Cronyism

CHAPTER 1

THE REPUBLICAN ASCENDANCY

The Corruption of Land

Strong ideological support for free markets and decentralization held back groups fighting for special privileges throughout most of early American history. Against the forces of government spoils who championed central banking, protectionism, consolidating infrastructure projects, federal supremacy, and foreign bellicosity, the libertarian contingent fought for hard money, free trade, privatized transportation, homesteading, states’ rights, and a noninterventionist foreign policy. But, disastrously, whenever the liberty-minded reformers ousted the favor seekers from office the levers of power incentivized the reformers to support their own cronyism. The proximate cause was always the same: land. In the words of one expansionist, “Land is the footstool of our power; land is the throne of our empire.”

The fate of the nation initially hinged on the battle between free-market Jeffersonian Republicans and interventionist Hamiltonian Federalists. After Thomas Jefferson won the presidency in 1800 and rolled back the judicial bureaucracy, taxes, and military expenditures, his desire to establish a limited confederation ran aground on the tantalizing opportunity to purchase France’s Louisiana Territory. Jefferson, though recognizing that the acquisition conflicted with his constitutional scruples, could not refuse five hundred million acres. He then embarked upon his own brand of favoritism to keep the swollen empire from breaking apart, including payments to land speculators, centralization of internal improvements, tariffs and mercantile protection, and plans to conquer Canada and Florida. By the War of 1812, Jefferson’s Republicans were indistinguishable from the Federalists they previously fought.

An “Era of Corruption” ensued in the following decade as the new National Republicans devised an American System of central banking, protectionism, public-works largesse, federal abrogation of settlers’ rights, and foreign aggression.By 1825 the situation had gotten so deplorable that Secretary of State John Quincy Adams and Speaker of the House Henry Clay bribed congressmen in an overtime House election to steal the presidency from the frontrunner, Senator Andrew Jackson, and give it to Adams. In the face of such flagrant corruption, Jackson allied with the politico Martin Van Buren to create a new Democratic Party devoted to restoring the old Jeffersonian laissez-faire ideology to counter the National Republicans’ growing cronyism.

Using executive vetoes, new free-market writings, and a partnership with British reformers, the Jacksonian presidents of the 1830s and 1840s triumphed over Clay’s interventionist Whig Party and dismantled the American System. Jacksonians eliminated the Second Bank of the United States, established the hard-money Independent Treasury, lowered protective tariffs, restrained federal government spending, and paid off the national debt. At the state level, the Democrats instituted various forms of free banking and enacted new state constitutions and general incorporation laws to weaken states’ ability to borrow, invest in public works, and grant restrictive corporate charters. According to Robert Kelley, by 1846 the Jacksonians, “shaped by the ideas of the Scotsman Adam Smith,” had achieved a “reasonably complete separation between government and business.”

The Jacksonian Democrats’ free-market reforms reduced government barriers to entry and other economic interventions. This enabled businesses to better allocate the country’s domestic pool of workers, new waves of immigrants, abundant natural resources, and growing levels of savings toward producing goods that consumers valued. Relatively freer competition in banking led to safer and more efficient banks compared to federal- and state-chartered monopolies. The move toward free trade allowed businesses to import less-expensive inputs, such as iron rails for the burgeoning railroad industry, and consumers to purchase lower-priced goods. Restraining the spending and debts of governments freed resources for private use, and private funds provided 75 percent of the investment for railroad infrastructure. Easier entry into railroading encouraged competition and innovation.

The institutional groundwork for a new Industrial Revolution had been laid. Businesses moved away from the water loom to the steam engine and produced in urban factories instead of artisanal shops. Railroads facilitated more of the nation’s commerce. The country’s manufacturing sector increased from 17 percent of commodity output in 1839 to 32 percent in 1859. Real gross domestic product per person, after rising 1 percent per year from 1820 to 1840 (the heyday of the American System), grew 1.7 percent each year over the next two decades. Real wages for common laborers similarly increased, from 1.7 percent per year in the earlier period to 2 percent per year from 1840 to 1860.

But right as the growth takeoff began, the political coalition that could maintain it fragmented. The old siren song of land returned, this time in the form of the independent Republic of Texas and Mexico’s possessions in the Southwest, especially California. Various special interests had long desired the two regions. Holders of Texas debt interested in a bailout, land speculators looking to monopolize the world’s cotton production, and plantation owners eager to make it harder for slaves to escape all wanted the Gulf of Mexico for the United States. Internationalist merchants and manufacturers, especially the Boston Associates in New England, sought ports on the Pacific Ocean to facilitate naval expansion and force trade into Asia. They reasoned that a government-sponsored transcontinental railroad would attach California to the American economy.

Land once again proved to be the reformers’ undoing when Jackson, who favored the expansion of slavery, and Van Buren, who opposed it, split on the question of Texas annexation in 1844. That split, writes Murray Rothbard, “symbolized the wider sectional rift within the Democratic Party,” and the rising issue of the western expansion of slavery “wreck[ed] the party and its libertarianism completely.”The Democratic Party now succumbed to the allure of territorial expansion, and Democratic president James K. Polk invaded Mexico in 1846 to capture western ports. During the land grab, the Democrats partnered with transcontinental railroad promoters, steamship magnates, and land speculators to bind together the extremities of the rapidly growing country. To assist with the financing costs, the party enlisted investment bankers eager to profit from selling the exploding federal debt. The reform coalition never recovered.

By the election of 1848, the Democratic Party had transformed into a proslavery organization dedicated to a vast program of internal improvements and aggressive naval expansion into Asia and the Caribbean. Van Buren lamented “the horrible corruption” that now existed, while another Democrat bemoaned the lack of “purity, [and] high devotion to principle.”With Whigs still itching to reestablish some revised version of the American System, no significant political party remained to fight special privileges. There were now only vying factions interested in their own forms of cronyism. The “decline of the Jacksonian party system and the slackened commitment to the issues on which it was formed,” writes Mark Summers, led to an environment ripe for capture by the multiplying groups of special interests.

Distributing the Conquests

The 1850s opened with enormous cronyism. Railroads demanded land grants, speculators lobbied for bailouts, investment bankers controlled the purse strings, and politicians of all parties stood ready to loot the taxpayer. Vying groups set aside their differences to join together in an immense defalcation of the public. Truly did the ruling caste constitute the “plundering generation.”

One issue loomed that had largely been absent in political debates until the annexation of Texas: the controversy around the expansion of slavery into the western territories. Disagreement, of course, threatened to delay any parceling out of the new conquests. The southern planter class grew increasingly worried that there were not enough government privileges to protect their peculiar institution: they thought Congress needed to strengthen fugitive slave regulations and make slavery permissible from coast to coast. Northerners had fought the extension of slavery in order to keep blacks out of the new territories and reserve the land for whites. Confining slavery to the South also facilitated the enactment of protective tariffs, which the free-trade South abhorred. Congress had resolved the matter in the Missouri Compromise of 1820, drawing a line through the middle of the country to determine where slavery would be sanctioned. The Mexican War, however, called into question how far west that line extended. After the conflict, when California petitioned to be admitted into the Union as a free state in 1849, plantation owners in the South feared that the handwriting was on the wall. They threatened secession.

Given the political climate, the issue would be resolved in only one way: not by forbidding slavery in the West or breaking the swollen empire up, but by Democrats and Whigs granting more privileges to slave owners along with other crony legislation to placate various competing groups. In the Compromise of 1850, Congress admitted California as a free state, providing solace to northern promoters of a transcontinental railroad. Congress also organized Utah and New Mexico into territories with the potential for slavery if settlers wanted it. While slave owners in the South worried about this so-called popular sovereignty and disapproved the compromise’s outlawing of the slave trade in the nation’s capital, Washington, DC, they received a prized desire: a new fugitive slave law. This regulation enormously strengthened slavery by creating a new class of federal court officers who possessed the power to conscript northerners into helping capture runaways. Fugitive slaves lacked the right to testify or receive a jury trial, and the law incentivized the new officers to rule against fugitives because they received $10 for deciding that a black person was a slave but only $5 for deciding the person was free.

The egregious protection of slavery, necessary for keeping southern plantation owners from seceding, was not the only cronyism in the compromise. Southerners won over a couple of Pennsylvania congressmen by agreeing to support some protective tariffs, while the Pennsylvania legislature responded by strengthening its enforcement of capturing fugitive slaves. New York did its part by voting for the compromise in the hope that Congress would increase appropriations for steamship subsidies to benefit local merchants.

Crucially, Texas and Illinois fought hard for monetary subsidies and land grants in the compromise: Texas received $10 million in taxpayer funds, and Illinois acquired a 2.5-million-acre land grant to build a railroad from Chicago to the Mississippi River. Of course, the actual beneficiaries were not the states’ citizens but rather speculators in Texas debt and railroad lobbyists in Illinois. Soon enough, Texas securities speculators received $7.75 million (78 cents on the dollar) from the US taxpayer, a windfall to those who bought bonds at just 12 cents. The federal government had picked winners and losers, diverting scarce funds from the public that could have been spent on private enterprise or consumption and redistributing them to political favorites who held Texas debt of dubious value.

The railroad interests received the bigger prize in the compromise: Illinois chartered the Illinois Central Railroad Company in 1851 to connect Chicago to the southern boundary of the state. Illinois, like many other states, had experienced disastrous consequences from its reckless debt-financed and monopoly-chartered infrastructure projects in the 1830s. For this reason, in 1848 Illinois adopted a new constitution that limited government investment and made it easier to open private corporations. The Illinois Central changed that: though the state did not directly invest in the railroad, it gave the company the entire federal land grant. This was an immense subsidy because the railroad did not have to homestead the land and could simply sell it to land speculators and settlers at high prices. Furthermore, the state granted the railroad a perpetual charter and agreed not to create a competitive railroad for fifty years, granting it a de facto monopoly. Once again, the government decided that it could do better than market forces. The good times lasted for a couple of years until the Panic of 1857 severely impacted the company, which had borrowed heavily from bankers, and almost drove it into bankruptcy.

The Illinois Central resembled the East Coast trunk lines—the large railroads being built and combined from smaller railroads to facilitate long-distance traffic to and from the Midwest. The Illinois Central and the trunk lines were the first truly big businesses in America. First, they were corporations owned by numerous stockholders. Second, they dwarfed other businesses: in the 1850s ten railroad corporations were capitalized at over $10 million, while the biggest textile and metal firms were capitalized at only $1 million. Third, railroads received funds from Wall Street, unlike manufacturing companies, which were much smaller and usually organized as partnerships and proprietorships that financed themselves internally. Fourth, the railroads exercised enormous political influence. They bribed politicians with free passes for transportation services and allied with members of the legal profession, who served as lobbyists and defended the companies in court. The Illinois Central, for example, established relationships with Senator Stephen Douglas of Illinois, a land speculator, and corporate lawyer Abraham Lincoln. The railroad behemoths would soon flex their economic and political muscles to acquire new political favors far greater than what was provided in the Compromise of 1850.

There was one mastermind behind the compromise who corralled all the contending plunderers. He was the Democrat W. W. Corcoran of Corcoran & Riggs, an investment bank in Washington, DC, that financed government and business projects. Corcoran, who earned $100,000 a year, seemed to benefit from every aspect of the compromise. When California later spent over $800,000 fighting Indian wars, Corcoran bought up the debt and then lobbied Congress to assume it, earning a 40 percent profit. A land speculator in the South, he wanted subsidies for slavery to protect the value of slave plantations. A heavy investor in Edward Collins’s subsidized steamships, Corcoran desired continued taxpayer assistance that encouraged the creation of large and inefficient vessels. Having purchased $140,000 of depreciated Texas securities, Corcoran bribed the United States secretary of the Treasury Thomas Corwin and former attorney general Reverdy Johnson to push the federal government to assume the debt at face value. Lastly, Corcoran invested in Illinois land purchases, and the Illinois Central asked him to help with financing. No wonder critics lamented: “What is the national legislature against Corcoran & Riggs’ office?”

Indeed, Corcoran was just getting started. Though he retired from his bank in 1854, his investments in government bonds, railroads, and land encouraged him to stay active in politics. Corcoran, his biographer notes, “relished the authority, the prestige, and above all the sense of being at the center of things.” Corcoran’s omnipresence marked a new age in Democratic politics, one of special-interest dominance.

In the election of 1852, Corcoran supported the Democratic lawyer Franklin Pierce of New Hampshire and made sure he would continue doling out spoils after he won: before the election Corcoran bought California debt for the presidential candidate and his secretary. Other special interests joined in. August Belmont, Corcoran’s occasional business partner and the Rothschilds’ investment banker in America, led New York City bankers and merchants to vote for Pierce. Amos Lawrence, brother of the prominent textile oligarch and Boston Associate Abbott Lawrence, maintained very close relations with Pierce. For the secretary of war position, Pierce chose a man reliable to the slave interests: Mississippi’s Jefferson Davis, the brother of one of the richest plantation owners in the South. With the Compromise of 1850 seemingly settling the slavery question, these groups looked forward to further rewards in the Pierce administration.

Transcontinental Peculations

Merchant and railroad interests desired military protection to assist worldwide American commerce and more land-grant munificence. They wanted naval and steamship appropriations to increase commercial trade overseas and transcontinental railroad subsidies to connect the country with the Pacific Ocean. Ruling elites hoped that these imperial interventions would increase their financial strength and enhance the United States’ power abroad. To their dismay, the slavery issue rose once more and this time prevented any further disbursement of special privileges.

August Belmont, who had become Pierce’s ambassador to the Netherlands, embraced all the special-interest policies. Belmont favored a powerful steam navy to protect American international commerce, a desire accomplished with the 57 percent increase in naval expenditures from 1852 to 1856. He waxed poetic about how his father-in-law, Commodore Matthew Perry, had been given “the greatest fleet which was ever appointed in peace times” to intimidate Japan into establishing trade relations with the United States.When it came to the coveted Caribbean trade, Belmont proposed a policy of financial pressure and military threats to strong-arm Spain into selling Cuba.

Belmont considered a transcontinental railroad the cornerstone of the United States’ economic policy. He wanted Congress and the private sector to join forces to establish American hegemony because “any nation which can secure to itself the trade of the East is sure to command the trade of the world.”Such a western transcontinental line, because it would be built far ahead of settler and business demand, would require a mountain of government assistance. Washington was eager to oblige. In March 1853, Congress authorized Secretary of War Jefferson Davis to survey potential railroad routes to the West Coast. Davis’s report established the feasibility of a northern route to the Puget Sound, a central line to San Francisco, and a track to southern California. The Pierce administration, eager to please southern expansionists, had already commissioned James Gadsden, a South Carolina railroad builder currently serving as the US Minister to Mexico, to purchase a strip of land from Mexico for $10 million so a railroad could be built from Texas to California.

Promoters of other transcontinental routes recognized what was going on: if the Pierce administration favored the southern route they could get left out in the cold. Senator Douglas, Belmont’s friend and chairman of the Senate Committee on Territories, held this view. An affiliate of the Illinois Central, Douglas heavily speculated in Chicago real estate and spent $11,000 to acquire lucrative lakefront property and thousands of acres near the railroad. Unsurprisingly, he openly advocated land grants “for commerce, and for the enhancement of the value of the lands.”Douglas wanted Congress to subsidize a transcontinental railroad along the proposed central route and make the eastern terminus near Chicago and the Illinois Central. But an enormous problem stood in the way—the unorganized territory to the west of Iowa and Missouri. If Douglas wanted to further enhance the value of his Chicago real estate with an east-to-west transcontinental railroad, he needed Congress to organize this land into territories. This would furnish land-grant lobbyists and territorial representatives favorable to his cause. Douglas demanded new territories fast, and he was willing to pay, whatever the cost.

When Douglas introduced into Congress in January 1854 a bill to organize the territories of Kansas and Nebraska, his avarice for a transcontinental railroad caused him to quickly acquiesce to southern demands to allow slavery in the territories if the settlers wanted it. In contrast to their position on the Compromise of 1850, slave owners now supported popular sovereignty because it could overthrow the Missouri Compromise’s dividing line. But Douglas’s momentous decision to sanction slavery in the proposed Kansas and Nebraska territories caused a seismic shift in the political landscape. The antislavery Democrats and Whigs bitterly complained about this latest appeasement to the slave interests, while the proslavery politicians proclaimed they would do battle until the end. Recognizing that his political strength lay in the South, Pierce threatened to withhold patronage from northern Democrats who opposed the measure, and he advocated a government contract to a New York steamship promoter as a sweetener for northern congressmen. When Pierce signed the Kansas-Nebraska Act into law in May, the South relished its victory.

It was a pyrrhic victory for Belmont, Douglas, and the Pacific railroad interests. Fierce fighting erupted in Kansas between proslavery and antislavery settlers, and the Pierce administration lost crucial northern support by siding with the South. The slavery issue once again threw into jeopardy all proposals for a transcontinental railroad and imperial visions, including Belmont’s machinations for Cuba. The controversy over slavery put global plans on hold indefinitely.

The nation’s political parties groaned and cracked under the pressure. The Whigs imploded. Southern Whigs, largely wealthy plantation owners eager for government aid, increasingly joined the proslavery Democrats while in the North, the Boston Associates and other procotton Whigs watched helplessly as antislavery Whigs left the party en masse. These antislavery Whigs and the northern Democrats opposed to slavery’s expansion created a new Republican Party dedicated to one unifying goal: stop the westward expansion of slavery and keep slaves in the South. The formation of the Republicans, named in honor of Jefferson’s party, was extremely significant: it was the last nail in the old political system’s coffin.

This turmoil did not yet rise to the level of presidential fervor. It was business as usual in the election of 1856. The Republican candidate, John Frémont, a transcontinental railroad promoter, lost handily to a longtime ally of Corcoran and Belmont, the Democrat James Buchanan. Corcoran even served as the president’s financial advisor, and Buchanan regularly visited his mansion across from the White House. The Buchanan administration, labeled the “Buchaneers” by its critics, promised to dole out plunder to its preferred railroad interests.This required sweeping the slavery issue under the rug.

The judicial branch came to the president’s rescue. Two days after Buchanan assumed office in March the Supreme Court ruled on an extremely relevant case. Infamously, the Supreme Court decided that the slave Dred Scott did not simply become a free person by his mere traveling to the free state of Illinois and free territory. In effect, the decision ruled the Missouri Compromise unconstitutional, stating that Congress lacked the power to prohibit slavery in any territory and implied that states did not possess the power to prohibit slavery within their borders. This apparent legalization of slavery nationwide enormously strengthened the institution. With the controversy over slavery seemingly settled by the high court, the door was open for Congress to finally grant transcontinental railroad subsidies.

There is evidence that individuals associated with the Illinois Central Railroad encouraged the Dred Scott decision in order to remove the slavery roadblock that had been preventing further federal largesse. The defendant was John F. A. Sanford, a prominent director of the Illinois Central and speculator in nearby land.Sanford was also the son-in-law of Pierre Chouteau Jr., a wealthy businessman who replaced Sanford on the Illinois Central’s board of directors. Corcoran was close with the Chouteau family and had engaged in business transactions with Pierre and his father. In addition, Corcoran, who was very sympathetic to the South’s peculiar institution, maintained close connections with one of the judges ruling in the majority, James Wayne of Georgia. “In light of these connections,” Philip Burch concludes, “it appears that Sanford could easily have been acting in the Dred Scott affair as the representative of various Northern business interests” that were eager to end concerns about the western expansion of slavery so they could get subsidies for a central transcontinental railroad.

If Sanford was doing the bidding of the northern business interests, they woefully miscalculated. The Dred Scott decision ignited the slavery controversy into a complete conflagration. It sabotaged plans for transcontinental largesse and territorial expansion in the Caribbean, infuriating Corcoran, Belmont, and Douglas. The case also accelerated the growth of the Republican Party. Unlike the Jeffersonian Republicans and Jacksonian Democrats, the new political organization did not serve as an effective reform coalition dedicated to removing special privileges. Although some old-line Democrats in favor of laissez-faire and other genuine antislavery activists joined the party, interests eager to facilitate pronorthern favoritism soon assumed control. Old forms of cronyism loomed on the horizon.

Return of the American System

The rise of the Republican Party portended an aggressive policy of coercive centralization and the reemergence of unified government in favor of a federal program of public works, aid to manufacturers, and monetary intervention. Henry Clay’s American System, the imperial program the Jacksonians had worked so hard to defeat, now reappeared with a vengeance. Without sufficient political opposition, nothing could stop it.

The Panic of 1857 transformed the Republicans from a party rallying against slavery’s extension to a supercharged Federalist-Whig coalition. The panic stemmed from commercial banks—deposit-taking and note-issuing institutions—increasing the money supply through fractional-reserve banking. Fractional-reserve banking is the practice of having more notes and deposits than what can be redeemed with gold, or specie, reserves. When banks make loans, they issue new notes or create new deposits for the borrower, even though the amount of reserves backing them has not gone up. This loan-making process, also known as credit expansion, increases the overall amount of notes and deposits in the economy and thereby increases the money supply.

In the late 1840s bank reserves began to increase sharply, ushering in a new burst of credit expansion. Gold flowed into the banking system after prospectors discovered new sources in California and the Treasury Department began to purchase government debt from banks with gold. Banks then expanded credit in concert because of a crucial regulatory flaw that existed in the free-banking systems: state-level prohibitions on opening branches across state lines that restricted where they could do business. Purely free competition among fractional-reserve banks incentivizes each bank to redeem other institutions’ notes and deposits for reserves, keeping credit expansions in check. The interstate branching prohibitions encouraged smaller banks to keep their reserves as balances in interest-bearing deposits at Wall Street banks as a way of diversifying their assets. The result was that Wall Street and interior banks both expanded on the same reserves rather than restraining each other’s credit expansion. Economists defined the resultant increase in the money supply as inflation, and the hard-money advocate Charles Holt Carroll wrote that “gold . . . [was] used as the basis of the greatest possible inflation by the banks.”Between 1848 and 1856 the money supply inflated 129 percent (11 percent per annum).

The credit expansion lowered the interest rates banks charged on loans and encouraged a boom in long-term production beyond the supply of available savings. Consequently, businesses borrowed to expand railroad construction, western land development, iron and coal production, manufacturing facilities, steamboat development, and even slave trading for plantation growth. But the inflation that propped up such unwise investments was not guaranteed to continue because the banking system was very unstable. If customers wanted to redeem deposits for notes, a customary practice during the fall harvesting season, the banking system had trouble meeting the demand. This was because of another defect in the extant free-banking systems: states’ requiring banks to insure the value of their notes with state government bonds in case they failed. This did not make banks safer and in fact hampered their ability to convert deposits into notes because in order to issue more notes they needed to purchase additional bonds. They paid out gold reserves instead. The declining confidence in banks’ specie reserves made them susceptible to bank runs.

When the Ohio Life Insurance and Trust Company, stuffed with unprofitable railroad investments, closed its doors in August 1857, the financial system imploded. Panic spread as customers ran to redeem notes and deposits for scarce gold reserves. Banks responded by suspending the payment of specie, despite being required to honor their contractual obligations. The credit crunch led to a business downturn that elevated unemployment, which contemporaries called a depression. Far from being an unmitigated evil, the depression phase of the business cycle was the necessary readjustment process: credit contraction spurred businesses to reallocate inputs away from the malinvestments and into production processes that the public’s supply of savings made feasible. Prices of factors of production that were bid too high during the boom, especially the wage rates of laborers, needed to be cut so the market could reemploy the resources. Thanks to the government practicing the same hands-off policy that it used during the Panics of 1819 and 1837, the depression readjustment barely affected economic growth.

According to the remaining Whigs, however, the solution was not to practice laissez-faire and let the market readjust on its own, but rather to reestablish “a National Bank and a Protective Tariff.”In other words, they advocated more credit expansion to create another unstable boom and the taxation of foreign competition to resuscitate overexpanded manufacturing businesses. Such policies would have hurt consumers and firms by causing another business cycle and making them pay higher prices for foreign goods. Initially, Republicans eschewed the American System’s central-banking plank because many hard-money ex-Jacksonians filled their ranks, including the New York Evening Post editor William Cullen Bryant and the Massachusetts economist and politician Amasa Walker. Cracks started to appear, however, when Governor Salmon P. Chase, a former Jacksonian Democrat turned Republican over the slavery issue, asked the Ohio legislature to reform its banking system and make banks back their notes with federal and not state bonds. While Ohioans shot down the proposal, Chase’s actions foreshadowed Republicans’ future monetary interventions.

The American System’s tariff privileges for manufacturers were more politically enticing for Republicans because of the crucial state of Pennsylvania. Tariff debates had become dormant at the federal level due to the free-trade Walker Tariff of 1846 and the desire of many businesses, who recognized that foreigners could more easily purchase American exports if they sold goods to United States customers, to expand into overseas markets. The political economist Henry Carey, however, saw an opening. Henry was the son of the ardent proponent of the American System Mathew Carey, and—like father, like son—served as the nation’s leading protectionist intellectual. Henry Carey shrewdly argued that it was the prevailing low tariff that caused the panic because it produced an outflow of specie reserves from banks. He desired the “reinauguration of protection as a part of the political platform”—that is, the granting of political privileges to firms that produced for the domestic market.Consequently, Carey organized the Home Protective Union in Philadelphia and helped Republicans win the ironmongering state in the 1858 midterm elections. Soon enough, manufacturers sent petitions to Congress, and the Republicans planned to use tariffs as a campaign pillar during the upcoming presidential election.

Nothing could stymie the protectionists. By 1860, ardent proslavery interests had finally destroyed the Democratic Party. When Senator Jefferson Davis pressed for a national slave code to protect the institution in the western territories, many northern Democrats decided they had had enough. At the party’s nominating convention in Charleston, northerners and southerners split and decided to run two separate tickets. Stephen Douglas, aided by the party’s new chairman, August Belmont, championed popular sovereignty, while Buchanan’s vice president, John Breckinridge of Kentucky, supported a federal slave code. Either way, the Democrats promised to strengthen slavery laws. Conditions were ripe for a Republican takeover.

All eyes turned toward the Republicans’ nominating convention in Chicago. The frontrunner was Senator William Seward of New York. But Republican politicos realized that a Seward-led ticket suffered from several weaknesses. First, Seward’s noted abolitionism hurt him in the moderate midwestern states of Illinois and Indiana, which had long discriminated against free blacks and wanted to stop only slavery’s westward expansion. Second, Seward favored immigration. The entry of foreigners had surged from 1845 to 1855, and many manufacturing workers were angry about the competition. Third, Seward was openly corrupt. The strong proponent of subsidies remained close to former Whig politico Thurlow Weed, the “King of the Lobby,” who helped the Third Avenue Railroad pay off New York City legislators for monopoly privileges.Seward’s liabilities left an opening.

Enter a relatively unknown man whom historians have turned into a demigod immune to any serious criticism: Abraham Lincoln. A failed contender for Douglas’s senate seat in 1858, Lincoln had relatively little political experience aside from serving as an Illinois state representative in the 1830s and a one-term congressman the following decade. In the 1850s, Lincoln was a tremendously successful attorney for the Illinois Central Railroad and other business concerns such as the Bank of Illinois and the Columbia Machine Manufacturing Company. Lincoln and the Illinois Central went hand in hand: he had served as a lobbyist for one of the factions wrangling for a railroad charter and frequently defended the company in legal disputes. In one case he billed the Illinois Central $5,000—an amount more than three times the governor’s salary. A Lincoln ticket had many advantages: Lincoln was a moderate on slavery and immigration, and the moniker “Honest Abe” helped cover up his questionable dealings and provided a useful contrast with other politicians.

Proponents of the American System’s third plank—transcontinental railroad subsidies—backed Lincoln. Railroads favored less expensive British-made iron, but they knew the protectionist was their best shot for federal subsidies. Norman Judd, an attorney for and director of the Chicago & Rock Island Railroad, engineered Lincoln’s campaign. Judd asked Grenville Dodge, an Iowa political leader and the assistant surveyor of the Chicago & Rock Island, to swing his state’s delegation to Lincoln. David Davis, a judge financially connected to the Illinois Central, provided crucial assistance by issuing a thousand counterfeit tickets to pack the Chicago convention with a Lincoln cheering section. Davis also shored up the Indiana and Pennsylvania delegations by promising Caleb Smith, the former president of the Cincinnati & Chicago Railroad, and Simon Cameron, a political boss associated with the Pennsylvania Railroad, cabinet positions.

With protectionists and many railroad interests firmly in the Lincoln camp, the Republicans injected the American System’s cronyism into its political platform. Specifically, the Republicans now championed a moderately protective tariff to shield domestic industry and a subsidized transcontinental railroad to integrate the home market. This suited Lincoln, a professed “old Henry Clay tariff Whig,” who had advocated railroad subsidies while serving in Congress.Against a divided Democratic Party, Lincoln swept the North while the southern Democrats won the Deep South. With the smallest popular vote percentage since the election of 1824 (less than 40 percent), and with only 2 percent of the votes in the South, the American System’s presidential candidate secured victory.

The Republican victory worried southern slave owners. Despite Lincoln professing a moderate stance on slavery and pledging to respect it in the South, slave owners refused to trust him. They believed that the South was now irrelevant in presidential elections and that through control of the postal service, military, and judicial patronage the Republicans could weaken the crony regulations protecting slavery’s foothold in the West and even the South. Slave owners especially fretted that slave insurrections would increase and runaways would be more successful with relaxed enforcement of the Fugitive Slave Act of 1850. In December, after the election, a state convention in slave-heavy South Carolina voted to secede from the Union, claiming that the “Slaveholding States will no longer have the power of self-government, or self-protection, and the Federal Government will have become their enemy.”Six other Deep South states (Mississippi, Florida, Alabama, Georgia, Louisiana, and Texas) followed suit. As Murray Rothbard underscores, this “secession was only ‘preventive,’ as Lincoln had given no indication of moving to repress slavery in the South.”

In February 1861, before Lincoln’s inauguration, delegates from the seceding states devised a constitution for the Confederate States of America. It replicated the US Constitution, save for more explicit protections of slavery and some limitations on government power which “turned out to be little more than cosmetic adornments.”Former US secretary of war Jefferson Davis became president, assisted by a cabinet and Confederate Congress that contained many former Whigs.

Far from strengthening slavery, the Confederacy’s mere existence considerably weakened it. Davis, along with many in the Confederate cabinet, had actually opposed secession for a simple reason: in the words of Davis’s future vice president, Alexander Stephens, “Slavery [is] much more secure in the Union than out of it.”They knew that the federal fugitive slave law immensely strengthened the institution by giving it national reach even into free states and making it much harder for slaves to escape to freedom. Crony state laws in the South that socialized the costs of owning slaves through mandatory tax-funded slave patrols and other restrictions could only go so far; nationalism provided the greatest protection to slavery. For this reason, William Lloyd Garrison and other northern abolitionists had long argued for northern secession.

In a profound sense, therefore, Lincoln should have let the South go if he wanted a peaceful and expedient end to slavery. But if there was one plank in the American System that the president-elect adored, it was the overriding commitment to aggressive nationalism befitting a transcontinental American empire. Since the days of the Revolutionary War special interests had long tried to consolidate the United States and weaken states’ sovereignty, and for good reason—states nullifying federal laws or choosing to exit a polity provides the ultimate bulwark against cronyism. Interstate and intercountry competition weakens taxes, subsidies, and discriminatory regulations. For example, northern manufacturers and shippers would lose the benefit of protectionist tariffs and navigation acts if southern states set their own tariffs and tonnage fees. Likewise, slave owners would forfeit valuable assistance in capturing runaway slaves if northern states refused to pass fugitive slave laws.

The American System depended on a unified domain, and Lincoln was determined to keep it that way. He even supported a constitutional amendment, the Corwin amendment, that prohibited federal interference with slavery. But the Confederacy still did not trust the Republican Party on the slavery question and desired a peaceful secession. When Lincoln assumed office in March, Davis offered to purchase Union forts, such as South Carolina’s Fort Sumter, and assume the South’s portion of the national debt.

Lincoln would have none of it. He decided to surreptitiously send armed relief to Fort Sumter, going against the advice of his military advisors, who thought Lincoln should abandon the post. But for Lincoln, such reprovisioning could goad the South into firing the first shot and thereby commence hostilities. When this occurred in April, Union propagandists were quick to present the Confederacy’s bombardment of the fort as an unprovoked attack, and many in the Mid-Atlantic sympathetic to secession turned against the South. Lincoln’s subsequent call for troops infuriated the remaining southern states: Virginia, Arkansas, North Carolina, and Tennessee seceded, along with slave-owning Indians in modern-day Oklahoma. Maryland, Missouri, Kentucky, and the Arizona territory might have seceded as well had Lincoln not occupied them with federal troops. However, the ardent opponent of self-determination was calculating enough to allow western Virginia to secede from Virginia and the Confederacy and join the Union as a new state because it contained part of the crucial Baltimore & Ohio Railroad.

With Lincoln applying the American System’s aggressive nationalism against states that wanted to peacefully secede, the die had been cast. The unpopular Civil War was extremely costly—it cut short more than seven hundred thousand lives, or over 2 percent of the total population of the North and South. At least five years of wealth accumulation were erased. The 1860s posted weak private-sector economic growth, and real income per capita fell by 3 percent during the decade. The South was politically and economically devastated. These harmful consequences exacerbated whites’ hostility toward blacks in both the North and the South.

As Lincoln’s campaign to conquer southern states dragged on, more and more northerners turned against him: midwesterners threatened secession while immigrants rioted against draft laws in New York City and other urban areas. Lincoln would likely have lost reelection in 1864 against the pro-negotiated-peace platform of the Democratic Party if his armies had not fortuitously sacked Atlanta in early September, thereby delivering a military victory that rapidly improved popular opinion of the president. It is true that the Republicans dealt a devastating blow to cronyism after the war by prohibiting slavery via the Thirteenth Amendment in 1865. But this could have been indirectly accomplished at a much lower cost by letting the Confederacy secede and repealing the Union’s proslavery regulations. The Confederacy would have hemorrhaged runaway slaves to the free North, which would no longer have to enforce fugitive slave laws. Slavery would have increasingly disappeared in the United States, as it was in the rest of the world where governments did not protect it.

Far from reducing cronyism during the Civil War, the Republicans ramped it up. Without the representation of southern Democrats in Congress, the northern Republicans now possessed enough power to force through the domestic planks of the American System: transcontinental land grants, protectionist tariffs, and quasi-central-banking regulations. These special favors were the building blocks for a government structure of widespread restrictions and subsidies, and they were up for sale to the interest groups willing to fight for them. Upon leaving for the presidency, Lincoln had told his law partner, William Herndon, that “the election of a President makes no change in the firm of Lincoln and Herndon.”There were many businesses on the sidelines looking for spoils and Lincoln did not disappoint.

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Caleb Cushing, “Address to the Essex Agricultural Society,” September 26, 1850, quoted in John M. Belohlavek, Broken Glass: Caleb Cushing and the Shattering of the Union (Kent, OH: Kent State University Press, 2005), 81.

Books of this scope typically provide only a bibliography and citations for direct quotations. To provide greater clarity, references are cited for each paragraph or, when closely related, after every few paragraphs. Unless otherwise noted, all percentages are rounded.

Patrick Newman, Cronyism: Liberty versus Power in Early America, 1607–1849 (Auburn, AL: Mises Institute, 2021), 121–201.

Robert Remini, Andrew Jackson, vol. 2, The Course of American Freedom, 1822–1832 (New York: History Book Club, 1998), 15.

Robert Kelley, The Cultural Pattern in American Politics: The First Century (New York: University Press of America, 1979), 158. Newman, Cronyism, 203–302.

Christopher J. Calton, “Monstrous Monopolies and Vicious Competition: The General Incorporation Movement in Nineteenth-Century America” (PhD diss., University of Florida, 2023), 189–212, 243; Albert Fishlow, “Internal Transportation in the Nineteenth and Early Twentieth Centuries,” in The Cambridge History of the United States, ed. Stanley L. Engerman and Robert E. Gallman (New York: Cambridge University Press, 2000), 2:574, 576–77, 579–80; Douglas A. Irwin, Clashing over Commerce: A History of US Trade Policy (Chicago: University of Chicago Press, 2017), 193–202; Richard Sutch and Susan B. Carter, eds., Historical Statistics of the United States, vol. 1, Population (New York: Cambridge University Press, 2006), 524–25; Richard Sutch and Susan B. Carter, eds., Historical Statistics of the United States, vol. 3, Economic Structure and Performance (New York: Cambridge University Press, 2006), 291–92; John Joseph Wallis, “Constitutions, Corporations, and Corruption: American States and Constitutional Change, 1842 to 1852,” Journal of Economic History 65, no. 1 (March 2005): 244–47; and Eugene N. White, “To Establish a More Effective Supervision of Banking: How the Birth of the Fed Altered Bank Supervision,” in The Origins, History, and Future of the Federal Reserve, ed. Michael Bordo and William Roberds (New York: Cambridge University Press, 2013), 30.

Jeremy Atack and Peter Passel, A New Economic View of American History, 2nd ed. (New York: W. W. Norton, 1994), 191–200; Louis Johnston and Samuel H. Williamson, “What Was the U.S. GDP Then?,” MeasuringWorth (accessed October 7, 2024), https://www.measuringworth.com/datasets/usgdp12/; David R. Meyer, The Roots of American Industrialization (Baltimore: Johns Hopkins University Press, 2003), 126–35; Lawrence H. Officer and Samuel H. Williamson, “Annual Wages in the United States, Unskilled Labor and Manufacturing Workers, 1774–Present,” MeasuringWorth (accessed October 7, 2024), https://www.measuringworth.com/datasets/uswage/; Sutch and Carter, Historical, 3:158; and Richard Sutch and Susan B. Carter, eds., Historical Statistics of the United States, vol. 4, Economic Sectors (New York: Cambridge University Press, 2006), 916.

Murray N. Rothbard, For a New Liberty: The Libertarian Manifesto, 2nd ed. (Auburn, AL: Ludwig von Mises Institute, 2006), 9–10.

Newman, Cronyism, 303–330.

Van Buren to Francis Blair, July 15, 1851, quoted in Mark Wahlgren Summers, The Plundering Generation: Corruption and the Crisis of the Union, 1849–1861 (New York: Oxford University Press, 1987), 186; and David Wilmot to E. O. Goodrich, 1851, quoted in Charles Buxton Going, David Wilmot, Free Soiler: A Biography of the Great Advocate of the Wilmot Proviso (New York: Appleton, 1924), 434.

Summers, Plundering, 16.

Summers, Plundering, 1.

Jeffrey Rogers Hummel, Emancipating Slaves, Enslaving Free Men: A History of the American Civil War (Chicago: Open Court, 2002), 53–55, 91; Kelley, Cultural, 221; and Newman, Cronyism, 124–25, 237–43, 307–10.

Hummel, Emancipating, 91–94; and Sandra K. Lueckenhoff, “A. Lincoln, a Corporate Attorney and the Illinois Central Railroad,” Missouri Law Review 61, no. 2 (Spring 1996): 410.

Summers, Plundering, 222–23.

Hummel, Emancipating, 93; and Summers, Plundering, 203–4.

Philip H. Burch Jr., Elites in American History, vol. 1, The Federalist Years to the Civil War (New York: Holmes and Meier, 1981), 215, 217, 226; Philip H. Burch Jr., Elites in American History, vol. 2, The Civil War to the New Deal (New York: Holmes and Meier, 1981), 16–17; Calton, “Monstrous,” 189–212, 243; Henry Cohen, Business and Politics in America from the Age of Jackson to the Civil War: The Career Biography of W. W. Corcoran (Westport, CT: Greenwood, 1971), 166; Lueckenhoff, “Lincoln,” 410–14; Newman, Cronyism, 298–99; Murray N. Rothbard, The Progressive Era, ed. Patrick Newman (Auburn, AL: Mises Institute, 2017), 92–93; Aaron M. Sakolski, The Great American Land Bubble: The Amazing Story of Land-Grabbing, Speculations, and Booms from Colonial Days to the Present Time (New York: Harper and Brothers, 1932), 278, 280–84; John F. Stover, “Illinois Central Railroad,” in Encyclopedia of American Business History and Biography: Railroads in the Nineteenth Century, ed. Robert L. Frey (New York: Facts on File, 1988), 193–94; Summers, Plundering, 101; and Wallis, “Constitutions,” 214–17, 219, 249–52.

“Postscript,” New York Evening Post, Sept. 7, 1850, 3. Burch, Elites, 1:199, 226–27; Cohen, Business, 94–96, 99, 115–17, 121, 140–44; Mark L. Goldstein, Before the Gilded Age: W. W. Corcoran and the Rise of American Capital and Culture (Washington, DC: Georgetown University Press, 2023), 49–50, 55–62, 91–96; and Summers, Plundering, 91, 104–6, 186–87, 220–21.

Cohen, Business, 99.

David Black, The King of Fifth Avenue: The Fortunes of August Belmont (New York: Dial Press, 1981), 52, 238; Burch, Elites, 1:202–4; Cohen, Business, 64, 143, 209, 361; Yonatan Eyal, The Young America Movement and the Transformation of the Democratic Party, 1828–1861 (New York: Cambridge University Press, 2007), 36, 225; and Goldstein, Gilded, 96–97.

August Belmont to Simon Belmont, January 1852, quoted in Black, King, 83.

August Belmont to Merchants of New York, August 12, 1853, quoted in Letters, Speeches, and Addresses of August Belmont (Privately Printed, 1890), 6.

Black, King, 91, 132–33; Dee Brown, Hear That Lonesome Whistle Blow: The Epic Story of the Transcontinental Railroads (New York: First Owl Books, 2001), 34; Eyal, Young, 36–40, 138, 169; Robert L. Frey, Introduction to Frey, Encyclopedia, xix; Irving Katz, August Belmont: A Political Biography (New York: Columbia University Press, 1968), 23–24, 44; Walter Nugent, Habits of Empire: A History of American Expansion (New York: Vintage Books, 2008), 218; John H. Schroeder, Shaping a Maritime Empire: The Commercial and Diplomatic Role of the American Navy, 1829–61 (Westport, CT: Greenwood Press, 1985), 121–33; Richard Sutch and Susan B. Carter, eds., Historical Statistics of the United States, vol. 5, Governance and International Relations (New York: Cambridge University Press, 2006), 92; and Richard White, Railroaded: The Transcontinentals and the Making of Modern America (New York: W. W. Norton, 2011), xxiv–xxvii, 17.

Congressional Globe, 33rd Congress, 1st Session, May 3, 1854, 1067.

Burch, Elites, 1:205–6, 229–30; Cohen, Business, 172; Eyal, Young, 13, 51, 70–71, 77, 221–22; Katz, Belmont, 56; and Summers, Plundering, 207–12.

Robert F. Dalzell Jr., Enterprising Elite: The Boston Associates and the World They Made (Cambridge, MA: Harvard University Press, 1987), 216–19; Hummel, Emancipating, 107–11, 117; Katz, Belmont, 44; Kelley, Cultural, 179–81, 196, 212, 240; Rothbard, Progressive, 113; Summers, Plundering, 211–14; and Sean Wilentz, The Rise of American Democracy: Jefferson to Lincoln (New York: W. W. Norton, 2005), 679.

“What is the Difference?” Indiana Herald, June 30, 1858, 2.

Cohen, Business, 142, 204–5; Janet L. Coryell, “W. W. Corcoran,” in Encyclopedia of American Business History and Biography: Banking and Finance to 1913, ed. Larry Schweikart (New York: Facts on File, 1990), 149; James L. Huston, The Panic of 1857 and the Coming of the Civil War (Baton Rouge: Louisiana State University Press, 1987), 12–13; Katz, Belmont, 50–57; Newman, Cronyism, 327; Summers, Plundering, 239–42; and Wilentz, Rise, 693–702.

Sanford’s name was misspelled as “Sandford” in the court case.

Burch, Elites, 1:214. Burch, Elites, 1:213–14, 233–34; Cohen, Business, 113, 121, 136, 156; Goldstein, Gilded, 90; Hummel, Emancipating, 112–14; Huston, Panic, 12–13; and Arthur M. Johnson and Barry E. Supple, Boston Capitalists and Western Railroads: A Study in the Nineteenth-Century Railroad Investment Process (Cambridge, MA: Harvard University Press, 1967), 130, 132, 134, 149–51.

Kelley, Cultural, 198, 202, 212–13; and Murray N. Rothbard, “Report on George B. DeHuszar and Thomas Hulbert Stevenson, A History of the American Republic, 2 vols.,” in Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard, ed. David Gordon (Auburn, AL: Ludwig von Mises Institute, 2010), 126–27.

Charles Holt Carroll, “Organization of Debt into Currency,” August 1858, in Organization of Debt into Currency and Other Papers (New York: Arno Press, 1972; repr., Auburn, AL: Ludwig von Mises Institute, 2007), 91.

Michael F. Bryan, “On the Origin and Evolution of the Word Inflation,” Federal Reserve Bank of Cleveland Economic Commentary, October 15, 1997, 2; Huston, Panic, 13; Patrick Newman, “The Origins of the National Banking System: The Chase-Cooke Connection and the New York City Banks,” Independent Review 22, no. 3 (Winter 2018): 394; Joseph T. Salerno, “Money and Gold in the 1920s and 1930s: An Austrian View,” in Money, Sound and Unsound (Auburn, AL: Ludwig von Mises Institute, 2010), 422–25; Sutch and Carter, Historical, 3:601; and Richard H. Timberlake, Monetary Policy in the United States: An Intellectual and Institutional History (Chicago: University of Chicago Press, 1993), 77–82.

Charles W. Calomiris and Larry Schweikart, “The Panic of 1857: Origins, Transmission, and Containment,” Journal of Economic History 51, no. 4 (December 1991): 809–24; Olivier Darné, Amélie Charles, and Claude Diebolt, “A Revision of the US Business-Cycles Chronology 1790–1928,” Economics Bulletin 34, no. 1 (2014): 238; Huston, Panic, 13–14, 23, 29, 32, 39, 54; Johnston and Williamson, “GDP”; Stanley Lebergott, “Changes in Unemployment, 1800–1960,” in The Reinterpretation of American Economic History, ed. Robert W. Fogel and Stanley L. Engerman (New York: Harper and Row, 1971), 79; Newman, “Origins,” 399; Sutch and Carter, Historical, 3:601; Mark Thornton and Robert B. Ekelund Jr., Tariffs, Blockades, and Inflation: The Economics of the Civil War (Wilmington, DE: Scholarly Resources, 2004), 109; and Paul B. Trescott, Financing American Enterprise: The Story of Commercial Banking (New York: Harper and Row, 1963), 37.

“A National Bank and a Protective Tariff,” Daily National Intelligencer, October 31, 1857, 2.

Frederick J. Blue, Salmon P. Chase: A Life in Politics (Kent, OH: Kent State University Press, 1987), 116; Huston, Panic, 43–45, 71; Newman, Cronyism, 293; Newman, “Origins,” 385; Lindsay Schakenbach Regele, Manufacturing Advantage: War, the State, and the Origins of American Industry, 1776–1848 (Baltimore: Johns Hopkins University Press, 2019), 144–45; Murray N. Rothbard, An Austrian Perspective on the History of Economic Thought, vol. 2, Classical Economics (Auburn, AL: Ludwig von Mises Institute, 2006), 466–67; and William G. Shade, Banks or No Banks: The Money Issue in Western Politics, 1832–1865 (Detroit: Wayne State University Press, 1972), 216–17.

Henry Carey to John McLean, June 26, 1858, quoted in George Winston Smith, Henry C. Carey and American Sectional Conflict (Albuquerque: University of New Mexico Press, 1951), 73.

Huston, Panic, 77–78, 135–36, 142–44; and Daniel Peart, Lobbyists and the Making of US Tariff Policy, 1816–1861 (Baltimore: Johns Hopkins University Press, 2018), 182–89.

Burch, Elites, 2:50; Hummel, Emancipating, 129–30; Huston, Panic, 235–36; Kirk Porter and Donald Johnson, National Party Platforms: 1840–1960 (Urbana: University of Illinois Press, 1961), 30–31; and Summers, Plundering, 273–74.

“Thurlow Weed Going to Georgia,” New York Daily Herald, May 17, 1857, 4.

“The Nominations,” Chicago Tribune, May 23, 1860, 2. Bruce Bueno de Mesquita and Alastair Smith, The Spoils of War: Greed, Power, and the Conflicts That Made Our Greatest Presidents (New York: Public Affairs, 2016), 103–7, 112–13; Burch, Elites, 2:50; Huston, Panic, 8–9; Kathryn Allamong Jacob, King of the Lobby: The Life and Times of Sam Ward, Man-about-Washington in the Gilded Age (Baltimore: Johns Hopkins University Press, 2010), 16–17; Lueckenhoff, “Lincoln,” 394–95, 399–400, 409–11, 413–14, 419–26; Newman, Cronyism, 238, 308; Summers, Plundering, 148, 230–31, 266–73; and Sutch and Carter, Historical, 3:524–25.

Brown, Hear, 6, 49; Bueno de Mesquita and Smith, Spoils, 113; Burch, Elites, 2:19, 23, 43–44, 48, 51; Charles Fairman, “Mr. Justice Bradley’s Appointment to the Supreme Court and the Legal Tender Cases,” Harvard Law Review 54, no. 6 (April 1941): 987; and Summers, Plundering, 271.

Abraham Lincoln to Edward Wallace, October 11, 1859, in The Collected Works of Abraham Lincoln, ed. Roy Basler, vol. 3, 1858–1860 (New Brunswick, NJ: Rutgers University Press, 1953), 487.

Bueno de Mesquita and Smith, Spoils, 96; Eyal, Young, 50; Michael F. Holt, The Election of 1860: A Campaign Fraught with Consequences (Lawrence: University Press of Kansas, 2017), 194–95; Hummel, Emancipating, 130–31; Huston, Panic, 238, 244, 256; Phillip W. Magness, “Morrill and the Missing Industries: Strategic Lobbying Behavior and the Tariff, 1858–1861,” Journal of the Early Republic 29, no. 2 (Summer 2009): 320–21; Peart, Lobbyists, 188–89; and Porter and Johnson, Platforms, 33.

“Declaration of Causes Which Induced the Secession of South Carolina,” December 24, 1860, quoted in Hummel, Emancipating, 131.

Rothbard, “Report,” 127.

Richard Franklin Bensel, Yankee Leviathan: The Origins of Central State Authority in America, 1859–1877 (New York: Cambridge University Press, 2003), 100.

Thomas J. DiLorenzo, The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War (New York: Three Rivers Press, 2003), 90, 123–24; Hummel, Emancipating, 105, 131–37, 151; Kelley, Cultural, 242–43; and John Majewski, Modernizing a Slave Economy: The Economic Vision of the Confederate Nation (Chapel Hill: University of North Carolina Press, 2009), 147.

Alexander Stephens to J. Smith, July 10, 1860, quoted in Hummel, Emancipating, 353.

Bensel, Yankee, 63; Bueno de Mesquita and Smith, Spoils, 110, 133; DiLorenzo, Real, 294–300; Hummel, Emancipating, 131–35, 353–54; Phillip W. Magness, “A Paradox of Secessionism: The Political Economy of Slave Enforcement and the Union,” in Public Choice Analyses of American Economic History, ed. Joshua Hall and Marcus Witcher (Cham, Switz.: Springer, 2018), 1:53–68; Jim Powell, Greatest Emancipations: How the West Abolished Slavery (New York: Palgrave Macmillan, 2008), 135, 237–45; Sheldon Richman, “The Anti-war Abolitionists: The Peace Movement’s Split over the Civil War,” Journal of Libertarian Studies 5, no. 3 (Summer 1981): 328; Rothbard, “Report,” 127; and Thornton and Ekelund, Tariffs, 106–9.

Bueno de Mesquita and Smith, Spoils, 133–34; Daniel W. Crofts, Lincoln and the Politics of Slavery: The Other Thirteenth Amendment and the Struggle to Save the Union (Chapel Hill: University of North Carolina Press, 2016); Phillip W. Magness, review of Lincoln and the Politics of Slavery: The Other Thirteenth Amendment and the Struggle to Save the Union, by Daniel W. Crofts, Reviews in History, no. 2063 (February 2017); and Newman, Cronyism, 55–56, 64–65, 124–30, 237.

Bueno de Mesquita and Smith, Spoils, 134; John V. Denson, “Lincoln and the First Shot: A Study of Deceit and Deception,” in Reassessing the Presidency: The Rise of the Executive State and the Decline of Freedom, ed. John V. Denson (Auburn, AL: Mises Institute, 2001), 231–88; David Detzer, Allegiance: Fort Sumter, Charleston, and the Beginning of the Civil War (New York: Harcourt, 2001), 210–53; DiLorenzo, Real, 101–10, 139; Ivan Eland, Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty (Oakland, CA: Independent Institute, 2009), 117–19; and Hummel, Emancipating, 137–47, 153, 155, 176.

Bueno de Mesquita and Smith, Spoils, 94; Thomas C. Cochran, “Did the Civil War Retard Industrialization?,” in The Economic Impact of the American Civil War, ed. Ralph Andreano (Cambridge, MA: Schenkman, 1962); Hummel, Emancipating, 234–35, 322; and Powell, Emancipations, 222–35.

Bueno de Mesquita and Smith, Spoils, 111; Hummel, Emancipating, 253–54, 291–92, 352–53; Lueckenhoff, “Lincoln,” 397–98; Powell, Emancipations, 237–45; and Jennifer L. Weber, Copperheads: The Rise and Fall of Lincoln’s Opponents in the North (New York: Oxford University Press, 2006), 27–28, 35–36, 79–81, 101–13, 157–58, 176–80.

Abraham Lincoln, quoted in John Duff, A. Lincoln: Prairie Lawyer (New York: Bramhall House, 1960), 104. Brian Dirck, Lincoln the Lawyer (Chicago: University of Illinois Press, 2009), 151; and Lueckenhoff, “Lincoln,” 398.