Sound Finance—National Banking.—From Hamilton's day to Lincoln's, business men in the East had contended for a sound system of national currency. The experience of the states with paper money, painfully impressive in the years before the framing of the Constitution, had been convincing to those who understood the economy of business. The Constitution, as we have seen, bore the signs of this experience. States were forbidden to emit bills of credit: paper money, in short. This provision stood clear in the document; but judicial ingenuity had circumvented it in the age of Jacksonian Democracy. The states had enacted and the Supreme Court, after the death of John Marshall, had sustained laws chartering banking companies and authorizing them to issue paper money. So the country was beset by the old curse, the banks of Western and Southern states issuing reams of paper notes to help borrowers pay their debts.
In dealing with war finances, the Republicans attacked this ancient evil. By act of Congress in 1864, they authorized a series of national banks founded on the credit of government bonds and empowered to issue notes. The next year they stopped all bank paper sent forth under the authority of the states by means of a prohibitive tax. In this way, by two measures Congress restored federal control over the monetary system although it did not reëstablish the United States Bank so hated by Jacksonian Democracy.
Destruction of States' Rights by Fourteenth Amendment.—These acts and others not cited here were measures of centralization and consolidation at the expense of the powers and dignity of the states. They were all of high import, but the crowning act of nationalism was the fourteenth amendment which, among other things, forbade states to "deprive any person of life, liberty or property without due process of law." The immediate occasion, though not the actual cause of this provision, was the need for protecting the rights of freedmen against hostile legislatures in the South. The result of the amendment, as was prophesied in protests loud and long from every quarter of the Democratic party, was the subjection of every act of state, municipal, and county authorities to possible annulment by the Supreme Court at Washington. The expected happened.
Few negroes ever brought cases under the fourteenth amendment to the attention of the courts; but thousands of state laws, municipal ordinances, and acts of local authorities were set aside as null and void under it. Laws of states regulating railway rates, fixing hours of labor in bakeshops, and taxing corporations were in due time to be annulled as conflicting with an amendment erroneously supposed to be designed solely for the protection of negroes. As centralized power over tariffs, railways, public lands, and other national concerns went to Congress, so centralized power over the acts of state and local authorities involving an infringement of personal and property rights was conferred on the federal judiciary, the apex of which was the Supreme Court at Washington. Thus the old federation of "independent states," all equal in rights and dignity, each wearing the "jewel of sovereignty" so celebrated in Southern oratory, had gone the way of all flesh under the withering blasts of Civil War.
Reconstruction in the South
Theories about the Position of the Seceded States.—On the morning of April 9, 1865, when General Lee surrendered his army to General Grant, eleven states stood in a peculiar relation to the union now declared perpetual. Lawyers and political philosophers were much perturbed and had been for some time as to what should be done with the members of the former Confederacy. Radical Republicans held that they were "conquered provinces" at the mercy of Congress, to be governed under such laws as it saw fit to enact and until in its wisdom it decided to readmit any or all of them to the union. Men of more conservative views held that, as the war had been waged by the North on the theory that no state could secede from the union, the Confederate states had merely attempted to withdraw and had failed. The corollary of this latter line of argument was simple: "The Southern states are still in the union and it is the duty of the President, as commander-in-chief, to remove the federal troops as soon as order is restored and the state governments ready to function once more as usual."
Lincoln's Proposal.—Some such simple and conservative form of reconstruction had been suggested by Lincoln in a proclamation of December 8, 1863. He proposed pardon and a restoration of property, except in slaves, to nearly all who had "directly or by implication participated in the existing rebellion," on condition that they take an oath of loyalty to the union. He then announced that when, in any of the states named, a body of voters, qualified under the law as it stood before secession and equal in number to one-tenth the votes cast in 1860, took the oath of allegiance, they should be permitted to reëstablish a state government. Such a government, he added, should be recognized as a lawful authority and entitled to protection under the federal Constitution. With reference to the status of the former slaves Lincoln made it clear that, while their freedom must be recognized, he would not object to any legislation "which may yet be consistent as a temporary arrangement with their present condition as a laboring, landless, and homeless class."
Andrew Johnson's Plan—His Impeachment.—Lincoln's successor, Andrew Johnson, the Vice President, soon after taking office, proposed to pursue a somewhat similar course. In a number of states he appointed military governors, instructing them at the earliest possible moment to assemble conventions, chosen "by that portion of the people of the said states who are loyal to the United States," and proceed to the organization of regular civil government. Johnson, a Southern man and a Democrat, was immediately charged by the Republicans with being too ready to restore the Southern states. As the months went by, the opposition to his measures and policies in Congress grew in size and bitterness. The contest resulted in the impeachment of Johnson by the House of Representatives in March, 1868, and his acquittal by the Senate merely because his opponents lacked one vote of the two-thirds required for conviction.
Congress Enacts "Reconstruction Laws."—In fact, Congress was in a strategic position. It was the law-making body, and it could, moreover, determine the conditions under which Senators and Representatives from the South were to be readmitted. It therefore proceeded to pass a series of reconstruction acts—carrying all of them over Johnson's veto. These measures, the first of which became a law on March 2, 1867, betrayed an animus not found anywhere in Lincoln's plans or Johnson's proclamations.
They laid off the ten states—the whole Confederacy with the exception of Tennessee—still outside the pale, into five military districts, each commanded by a military officer appointed by the President. They ordered the commanding general to prepare a register of voters for the election of delegates to conventions chosen for the purpose of drafting new constitutions. Such voters, however, were not to be, as Lincoln had suggested, loyal persons duly qualified under the law existing before secession but "the male citizens of said state, twenty-one years old and upward, of whatever race, color, or previous condition, ... except such as may be disfranchised for participation in the rebellion or for felony at common law." This was the death knell to the idea that the leaders of the Confederacy and their white supporters might be permitted to share in the establishment of the new order. Power was thus arbitrarily thrust into the hands of the newly emancipated male negroes and the handful of whites who could show a record of loyalty. That was not all. Each state was, under the reconstruction acts, compelled to ratify the fourteenth amendment to the federal Constitution as a price of restoration to the union.