WAYS AND MEANS

How Lincoln’s administration effected a significant expansion of the federal government to pay for the Civil War.

Lowenstein is not a Lincoln scholar, but no matter. His experience writing about financial matters, on display in such books as America’s Bank: The Epic Struggle To Create the Federal Reserve and The End of Wall Street, informs this fresh look at the president’s essential Republican roots as a self-made man, rather than slaveholder, and belief that anyone could be successful in America. Even before the war, just as Lincoln was assuming office, a recession loomed, and he tapped one of his rivals, Salmon P. Chase, to lead the Treasury. (For more on Chase, turn to Walter Stahr’s recent bio.) The economic differences between the North and South were vast, with the South essentially a monoculture of cotton exports, dependent on the North’s manufacturing base. This led to widespread inequality and inefficiency, hampering the South’s ability to wage war. Lowenstein ably chronicles the myriad economic problems facing each side. For example, in the South, Jefferson Davis fervently believed that the war was less about slavery than objection to “the Hamiltonian ideal of centralism. Federal involvement in the economy was off limits.” The North, on the other hand, guided by Lincoln, believed the government should work for the betterment of the people. Lincoln’s Congress, writes Lowenstein, “enacted a protective tariff worthy of Henry Clay and enabl[ed] legislation for a transcontinental railroad. It involved the federal government in agriculture, education, and land policy. It legislated an income and refocused the war’s purposes to include a frontal attack on slavery. It could almost be said that it created the government itself.” Eventually, Chase came around to implementing a legal tender, the greenback, to stabilize and regulate the economy and create national banking, a system that exists to this day.

An accessible exploration of how war enabled the federal government to acquire real financial power.