Lincoln’s Government-Subsidized Railroad
From: bernhard1848@att.net
Alexander Hamilton’s desire for the United States to adopt England’s centralized financial and industrial mercantile system evolved into Henry Clay’s “American System” which was relentlessly promoted by the Whig party. The Whig agenda of building imperial state power and granting monopolistic privilege to those politically well-connected eventually found success with the election of Clay-disciple Abraham Lincoln, a Whig for many more years than he was a Republican. As soon as conservative Southern congressmen had withdrawn with their States in 1861, the Federalist-Whig-Republicans made up for lost time.
Bernhard Thuersam, Chairman
North Carolina War Between the States Sesquicentennial Commission
www.ncwbts150.com
"The Official Website of the North Carolina WBTS Sesquicentennial"
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Lincoln’s Government-Subsidized Railroad
“When Lincoln was elected in 1860, nearly every State constitution prohibited the use of tax dollars for internal improvement subsidies, and federal subsidies had never materialized for constitutional reasons as well. By that time, “internal improvement subsidies” meant subsidies for railroad corporations, primarily, the shipping industry secondarily. But as of 1860 “no bill granting federal aid for the construction of a railroad to the Pacific had ever managed to clear both houses of Congress” despite the persistent support for such subsidies by the Whigs and, later the Republicans.
“Constitutional scruples,” writes historian Leonard Curry, “ranked high among the considerations that had prevented Congress from passing a Pacific Railroad Act before 1861.”
Thus, even though by mid-1862 the military situation facing Lincoln was desperate – so desperate that he resorted to the trick of an emancipation proclamation that freed no one and decided to dramatically change his war strategy to target Southern civilians – the Lincoln administration and Congress diverted millions of dollars to the construction of a railroad to California. The major opposition to federal railroad subsidies had always come from Southerners…Now that these Southern congressmen were no longer present, there was nothing stopping Republicans from adopting the second plank of the American System, massive subsidies for railroad corporations.
[The Pacific railroad] was supposedly necessary for military purposes, just in case California seceded. California was said to be developing “a different culture,” and multiculturalism was to be avoided at all costs. California had recently said “no thank you” to the government’s issuance of paper money (“greenbacks”), preferring instead to remain on the gold standard. This opposition, too, needed to be crushed according to Lincoln and the Republicans in Congress.
Most historians argue that the transcontinental railroad would never have been built if the only source of financing came from private capital markets, but that view is wrong. All of England’s railroad lines were privately-financed, and American railroad entrepreneur James J. Hill did in fact build a transcontinental railroad, the Great Northern, without government subsidies. Hill’s line was built fifteen years later than the government-subsidized ones, but it would likely have been built even sooner had his competitors not received millions of dollars in subsidies.
The Great Northern was a famously efficient and profitable operation; by contrast, the Union Pacific and Central Pacific were so inefficient that they were bankrupt as soon as they were completed in 1869.”
(The Real Lincoln, A New Look at Abraham Lincoln, His Agenda, and Unnecessary War, Thomas J. DiLorenzo, Forum Publishing, 2002, pp. 245-247)
