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1 Origins of the Civil War Claims System On April 13, 1861, war fever gripped the United States. One day after the Confederate attack upon Fort Sumter, popular sentiment in the North erupted in a show of support for the idea of Union. As men rushed by the tens of thousands to hastily set up recruiting offices, the governors of the states agitated and rode this tidal wave of excitement . Caught in the euphoria of the moment and believing, as most people did, that the rebellion would be short lived, the governors gave little thought to the long-term financing of the war. Oliver P. Morton of Indiana, for example, declared that his state was willing to spend its ‘‘best blood and treasure without limit.’’ Alexander Randall of Wisconsin spoke for many when he cried out: ‘‘What is money? What is life—in the presence of such a crisis?’’1 Early fiscal abandon knew few bounds. Where money was short, some governors, such as William A. Buckingham of Connecticut and Erastus Fairbanks of Vermont, bought the necessary supplies with their own personal cash and credit. Other state officials concluded that Washington’s financial assistance was unnecessary. Writing in May 1861, Col. Ambrose Burnside of Rhode Island refused a War Department offer to requisition supplies for his regiment. An indignant Burnside spurned the offer, noting that Rhode Island’s troops ‘‘need nothing . . . from the government; Rhode Island and her governor will attend to their wants.’’ A similar situation occurred in the 1 Two states, New Jersey and New York, did have early reservations about state spending. See War Department, United States, War of the Rebellion: The Official Records of the Union and Confederate Armies, 3 series, 70 vols. (Washington: Government Printing Office, 1880–1901), 3:1:73, 83. Hereafter cited as OR. The enthusiasm of other governors is covered in William B. Weeden, War Government, Federal and State, in Massachusetts, New York, Pennsylvania, and Indiana, 1861– 1865 (Boston: Houghton, Mifflin and Company, 1906), 163–64. Morton quoted in OR, 3:1:126. Randall quoted in Walter S. Glazer, ‘‘Wisconsin Goes to War: April 1861,’’ Wisconsin Magazine of History 50 (1967): 152. 2 SACRED DEBTS Midwest. Mixing personal disdain for Abraham Lincoln with his belief that Illinois alone could crush the Confederacy, Republican governor Richard Yates attempted to raise a private army of 100,000 men without financial assistance from Washington. In yet another twist in federal relations, John Andrew of Massachusetts bombarded President Lincoln with not only military advice but offers of unconditional grants of money. To Andrew, the war was from the first day a holy crusade for abolition that should not be impeded by worries over the availability of revenue. A state’s troops should go forward, he proclaimed, and ‘‘the question of who shall pay for them afterwards, is of secondary importance. . . .’’2 Eventually, this impetuousness waned. A number of states continued to suffer from the effects of the nationwide economic panic that had begun in 1857. The Old Northwest, especially, entered the war in a cash-starved condition. Shaky antebellum credit and traditionally unstable currencies joined together with the lingering effects of the panic to push several states to their financial limits. As early as July 17, 1861, Ohio let it be known that the state needed help to pay its war-related bills.3 In Wisconsin, Governor Randall’s early war enthusiasm , which had led him to ask ‘‘What was money?’’ faded by summer when he realized that his state had literally no money. Other states, ranging from Iowa to Maine, soon found themselves in a similar plight. Confederate victory at Manassas on July 21 sealed the financial fates of the states as they then understood that this war would be neither short nor cheap. Their governors then turned to Washington for help.4 2 Burnside quoted in William B. Hesseltine, Lincoln and the War Governors (New York: Alfred A. Knopf, 1948; reprint, Gloucester, Mass.: Peter Smith, 1972), 170. Jack Northrup, ‘‘Governor Richard Yates and President Lincoln,’’ Lincoln Herald 70 (1968), 196. Andrew quoted in William Schouler, A History of Massachusetts in the Civil War, 2 vols. (Boston: E. P. Dutton, 1868–1871), 1:123. See also Edith Ware, ‘‘Political Opinion in Massachusetts During the Civil War and Reconstruction’’ (Ph.D. diss., Columbia University, 1916), 67. 3 The financial conditions among midwesten states are examined in William G. Shade, Banks or No Banks: The Money Issue in Midwestern Politics, 1832–1865 (Detroit: Wayne State University Press...

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