Bill
Thomas Ferguson, "The Civil War Party System", in Thomas Ferguson, *Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems* (University of Chicago Press, 1995, pp. 61-71).
PART 2
While Union defeats in the early part of the war created trying times for the Republicans, as long as the war lasted this rival bloc could offer only limited opposition. As soon as hostilities ended, however, it posed a more formidable threat.
For the end of the war immediately posed the question of what policy to pursue toward the South. This automatically raised the possibility of an alliance between the "War Democrats" and the elements of the Republican bloc that had a long-term interest in the revival of the cotton trade and New York City's traditional commercial ties, a lower tariff rate, and a speedy return to the gold standard abandoned at the start of the war.
Though this essay cannot trace the process in detail, precisely this alliance emerged in time to revive the Democratic Party. Backed by a massive coalition of bankers, merchants, and some (not all) important railroad men, President Andrew Johnson treated the South rather like another group of similarly connected business leaders treated Germany 80 years later, and began reinstalling the old leadership of the defeated country into power. He also pursued a highly conservative monetary policy designed to get the United States quickly back on gold, and laid plans to cut tariffs (Nugent, 1967; Coben, 1959).
All of these proposals generated powerful opposition. The Reconstruction, tariff, and monetary policies were sharply opposed by many industrialists, especially those in Pennsylvania and the Midwest, who complained bitterly about tariff cuts and deflation; some railroads, which did not want to have to pay off newly issued bonds in sound money; and many Republicans of all stripes whose overriding priority was the creation of a viable Republican Party in the South to secure the fruits of the Civil War. Johnson had to be rescued by superlawyer William Everts, attorney for the Astors and the New York Central, and barely escaped impeachment (Nugent, 1967; Coben, 1959; Burch, 1981a, pp. 26-32).
Over time the Republican bloc tended to melt away in a complicated and confusing pattern. "Liberal Republicans" pressed demands for tariff and civil service reform (which almost always began with the Customs House, the center of both party organizations and tariff abuses). Led by Samuel Tilden, a New York bank attorney with the closest possible ties to the big banks and many railroads, the Democrats reorganized.[110] Though a complex bargain between the Pennsylvania and several other big railroads, along with the more familiar agreement to end the occupation of the South, deprived Tilden of the Presidency in 1876, polarization between industry and finance continued.[111] In Boston, bankers like Henry Lee Higginson joined John Murray Forbes, and many merchants and attorneys such as Moorfield Storey, and split loudly from the GOP. Similar events occurred in New York. Sometimes referred to as Mugwumps, these groups pushed hard for lower tariffs, maintenance of the gold standard, civil service reform, and a foreign policy that limited American aggressiveness in the interest of close relations with Great Britain (the final source of credit for many in these groups).[112]
A substantial number of railroads fell in line, either because the financiers were coming to control them or because the program attracted them. Throughout most of this period the New York Central and the Democratic machine that was closely associated with it continued to pour stupendous resources into efforts to mobilize high turnouts.[113]
In 1884 the banks and their allies won with their favorite candidate, Grover Cleveland. By then the seesaw pattern of major party competition that characterized the rest of the system was essentially set. Industrialists (who often favored soft or "softer" money than financiers, though never free coinage of silver or unlimited issues of greenbacks); some railroad magnates (who sometimes backed tariffs for special reasons); many merchants; and (mostly inland and small) bankers opposed the Democrats on the traditional GOP platform of high tariffs, although a few major exporters sometimes were willing to waive (someone else s) specific duties for very carefully circumscribed "reciprocity" treaties that would get their own goods into another country. They also expressed a willingness to subsidize the merchant marine (which the Democrats opposed as contrary to free trade). In a portent of things to come, the Republicans became increasingly strident in their calls for a naval build-up and foreign expansion in the Caribbean. They also harshly criticized the Democrats for their friendship with the British (Schirmer, 1972, Chaps. 1-3; Eiteman, 1930).
Neither party made any serious appeal to workers. Both watched impassively while the panic of 1873 destroyed the unionization drives of the late 1860s, which had enrolled 2.4 percent of the total work force by 1869 (Lebergott, 1972, p. 220). As related in more detail below, both parties also favored all necessary force to put down the strikes and riots that soared after the onset of early 1870s depression. Both opposed virtually all relief during the Great Depression. They both also exalted the role of the judiciary in checking relief measures passed by occasionally errant legislatures.[114]
The parties also ignored all but affluent farmers. Bankers and railroadmen typically dominated the newly created Department of Agriculture regardless of which party held power. Both parties also greeted farmers, clamoring for regulation of railroads, or much larger increases in the money supply than the industrialists would stand for, with proposals for increasing exports (Crapol and Schonberger, 1972) and, as the ethnocultural analysts remind us, with conservative religious appeals.[115]
NOTES
88. The literature is immense, but see, for example, Beard and Beard (1934, Chaps. 15 and 17).
89. See the review of these various studies in Lee and Passell (1979, Chap. 10).
90. For references and a discussion of these theories, see Lee and Passell (1979, pp. 214-18).
91. For example. Robert Toombs, in a speech to the Senate, in the Congressional Globe (Jan. 7, 1861), pp. 270-71; though this is quoted in Lebergott (1972, p. 214), its point seems not to have been taken up in the subsequent literature, although Lebergott himself makes it clearly.
92. See the discussion in Polakoff (1981, p. 165), although he perhaps underestimates the pro-Southern sentiment that grew in parts of southern California. Note also that further settlement was certain to follow a successful transcontinental railroad, which many Southerners promoted.
93. Jones (1970) is one of many discussions.
94. For Walker, see LaFeber (1993, pp. 28-30): for Cuba, see, e.g., Jones (1970, pp. 66, 69).
95. Expansion into Mexico, for example, virtually required that the states remain united. Not surprisingly, therefore, many early Southern supporters of territorial expansion such as South Carolina's Joel Poinsett, opposed efforts to bring North-South conflicts to a head. See also Draughton (1966) on the role played by Sam Houston's brother George in sparking opposition to Calhoun in the late 1840s.
96. Note also that parts of several of these states fell well below the Mason-Dixon line, the traditional dividing point between North and South.
97. See, among many sources, Russel (1948, passim). Jefferson Davis, future president of the Confederate States of America, was a major player in some of these struggles.
98. See Sorin (1970) for a statistical study of leading New York abolitionists. A leading abolitionist, New York's Gerit Smith, was for some years probably the largest landowner in the United States. Lewis Tappan, another abolitionist leader, founded the firm that is today Dun & Bradstreet.
99. "James F. Joy," National Cyclopedia. XVIII. p. 121: Forbes (1900, p. 171).
100. "James F. Joy," National Cyclopedia, XVIII, p. 121: Dodd (1911, p. 787); Stover, (1975. p. 90).
101. Edelstein (1968, pp. 216-17). Forbes had earlier helped ship guns to Kansas. Gerit Smith also contributed to Brown. See "Gerit Smith" National Cyclopedia, XVIII. p. 332.
102. See, e.g., Forbes (1900, p. 186).
103. Dodd (1911, p. 787) identifies several prominent New York Democrats as controlling the Illinois Central in this period. But while Dodd may be correct, neither the United States Railroad Directory for 1856 nor Low's Railway Directory for 1858 records any of the men Dodd discusses as serving on the board. These directories do, however, show clearly that Dodd was right in claiming that New York interests maintained a dominant position on the board. The next directory I have been able to locate dates from 1861. This shows a continued heavy representation of New Yorkers, but also some turnover, including the removal of one director listed as living in Chicago, and the arrival of Nathaniel Banks. The seriously incomplete accounts of Lincoln's relationship to the Illinois Central in Sunderland, (1955, pp. 24 and 39) and Corliss (1950. pp. 108, 117 ff., and 121) are consistent with the view that the Central's top officers and directors were far more favorably inclined to Lincoln in 1860 than in 1858. It should also be observed that railroads in certain areas (like the Baltimore & Ohio, which ran through border states) were not at all enthusiastic about either Lincoln or conflict with the South.
104. Forbes (1900, p. 182): "James F. Joy" National Cyclopedia, XVIII, p. 121.
105. While the full network of ties between all the principals in the Lincoln campaign is too dense to discuss here, for Ogden's business relations with Thomas Scott of the Pennsylvania Railroad, see *Burgess' Railway Directory* (1861), p. 88. Note also that most of these men still hoped to avoid war with the South.
106. For Cornell, see Dorf (1952, pp. 199 and 227); for Chase and Cooke, see Burch (1981b, pp. 20-21).
107. Almost all accounts of Lincoln's election mention Pennsylvania and the tariff; for banking reform, see Rezeck (1942) or Hammond (1957, Chaps. 21 and 22). See also Burch (1981b, p. 22).
108. The literature on these matters is immense; see, e.g., Polakoff (1981, pp. 196 ff.) for a brief account.
109. Of many accounts, see e.g., the discussion of McClellan's candidacy in Burch (1981b. p. 55, n. 70). In this period many railroads also shifted back and forth among the parties in a complex pattern that defies summary here.
110. Polakoff (1981, Chaps. 6 and 7); Burch (1981b, pp. 74-75).
111. For the railroad and other bargains in the Compromise of 1877, see Burch (1981b. p. 74). See also Josephson (1963) for many of the events of this period and Goodwyn (1976) or Schwarz (1976) for the subsequent nightmares Southern elites visited upon their subject population.
112. Schirmer (1972, Chap. 2). For civil service reform in this period see especially Roy (1981); for Forbes, see "John Murray Forbes," National Cyclopedia, XXXV, pp. 331-32.
113. For the New York Central and the Democrats, see inter alia, Shefter (1976); for the turnout efforts in this period, see Polakoff (1981, pp. 232-33). In the 1880s the New York Central drew closer to the GOP.
114. 1 am presently preparing a study of "The System of '96: A Reconsideration," which attempts a rough quantitative evaluation of these trends.
115. See the sensitive discussion in Polakoff (1981, pp. 249ff.); note his discussion of the importance of distinguishing among levels of government.
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