The railways were in a state of physical dilapidation little removed from destruction, save for those that had been captured and kept in partial repair by the Federal troops. The rolling stock had been lost by capture, by destruction to prevent capture, in wrecks, which were frequent, or had been worn out. The railroad companies possessed large sums in Confederate currency and in securities which were now valueless. About two-thirds of all the lines were hopelessly bankrupt. Fortunately, the United States War Department took over the control of the railway lines and in some cases effected a temporary reorganization which could not have been accomplished by the bankrupt companies. During the summer and fall of 1865 "loyal" boards of directors were appointed for most of the roads, and the army withdrew its control. But repairs and reconstruction were accomplished with difficulty because of the demoralization of labor and the lack of funds or credit. Freight was scarce and, had it not been for government shipments, some of the railroads would have been abandoned. Not many people were able to travel. It is recorded that on one trip from Montgomery to Mobile and return, a distance of 360 miles, the railroad which is now the Louisville and Nashville collected only thirteen dollars in fares.
Had there been unrestricted commercial freedom in the South in 1865-66, the distress of the people would have been somewhat lessened, for here and there were to be found public and private stores of cotton, tobacco, rice, and other farm products, all of which were bringing high prices in the market. But for several months the operation of wartime laws and regulations hindered the distribution of even these scanty stores. Property upon which the Confederate Government had a claim was of course subject to confiscation, and private property offered for sale, even that of Unionists, was subject to a 25 per cent tax on sales, a shipping tax, and a revenue tax. The revenue tax on cotton, ranging from two to three cents a pound during the three years after the war, brought in over $68,000,000. This tax, with other Federal revenues, yielded much more than the entire expenses of reconstruction from 1865 to 1868 and of all relief measures for the South, both public and private. After May, 1865, the 25 per cent tax was imposed only upon the produce of slave labor. None of the war taxes, except that on cotton, was levied upon the crops of 1866, but while these taxes lasted they seriously impeded the resumption of trade.
Even these restrictions, however, might have been borne if only they had been honestly applied. Unfortunately, some of the most spectacular frauds ever perpetrated were carried through in connection with the attempt of the United States Treasury Department to collect and sell the confiscable property in the South. The property to be sold consisted of what had been captured and seized by the army and the navy, of "abandoned" property, as such was called whose owner was absent in the Confederate service, and of property subject to seizure under the confiscation acts of Congress. No captures were made after the general surrender, and no further seizures of "abandoned" property were made after Johnson's amnesty proclamation of May 29, 1865. This left only the "confiscable" property to be collected and sold.
For collection purposes the States of the South were divided into districts, each under the supervision of an agent of the Treasury Department, who received a commission of about 25 per cent. Cotton, regarded as the root of the slavery evil, was singled out as the principal object of confiscation. It was known that the Confederate Government had owned in 1865 about 150,000 bales, but the records were defective and much of it, with no clear indication of ownership, still remained with the producers. Secretary Chase, foreseeing the difficulty of effecting a just settlement, counseled against seizure, but his judgment was overruled. Secretary McCulloch said of his agents: "I am sure I sent some honest cotton agents South; but it sometimes seems doubtful whether any of them remained honest very long." Some of the natives, even, became cotton thieves. In a report made in 1866, McCulloch describes their methods:
Contractors, anxious for gain, were sometimes guilty of bad faith and peculation, and frequently took possession of cotton and delivered it under contracts as captured or abandoned, when in fact it was not such, and they had no right to touch it.… Residents and others in the districts where these peculations were going on took advantage of the unsettled condition of the country, and representing themselves as agents of this department, went about robbing under such pretended authority, and thus added to the difficulties of the situation by causing unjust opprobrium and suspicion to rest upon officers engaged in the faithful discharge of their duties. Agents, … frequently received or collected property, and sent it forward which the law did not authorize them to take.… Lawless men, singly and in organized bands, engaged in general plunder; every species of intrigue and peculation and theft were resorted to.
These agents turned over to the United States about $34,000,000. About 40,000 claimants were subsequently indemnified on the ground that the property taken from them did not belong to the Confederate Government, but many thousands of other claimants have been unable to prove that their property was seized by government agents and hence have received nothing. It is probable that the actual Confederate property was nearly all stolen by the agents. One agent in Alabama sold an appointment as assistant for $25,000, and a few months later both the assistant and the agent were tried by a military court for stealing and were fined $90,000 and $250,000 respectively in addition to being imprisoned.
Other property, including horses, mules, wagons, tobacco, rice, and sugar which the natives claimed as their own, was seized. In some places the agents even collected delinquent Confederate taxes. Much of the confiscable property was not sold but was turned over to the Freedmen's Bureau ¹ for its support. The total amount seized cannot be satisfactorily ascertained. The Ku Klux minority report asserted that 3,000,000 bales of cotton were taken, of which the United States received only 114,000. It is certain that, owing to the deliberate destruction of cotton by fire in 1864-65, this estimate was too high, but all the testimony points to the fact that the frauds were stupendous. As a result the United States Government did not succeed in obtaining the Confederate property to which it had a claim, and the country itself was stripped of necessities to a degree that left it not only destitute but outraged and embittered. "Such practices," said Trowbridge, "had a pernicious effect, engendering a contempt for the Government and a murderous ill-will which too commonly vented itself upon soldiers and negroes."
The South faced the work of reconstruction not only with a shortage of material and greatly hampered in the employment even of that but still more with a shortage of men. The losses among the whites are usually estimated at about half the military population, but since accurate records are lacking the exact numbers cannot be ascertained. The best of the civil leaders, as well as the prominent military leaders, had so committed themselves to the support of the Confederacy as to be excluded from participation in any reconstruction that might be attempted. The business of reconstruction, therefore, fell of necessity to the Confederate private soldiers, the lower officers, nonparticipants, and lukewarm individuals who had not greatly compromised themselves. These politically and physically uninjured survivors included also all the "slackers" of the Confederacy. But though there were such physical and moral losses on the part of those to whom fell the direction of affairs there was also a moral strengthening in the sound element of the people who had been tried by the discipline of war.
The greatest weakness of both races was their extreme poverty. The crops of 1865 turned out badly, for most of the soldiers reached home too late for successful planting and the negro labor was not dependable. The sale of such cotton and farm products as had escaped the treasury agents was of some help, but curiously enough much of the good money thus obtained was spent extravagantly by a people used to Confederate rag money and for four years deprived of the luxuries of life. The poorer whites who had lost all were close to starvation. In the white counties which had sent so large a proportion of men to the army the destitution was most acute. In many families the breadwinner had been killed in war. After 1862 relief systems had been organized in nearly all the Confederate States for the purpose of aiding the poor whites, but these organizations were disbanded in 1865. A Freedmen's Bureau official traveling through the desolate back country furnishes a description which might have applied to two hundred counties, a third of the South: "It is a common, an every-day sight in Randolph County, that of women and children, most of whom were formerly in good circumstances, begging for bread from door to door. Meat of any kind has been a stranger to many of their mouths for months. The drought cut off what little crops they hoped to save, and they must have immediate help or perish. By far the greater suffering exists among the whites. Their scanty supplies have been exhausted, and now they look to the Government alone for support. Some are without homes of any description."