This book provides an overview of the Union financial policies during the American Civil War. While other notable works have analysed aspects of the Union finances this volume addresses the Union government's wartime fiscal policies as a whole. The title of this book indicates my primary thesis. I propose that the revenue imperative, the attempt to keep pace with the burgeoning expenses of the war, governed the Union's financial strategy more than their pre-war ideology or attempts to appease special interests, as other historians have argued. Preserving the nation placed insurmountable strains on the antebellum organization of the government, resulting in a fundamental restructuring of the American financial system. Although this change came about incidentally, rather than by design, I believe this financial transformation does constitute a critical ‘water-shed’ in American economic history. The fiscal policies developed to keep the Union forces fed, clothed and armed became the ‘father of what followed’, and laid the groundwork for the intensive financial dislocations that manifested later in the nineteenth century.

A close examination of the internal revenue measures inaugurated during the war clarifies my proposition. Throughout the antebellum period, the national government relied overwhelmingly on indirect taxes as its primary source of revenue. These ‘duties, imposts, and excises’, were collected as tariff revenue at ports throughout the United States. Because of this reliance on indirect taxes, the federal government became a less tangible force in the economic lives of most Americans. Conversely, direct taxes on real and personal property, the rates of which were determined by assessment, became a revenue method employed primarily by state and local governments. Only during the Quasi-War of the late eighteenth century, or the war against Great Britain that began in 1812, did Congress resort to collecting direct taxes. This financial structure fit neatly into the ‘fiscal federalism’ that evolved during the decades before the Civil War.

When historians of the United States contemplate federalism, they generally focus on how this governing structure allowed the ‘peculiar institution’ of slavery to develop, and inevitably, rend the nation. In this book, I argue that this fiscal federalism played an important role in the determining Union financial policy.