CHAPTER I

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[Illustration: Copyright, 1912, Moffett, Chicago

[Signature]Woodrow Wilson]

THE NEW NATION

BY

FREDERIC L. PAXSON

PROFESSOR OF HISTORY UNIVERSITY OF WISCONSIN

[Illustration: logo]

HOUGHTON MIFFLIN COMPANY

BOSTON NEW YORK CHICAGO

The Riverside Press Cambridge

COPYRIGHT, 1915, BY FREDERIC L. PAXSON

ALL RIGHTS RESERVED

The Riverside Press

CAMBRIDGE MASSACHUSETTS

U.S.A.

PREFACE

A new nation has appeared within the United States since the Civil War,

but it has been only accidentally connected with that catastrophe. The

Constitution emerged from the confusion of strife and reconstruction

substantially unchanged, but the economic development of the United

States in the sixties and seventies gave birth to a society that was, by

1885, already national in its activities and necessities. In many ways

the history of the United States since the Civil War has to do with the

struggle between this national fact and the old legal system that was

based upon state autonomy and federalism; and the future depends upon

the discovery of a means to readjust the mechanics of government, as

well as its content, to the needs of life. This book attempts to narrate

the facts of the last half-century and to show them in their relations

to the larger truths of national development.

FREDERIC L. PAXSON.

CONTENTS

I. THE CIVIL WAR 1

II. THE WEST AND THE GREENBACKS 20

III. THE RESTORATION OF HOME RULE IN THE SOUTH 39

IV. THE PANIC OF 1873 59

V. THE HAYES ADMINISTRATION 75

VI. BUSINESS AND POLITICS 92

VII. THE NEW ISSUES 108

VIII. GROVER CLEVELAND 126

IX. THE LAST OF THE FRONTIER 142

X. NATIONAL BUSINESS 162

XI. THE FARMERS' CAUSE 177

XII. THE NEW SOUTH 192

XIII. POPULISM 208

XIV. FREE SILVER 225

XV. THE "COUNTER-REFORMATION" 244

XVI. THE SPANISH WAR 258

XVII. THEODORE ROOSEVELT 276

XVIII. BIG BUSINESS 293

XIX. THE "MUCK-RAKERS" 309

XX. NEW NATIONALISM 324

INDEX i

MAPS AND CHARTS

THE RAILWAYS OF THE "OLD NORTHWEST" 13

THE WESTERN RAILWAY LAND GRANTS, 1850-1871 23

THE SOLID SOUTH, 1880-1912 53

THE POLITICAL SITUATION AT WASHINGTON, 1869-1917 76, 77

POPULATION AND IMMIGRATION, 1850-1910 120

THE WESTERN RAILROADS AND THE CONTINENTAL FRONTIER, 1870-1890 146, 147

THE DISTRIBUTION OF THE PUBLIC DOMAIN, 1789-1904 153

THE CONGRESSIONAL ELECTION OF 1890 _between 186 and 187_

THE FLOOD OF SILVER, 1861-1911 227

ALASKA, THE PHILIPPINES, AND THE SEAT OF THE SPANISH WAR 259

NORTH AMERICA IN 1915 _between 340 and 341_

THE NEW NATION

CHAPTER I

THE CIVIL WAR

The military successes of the United States in its Civil War maintained

the Union, but entailed readjustments in politics, finance, and business

that shifted the direction of public affairs for many years. In the eyes

of contemporaries these changes were obscured by the vivid scenes of the

battlefield, whose intense impressions were not forgotten for a

generation. It seemed as though the war were everything, as though the

Republican party had preserved the nation, as though the nation itself

had arisen with new plumage from the stress and struggle of its crisis.

The realities of history, however, which are ever different from the

facts seen by the participant, are in this period further from the

tradition of the survivor than in any other stage of the development of

the United States. As the Civil War is viewed from the years that

followed it, the actualities that must be faced are the facts that the

dominant party saved neither the nation nor itself except by changing

its identity; that economic and industrial progress continued through

the war with unabated speed, and that out of the needs of a new economic

life arose the new nation.

The Republican party, whose older spokesmen had been trained as Whigs or

Democrats, had by 1861 seasoned its younger leaders in two national

campaigns. It had lost the first flush of the new enthusiasm which gave

it birth as a party opposed to the extension of slavery. The signs of

the times had been so clear between 1856 and 1860 that many politicians

had turned their coats less from a moral principle than from a desire to

win. When Lincoln took up the organization of his Administration, these

clamored for their rewards. There was nothing in the political ethics of

the sixties that discountenanced the use of the spoils of office, and

Lincoln himself, though he resented the drain of office-seeking upon his

time, appears not to have seen that the spoils system was at variance

with the fundamentals of good government.

It was a Republican partisan administration that bore the first brunt of

the Civil War, but the struggle was still young when Lincoln realized

that the Union could not stand on the legs of any single party. To

develop a general Union sentiment became an early aim of his policy and

is a key to his period. He was forced to consider and reconcile the

claims of all shades of Republican opinion, from that of the most

violent abolitionist to that of the mere unionist. In the Democracy,

opinion ranged from that of the strong war Democrat to that of the

Copperhead whose real sympathies were with the Confederacy.

To conciliate a working majority of the voters of the Union States, a

majority which must embrace many Union Democrats, Lincoln steadily

loosened the partisan bonds. The congressional elections of 1862 showed

that he was still far from success. His overtures to the Democrats of

the border States fell into line with his general scheme. His tolerance

of McClellan and his support of Stanton, both of whom by sympathy and

training were Democrats, reveal the comprehensive power of his

endurance. As the election of 1864 approached to test the success of his

generalship, he had to fight not only for a majority in the general

canvass but for the nomination by his own party.

There were many men in 1864 who believed that the war was a mistake and

that Lincoln was a failure. The peace Democrats denounced him as a

military dictator; to the radical Republicans he was spineless and

irresolute. Within his own Cabinet there was dissension that would have

unnerved a less steady man. Chase, the Secretary of the Treasury, wanted

to be President, and had allowed his friends to intrigue in his behalf,

yet had not withdrawn from the counsels of his rival. At various times

he had threatened to resign, but Lincoln had shut his eyes to this

infidelity and had coaxed him back. Not until after the President had

been renominated did he accept the resignation of Chase, and even then

he was willing to make the latter Chief Justice of the Supreme Court.

Chase, in the Cabinet and in touch with dissatisfied Republicans

outside, was a menace to impartial administration. Less distressing, but

noisier than he, was John C. Fremont, the first nominee of the party,

who had sulked in the midst of admiring friends since Lincoln had

removed him from important military service in 1861. About him the

extreme abolitionists were gathered, and in his favor there was held a

convention in May, 1864. But this dissenting movement collapsed upon

itself before the elections in November.

The Republicans went into convention at Baltimore, on June 7, 1864. The

candidacy of Chase had faded, that of Fremont was already unimportant,

and the renomination of Lincoln was assured. But the party carefully

concealed its name and, catering to loyalists of whatever brand, it

called itself "Union," and invited to its support all men to whom the

successful prosecution of the war was the first great duty. It was a

Union party in fact as well as name. Delegations of Democrats came to it

from the border States, and from one of these the convention picked a

loyal Democrat for the Vice-Presidency. With Lincoln and Andrew Johnson

on its ticket, with a platform silent upon the protective tariff, and

with an organization so imperfect that no roll of delegates could be

made until the convention had been called to order, the Administration

party of 1864 was far from being the same organization that had, in

1856, voiced its protest against the Kansas-Nebraska Bill.

The excesses of the Democrats aided Lincoln almost as much as the

efforts of the party which nominated him. A convention at Chicago, in

August, presided over by Governor Seymour, of New York, and under the

dominance of Clement L. Vallandigham, did not need to denounce the war

as a failure in order to disappoint the Union Democrats. Not even the

nomination of McClellan, nor his repudiation of the platform, could undo

the result of such leadership. It was far from certain which ticket

would receive the greater vote in November, but it was clear that union

against disunion was the issue, and that men would vote according to

their hopes and fears. The former were in the ascendant when the polls

were opened, for Sherman had gained a decisive victory in his occupation

of Atlanta, while Farragut had gained another at Mobile Bay. On the

strength of these successes the Union ticket carried every State but

Delaware, Kentucky, and New Jersey.

Chase, who left the Treasury during the presidential campaign, had by

that time finished the work which carried the financial burdens of the

Civil War and provided party texts for another generation. He had come

to his task without special fitness, but had speedily mastered the

essentials of war finance. In his reports he outlined the policy which

Congress followed, more or less closely. Taxes ought to be increased, he

urged, to meet all the costs of civil administration, interest on the

debt, and sinking fund for the same. These were current burdens which

the country ought not to try to escape. But the extra cost of the war,

which was to be regarded as a permanent investment by the Union for its

own defense, might fairly be made a charge upon posterity. To meet these

he urged the creation of a sufficient bonded debt.

The Thirty-seventh Congress (1861-63) had been more ready to borrow

than to tax. In all its experience until 1861 the United States had met

no crisis in which large revenues had been required. In the thirty

preceding years its total annual receipts had ranged from $20,000,000 to

$81,000,000, while in the fiscal year in which the war began the total

had reached $83,000,000, of which $41,000,000 were loans rather than

revenue. Since the panic of 1857 the Treasury had faced a deficit at the

end of each year, and had been compelled not only to spend its

accumulated surplus on current needs, but to borrow heavily. The tariff

duties, collected at the custom-houses, were, as they always had been,

the mainstay of the revenue. But these had not met the needs of the

three lean years before the war.

Had there been no war, the disordered finances of the United States

might, in 1861, have called for corrective measures and new taxes, and

these could not have become effective before 1862 or 1863. As it was,

loans were resorted to for first-aid. In 1862 they alone were more than

six times as great as the total receipts of 1861; in 1865 they were

nearly three times as great as in 1862. Taxes were authorized more

reluctantly than loans, they became profitable more slowly, and did not,

until the last year of war, reveal the fiscal capacities of the United

States.

The favorite national tax of the United States had always been the

tariff. Supplemented by miscellaneous items which included no internal

revenue after 1849, and no direct tax after 1839, it carried most of the

financial burdens. Whether parties preferred it high or low, or levied

it for protection or for revenue, they had continued to cherish it as a

fiscal device, and had acquired no experience with alternate sources of

supply. Like the army of the United States, which in time of war had to

break in its volunteer levies before it could win victories, the

Treasury and Congress had to learn how to tax before they could bring

the taxable resources of the United States to supplement the loans.

The tariff was revised and increased several times between 1861 and

1865, and yielded its greatest return, $102,000,000, in 1864. The result

was due to both the swelling volume of imports and the higher rates.

Like all panics, that of 1857 had lessened the buying capacity of the

American people. In hard times luxuries were sacrificed and treasury

receipts were thereby greatly curtailed. A return to normal conditions

of business would have been visible by 1861 had not war obscured it.

Steadily through the war a prosperous North and West bought more foreign

goods regardless of the price.

The rate of tariff was based upon the probable revenue, the protective

principle, and the tax burdens already imposed upon American

manufacturers. Not until 1863 were the internal or direct taxes

noticeable, but in 1864 these passed the tariff as a source of revenue,

with a total of $116,000,000. In 1866 this total was swollen to

$211,000,000. Like the tariff, the income, excise, and direct taxes were

often revised and raised, and many of the tariff increases were

dependent upon them. When the American manufacturer, who already

declared that he could stay in business only because the tariff

protected him from European competition, found himself burdened with a

tax on his income and with others upon his commercial transactions and

his output, he complained bitterly of the disadvantage at which he was

placed. To equalize his burdens, the import rates were repeatedly raised

against the foreigner. By the end of the war, the tariff exceeded

anything known in American experience, and was fixed less with the

intention of raising revenue than of enabling the American producer to

pay his internal tax. Less than $85,000,000 were collected from the

customs in 1865; while $211,000,000 came from internal sources.

By taxing and borrowing the United States accumulated $88,000,000 in

1861, $589,000,000 in 1862, $888,000,000 in 1863, $1,408,000,000 in

1864, and $1,826,000,000 in 1865. The Treasury, unimportant in the

world's affairs before 1861, suddenly became one of the greatest dealers

in credit. Its debt of $2,808,000,000, outstanding in October, 1865,

affected the interests and solidity of international finance, and

indicated, as well, resources of which even boastful Americans had been

unaware in 1861. One item in the debt, however, was a menace to the

security of the whole, which was but little stronger than its weakest

part.

The physical currency in which the debt was to be created and the

expenses paid was as difficult to find in 1861 as the wealth which it

measured. After Jackson destroyed the second Bank of the United States

there had been no national currency but coin, and too little of that.

Gold and silver had been coined at the mint, and the former had given

the standard to the dollar. In intrinsic worth the gold dollar, as

defined in 1834 at the ratio of sixteen to one, was slightly inferior to

its silver associate, and by the law of human nature, which induces men

to hold the better and pass the cheaper money, the value of the gold

coin had become the measure of exchange.

The coined money did not circulate generally. It was devoted to a part

of the business of government, and to the needs of the banks which

provided the actual circulating medium. Scattered over all the States,

hundreds of state and private banks issued their own notes to serve as

money. At best, and in theory, these were exchangeable for gold at par;

at worst, they were a total loss; yet as they were, variant and

depreciated since the panic of 1857, they were the money of the people

when the Civil War began. Before the end of 1861 the banks gave up the

pretense of redeeming their notes in coin. The United States Treasury

suspended the payment of specie early in 1862, and thereafter for

seventeen years the paper money in circulation depended for its value on

the hope that it would some day be redeemed.

The needs of the Treasury, in the crisis of suspension, induced Congress

to authorize the emission of $150,000,000 of legal-tender paper money.

These notes, soon known as the "greenbacks," became the measure of the

difference between standard money and coin. Issued at par, they sank in

value and fluctuated until in the darkest days of 1864 a dollar in gold

could be exchanged for $2.85 in greenbacks. Yet they were called

dollars, and the creditor was forced to accept them in payment of his

debts. They were themselves a forced loan, borrowed by compulsion from

the people, and constituting $433,000,000 in the total debts of the

United States in 1865.

The greenback element in the national debt threatened the integrity of

the whole. Should redemption take place at par, and at once, the credit

of the United States could not fail to be strengthened. But should the

greenbacks be allowed to remain below par, should more of them be

issued, or should the United States avail itself of its technical

privilege to pay off part of the bonded debt in "lawful money"

manufactured by the printing-press, the weakest item in the total might

easily depress the whole.

The future of American politics after 1865 was largely determined by the

methods through which the revenue had been increased and by the fate of

the greenbacks, but more important for the immediate future than either

of these was the great fact that in five years the United States had

been able to incur its net debt of $2,808,000,000, and had raised in

addition more than $700,000,000 through taxation. It was a prosperous

Union that emerged from the Civil War, and every region but the South

was strong in its conscious wealth.

The whole of the United States had shared in the unusual growth in the

period following the Mexican War, in which the new railroads were tying

the Mississippi Valley to the seaboard. The census of 1860 reported an

increase of 36 per cent in total population in ten years, somewhat

unevenly divided, since the Confederate area had increased but 25 per

cent, as compared with 39 per cent in the North and West, yet large

enough everywhere to keep up the traditions of a growing population. The

growth continued in the next decade, despite the Civil War. It is not to

be expected that it should have touched the record of the fifties, for

2,500,000 men were drawn from production for at least three years--the

three years in which most of them would have grown to manhood and

married, had there been no war. The South, desolated by war, and with

nearly every able-bodied white man in the ranks, stood still, with under

9 per cent increase. But the whole country grew in population from

31,443,321 to 38,558,371 (22 per cent), while the North and West, in

spite of war, grew 27 per cent,--more than the South had done in its

most brilliant decade.

How far the North and West would have gone had they not been hampered by

the depression after 1857 cannot be stated. These regions had suffered

most from the panic, since in them railroads and banks, factories and

cities, and all the agents of a complex industrial organization had been

most active. The industrial disturbance had disarranged for the time the

elaborate Northern system. The simpler South, with its staple crops, its

rural population, and its few railways, had suffered less. Southerners

before the war had seen in their immunity from the effects of panic a

proof of their superiority over other social orders; they had misread

the times and prophesied the disintegration of the industrial

organization of the North.

The South seceded before the rest of the United States emerged from the

panic period. In the next four years the treasury receipts show the

resources of the loyal States. Industry, recovered from its depression,

went ahead unnoticed in the noise of war, yet little impeded by the fact

of war.

Communication by rail brought the most significant of the single changes

into the Northern States. Before the panic of 1857 the trunk-line

railways had completed their net of tracks between the Mississippi and

tidewater. Nearly ten thousand miles had been built in the Old Northwest

alone in the ten preceding years. But the effect of this on business,

certain to come in any event, was not seen until secession closed the

Mississippi to the agricultural exports of the Northwest. For a part of

1861 and 1862 traffic piled up along the young railroads extending from

St. Louis and Chicago to Buffalo, Pittsburg, New York, and Philadelphia.

But before 1863 these lines, notably the New York Central, the Erie, and

the Pennsylvania, had adapted themselves to the trade which the South

had thrust upon them; and never since secession has New Orleans regained

her place as the great outlet of the Mississippi Valley.

The fundamental change in the direction of its trade added to the

prosperity of the North. In the additions to the transportation system,

made to accommodate the new business, new railroads were less prominent

than second tracks, bridges, tunnels, and terminal facilities. The

experimental years of railroading had passed before most of the lines

learned the importance of city terminals. The growth of the cities and

the rising price of land made the attainment of these more difficult

than they need have been, while city governments and their officials

learned that illicit profits could be made out of the necessities of the

railroads. The great lines, active in the development of their plants,

and consolidating during the sixties to get the benefits of unified

management, added to the bustle in the cities in the North.

[Illustration: THE RAILWAYS OF THE "OLD NORTHWEST"

Showing the development between 1848 and 1860, upon which the Civil War

prosperity of the region was based]

The United States was an agricultural country until the beginning of

manufacturing and the revolution in communication made it profitable to

concentrate people and capital in the cities. Between 1850 and 1880 the

number of cities with a population of 50,000 more than doubled. The

actual construction of the houses, the water and lighting systems, and

the sewers for these communities gave employment to labor. As cities

grew, their more generous distances brought in the street-car companies,

whose occupation of the public streets added to the temptations and

opportunities of the officials of government. The swelling manufactures

increased the city groups and gave them work.

The country life itself began to change. The typical farming families,

developed by pioneer conditions, had remained the social unit for

several generations, but these felt the lure of the cities which drew

their boys and girls into the factories. Domestic manufactures could not

compete in quality, appearance, or price with the output of the new

factories. The farmer began to give up his slaughtering and

butter-making, as he had already abandoned his spinning and weaving, and

devoted himself more exclusively to raising crops. Here, too, the

mechanical improvements touched his life. Agricultural machinery was

coming into general use, while the new railroads carried off his produce

to the great markets which the rising cities created.

The number of employees of American factories increased more than half

between 1860 and 1870, while the capital invested and the goods turned

out were more than doubled. The United States was for the first time

looking to a day when all the ordinary necessities of life could be made

within its limits. At Chicago, St. Louis, New York, Boston,

Philadelphia, and a host of cities in the interior, men were not

disturbed by the war in their attempt to exploit the abundant resources

of the continent. The manufacture of food began to shift from the

household to the city factory, to the advantage of the cities lying near

the great fresh areas of farm lands. The flour mills of the Northwest,

the meat-packing establishments at Chicago and elsewhere, the

distilleries of central Illinois, utilized the agricultural staples and

transformed them for export. The presence of factories forced upon the

city governments, East and West, already embarrassed by the pains of

rapid growth, the problems of police power and good government. Charters

written for semi-rural villages were inadequate when the villages became

cities.

Clothing, no less than food, passed into the factory, thanks to Elias

Howe and his sewing-machine and the shoe machinery of McKay. Before the

war the influences of this change were visible in the increasing demand

for cotton. Now came the great growth of the textile regions of the

East, around Fall River and Philadelphia, and of the shoe factories in

the Lynn district.

The use and manufacture of machines gave new stimulus to those regions

where coal and iron, placed conveniently with reference to

transportation, had fixed the location of smelters and rolling-mills. In

the middle of the sixties Henry Bessemer's commercial process for the

manufacture of steel marks the beginning of a revolution in the

construction of railroads and bridges, as well as in public and private

architecture. Pittsburg became the heart of the steel industry, and the

young men who controlled it fixed their hands upon the commercial future

of the United States. The newest of industries, the trade in petroleum

and its oils, reached fifteen millions in Pittsburg alone in 1864.

The trunk-line railways with their spurs and branches adjusted

themselves early in the war to the new direction of business currents.

They then began to carry the new inhabitants into the cities, the new

manufactures to their markets, and to press upon iron, coal, and timber

for their own supplies. Men of business laid the foundations of huge

fortunes in supplying the new and growing demands. The stock company,

with negotiable shares and bonds, made it possible for the small

investor to share in the larger commercial profits and losses.

The growth and elaboration of companies and commerce were projected upon

a legal system that was most accustomed to small enterprises and local

trade. Not only had the corporations to establish customs and precedents

among themselves, but courts, legislatures, and city councils had to

face the need for an amplification of American law. The speed with which

the new life swept upon the country, the inexperience of both business

men and jurists, the public ignorance of the extent to which the

revolution was to go, and the cross-purposes inevitable when States

tried to regulate the affairs of corporations larger than themselves,

make it unnecessary to search further for the key to the confusing

half-century that followed the Civil War.

The rapid changes in manufacturing, transportation, urban life, and

business law that came with the prosperity of the early sixties gave to

these years an appearance of materialism that has misled many observers.

None of the developments received full contemporary notice, for war

filled the front pages of the newspapers. The men who directed them were

not under scrutiny, and could hardly fail to bring into business and

speculation that main canon of war time that the end is everything and

that it justifies the means. But though war was not the sole American

occupation between 1861 and 1865, and though a new industrial revolution

was begun, material things often gave way in the American mind to

altruistic concepts and the service of the ideal.

Congress endowed the agricultural colleges in the early years of the

war, and the state universities, though thinned by the enlistment of

their boys, established themselves. The creation of new universities,

the endowment of older foundations, and the beginning of an education

that should fit not only for law, medicine, and theology, but for

business, agriculture, engineering, and teaching, all bear testimony to

the real interests of American democracy. The ideal was as yet far

removed from the fact, and the intellectual leaders of the United States

were yet to pass through a period of black pessimism, but the people

were still firm in their faith that education is the mainstay of popular

government, and gave their full devotion to both.

The four years of the Civil War carried the United States over a period

of social and economic transition and left it well started on the new

course. They enlarged and expanded the activities of government,

hastening that day when there should exist a public conviction that

government is a matter of technical expertness and must be run in a

scientific manner for the common good. They raised the problems of

taxation and currency to a new importance, and impressed their

significance upon the men who directed the industries of the country. In

their prosperity they made it possible to save the Union; and at their

close a Union party, uncertain of its strength and its personnel, faced

the problems of a united country which included an industrial North, a

desolated South, and a vanishing frontier.

BIBLIOGRAPHICAL NOTE

For further references upon the Civil War period, consult William E.

Dodd, _Expansion and Conflict_ (in this series), and F.L. Paxson, _The

Civil War_ (1911). The best and most exhaustive narrative is J.F.

Rhodes, _History of the United States from the Compromise of 1850 to the

Final Restoration of Home Rule at the South in 1877_ (7 vols.,

1892-1906), and this may be supplemented to advantage by E.D. Fite,

_Social and industrial Conditions in the North during the Civil War_

(1910). There is a convenient account of the election of 1864, with

platforms and tables of votes, in E. Stanwood, _A History of the

Presidency_ (1898) and there are many valuable documents in E.

McPherson's annual _Political Manual_. The biographies of W.H. Seward,

by F. Bancroft, and Jay Cooke, by E.P. Oberholtzer, are among the best

of the period. There are no better summaries of finances than D.R.

Dewey's _Financial History of the United States_ (1903, etc.); W.C.

Mitchell's _History of the Greenbacks_ (1903); and J.A. Woodburn's

_Thaddeus Stevens_ (1913). In the _Annual Cyclopaedia_ (published by D.

Appleton & Co., 1861-1902) are useful and accurate accounts of current

affairs. E.L. Godkin began to publish the _Nation_ in New York in the

summer of 1865, and H.V. Poore issued the first volume of his annual

_Manual of the Railroads of the United States_, in 1868.

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