Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War

Journalist Lowenstein (The End of Wall Street) argues in this masterful history that the financing of the Civil War was as crucial to the shaping of American history as the Emancipation Proclamation and the defeat of the Confederacy. Adjusted for inflation, President Lincoln’s requested $400 million budget for the Union Army in 1861 was more than the U.S. government had spent on the country’s three previous wars combined, Lowenstein notes. In order to help pay for the war, Treasury Secretary Salmon P. Chase initiated America’s first federal use of “fiat” money (currency not backed by gold), a new system of national (rather than state) banks, the Bureau of Internal Revenue (the precursor of today’s IRS), and the progressive income tax. Lowenstein’s lucid, character-driven narrative delves into these and other developments, explaining how crucial economic reforms were to winning the war, and how Republican legislation during Lincoln’s presidency greatly increased federal power and fulfilled his vision of how a strong national government could better the lives of ordinary Americans. As Lowenstein notes, in addition to waging the war, Congress also passed legislation for a transcontinental railroad, established departments of education and agriculture, and enacted the 1862 Homestead Act to promote the development of lands west of the Mississippi River. Full of fascinating historical tidbits and clear explanations of complex financial and political matters, this is a must-read for American history buffs. (Mar.)