal government to solve societal problems were all kind of being invented on the fly here, and what the economic and financial ramifications of this were.

The author thinks those are all great things, but regardless of one's opinion it's a very informative and thought-provoking read.

PS - I forgot to mention that the US notes WERE eventually repaid in full, even though they traded as low as (IIRC) something like 20 cents on the dollar. So it wasn't quite "fiat currency" as we know it today.

[vnatale]

Am now starting to read it....

[vnatale]

I've just finished "Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War" and enjoyed it greatly. It would be of interest to a lot of folks here. It mostly focuses on US Treasury Secretary Salmon P Chase and the things that both sides were doing from a financial perspective.

Both sides started issuing fiat currency, although it was theoretically to be payable in gold at a later time. What interesting is to track the "price of gold" as denominated in those currencies as the fortunes of the war ebbed and flowed. The Confederate money actually says that it's payable six months after a treaty of peace with the US is signed. And the larger Confederate notes paid interest! Each one has a date handwritten on it in order to track the interest. I actually have some of these notes from my grandfather's grandfather, which is pretty cool. Can't spend them at the grocery store.

The book also describes how fiat money, a large national debt, and the general philosophy of looking to the federal government to solve societal problems were all kind of being invented on the fly here, and what the economic and financial ramifications of this were.

The author thinks those are all great things, but regardless of one's opinion it's a very informative and thought-provoking read.

PS - I forgot to mention that the US notes WERE eventually repaid in full, even though they traded as low as (IIRC) something like 20 cents on the dollar. So it wasn't quite "fiat currency" as we know it today.

Xan,

Am I correct in remembering that you cited this as being deliberate on Lincoln's part so as to provoke a war?

"Secession was a southern project; the war came mostly from the North. Even in the Union, the people, while appalled by secession, showed no interest in a war. Lincoln’s cabinet, polled on whether to resupply the federal garrison at Fort Sumter, voted five to two against. Yet just a month later, when Lincoln sent a fleet to reprovision the fort, prompting the South to fire the first shot, the northern public overwhelmingly supported war. The overnight change in northern sentiment dovetailed with the only justification that Lincoln gave for fighting: to preserve the Union."

[vnatale]

Is there a parallel here to the debate as to whether or not Biden should have put sanctions on Russia before they invaded Ukraine rather than after as he did?


"Dix’s war telegram jolted the sleepwalking northern people. They suddenly awakened to the reality of conflict. Belmont, the Democratic Party financier, and previously an appeaser, wrote spirited letters to the southern governors, pleading restraint. “Secession,” he warned, “means civil war.” Southerners had confidently, if recklessly, interpreted northern efforts to conciliate to mean that business interests would prevent the North from ever employing force. Their miscalculation was simple: the South’s leverage lay in the threat of secession. Once the South seceded, northerners would have no reason to placate."

[vnatale]

I've just finished "Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War" and enjoyed it greatly. It would be of interest to a lot of folks here. It mostly focuses on US Treasury Secretary Salmon P Chase and the things that both sides were doing from a financial perspective.

Both sides started issuing fiat currency, although it was theoretically to be payable in gold at a later time. What interesting is to track the "price of gold" as denominated in those currencies as the fortunes of the war ebbed and flowed. The Confederate money actually says that it's payable six months after a treaty of peace with the US is signed. And the larger Confederate notes paid interest! Each one has a date handwritten on it in order to track the interest. I actually have some of these notes from my grandfather's grandfather, which is pretty cool. Can't spend them at the grocery store.

The book also describes how fiat money, a large national debt, and the general philosophy of looking to the federal government to solve societal problems were all kind of being invented on the fly here, and what the economic and financial ramifications of this were.

The author thinks those are all great things, but regardless of one's opinion it's a very informative and thought-provoking read.

PS - I forgot to mention that the US notes WERE eventually repaid in full, even though they traded as low as (IIRC) something like 20 cents on the dollar. So it wasn't quite "fiat currency" as we know it today.

Xan,

Am I correct in remembering that you cited this as being deliberate on Lincoln's part so as to provoke a war?

"Secession was a southern project; the war came mostly from the North. Even in the Union, the people, while appalled by secession, showed no interest in a war. Lincoln’s cabinet, polled on whether to resupply the federal garrison at Fort Sumter, voted five to two against. Yet just a month later, when Lincoln sent a fleet to reprovision the fort, prompting the South to fire the first shot, the northern public overwhelmingly supported war. The overnight change in northern sentiment dovetailed with the only justification that Lincoln gave for fighting: to preserve the Union."

Further evidence from the book that Lincoln was NOT trying to provoke a war:

"While Sumter hung in the balance, Lincoln was careful not to provoke the South. If war came, he wished not to be seen as having caused it. He let southern judgeships lie vacant; he did not attempt to retake forts and custom houses in Rebel hands. But the notion of ceding part of the government he had inherited sat poorly with the President. As he would say to Congress (histrionically referring to himself in the third person), “He felt that he had no moral right to shrink; nor even to count the chances of his own life, in what might follow.”"

[vnatale]

I've just finished "Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War" and enjoyed it greatly. It would be of interest to a lot of folks here. It mostly focuses on US Treasury Secretary Salmon P Chase and the things that both sides were doing from a financial perspective.

Both sides started issuing fiat currency, although it was theoretically to be payable in gold at a later time. What interesting is to track the "price of gold" as denominated in those currencies as the fortunes of the war ebbed and flowed. The Confederate money actually says that it's payable six months after a treaty of peace with the US is signed. And the larger Confederate notes paid interest! Each one has a date handwritten on it in order to track the interest. I actually have some of these notes from my grandfather's grandfather, which is pretty cool. Can't spend them at the grocery store.

The book also describes how fiat money, a large national debt, and the general philosophy of looking to the federal government to solve societal problems were all kind of being invented on the fly here, and what the economic and financial ramifications of this were.

The author thinks those are all great things, but regardless of one's opinion it's a very informative and thought-provoking read.

PS - I forgot to mention that the US notes WERE eventually repaid in full, even though they traded as low as (IIRC) something like 20 cents on the dollar. So it wasn't quite "fiat currency" as we know it today.

The HEART of the book?

"Chase faced the same options as Memminger—indeed, as any sovereign. He could tax, he could borrow, or he could print money. The financial narrative of the war was essentially the story of how the opposing camps chose from among these alternatives. Each of the three financing options affected the potency of the other two. A government that taxed, and thus collected income, saw its credit enhanced and was more able to borrow. A government that overran the printing press would ruin its credit."