AnotherFederalGeneral，BenjaminF。Butler，inthecourseof1861，alsoraisedtheissue，thoughnotintheboldfashionofFremont。RunawayslavescametohiscampontheVirginiacoast，andherefusedtosurrenderthemtotheowners。Hetookthegroundthat，astheyhadprobablybeenusedinbuildingConfederatefortifications，theymightbeconsideredcontrabandofwar。HewassustainedbyCongress，whichpassedwhatiscommonlycalledtheFirstConfiscationActprovidingthatslavesusedbyConfederatearmiesinmilitarylaborshould，ifcaptured，be"forfeited"——whichofcoursemeantthattheyshouldbesetfree。Butthisdidnotsettlewhatshouldbedonewithrunawayswhosemasters，thoughresidentsofsecededStates，wereloyaltotheUnion。TheWarDepartmentdecidedthattheyshouldbehelduntiltheendofthewar，whenprobablytherewouldbemade"justcompensationtoloyalmasters。"
ThisfirststageofLincoln'spolicyresteduponthehopethattheUnionmightberestoredwithoutprolongedwar。Heabandonedthishopeabouttheendoftheyear。Thereupon，hispolicyentereditssecondstage。Inthespringof1862heformulatedaplanforgradualemancipationwithcompensation。TheslavesofMaryland，Delaware，Kentucky，Missouri，andtheDistrictofColumbiaweretobepurchasedattherateof$400each，thusinvolvingatotalexpenditureof$173，000，000。AlthoughCongressadoptedthejointresolutionrecommendedbythePresident，the"borderStates"wouldnotaccepttheplan。ButCongress，byvirtueofitsplenarypower，freedtheslavesbypurchaseintheDistrictofColumbia，andprohibitedslaveryinalltheterritoriesoftheUnitedStates。
DuringthesecondstageofhispolicyLincolnagainhadtoreversetheactionofanunrulygeneral。TheFederalforcesoperatingfromtheirbaseatPortRoyalhadoccupiedaconsiderableportionoftheCarolinacoast。GeneralHunterissuedanorderfreeingalltheslavesinSouthCarolina，Georgia，andFlorida。Incountermandingtheorder，LincolnmadeanotherfutileappealtothepeopleoftheborderStatestoadoptsomeplanofcompensatedemancipation。
"Idonotargue，"hesaid；"Ibeseechyoutomakeargumentsforyourselves。Youcannot，ifyouwouldbeblindtothesignsofthetimes。Ibegofyouacalmandenlargedconsiderationofthem，ranging，ifitmaybe，farabovepersonalandpartisanpolitics。Thisproposalmakescommoncauseforacommonobject，castingnoreproachesuponany。ItactsnotthePharisee。Thechangeitcontemplateswouldcomegentlyasthedewsofheaven，notrendingorwreckinganything。Willyounotembraceit?Somuchgoodhasnotbeendonebyoneeffortinallpasttime，asintheprovidenceofGoditisnowyourhighprivilegetodo。Maythevastfuturenothavetolamentthatyouneglectedit。"
ThispersuasiveattitudeandreluctancetoforcetheissuehadgreatlydispleasedtheAbolitionists。Theirmostgiftedorator，WendellPhillips，reviledLincolnwithallthepowerofhisliterarygenius，andwithafurythatmightbecalledmalevolent。
Meanwhile，aSecondConfiscationActproclaimedfreedomfortheslavesofallthosewhosupportedtheConfederateGovernment。
HoraceGreeleynowpublishedinthe"NewYorkTribune"aneditorialentitled，"ThePrayerofTwentyMillions。"HedenouncedLincoln'streatmentofFremontandHunteranddemandedradicalaction。Lincolnrepliedinaletternowfamous。"IwouldsavetheUnion，"saidhe，"IwouldsaveittheshortestwayundertheConstitution……IfIcouldsavetheUnionwithoutfreeinganyslave，Iwoulddoit；andifIcouldsaveitbyfreeingsomeandleavingothersalone，Iwouldalsodothat。WhatIdoaboutslaveryandthecoloredrace，IdobecauseIbelieveithelpstosavetheUnion；andwhatIforbear，IforbearbecauseIdonotbelieveitwouldhelptosavetheUnion。"
However，attheverytimewhenhewrotethisremarkableletter，hehadinhisownmindentereduponthethirdstageofhispolicy。HehadeventhendiscussedwithhisCabinetanannouncementfavoringgeneralemancipation。Thetimedidnotseemtothemripe。ItwasdecidedtowaituntilaFederalvictoryshouldsavetheannouncementfromappearingtobeacryofdesperation。Antietam，whichtheNorthinterpretedasavictory，gaveLincolnhisopportunity。
TheEmancipationProclamationappliedonlytotheStatesinarmsagainsttheFederalGovernment。SuchStatesweregiventhreemonthsinwhichtoreturntotheUnion。Thereafter，iftheydidnotreturn，theirslaveswouldberegardedbythatGovernmentasfree。NodistinctionwasmadebetweenslavesownedbysupportersoftheConfederacyandthosewhoseownerswereinoppositiontoit。TheProclamationhadnobearingonthoseslaveStateswhichhadnotseceded。Needlesstoadd，nosecededStatereturned，andasecondProclamationmakingtheirslavestheoreticallyfreewasinduetimeissuedonthefirstofJanuary，1863。
ItmustnotbeforgottenthatthisradicalchangeofpolicywasmadeinSeptember，1862。Wehavealreadyheardoftheelectionswhichtookplacesoonafter——thoseelectionswhichmarkperhapsthelowestebbofLincoln'spopularity，whenSeymourwaselectedGovernorofNewYork，andthepeacepartygainedoverthirtyseatsinCongress。Itisaquestionwhether，asapurelydomesticmeasure，theEmancipationProclamationwasnot，forthetime，aninjurytotheLincolnGovernment。AndyetitwastherealturningpointinthefortunesoftheNorth。Itwasthecentralfactinthemaintenanceoftheblockade。
InEnglandatthistimethecottonfaminewasatitsheight。
Nearlyamillionpeopleinthemanufacturingdistrictswerewhollydependentuponcharity。ThisresultoftheblockadehadbeenforeseenbytheConfederateGovernmentwhichwasconfidentthatthedistressofEngland'sworkingpeoplewouldcompeltheEnglishministrytointerveneandbreaktheblockade。TheemployersinEnglandwhoselosswaswhollyfinancial，didastheConfederateshopedtheywoulddo。Theworkmen，however，tookadifferentcourse。Schooledbyanumberofabledebaters，theyfellintolinewiththatthirdgroupofpoliticalleaderswhosawinthevictoryoftheNorth，whateveritsmotives，theeventualextinctionofslavery。Tothesepeople，theEmancipationProclamationgaveadefiniteprogramme。Itwasnow，theleadersargued，nolongeraquestionofeventualeffect；theNorthhadproclaimedamotiveandthatmotivewastheextinctionofslavery。GreatnumbersofEnglishmenofallclasseswhohadhithertoheldbackfromsupportingCobdenandBrightnowrangedthemselvesontheirside。Addressesofpraiseandsympathy"begantopourintotheLegationoftheUnitedStatesinasteadyandeverswellingstream。"AnimmensepopulardemonstrationtookplaceatExeterHall。Cobden，writingtoSumner，describedthenewsituationinBritishpolitics，inaletteramountingtoanassurancethattheGovernmentneveragainwouldattempttoresistthepopularpressureinfavoroftheNorth。
Onthelastdayof1862ameetingofworkingmenatManchester，wherethecottonfaminewascausinguntoldmisery，adoptedoneofthoseNewYeargreetingstoLincoln。Lincoln'sreplyexpressedwithhisusualdirectnesshisownviewofthesympatheticrelationthathadbeenestablishedbetweenthedemocraticclassesofthetwocountries:
"IknowanddeeplydeplorethesufferingswhichtheworkingmenatManchester，andinallEurope，arecalledtoendureinthiscrisis。IthasbeenoftenandstudiouslyrepresentedthattheattempttooverthrowthisGovernment，whichwasbuiltuponthefoundationofhumanrights，andtosubstituteforitonewhichshouldrestexclusivelyonthebasisofhumanslavery，waslikelytoobtainthefavorofEurope。Throughtheactionofourdisloyalcitizens，theworkingmenofEuropehavebeensubjectedtoseveretrials，forthepurposeofforcingtheirsanctiontothatattempt。Underthecircumstances，IcannotbutregardyourdecisiveutterancesuponthequestionasaninstanceofsublimeChristianheroismwhichhasnotbeensurpassedinanyageorinanycountry。Itisindeedanenergeticandreinspiringassuranceoftheinherentpoweroftruth，andoftheultimatetriumphofjustice，humanity，andfreedom。Idonotdoubtthatthesentimentsyouhaveexpressedwillbesustainedbyyourgreatnation；and，ontheotherhand，Ihavenohesitationinassuringyouthattheywillexciteadmiration，esteem，andthemostreciprocalfeelingsoffriendshipamongtheAmericanpeople。I
hailthisinterchangeofsentiment，therefore，asanaugurythatwhateverelsemayhappen，whatevermisfortunemaybefallyourcountryormyown，thepeaceandfriendshipwhichnowexistsbetweenthetwonationswillbe，asitshallbemydesiretomakethem，perpetual。"
CHAPTERX。THESECRETARYOFTHETREASURY
ThoughthedefeatoftheDemocratsatthepollsin1863andthenowdefinitelyfriendlyattitudeofEnglandhaddonemuchtosecurethestabilityoftheLincolnGovernment，thissuccesswasdueinparttoafigurewhichnowcomestothefrontanddeservesattentiveconsideration。IndeedtheworkofSalmonPortlandChase，SecretaryoftheTreasury，formsabridge，asonemightsay，betweenthefirstandsecondphasesofLincoln'sadministration。
TheinterestingEnglishmanwhoisthelatestbiographerofLincolnsaysofChase:"Unfortunately，thisimposingpersonwasasneak。"ButisLordCharnwoodjustifiedinthatsurprisingcharacterization?HefindssupportinthetestimonyofSecretaryWelles，whocallsChase，"artfuldodger，unstable，andunreliable。"Andyetthereisanotherside，foritistheconventionalthinginAmericatocallhimourgreatestfinanceministersinceHamilton，andevenaconspicuousenemysaidofhim，atacrucialmoment，thathiscourseestablishedhischaracter"asanhonestandfrankman。"
Takingthesecontradictoryestimatesashintsofacontradictionintheman，weareforcedtotheconclusionthatChasewasaprofessionalinpoliticsandanamateurinfinance。Perhapshereinisthewholeexplanationofthetwocharacteristicsofhisfinancialpolicy——hisreluctancetolaytaxes，andhisfaithinloans。Histwoeyesdidnotseethingsalike。Onewasreallytryingtomakeouttheorthodoxpathoffinance；theotherwaspeeringalongthemoredeviousroadofpopularcaprice。
TheopeningofthewarcaughttheTreasury，asitcaughtallbranchesoftheGovernment，utterlyunprepared。BetweenAprilandJuly，1861，Chasehadtoborrowwhathecould。WhenCongressmetinJuly，hisrealcareerasdirectoroffinancialpolicybegan——or，ashisenemiesthink，failedtobegin。Atleast，hefailedtourgeuponCongresstheneedofnewtaxesandappearedsatisfiedwithhimselfaskingforanissueof$240，000，000inbondsbearingnotlessthansevenpercentinterest。Congressvotedtogivehim$250，000，000ofwhich$50，000，000mightbeinterest-bearingtreasurynotes；madeslightincreasesinduties；
andPreparedforexciseanddirecttaxationthefollowingyear。
LaterintheyearCongresslaidathreepercenttaxonallincomesinexcessof$800。
WhenCongressreassembledinDecember，1861，expenditureswereracingaheadofreceipts，andtherewasadeficitof$143，000，000。Itmustnotbeforgottenthatthismonthwasatimeofintenseexcitabilityandofnervousreaction。Fremonthadlatelybeenremoved，andtheattackonCameronhadbegun。AtthiscrucialmomentthesituationwasmadestillmorealarmingbytheactionoftheNewYorkbanks，followedbyallotherbanks，insuspendingspeciepayments。TheylaidtheresponsibilityuponChase。AsyndicateofbanksinNewYork，Boston，andPhiladelphiahadcometotheaidoftheGovernment，butwhentheytookupgovernmentbonds，Chasehadrequiredthemtopaythefullvaluecashdown，thoughtheyhadaskedpermissiontoholdthemoneyondepositandtopayitasneededonrequisitionbytheGovernment。Furthermore，inspiteoftheirprotest，Chaseissuedtreasurynotes，whichthebankshadtoreceivefromtheirdepositors，whoneverthelesscontinuedtodemandspecie。OnJanuary1，1862，thebanksowed$459，000，000andhadinspecieonly$87，000，000。Chasedefendedhiscoursebysayingthatthefinancialcrisiswasnotduetohispolicy——orlackofpolicy，asitwouldnowseem——buttoagenerallossoffaithintheoutcomeofthewar。
Therenowaroseamoralcrisisforthis"imposingperson"whowasSecretaryoftheTreasury——acrisiswithregardtowhichtherearestilldifferencesofopinion。Whilehefacedhisproblemsilently，theCommitteeonWaysandMeansintheHousetookthematterinhand:Itssolutionwasanoldonewhichallsoundtheoristsonfinanceuniteincondemning——theissueofirredeemablepapermoney。AndwhatdidtheSecretaryoftheTreasurydo?Previously，asGovernorofOhio，hehaddenouncedpapermoneyas，ineffect，afrauduponsociety。Longafter，whenthetideoffortunehadlandedhiminthehighplaceofSupremeJustice，hereturnedtothisviewandcondemnedasunconstitutionalthelawof1862establishingasystemofpapermoney。ButatthetimewhenthatlawwaspassedChase，thoughhewentthroughtheformofprotesting，soonacquiesced。BeforelonghewasaskingCongresstoallowafurtherissueofwhathehadpreviouslycalled"fraudulent"money。
TheanswertothequestionwhetherChaseshouldhavestucktohisprinciplesandresignedratherthanacquiesceinthepapermoneylegislationturnsonthatotherquestion——howwerethepoliticianandthefinancierrelatedinhismake-up?
BeforeCongressandtheSecretaryhadfinished，$450，000，000wereissued。Pricesnaturallyrose，andtherewasspeculationingold。Evenbeforethefirstissueofpapermoney，thetreasurynoteshadbeenslightlybelowpar。InJanuary，1863，ahundreddollarsinpaperwouldbring，inNewYork，only$69。00ingold；ayearlater，afterfalling，rising，andfallingagain，thevaluewas$64。00；inJulyandAugust，1864，itwasatitslowest，$39。00；whenthewarclosed，ithadrisento$67。00。Therewaspowerfulprotestagainstthelegislationresponsibleforsuchaconditionofaffairs。JustinMorrill，theauthoroftheMorrilltariff，said，"IwouldassoonprovideChinesewoodengunsforthearmyaspapermoneyaloneforthearmy。Itwillbeabreachofpublicfaith。Itwillinjurecreditors；itwillincreaseprices；itwillincreasemanyfoldthecostofthewar。"Recentstudentsagree，inthemain，thathisprophecieswerefulfilled；
andacommonestimateoftheprobableincreaseinthecostofthewarthroughtheuseofpapermoneyandtheconsequentinflationofpricesis$600，000，000。
Therewasmuchmorefinanciallegislationin1862；butChasecontinuedtostandasideandallowCongresstheleadinestablishinganexciselaw，anincreaseintheincometax，andahighertariff——thelastofwhichwasnecessitatedbytheexciselawwhichhasbeendescribedasabill"thattaxedeverything。"
ToenableAmericanmanufacturerstobeartheexcisedutiesleviedupontheirbusiness，protectionwasevokedtosecurethemthepossessionoftheirfieldbyexcludingforeigncompetition。Allthesetaxes，however，producedbutafractionoftheGovernment'srevenue。Borrowing，thefavoritemethodoftheSecretary，wasacceptedbyCongressasthemainresource。Itiscomputedthatbymeansoftaxationtherewasraisedinthecourseofthewar$667，163，247。00，whileduringthesameperiodtheGovernmentborrowed$2，621，916，786。00。
WhateverelsehemaythinkofChase，noonedeniesthatin1862
hehadotherinterestsbesidesfinance。Lincoln'sCabinetinthosedayswasfarfromanharmoniousbody。AllthroughitshistorytherewasaChasefactionandaSewardfaction。TheformerhadbehindthemtheRadicalRepublicans，whilethelatterrelieduponthesupportofthemoderates。ThisdivisionintheRepublicanpartyrunsdeepthroughthepoliticsofthetime。
ThereseemstobegoodreasontothinkthatChasewasnottakenbysurprisewhenhisradicalalliesinCongress，inDecember，1862，demandedofLincolntheremovalofSeward。Itwillberememberedthattheelectionsoftheautumnof1862hadgoneagainstLincoln。Atthismomentofdismay，thefriendsofChasestrucktheirblow。Sewardinstantlyofferedhisresignation。
ButLincolnskillfullytemporized。Thereupon，Chasealsoresigned。Judgingfromthescantyevidencewehaveofhisintention，wemayconcludethathethoughthehadLincolninacornerandthatheexpectedeithertobecomefirstministerortheavowedchiefofanirresistibleopposition。Butheseemstohavegonetoofastforhisfollowers。Lincolnhadmetthem，togetherwithhisCabinet，inaconferenceinDecember，1862，andfranklydiscussedthesituation，withtheresultthatsomeofthemwavered。WhenLincolninformedbothSewardandChasethathedeclinedtoaccepttheirresignations，bothreturned——Sewardwithalacrity，Chasewithreluctance。OneofthecluestoLincoln'scabinetpolicywashisdeterminationtokeepboththesefactionscommittedtotheGovernment，withoutallowinghimselftobeunderthethumbofeither。
DuringthesixmonthsfollowingthecabinetcrisisChaseappearsathisbest。Astupendousdifficultylaybeforehimandheattackeditmanfully。TheGovernment'sdeficitwas$276，900，000。
Oftheloansauthorizedin1862——the"five-twenties"astheywerecalled，bringingsixpercentandtorunfromfivetotwentyyearsattheGovernment'spleasure——thesaleshadbroughtin，toDecember，1862，only$23，750，000，thoughfivehundredmillionhadbeenexpected。ThebanksindecliningtohandlethesebondslaidtheblameontheSecretary，whohadinsistedthatallpurchasersshouldtakethematpar。
Itisnotfeasible，inaworkofthischaracter，toenterintothecomplexitiesofthefinancialsituationof1863，ortodeterminejustwhatinfluencescausedarevolutioninthemarketforgovernmentbonds。Buttwofactorsmustbementioned。Chasewasinducedtochangehisattitudeandtoselltobankslargenumbersofbondsataratebelowpar，thusenablingthebankstodisposeofthemataprofit。HealsocalledtohisaidJayCooke，anexperiencedbanker，whowasallowedacommissionofone-halfpercentonallbondssoldupto$10，000，000andthree-eighthsofonepercentafterthat。Cookeorganizedacountrywideagencysystem，withtwenty-fivehundredsubagentsthroughwhomheoffereddirectlytothepeoplebondsinsmalldenominations。Byallmannerofdevices，patriotismandthepurchaseofbondsweremadetoappearthesamething，andbeforetheendoftheyear$400，000，000infive-twentybondshadbeensold。Thiscampaigntodisposeofthefive-twentieswastheturning-pointinwarfinance，andlaterborrowingsencounterednosuchdifficultiesasthoseof1862and1863。
BetterknowntodaythanthisprecariouslegislationisthefamousActof1863，whichwasamendedinthenextyearandwhichformsthebasisofourpresentsystemofnationalbanks。ToChasehimselfthecreditforthisseemstobedue。Evenin1861headvisedCongresstoestablishasystemofnationalbanks，andherepeatedtheadvicebeforeitwasfinallytaken。Thecentralfeatureofthissystemwhichheadvocatedisonewithwhichwearestillfamiliar:permissiontothebanksacceptinggovernmentsupervisiontodepositgovernmentbondsintheTreasuryandtoacquireinreturntherighttoissuebank-notestotheamountofninetypercentofthevalueofthebonds。
TherecanbenodoubtthatChasehimselfratedveryhighlyhisownservicestohiscountry。Noristhereanydoubtthat，aloneamongLincoln'scloseassociates，hecontinueduntiltheendtobelievehimselfabettermanthanthePresident。HeandhisradicalfollowingmadenochangeintheirattitudetoLincoln，thoughChasepursuedacourseofconfidentialcriticismwhichhassinceinspiredthecharacterizationofhimasa"sneak，"whilehisfollowersweremoreoutspoken。Inthesummerof1863ChasewasseriouslytalkedofasthenextPresident，andbeforetheendoftheyearChaseclubswerebeingorganizedinallthelargecitiestopromotehiscandidacy。ChasehimselftooktheadroitpositionofnotbelievingthatanyPresidentshouldserveasecondterm。
Earlyin1864theChaseorganizationsentoutaconfidentialcircularsignedbySenatorPomeroyofKansassettingforththecaseagainstLincolnasacandidateandthecaseinfavorofChase。UnfortunatelyforChase，thiscircularfellintothehandsofanewspaperandwaspublished。ChaseatoncewrotetoLincolndenyinganyknowledgeofthecircularbutadmittinghiscandidacyandofferinghisresignation。NomoreremarkableletterwaswrittenbyLincolnthanhisreplytoChase，inwhichheshowedthathehadlongfullyunderstoodthesituation，andwhichheclosedwiththesewords:"WhetheryoushallremainattheheadoftheTreasuryDepartmentisaquestionwhichIdonotallowmyselftoconsiderfromanystandpointotherthanmyjudgmentofthepublicservice，and，inthatview，Idonotperceiveoccasionforchange。"
TheChaseboomrapidlydeclined。ThedeathblowwasgivenbyacaucusoftheUnionmembersofthelegislatureofhisownStatenominatingLincoln"atthedemandofthepeopleandthesoldiersofOhio。"ThedefeatembitteredChase。Forseveralmonths，however，hecontinuedintheCabinet，andduringthistimehehadthemortificationofseeingLincolnrenominatedintheNationalUnionConventionamidagreatdisplayofenthusiasm。
Morethanonceinthepast，Chasehadofferedhisresignation。
OnoneoccasionLincolnhadgonetohishouseandhadbeggedhimtoreconsiderhisdecision。Soonaftertherenomination，ChaseagainofferedhisresignationuponthepretextofadisagreementwiththePresidentoverappointmentstooffice。Thistime，however，Lincolnfelttheendhadcomeandacceptedtheresignation。Chase'ssuccessorintheTreasurywasWilliamPittFessenden，SenatorfromMaine。Duringmostofthesummerof1864
Chasestoodaside，sullenandenvious，watchingtheprogressofLincolntowardasecondelection。SomuchdidhisbitternessaffecthisjudgmentthathewascapableofwritinginhisdiaryhisbeliefthatLincolnmeanttoreversehispolicyandconsenttopeacewithslaveryreestablished。
CHAPTERXI。NORTHERNLIFEDURINGTHEWAR
Therealeffectsofwaronthelifeofnationsisoneofthoseoldandcomplicateddebateswhichlieoutsidethescopeofavolumesuchasthis。YetintheparticularcaseoftheNorthernpeopleitisimperativetoanswertwoquestionsbothofwhichhaveprovokedinterminablediscussion:WasthemorallifeoftheNorthgoodorbadinthewaryears?Wasitscommerciallifesound?
Astothemoralquestion，contemporaryevidenceseemsatfirstsightcontradictory。TheveryableEnglishmanwhorepresentedthe"Times"，WilliamH。Russell，givesthisuglypictureofanAmericancityin1863:
"EveryfreshbulletinfromthebattlefieldofChickamauga，duringmythreeweeks'stayinCincinnati，broughtalonglistofthedeadandwoundedoftheWesternarmy，manyofwhom，oftheofficers，belongedtothebestfamiliesoftheplace。Yetthesignsofmourningwerehardlyanywhereperceptible；thenoisygaietyofthetownwasnotabatedonejot。"
Ontheotherhand，aprivatemanuscriptofaCincinnatifamilydescribesthe"intensegloomhangingoverthecitylikeapall"
duringtheperiodofthatdreadfulbattle。ThememoriesofoldpeopleatCincinnatiinafterdays——iftheyhadbelongedtothe"loyal"party——containedonlysadimpressionsofacitythatwasonegreathospitalwhere"allourbestpeople"workedpassionatelyasvolunteerassistantsofthegovernmentmedicalcorps。
AthirdfacttobeborneinmindinconnectionwiththisapparentcontradictioninevidenceisthesourceofthegreaterfortunesofCincinnati，alargeproportionofwhicharetobetraced，directlyorindirectlytogovernmentcontractsduringthewar。
InsomecasesthemercilessindifferenceoftheCincinnatispeculatorstothetroublesoftheircountryarealocalscandaltothisday，anditisstilltold，sometimeswithscorn，sometimeswithamusement，howperhapsthegreatestofthesefortuneswasmadebyforcingupthepriceofironatatimewhentheGovernmenthadtohaveiron，costwhatitmight。
Thuswenosoonertakeupthemoralproblemofthetimesthanwefindourselvesinvolvedinthecommercialquestion，forhere，asalways，moralsandbusinessareintertwined。WasthecommercialmanagementoftheNorthcreditabletotheGovernmentandanhonortothepeople?ThesurestwaytoanswersuchquestionsistotraceoutwithsomefullnessthecommercialandindustrialconditionsoftheNorthduringthefouryearsofwar。
Thegeneralreaderwholooksforthefirsttimeintothematterislikelytobestaggeredbywhatstatisticsseemtosay。
Apparentlytheycontradictwhatheisaccustomedtohearfrompopulareconomistsaboutthewasteofwar。Hehasbeentoldinthenewspapersthatbusinessisunderminedbythewithdrawalofgreatnumbersofmenfrom"productive"consumptionofthefruitsoflaborandtheirengagementassoldiersin"unproductive"
consumption。But，tohisastonishment，hefindsthatthestatisticsof1861-1865showmuchincreaseinNorthernbusiness——as，forexample，in1865，theproductionof142millionpoundsofwoolagainst60millionin1860。Thegovernmentreportsshowthat13milliontonsofcoalwereminedin1860and21millionin1864；in1860，theoutputofpigironwas821，000tons，and1，014，282tonsin1864；thepetroleumproductionrosefrom21
milliongallonsin1860to128millionin1862；theexportofcorn，measuredinmoney，showsfor1860abusinessof$2，399，808
comparedwith$10，592，704for1863；wheatexportingshowed，also，anenormousincrease，risingfrom14millionsin1860to46
millionsin1863。Thereare，tobesure，manystatisticswhichseemtocontradictthese。Someofthemwillbementionedpresently。Andyet，onthewhole，itseemssafetoconcludethattheNorth，atthecloseofthethirdyearofwarwasproducingmoreandwasreceivinglargerprofitsthanin1860。
Todealwiththissubjectinitsentiretywouldleadusintothelabyrinthsofcomplexeconomictheory，yettwoorthreesimplefactsappearsoplainthateventhemerehistorianmayventuretosetthemforth。Whenwelookintothestatisticswhichseemtoshowageneralincreaseofbusinessduringthewar，wefindthatinpointoffactthisincreasewashighlyspecialized。Allthoseindustriesthatdealtwiththephysicalnecessitiesoflifeandallthosethatdealtpeculiarlywitharmiesflourishedamazingly。
Andyetthereisanothersidetothestory，fortherewereotherindustriesthatweresetbackandsomethatalmost，ifnotentirely，disappeared。Agoodinstanceisthemanufactureofcottoncloth。Whenthewaropened，200，000handswereemployedinthismanufactureinNewEngland。WiththesealingupoftheSouthandthefailureofthecottonsupply，theirworktemporarilyceased。Whatbecameoftheworkmen?Briefly，oneofthreethingshappened:somewentintoothertrades，suchasmunitions，inwhichthewarhadcreatedanabnormaldemandforlabor；agreatnumberofthembecamesoldiers；andmanyofthemwentWestandbecamefarmersorminers。Furthermore，manywhosetradeswerenotinjuredbythewarlefttheirjobsandfledwestwardtoescapeconscription。Theirplaceswereleftopentobefilledbyoperativesfromtheinjuredtrades。
Inoneoranotherofthesewaysthelaborerwhowasthrownoutofworkwasgenerallyabletorecoveremployment。Butitisimportanttorememberthatthekeytothelaborsituationatthattimewasthevastareaofunoccupiedlandwhichcouldbehadfornothingornexttonothing。ThisfactisbroughthomebyacomparisonofthesituationoftheAmericanwiththatoftheEnglishworkmanduringthecottonfamine。AccordingtoitsownideasEnglandwasthenfullycultivated。Therewasnobodyoflandwaitingtobethrownopen，asanemergencydevice，toahostofnew-madeagriculturists。Whenthecotton-millsstoppedatManchester，theiroperativeshadpracticallynoopeningsbutinotherindustrialoccupations。Assuchopportunitieswerelacking，theybecameobjectsofcharityuntiltheycouldresumetheirwork。Asacountrywithagreatreserveofunoccupiedland，theUnitedStateswassingularlyfortunateatthiseconomiccrisis。
OneofthenoteworthyfeaturesofNorthernlifeduringthewaristhattherewasnoabnormalincreaseinpauperism。Agreatdealhasbeenwrittenupontheextensivecharitiesofthetime，butthetermiswronglyapplied，forwhatisreallyreferredtoisthevolunteeraidgiventotheGovernmentinsupportingthearmies。Thiswasdoneonavastscale，byallclassesofthepopulation——thatis，byallwhosupportedtheUnionparty，fortheseparationbetweenthetwopartieswasbitterandunforgiving。Butofcharityintheordinarysenseofthecareofthedestitutetherewasnosignificantincreasebecausetherewasnopeculiarneed。Hereagainthefactthatthefreelandcouldbeeasilyreachedisthefinalexplanation。Therewasnoneedfortheunemployedworkmantobecomeapauper。HecouldtakeadvantageoftheHomesteadAct*，whichwaspassedin1862，andacquireafarmof160acresfree；orhecouldsecureatalmostnominalcostfarm-landwhichhadbeengiventorailwaysasaninducementtobuild。UndertheHomesteadAct，theGovernmentgaveawaylandamountingto2，400，000acresbeforethecloseofthewar。TheIllinoisCentralalonesoldtoactualsettlers221，000
acresin1863and264，000in1864。Itwasduringthewar，too，thatthegreatundertakingofthetranscontinentalrailwaywasbegun，partlyformilitaryandpartlyforcommercialreasons。Inthisproject，bothasafieldoflaborandasastimulustoWesternsettlement，thereisalsotobefoundonemoredeviceforthereliefofthelaborsituationintheEast。
*ThisAct，whichmayberegardedastheculminationofthelongbattleoftheNortherndreamerstowin"landforthelandless，"
providedthateverysettlerwhowas，orintendedtobe，acitizenmightsecure180acresofgovernmentlandbylivingonitandcultivatingitforfiveyears。
ThereisnomoreimportantphenomenonofthetimethantheshiftingoflargemassesofpopulationfromtheEasttotheWest，whilethewarwasinprogress。Thisfactbeginstoindicatewhytherewasnoshortageintheagriculturaloutput。TheNorthsufferedacutelyfrominflationofpricesandfromaspeculativewildnessthataccompaniedtheinflation，butitdidnotsufferfromalackofthosethingsthatareproducedbythesoil——food，timber，metals，andcoal。Inadditiontothereasonjustmentioned——thesearchfornewoccupationbyEasternlaborwhichhadbeenthrownoutofemployment——threeothercauseshelpedtomaintaintheefficiencyofworkinthemines，intheforests，andonthefarms。Thesethreefactorswereimmigration，thelaborofwomen，andlabor-savingmachines。
Immigration，naturally，fellofftoacertaindegreebutitdidnotbecomealtogethernegligible。Itisprobablethat110，000
able-bodiedmencameintothecountrywhilewarwasinprogress——apooroffsettothemanyhundredthousandwhobecamesoldiers，butneverthelessacontributionthatcountedforsomething。
Vastlymoreimportant，intheworkoftheNorth，wastheparttakenbywomen。ApatheticdetailwithwhichinourownexperiencetheworldhasagainbecomefamiliarwastheabsenceofyoungmenthroughoutmostoftheNorth，andthepresenceofwomennewtotheworkinmanyoccupations，especiallyfarming。A
singlequotationfromahomemissionaryinIowatellsthewholestory:
"IwillmentionthatImetmorewomendrivingteamsontheroadandsawmoreatworkinthefieldsthanmen。Theyseemtohavesaidtotheirhusbandsinthelanguageofafavoritesong，'Justtakeyourgunandgo；
ForRuthcandrivetheoxen，John，AndIcanusethehoe!'
"IwentfirsttoClarinda，andthetownseemeddeserted。Uponinquiryforformerfriends，thefrequentanswerwas，"Inthearmy。"FromHawleyvillealmostallthethoroughlyloyalmaleinhabitantshadgone；andinonetownshipbeyond，whereI
formerlypreached，therearebutsevenmenleft，andatQuincy，thecountyseatofAdamsCounty，butfive。"
Evenmoreimportantthanthechangeinthepersonneloflaborwerethenewmachinesoftheday。DuringthefifteenyearsprevioustothewarAmericaningenuityhadreachedahighpoint。
Suchinventionsasthesewingmachineandthehorse-reaperdateintheirpracticalformsfromthatperiod，andbothofthesehelpedtheNorthtofightthewar。Theirfurtherimprovement，andtheextensionoftheprinciplesinvolvedtomanynewformsofmachinery，sprangfromthepressingneedtomakeupforthelossofmenwhoweredrainedbythearmyfromthefarmsandtheworkshops。Itwasthehorse-reaper，thehorse-rake，thehorse-thresherthatenabledwomenandboystoworkthefarmswhilehusbands，fathers，andelderbrotherswereatthefront。
AllthesecausesmaintainedNorthernfarmingatahighpitchofproductivity。Thisefficiencyisimpliedinsomeofthefiguresalreadyquoted，butmanyotherscouldbecited。Forexample，in1859，thetotalproductionofwheatforthewholecountrywas173
millionbushels；in1862，theNorthaloneproduced177millions；
evenin1864，withoveramillionmenunderarms，itstillproduced160millionbushels。
ItmustberememberedthatthegreatNorthernarmyproducednothingwhileitconsumedtheproductsofagricultureandmanufacture——food，clothing，arms，ammunition，cannon，wagons，horses，medicalstores——ataratethatmighthaveledapoeticalpersontoimaginethearmyasadevouringdragon。Who，inthelastanalysis，providedallthesesupplies?Whopaidthesoldiers?Whosupplementedtheirmeagerpayandsupportedtheirfamilies?Thepeople，ofcourse；andtheydidsobothdirectlyandindirectly。IntaxesandloanstheypaidtotheGovernmentaboutthreethousandmillionsofdollars。Theirindirectassistancewasperhapsasgreat，thoughitisimpossibletodaytoestimatewithanyapproachtoaccuracytheamounteitherinmoneyorservice。AmongobviousitemsarethecollectionsmadebytheSanitaryCommissionforthebenefitofthehospitalservice，amountingtotwenty-fivemilliondollars，andaboutsixmillionsraisedbytheChristianCommission。InahundredotherwaysbothindividualsandlocalitiesstrainedtheirresourcestosupplementthoseoftheGovernment。Immensesubscriptionlistswerecirculatedtoraisefundsforthefamiliesofsoldiers。ThecityofPhiladelphiaalonespentinthiswayinasingleyear$600，000。Thereisalsoevidenceofavastamountofunrecordedreliefofneedyfamiliesbytheneighbors，andinthefarmingdistricts，suchassistance，particularlyintheformoffuelduringwinter，wasverygenerallygiven。
Whatmadepossiblethisenormoustotalofcontributionswas，inaword，thegeneralwillingnessofthosesupportingthewartoforegoluxuries。Theyceasedbuyingagreatmultitudeofunnecessarythings。Butwhatbecameofthelaborthathadpreviouslysuppliedthedemandforluxuries?ApartofitwentthewayofallotherNorthernlabor——intonewtrades，intothearmy，ortotheWest——andapartcontinuedtomanufactureluxuries:fortheirmarket，thoughcurtailed，wasnotdestroyed。
Therewere，indeed，twopopulationsintheNorth，andtheywereseparatedbyanemotionalchasm。HadalltheNorthbeenaunitinfeeling，theproductionofarticlesofluxurymighthaveceased。BecauseofthisemotionaldivisionoftheNorth，however，thisbusinesssurvived；forthesacrificeofluxuriousexpenditurewasmadebyonlyapartofthepopulation，eventhoughitwasthemajority。
Furthermore，thewholematterwasadjustedvoluntarilywithoutsystematicgovernmentdirection，sincetherewasnothinginthefinancialpolicyoftheGovernmenttocorrespondtoconscription。
Consequently，bothinthewayofloansandinthewayofcontributions，aswellasinthematterofunpaidservice，theentireburdenfelluponthewarpartyalone。Intheabsenceofanythinglikeeconomicconscription，ifsuchaphrasemaybeused，thoseNorthernerswhodidnotwishtolendmoney，ortomakefinancialsacrifice，ortogiveunpaidservice，werefreetopursuetheirownbent。Theelectionof1864showedthattheyformedamarketwhichamountedtosomethingbetweensixandninemillions。Thereisnoreasontosupposethatthesemillionsin1864spentlessonluxuriesthantheydidin1860。Twoorthreeitemsareenough。In1860，theimportationofsilkamountedto32milliondollars；in1862，inspiteofinflatedprices，ithadshrunkto7millions；theconsumptionofmaltliquorsshrankfrom101milliongallonsin1860to62milliongallonsin1863；ofcoffee，hardlytobeclassedasaluxury，therewereconsumedin1861，184millionpoundsandin1863，80millions。
Thecluetothestoryofcapitalistobefoundinthisfact，toooftenforgotten，thattherewasaneconomic-politicaldivisioncuttingdeepthrougheverystratumoftheNorthernpeople。Theireconomiclifeaswellastheirpoliticallifewascontrolledontheonehandbyadevotiontothecauseofthewar，andontheotherhandbyahatredofthatcauseorbycynicalindifference。
AndwecannotinsisttoopositivelythattheGovernmentfailedverylargelytotakethisfactintoaccount。TheAmericanspiritofinvention，soconspicuousatthattimeinmechanics，didnotapplyitselftothescienceofgovernment。Lincolnconfessedlywasnotafinancier；hisinstinctwasathomeonlyinproblemsthatcouldbestatedintermsofmen。Witnesshisacceptanceofconscriptionandhisfirmnessincarryingitthrough，asaresultofwhichhesavedthepatrioticpartyfrombearingthewholeburdenofmilitaryservice。Buttherewasnoparallelconservationofpowerinthefieldofindustry。Thefinancialpolicy，leftinthehandsofChase，maytrulybedescribedasbarrenofideas。Incidentally，itmaybementionedthatthe"loyal"NorthwasleftatthemercyofitsdomesticenemiesandapreytoparasitesbyChase'spolicyofloansinsteadoftaxesandofvoluntarysupportinsteadofenforcedsupport。
Theconsequenceofthisfinancialpolicywasanimmenseopportunityforthe"disloyally"andtheparasitestomakehugewarprofitsoutofthe"loyals"andtheGovernment。Ofcourse，itmustnotbesupposedthateveryonewhoseizedthechancetofeatherhisnestwassocarelessorsoimpoliticastolethimselfbeclassedasa"disloyal。"Anincidentoftheautumnof1861showsthetemperofthoseprofessed"loyals"whowerereallyparasites。ThebackgroundoftheincidentissuppliedbyareportoftheQuartermaster-General:
"Governorsdailycomplainthatrecruitingwillstopunlessclothingissentinabundanceandimmediatelytothevariousrecruitingcampsandregiments。Witheveryexertion，thisdepartmenthasnotbeenabletoobtainclothingtosupplythesedemands，andtheyhavebeensourgentthattroopsbeforetheenemyhavebeencompelledtodopicketdutyinthelatecoldnightswithoutovercoats，orevencoats，wearingonlythinsummerflannelblouses……Could150，000suitsofclothing，overcoats，coats，andpantaloonsbeplacedtoday，indepot，itwouldscarcesupplythecallsnowbeforeus。Theywouldcertainlyleavenosurplus。"
TheGovernmentattemptedtomeetthisdifficultyintheshortestpossibletimebypurchasingclothingabroad。Butsuchdisregardofhomeindustry，the"patriotism"oftheNewEnglandmanufacturerscouldnotendure。Alongwiththereportjustquoted，theQuartermaster-GeneralforwardedtotheSecretaryofWaralongargumentativeprotestfromacommitteeoftheBostonBoardofTradeagainstthepurchaseofarmyclothinginEurope。
AnyAmericanofthepresentdaycanguesshowtheprotestwaswordedandwhatargumentswereused。Strippedofitsinsincerity，itsignifiedthis:thecottonmillswereinoperativeforlackofmaterial；theirownerssawnochancetosavetheirdividendsexceptbyrequipmentaswoolenmills；theexistingwoolenmillsalsosawagreatchancetoforcewooluponthemarketasasubstituteforcotton。InOhio，California，Pennsylvania，andIllinois，thegrowersofwoolsawtheopportunitywithequalclearness。But，oneandall，thesevariousgroupsofparasitessawthattheirgamehingedononecondition:themunitionsmarketmustbekeptopenuntiltheywerereadytomonopolizegovernmentcontracts。Ifsoldierscontractedpneumoniadoingpicketdutyoncoldnights，intheirsummerblouses，thatwasbutanunfortunateincidentofwar。
VerydifferentinspiritfromtheprotestoftheBostonmanufacturersisadispatchfromtheAmericanministeratBrusselswhichshowswhatAmericanpublicservants，incontrastwithAmericanmanufacturers，wereabout。AbroadtheagentsofNorthandSouthwerefightingacommercialduelinwhicheachstrovetomonopolizethemunitionsmarket。TheUnitedStatesNavy，seeingthingsfromanangleentirelydifferentfromthatoftheBostonBoardofTrade，ablysecondedtheministersbyblockadingtheSouthernportsandbythuspreventingthemovementofspecieandcottontoEurope。Asaconsequence，fourmonthnoteswhichhadbeengivenbySouthernagentswiththeirordersfelldue，hadtoberenewed，andbegantobeheldindisfavor。
AgentsoftheNorth，gettingwindofthesehitchesinnegotiations，eagerlysoughttotakeovertheunpaidConfederateorders。AllthesedetailsofthesituationhelptoexplainthejubilanttoneofthisdispatchfromBrusselslateinNovember，1861:
"Ihavenowinmyhandscompletecontroloftheprincipalrebelcontractsonthecontinent，viz。:206，000yardsofclothreadyfordelivery，alreadycommencingtomoveforwardtoHavre；graybutcanbedyedblueintwentydays；100，000yardsdeliverablefrom15thofDecemberto26thofJanuary，lightbluearmycloth，sameasours；100，000blankets；40，000gunstobeshippedintendays；20，000saberbayonetstobedeliveredinsixweeks……Thewinterclothingfor100，000mentakenoutoftheirhands，whentheycannotreplaceit，wouldalmostcompensateforBullRun。
ThereisnoconsiderableamountofclothtobehadinEurope；thestocksareveryshort。"
TheSecretaryofWarwasasdevoidofideasastheSecretaryoftheTreasurywasandevenlessequippedwithresistingpower。
ThoughhecouldnotundotheworkalreadydonebytheagentsoftheGovernmentabroad，hegavewayasrapidlyaspossibletothealliedparasiteswhoseheadquarters，atthemoment，wereinBoston。Thestorygrowsuglierasweproceed。Twopowerfulcommercialcombinationstookchargeofthepolicyofthewooleninterests——theNationalWoolgrowers'AssociationandtheNationalAssociationofWoolManufacturers，whichweresoonincontrolofthisimmenseindustry。WoolenmillssprangupsofastthatareportoftheNewYorkChamberofCommercepronouncedtheirincrease"scarcelycredible。"SogreatwasthenewmarketcreatedbytheGovernmentdemand，andsoruthlessweretheparasitesinforcingupprices，thatdividendsonmillstockroseto10，15，25，andeven40percent。AndallthewhilethewoolgrowersandthewoolmanufacturerswereclamoringtoCongressforprotectionofthehomeindustry，exclusionofthewickedforeigncompetition，andallinthenameoftheirdevoted"patriotism"——patriotismwithadividendof40percent!
Ofcourse，itisnotmeantthateverywoolgrowerandeverywoolenmanufacturerwaseithera"disloyal"oraparasite。Bynomeans。Numbersofthemweretobefoundinthatgreathostof"loyals"whoputtheirdividendsintogovernmentbondsandgavetheirservicesunpaidasauxiliariesoftheCommissaryDepartmentortheHospitalServiceoftheArmy。Whatismeantisthattheabnormalconditionsofindustry，uncorrectedbytheGovernment，affordedaglaringopportunityforunscrupulousmenofbusinesswho，whatevertheirprofessions，caredahundredtimesmoreforthemselvesthanfortheircountry。Tothesewasduethepitilesshamperingofthearmyintheinterestofthewool-trade。Forexample，manyuniformspaidforatoutrageousprices，turnedouttobemadeofamiserablecheapfabric，called"shoddy，"whichresistedweatherscarcelybetterthanpaper。Thisfraudgavetheword"shoddy"itspresentsignificanceinourAmericanspeechandproducedthephrase——appliedtomanufacturersnewlybecomerich——"shoddyaristocracy。"AnevenmoreshamefulresultoftheselfishnessofthemanufacturersandoftheweaknessoftheGovernmentwastheuseofclothforuniformsnotoftheregulationcolors，withtheresultthatsoldierssometimesfiredupontheircomradesbymistake。
Theprosperityofthecapitalistswhofinancedthewoolenbusinessdidnotextendtothelaboremployedinit。OneoftheugliestdetailsofthetimewastheresoluteattemptoftheparasitestoseizethewholeamountoftheabnormalprofitstheywrungfromtheGovernmentandfromthepeople。Foritmustnotbeforgottenthatthewholenationhadtopaytheirprices。Itisestimatedthatpricesinthemainadvancedabout100percentwhilewageswerenotadvancedmorethansixtypercent。Itisnotstrangethattheseyearsofwarformaperiodofbitterantagonismbetweenlaborandcapital。
Whatwentoninthewoolenbusinessistobefoundmoreorlessineverybusiness。Immensefortunessprangupovernight。Theyhadbuttworoots:governmentcontractsandexcessiveprofitsduetowarprices。ThegiganticfortuneswhichcharacterizedtheNorthattheendofthewararethusaccountedfor。Theso-calledprosperityofthetimewasaclassprosperityandwasabsorbedbyparasiteswhofatteneduponthenecessitiesoftheGovernmentandthesacrificesofthepeople。
CHAPTERXII。THEMEXICANEPISODE