Gyroscopic Investing

I'm in the midst of reading this excellent book: Battle Cry of Freedom: The Civil War Era.

I just read the section regarding how the North successfully financed the war. I am going to put a long excerpt here because it seems like it would of interest to many of you and has a lot of relevance to Permanent Portfolio theory.

Vinny

Union defeat at the battle of Ball's Bluff in October 1861 and McClellan's failure to advance on Richmond eroded confidence in northern victory. Then came the threat of war with Britain over Captain Wilkes's seizure of Mason and Slidell from the Trent. The panic on financial exchanges caused a run on banks, whose specie reserves plummeted. The sequel was inevitable. On December 30 the banks of New York suspended specie payments. Banks elsewhere followed suit. Deprived of specie, the Treasury could no longer pay suppliers, contractors, or soldiers. The war economy of one of the world's richest nations threatened to grind to a halt. As Lincoln lamented on January 10, "the bottom is out of the tub. What shall I do?"

What indeed? Lincoln, no financial expert, played little role in congressional efforts to resolve the crisis. Chase proposed the chartering of national banks authorized to issue notes secured by government bonds. This would free the currency from direct specie requirements, pump new money into the economy, and create a market for the bonds. These ideas eventually bore fruit in the National Banking Act of 1863. But
Congressman Elbridge G. Spaulding of New York, chairman of the House subcommittee charged with responsibility for framing emergency legislation, believed that the immediate crisis demanded quicker action than the lengthy procedures necessary to establish a new banking system. A delegation of bankers tried to persuade Spaulding (himself a banker) to introduce legislation allowing banks to become depositories of public funds, thereby ending the wasteful practice of transferring gold from banks to subtreasury vaults, and to authorize a new issue of bonds to be sold "at the market" rather than for face value. Since such bonds would sell below par, investors would reap high interest rates and large profits at government expense. Spaulding rejected this proposal along with "any and every form of 'shinning' by Government through Wall or State streets . . . [and] the knocking down of Government stocks to seventy-five or sixty cents on the dollar."33 Instead, he introduced a bill to authorize the issuance of $150 million in Treasury notes—i.e., fiat money.

This bill seemed to imitate the dubious Confederate example—but with a crucial difference. The U.S. notes were to be legal tender—receivable for all debts public or private except interest on government bonds and customs duties. The exemption of bond interest was intended as an alternative to selling the bonds below par, with the expectation that the payment of 6 percent interest in specie would make the bonds attractive to investors at face value. Customs duties were to be payable in specie to assure sufficient revenue to fund the interest on bonds. In all other transactions individuals, banks, and government itself would be required to accept U.S. notes—soon to be called greenbacks—as lawful money.

Opponents maintained that the legal tender bill was unconstitutional because when the framers empowered Congress "to coin money," they meant coin. Moreover, to require acceptance of paper money for debts previously contracted was a breach of contract. But the attorney general and most Republican congressmen favored a broad construction of the coinage and the "necessary and proper" clauses of the Constitution. "The bill before us is a war measure," Spaulding told the House, "a necessary means of carrying into execution the power granted in the Constitution 'to raise and support armies.' . . . These are extraordinary
times, and extraordinary measures must be resorted to in order to save our Government and preserve our nationality."34

Opponents also questioned the expediency, morality, even the theology of the legal tender bill. Such notes would depreciate, they said, as the Revolutionary continentals had done and as Confederate notes were even then depreciating. "The wit of man," said Democratic Congressman George Pendleton of Ohio, "has never discovered a means by which paper currency can be kept at par value, except by its speedy, cheap, certain convertibility into gold and silver." If this bill passed, "prices will be inflated . . . incomes will depreciate; the savings of the poor will vanish; the hoardings of the widow will melt away; bonds, mortgages, and notes—everything of fixed value—will lose their value." One banker insisted that "gold and silver are the only true measure of value. These metals were prepared by the Almighty for this very purpose."35

Supporters of the bill exposed the hollowness of such arguments. "Every dollar."33 Instead, he introduced a bill to authorize the issuance of $150 million in Treasury notes—i.e., fiat money.

This bill seemed to imitate the dubious Confederate example—but with a crucial difference. The U.S. notes were to be legal tender—receivable for all debts public or private except interest on government bonds and customs duties. The exemption of bond interest was intended as an alternative to selling the bonds below par, with the expectation that the payment of 6 percent interest in specie would make the bonds attractive to investors at face value. Customs duties were to be payable in specie to assure sufficient revenue to fund the interest on bonds. In all other transactions individuals, banks, and government itself would be required to accept U.S. notes—soon to be called greenbacks—as lawful money.

Opponents maintained that the legal tender bill was unconstitutional because when the framers empowered Congress "to coin money," they meant coin. Moreover, to require acceptance of paper money for debts previously contracted was a breach of contract. But the attorney general and most Republican congressmen favored a broad construction of the coinage and the "necessary and proper" clauses of the Constitution. "The bill before us is a war measure," Spaulding told the House, "a necessary means of carrying into execution the power granted in the Constitution 'to raise and support armies.' . . . These are extraordinary
times, and extraordinary measures must be resorted to in order to save our Government and preserve our nationality."34

Opponents also questioned the expediency, morality, even the theology of the legal tender bill. Such notes would depreciate, they said, as the Revolutionary continentals had done and as Confederate notes were even then depreciating. "The wit of man," said Democratic Congressman George Pendleton of Ohio, "has never discovered a means by which paper currency can be kept at par value, except by its speedy, cheap, certain convertibility into gold and silver." If this bill passed, "prices will be inflated . . . incomes will depreciate; the savings of the poor will vanish; the hoardings of the widow will melt away; bonds, mortgages, and notes—everything of fixed value—will lose their value." One banker insisted that "gold and silver are the only true measure of value. These metals were prepared by the Almighty for this very purpose."35

Supporters of the bill exposed the hollowness of such arguments. "Every intelligent man knows that coined money is not the currency of the country," said Republican Representative Samuel Hooper of Massachusetts. State banknotes—many of them depreciated and irredeemable—were the principal medium of exchange. The issue before Congress was whether the notes of a sovereign government had "as much virtue . . . as the notes of banks which have suspended specie payments."36

By early February most businessmen and bankers had become convinced of the necessity for the legal tender bill. So had Treasury Secretary Chase and Finance Committee Chairman Fessenden. "I came with reluctance to the conclusion that the legal tender clause is a necessity," Chase informed Congress on February 3, 1862. "Immediate action is of great importance. The Treasury is nearly empty." Fessenden considered the measure "of doubtful constitutionality. . . . It is bad faith. . . . It shocks all my notions of political, moral, and national honor." Nevertheless, "to leave the government without resources in such a crisis is not to be thought of." Fessenden voted for the bill.37 So did three-fourths of his Republican colleagues in Congress, who readily overcame
the three-fourths of the Democrats who voted against it. With Lincoln's signature on February 25, the Legal Tender Act became law.

This act created a national currency and altered the monetary structure of the United States. It asserted national sovereignty to help win a war fought to preserve that sovereignty. It provided the Treasury with resources to pay its bills, it restored investor confidence to make possible the sale at par of the $500 million of new 6 percent bonds authorized at the same time, and unlocked the funds that had gone into hoarding during the financial crisis of December. All these good things came to pass without the ruinous inflation predicted by opponents, despite the authorization of another $150 million of greenbacks in July 1862. This brought the total to $300 million, nearly equal to the amount of Confederate Treasury notes then in circulation. But while the southern price index rose to 686 (February 1861 = 100) by the end of 1862, the northern index then stood only at 114. For the war a Republican Representative Samuel Hooper of Massachusetts. State banknotes—many of them depreciated and irredeemable—were the principal medium of exchange. The issue before Congress was whether the notes of a sovereign government had "as much virtue . . . as the notes of banks which have suspended specie payments."36

By early February most businessmen and bankers had become convinced of the necessity for the legal tender bill. So had Treasury Secretary Chase and Finance Committee Chairman Fessenden. "I came with reluctance to the conclusion that the legal tender clause is a necessity," Chase informed Congress on February 3, 1862. "Immediate action is of great importance. The Treasury is nearly empty." Fessenden considered the measure "of doubtful constitutionality. . . . It is bad faith. . . . It shocks all my notions of political, moral, and national honor." Nevertheless, "to leave the government without resources in such a crisis is not to be thought of." Fessenden voted for the bill.37 So did three-fourths of his Republican colleagues in Congress, who readily overcame
the three-fourths of the Democrats who voted against it. With Lincoln's signature on February 25, the Legal Tender Act became law.

This act created a national currency and altered the monetary structure of the United States. It asserted national sovereignty to help win a war fought to preserve that sovereignty. It provided the Treasury with resources to pay its bills, it restored investor confidence to make possible the sale at par of the $500 million of new 6 percent bonds authorized at the same time, and unlocked the funds that had gone into hoarding during the financial crisis of December. All these good things came to pass without the ruinous inflation predicted by opponents, despite the authorization of another $150 million of greenbacks in July 1862. This brought the total to $300 million, nearly equal to the amount of Confederate Treasury notes then in circulation. But while the southern price index rose to 686 (February 1861 = 100) by the end of 1862, the northern index then stood only at 114. For the war as a whole the Union experienced inflation of only 80 percent (contrasted with 9,000 percent for the Confederacy), which compares favorably to the 84 percent of World War I (1917–20) and 70 percent in World War II (1941–49, including the postwar years after the lifting of wartime price controls). While the greenbacks' lack of a specie backing created a speculator's market in gold, the "gold premium" did not rise drastically except in periods of Union military reverses. During the four months after passage of the Legal Tender Act, the gold premium rose only to 106 (that is, 100 gold dollars would buy 106 greenback dollars).

Three main factors explain the success of the Legal Tender Act. First: the underlying strength of the northern economy. Second: the fortuitous timing of the law. It went into effect during the months of Union military success in the spring of 1862, floating the greenbacks on a buoyant mood of confidence in victory. The third reason was the enactment of a comprehensive tax law on July 1, 1862, which soaked up much of the inflationary pressure produced by the greenbacks. The Union ultimately raised half again as much war revenue from taxes as from the issuance of paper money—in sharp contrast with the Confederate experience.38

The Internal Revenue Act of 1862 taxed almost everything but the air northerners breathed. It imposed sin taxes on liquor, tobacco, and

playing cards; luxury taxes on carriages, yachts, billiard tables, jewelry, and other expensive items; taxes on patent medicines and newspaper advertisements; license taxes on almost every conceivable profession or service except the clergy; stamp taxes, taxes on the gross receipts of corporations, banks, insurance companies, and a tax on the dividends or interest they paid to investors; value-added taxes on manufactured goods and processed meats; an inheritance tax; and an income tax. The law also created a Bureau of Internal Revenue, which remained a permanent part of the federal government even though most of these taxes (including the income tax) expired several years after the end of the war. The relationship of the American taxpayer to the government was never again the same.

The Internal Revenue Act was strikingly modern in several respects. It withheld the tax from the salaries of government employees and from dividends paid by corporations. It expanded the progressive aspects of the earlier income tax by exempting the first $600, levying 3 percent on incomes between $600 and $10,000, and 5 percent on incomes over $10,000.39 The first $1,000 of any legacy was exempt from the inheritance tax. Businesses worth less than $600 were exempt from the value-added and receipts taxes. Excise taxes fell most heavily on products purchased by the affluent. In explanation of these progressive features, Chairman Thaddeus Stevens of the House Ways and Means Committee said: "While the rich and the thrifty will be obliged to contribute largely from the abundance of their means . . . no burdens have been imposed on the industrious laborer and mechanic. . . . The food of the poor is untaxed; and . . . no one will be affected by the provisions of this bill whose living depends solely on his manual labor."40

You've got some repetition in there, but thanks for the write up, I'll add that book to my list.

Yes, Lincoln developed the prototypes for all of the tyrannical Democrat schemes of the 20th Century.
That's why he's one of the three worst US Presidents.

In another topic we partly discussed the North's reasons for going to war.

From the same book a description of the Northern soldiers' view of blacks (circa 1862):

Sometimes their welcome was less than friendly. While northern soldiers had no love for slavery, most of them had no love for slaves either. They fought for Union and against treason; only a minority in 1862 felt any interest in fighting for black freedom. Rare was the soldier who shared the sentiments of a Wisconsin private: "I have no heart in this war if the slaves cannot be free." More common was the conviction of a New York soldier that "we must first conquer & then its time enough to talk about the dam'd niggers." While some Yanks treated contrabands with a degree of equity or benevolence, the more typical response was indifference, contempt, or cruelty. Soon after Union forces captured Port Royal, South Carolina, in November 1861, a private described an incident there that made him "ashamed of America": "About 8–10 soldiers from the New York 47th chased some Negro women but they escaped, so they took a Negro girl about 7–9 years old, and raped her." From Virginia a Connecticut soldier wrote that some men of his regiment had taken "two niger wenches . . . turned them upon their heads, & put tobacco, chips, sticks, lighted cigars & sand into their behinds."14 Even when Billy Yank welcomed the contrabands, he often did so from utilitarian rather than humanitarian motives. "Officers & men are having an easy time," wrote a Maine soldier from occupied Louisiana in 1862. "We have Negroes to do all fatigue work, cooking and washing clothes.


Vinny

More from the book on what was going on politically in the North regarding blacks during the runup to Lincoln planning to issue the Emancipation Proclamation.

Vinny



As they had done in every election since the birth of the Republican party, northern Democrats exploited the race issue for all they thought it was worth in 1862. The Black Republican "party of fanaticism" intended to free "two or three million semi-savages" to "overrun the North
and enter into competition with the white laboring masses" and mix with "their sons and daughters." "Shall the Working Classes be Equalized with Negroes?" screamed Democratic newspaper headlines.33 Ohio's soldiers, warned that state's congressman and Democratic leader Samuel S. Cox, would no longer fight for the Union "if the result shall be the flight and movement of the black race by millions northward." And Archbishop John Hughes added his admonition that "we Catholics, and a vast majority of our brave troops in the field, have not the slightest idea of carrying on a war that costs so much blood and treasure just to gratify a clique of Abolitionists."34

With this kind of rhetoric from their leaders, it was little wonder that some white workingmen took their prejudices into the streets. In a half-dozen or more cities, anti-black riots broke out during the summer of 1862. Some of the worst violence occurred in Cincinnati, where the replacement of striking Irish dockworkers by Negroes set off a wave of attacks on black neighborhoods. In Brooklyn a mob of Irish-Americans tried to burn down a tobacco factory where two dozen black women and children were working. The nightmare vision of blacks invading the North seemed to be coming true in southern Illinois, where the War Department transported several carloads of contrabands to help with the harvest. Despite the desperate need for hands to gather crops, riots forced the government to return most of the blacks to contraband camps south of the Ohio River.

Anti-black sentiments were not a Democratic monopoly. The antebellum Negro exclusion laws of several midwestern states had commanded the support of a good many Whigs. In 1862 about two-fifths of the Republican voters joined Democrats to reaffirm Illinois's exclusion law in a referendum. Senator Lyman Trumbull of Illinois, architect of the confiscation act, conceded that "there is a very great aversion in the
West—I know it to be so in my State—against having free negroes come among us. Our people want nothing to do with the negro."35 To placate this aversion, some Republicans maintained that it was slavery which forced blacks to flee North toward freedom; emancipation would keep this tropical race in the South by giving them freedom in a congenial clime. This thesis encountered considerable skepticism, however. To meet the racial fears that constituted the party's Achilles' heel, many Republicans turned to colonization.

This solution of the race problem was stated crudely but effectively by an Illinois soldier: "I am not in favor of freeing the negroes and leaving them to run free among us nether is Sutch the intention of Old Abe but we will Send them off and colonize them."36 Old Abe did indeed advocate colonization in 1862. From his experience in Illinois politics he had developed sensitive fingers for the pulse of public opinion on this issue. He believed that support for colonization was the best way to defuse much of the anti-emancipation sentiment that might otherwise sink the Republicans in the 1862 elections. This conviction underlay Lincoln's remarks to a group of black leaders in the District of Columbia whom he invited to the White House on August 14, 1862. Slavery was "the greatest wrong inflicted on any people," Lincoln told the delegation in words reported by a newspaper correspondent who was present. But even if slavery were abolished, racial differences and prejudices would remain. "Your race suffer very greatly, many of them, by living among us, while ours suffer from your presence." Blacks had little chance to achieve equality in the United States. "There is an unwillingness on the part of our people, harsh as it may be, for you free colored people to remain among us. . . . I do not mean to discuss this, but to propose it as a fact with which we have to deal. I cannot alter it if I would." This fact, said Lincoln, made it necessary for black people to emigrate to another land where they would have better opportunities. The president asked the black leaders to recruit volunteers for a government-financed pilot colonization project in Central America. If this worked, it could pave the way for the emigration of thousands more who might be freed by the war.37

Most black spokesmen in the North ridiculed Lincoln's proposal and
denounced its author. "This is our country as much as it is yours," a Philadelphia Negro told the president, "and we will not leave it." Frederick Douglass accused Lincoln of "contempt for negroes" and "canting hypocrisy." The president's remarks, said Douglass, would encourage "ignorant and base" white men "to commit all kinds of violence and outrage upon the colored people." Abolitionists and many radical Republicans continued to oppose colonization as racist and inhumane. "How much better," wrote Salmon P. Chase, "would be a manly protest against prejudice against color!—and a wise effort to give free[d] men homes in America!"38

But conservatives chided their radical colleagues for ignoring the immutability of racial differences. Abolitionists "may prattle as they wish about the end of slavery being the end of strife," wrote one conservative, but "the great difficulty will then but begin! The question is the profound and awful one of race." Two-thirds of the Republicans in Congress became sufficiently convinced of the need to conciliate this sentiment that they voted for amendments to the District of Columbia emancipation bill and the confiscation act appropriating $600,000 for colonization. As a practical matter, said one Republican, colonization "is a damn humbug. But it will take with the people."39

The government managed to recruit several hundred prospective black emigrants. But colonization did turn out to be a damn humbug in practice. The Central American project collapsed in the face of opposition from Honduras and Nicaragua. In 1863 the U.S. government sponsored the settlement of 453 colonists on an island near Haiti, but this enterprise also foundered when starvation and smallpox decimated the colony. The administration finally sent a naval vessel to return the 368 survivors to the United States in 1864. This ended official efforts to colonize blacks. By then the accelerating momentum of war had carried most northerners beyond the postulates of 1862.

Lincoln's colonization activities in August 1862 represented one part of his indirect effort to prepare public opinion for emancipation. Although he had decided to withhold his proclamation until Union arms
won a victory, he did drop hints of what might be coming. On August 22 he replied to Horace Greeley's emancipation editorial, "The Prayer of Twenty Millions," with an open letter to the editor. "My paramount object in the struggle is to save the Union, and is not either to save or to destroy slavery," wrote Lincoln in a masterpiece of concise expression. "If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing
viewpoints: a reiteration that preservation of the Union remained the purpose of the war, but a hint that partial or even total emancipation might become necessary to accomplish that purpose.

The same intentional ambiguity characterized Lincoln's reply on September 13 to a group of clergymen who presented him a petition for freedom. The president agreed that "slavery is the root of the rebellion," that emancipation would "weaken the rebels by drawing off their laborers" and "would help us in Europe, and convince them that we are incited by something more than ambition." But in present circumstances, "when I cannot even enforce the Constitution in the rebel states . . . what good would a proclamation of emancipation from me do? . . . I do not want to issue a document that the whole world will necessarily see must be inoperative, like the Pope's bull against the comet!"41 Here too was something for everybody: an assertion that emancipation was desirable though at present futile but perhaps imminent if the military situation took a turn for the better.

Military matters preoccupied Lincoln as he uttered these words. For two months, events in both the western and eastern theaters had been deteriorating to the point where by mid-September three southern armies were on the march northward in a bold bid for victory. But within the next few weeks the Confederate tide receded southward again without prevailing, thus ending the chance for European recognition and giving Lincoln the victory he needed to issue the emancipation proclamation.

Right. Lincoln didn't care about slavery. His goal was to make the South to pay his tariffs by force of arms if they would not do it voluntarily.
In other words, he was a tyrant.

Libertarian666 wrote: ↑Thu Jul 23, 2020 9:25 pm Right. Lincoln didn't care about slavery. His goal was to make the South to pay his tariffs by force of arms if they would not do it voluntarily.
In other words, he was a tyrant.

He cared about it. But he was NOT an abolitionist and viewed blacks as being inferior. He valued winning the war and preserving the union ahead of what it meant for the blacks. When the time came when freeing the slave (only in the Confederate states) would assist in him meeting his goals it was now the opportune time for him to issue the Emancipation Proclamation.

This book is excellent.

A few weeks ago I also read this one:

A People's History of the Civil War: Struggles for the Meaning of Freedom (New Press People's History)

https://www.amazon.com/A-People-s-Histo ... l_huc_item

It was also excellent and as soon as I finished reading it I told others that I'd like to reread it again, only this time in a studying fashion so as to retain much more of it.

At the end of reading it, my evaluation of Lincoln had drastically changed.

If you read it, I don't know if it would be possible for your evaluation of Lincoln to change to any extent. Probably would just reinforce your existing views.

The book did point out the hypocrisy of Lincoln calling for families to contribute their sons to the War effort while keeping his own son out for four years. When he finally relented to let him join the army, he begged Grant to put him somewhere where he'd be subject to no danger.

Vinny

yankees60 wrote: ↑Thu Jul 23, 2020 9:47 pm

Libertarian666 wrote: ↑Thu Jul 23, 2020 9:25 pm Right. Lincoln didn't care about slavery. His goal was to make the South to pay his tariffs by force of arms if they would not do it voluntarily.
In other words, he was a tyrant.

He cared about it. But he was NOT an abolitionist and viewed blacks as being inferior. He valued winning the war and preserving the union ahead of what it meant for the blacks. When the time came when freeing the slave (only in the Confederate states) would assist in him meeting his goals it was now the opportune time for him to issue the Emancipation Proclamation.

This book is excellent.

A few weeks ago I also read this one:

A People's History of the Civil War: Struggles for the Meaning of Freedom (New Press People's History)

https://www.amazon.com/A-People-s-Histo ... l_huc_item

It was also excellent and as soon as I finished reading it I told others that I'd like to reread it again, only this time in a studying fashion so as to retain much more of it.

At the end of reading it, my evaluation of Lincoln had drastically changed.

If you read it, I don't know if it would be possible for your evaluation of Lincoln to change to any extent. Probably would just reinforce your existing views.

The book did point out the hypocrisy of Lincoln calling for families to contribute their sons to the War effort while keeping his own son out for four years. When he finally relented to let him join the army, he begged Grant to put him somewhere where he'd be subject to no danger.

Vinny

You probably know this already, but he explicitly said that he would free all the slaves, some of the slaves, or none of the slaves, whatever it took to "preserve the union".

Of course what "preserve the union" actually meant was to continue his tyranny over the Southern states that were being crushed by his tariffs.

He was a tyrant who paved the way for the progressive tyrants of the 20th centuries, and for those of the 21st century if they get into power.

I know he is the icon of the Republican party, but I don't care about that. I'm a Republican only because the alternative is total tyranny.

An important law passed by Congress in February 1863 intensified the alienation of western Democrats: the National Banking Act. This measure owed much to Secretary of the Treasury Chase's desire to augment
the market for war bonds; it owed even more to the Whiggish Republican desire to rationalize the decentralized, unstable structure of state banks and to create a uniform banknote currency. Treasury notes (greenbacks) provided a national currency, but they circulated alongside several hundred types of banknotes of varying degrees of soundness. No effective national regulation of banking had existed since the Jacksonian era. A nation "which leaves the power to regulate its currency to the legislation of thirty-four different states abandons one of the essential attributes of sovereignty," said Representative Samuel Hooper of Massachusetts. "The policy of this country," added Senate Finance Committee Chairman John Sherman, "ought to be to make everything national as far as possible; to nationalize our country so that we shall love our country."7

On February 25, 1863, the National Banking Act became law with the affirmative votes of 78 percent of the Republicans overcoming the negative votes of 91 percent of the Democrats. As supplemented by additional legislation the next year, this law authorized the granting of federal charters to banks that met certain standards, required them to purchase U. S. bonds in an amount equal to one-third of their capital, and permitted them to issue banknotes equal to 90 percent of the value of such bonds. Not until Congress drove state banknotes out of circulation with a 10 percent tax levied on them in 1865 did most state banks convert to federal charters. But the 1863 law laid the groundwork for the banking system that prevailed for a half-century after the war. Not surprisingly, Jacksonian Democrats in the Old Northwest denounced "this monstrous Bank Bill" as new evidence of the wartime conspiracy by "the money monopoly of New England" to "destroy the fixed institutions of the States, and to build up a central moneyed despotism."

Some of this behavior being replicated in our country today....but nowhere to the degree of ferocity as described blow.

Vinny

Such rhetoric inflamed smoldering tensions. Draft dodgers and mobs killed several enrollment officers during the spring and summer. Anti-Negro violence erupted in a number of cities. Nowhere was the tinder more flammable than in New York City, with its large Irish population and powerful Democratic machine. Crowded into noisome tenements in a city with the worst disease mortality and highest crime rate in the Western world, working in low-skill jobs for marginal wages, fearful of competition from black workers, hostile toward the Protestant middle and upper classes who often disdained or exploited them, the Irish were ripe for revolt against this war waged by Yankee Protestants for black freedom. Wage increases had lagged 20 percent or more behind price increases since 1861. Numerous strikes had left a bitter legacy, none more than a longshoremen's walkout in June 1863 when black stevedores under police protection took the place of striking Irishmen.

Into this setting came draft officers to begin the drawing of names on Saturday, July 11. Most of the militia and federal troops normally stationed in the city were absent in Pennsylvania pursuing Lee's army after the battle of Gettysburg. The first day's drawing went quietly enough, but on Sunday hundreds of angry men congregated in bars and vowed to attack the draft offices next morning. They made good their threat, setting off four days of escalating mob violence that terrorized the city
Many of the men (and women) in the mobs indulged in indiscriminate looting and destruction. But as in most riots, the mobs singled out certain targets that were related to the underlying causes of the outbreak. Draft offices and other federal property went up in flames early in the rioting. No black person was safe. Rioters beat several, lynched a half-dozen, smashed the homes and property of scores, and burned the Colored Orphan Asylum to the ground. Mobs also fell upon several business establishments that employed blacks. Rioters tried to attack the offices of Republican newspapers and managed to burn out the ground floor of the Tribune while howling for Horace Greeley's blood. Several editors warded off the mob by arming their employees with rifles; Henry Raymond of the Times borrowed three recently invented Gatling guns from the army to defend his building. Rioters sacked the homes of several prominent Republicans and abolitionists. With shouts of "Down with the rich" and "There goes a $300 man" they attacked well-dressed men who were incautious enough to show themselves on the streets. These hints of class warfare were amplified by assaults on the property of reputed anti-labor employers and the destruction of street-sweeping machines and grain-loading elevators that had automated the jobs of some of the unskilled workers who made up the bulk of the rioters. Several Protestant churches and missions were burned by the mobs whose membership was at least two-thirds Irish.

Untrained in riot control, New York's police fought the mobs courageously but with only partial success on July 13 and 14. Army officers desperately scraped together a few hundred troops to help. The War Department rushed several regiments from Pennsylvania to New York, where on July 15 and 16 they poured volleys into the ranks of rioters with the same deadly effect they had produced against rebels at Gettysburg two weeks earlier. By July 17 an uneasy peace returned to the shattered city. Determined to carry out the draft in New York lest successful resistance there spawn imitation elsewhere, the government built
up troop strength in Manhattan to 20,000 men who enforced calm during the resumption of drafting on August 19. By then the city council had appropriated funds to pay the commutation fees of drafted men—including, no doubt, some of the rioters.

yankees60 wrote: ↑Fri Jul 24, 2020 9:24 pm Many of the men (and women) in the mobs indulged in indiscriminate looting and destruction. ...

Untrained in riot control, New York's police fought the mobs courageously but with only partial success on July 13 and 14. Army officers desperately scraped together a few hundred troops to help. The War Department rushed several regiments from Pennsylvania to New York, where on July 15 and 16 they poured volleys into the ranks of rioters with the same deadly effect they had produced against rebels at Gettysburg two weeks earlier. By July 17 an uneasy peace returned to the shattered city. Determined to carry out the draft in New York lest successful resistance there spawn imitation elsewhere, the government built up troop strength in Manhattan to 20,000 men who enforced calm during the resumption of drafting on August 19. By then the city council had appropriated funds to pay the commutation fees of drafted men—including, no doubt, some of the rioters.

Interesting passage with respect to what's going on today....

It establishes that yes, the federal government has the right (and frankly, duty) to restore order in civilian settings. I can only imagine the outcry if Trump sent 20,000 troops to Portland or Seattle, but it may need to happen if the rioting continues.

The cure may be worse than the disease, but I'll take it if it's only temporary (unlike the "disease" which has been going on for months now). Based on NextDoor posts and what I hear from people in the neighborhood, NO ONE is happy with the rioters, and all the posts are highly critical of the city government's actions with respect to crime. There's also a LOT of support for Trump upstate, per my friend who has been spending most of her time at her little off-grid hideway near Woodstock. I'm sure New York (as well as Oregon, Washington, Illinois etc) is in no danger of going red anytime soon, but I can't imagine this is good news for Democrats. Unless maybe they figure that criminals outnumber law-abiding citizens with property that they want to keep, as I'm sure the former are quite pleased with the changes.

The price of gold, an inverse barometer of public opinion, rose from 171 to 191 during the last two weeks of May.23

23. The price of gold measured the value of the dollar in relation to the value of gold. A price of 191 meant that this many greenback dollars were required to purchase 100 gold dollars. The value of the greenback dollar rose and fell in proportion to confidence in northern military prospects; the higher the price of gold, the lower the value of the dollar.

Thus ended a seven-week campaign of movement and battle whose brutal intensity was unmatched in the war. Little wonder that the Army of the Potomac did not fight at Petersburg with "the vigor and force" it had shown in the Wilderness—it was no longer the same army. Many of its best and bravest had been killed or wounded; thousands of others,
their enlistments expired or about to expire, had left the war or were unwilling to risk their lives during the few days before leaving. Some 65,000 northern boys were killed, wounded, or missing since May 4. This figure amounted to three-fifths of the total number of combat casualties suffered by the Army of the Potomac during the previous three years. No army could take such punishment and retain its fighting edge. "For thirty days it has been one funeral procession past me," cried General Gouverneur K. Warren, commanding the 5th Corps, "and it has been too much!"

Could the northern people absorb such losses and continue to support the war? Financial markets were pessimistic; gold shot up to the ruinous height of 230.

During their raid some of Early's soldiers made as little distinction between military and private property as did many northern soldiers in the South. Indeed, they went the Union invaders one better, for while the latter often seized or burned whatever tangible goods they could find they rarely took Confederate money, which was almost worthless. But northern greenbacks were another matter; the rebels levied $20,000 on Hagerstown and $200,000 on Frederick, besides drinking up the contents of Francis Preston Blair's wine cellar, burning down the Silver Spring home of his son Montgomery the postmaster-general, and putting the torch to the private residence of Maryland's governor. To add further injury to insult, on July 30 two of Early's cavalry brigades rode into Pennsylvania, demanded $500,000 from the citizens of Chambers-burg as restitution for Hunter's pillaging in Virginia, and burned the town when they refused to pay.

Early's foray to the outskirts of Washington caused the London Times to comment that "the Confederacy is more formidable than ever." Many discouraged Yankees agreed. Gold soared to 285. "I see no bright spot anywhere," wrote New York diarist George Templeton Strong, only "humiliation and disaster. . . . The blood and treasure spent on this
summer's campaign have done little for the country."13 On July 18, Lincoln issued a new call for 500,000 men, with quota deficiencies to be filled by a draft just before the fall elections. "Lincoln is deader than dead," chortled a Democratic editor.

As the full extent of Hood's defeat became known and as shortages exacerbated by Sherman's and Sheridan's ravages became more serious, during the night Hood pulled his army back two miles to a new and shorter line anchored by hills on both ends.
the head of the Confederate War Bureau conceded that "things are getting worse very rapidly. . . . Ten days ago the last meat ration was issued [to Lee's army] and not a pound remained in Richmond. . . . The truth is we are prostrated in all our energies and resources." The price of gold rose to 5,000, and the value of the Confederate dollar slipped to less than 2 percent of its 1861 level. The heretofore resolute General Gorgas, who had performed miracles to keep rebel armies supplied with arms and ammunition, wondered in January 1865: "Where is this to end? No money in the Treasury—no food to feed Gen. Lee's army—no troops to oppose Gen. Sherman. . . . Is the cause really hopeless? Is it to be lost and abandoned in this way? . . . Wife and I sit talking of going to Mexico to live out there the remnant of our d

The upbeat tone of Lincoln's annual message to Congress on December 6 provided a northern counterpoint to southern gloom. "The purpose of the people . . . to maintain the integrity of the Union, was never more firm, nor more nearly unanimous, than now," said Lincoln. And the resources to do the job "are unexhausted, and, as we believe, inexhaustible." With 671 warships the navy was the largest in the world. With a million men in uniform the army was larger and better equipped than ever. And despite the deaths of over 300,000 soldiers, immigration and natural increase had more than made up the loss. Thus while "material resources are now more complete and abundant than ever," we also "have more men now than we had when the war began. . . . We are gaining strength, and may, if need be, maintain the contest indefinitely."17

These were chilling words to the South. Josiah Gorgas noted in his diary that "Lincoln's message spawns nothing but subjugation."18 Nor was the president's talk of abundant and inexhaustible resources mere gasconade. On the contrary, the demands of war had boosted the northern economy to new heights of productivity following the temporary setback of 1861–62 caused by departure of the South with its markets and raw materials. Coal and iron production declined in the first year or so of the war, but increased by 1864 to higher levels than ever before. Iron production in the Union states was 29 percent higher in 1864 than for the whole country in the previous record year of 1856; coal production

in the North during the four war years was 21 percent greater than in the highest four peacetime years for both North and South. The North built more merchant ship tonnage during the war than the whole country had built in any comparable peacetime period despite the crippling of the transatlantic merchant marine by southern commerce raiders and the competing demands of the navy on shipbuilding capacity. Although new railroad construction slowed during the war, the amount of traffic over existing lines increased by 50 percent or more, absorbing the excess capacity created by the railroad-building boom of the 1850s. Traffic on the Erie Canal also increased by more than 50 percent during the war. Despite a drastic decline of 72 percent in the North's leading industry, cotton textiles, the overall manufacturing index stood 13 percent higher in 1864 for the Union states alone than for the entire country in 1860. The North had to import hundreds of thousands of rifles in the first year or two of the war; by 1864 the firearms industry was turning out more than enough rifles and artillery for the large Union army.

And the northern economy churned out plenty of butter as well as guns. Despite the secession of southern states, war in the border states, and the absence of a half-million farmers in the army, Union states grew more wheat in both 1862 and 1863 than the entire country had grown in the previous record year of 1859. Despite the food needs of the army and the civilian population, the United States actually doubled its exports of wheat, corn, pork, and beef during the war to help fill the void created by crop failures in western Europe during the early 1860s. In 1864 the president of the Illinois Agricultural Society boasted of "railroads pressed beyond their capacity with the freights of our people . . . more acres of fertile land under culture . . . and more prolific crops than ever before . . . whitening the Northern lakes with the sails of its commerce . . . and then realize, if you can, that all this has occurred and is occurring in the midst of a war the most stupendous ever prosecuted among men." It was an impressive achievement, all right, made possible by the stimulus of war production, by mechanization of agriculture, and by the expanded employment of women as well as machines in northern industry. In the contrasting impact of the war on the northern and southern economies could be read not only the final outcome of the war but also the future economic health of those regions.

The North had enough manpower and energy left over from the war effort to continue the process of westward expansion. As Lincoln noted in his 1864 message, a hundred miles of the eastern end of the transcontinental railroad had been surveyed and twenty miles of tracks already laid on the other end in California. Gold production held steady during the war, copper increased by 50 percent, and silver quadrupled as new mines were opened, especially in Nevada, which entered the Union as a state in 1864. Western growth had its dark side, of course: many of the new settlers were draft dodgers from states east of the Mississippi; the politics of federal aid to railroad construction were none too scrupulous; and worst of all, the extinguishment of Indian titles to the land proceeded ruthlessly, accompanied by bloody fighting in Minnesota, Colorado, and elsewhere during the war.20

New industries also blossomed in the hothouse climate of the southern wartime economy. Gunpowder mills, ordnance plants, machine shops, and the like sprang up at Augusta, Selma, Atlanta, and numerous other places, while the Tredegar Works in Richmond turned out iron for every conceivable military use. But Yankee invasions and raids sooner or later destroyed most of this new industry, along with anything else of economic value within reach, so that by war's end much of the South was an economic desert. The war not only killed one-quarter of the Confederacy's white men of military age. It also killed two-fifths of southern livestock, wrecked half of the farm machinery, ruined thousands of miles of railroad, left scores of thousands of farms and plantations in weeds and disrepair, and destroyed the principal labor system on which southern productivity had been based. Two-thirds of assessed southern wealth vanished in the war. The wreckage of the southern economy caused the 1860s to become the decade of least economic growth in American history before the 1930s. It also produced a wrenching redistribution of wealth and income between North and South. As measured by the census, southern agricultural and manufacturing capital declined by 46 percent between 1860 and 1870, while northern capital
increased by 50 percent.21 In 1860 the southern states had contained 30 percent of the national wealth; in 1870, only 12 percent. Per capita commodity output (including agriculture) was almost equal in North and South in 1860; by 1870 the North's per capita output was 56 percent greater. In 1860 the average per capita income of southerners including slaves was about two-thirds of the northern average; after the war southern income dropped to less than two-fifths of the northern average and did not rise above that level for the rest of the nineteenth century. Such were the economic consequences of the South's bid for independence.

Only 371 more pages to go.

Kriegsspiel wrote: ↑Sun Jul 26, 2020 10:00 pm Only 371 more pages to go.

On the last chapter. About 93% done.

Vinny