Sovereignty and an Empty Purse

Sovereignty and an Empty Purse: Banks and Politics in the Civil War

BRAY HAMMOND
Copyright Date: 1970
Pages: 410
https://www.jstor.org/stable/j.ctt7zth4j
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  • Book Info
    Sovereignty and an Empty Purse
    Book Description:

    A sequel to his Pulitzer Prize-winningBanks and Politics in America from the Revolution to the Civil War, this book by Bray Hammond focuses on how Washington struggled financially to settle the Civil War and how its measures spurred the growth of federal government.

    Originally published in 1993.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-5535-3
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. PREFACE
    (pp. v-vi)
    Bray Hammond
  3. Table of Contents
    (pp. vii-ix)
  4. 1 A STUNTED GOVERNMENT
    (pp. 1-34)

    In May 1861, the month following South Carolina’s shelling of Fort Sumter and President Lincoln’s order instituting the blockade of Southern ports, the young English historian, Sir John Acton—not yet Lord Acton—described the dissolution of the American Union as an accomplished fact. He found the South’s secession “no accidental or hasty or violent proceeding but the normal and inevitable result of a long course of events.” The period, just ended, “between the convention of 1787 and the election of Mr Davis,” president of the new Southern republic, possessed “an almost epic unity. The question,” he said, “on which...

  5. 2 SUMTER, BULL RUN, AND THE SPECIAL SESSION APRIL TO AUGUST 1861
    (pp. 35-70)

    Fort Sumter fell before the fire of the South Carolinians and their friends 13 April 1861. On the 15th President Lincoln called up the militia to the number of seventy-five thousand men and summoned Congress to meet in special session 4 July. In South Carolina, Georgia, Alabama, Florida, Mississippi, Louisiana, and Texas, the President said, forces had arisen that were obstructing execution of the laws of the United States and that were “too powerful to be suppressed by the ordinary course of judicial proceedings or by the powers vested in the marshals.” He said the militia’s first task would “probably...

  6. 3 SECRETARY CHASE AND THE BANKERS
    (pp. 71-106)

    Secretary Chase centered his negotiations for a loan upon the banks of New York, Boston, and Philadelphia. He had concluded, he said in his annual report the following December, that to get the money he had been authorized to borrow, the “safest, surest, and most beneficial plan would be to engage the banking institutions of the three chief commercial cities of the seaboard to advance the amounts needed. . . .” They would receive in return three-year Treasury notes bearing seven and three-tenths per cent interest to be resold to permanent investors. The banks’ advances, that is, would supply the...

  7. 4 AUGUST TO DECEMBER 1861
    (pp. 107-128)

    Under the arrangement with Chase, concluded 15 August 1861, the banks of New York, Boston, and Philadelphia began making the Treasury a series of advances in coin as called for by him at intervals of six days or so. These advances became less regular by winter, for the gold the Secretary took from the banks did not return to them as he supposed it would, and whether he liked it or not his calls had to be tempered to the ability of the banks to meet them. Still less regularly the banks received the three-year Treasury notes of the “national...

  8. 5 THE DECEMBER COLLAPSE
    (pp. 129-164)

    December was dominated by three things: the threat of war over theTrent’s seizure, the uneasiness intensified by Secretary Chase’s report to Congress, and the prospective suspension of specie payments.

    Till the middle of the month, Britain’s response to theTrent’s seizure was awaited—with bravado in public and with apprehension beneath the surface. The shock when it came was violent, but it was short. For British anger and American glee yielded fortunately to common sense and to a constraining awareness by each government that the stand it was tempted to take was contrary to what it had fought for...

  9. 6 MAKING PAPER A LEGAL TENDER
    (pp. 165-208)

    The bill to make the government’s paper a means of payment which creditors could not refuse lay in the lap of a committee about equally divided for and against it. Spaulding and Hooper supported it, and so did Chairman Thaddeus Stevens, after overcoming some qualms about its constitutionality which his nationalism had not yet become radical enough to dismiss instantly. Maynard, a Whig, also supported it. Morrill, Horton, and Corning—Republican, Whig, and Democrat respectively—steadfastly opposed it from first to last. Phelps, Democrat, was absent in Missouri. Stratton, Republican, was on the fence. Since the traditional opinion that the...

  10. 7 ADOPTION OF THE LEGAL TENDER ACT
    (pp. 209-236)

    After nine days of stubborn debate, the legal tender bill had passed the House Thursday, 6 February 1862, by a vote of 93 to 59.

    In the Senate the next day, Senator Fessenden, chairman of the Finance Committee, interrupted discussion of civil appropriations to ask that a bill authorizing the issue of ten million dollars of demand notes be acted upon at once. The ten millions were in addition to the fifty millions authorized the previous summer. The senator read aloud a brief letter just received from Secretary Chase with the draft of an even briefer bill that would authorize...

  11. 8 NORTH AND SOUTH
    (pp. 237-260)

    Specie payments had stopped 30 December 1861; the Treasury’s demand notes were not made legal tender till 25 February; and new notes were not engraved, printed, and ready to be paid the government’s creditors till early in April. The sub-Treasury in New York received its first notes on Saturday the 5th. So for almost two months no lawful money was circulating, and for more than three there was none in use that was commonly recognized as legal tender. Then how, it may be asked, did people manage in that interval? How could the banks and the government continue as long...

  12. 9 THE REVENUE BILL, HR 312
    (pp. 261-282)

    Readers will recall that in the act of 5 August 1861, described in chapter 2, the special session of Congress had authorized increases in import duties, a tax on land and other property, and a tax on incomes. Only the import duties had been put into immediate effect; the tax on property was collected for the federal government by all the states not seceding, except Delaware; the tax on income had been deferred till 1862. So, altogether, what is to be said of taxes while Chase was at the Treasury is little and mostly negative.¹

    During the latter half of...

  13. 10 WAYS AND MEANS VERSUS THE ADMINISTRATION
    (pp. 283-318)

    Of the three elements constituting the financial program presented by John B. Alley a year before in his speech of 23 January 1862, the last to be taken up was the national currency scheme. The two other elements of Alley’s program—the legal tender measure and the revenue measure—had got immediate attention from Congress and tardy enactment in spite of Secretary Chase’s coldness toward them. While yielding to the legal tender and revenue measures forced on him by bankers and congressional leaders, Chase had stuck to his preference for the policy of wartime borrowing which he had taken over...

  14. 11 THE ADMINISTRATION BILL ENACTED
    (pp. 319-352)

    The means by which the national bank measure was suddenly raised again from the dead and made law are evident only in general. It seems that Secretary Chase and his friends bestirred themselves and managed, by making the most of every chance, to squeak through with the bill. According to Senator Sherman, while Congress was engaged with other matters, the proposal made by Chase in December 1861 had continued to be discussed “among those whose business made them conversant with finance and currency,” and “though it ran counter to the local interests of those engaged in the business of banking,...

  15. 12 CONCLUSION
    (pp. 353-364)

    The federal program of war-time financing may be said to have ended formally with John B. Alley’s resolution of 18 December 1865 concurring with the opinion of the Secretary of the Treasury, Hugh McCulloch, that the time had come for retirement of the greenbacks, issue of which Alley himself had been the first to recommend in Congress almost four years before. The resolution, eight months after Appomattox, expressed the opinion of Congress about “the necessity of a contraction of the currency with a view to as early a resumption of specie payments as the business interests of the country will...

  16. NOTES
    (pp. 365-378)
  17. WORKS CITED
    (pp. 379-386)
  18. INDEX
    (pp. 387-400)