WEBVTT NOTE Lincoln and the Trimuph of Mercantilism 1 00:00:00.000 --> 00:00:18.000 I'd like to add a footnote to George Bittlingmeier's talk. I once wrote a paper on antitrust in which the very last sentence was that Senator John Sherman, the author of the Sherman Antitrust Act, has arguably done more damage to the U.S. economy than did his older brother, General William Tecumseh Sherman. 2 00:00:18.000 --> 00:00:23.000 They were brothers and communicated quite a bit during the Civil War. 3 00:00:23.000 --> 00:00:28.040 My paper, many of you were at the conference last year, the anniversary 4 00:00:28.040 --> 00:00:32.760 conference where I gave another paper on Lincoln and it was mostly about Lincoln 5 00:00:32.760 --> 00:00:37.920 in office and what he did. This paper is about Lincoln's political career prior to 6 00:00:37.920 --> 00:00:43.960 being elected president, primarily. And the point I'd like to make is really 7 00:00:43.960 --> 00:00:48.360 Lincoln was the political son of Alexander Hamilton. He always was. He was 8 00:00:48.360 --> 00:00:52.320 always a devotee of Hamilton and Hamilton's plans for centralized 9 00:00:52.320 --> 00:00:53.320 by His Government. 10 00:00:53.320 --> 00:00:57.360 And when David Gordon was talking about Hamilton and Washington this morning, something that 11 00:00:57.360 --> 00:01:02.520 popped into my head, this is the kinds of things that pop into professors' heads, was 12 00:01:02.520 --> 00:01:09.000 a passage that I read recently about how Patrick Henry, the famous Patrick Henry who convinced 13 00:01:09.000 --> 00:01:13.560 Virginians to get into the Revolutionary War by saying, give me liberty or give me death, 14 00:01:13.560 --> 00:01:19.880 was an opponent, opponent of the U.S. Constitution because he observed that many of the proponents 15 00:01:19.880 --> 00:01:26.360 of the Constitution were military men and so he went around Virginia and warned his fellow Virginians 16 00:01:26.360 --> 00:01:32.200 that if you go along with this someday the central government is going to march down here heavily 17 00:01:32.200 --> 00:01:38.200 armed and rob Virginians of their liberty. This was Patrick Henry at the Constitutional Convention 18 00:01:38.760 --> 00:01:46.040 and so he was on the other side of the Hamiltonian system. Now the author of 19 00:01:46.040 --> 00:01:51.000 of Lincoln's Collected Works, Roy Basler, said that, quote, 20 00:01:51.000 --> 00:01:54.520 as of 1857, Lincoln had no solution to the problem 21 00:01:54.520 --> 00:01:57.360 of slavery except the colonization idea, 22 00:01:57.360 --> 00:01:59.640 which he had inherited from Henry Clay. 23 00:01:59.640 --> 00:02:02.440 When he spoke of respecting the Negro as a human being, 24 00:02:02.440 --> 00:02:04.760 his words lacked effectiveness. 25 00:02:04.760 --> 00:02:07.460 This is the editor of Lincoln's Collected Works. 26 00:02:07.460 --> 00:02:11.200 So Lincoln rarely said anything about slavery prior to 1857, 27 00:02:11.200 --> 00:02:12.840 and when he did, he couldn't believe him, 28 00:02:12.840 --> 00:02:15.660 according to the editor of his Selected Works. 29 00:02:15.660 --> 00:02:30.660 But what he did say a lot about, and what he devoted his entire political life to, from 1832, when he first entered politics as a candidate for the state legislature in Illinois, until 1860, was something entirely different. 30 00:02:30.660 --> 00:02:44.660 It was the Hamiltonian system, essentially. And I want to see what Lincoln himself said about it. A little quote here. If you can read that, when he first ran for office, this is what he said. This was his stump speech. 31 00:02:44.660 --> 00:02:48.660 I presume you all know who I am. I am humble Abraham Lincoln. 32 00:02:48.660 --> 00:02:53.660 I have been solicited by many friends to become a candidate for the legislature. 33 00:02:53.660 --> 00:02:57.660 My politics are short and sweet like the old woman's dance. 34 00:02:57.660 --> 00:03:01.660 I'm in favor of a national bank, in favor of the internal improvement system, 35 00:03:01.660 --> 00:03:04.660 and a high protective tariff. 36 00:03:04.660 --> 00:03:08.660 And he stuck to that for 30 years and never wavered. 37 00:03:08.660 --> 00:03:11.660 Those are the three things he fought for for 30 years. 38 00:03:11.660 --> 00:03:19.560 never mentioned slavery at all until 1857, hardly, and even then you couldn't believe what he said, according to the editor of his collective works. 39 00:03:19.560 --> 00:03:25.560 Lincoln, there's another word for this, economists have a word for this collection of policies. 40 00:03:25.560 --> 00:03:32.760 Central banking, internal improvements was a euphemism for corporate welfare and protectionism. 41 00:03:32.760 --> 00:03:40.260 The word is mercantilism, and let me offer you Murray Rothbard's definition of mercantilism from his Logic of Action book. 42 00:03:40.260 --> 00:03:59.260 Mercantilism, which reached its height in the Europe of the 17th and 18th centuries, was a system of statism which employed economic fallacy to build up a structure of imperial state power, as well as special subsidy and monopolistic privilege to individuals or groups favored by the state. 43 00:03:59.260 --> 00:04:05.260 That's what Lincoln stood for, that's what he always said he stood for, and that's what he achieved, ultimately. 44 00:04:05.260 --> 00:04:09.260 He was a Whig, and this is what the Whigs stood for, the American Whigs. 45 00:04:09.260 --> 00:04:22.260 And by the way, a Whig, the Whig Party was established in 1832 and it became defunct by 1856 when Daniel Webster and Henry Clay died, essentially. 46 00:04:22.260 --> 00:04:27.260 And the American Whigs of that time were not the same as the early American Whigs. 47 00:04:27.260 --> 00:04:33.260 The early American Whigs, like Thomas Jefferson, were opponents of the state as were the British Whigs. 48 00:04:33.260 --> 00:04:41.420 Wigs. That's why the whole term wig, as understood by Lincoln as a wig, is a deceptive term because 49 00:04:41.420 --> 00:04:45.580 they were in favor of state power. They weren't the opponents of state power. They're in favor 50 00:04:45.580 --> 00:04:53.020 of it, but they took the name that Americans knew had been tagged to Jefferson and his compatriots 51 00:04:53.020 --> 00:04:59.020 and called themselves wigs. So I thought that was kind of interesting. Lincoln said in 1859 52 00:04:59.020 --> 00:05:29.020 He was always a Whig in politics and he eulogized Henry Clay by calling him the great parent of Whig principles and the font from which my own political views have flowed. Roy Basler said that in the eulogy one could hardly read any paragraph in the eulogy without feeling that Lincoln was consciously or unconsciously inviting comparison and contrast of himself with Henry Clay and his system of corporate welfare, protectionism and central banking. 53 00:05:29.020 --> 00:05:59.020 Banking. Lincoln was a master politician. Despite what many of you may have been taught in elementary school or have read in the popular literature, Lincoln was a pro. He was a real pro and he idolized Henry Clay. I've read several biographies of Henry Clay over the past year and I've come to the conclusion that I think of him as sort of a combination of Tip O'Neill, Danny Rostenkowski and Bill Clinton all rolled into one. Henry Clay, he was a political 54 00:05:59.020 --> 00:06:16.020 Lincoln was a genius, which is to say he was a maniac of some sort and a man to be feared, but he was such a genius in politics that he was first elected in 1811 and one year later was voted Speaker of the House of Representatives. He was such a natural. 55 00:06:16.020 --> 00:06:25.020 This is the man who Lincoln idolized. Lincoln was a skilled politician. David Donald, who is a Pulitzer Prize winning biographer of Lincoln, said that Lincoln was, quote, 56 00:06:25.020 --> 00:06:33.020 The Master Wire Puller who operated the state political organization first of the Whig Party and after its decay, that of the Republicans. 57 00:06:33.020 --> 00:06:40.020 He spent virtually his entire political career prior to 1860 just doing the dirty work of politics. 58 00:06:40.020 --> 00:06:46.020 And let me read you one thing. This is a letter that he sent out to all the Whig Party hacks in Illinois. 59 00:06:46.020 --> 00:06:49.020 He said, this is what you do. He was directing them. 60 00:06:49.020 --> 00:06:53.020 Divide your county into small districts and appoint in each one a subcommittee. 61 00:06:53.020 --> 00:06:57.420 Make a perfect list of all the voters and ascertain with certainty for whom they will vote. 62 00:06:57.420 --> 00:07:01.820 Designate doubtful voters in separate lines indicating their probable choice. 63 00:07:01.820 --> 00:07:06.820 Each subcommittee must keep a constant watch on the doubtful voters and have them talked to by those 64 00:07:06.820 --> 00:07:11.820 in whom they have the most confidence. Also, WIC documents must be given them on election day. 65 00:07:11.820 --> 00:07:17.820 On and on and on. He did this for 30 years. He was just the consummate politician. 66 00:07:17.820 --> 00:07:30.820 So that after 30 years of this, essentially, David Donald said that Lincoln, quote, had maneuvered himself into a position where he controlled the party machinery platform and candidates in one of the pivotal states of the Union. 67 00:07:30.820 --> 00:07:38.820 And another biographer called him, quote, the smartest parliamentarian and the cunningest log roller in the Illinois legislature. 68 00:07:38.820 --> 00:07:44.820 So Lincoln was not a guileless, naive, unsophisticated backwoodsman and rail splitter. 69 00:07:44.820 --> 00:07:49.820 He was slick. Slick Abe doesn't have a ring to it, but he was slick. 70 00:07:49.820 --> 00:07:58.820 One example, one anecdote of how slick he was is, you know, here he is the master wire puller, 71 00:07:58.820 --> 00:08:03.820 the master politician, the biggest conniver in Washington. That's what a master politician is. 72 00:08:03.820 --> 00:08:08.820 A group of Pennsylvania congressmen visited him in the White House, and Lincoln said this to them, 73 00:08:08.820 --> 00:08:19.820 quote, you know, I never was a contriver. I don't know much about how things are done in politics, end quote, Abraham Lincoln as president. 74 00:08:19.820 --> 00:08:28.820 And so he used these tremendous political skills and he was a political genius and a silver tongue genius at that. 75 00:08:28.820 --> 00:08:35.820 And that's a dangerous competition for a politician to be a silver tongue political genius in no matter who you are. 76 00:08:35.820 --> 00:09:05.820 Lincoln, so what did he apply this genius to? He was a central bank crusader. The one thing that the Whigs crusaded for, even before there were Whigs, from the time of Alexander Hamilton, was a central bank and they considered Andrew Jackson to be the Antichrist because Andrew Jackson destroyed the second bank of the United States in 1833 and Lincoln as a member of 77 00:09:05.820 --> 00:09:35.820 The Speaker of the State Legislature in Illinois was the head of the Whig Party by 1838. He had worked himself up to the top man in the Whig Party and he was very influential. The Whigs were very influential within the State Legislature and at that time they were opposed to gold as a basis of the monetary system and were in favor of fiat money and the national banking system and if they couldn't get that, they couldn't get a national banking system, they wanted state banks to issue paper money. 78 00:09:35.820 --> 00:09:43.220 to be the basis of the monetary system. The legislature in Illinois was about to allow 79 00:09:43.220 --> 00:09:49.380 to lapse a law that permitted the payment to the bank in paper money. So they were going 80 00:09:49.380 --> 00:09:54.140 to go back to hard money. Lincoln and the Whigs in Illinois did everything they could 81 00:09:54.140 --> 00:09:59.380 to stop this. They opposed even investigation of the State Bank of Illinois. They didn't 82 00:09:59.380 --> 00:10:04.500 even want it to be audited by anybody. And at one particular time in late December of 83 00:10:04.500 --> 00:10:10.420 of 1840. The legislature was about to vote to let this law lapse and go in the direction 84 00:10:10.420 --> 00:10:17.180 of hard money and Lincoln bolted for the door and his Whig compatriots followed him and 85 00:10:17.180 --> 00:10:21.220 they didn't want there to be a quorum to take a vote on this. The door was locked and it 86 00:10:21.220 --> 00:10:26.380 was guarded by an armed guard. So Lincoln walked across the room and jumped out the 87 00:10:26.380 --> 00:10:32.820 window. It was a first floor window and all of his Whig followers like Lemmings all jumped 88 00:10:32.820 --> 00:10:42.820 The Democrats began ridiculing him by calling him Leaping Lincoln and his Flying Brethren after that. 89 00:10:42.820 --> 00:10:53.820 This is a famous story, all the biographies of Lincoln have this story, but they usually don't tell it in the context of hard money versus inflationism. 90 00:10:53.820 --> 00:10:57.820 It's just sort of a cute story that he jumped out of a window there. 91 00:10:57.820 --> 00:11:07.820 So that's just one example of how in the early days he was fighting for inflationism in central banking, or at least against hard money. 92 00:11:07.820 --> 00:11:19.820 Lincoln was a lifelong protectionist and he made many speeches that were just downright foolish and stupid, if you look at him, even from the standards of the economics of that time, absurd. 93 00:11:19.820 --> 00:11:29.820 For example, he argued that protectionist tariffs would not harm the average consumer at all, because they would only be collected from, quote, 94 00:11:29.820 --> 00:11:39.820 those whose pride, whose abundance of means, prompt them to spurn the manufacturers of our own country and to strut around in British cloaks and coats and pantaloons. 95 00:11:39.820 --> 00:11:51.820 He told a reporter that, quote, he could not tell the reason, but he was sure that protectionist terrorists would make everything the farmers bought cheaper somehow. 96 00:11:51.820 --> 00:12:03.820 Like I said, absurdities. He was a devotee of an economist named Henry C. Carey, who all the wigs were, who wrote protectionist creeds. 97 00:12:03.820 --> 00:12:22.820 from Pennsylvania, of course, being a big protectionist, and Lincoln made another stump speech that took some of Kerry's work and said that free trade would supposedly increase the costs and prices because so much useless labor would be employed transporting goods from one country to another. 98 00:12:22.820 --> 00:12:33.820 By that logic, of course, it would be illegitimate for anyone in Ohio and Indiana to import things into Illinois as useless labor importing things into Illinois. 99 00:12:33.820 --> 00:12:43.820 Lincoln also believes in a crude version of the Marxian labor theory of value. He announced in one speech that free trade perpetuated a system whereby, 100 00:12:43.820 --> 00:12:58.820 Some have labored and others have, without labor, enjoyed a large portion of the fruits to secure to each laborer the whole product of his labor, or as nearly as possible, is a most worthy object of any good government. 101 00:12:58.820 --> 00:13:08.820 As an interesting anecdote, during the Civil War, Lincoln did receive several letters of support from Karl Marx himself. 102 00:13:08.820 --> 00:13:18.820 I have no idea whether Karl Marx ever read his speeches on the labor theory of value or not, but he was a big fan of Lincoln's. 103 00:13:18.820 --> 00:13:48.820 Protectionism, the second plank of the WIG platform. The third thing was corporate welfare. Lincoln tried this out using his dominant position in the Illinois legislature, his influence in the Illinois legislature. He was the main mover and shaker behind a $12 million appropriation for an incredible boondoggle in the early 40s, early 1840s. Here's what they planned. 104 00:13:48.820 --> 00:14:18.820 Imagine a politician proposing this today. Every river and stream was to be widened, deepened, and made navigable. A canal to connect the Illinois River and Lake Michigan was to be dug. Cities were to spring up everywhere. Capital from abroad was to come pouring in. Attracted by the glowing reports of marvelous progress and great internal wealth, people were to come swarming in by colonies. Until the end, it was imposed by this legislature under the guise of improvements in terms of economic growth. 105 00:14:18.820 --> 00:14:31.820 and Internal Improvements became so monumental in size, it is little wonder that at intervals for years afterward, the monster of debt repudiation often showed its hideous face above the waves of popular indignation. 106 00:14:31.820 --> 00:14:37.820 George Nicolet and George Hay were Lincoln's personal secretaries in the White House. 107 00:14:37.820 --> 00:14:43.820 They were also law students who studied the law in his law office in Springfield. 108 00:14:43.820 --> 00:14:50.520 And they said that the market was cluttered with Illinois bonds, one banker and one broker after another, 109 00:14:50.520 --> 00:14:57.880 to whose hands they had been recklessly confided in New York and London failed or made away with the proceeds of the sales. 110 00:14:57.880 --> 00:15:03.260 So the bond dealers were just stealing all this money and taking away with it. 111 00:15:03.260 --> 00:15:11.560 Nicolay and Hayes say, after spending $12 million, nothing was left of the brilliant schemes of the historic legislature of 1836, 112 00:15:11.560 --> 00:15:15.560 but a load of debt which crippled for many years the energies of the people. 113 00:15:15.560 --> 00:15:23.560 Herndon went on to say that the internal improvement system, the adoption of which Lincoln had played such a prominent part, 114 00:15:23.560 --> 00:15:29.560 had collapsed with the result that Illinois was left with an enormous debt and an empty treasury. 115 00:15:29.560 --> 00:15:35.560 So it was an unmitigated disaster financially, but it was a huge political success for the Whigs 116 00:15:35.560 --> 00:15:40.560 because they proved that they were able to dish out $12 million in patronage. 117 00:15:40.560 --> 00:15:46.560 And this is what shows you the importance of a central bank. 118 00:15:46.560 --> 00:15:49.560 This is why the Whigs and Lincoln wanted a central bank. 119 00:15:49.560 --> 00:15:55.560 If you do this sort of thing, you can win political support by dishing out all this patronage, 120 00:15:55.560 --> 00:16:00.560 but there's a cost in that the taxes must be raised to pay for it all. 121 00:16:00.560 --> 00:16:06.560 But if you can dish out the support without the taxes, that is by printing money, it's like magic. 122 00:16:06.560 --> 00:16:14.240 The Whigs understood that 150, 170 years ago. This was their dream. Money for nothing. 123 00:16:14.240 --> 00:16:20.760 And so that is exactly why they so tenaciously clung to the central bank issue for years 124 00:16:20.760 --> 00:16:27.880 and years and years. After this whole disaster was over, Lincoln confided to a friend that 125 00:16:27.880 --> 00:16:33.600 what he really aspired to become, this is in the late 1830s, what he really aspired 126 00:16:33.600 --> 00:16:39.960 to Become was in his words, quote, the DeWitt Clinton of Illinois. DeWitt Clinton, no relation 127 00:16:39.960 --> 00:16:45.600 to Bill Clinton, I don't think. DeWitt Clinton. Who was DeWitt Clinton? This is what Abraham 128 00:16:45.600 --> 00:16:50.840 Lincoln wanted to be. DeWitt Clinton was the governor of New York. Paul Johnson in his 129 00:16:50.840 --> 00:16:55.880 recent biography of the history of the American people said that DeWitt Clinton, quote, invented 130 00:16:55.880 --> 00:17:00.920 the spoils system whereby an incoming governor turned out all officeholders and rewarded 131 00:17:00.920 --> 00:17:13.920 So Lincoln aspired, by his own words, to be a midwestern boss tweed, a political string-puller and patronage dispenser, or the godfather of Illinois politics. 132 00:17:13.920 --> 00:17:20.920 That's what he wanted to be. Another disaster that he created in Illinois was moving the state capitol from Vandalia to Springfield. 133 00:17:20.920 --> 00:17:34.920 The governor of Illinois, Thomas Ford, in 1847, explained that there was no good reason for this, other than Lincoln and the Whigs were able to collect a lot of bribe money from the businesses around Springfield, so they did it. 134 00:17:34.920 --> 00:17:47.920 The governor said this, it was made to cost the state about $6 million to remove the seat of government from Vandalia to Springfield, half of which would have purchased all the real estate in that town three times over, 135 00:17:47.920 --> 00:18:07.920 and thus by multiplying railroads by distributing money to some of the counties to be wasted of course by the county commissioners and by giving the seat of government to Springfield was the whole state bought up and bribed to approve the most senseless and disastrous policy which ever crippled the energies of a growing country. 136 00:18:07.920 --> 00:18:13.920 So, in his role as the head of the Whigs in the Illinois legislature, 137 00:18:13.920 --> 00:18:16.920 Lincoln was a walking disaster financially for the state. 138 00:18:16.920 --> 00:18:22.920 He helped pile tens of millions of dollars in debt on the state taxpayers, but that was the Whig agenda. 139 00:18:22.920 --> 00:18:24.920 There it is. That's it. 140 00:18:24.920 --> 00:18:32.920 They never were able to have a central bank pay for it, however, but they fought for that for the next 30 years. 141 00:18:32.920 --> 00:18:40.000 Now who were the Whigs? Who were the Whigs exactly? I think there's a book 142 00:18:40.000 --> 00:18:45.040 named by Edgar Lee Masters entitled Lincoln the Man. Edgar Lee Masters was a 143 00:18:45.040 --> 00:18:50.040 poet and a playwright and he was a law partner of Clarence Darrow and he wrote 144 00:18:50.040 --> 00:18:55.960 this book Lincoln the Man and I think he has a perfect description of exactly who 145 00:18:55.960 --> 00:19:01.600 the Whig party people were and the Whig party was formed in 1832 as a reaction 146 00:19:01.600 --> 00:19:09.040 to Andrew Jackson, and this is what Edgar Lee Masters says, who the Whigs were. 147 00:19:09.040 --> 00:19:11.240 And Henry Clay was their leader. 148 00:19:11.240 --> 00:19:15.200 Henry Clay was the champion of that political system, the Whigs, which doles favors to the 149 00:19:15.200 --> 00:19:18.040 strong in order to win and keep their adherents to the government. 150 00:19:18.040 --> 00:19:22.640 His system offered shelter to devious schemes and corrupt enterprises, and a people taxed 151 00:19:22.640 --> 00:19:26.080 to make profits for enterprises that cannot stand alone. 152 00:19:26.080 --> 00:19:31.320 His example and his doctrines led to the creation of a party that had no platform to announce 153 00:19:31.320 --> 00:19:35.020 because its principles were plunder and nothing else. 154 00:19:35.020 --> 00:19:36.800 That's why they never had a platform. 155 00:19:36.800 --> 00:19:39.160 These wigs adopted the tricks of the pickpocket 156 00:19:39.160 --> 00:19:40.960 who dresses himself like a farmer 157 00:19:40.960 --> 00:19:44.520 in order to move through a rural crowd unidentified 158 00:19:44.520 --> 00:19:47.620 while he gathers purses and watches. 159 00:19:47.620 --> 00:19:50.340 And I think that is an absolute perfect description 160 00:19:50.340 --> 00:19:52.060 of who the wigs, they stood for nothing 161 00:19:52.060 --> 00:19:54.080 because what they wanted was plunder. 162 00:19:54.080 --> 00:19:56.340 Who could say I'm for plunder, vote for me. 163 00:19:56.340 --> 00:20:08.340 Andrew Jackson was their mortal enemy because he was responsible for the destruction of the second bank of the United States. 164 00:20:08.340 --> 00:20:13.340 Andrew Jackson said about this bank, he said it is, quote, dangerous to the liberty of the American people 165 00:20:13.340 --> 00:20:19.340 because it represented a fantastic centralization of economic and political power under private control. 166 00:20:19.340 --> 00:20:23.340 Of course, we now know he was absolutely right about that. 167 00:20:23.340 --> 00:20:31.340 The Whigs made no bones about their desires for a central bank. It was a form of graft to them. 168 00:20:31.340 --> 00:20:38.340 Henry Clay left Congress in 1822 for two years to become the general counsel of the bank. 169 00:20:38.340 --> 00:20:42.340 He was $40,000 in debt at the time, personal debt. 170 00:20:42.340 --> 00:20:50.340 Clay biographer Maurice Baxter explained that Clay's income from the business and general counsel apparently amounted to what he needed. 171 00:20:50.340 --> 00:20:59.740 $3,000 a year from the bank as chief counsel, more for appearing in specific cases, and a sizable amount of real estate in Ohio and Kentucky in addition to the cash. 172 00:20:59.740 --> 00:21:09.540 When he resigned to become Secretary of State in 1825, he was pleased with his compensation, and Daniel Webster never bothered to resign. 173 00:21:09.540 --> 00:21:13.740 He just hit up the bank for money in return for his political support. 174 00:21:13.740 --> 00:21:17.840 In a letter he wrote to Nicholas Biddle, the bank's president, he said, quote, 175 00:21:17.840 --> 00:21:23.520 I believe my retainer has not been renewed or refreshed as usual. If it be wished that 176 00:21:23.520 --> 00:21:29.520 my relation to the bank should be continued, it may well be well to send me the usual retainer." 177 00:21:29.520 --> 00:21:36.200 End quote. Now, in the Whigs, there were Northern Whigs like Daniel Webster and Henry Clay who 178 00:21:36.200 --> 00:21:42.480 were statists. There were Southern Whigs like John C. Calhoun who were not as statists since 179 00:21:42.480 --> 00:22:12.480 The Northern Whigs hated Jackson because of the bank. The Southern Whigs, like Calhoun, hated Jackson because he was the father of the tariff of abominations of 1828. That was his bill that he signed. Henry Clay was the sponsor of that bill, by the way, and Andrew Jackson signed off on it. So it was an odd coalition, the Whigs. And they didn't know what to do. 180 00:22:12.480 --> 00:22:19.000 They toiled mightily to get a central bank. In 1840, they thought their time had arrived. 181 00:22:19.000 --> 00:22:24.340 William Henry Harrison was elected president. The Whigs had Henry Clay in charge of Congress. 182 00:22:24.340 --> 00:22:29.440 They controlled the Congress. They had a Whig in the White House. They immediately wanted 183 00:22:29.440 --> 00:22:34.240 to get a bank bill out there. William Henry Harrison, by the way, is Lew Rockwell's favorite 184 00:22:34.240 --> 00:22:47.240 The President, because he only lasted one month. He died. He died. His vice president took over. John Tyler was a southern Whig, well, a northern Whig, a southern Whig. 185 00:22:47.240 --> 00:22:54.240 John Tyler, according to his biographer, Oliver Chitwood, they really didn't pay much attention to who the vice president was. 186 00:22:54.240 --> 00:23:17.240 The Wigs immediately put in a bill for a national bank, and they didn't even consult the president, and a tariff, and a big tariff increase, didn't even ask the president, they assumed Tyler would go on with it. 187 00:23:17.240 --> 00:23:30.240 Well, Tyler turns out to be a Jeffersonian. He vetoed the bank bill, saying the power of Congress to create a national bank to operate per se over the Union has been a question of dispute from the origin of the government. 188 00:23:30.240 --> 00:23:44.240 My own opinion has been uniformly proclaimed to be against the exercise of any such power by this government. The Whigs went berserk. They rioted at the White Houses with blunderbusses, drums and trumpets, shouting a bank, a bank, Donald Tyler. 189 00:23:44.240 --> 00:24:03.240 And so for 20 more years, this was 1841, for 20 more years, this band of unscrupulous and imperious politicians continued promoting its views by electing former generals as their presidential candidates, General William Henry Harrison, General Zachary Taylor, General Winfield Scott, and so on. 190 00:24:03.240 --> 00:24:10.240 and politicians continued promoting its views by electing former generals as their presidential candidates. 191 00:24:10.240 --> 00:24:16.240 General William Henry Harrison, General Zachary Taylor, General Winfield Scott were all their candidates. 192 00:24:16.240 --> 00:24:21.240 Taylor was elected, but he died in the second year too, and so they lost another chance. 193 00:24:21.240 --> 00:24:24.240 He kicked the bucket. 194 00:24:24.240 --> 00:24:33.180 Okay, so we get to the late 1850s. The Whigs had become the Republicans. The Whig Party 195 00:24:33.180 --> 00:24:38.840 was defunct in 1856 and that's the year Lincoln became a Republican. And Lincoln assured his 196 00:24:38.840 --> 00:24:42.920 constituents that the Republicans stood for everything the Whigs always stood for, that 197 00:24:42.920 --> 00:24:46.320 there was no difference between them. There was just a different name, different, but 198 00:24:46.320 --> 00:24:50.320 it was the same collection of interest groups that had existed since the time of Hamilton 199 00:24:50.320 --> 00:25:08.320 The Wigs have been defeated every step along the way by American presidents beginning in James Madison who vetoed internal improvements bills and many protectionist tariff bills and the central bank such as Andrew Jackson. 200 00:25:08.320 --> 00:25:12.320 Lincoln was their man because Lincoln was contemptuous of the Constitution. 201 00:25:12.320 --> 00:25:22.320 Samuel Morrison and Henry Stoke Comminger describe Lincoln as quote a dictator from the standpoint of American constitutional law and practice. 202 00:25:22.320 --> 00:25:30.320 The political scientist Clinton Rossiter made the quote Lincoln dictatorship a major case study in his book, Constitutional Dictatorship. 203 00:25:30.320 --> 00:25:36.320 William Archibald Dunning, a historian, referred to the Lincoln administration as a quote temporary dictatorship. 204 00:25:36.320 --> 00:25:44.320 Even his defenders called him a benevolent dictator. He's a dictator, yeah, but he was a benevolent dictator. 205 00:25:44.320 --> 00:25:51.320 Among the reasons these people all called him a dictator and a destroyer of the Constitution. 206 00:25:51.320 --> 00:25:56.320 He conducted a war by decree for months without the consent of Congress. He suspended habeas corpus. 207 00:25:56.320 --> 00:26:05.320 He conscripted railroads, censored telegraph lines, imprisoned without trial as many as 30,000 northern citizens for anti-war opinions. 208 00:26:05.320 --> 00:26:19.320 Deported a member of Congress, Clement Volandegam of Ohio, who was a fierce opponent of the moral tariff and of the central bank for openly opposing Lincoln's income tax at a democratic party in Ohio, deported to Canada. 209 00:26:19.320 --> 00:26:32.320 And he shut down hundreds of northern newspapers. Even Francis Scott Key's grandson was sent to military prison without trial in Fort McHenry, of all places, where Francis Scott Key wrote the Star Spangled Banner from. 210 00:26:32.320 --> 00:26:40.360 and so Lincoln was their man he was contemptuous of the Constitution and it's kind of funny if you read 211 00:26:40.360 --> 00:26:45.000 Lincoln biographies one of the things you'll find is that he's the one president that exercised the 212 00:26:45.000 --> 00:26:51.160 veto the least two times he vetoed only two bills they were minor things didn't really matter too 213 00:26:51.160 --> 00:26:56.400 much and the interpretation most historians that I've read seem to give that is that Lincoln was so 214 00:26:56.400 --> 00:27:26.400 My interpretation is very different. My interpretation is this is exactly what his role was to let the Whigs, who are now calling themselves Republicans, manage domestic policy, while he did something else. Why he didn't veto their policies? Presidents had been vetoing their policies for 50 years. That was the game. Senator John Sherman, who was powerful back then, explained what a 215 00:27:26.400 --> 00:27:56.400 What Lincoln was supposed to do. He said, quote, those who elected Mr. Lincoln expect him to secure to free labor its just right to the territories of the United States, to protect by wise revenue laws the labor of our people, to secure the public lands to actual settlers, to develop the internal resources of the country by opening new means of communication between the Atlantic and the Pacific. That's kind of a mind-boggling collection of words, but David Donald interprets that. He says, interpreting this from the politicians 216 00:27:56.400 --> 00:28:02.040 Idiom into plain English. This means Lincoln and the Republicans, quote, intended to enact 217 00:28:02.040 --> 00:28:07.620 the high protective tariff that mothered monopoly, to pass a homestead law that invited speculators 218 00:28:07.620 --> 00:28:12.300 to loot the public domain and to subsidize a transcontinental railroad that afforded 219 00:28:12.300 --> 00:28:19.360 infinite opportunities for jobbery, end quote. And that of course is exactly what they did. 220 00:28:19.360 --> 00:28:24.520 Lincoln in office, the tariff, in 1857 it's the lowest tariff rates have ever been in 221 00:28:24.520 --> 00:28:54.520 American History. Four years later, they were the highest in history. The average tariff rate was 47.06% by 1862. And Frank Taussig, the historian of the American tariff system, said that long after the war, almost any increase in tariff duties demanded by domestic producers was readily made. Great fortunes were made by changes in legislation urged and brought about by those who were benefited from them. So plank number one, protectionism. 222 00:28:54.520 --> 00:29:10.520 In the midst of the Civil War, as of 1862, the Confederates were winning the war and Lincoln was desperate, and yet they're diverting millions of dollars to build railroads out to California. 223 00:29:10.520 --> 00:29:22.520 Railroad lobbyists descended on Washington in early 1862, and they created a nationalized version of the financial mess that Lincoln was involved in. 224 00:29:22.520 --> 00:29:28.240 The financial mess that Lincoln was involved in in Illinois that I described earlier, essentially. 225 00:29:28.240 --> 00:29:34.520 And this mess lasted long after Lincoln died, and of course the Grant administration was 226 00:29:34.520 --> 00:29:40.600 famous for all the corruption that came as a result of this, when during the Grant administrations 227 00:29:40.600 --> 00:29:48.780 the Speaker of the House, Shuler Colfax, who was later Grant's Vice President, was caught 228 00:29:48.780 --> 00:29:54.220 up in the credit mobiliar scandal as were a dozen prominent Republican congressmen, Secretary 229 00:29:54.220 --> 00:30:01.860 of War, Belknap was forced to resign for taking bribes, Orville Babcock, Grant's private secretary, 230 00:30:01.860 --> 00:30:07.580 was involved in a swindling ring, Treasury Secretary W.W. Richardson was implicated in 231 00:30:07.580 --> 00:30:14.780 a tax swindle, Grant's ambassador to England, Robert Schenck, had to flee England to avoid 232 00:30:14.780 --> 00:30:23.540 being arrested for selling Londoners' worthless stock on and on and on. Leonard Currie, the 233 00:30:23.540 --> 00:30:30.420 historian, remarked that following the war, following all this, other interests, desirous 234 00:30:30.420 --> 00:30:34.580 of demonstrating that they too were politically powerful and hence deserving of preference, 235 00:30:34.580 --> 00:30:41.340 hastened to the feast of corporate welfare for decades afterwards. The Central Bank was 236 00:30:41.340 --> 00:31:11.340 was finally created. The National Currency Acts of 1863 and 1864 created a network of nationally chartered banks and Lazarus Powell from Kentucky, a congressman, I dug up a quote from him that said something I thought that I kind of liked his quotation, his statement about the meaning of the creation finally of the central bank. He said he was an opponent of it at the time. He said central banking would enable the National Congress to destroy 237 00:31:11.340 --> 00:31:18.340 for Every Institution of the States and Cause All Power to be Consolidated and Concentrated Here in Washington. 238 00:31:18.340 --> 00:31:28.340 And I think he was absolutely right. The Clay Lincoln American system, as it was called, mercantilist system, was virtually complete at this time. 239 00:31:28.340 --> 00:31:35.340 And my time is almost up, but one final conclusion I would make. 240 00:31:35.340 --> 00:31:45.340 I wrote some quotations down, I guess I lost them or, you know, I want to make a minor connection between this and what David Gordon said earlier. 241 00:31:45.340 --> 00:31:57.340 Another thing popped into my head in that, you know, David Gordon mentioned that because George Washington was so revered, virtually anything he said was, you know, I'm for it because Washington's for it. 242 00:31:57.340 --> 00:32:00.340 Well, that to this day, that is true of Lincoln. 243 00:32:00.340 --> 00:32:08.340 People are still invoking Lincoln. Jack Kemp barely can ever make a speech without saying party of Lincoln, you know, I'm the party of Lincoln. 244 00:32:08.340 --> 00:32:17.340 And the late Mel Bradford had an interesting way of looking at this and he was a big critic of Lincoln, unlike me. 245 00:32:17.340 --> 00:32:25.340 And one phrase, he says one thing that came out of Lincoln's death was what he called, quote, 246 00:32:25.340 --> 00:32:31.340 A Durable Heritage of Pious Self-Congratulation 247 00:32:31.340 --> 00:32:36.340 And he quotes Robert Penn Warren as referring to this as the treasury of virtue. 248 00:32:36.340 --> 00:32:43.340 That is, anything that can be done in the name of Abraham Lincoln is virtuous and pious by definition. 249 00:32:43.340 --> 00:32:49.340 Whether it's sleazy corporate welfare schemes, inflationism, it doesn't matter. 250 00:32:49.340 --> 00:32:53.340 If you can connect Lincoln to it, it's a good idea. 251 00:32:53.340 --> 00:32:59.340 So my theme here is that mercantilism is what Lincoln was always all about, and if you really 252 00:32:59.340 --> 00:33:04.420 want to read up on this history, I have some good quotes from Benjamin Wade and other famous 253 00:33:04.420 --> 00:33:10.680 so-called abolitionists who always said the main reason they were in favor of abolition 254 00:33:10.680 --> 00:33:16.360 was to end the Three-Fifths Clause of the Constitution, which artificially inflated 255 00:33:16.360 --> 00:33:25.400 the Democratic Party's influence and to reverse that. But the end, the object, was this. The 256 00:33:25.400 --> 00:33:31.320 object of that was to get enough votes to pass this system. They always admitted that, as did Lincoln. Time is up.