Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War

When Abraham Lincoln assumed the presidency in 1861, federal coffers were practically empty. The country’s finances had been left in shambles by the administration of James Buchanan, who had unsound fiscal and monetary policies and feared that his treasury secretary held Southern sympathies. In this enlightening work of economic history, financial journalist Lowenstein (America’s Bank) explores the massive transformation of U.S. finances under the tenure of Lincoln and his Secretary of the Treasury Salmon P. Chase. For instance, during the Civil War, the federal government successfully implemented the first-ever income tax, to pay for the mounting war costs. Other firsts included the federal government taking on massive amounts of debt from bond issues; the establishment of a fiat paper currency issued by national banks; and the solidifying of Wall Street as the nation’s financial hub. Chase and Lincoln’s fractious relationship is on full display here, including Chase’s multiple threats to resign and his pursuit of the presidency before and after Lincoln’s tenure. Lowenstein details the Confederacy’s missteps as it tried to raise money, as well as the federal blockade’s stranglehold on Southern ports and shipping.