Government During the War

Government During the War

Republicans in Union Congress enacted national reforms. The Confederacy adopted its own constitution and formed its own government.

Learning Objectives

Compare and contrast the Confederate governance and constitution with that of the United States, and discuss bills passed in Congress after the secession of the South

Key Takeaways

Key Points

  • Prior to secession, the South had resisted policies that could hurt the plantation economy.
  • In March 1861, the Confederate Constitution was adopted; this document placed strong emphasis on the rights of individual member states, and explicitly protected the institution of slavery.
  • In February 1862, the permanent Confederate Congress began its first session.
  • In May 1862, the Homestead Act opened up public-domain lands for family farms in the Union.
  • In February 1863, the National Banking Act established a system of national banks in the Union.
  • The Union also sponsored agricultural training programs during this period through the newly established Department of Agriculture and the Morrill Land Grant College Act.
  • In July 1862, the Union Congress promoted the construction of the transcontinental railroad in the United States with the Pacific Railroad Act, in order to open up the western plains and California.

Key Terms

  • National Banking Act: The National Banking Acts of 1863 and 1864 were two U.S. federal banking acts that created the U.S. National Banking System.
  • Homestead Act: One of three U.S. federal laws that gave (at no cost) an applicant ownership of farmland called a “homestead”—typically 160 acres (65 hectares or one-fourth section) of undeveloped federal land west of the Mississippi River.
  • Confederate Congress: The legislative body of the Confederate States of America, which existed between 1861 and 1865 during the American Civil War.

Union Governance

Following the secession of the Southern states, the absence of Southern Democrats in Congress allowed the Republican Congress in Washington to enact legislation that reshaped the nation’s financial, tax, land, and higher-education systems. Prior to secession, the South had resisted policies that would hurt the plantation economy, including tariffs to promote industry and land grants for family farms. With the establishment of the Confederacy, Republicans in Congress enacted sweeping federal changes, including implementation of the Morrill Tariff and passage of the Homestead Act, Pacific Railroad Act, and National Banking Act. The latter established a system of national banks in 1863, and promoted development of a national currency backed by bank holdings of U.S. Treasury securities.

Portrait of Justin Smith Morrill

Justin Smith Morrill: The Morrill Tariff, named for Vermont Representative Justin Smith Morrill, was strongly opposed by the South.

By taxing British imports, the Morrill Tariff provided an additional source of revenue and encouraged the establishment of domestic factories. The Morrill Tariff also impacted immigration, as tens of thousands of Europeans were drawn to America for high-wage factory and craftsman jobs.

The Pacific Railroad Act of 1862 promoted the construction of the transcontinental railroad in the United States. The government provided land grants to railroad companies and issued government bonds for financing. These opportunities encouraged railroad-construction companies to open up the western plains and California. Railroads were also encouraged to sell tracts for family farms at low prices with extended credit.

The 1862 Homestead Act opened up public-domain lands for family farms at no cost. This act was unpopular among Southern slaveholders, who wanted to see more land dedicated to plantations. Agriculture prospered during the war due to the demand from Union troops and Britain, which was heavily reliant on U.S. wheat. The government also sponsored agricultural training programs during this period, through the newly established Department of Agriculture and the Morrill Land Grant College Act.

Confederate Governance

In February 1861, the six states that had seceded at that point formed the Confederate States of America and unanimously elected Jefferson Davis as president and Alexander Stephens as provisional vice president. Davis was elected to serve a six-year term without the possibility of reelection.

The Confederate Constitution was adopted on March 11, 1861. Much of the Confederate Constitution replicated the U.S. Constitution verbatim. However, the Confederate Constitution placed greater emphasis on the rights of individual member states and contained several explicit protections of the institution of slavery.

For the first year of the war, a provisional Confederate Congress functioned as the Confederacy’s legislative branch. The permanent Confederate Congress began its first session on February 18, 1862. This Congress followed the U.S. model of a bicameral legislature: Two senators represented each state, and members of the House of Representatives were apportioned according to free and slave populations within each state. Two Congresses sat in six sessions until March 18, 1865.

The significance of individual votes and the independence of each voter was a unique feature of the Confederate Congress due to the absence of guiding political parties. Congress addressed military concerns such as control of state militias, conscription and exemption, and economic and fiscal policy, and supported the Davis administration in foreign affairs and peace negotiations.

Union Finances

The Union emerged from the Civil War with a healthy economy by funding the war with new taxes, printing money, and issuing government bonds.

Learning Objectives

Describe how the Union financed the war through taxes, printing money, the sale of government bonds, and the creation of a national banking system

Key Takeaways

Key Points

  • The Union relied on patriotism to gain popular support for new taxes on manufactured goods, income, and other goods.
  • Taxes on manufactured goods were an important source of tax revenue.
  • Established in July 1862, the Revenue Act of 1862 was the nation’s first income tax.
  • The Legal Tender Act of 1862 allowed the Union to print paper money to finance the war.
  • Government bonds also were sold directly to citizens for the first time.
  • In 1863, the National Banking Act created a system of national banks that provided a sound currency for industrial expansion.

Key Terms

  • National Banking Act: The National Banking Acts of 1863 and 1864 were two U.S. federal banking acts that created the U.S. National Banking System.
  • Legal Tender Act of 1862: A bill (12 Stat. 345), enacted February 25, 1862, and passed to issue paper money to help finance the Civil War.
  • Revenue Act of 1862: A bill (Ch. 119, 12 Stat. 432) passed by Congress to help fund the American Civil War.

Following the secession of the Southern states, Republicans in Washington sought to finance the war while simultaneously implementing an elaborate program of economic modernization. The Morrill Tariff and the Homestead Act were among the far-reaching changes enacted by Congress in this period to fulfill the Republican vision of an industrial nation.

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Portrait of Secretary of the Treasury Salmon P. Chase: Chase oversaw the Union’s financial strategy during the Civil War.

The Treasury Department under Secretary Salmon P. Chase showed remarkable ingenuity in financing the war without crippling the economy. Several new taxes imposed during the war relied on wartime patriotism to bolster public approval. The United States required more than three billion dollars to pay for the immense armies and fleets raised to fight the Civil War and more than $400 million in 1862 alone.

The largest tax sum by far came from taxes imposed on manufactured goods. The Morrill Tariff was also an important source of tax revenue. The Union also levied the nation’s first income tax with the Revenue Act of 1862. Annual income of U.S. residents was taxed at a 3 percent rate, while those earning more than $10,000 per year were taxed at a 5 percent rate.

An additional means of financing the war was printing money, a strategy also employed in the Confederacy. The Legal Tender Act of 1862 was enacted in February 1862 to issue paper money to finance the war. As the paper money depreciated, it became the subject of controversy, particularly because debts contracted earlier could be paid in this cheaper currency.

Apart from instituting new taxes and printing money, a third major source of funding was government bonds. For the first time, bonds in small denominations were sold directly to citizens. Among the Union’s most important war measures was the creation of a system of national banks that provided a sound currency for industrial expansion.These new banks were required to purchase government bonds, directly financing the war.

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The Greenback bill issued by the United States during the Civil War: The Union printed paper money, which was used in lieu of gold and silver, to finance the war.

Using these fundraising tactics, the Union was able to successfully generate funds for the war and emerged from the conflict with a healthy economy.

Confederate Finances

The Southern economy was crippled during the Civil War by a self-imposed cotton embargo, Union blockades, and inflation.

Learning Objectives

Describe how the Confederacy sought to finance the war and gain international recognition through taxes and the cotton embargo

Key Takeaways

Key Points

  • In August 1861, the Confederate Congress introduced a “war-tax,” which proved to be politically unpopular among Southern Democrats and difficult to collect.
  • In 1861, Southern planters introduced a self-imposed embargo on cotton exports in an attempt to starve Europe of cotton and force diplomatic recognition of the Confederacy. Britain responded by importing cotton from other parts of the world.
  • In April 1861, the Union imposed a blockade of Southern ports that remained for the duration of the war, limiting sources of food, medicine, and war supplies.
  • The Confederacy soon turned to issuing bonds and printing money to finance the war.
  • The leniency of Confederate banks during the war encouraged speculation.
  • In 1861, the Confederate dollar was worth 90¢ in Union dollars; by the war’s end, it was worth.017¢.

Key Terms

  • Union Blockade: Also know as the “Blockade of the South”; took place between 1861 and 1865, during the American Civil War, when the Union Navy maintained a strenuous effort along the Atlantic and Gulf Coast of the Confederate States of America to prevent the passage of trade goods, supplies, and arms to and from the Confederacy.
  • Confederate States of America Dollar: Currency first issued into circulation in April 1861 when the Confederacy was only two-months old on the eve of the outbreak of the Civil War.
  • war-tax: A direct charge levied on the population of a state utilized for some period of time to finance a war or conflict.

Early in the war, the Confederate economy relied mostly on tariffs on imports and taxes on exports. The Confederate economy also relied on voluntary donations of coins and bullion from private individuals in support of the Confederate cause; these were initially quite substantial, but became scarce by the end of 1861. A small “war-tax” was enacted in August 1861, but proved to be politically unpopular among Southern Democrats and difficult to collect.

The Confederate government desperately sought to secure international recognition of the Confederacy as a nation and gain European allies. The Confederate government hoped to force diplomatic recognition of the Confederacy by starving Europe of cotton. In 1861, Southern planters agreed to a self-imposed embargo on cotton exports. Cotton was stored in warehouses and used to prop up Confederate war bonds sold in Europe. Throughout the war, the South clung to the notion that the Confederacy would be able to capitalize on its cotton monopoly.

This embargo was effective at first, creating an immediate source of income from the valuable cotton-backed bonds, shutting down hundreds of textile factories, and putting thousands of people in Europe out of work. However, the embargo became a loss for the Confederacy when the British did not cave in to its demands, choosing instead to import cotton from Egypt and India in 1862.

The self-inflicted damage resulting from the embargo was exacerbated by the blockade of Southern ports by the Union Navy, beginning in 1861. The Union blockade greatly diminished the revenue from taxes on international trade, and Southern cotton exports fell by 95 percent. This powerful weapon eventually ruined the Southern economy. Ordinary freighters had no reasonable hope of evading the blockade and soon stopped calling at Southern ports. The blockade largely reduced imports of food, medicine, war materials, manufactured goods, and luxury items, resulting in severe shortages and inflation.

An image of the SS Banshee

The blockade runner USS Banshee (1862), by R.G. Skerrett, 1899: The USS Banshee was among the blockade runners that attempted to evade the Union blockade of the Confederate coast.

The illustrated map shows a giant snake, "Scott's Great Snake," wrapped around the Confederate states. Its tail is coiled around a flagpole with a U.S. flag and a liberty cap at Washington, D.C. Its body extends around Florida and up through Texas, Indian Territory, Kansas, and around to Missouri. It's head, which rests above southern Missouri, is decorated with the stars and stripes of the American flag. It bears its fangs, driving "Jackson & Co." into Arkansas.

Cartoon map illustrating General Winfield Scott’s plan to crush the Confederacy economically, 1861: This snake represents the Union blockade of Southern ports.

Hoping to avoid an unpopular tax increase, the Confederacy soon turned to issuing debt and printing Confederate money to finance the war. Many banks suspended specie payments at the end of 1860, and thereafter irresponsibly increased banknote issue and loans. These choices added to the general redundancy of the currency and stimulated speculation. During the course of the war, Confederate States of America dollars severely depreciated and eventually became worthless. The resulting inflation remained a problem for the Southern states throughout the remainder of the war, collapsing the South’s financial infrastructure and forcing a move to a barter economy for civilians.

By 1863, the Southern economy, which was completely tied to the price of cotton, had crashed, crippling the South’s ability to secure any kind of European alliance or purchase badly needed war supplies. With little revenue from taxation, and with the disastrous effects of the wholesale issue of paper money before it, the Confederate government made every effort to borrow money by issuing bonds. These bonds, however, depreciated rapidly as the economy collapsed. At the beginning of the war, the Confederate dollar was valued at 90¢ in Union dollars. By the war’s end, its price had dropped to only.017¢.

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Five-dollar and 100-dollar Confederate States of America banknotes: Confederate currency, widely distributed during the war, ultimately lost all value.

Union Politics

Republicans were split between those who sought peace within the Confederacy and those who wanted emancipation for slaves.

Learning Objectives

Explain the policies enacted by the Republican Party during the Civil War

Key Takeaways

Key Points

  • Prior to the war, Abraham Lincoln attempted to abstain from the debate over slavery, arguing that he had no constitutional authority to intervene.
  • Copperhead Democrats opposed emancipation and sought an immediate peace settlement with the Confederacy.
  • In August 1861, the First Confiscation Act authorized the confiscation of any Confederate property, including slaves, by Union forces.
  • In July 1862, Congress passed the Second Confiscation Act, declaring that any Confederate official who did not surrender within 60 days of the act’s passage would have his slaves freed.
  • On September 22, 1862, Lincoln issued a preliminary proclamation that he would order the emancipation of all slaves in any state of the Confederacy that did not return to Union control by January 1, 1863.
  • The Emancipation Proclamation took effect, affirming the freedom of slaves in the 10 states that were then in rebellion.

Key Terms

  • Radical Republicans: A loose faction of American politicians within the Republican Party from about 1854 (before the American Civil War) until the end of Reconstruction in 1877. Radicals strongly opposed slavery during the war and after the war distrusted ex-Confederates, demanding harsh policies for the former rebels, and emphasizing civil rights and voting rights for freedmen (recently freed slaves).
  • Copperhead Democrats: A vocal group of Democrats located in the Northern United States of the Union who opposed the American Civil War, wanting an immediate peace settlement with the Confederates.
Portrait of Thaddeus Stevens

Thaddeus Stevens, ca. 1863: Stevens was a leader among the Radical Republicans, supporters of emancipation.

Prior to the Civil War, Abraham Lincoln attempted to abstain from the debate over slavery, arguing that he had no constitutional authority to intervene. As the war progressed, emancipation remained a risky political act that had little public support. Lincoln faced strong opposition from Copperhead Democrats, who demanded an immediate peace settlement with the Confederacy. Many recent immigrants in the North also opposed emancipation, viewing freed slaves as competition for scarce jobs. Within the Republican Party, however, the Radical Republicans, led by House Republican leader Thaddeus Stevens, put strong pressure on Lincoln to end slavery quickly. One of the Radicals Republicans’ most persuasive arguments was that the rebel economy would be destroyed were it to lose slave labor.

Congress passed several laws between 1861 and 1863 that aided the growing movement toward emancipation. Despite his concerns that premature attempts at emancipation would weaken his support and entail the loss of crucial border states, Lincoln signed these acts into law. The first of these laws to be implemented was the First Confiscation Act of August 1861, which authorized the confiscation of any Confederate property, including slaves, by Union forces. In March 1862, Congress approved a Law Enacting an Additional Article of War, which forbade Union Army officers from returning fugitive slaves to their owners. The following month, Congress declared that the federal government would compensate slave owners who freed their slaves. Moderate Republicans accepted Lincoln’s plan for gradual, compensated emancipation, which was put into effect in the District of Columbia.

In June 1862, Congress passed a Law Enacting Emancipation in the Federal Territories, and in July, passed the Second Confiscation Act, which contained provisions intended to liberate slaves held by rebels. The latter act also declared that any Confederate official, military or civilian, who did not surrender within 60 days of the act’s passage would have his slaves freed.

In order to increase public support for emancipation, Lincoln strategically chose to associate the Emancipation Proclamation with the Union victory at the Battle of Antietam in September 1862. On September 22 of that year, Lincoln issued a preliminary proclamation that he would order the emancipation of all slaves within all Confederate states that did not return to Union control by January 1, 1863. When none of the states returned to the Union by that date, Lincoln honored his proclamation, and the order immediately took effect.

The title page of the pamphlet reads, "Abraham Africanus I. His secret life, as revealed under the mesmeric influence. Mysteries of the White House. J.F. Fleeks, Publisher. No. 26 Ann Street, NY." The page includes an dark-skinned portrait of Abraham Lincoln, wearing a crown.

Copperhead pamphlet from 1864 mocking President Abraham Lincoln: The Copperhead Democrats strongly opposed emancipation and pressured Lincoln to make peace with the Confederacy.

Predictably, the Confederates were initially outraged by the Emancipation Proclamation and used it as further justification for their rebellion. The Proclamation was also immediately denounced by Copperhead Democrats, a more extreme wing of the Northern Democratic faction of the Democratic Party that opposed the war and hoped to restore the Union peacefully via federal acceptance of the institution of slavery. Additionally, these Democrats viewed the Proclamation as an unconstitutional abuse of Presidential power. Controversy surrounding the Emancipation Proclamation, as well as military defeats suffered by the Union, caused many moderate Democrats to abandon Lincoln and join the more extreme Copperheads in the 1862 elections. Democrats gained 28 seats in the House in the 1862 election cycle, as well as the governorship of New York.

Some Copperheads advocated violent resistance to the wartime effort, which greatly increased tensions between pro-war and anti-war factions. Though no organized attacks ever materialized, sensationalist politics did give rise to the Charleston Riot in Illinois during March 1864. Many Copperhead leaders were arrested and held in military prisons without trial, sometimes for months at a time. For example, Ambrose Burnside in 1863 issued General Order Number 38 in Ohio, which made it an offense to criticize the war in any way. The order was then used to arrest a congressman from Ohio, Clement Vallandigham, when he criticized the order itself. Additionally, a number of Copperheads were accused of treason by Republicans in a series of trials that took place during 1864.

A faction within the Republican Party, called the “Radical Republicans,” also opposed the war. Unlike the Copperheads, Radical Republicans were strongly against the institution of slavery and pushed for uncompensated abolition of the slaves as opposed to Lincoln’s plan to pay individuals who freed their slaves and were also loyal to the Union. For a brief time in 1864, Radical Republicans formed a new political party called the “Radical Democracy Party” with John Frémont as their presidential candidate, but the party dissolved when Frémont withdrew his candidacy. Radical Republicans were generally critical of President Lincoln, but he still appointed members of all political factions to his cabinet.

Confederate Politics

Confederate politics were dominated by the tension between states’ rights and the military needs of the Confederacy.

Learning Objectives

Examine the tensions between Confederate state leaders and President Jefferson Davis

Key Takeaways

Key Points

  • States’ rights continually caused tension between state leaders and President Jefferson Davis.
  • Powerful state governors used states’-rights arguments to withhold militia units from national service.
  • North Carolina Governor Zebulon Vance frequently opposed Davis over the issue of states’ rights.
  • Conscription, put into law by the Confederate Congress in April 1862, was a particularly unpopular practice within the Confederacy.
  • Davis also feuded bitterly with Vice President Alexander Stephens.
  • The lack of a two-party political system prevented the emergence of alternatives to the way in which war was conducted by the Davis administration.

Key Terms

  • Zebulon B. Vance: (May 13, 1830–April 14, 1894) Confederate military officer in the American Civil War, the 37th and 43rd Governor of North Carolina, and U.S. Senator. A prodigious writer, Vance became one of the most influential Southern leaders of the Civil War and postbellum periods.
  • Alexander Stephens: (February 11, 1812–March 4, 1883) An American politician from Georgia. He was Vice President of the Confederate States of America during the American Civil War. He also served as a U.S. Representative from Georgia (both before the Civil War and after Reconstruction) and as the 50th Governor of Georgia from 1882 until his death in 1883.
  • conscription: Involuntary labor, especially military service, demanded by some established authority or government.

States’ rights, one of the primary platforms for secession, was an enduring issue in Confederate politics that caused tension between state leaders and President Jefferson Davis.

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Illustration of Confederate cabinet, Harper’s Weekly, 1861: Front row, left to right: Judah P. Benjamin, Stephen Mallory, Alexander Stephens, Jefferson Davis, John Henninger Reagan, and Robert Toombs. Back row, standing left to right: Christopher Memminger and LeRoy Pope Walker.

Davis clashed with powerful state governors who used states’-rights arguments to hamper mobilization plans. Governors and state legislatures, fearing that Richmond would encroach on the rights of the states, withheld soldiers and funds from the war effort. The first conscription act in North America authorizing Davis to draft soldiers was viewed as the, “essence of military despotism.”

Portrait of Zebulon Baird Vance

Zebulon Baird Vance, ca. 1870s: Zebulon Vance, Governor of North Carolina, challenged the central Confederate government.

Governor Zebulon B. Vance of North Carolina, a powerful advocate of states’ rights, frequently opposed Davis. Vance was particularly opposed to conscription efforts in North Carolina, limiting recruitment success in that state. Vance’s work to mitigate harsh Confederate conscription practices inspired his nickname, “War Governor of the South.” North Carolina was also the only state to observe the right of habeas corpus during the war. Vance insisted that a portion of supplies smuggled into North Carolina by blockade runners be given to the state, despite need elsewhere. Georgia’s governor Joseph Brown also spoke out against attempts by Davis to expand the rights of the Confederate central government.

Davis also feuded bitterly with his vice president. Vice President Alexander Stephens was a strong proponent of states’ rights, placing this principle above military considerations. Throughout the war, Stephens denounced many of the President’s policies, including conscription, suspension of the writ of habeas corpus, impressment, various financial and taxation policies, and Davis’ military strategy.

Despite political differences, no political parties were formed within the Confederacy. Without a two-party system, electoral protests tended to be narrowly state-based. The 1863 midterm elections became mere expressions of futile and frustrated dissatisfaction. The lack of a functioning two-party system prevented the formulation of any effective alternatives to the conduct of the war by the Davis administration.