66 e lusive v ictories
In one other vital area, the Republican Party helped the president
keep up popular support. Th e North was so wealthy that it could
generate suffi cient resources to both sustain a major war and promote
economic expansion. Accordingly, although at times fi nancing the
war presented a challenge to the administration, congressional Repub-
licans moved ahead with programs that promised benefits to key
backers. Lincoln had limited involvement in these actions, refl ecting
his Whig roots and the conviction that the legislature should take the
lead in shaping policy other than that implicated in a national emer-
gency. Only on a few key measures, such as the bill to establish a
new national banking system to help fi nance the war, did Lincoln
intervene directly to pressure lawmakers. Usually his aid was unnec-
essary. Before secession, southern lawmakers had blocked federal ini-
tiatives to promote industrial development and agricultural settlement
by free labor. With the resignation of most southern members of
Congress, though, Republicans moved quickly to push through major
legislation. Th is included steep protective tariff s that generated signif-
icant revenues while boosting domestic manufacturing in sectors such
as iron and steel. Meanwhile, a homesteading law encouraged west-
ward migration to settle new land, long a popular idea among
northern voters, while subsidies for railroad construction drew signif-
icant support in the Border States. Perhaps the best measure of how
much largesse the Union government could support was its decision
to charter a transcontinental railroad, a move that could not possibly
yield signifi cant benefi ts to the government for years.
Later wars would demonstrate just how fortunate Lincoln and the
Republicans were to be able to wage a war and pursue a bold program
of domestic reform. Most wartime presidents and their parties, as we
will see, have been forced to abandon popular domestic initiatives.
Partly this has been dictated by the economics of fi nancing a war, with
higher defense outlays crowding out social expenditures while the need
for increased revenues has compelled the federal government to adopt
unpopular tax increases. Th e Lincoln administration did have to step
up tax collections, but a good deal of revenue came from hidden
taxes, as when northern consumers paid more for imports whose price
refl ected high tariff duties.