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Rh Piermont to Dunkirk, New York, in 1851; and another line—the Pennsylvania—was completed from Harrisburg to Pittston, Pennsylvania, in 1854. These were at least the germs of great trunk lines. The cost of American railways has been only from one-half to one-fourth of the cost of European railways; but an investment in a Far Western railway in 1850-1860 was an extra-hazardous risk. Not only did social conditions make any form of business hazardous; the new railway often had to enter a territory bare of population, and there create its own towns, farms and traffic. Whether it could do so was so doubtful as to make additional inducements to capital necessary.

The means attempted by Congress in 1850, in the case of the Illinois Central railroad, was to grant public lands to the corporation, reserving to the United States the alternate sections. At first grants were made to the states for the benefit of the corporations; the act of 1862 made the grant directly to the corporation.

239. The vital military and political necessity of an immediate railway connexion with the Pacific coast was hardly

open to doubt in 1862; but the necessity hardly justified the terms which were offered and taken. The Union Pacific railroad was incorporated; the United States government was to issue to it bonds, on the completion of each 40 m., to the amount of $16,000 per mile, to be a first mortgage; through Utah and Nevada the aid was to be doubled, and for some 300 m. of mountain building to be trebled; and, in addition to this, alternate sections of land were granted, The land-grant system, thus begun, was carried on extensively, the largest single grants being those of 47,000,000 acres to the Northern Pacific (1864) and of 42,000,000 to the Atlantic & Pacific line (1866).

240. Specie payments had been suspended almost everywhere towards the end of 1861; but the price of gold was but

102.5 at the beginning of 1862. About May its price in paper currency began to rise. It touched 170 during the next year, and 285 in 1864; but the real price probably never went much above 250. Other articles felt the influence in currency prices. Mr D. A. Wells, in 1866, estimated that prices and rents had risen 90% since 1861, while wages had not risen more than 60%.

241. The duties on imports were driven higher than the original Morrill tariff had ever contemplated. The average rates, which had been 18% on dutiable articles and 12%

on the aggregate in 1860-1861, rose, before the end of the war, to nearly 50% on dutiable articles and 35% on the aggregate. Domestic manufactures sprang into new life under such hothouse encouragement; every one who had spare wealth converted it into manufacturing capital. The probability of such a result had been the means of getting votes for an increased tariff; free traders had voted for it as well as protectionists. For the tariff was only a means of getting capital into positions in which taxation could be applied to it, and the “internal revenue” taxation was merciless beyond precedent. The annual increase of wealth from capital was then about $550,000,000; the internal revenue taxation on it rose in 1866 to $310,000,000, or nearly 60%.

242. The stress of all this upon the poor must have been great, but it was relieved in part by the bond system on which

the war was conducted. While the armies and navies were shooting off large blocks of the crops of 1880 or 1890, work and wages were abundant for all who were competent for them. It is true, then, that the poor paid most of the cost of the war; it is also true that the poor had shared in that anticipation of the future which had been forced on the country, and that, when the drafts on the future came to be redeemed, it was done mainly by taxation on luxuries. The destruction of a Northern railway meant more work for Northern iron mills and their workmen. The destruction of a Southern road was an unmitigated injury; it had to be made good at once, by paper issues; the South could make no drafts on the future, by bond issues, for the

blockade had put cotton out of the game, and Southern bonds were hardly saleable. Every expense had to be met by paper

issues; each issue forced prices higher; every rise in prices called for an increased issue of paper, with increased effects for evil. A Rebel War-Clerk's Diary gives the following as the prices in the Richmond market for May 1864: “Boots, $200; coats, $350; pantaloons, $100; shoes, $125; flour, $275 per barrel; meal, $60 to $80 per bushel; bacon, $9 per pound; no beef in market; chickens, $30 per pair; shad, $20; potatoes, $25 per bushel; turnip greens, $4 per peck; white beans, $4 per quart or $120 per bushel; butter, $15 per pound; lard, same; wood, $50 per cord.” How the rise in wages, always far slower than other prices, could meet such prices as these one must be left to imagine. Most of the burden was sustained by the women of the South.

243. The complete lack of manufactures told heavily against the South from the beginning. As men were drawn

from agriculture in the North and West, the increased demand for labour was shaded off into an increased demand for agricultural machinery; every increased percentage of power in reaping-machines liberated so many men for service at the front. The reaping machines of the South—the slaves—were incapable of any such improvement, and, besides, required the presence of a portion of the possible fighting-men at home to watch them. There is an evident significance in the exemption from military duty in the Confederate States of “one agriculturist on such farm, where there is no white male adult not liable to duty, employing 15 able-bodied slaves between ten and fifty years of age.” But, to the honour of the enslaved race, no insurrection took place.

244. The pressing need for men in the army made the Confederate Congress utterly unable to withstand the growth of

executive power. Its bills were prepared by the cabinet, and the action of Congress was quite perfunctory. The suspension of the writ of habeas corpus, and the vast powers granted to President Davis, or assumed by him under the plea of military necessity, with the absence of a watchful and well-informed public opinion, made the Confederate government by degrees almost a despotism. It was not until the closing months of the war that the expiring Confederate Congress mustered up courage enough to oppose the president's will. (See .) The organized and even radical opposition to the war in the North, the meddlesomeness of Congress and its “committees on the conduct of the war,” were no doubt unpleasant to Lincoln but they carried the country through the crisis without the effects visible in the South.

245. Another act of Federal legislation—the National Bank Act (Feb. 25, 1863; supplemented by the act of June 3, 1864)—should be mentioned here, as it was closely

connected with the sale of bonds. The banks were to be organized, and, on depositing United States bonds at Washington, were to be permitted to issue notes up to 90% of the value of the bonds deposited. As the redemption of the notes was thus assured, they circulated without question all over the United States. By a subsequent act (1865) the remaining state bank circulation was taxed out of existence. (See : United States.)

246. At the beginning of 1862 the lines of demarcation between the two powers had become plainly marked. The

western part of Virginia had separated itself from the parent state, and was admitted as a state (1863) under the name of West Virginia. It was certain that Delaware, Maryland, Kentucky and Missouri had been saved to the Union, and that the battle was to be fought out in the territory to the south of them.

247. At the beginning of the war the people and leaders of the North had not desired to interfere with slavery, but circumstances had been too strong for them. Lincoln had declared that he meant to save the Union as he best could—by preserving slavery, by destroying it, or by destroying part