the transformation of european politics 1763 1848

A twenty-first-century secretary would come to the meeting wielding the mighty dollar, a fiat currency backed by the confidence of investors within and beyond the United States rather than by gold. In a modern financial crisis, the government would probably be bailing the banks out rather than vice versa. Today’s treasury secretary would likely have direct experience of banking before taking office. The relationship between government and money has changed so fundamentally since the summer of 1861 that the contemporary version of this meeting would be quite different. If the Associated Banks refused his terms, he declared, “I will go back to Washington, and issue notes for circulation for it is certain that the war must go on until the rebellion is put down, if we have to put out paper until it takes a thousand dollars to buy a breakfast.” Chase’s confidence and self-regard assumed their full stature when the bankers pushed back against his demand for gold. (Chase Bank was named in his honor four years after his death, but he had no connection with the firm.) Chase had tried and failed to win the Republican presidential nomination in the summer of 1860 the following January he accepted Lincoln’s offer of a cabinet post, but he could never shake the feeling that he would be better suited to the White House than the Treasury.

Didn’t Chase understand that a bank simply couldn’t empty its vaults and remain in business?Ĭhase didn’t like bankers and didn’t know a lot about banking: he’d been a lawyer and an antislavery campaigner in Ohio before winning a US Senate seat in 1849. But they couldn’t approve the secretary’s demand that this gigantic sum be paid in gold. They agreed to his request for an immediate $50 million, with the possibility of another $100 million in due course. (The federal government’s total annual expenditure during the 1850s had averaged less than $60 million.) Chase had come to see the representatives of the Associated Banks, the nation’s leading financiers, who were attentive to the perils of the moment. Bull Run had destroyed hopes of a swift end to the fighting, and the war was already costing more than $1 million per day. Chase traveled from Washington to New York in search of money. In August 1861, a couple of weeks after the Union’s disastrous defeat at Bull Run, Treasury Secretary Salmon P.

The transformation of european politics 1763 1848