with less sacrifice. 1

Secretary Stanton in liis report defended the new policy
of emancipation from the standpoint of military expediency.
The enemy, he contended, ought to be attacked in his most
vulnerable point, at that system which kept the laborers
at home supporting their masters, who were fighting against
the Union. Rightly organized in recovered territory, as it
had already been in the sea islands of South Carolina, this
labor could be made useful to our armies in various ways.
"So far from the Southern States being invincible, no



1 Observe the eloquent exordium of this earnest message. Am.
Cycl. 1862, 726-7;)2 ; N. & H- c. 19.



1863. EMANCIPATION FINALLY PROCLAIMED. 277

country was ever so vulnerable, if the means at hand are
employed against them." 1



On the 1st of January, 1863, was issued the full procla
mation of emancipation, according to the preliminary warn
ing of September, and with the moral support of the House
of Representatives, which by a vote of more tliuii two to
one had laid aside a resolve of disapproval. In Cabinet
conference no doubt or dissent had been manifest over this
final action; a few verbal changes were proposed to smooth
the President s expression, while Chase objected, though in
vain, to exempting fractional parts of States from its oper
ation. 2 Lincoln, who prepared the document, and then
rewrote it entirely with his own hand, having notes of
these suggestions before him, placed his final signature to
the proclamation as soon as the New Year s reception at
the White House was over. No ceremony attended an act
one of the most comprehensive and beneficent in history;
but in presence of less than a dozen witnesses he wrote his
name, and the paper was taken to the Department of State,
there to be countersigned and attested, and then deposited
in the public archives. Deeds made good an expression of
the pen, which historically might else have been made in
vain; and, thus borne out, a manifesto, more momentous
for civilization than a single ruler ever issued since Con-
stantine proclaimed Christianity, induced all other constitu
tional agencies to broaden and make forever efficacious its
enlightened purpose. "And upon this act, sincerely be-



1 Message and documents ; 26 Harper, 269.

2 Chase s criticism suited the advanced Republicans, with whom he
was now in sympathy, in making military necessity the entering
wedge to force general emancipation upon the loyal slave States. The
President was careful not to offend border sentiment in that respect.
The fractional parts of States thus excepted were portions of Louisiana
and Virginia already under full submission to Union authority. New
Orleans, Norfolk, and Portsmouth were included, and those loyal
counties of Virginia about to be recognized as the new State of
West Virginia.



278 HISTORY OF THE CIVIL WAR. CHAP. I.

lieved to be an act of justice, warranted by the Constitution,
upon military necessity, 1 1 invoke the considerate judgment
of mankind, and the gracious favor of Almighty God." 2

In Boston, Pittsburg, and Buffalo this proclamation was
saluted with a hundred guns. Garrison s Liberator, though
deriding all plans of recompensed emancipation, welcomed
"the great historical event," and with other abolitionists
who had hitherto stood aloof from the conflict showed signs
of sympathetic approval. 3 But in general the President s
new policy worked through a dense fog of popular prejudice
and disaffection, and it took many soundings to demonstrate
how greatly the Union cause had gained by it. At the
South the two proclamations were thought an empty vaunt,
though leaders accepted the announcement as the sign of a
determined spirit. The oppressed race and they, most
of all, who had passed through the old crucible of submis
sion and were no longer young withheld clear token of
gratitude ; but Lincoln henceforth blended inseparably with
Bible deliverers in the mazy worship of this simple folk,
and in negro watch-meetings of New Year s Eve the morn
ing star had been invoked and prayed for. Northerners
of the white race had not looked kindly on the free negroes
settled among them, and to Irish laborers, in particular,
their presence was offensive. What John Sherman had said
of Ohio in the Senate was true doubtless of most other
States in the North never polluted by slavery: that free
negroes were looked upon as a class to be kept by themselves,
always deprived of the ballot, always debarred from social
intercourse with the whites and of all advantages which
their own class could not enjoy in common. 4



1 These three qualifying words Lincoln scrupulously supplied in the
draft of the above felicitous closing paragraph which Chase had supplied
in Cabinet meeting.

2 6 N. & H. c. 19. It is estimated that 3,108,197 slaves were thus
directly and immediately invested with freedom, while 832,259 else
where were exempted from such military operation. Am. Cycl. 1863,
835. 3 4 Garrison, 70.

4 Am. Cycl. 1862, 753. 754. A vote in Illinois upon a proposed new
constitution in 1862 illustrates this point strongly.



1862-63. NO RECOMPENSE TO MASTERS. 279

As for purchasing the freedom of this docile race or colo
nizing negroes abroad, as the President recommended, events
foreclosed all hope in that direction, though his proposal of
recompense evinced a sense of fairness. In the loyal border
States, slaveowners stood upon a certain sense of honor and
self-respect, and refused to sell out what seemed to them a
fundamental right. Upon Missouri alone had the Presi
dent s plan of compensated abolishment, proposed
in 1862, made a favorable impression, and that
chiefly because of the extreme antislavery views which pre
vailed among the influential Germans of that State. 1 The
elections of November favoring such a course, Governor
Gamble, in his message when the State legislature met in
December, announced his official preference for a system of
free labor, and counselled compliance with the President s
wishes. 2 A bill had been introduced in Congress at its
second session, authorizing compensation at the rate of
three hundred dollars for each slave, to be given to any
loyal border State adopting emancipation. And now at this
third short session, to gratify the only border State that
responded favorably, new bills in both branches proposed
aiding Missouri to ransom her negro slaves. But what with
loss of time through differences concerning a price, and the
dilatory tactics of a stubborn opposition, the House bill,
after amendment by the Senate, never reached a vote. Left
in the drift of unfinished business when this Congress ex
pired, emancipation by national purchase found never a
chance again. 8



The opposition effort in the autumn canvass to make this
administration odious for its arbitrary arrests and severity
roused hopes among Confederate leaders not destined to



1 See Missouri convention of 1862, cited 6 N. & H. c. 18.

2 Am. Cycl. 1862, 595.

3 6 N. & H. c. 18 ; Am. Cycl. 1863, 313-321. A Senate bill origi
nally proposed would have appropriated $20,000,000. The House bill
named $10,000,000, which the Senate changed to $15,000,000.



280 HISTORY OF THE CIVIL WAR. CHAP. I.

fulfilment. 1 When Congress reconvened, the Democrats
of the present body, flushed by success, opened an attack
upon the President. On the very first day of the session,
Samuel S. Cox, then of Ohio, and William A. Richardson
of Illinois 2 offered resolutions of inquiry in the House con
cerning civilian arrests and confinement, but these were
laid 011 the table. Presently, in resolutions artfully drawn,
which declared hostility to all foreign intervention, Vallan-
digham denounced the idea of a dictatorship or of pervert
ing this civil conflict from its original purpose into one for
subjugating the South or abolishing slavery. Bayard and
other Democrats of the Senate contended that the President
had no constitutional right to suspend the habeas corpus
writ, without the express permission of Congress. In both
branches of Congress all such resolutions of hostile purport
were promptly put aside, and "Trust the Executive" was
the firm conclusion of the Republican majority. 3

On the 8th of December, Thaddeus Stevens, foremost
among the thoroughs in the House, and a strong emancipa
tionist, introduced, in that branch, a bill to indemnify the
President and all acting under his orders for suspending
the writ of habeas corpus, and it expressly authorized him,
furthermore, to suspend the privilege at discretion while
the present rebellion lasted. After a brief debate the bill
passed the House by two to one. In another form the
Senate passed such a measure by nearly five to one ; and all
differences being adjusted in conference, the bill on the 3d
of March became a law. 4 In granting indemnity to the

1 What with the recent military proclamations, " and civil liberty so
completely trodden under foot," Lee wrote in October to Davis, soon
after Antietam, " I have strong hopes that the conservative portion of
that people, unless dead to the feelings of liberty, will rise and depose
the party now in power." 19 W. R. pt. 2, 644.

2 The latter was presently chosen to the Senate, to serve for the
unexpired term of his deceased friend, Douglas.

8 Cong. Globe, passim ; Am. Cycl. 1863, 241.

* Am. Cycl. 1863, 241-256 ; 12 U. S. Stats. 755. Political prisoners
were here brought under the supervision of Federal courts. In Sep
tember, 1863, at a time of obstructions to the draft, the President
ordered a further suspension. 7 N. & H. c. 2.



1862-63. WEST VIRGINIA A SEPARATE STATE. 281

Executive, the time-honored precedents of Parliament were
followed, except in confessing illegality; for Lincoln still
contended that a President s suspension of the writ in
emergencies like the present was warranted by the Consti
tution. Henceforward President and Congress concurred
in a policy which the former always exercised with modera
tion and reserve.

On the 31st of December, 1862, a new State was author
ized, consisting of the loyal western counties of Virginia.
" Kanawha " had once been proposed for a name, but that
finally chosen by the people was "West Virginia." 1 To
meet the constitutional requirement that the consent of
the legislatures of both States concerned should be obtained,
as well as that of Congress, the legislature of the restored
or Peirpoint government of Virginia, sitting at Wheeling,
gave formal consent, in May, 1862, to the formation of a
new State within the jurisdiction of the old ; and these pro
ceedings being laid before Congress, the Senate had passed,
in July, the bill in which the House now concurred. There
had been divergence of views in Congress, but nothing was
insisted upon except the condition precedent of racial free
dom. The new State constitution, as submitted to that
body, had simply forbidden slaves to be brought within the
State, but the present act made gradual emancipation, be
ginning on the 4th of next July, a prerequisite of admission
to the Union. 2

1 The constitution of this new State, framed in convention, was
adopted by the people, April 3d, 1862, by the overwhelming vote of
18,862 to 514. See Act December 31st, 1862 ; 12 Stats. 033 ; supra,
p. 84.

2 This condition the convention of West Virginia accepted, and the
voters approved the amendment by a majority of about 17,000. The
President, April 20th, 1863, issued his formal proclamation of admission
accordingly. Various constitutional doubts had been discussed by
President and Cabinet, before the bill was signed which passed Con
gress. The Supreme Court of the United States has since pronounced
the severance of Virginia constitutionally valid in all respects. See 6
N. & H. c. 14; Am. Cycl. 1862, 800. The "Peirpoint government,"
which now moved to Alexandria, was recognized as the loyal and
original Virginia, while civil war lasted.



282 HISTORY OF THE CIVIL WAR. CHAP. I.

The financial legislation of this session was of permanent
importance. Already had the loyal people submitted to the
feverish spell of paper money. In place of silver change,
fractional postal notes, issued by Government, 1 supplanted
private tokens and supplied many a petty business conducted
through the mails. Gold was still required for the customs
and foreign exchange, and was paid out for interest on the
bonds. It had become the favorite commodity of Wall
Street speculators, its value quoted from day to day at a
premium for which intrinsic causes could not fully account,
though military gain or loss had much to do with it. It
sold in February, 1863, at 72 above par, but there were
days in 1864 when the premium rose to 185. 2 Chase had
used with remarkable success the gigantic resources for
borrowing which Congress had committed to him; "all
these measures," he reported in December, "worked well."
The new legal -tender currency was in full circulation. But
one immense scheme he had proposed which it remained
for Congress to sanction ; and this was to reorganize upon
a national scale the banking capital of the Union, so long
dispersed among State jurisdictions, independent of one
another. A plan which had hitherto found few supporters
was now fully matured, with the aid of Samuel Hooper
and Elbridge G. Spaulding, of the House Ways and Means
Committee, Sherman introducing the bill in the Senate.
The short month of February, 1863, saw this bill with its
amendments reported and passed in the Senate by
a narrow vote, concurred in more favorably by the
Representatives, and on the 25th of the month approved
by the President, who had earnestly advised the. measure,
and in later messages commended its practical operation. 3
The details of the system were committed to a new officer
in the Treasury Department, designated as Comptroller of
the Currency. Under his permit banking associations were
to be organized, one-third of whose capital should be in

1 See 12 Stats. 592.

2 6 N. & H. 239. See Am. Cycl. 1863, 408.

8 Am. Cycl. 1863, 290-304; 6 N. & II. 211. This bill passed the
Senate, by a vote of 23 to 21 ; and the House concurred by 78 to 64.



1863. NATIONAL BANK SYSTEM. 83

United States bonds, deposited at the Treasury by way of
pledge for currency notes, which in the name of each
separate bank the Comptroller should prepare and supply
within a certain margin of security. 1 Under another act
of this same session State-bank circulation was taxed out
of competition with the new projected currency. 2

The feat, in short, accomplished under Republican aus
pices, was to reestablish, under highly favoring conditions,
something like that United States Bank of the fathers,
which had twice been chartered, but twice failed of re-
charter because of an odious monopoly. A national insti
tution, shorn of such powers, was now no corporate monster,
as Jackson saw it, but a cluster of State and local banks,
created liberally and without dangerous favoritism. Many
of the new national banks of limited capital thus permitted
were the previous State banks reorganized, bearing with
" national " the same general name as before. The main
public advantage was that for which Clay, Webster, and
the old Whig party had striven through an earlier era in
vain, to give to this broad country a stable, permanent,
and uniform currency, available everywhere; an object un
attainable under the condition superseded, with its many
States, many systems, and many banks of good, bad, and
indifferent credit. For with counterfeits and confusion, and
with discounts to pay between one State and another, State
banks had come far short of the Union s growing wants,
and the evils of variety had been much aggravated by war.
Besides all this, such a new banking system created a power
ful and permanent influence to sustain the national credit
under all trials, for it was built upon the national debt, and
bound people and government together in financial efforts.
Moreover was added a convenient assistance to the opera
tions and policy of the Government, and hence the rigid

1 12 Stats. 665. By organizing these institutions, about $300,000,-
000 of United States notes were brought back to the Treasury and
funded in six per cent bonds of the public debt. Am. Cycl. 1863,
399 ; 6 N. & H. 242-245.

2 Ib. 712 ; presently pronounced a constitutional tax by the Supreme
Court.



284 HISTORY OF THE CIVIL WAR. CHAP. I.

Van Buren separation relaxed, and national banks became
to some extent depositaries of public moneys. A further
advantage already predicted was the strong aid afforded
toward resuming specie payments when the war should end.
The plan at first aroused strong prejudice, as though an
invasion of State authority, an attempt to pour the banking
capital of the Union into a tub without a bottom; but when
the act was revised and repassed in 1864, with some im
provements, the popular approval became decided. 1 That
system has stood ever since, benign in its influence, and, so
far as can be forecast, a permanent solution, with a uniform
bank currency circulating as safe as the Government itself.
This for Chase was the crowning achievement of his career
as Secretaiy, the financial measure unquestionably wise.

By an act approved at the close of this session Congress
enlarged the volume of loans already recognized, and gave
the Treasury ample borrowing power until 1864. 2 The
aggregate total of operations thus provided for, inclusive
of bonds and interest-bearing Treasury notes, exceeded two
billion dollars. Armed with such immense authority, be
sides the power to readjust the banking system of a con
tinent, Chase now spread over the loyal States a network of
agencies to advertise and invite a popular investment in
the nation s securities. 3 The response surpassed his most
sanguine expectations. People of moderate means vied
with the banks and large capitalists to become public cred
itors. Farmers and tradesmen brought the gains of their
produce; wage-earners and young men rising in the liberal
professions, their first savings; snug hoarders called in their
money loaned out on mortgage or pledge security, to reinvest
with the Government. The motive of pecuniary gain became
sanctified, as it were, by a patriotic sentiment; for should
the Union perish, all fortunes, all national wealth, must

1 The original act attempted to equalize the currency among the
States and limited the total to $300,000,000. This was afterwards
changed so as to permit bank organization more freely.

2 12 Stats. 709 ; Am. Cycl. 180:}, 401.

3 The new and enterprising banking house of Jay Cooke & Co.
took up these details with great energy on a moderate commission.



1862-63. LOANS AND INTERNAL REVENUE. 285

surely sink together. Of all loans thus offered by the
United States, the famous "five-twenties," a six per cent
bond, proved the most attractive of the war; 1 and other
popular loans thus floated were certificates of indebtedness
and the "seven-thirties," or Treasury notes bearing that
rate of interest. Within two months after the present-
Congress adjourned, the deficit confronting it in December
had disappeared, the brave defenders of the Union by sea
and land received all arrears, and suspended requisitions
at the Treasury were satisfied. It seemed as if the Pros-
pero of finance had but waved his magic wand to disclose
these inner resources; for henceforth faint-heartedness in
the nation s fiscal operations was at an end, and at about six
per cent the ravenous wants of a prodigious war were met
to the very last, >a feat for which neither England nor
America in past experience could afford a parallel. 2



To maintain a national income for interest payments and
those other annual needs of government which cannot be
funded for the future, every private industry had to bear
its exaction. A people that in this generation had never
before paid a dollar to the general government, except in
directly through the customs, found now the pressure and
espionage of the nation brought to their very doors, and
that system of internal taxation, which Jefferson once stig
matized as " infernal," and which twice before in our history
as a nation had been borne for a few years only of grave
emergency, was reerected, this time to stay, buttressed and
permanent as never before.

The act of July 1st, 1862, set up the new establishment of
internal revenue, and George S. Boutwell, of Massachusetts,
a future Secretary of the Treasury, was the earliest com
missioner. That original act was amended at this final



1 Redeemable in five years and payable in twenty years with semi
annual interest in gold. This loan popularized the use of coupons for
interest payments, in securities public or private.

^ 6 N. & H. c. 11 ; Am. Cycl. 180:}, 400, 401.



286 HISTORY OF THE CIVIL WAR. CHAP. I.

session, 1 and four times again in course of the succeeding
Congress, or while war lasted. A revenue, at first disap
pointing because of the difficulty of putting new machinery
in motion, rose by 1866 to nearly $311,000,000, or con
siderably in excess of the British revenue for that year from
all sources combined. 2 Under this vast general establish
ment, States and Territories were divided into convenient
districts, corresponding nearly to those for Congress, with
an assessor and collector appointed for each, having large
discretionary powers for inspection and seizures, while, fol
lowing an old rule, liable to abuse, informers shared with
the Union all penalties recovered for violations of the law.
By far the largest tax was derived during the war from
domestic manufactures and productions, from distilled
spirits and fermented liquors, first of all ; from makers of
tobacco, snuff, and cigars, and, with more burden, upon
textile manufactures and products generally. This last-
named tax, unscientific as first adjusted, was without prece
dent, and among its items were clothing, fabrics of wool
and cotton, boots and shoes, petroleum, and iron. Wealthy
citizens paid an income tax, 3 with the solace of being listed
in local newspapers as a sort of upper class. Licenses were
imposed in almost every line of business pursuit, from
wholesale dealers and bankers, graded by the extent of
capital employed, to lawyers, petty brokers, and claim
agents. Stamp taxes were imposed upon deeds, contracts,
checks, receipts, and proprietary articles, and there were
various special taxes, besides, upon the business of banks,
common carriers, and auctioneers, upon legacies and suc
cessions, upon carriages and other articles of luxury. The
influence of the national tax-gatherer was carried to every
workshop and fireside in the land, to persons and employ
ments as never before.

This historical Congress the first without a Southern



1 12 Stats. 632 (March 3d, 18G3).

2 With a cost of about 2 per cent for collection.

8 Levied in an unconstitutional manner, according to later judicial



1862-63. MISCELLANEOUS LEGISLATION. 287

representation, the earliest under control of the new Repub
lican party, did something to check abuses incident to
war, as well as to create them. All pecuniary interest in
public contracts was forbidden to legislators and to officers
and agents of the Government; 1 penalties were denounced
for presenting fraudulent claims or giving false military
vouchers; 2 and by the act which turned over in trust all
captured and abandoned cotton, sugar, rice, and tobacco, to
the Treasury and its special agents, all analogy to maritime
prize was discountenanced. 3 Practice acts were amended
so as to expedite the work of the Federal courts, now vastly
enlarged by the war; yet through all this difficult era Federal
Supreme Court justices did circuit duty as Before, district
judges completing the establishment. 4 The Court of Claims
was reorganized as a judicial tribunal, and one of the two
new judges appointed was Wilmot, who in the fierce strife
of Pennsylvania politics had lost a reelection to the Senate.



Through liberal appropriations, the creation of high sub
ordinates, and various measures of Congress for promoting
civil efficiency, our Executive departments expanded to
meet increasing tasks, and yet on their present lines.
Caleb B. Smith, in January, 18G3, made the first vacancy
among the President s official advisers, appointed a United
States district judge for Indiana, in which station he died
a year later; and to him succeeded by promotion as Secre
tary of the Interior, John P. Usher, of the same State. An
other change, which would have rent this Cabinet asunder,
the President averted with consummate tact and wisdom.