Friday, October 19, 2012

Lincoln and Finance

This is a neat piece on how Lincoln changed American finance and there are some good articles linked here:
Entering office at the dawn of the Civil War, President Abraham Lincoln faced extraordinary challenges. Everything about the war was contentious including finding the means to finance it. In addition to raising $3 billion to fight the Confederacy, Lincoln and his Treasury Secretary, Salmon P. Chase, had the added challenge of financing the war in a way that was perceived equitable across the polarized nation. They were responsible for a nation that also lacked a stable financial infrastructure without a central bank, a national banking system, a national currency or a means for collecting internal federal taxes.

Lincoln and Chase’s financial legacy was tremendous, as they created innovative ways to collect federal revenues that are still used today. New taxes, such as the first income and inheritance tax, were introduced in the war years, along with new excise taxes. Also, for the first time since the Revolution, the federal government printed its own money, called greenbacks, and took the first steps toward creating a national regulatory system for banks. Bond drives were organized to sell securities to laypeople and immigrants to raise money for the war while uniting the Union states. By the war’s end, the Union raised about two-thirds of its money through loans, and about a quarter by increasing tariffs and taxes.

There are also some really neat objects linked as well.

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