THE COST OF THE WAR
%464. The Cost in Money.%--When Fort Sumter was fired on in 1861 and
Lincoln made his call for volunteers, the national debt was $90,000,000,
the annual revenue was $41,000,000, and the annual expenses of the
government $68,000,000. As the expenses were vastly increased by the
outbreak of war, it became necessary to get more money. To do this,
Congress, when it met in July, 1861, began a financial policy which must
be described if we are to understand the later history of our country.
%465. Power to raise Money.%--The Constitution gives Congress power
1. "To lay and collect taxes, duties, imposts, and excises."
2. "To borrow money on the credit of the United States."
3. To apportion direct taxes among the several states according to their
population.
%466. Raising Money by Taxation; Internal Revenue.%--Exercising these
powers, Congress in 1861 increased the duties on articles imported, laid
a direct tax of $20,000,000. and imposed a tax of three per cent on
all incomes over $800. The returns were large, but they fell far short
of the needs of the government, and in 1862 an internal revenue system
was created. Taxes were now imposed on spirits and malt liquors; on
manufactured tobacco; on trades, professions, and occupations; till
almost everything a man ate, drank, wore, bought, sold, or owned was
taxed. The revenue collected from such sources between 1862 and 1865 was
$780,000,000.
%467. Raising Money "on the Credit of the United States."%--Money
raised by internal revenue and the tariff was largely used to pay
current expenses and the interest on the national debt. The great war
expenses were met by borrowing money in two ways:
1. By selling bonds.
2. By issuing "United States notes."
%468. The Bonded and Interest-paying Debt.%--The bonds were
obligations by which the government bound itself to pay the holder the
sum of money specified in the bond at the end of a certain period of
years, as twenty or thirty or forty. Meantime the holder was to be paid
interest at the rate of five, six, or seven per cent a year. Between
July 1, 1861, and August 31, 1865, when our national debt was greatest,
$1,109,000,000 worth of bonds had been sold to the people and the money
used for war purposes.
%469. United States Notes.%--The United States notes were of two
kinds: those which bore interest, and those which did not. Those bearing
interest passed under various names, and by 1866 amounted to
$577,000,000.
United States notes bearing no interest were the "old demand notes," the
"greenbacks," the "fractional currency," and the "national bank notes."
The greenbacks (a name given them from the green color of their backs)
were authorized early in 1862, were in denominations from $1 up, bore no
interest, were legal tender in payment of all debts, public and private,
except duties on imports and interest on the public debt. In time
$450,000,000 were authorized to be issued, and in 1864, $449,000,000
were in circulation.
%470. Fractional Currency.%--The issue of the demand notes in 1861,
and the fact, apparent to every one, that Congress must keep on issuing
paper money, led the state banks to suspend specie payment in December,
1861. As a consequence, the 3, 5, 10, 25, and 50 cent silver pieces (and
of course all the gold) disappeared from circulation. This left the
people without small change, and for a time they were forced to pay
their car fare and buy their newspapers and make change with postage
stamps and "token" pieces of brass and copper, which passed from hand to
hand as cents. Indeed, one act of Congress, in July, 1862, made it
lawful to receive postage stamps (in sums under $5) in payment of
government dues. But in March, 1863, another step was taken, and an
issue of $50,000,000 in paper fractional currency was authorized.
%471. The National Banking System.%--Yet another financial measure to
aid the government was the creation of national banks. In 1863 Congress
established the office of "Comptroller of the Currency," and authorized
him to permit the establishment of banking associations. Each must
consist of not less than five persons, must have a certain capital, and
must deposit with the Treasury Department at Washington government bonds
equal to at least one third of its capital. The Comptroller was then to
issue to each association bank notes not exceeding in value ninety per
cent of the face value of the bonds. It was supposed that the state
banks, which then issued $150,000,000 in 7000 kinds of bank notes, would
take advantage of the law, become national banks, and use this national
money, which would pass all over the country. This would enable the
government to sell the banks $150,000,000 and more of bonds. But the
state banks did not do so till 1865, when a tax of ten per cent was laid
on the amount of paper money each state bank issued. Then, to get rid of
the tax, hundreds of them bought bonds and became national banks.
%472. The National Debt and State Expenditures.%--On the 31st of
August, 1865, the national debt thus created reached its highest figure,
and was in round numbers $2,845,000,000.
Besides the debt incurred by the national government, there were heavy
expenditures by the states, and we might say by almost every city and
town, amounting to $468,000,000. But even when the war ended, the outlay
on account of the war did not cease. Each year there was interest to
pay on the bonded debt, and pensions to be given to disabled soldiers
and sailors, and to the widows and orphans of men killed, and claims for
damages of all sorts to be allowed. Between July 1, 1861, and June 30,
1879, the expenditure of the government growing out of the war amounted
to $6,190,000,000.
Many men who served in the army made great personal sacrifices. They
were taken away from some useful employment, from their farms, their
trades, their business, or their professions. What they might have
earned or accomplished during the time of service was so much loss.
%473. The Cost in Human Life.%--While the war was raging, Lincoln
made twelve calls for volunteers, to serve for periods varying from 100
days to three years. The first was the famous call of April 15, 1861,
for 75,000 three-months men; the last was in December, 1864. When the
numbers of soldiers thus summoned from their homes are added, we find
that 2,763,670 were wanted and 2,772,408 responded. This does not mean
that 2,770,000 different men were called into service or were ever at
any one time under arms. Some served for three months, others for six
months, a year, or three years. Very often a man would enlist and when
his term was out would reenlist. The largest number in service at any
time was in April, 1865. It was 1,000,516, of whom 650,000 were fit for
service. In 1865, 800,000 were mustered out between April and October.
Of those who gave their lives to preserve the Union, 67,000 were killed
in battle, 43,000 died of wounds, and 230,000 of disease and other
causes. In round numbers, 360,000 men gave up their lives in defense of
the Union. How many perished in the Confederate army cannot be stated,
but the loss was quite as large as on the Union side; so that it is safe
to say that more than 700,000 men were killed in the war.[1]
[Footnote 1: A table giving the size of the armies and the loss of life
will be found in _Battles and Leaders of the Civil War_, Vol. IV., pp.
767-768.]
%474. Suffering in the South.%--The South raised all the cotton,
nearly all the rice and tobacco, and one third of the Indian corn grown
in our country, and depended on Europe and the North for manufactured
goods. But when the North, in 1861 and 1862, blockaded her ports and cut
off these supplies, her distress began. Brass bells and brass kettles
were called for to be melted and cast into cannon, and every sort of
fowling piece and old musket was pressed into service and sent to the
troops in the field. As money could not be had, treasury notes were
issued by the million, to be redeemed "six months after the close of the
war." Planters were next pledged to loan the government a share of the
proceeds of their cotton, receiving bonds in return. But the blockade
was so rigorous that very little cotton could get to Europe. When this
failed, provisions for the army were bought with bonds and with paper
money issued by the states.
This steady issue of paper money, with nothing to redeem it, led to its
rapid decrease in value. In 1864 it took $40 in Confederate paper money
to buy a yard of calico. A spool of thread cost $20; a ham, $150; a
pound of sugar, $75; and a barrel of flour, $1200.
%475. Makeshifts.%--Thrown on their own resources, the Southern people
became home manufacturers. The inner shuck of Indian corn was made into
hats. Knitting became fashionable. Homespun clothing, dyed with the
extract of black-walnut bark or wild indigo or swamp maple or
elderberries, was worn by everybody. Barrels and boxes which had been
used for packing salt fish and pork were soaked in water, which was
evaporated for the sake of the salt thus extracted. Rye or wheat roasted
and ground became a substitute for coffee, and dried raspberry
leaves for tea.
Quite as desperate were the shifts to which the South was put for
soldiers. At first every young man was eager to rush to the front. But
as time passed, and the great armies of the North were formed, it became
necessary to force men into the ranks, to "conscript" them; and in 1862
an act of the Confederate Congress made all males from eighteen to
thirty-five subject to military duty. In September, 1862, all men from
eighteen to forty-five, and later from sixteen to sixty, were subject to
conscription. The slaves, of course, worked on the fortifications, drove
teams, and cooked for the troops.
%476. Cost to the South%.--Thus drained of her able-bodied
population, the South went rapidly to rack and ruin. Crops fell off,
property fell into decay, business stopped, railroads were ruined
because men could not be had to keep them in repair, and because no
rails could be obtained. The loss inflicted by this general and
widespread ruin can never be even estimated. Cotton, houses, property of
every sort, was destroyed to prevent capture by the Union forces. On
every battlefield incalculable damage was done to woods, villages,
farmhouses, and crops. Bridges were burned; cities, such as Richmond,
Atlanta, Columbia, Charleston, were well-nigh destroyed by fire;
thousands of miles of railroad were torn up and ruined. The loss
entailed by the emancipation of the slaves, supposing each negro worth
$500, amounts to $2,000,000,000.
SUMMARY
1. When the war opened, and the army and navy were called into the
field, Congress proceeded to raise money by three methods: A. Increasing
taxation. B. Issuing bonds. C. Issuing paper money.
2. Taxation was in three forms: A. Direct tax. B. Tariff duties. C.
Internal revenue, which included a vast number of taxes.
3. Paper money consisted of treasury notes, United States notes
(greenbacks), fractional currency.
4. Besides the cost to the nation, there was the cost to the states,
counties, cities, and towns for bounties, and in aid of the war in
general; and the cost to individuals.
6. There is again the cost produced by the war and still being paid as
pensions, care of national cemeteries, etc., and interest on the
public debt.
6. The cost in human life was great to both North and South; there was
also a destruction of property and business, the money value of which
cannot be estimated.
"_THE INDESTRUCTIBLE UNION OF INDESTRUCTIBLE STATES._"