Monday, October 18, 2010

Lincoln the Unifier

Lincoln abolished slavery. He did it 30 years after the slave trade was abolished in the United Kingdom, and almost one hundred years after slave ownership was abolished in England and Wales. What else did Lincoln do?

He held the nation together, preventing the secession of the Confederate states.

He tied the nation together, supporting construction of the First Transcontinental Railroad.

He unified the nation's economy, supporting the National Bank Act and creating a national currency. (The goal of political unification via currency unification is in our time being attempted with the Euro, a currency that entered into circulation on January 1, 2002.)

Before Lincoln's time, it is said, people spoke of these United States, but since Lincoln people speak of the United States.

Wikipedia (3 October 2010) says:

The National Bank Act (ch. 58, 12 Stat. 665, February 25, 1863) was a United States federal law that established a system of national charters for banks, the United States national banks. It encouraged development of a national currency based on bank holdings of U.S. Treasury securities, the so-called National Bank Notes.

Under the National Bank Act, private banks issued national currency backed by government debt.

Since the time of Lincoln, our money has been backed by government debt. We still do that today. G. Thomas Woodward writes:

A great deal of concern is often expressed about what "backs" Federal Reserve Notes. Technically, the notes are collateralized by holdings of securities -- mostly those of the United States government.

And then there is this, from

The national crisis of the Civil War pushed the federal government to reenter bank regulation. The war required vast amounts of money and credit, and difficulties in financing the war were draining the nation's gold supply...

To help finance the war, in 1861 Treasury Secretary Salmon P. Chase recommended the establishment of a national banking system. National banks could be chartered by the federal government and authorized to issue bank notes secured by U.S. government bonds. Chase's plan would have ensured a market for federal debt, since the new national banks would be required to buy the bonds.

Oh, to be as clever as Salmon!

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