Fateful Lightning: A New History of the Civil War & Reconstruction by Allen Guelzo (self help books to read TXT) 📕

of the armies than the private railroad companies that Stanton harnessed to the Union war effort. All told, the federal government handed rail corporations 158 million acres of public lands and more than $64 million in federal bonds to underwrite construction. By the 1870s, one-third of all the iron being manufactured in the United States went into rails. The same story was repeated on the state level, especially in the South. The Southern rail system staged an astonishing recovery, with much of the rolling stock being provided by demobilization sales of locomotives and cars by the U.S. Army’s military railroad system. “Nine-tenths of the railroads in the South are now in operation,” announced Scientific American at the close of 1866, “consisting of ninety roads with aggregate length of 8,170 miles.” That, in turn, created a host of large-scale subsidiary industries in machines and tools that helped make the great ironworks (such as the Phoenix Ironworks) immensely profitable, but that left the small-scale prewar mills dropping ever further behind.8

Yet even the boost given to the railroads by the war was tangential rather than direct; it was not so much the war as the free hand a Republican Congress was given in 1862 to fund railroad construction that put new sources of wealth behind the railroad industry. Any other excuse to override Democratic opposition to such “internal improvements” would probably have produced the same result. Northern agriculture and Northern finance benefited far more from the war than did Northern industry and Northern railroads. The outbreak of the war and its demands for foodstuffs neatly coincided with the mass introduction in the late 1840s and 1850s of mechanical seeders, steel plows, and McCormick reapers (250,000 of them were in use by the end of the war), and the potent combination of wartime demand and machine-based productive capacity combined to swell the production of Northern wheat and oats by 35 percent, Northern wool by 66 percent, and Northern potatoes by 28 percent; exports of wheat, even during the war, doubled over prewar export levels, as did exports of pork and corn. Moreover, Northern wartime price inflation helped Northern farmers pay off their land indebtedness with cheap greenbacks, and doubled land values in major western states such as Illinois and Iowa. “Creditors were running away from debtors,” smirked William McCormick, of the reaper family, “who pursued them in triumph and paid them without mercy.”9

Northern financiers benefited in even more remarkable ways. The seven Democratic administrations that straddled the first six decades of the nineteenth century gave little if any encouragement to the development of American finance by holding the government’s role in the economy strictly to exchanges of specie. A good deal of the capitalization of American industry in the 1820s and 1830s had to be imported from abroad. But the war and the Republicans changed that: first, the threat of the civil war drove foreign investors off the American securities market, drove down demand, and allowed American investors to step into the vacuum; then, the Republicans dismissed the Democrats’ abiding suspicion of the financial markets and took the nation off the gold standard; finally, the immense amounts of money needed to carry on the war created a new class of financiers—bankers, insurers, and brokers such as Jay Cooke—who dealt in unprecedented volumes of cash and securities. The creation of the national banking system in 1863, and the subsequent disappearance of state bank currencies from Northern circulation, helped to further shift massive new amounts of financial power in the hands of financiers.10

Yet even these entries on the profit side of the war’s ledger were mottled with failures and ambiguities. Northern finance quickly outstripped the capacity of the Federal government to oversee and regulate it, and the financial community soon found itself agitating for a return to the gold standard, not to restrain the freewheeling dealings of the financial markets, but to slow down currency inflation and attach the markets to a standard independent of federal control. This meant, in effect, returning the United States to its dependence on the international flow of specie, especially through the hands of British financiers, and when the British financial markets failed in 1873, they carried Jay Cooke and the other American financiers down with them.

The Panic of 1873 hit agriculture the hardest. The farmers who had rashly expanded westward on the balloon of increased wartime production and cost-free homesteading now suddenly found themselves tied to distant markets where their goods sold for less and less. The dream of easy landownership promised by the Homestead Act in 1862 opened the spigots for emigration westward: Montana, which was organized as a territory in 1864, saw its population balloon from 21,000 in 1870 to 143,000 by 1890; Kansas, which was the source of so much grief before the Civil War, was admitted as a state in 1864 with less than 110,000 inhabitants, but by 1890 it had more than 1.4 million. By 1886 the North American Review concluded that “for all practical purposes of bestowing free farms on its growing population, the public domain of the United States is now exhausted.”11

What the Homestead Act did not tell these hopeful settlers was that the lands of the Great Plains contained some of the most arid, inhospitable, and useless agricultural soils in the world. The weather veered unpredictably from baking hot to freezing cold, and the wind howling across the unforested prairie was enough to drive the isolated mad. “On every hand the treeless plain stretches away to the horizon,” wrote one traveler in 1893; “one mile of it is almost exactly like another,” and “when the snow covers the ground the prospect is bleak and dispiriting.” And the land itself was difficult and intractable to farm: “Some savage quality must be taken from the ground by cultivation.” And that was in the best of times. The winter of 1886 was appallingly severe in the West, freezing hundreds of thousands of cattle in enormous snowdrifts, and in the summer of 1887 drought killed off