Lincoln, Republicans, and Corporate Welfare

“I supported President Lincoln. I believed his war policy would be the only way to save the country, but I see my mistake. I visited Washington a few weeks ago, and I saw the corruption of the present administration—and so long as Abraham Lincoln and his Cabinet are in power, so long will war continue. And for what? For the preservation of the Constitution and the Union? No, but for the sake of politicians and government contractors.”

J.P. Morgan—American financier and banker, 1864.

Many individuals are familiar with President Dwight D. Eisenhower’s warning about the “military-industrial complex” in his January 17, 1961, Farewell Address. The crux of this foreboding was to be leery of the military-industrial establishment’s propensity to influence America’s actions at home and abroad. Although this primarily referenced “war for profit” (echoing Smedley Darlington Butler’s description of the war profiteers in his book, War is a Racket), it is not always confined to the war industry. Indeed, the intertwining of corporations and government can extend to multiple industries. Corporate welfare is typically manifested in the form of special favors, grants, tax breaks, etc.

Abe Lincoln’s political career was intimately connected to corporate and banking interests. In 1832 Lincoln described his political philosophy: “I am in favor of a national bank. I am in favor of the internal improvement system, and a high protective tariff.” These beliefs remained consistent, whether he was a Whig or a Republican.

The Republican Party was the amalgamation of several factions, one being the Protectionist Wing of the defunct Whig Party. This sects’ philosophy mirrored many of the early Federalists relative to Lincoln’s aforementioned trifecta of political thought. When Lincoln, a minority president, came to power, astute Southerners anticipated what was in store. A modern example that puts it in clear perspective appears in the AMC show Hell on Wheels, where Thomas Durant describes a circuitous railroad route to the bewilderment of some observers. The route is drawn to maximize per mile federal subsidies and line the pockets of the group with direct financial interest in the railroads. Many of Lincoln’s supporters would reap the rewards of this venture.

As one of the highest paid lawyers in the country, Lincoln’s services were in high demand, especially by the railroads. He won numerous cases that benefitted the railroad industry and received many personal benefits in return. The Union Pacific Railroad, approved by Congress on July 1, 1862, was a key part of West Coast railroad expansion. [Massachusetts-born Thomas Clark “Doc” Durant was intimately connected to the Union Pacific, serving as its Vice-President. He was also part of the Credit Mobilier scandal.] Given the responsibility of naming the terminus of the newly created railroad, Lincoln selected Council Bluffs, Iowa; he owned property in the area. In one pen stroke Lincoln was able to greatly increase the value of his own property.

Many Southerners were aware of Lincoln and his ilk and the Confederate Constitution reflected it. One upgrade over the original constitution was the way the corporate welfare/internal improvements agenda was handled. From the outset, many Southerners complained about the ambiguously worded General Welfare Clause; Patrick Henry and others saw it as an open door for federal interventionism. The U.S. Constitution stated “...provide for the common defence and general welfare of the United States” whereas the Confederate Constitution stated “provide for the common defence, and carry on the government of the Confederate States…” This rewording was designed to lessen the chance of corporate/government abuse.

Not only did the Confederate Constitution “clean up” the “General Welfare Clause” it supported free trade and opposed protectionism. Article I, Section 8, Clause 2 stated: “but no bounties shall be granted from the Treasury; nor shall any duties or taxes on importation from foreign nations be laid to foster any branch of industry.” [This wording is not in the U.S. Constitution.] This was clearly aimed at the Republican agenda of protecting industries that fostered cozy relationships with political leaders or parties.

The Southern States had fought the corporate welfare efforts of these political factions since the beginning of the republic. This “internal improvements” agenda went hand-in-hand with corporate welfare. Economist Randall Holcombe explained: “Southern Founders sought to prohibit general revenues from being used for the benefit of special interests. Tax revenues were to be spent for programs that benefited everyone, not a specific segment of the population.” As another way to deter financial shenanigans, the Confederate Constitution gave its president a line item veto, where parts of a bill could be removed.

It is not surprising that so many modern Democrats, Republicans, Neoconservatives, Globalists, Socialists, etc., place Lincoln on a pedestal. As J.P. Morgan noted, Lincoln and his cabinet were masters of corruption and connecting favored industries with government.

Sources: “The Confederate Constitution,” by Randall Holcombe, from The Free Market, June 1992; “Defining Differences Between the United States and Confederate Constitution,” by Vito Mussomeli, from the Abbeville Blog, March 2019; Union At All Costs, by John M. Taylor; and Mildred Lewis Rutherford, A True Estimate of Abraham Lincoln & Vindication of the South (Wiggins, Mississippi: Crown Rights Book Company, 1997.). **The J.P. Morgan quote appeared on page 11 of the December 25, 1922, edition of Barron’s. Original source: New Haven Register; copied in New York World, September 15, 1864. It was reprinted in Rutherford’s book. Also, in Hear that Lonesome Whistle Blow, Dee Brown covers much of the greed surrounding Westward railroad expansion.