Politics as Usual 377The Southerners then counterattacked, driving
the Union soldiers back. As often happens with green
troops, retreat quickly turned to rout. McDowell’s
men fled toward the defenses of Washington, aban-
doning their weapons, stumbling through lines of
supply wagons, trampling foolish sightseers who had
come out to watch the battle. Panic engulfed
Washington. Richmond exulted. Both sides expected
the northern capital to fall within hours.
The inexperienced southern troops were too dis-
organized to follow up their victory. Casualties on
both sides were light, and the battle had little direct
effect on anything but morale. Southern confidence
soared, while the North began to realize how
immense the task of subduing the Confederacy
would be.
After Bull Run, Lincoln devised a broader,
more systematic strategy for winning the war. The
navy would clamp a tight blockade on all southern
ports. In the West Union generals made plans to
gain control of the Mississippi. (This was part of
General Scott’sAnaconda Plan, designed to starve
the South into submission.) More important, a new
army would be mustered at Washington to invade
Virginia. Congress promptly authorized the enlist-
ment of 500,000 three-year volunteers. To lead
this army and—after General Scott’s retirement in
November—to command the Union forces, Lincoln
appointed a thirty-four-year-old major general,
George B. McClellan.
McClellan was the North’s first military hero.
Units under his command had driven the Confederates
from the pro-Union western counties of Virginia,
clearing the way for the admission of West Virginia as a
separate state in 1863. The fighting had been on a
small scale, but McClellan, an incurable romantic and
something of an egomaniac, managed to inflate its
importance. “You have annihilated two armies,” he
proclaimed in a widely publicized message to his
troops. Few Northerners noticed that they had “anni-
hilated” only about 250 Confederates.
Despite his penchant for self-glorification,
McClellan possessed solid qualifications for com-
mand. One was experience. After graduating from
West Point second in his class in 1846, he had
served in the Mexican War. During the Crimean War
he spent a year in the field, talking with British offi-
cers and studying fortifications. McClellan had a fine
military bearing, a flair for the dramatic, and the
ability to inspire troops. He was a talented adminis-
trator and organizer. He liked to concoct bold plans
and dreamed of striking swiftly at the heart of the
Confederacy to capture Richmond, Nashville, even
New Orleans. Yet he was sensible enough to insist
on massive logistic support, thorough training for
the troops, iron discipline, and meticulous staff work
before making a move.Paying for the War
After Bull Run, this policy was exactly right. By the
fall of 1861 a real army was taking shape along the
Potomac: disciplined, confident, adequately supplied.
Northern shops and factories were producing guns,
ammunition, wagons, uniforms, shoes, and the
countless other supplies needed to fight a great war.
Most manufacturers operated on a small scale, but
with the armed forces soon wearing out 3 million
pairs of shoes and 1.5 million uniforms a year and
with men leaving their jobs by the hundreds of thou-
sands to fight, the tendency of industry to mechanize
and to increase the size of the average manufacturing
unit became ever more pronounced.
At the beginning of the war Secretary of the
Treasury Salmon P. Chase underestimated how much
it would cost. He learned quickly. In August 1861
Congress passed an income tax law (3 percent on
incomes over $800, which effectively exempted ordi-
nary wage earners) and assessed a direct tax on the
states. Loans amounting to $140 million were autho-
rized. As the war dragged on and expenses mounted,
new excise taxes on every imaginable product and ser-
vice were passed, and still further borrowing was nec-
essary. In 1863 the banking system was overhauled.
During the war the federal government borrowed a
total of $2.2 billion and collected $667 million in taxes,
slightly over 20 percent of its total expenditures. These
unprecedented large sums proved inadequate. Some
debts were repaid by printing paper money unre-
deemable in coin. About $431 million in greenbacks—
the term distinguished this fiat money from the
redeemable yellowback bills—were issued during the
conflict. Public confidence in all paper money vacillated
with each change in the fortunes of the Union armies,
but by the end of the war the cost of living in the North
had doubled.
On balance, the heavy emphasis on borrowing
and currency inflation was expensive but not irrespon-
sible. In a country still chiefly agricultural, people had
relatively low cash incomes and therefore could not
easily bear a heavy tax load. Many Americans consid-
ered it reasonable to expect future generations to pay
part of the dollar cost of saving the Union when theirs
was contributing so heavily in labor and blood.Politics as Usual
Partisan politics was altered by the war but not sus-
pended. The secession of the southern states left the
Republicans with large majorities in both houses of