The Way that Lincoln Financed the Civil War Led to Transcontinental Railroads, Public Colleges, the Homestead Act, and Income Tax

The financing of the Civil War was as crucial to the shaping of American history as the Emancipation Proclamation and the defeat of the Confederacy. Not only did the Lincoln government establish a national banking system, they invented many things to deepen and broaden the government’s involvement in the lives of ordinary Americans—the transcontinental railroad, the Homestead Act, the Morrill Act (endowing land-grant colleges for the middle class), help for farmers, a government role in immigration, a new system of taxes including, for the first time, income taxes.

Lincoln and his fellow Republicans created a new notion of what government could do—larger, more proactive, more responsible for the national welfare. Lincoln and his allies had been fighting for this agenda for years, and until the war had been on the losing side. In the case of Lincoln personally, and for many of the original GOP leaders, belief in government arose from personal experience. Lincoln wanted the government to promote opportunity for others like himself—that is, for pioneers, poor settlers, remote western farmers. So the party backed legislation to support transportation, education, credit facilities, and so forth.

Today’s guest is Roger Lowenstein, author of Ways and Means: Lincoln, His Cabinet and the Financing of the Civil War. Lincoln and his cabinet created a new notion of what government could be—larger, more proactive, more responsible for the national welfare.

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