How economic strategies helped to determine the victor in America's Civil War

In Roger Lowenstein's new book Ways and Means, he investigates the financial forces that kept the Union and Confederate fighting forces funded during the Civil War.

STEVE INSKEEP, HOST:

The war in Ukraine underlines the importance of economic power. Russia has a weak economy where a lack of funds and corruption¹ apparently² caused embarrassing slowdowns for their previously³ respected military. Western nations have responded by flexing⁴ their economic power, cutting off Russia from one source of income after another. Money always matters in war.

Roger Lowenstein wrote "Ways And Means: Lincoln And His Cabinet And The Financing Of The Civil War," which faces on the rebellion in the United States beginning in 1861. At that time, the federal government was small. Its people were lightly taxed. Many basics of national finance did not exist. There wasn't even a national paper currency. Government services were primitive⁵.

ROGER LOWENSTEIN: You know, we basically had a Postal⁶ Service. We had a very small Army, mostly in scattered⁷ forts out in the West, and basically nothing else. That old debate you learn about in school between Hamilton and Jefferson - well, Jefferson had won. There was basically no central government until Lincoln and the Civil War came along.

INSKEEP: And then this situation arises in which Southern states try to secede⁸ from the Union because they want to uphold slavery. Northern states vowed⁹ to fight that, to contest that. And you point out there is an economic strategy to war. You have to pay for the war. It's very expensive. What was the economic strategy of each side?

LOWENSTEIN: So the North really realized that the old system, which was a few private banks lending gold to the government, wouldn't do anymore. They sold the bonds to a vast number of just ordinary citizens, the predecessor¹⁰ of the war bond campaigns in latter world wars. They adopted an income tax so the government would have real revenue, which gave investors¹¹ faith in the government. And they also printed a new national currency, the greenback, a precursor¹² of the fiat¹³ money, the paper bills we carry in our wallets today. And it worked very well. The Lincoln government spent more money than had been spent in all the years in the United States combined up to that time, and they came out of the war remarkably¹⁴ in stronger financial condition than they had entered it.

The South had a completely different philosophy. They were against strong federal government. That was part and parcel of the reason why they had seceded¹⁵. They refused to tax. Remarkably, their citizens were very willing to die for the Confederacy. But they weren't willing to be taxed by it. They didn't have any of the national supports that the Union did. And they went broke very quickly. They had horrendous¹⁶ inflation up to 80%, 100% and ultimately to 9,000% inflation, if you can imagine that. And to quote one senior Treasury¹⁷ official, we weren't whipped in the battlefield. We were whipped in the Treasury Department.

INSKEEP: Did people in the North resist this economic transformation¹⁸?

LOWENSTEIN: They were remarkably tolerant of it, I think, particularly to taxation¹⁹. Salmon²⁰ Chase, secretary of the Treasury, was extremely reluctant to levy²¹ taxes. Everybody knew that Americans hated taxes. They were among, if not the most lightly taxed people in the developed world. But they also knew they needed taxes. And they loved the greenback because this was money that was accepted everywhere.

Previous to the Civil War, every bank in every state issued its own notes, and nobody knew what one state's money was worth in another state. It was a terribly cumbersome²² system. And to some people's surprise, the greenback was extremely popular. In fact, it even circulated in the South, much to the great chagrin²³ of Jefferson Davis and the Confederate officials. And then, of course, people subscribed²⁴ to the bonds in tremendous volumes. And they really became truly an extra army, these just ordinary citizens ponying²⁵ up their savings²⁶, which was a new idea - investing. And so I think people were remarkably accepting of these changes.

INSKEEP: Did Lincoln then establish the system that the United States used to establish world influence and win World War I and World War II? - that we've got a big country, big economy. We can raise a large army, and we can pay for it.

LOWENSTEIN: Lincoln said in the very beginning, the side with the most resources will win the war. He was extremely focused on that, even though he left most of the details to Chase. You know, he wanted modernity. He wanted people in the what we now call the Midwest to have roads and railroads and transportation. He wanted people to be able to go to school - publicly funded schools as he had not been able to. He wanted a credit system that was good throughout the country. He talked throughout the war that it was important to continue the country's economic progress. And he would talk about that in what we now call the State of the Union, his annual addresses - how important it was to keep the prosperity of the country growing even as we were fighting.

INSKEEP: And the country was prosperous, or at least the North was prosperous, even as the war went on?

LOWENSTEIN: It was. There was a brief recession in the beginning. Obviously, trade with the South was cut off. Debts weren't paid. But come 1862 and certainly 1863, the North became quite prosperous. Immigration throughout the war, and particularly in the latter half, was quite vigorous, which meant that the people who have been going off to war were replaced in farms and factories by immigrants. There were fresh loads of minors²⁷ going to the West and new mines being excavated²⁸. And Lincoln was very excited about that. He was extremely excited about the transcontinental railroad. In fact, he said that he couldn't wait till it was built. And after his presidency²⁹, he hoped to ride it to California.

INSKEEP: Of course, he didn't live to do that.

LOWENSTEIN: He didn't get there.

INSKEEP: What do you think about bringing out this book now as the United States, a great economic power, is effectively waging war against Russia using economic means purely³⁰? There's not even a military involved directly.

LOWENSTEIN: Well, I think there's quite a comparison, Steve. We're facing Vladimir Putin, who obviously bet that his energy weapon would be enough to frighten and maybe completely shut down any meaningful resistance from the West. And it seems if, I'm not being too optimistic, that Putin overplayed the - his energy hand, or at least certainly the Ukrainians are resisting, and the West has responded with very strong sanctions.

A very similar thing happened in the South. They thought that because they produced three-quarters of the world's cotton and cotton was the heart of the textiles industry, which was the heart of the industrial revolution for its first half century, that they were immune. The senator from South Carolina, James Hammond, said shortly before the war, cotton is king. No one dares lay a finger on the South. And Southerners believe that. And they thought that when they seceded, the North wouldn't go to war against them because the North needed their cotton and that if the North did, Europe would come in and intervene because the mills of England and France also needed their cotton. Of course, we know that the South really overplayed their hand. None of what they counted on came to pass. But they had the same sort of insular³¹ mentality³², I think, that we see in Putin today of this commodity producer thinking that they really are king and they really are immune.

INSKEEP: The new book by Roger Lowenstein is called "Ways And Means: Lincoln And His Cabinet And The Financing Of The Civil War." Thanks so much.

LOWENSTEIN: Steve, always a pleasure.

(SOUNDBITE OF YUSUF SONG, "TO BE WHAT YOU MUST")

1 corruption   

n.腐败，堕落，贪污

参考例句：

• The people asked the government to hit out against corruption and theft.人民要求政府严惩贪污盗窃。
• The old man reviled against corruption.那老人痛斥了贪污舞弊。

2 apparently   

adv.显然地；表面上，似乎

参考例句：

• An apparently blind alley leads suddenly into an open space.山穷水尽，豁然开朗。
• He was apparently much surprised at the news.他对那个消息显然感到十分惊异。

3 previously   

adv.以前，先前（地）

参考例句：

• The bicycle tyre blew out at a previously damaged point.自行车胎在以前损坏过的地方又爆开了。
• Let me digress for a moment and explain what had happened previously.让我岔开一会儿，解释原先发生了什么。

4 flexing   

n.挠曲，可挠性v.屈曲( flex的现在分词 )；弯曲；（为准备大干而）显示实力；摩拳擦掌

参考例句：

• Flexing particular muscles allows snakes to move in several ways. 可弯曲的特殊的肌肉使蛇可以用几种方式移动。 来自电影对白
• China has become an economic superpower and is flexing its muscles. 中国已经成为了一个经济巨人而且在展示他的肌肉。 来自互联网

5 primitive   

adj.原始的；简单的；n.原(始)人，原始事物

参考例句：

• It is a primitive instinct to flee a place of danger.逃离危险的地方是一种原始本能。
• His book describes the march of the civilization of a primitive society.他的著作描述了一个原始社会的开化过程。

6 postal   

adj.邮政的，邮局的

参考例句：

• A postal network now covers the whole country.邮路遍及全国。
• Remember to use postal code.勿忘使用邮政编码。

7 scattered   

adj.分散的，稀疏的；散步的；疏疏落落的

参考例句：

• Gathering up his scattered papers,he pushed them into his case.他把散乱的文件收拾起来，塞进文件夹里。

8 secede   

v.退出，脱离

参考例句：

• They plotted to make the whole Mississippi Valley secede from the United States.他们阴谋策划使整个密西西比流域脱离美国。
• We won't allow Tibet to secede from China and become an independent nation.我们决不允许西藏脱离中国独立。

9 vowed   

起誓，发誓（vow的过去式与过去分词形式）

参考例句：

• He vowed quite solemnly that he would carry out his promise. 他非常庄严地发誓要实现他的诺言。
• I vowed to do more of the cooking myself. 我发誓自己要多动手做饭。

10 predecessor   

n.前辈，前任

参考例句：

• It will share the fate of its predecessor.它将遭受与前者同样的命运。
• The new ambassador is more mature than his predecessor.新大使比他的前任更成熟一些。

11 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

12 precursor   

n.先驱者；前辈；前任；预兆；先兆

参考例句：

• Error is often the precursor of what is correct.错误常常是正确的先导。
• He said that the deal should not be seen as a precursor to a merger.他说该笔交易不应该被看作是合并的前兆。

13 fiat   

n.命令，法令，批准；vt.批准，颁布

参考例句：

• The opening of a market stall is governed by municipal fiat.开设市场摊位受市政法令管制。
• He has tried to impose solutions to the country's problems by fiat.他试图下令强行解决该国的问题。

14 remarkably   

ad.不同寻常地，相当地

参考例句：

• I thought she was remarkably restrained in the circumstances. 我认为她在那种情况下非常克制。
• He made a remarkably swift recovery. 他康复得相当快。

15 seceded   

v.脱离，退出( secede的过去式和过去分词 )

参考例句：

• The Republic of Panama seceded from Colombia in 1903. 巴拿马共和国于1903年脱离哥伦比亚。
• One of the states has seceded from the federation. 有一个州已从联邦中退出。 来自辞典例句

16 horrendous   

adj.可怕的，令人惊惧的

参考例句：

• He described it as the most horrendous experience of his life.他形容这是自己一生中最可怕的经历。
• The mining industry in China has a horrendous safety record.中国的煤矿工业具有令人不安的安全记录。

17 treasury   

n.宝库；国库，金库；文库

参考例句：

• The Treasury was opposed in principle to the proposals.财政部原则上反对这些提案。
• This book is a treasury of useful information.这本书是有价值的信息宝库。

18 transformation   

n.变化；改造；转变

参考例句：

• Going to college brought about a dramatic transformation in her outlook.上大学使她的观念发生了巨大的变化。
• He was struggling to make the transformation from single man to responsible husband.他正在努力使自己由单身汉变为可靠的丈夫。

19 taxation   

n.征税，税收，税金

参考例句：

• He made a number of simplifications in the taxation system.他在税制上作了一些简化。
• The increase of taxation is an important fiscal policy.增税是一项重要的财政政策。

20 salmon   

n.鲑，大马哈鱼，橙红色的

参考例句：

• We saw a salmon jumping in the waterfall there.我们看见一条大马哈鱼在那边瀑布中跳跃。
• Do you have any fresh salmon in at the moment?现在有新鲜大马哈鱼卖吗？

21 levy   

n.征收税或其他款项，征收额

参考例句：

• They levy a tax on him.他们向他征税。
• A direct food levy was imposed by the local government.地方政府征收了食品税。

22 cumbersome   

adj.笨重的，不便携带的

参考例句：

• Although the machine looks cumbersome,it is actually easy to use.尽管这台机器看上去很笨重，操作起来却很容易。
• The furniture is too cumbersome to move.家具太笨，搬起来很不方便。

23 chagrin   

n.懊恼；气愤；委屈

参考例句：

• His increasingly visible chagrin sets up a vicious circle.他的明显的不满引起了一种恶性循环。
• Much to his chagrin,he did not win the race.使他大为懊恼的是他赛跑没获胜。

24 subscribed   

v.捐助( subscribe的过去式和过去分词 )；签署，题词；订阅；同意

参考例句：

• It is not a theory that is commonly subscribed to. 一般人并不赞成这个理论。 来自《简明英汉词典》
• I subscribed my name to the document. 我在文件上签了字。 来自《简明英汉词典》

25 ponying   

矮种马，小型马( pony的现在分词 )； ￡25 25 英镑

参考例句：

• Caption: Ponying Up:Russian Prime Minister Vladimir Putin rides a horse while on vacation in Tuva, Russia. 描述：骑马：俄联邦图瓦共和国度假期间，俄罗斯总理弗拉基米尔·普京骑着一匹马。

26 savings   

n.存款，储蓄

参考例句：

• I can't afford the vacation,for it would eat up my savings.我度不起假，那样会把我的积蓄用光的。
• By this time he had used up all his savings.到这时，他的存款已全部用完。

27 minors   

n.未成年人( minor的名词复数 )；副修科目；小公司；[逻辑学]小前提v.[主美国英语]副修，选修，兼修( minor的第三人称单数 )

参考例句：

• The law forbids shops to sell alcohol to minors. 法律禁止商店向未成年者出售含酒精的饮料。 来自《简明英汉词典》
• He had three minors this semester. 这学期他有三门副修科目。 来自《简明英汉词典》

28 excavated   

v.挖掘( excavate的过去式和过去分词 )；开凿；挖出；发掘

参考例句：

• The site has been excavated by archaeologists. 这个遗址已被考古学家发掘出来。
• The archaeologists excavated an ancient fortress. 考古学家们发掘出一个古堡。 来自《简明英汉词典》

29 presidency   

n.总统(校长，总经理)的职位(任期)

参考例句：

• Roosevelt was elected four times to the presidency of the United States.罗斯福连续当选四届美国总统。
• Two candidates are emerging as contestants for the presidency.两位候选人最终成为总统职位竞争者。

30 purely   

adv.纯粹地，完全地

参考例句：

• I helped him purely and simply out of friendship.我帮他纯粹是出于友情。
• This disproves the theory that children are purely imitative.这证明认为儿童只会单纯地模仿的理论是站不住脚的。

31 insular   

adj.岛屿的，心胸狭窄的

参考例句：

• A continental climate is different from an insular one.大陆性气候不同于岛屿气候。
• Having lived in one place all his life,his views are insular.他一辈子住在一个地方，所以思想狭隘。

32 mentality   

n.心理，思想，脑力

参考例句：

• He has many years'experience of the criminal mentality.他研究犯罪心理有多年经验。
• Running a business requires a very different mentality from being a salaried employee.经营企业所要求具备的心态和上班族的心态截然不同。