Why the Republican Party Elected Lincoln
by Thomas J. DiLorenzo
by Thomas J. DiLorenzo
It is occasionally possible to see through the fog of mysticism, superstition, lies, and the romantic, happy-faced, floating butterfly vision of Abraham Lincoln that has been created by American court historians over the past century. One place to begin is the gem of a book by Pulitzer prize-winning Lincoln biographer David Donald entitled Lincoln Reconsidered. In a particularly important passage Donald quotes Senator John Sherman of Ohio, the brother of General William Tecumseh Sherman and Republican Party powerhouse from the 1860s to the 1890s who was chairman of the U.S Senate Finance Committee during the Lincoln administration, on why the Republican Party nominated and elected Abraham Lincoln.
"Those who elected Mr. Lincoln expect him . . . to secure to free labor its just right to the Territories of the United States; to protect . . . by wise revenue laws, the labor of our people; to secure the public lands to actual settlers . . . ; to develop the internal resources of the country by opening new means of communication between the Atlantic and Pacific."
Donald then claims to translate this statement "from the politician's idiom" into plain English. Lincoln and the Republican Party "intended to enact a high protective tariff that mothered monopoly, to pass a homestead law that invited speculators to loot the public domain, and to subsidize a transcontinental railroad that afforded infinite opportunities for jobbery."
This is what is so refreshing about David Donald, the best and most honest of all the mainstream "Lincoln scholars." He understood that "wise revenue laws" meant a 47 percent tariff on imports that would plunder the Southern states especially severely; he understood that "free labor" meant white labor, and protecting the white race's "just right to the territories" meant disallowing labor market competition from either slaves or free blacks. At the time, the small number of free blacks in the North had no real citizenship rights and some states, like Lincoln's Illinois, had amended their constitutions to make it illegal for blacks to move into the state.
Donald also understood that "developing the internal resources of the country" was a euphemism for the colossal corruption that would inevitably accompany massive federally-funded subsidies to railroad corporations.
The financial powers behind the Republican Party in 1860 were the Northern railroad barons, Northern manufacturers who wanted protectionist tariffs to protect them from competition, and Northern bankers and investors like Jay Cooke who wanted to use their political connections to make a killing financing a transcontinental railroad (among other schemes, such as central banking). They decided at the Chicago Republican National Convention of 1860 that Abraham Lincoln was the perfect political front man for their corrupt, mercantilist agenda.
The Great Railroad Lobbyist
From the time he entered politics in 1832, Abraham Lincoln aspired to such a position. That is why he became a Whig, the party of the moneyed elite. Lincoln was one of the most money- and power-hungry politicians in American history. (Indeed, this would seem to be a prerequisite for anyone who is capable of being elected president).
As soon as he entered the Illinois legislature he led his local delegation in a successful Whig Party effort to appropriate some $12 million in taxpayer subsidies for railroad and canal-building corporations. In his landmark book, Lincoln and the Railroads, first published in 1927 and reprinted in 1981 by Arno Press, John W. Starr, Jr. noted how one of Lincoln's colleagues in the legislature said "He seemed to be a born politician. We followed his lead . . . " And they followed Lincoln down a road that would nearly bankrupt the state of Illinois. The $12 million was squandered: Almost no projects were completed with it; much of the money was stolen; and the taxpayers of Illinois were put deep into debt for years to come.
Lincoln's "internal improvements" fiasco in Illinois promised to build "a railroad from Galena in the extreme northwestern part of the state." Above St. Louis, in Alton, "three [rail]roads were to radiate"; "There was also a road to run from Quincy . . . through Springfield"; another one "from Warsaw . . . to Peoria"; and yet another "from Pekin . . . to Bloomington" (Starr, pp. 25—26). The first road mentioned was to become the Illinois Central, which would later employ Lincoln for more than a decade as one its top lawyers.
Lincoln and the Whigs saw to it that "the Assembly also voted wildly and injudiciously in the matter of banking legislation," urging the legislature to print paper money to help finance what his personal secretaries, Nicolay and Hay, would later say was "a disaster to the state." Lincoln's law partner, William Herndon, described the whole debacle as "that sanguine epidemic of financial and industrial quackery which devastated the entire community" (p. 28). The whole scheme was eventually abandoned, and taxes were raised sharply on the hapless Illinois taxpayers to pay off the debt.
The 1837 internal improvements debacle in Illinois may have been a disaster for the public, but it helped catapult a young Abraham Lincoln into position as one of the top — if not the top — lawyer/lobbyists in the country for the railroad corporations.
By 1860 the Illinois Central Railroad was one of the largest corporations in the world. In a company history, J. G. Drennan noted that "Mr. Lincoln was continuously one of the attorneys for the Illinois Central Railroad Company from its organization [in 1849] until he was elected President" (Starr, p. 58). He was called on by the company's general counsel to litigate dozens of cases. He was such a railroad industry "insider" that he often rode in private cars and carried a free railroad pass, courtesy of the Illinois Central.
Lincoln successfully defended the Illinois Central against McLean County, Illinois, which wanted to tax the corporation, for which he was paid $5,000, an incredible sum for a single tax case in the 1850s. The man who paid him the fee was George B. McClellan, the vice president of the Illinois Central who in 1862 would become the commanding general of the Army of the Potomac and, later, Lincoln's opponent in the 1864 election. Starr explains the dishonest ruse that was apparently used by Lincoln and McClellan to trick the Illinois Central's New York City-based board of directors to go along with such an unprecedented fee to a "country lawyer" from Illinois.
McClellan would formally refuse to pay such a large fee, making his directors happy. Then Lincoln would sue the Illinois Central for the fee. But when Lincoln went to court over the fee (armed with depositions from other Illinois lawyers that such astronomical fees were perfectly appropriate!) no lawyers for the company showed up and he won by default. Proof that this was all a ruse lies in the fact that "Lincoln . . . continued to handle [the Illinois Central's] litigation afterwards, the same as he had done before" (p. 79).
By the late 1850s, writes Starr, it was widely known that "Lincoln's close relations with powerful industrial interests" are "always potent and present in political counsels" (p. 67). In today's language, he was the equivalent of a powerful, rich and politically influential "K Street lobbyist." He often traveled "with a party of officials of the Illinois Central company. He rode in a private car, on his own pass furnished him in his capacity as attorney for the company." This "greatly impressed some of the young Republican leaders . . ." This was the real Lincoln, and it is diametrically opposed to the image of the modest, backwoods "rail splitter" that the court historians have created.
In a masterpiece of understatement, Starr comments that "Lincoln's rise [in politics] was coincident with that of the railroads" (p. 80). In addition to working for the Illinois Central, Lincoln also represented the Chicago and Alton, Ohio and Mississippi, and Rock Island Railroad corporations. As soon as the Chicago and Mississippi Railroad was built, he was appointed as the local attorney for that company as well. By 1860 Lincoln was the most prominent attorney/lobbyist the railroad industry had. He was so prominent that the New York financier Erastus Corning offered him the job of general counsel of the New York Central Railroad at a salary of $10,000 a year, an incredible sum at the time. Lincoln turned down the offer after agonizing over it.
Lincoln also used his status as one of the top political insiders within the railroad industry to engage in some very lucrative real estate investments. On one of his trips in a private rail car accompanied by an entourage of Illinois Central executives Lincoln "decided to go to Council Bluffs, Iowa, where he had some real estate investments" (p. 152). "Shortly before his trip to Council Bluffs," writes Starr, "Abraham Lincoln had purchased several town lots from his fellow railroad attorney, Norman B. Judd, who had acquired them from the Chicago and Rock Island Railroad. Council Bluffs at this time was a frontier town, containing about fifteen hundred people" (p. 195). To this day, this land in Council Bluffs, Iowa is known as "Lincoln's Hill."
Why invest in real estate in Council Bluffs, Iowa, of all places? Why not Chicago or even Springfield, the state capital? Because Lincoln the political insider knew that there was a very high likelihood that 1) the federal government would eventually subsidize a transcontinental railroad; and 2) the starting point for that railroad could well be in the vicinity of Council Bluffs. If so, the value of his real estate holdings would be wildly inflated and he would make a killing.
Indeed, the 1860 Republican Party Platform contained a sixteenth plank that read: "That a railroad to the Pacific Ocean is imperatively demanded by the interests of the whole country; the Federal Government ought to render immediate and efficient aid in its construction . . ." As the party's nominee, Lincoln pledged his wholehearted support of this plank. In the interests of "the whole country," of course.
When he became president legislation was immediately proposed, in a special legislative session called by Lincoln in July of 1861, to create the taxpayer-subsidized Union Pacific Railroad. "There was no firmer friend of the Union Pacific bill than the President himself," writes Starr. (In contrast, most mainstream "Lincoln scholars" make the preposterous assertion that he had nothing to do with such legislation). The bill was passed in 1862 and it gave the president the power to appoint all the directors and commissioners and, more importantly, "to fix the point of commencement" of the Union Pacific Railroad. And guess where Lincoln chose to fix the point of commencement of the railroad. He "fixed the eastern terminus of the Union Pacific Railroad . . . at Council Bluffs, Iowa" (p. 202). His financial gains must have dwarfed Corning's $10,000 salary offer. During the Grant administrations dozens of prominent people would go to federal prison for such criminal self-dealing but Lincoln, the ringleader of the whole enterprise, has up to now escaped scrutiny.
In addition to lining his own pockets with this piece of legislation, proving to his well-heeled supporters that he was indeed "one of them," the legislation was essentially the Mother of all Political Payoffs. One hundred fifty-eight of the prominent Northern bankers, industrialists, and railroad barons who had supported Lincoln's political career were appointed as "commissioners." As Dee Brown wrote in Hear that Lonesome Whistle Blow: The Epic Story of the Transcontinental Railroads, when Lincoln signed the bill creating the Union Pacific he "assured the fortunes of a dynasty of American families . . . Brewsters, Bushnells, Olcotts, Harkers, Harrisons, Trowbridges, Langworthys, Reids, Ogdens, Bradfords, Noyeses, Brooks, Cornells, and dozens of others . . ." (p. 49).
What does all this have to do with Lincoln's war "to save the union"? The answer is, "everything." The official reason for the war that was given by both Lincoln and the U.S. Congress was "to save the union." But Lincoln inherited no "perpetual union." The union of the founding fathers was a voluntary compact of the states. The states delegated certain powers to the central government as their agent, but retained sovereignty for themselves. Secession was considered a legitimate option by political and opinion leaders from all sections of the country in 1860, as I document quite extensively in The Real Lincoln.
In his First Inaugural Address Lincoln promised that he had no intention of disturbing Southern slavery, and that even if he did it would be unconstitutional to do so. In the same speech he pledged his support of a proposed constitutional amendment that had just passed the U.S. Senate two days earlier (after passing the House of Representatives) that would have forbidden the federal government from ever interfering with Southern slavery. In other words, he was perfectly willing to see Southern slavery persist long after his own lifetime.
But on the issue of taxation he was totally uncompromising. The Republican Party was about to more than double the average tariff rate (from 15 percent to over 32 percent), and then increase it again to 47 percent. The Morrill Tariff passed the House of Representatives in the 1859 session, before Lincoln's nomination and before any serious movement toward secession. In the First Inaugural Lincoln clearly stated that it was his obligation as president to "collect the duties and imposts," but beyond that "there will be no invasion of any state." He was telling the South: "We are going to economically plunder you by doubling and tripling the tariff rate (the main source of federal revenue at the time), and if you refuse to collect the higher tariffs, as the South Carolinians did with the 1828 "Tariff of Abominations," there will be an invasion. That is, there will be mass killing, mayhem, and total war.
Why was the tariff so important — even more important than the issue of slavery in the eyes of Abraham Lincoln? Because tariff revenues comprised about 90 percent of federal revenue, and if the Southern states seceded they would no longer pay the federal tariff. All the grandiose plans of building a transcontinental railroad with taxpayer subsidies and creating a continental empire would be destroyed, and along with them the political career of Abraham Lincoln and, possibly, the Republican Party itself. The union was "saved" geographically but destroyed philosophically by the waging of total war on the civilian population of the South, a war in which nearly one half of the adult white male population was either killed or mutilated.
Three months after the war, Generals Grant, Sherman and Sheridan would commence a twenty-five year campaign of ethnic genocide against the Plains Indians to make the American West safe for the subsidized transcontinental railroads. Sherman (who was also a railroad industry-related real estate investor) explicitly stated that the purpose of eradicating the Plains Indians was to make sure that they did not stand in the way of the government-subsidized railroads.
By ignoring this true history of how a modestly successful trial lawyer from Illinois came to be the nominee of the moneyed elite that ran the Republican Party in 1860, America's court historians have railroaded the public into believing a fairy tale version of their own history. The popular notion that the Republican Party's early leaders were Selfless Humanitarians is as big a lie as has ever been told.
October 1, 2003
Thomas J. DiLorenzo [send him mail] is the author of the LRC #1 bestseller, The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War (Forum/Random House, 2002) and professor of economics at Loyola College in Maryland.
Copyright © 2003 LewRockwell.com
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