Hello H-CivWar Readers:
Today we feature David K. Thomson to talk about his new book, Bonds of War: How Civil War Financial Agents Sold the World on the Union, published by the University of North Carolina Press in April 2022.
David Thomson is assistant professor of history at Sacred Heart University. He received his Ph.D. from the University of Georgia.
To start, Dave, how did you get interested in such a head exploding topic as bond and war finance?
DKT: The reason I got into this story was, in reality, dumb luck with an archival find. I really believed that when I went to grad school I was going to explore religion during the American Civil War, specifically unconventional usage of providential discourse by both North and South. It was while I slowly started to wade my toes into exploring this that I came across a letter in a minister's correspondence. The minister based in New York state received a letter from a Civil War bond "traveling salesman" (more on that soon). In this one letter that stopped me dead in its tracks, the salesman notes how excited he is that the minister has agreed to work with him the coming Sunday to sell bonds at church. He reiterates in the work the financial arrangements in terms of how they would break down their relative shares of the commission and specific biblical passages to use in his sermon to help entice/justify his parishioners. This got me wondering, surely with all the books on the war there must be several studies that really got into depth on the topic of war bonds? Being in grad school and pre-comps, I took a moment to do a bit of a dive down the rabbit hole only to find that there's not a ton on the topic--especially in the context of Civil War literature. I thought this presented an opportunity to really try and tackle a topic that was not well trodden in Civil War historiography. This therefore led me down the path of exploring war bonds for the U.S. government during the Civil War and became ultimately, Bonds of War.
What do you argue in Bonds of War?
DKT: In Bonds of War, I argue that the story of American war finance is not one that we should just primarily associate with the 20th century, but rather it is essential to understanding the American Civil War as well. For it was the sale of some $2.23 billion in bonds by the United States government that literally helped to fund the operations of the war. If one looks at wartime newspapers, alongside battlefield reports, there were frequently the latest financial updates on these war bonds. Such was the interest in these financial instruments during the time period. Yet somehow that has been lost somewhat in the scholarship. Bonds of War therefore centers the story of bond sales and the domestic bond czar of these operations, Jay Cooke. Cooke leveraged notions of patriotism and profit as a joint ideal-- not something that ran contrary to other notions of sacrifice during the war including serving in the Union Army and largely "going without." In order to facilitate these sales, Cooke relied on an army of traveling salesman that numbered in thousands to travel across the North and even into the occupied Confederacy to sell this debt and promise in the nation. But while this is a story about the domestic sales and marketing tactics of the war, it is also a story with an international angle as well. For bonds also sold in large quantities abroad, on the order of the hundreds of millions. While prior scholarship has largely focused on the return of debt from overseas in the early months of the conflict, there's an underappreciation for the sales in the Netherlands and German states during the war itself. Sales in these regions often came with language surrounding anti-slavery and anti-aristocratic sentiments. Financiers relied to a certain degree on kinship and faith-based networks in order to facilitate these sales abroad. Such sales only increased in the Reconstruction era as more than half of the national debt could be found abroad by 1869. You cannot tell the story of Civil War debt without getting into this international dimension.
You did some impressive leg work with your book and that leads into my next question too. Where did you find your information? Were there useful government documents? Did the banks involved keep records that you could access? Were there any holes that you found and wished did not exist?
DKT: So this book really relied on a multitude of primary sources. I relied on a large number of manuscript collections for their correspondence chiefly, but also newspapers and financial records likewise proved of tremendous consequence for the work. Domestically, Jay Cooke's papers at the Historical Society of Pennsylvania proved a treasure trove, not only for his various letters and announcements that he sent out to agents and subagents, but also letters with important individuals like Salmon Chase and his brother Henry Cooke who was based in Washington. But there were also a tremendous amount of inbound letters within that collection from the traveling salesman. These reports proved some of the most inspiring correspondence that I encountered. Perhaps the other single most important collection domestically (and government documents as well) was located at the National Archives at their College Park campus. In particular, there were invaluable records as part of the Bureau of Public Debt. I'm not entirely sure how much these materials have ever been used. The volumes numbered in the hundreds and were really important for understanding who purchased this debt, where, and when. Many may think financial ledgers simply list transactions, the reality is so much more complex. There were also a wide array of financial ledgers housed abroad in England, France, Germany, Switzerland, the Netherlands, and Belgium. While these records were of critical importance to the international portion of the story, they were not fully complete. In fact, bank records were some of the more challenging to acquire--especially within the United States. So domestic banking records would qualify as one group of records where a hole existed where I wish it did not. But the vast array of government records for the United States government did help to offset that some. Perhaps the two single largest holes that do exist that I wish I could have filled in more deeply were 1) German banking records and 2) a wider array of firsthand accounts as to what motivated people to buy bonds. As for the German banking records, many of these were destroyed during World War II and therefore make it hard to quantify on one hand precisely the levels of investment while also preventing me from accessing invaluable bank correspondence. As for these firsthand accounts, I desperately wish I could have located more individuals writing to family, friends, or others about what motivated them to invest. I had to rely more heavily on newspaper accounts as a result, and I simply wish this wasn't the case.
Also, let me ask a bit of a historiographical question. It has been a long time since I read Jay Sexton's Debtor Diplomacy, but you two are operating on similar scholarly plains--how do you differ from Jay and what did you find were your biggest correctives of his work?
DKT: As for the relationship of my work to Jay Sexton's great book Debtor Diplomacy, I'd want to first note how important Jay's book was for this project. Jay has also proved as an invaluable sounding board throughout the process and helped to shape the project into the book that it became. I don't see myself as issuing a corrective to Jay's book. Rather, I think I provide a bit more to help flesh out the narrative and the paramount importance of the Netherlands and German states in the story of international bond sales during the American Civil War. Where I see a slight deviation from Jay is that I place a larger emphasis on the financiers and banking institutions themselves. Getting into this German, Dutch, Swiss, and French source material I think has merely more fully rounded out the story of transatlantic finance during the Civil War and perhaps shed additional light on the faith-based and kinship networks that facilitated these sales across the Atlantic. Mine is more a story of 19th century finance and less one centered around the state and foreign relations more specifically.
All of this is fascinating. I look forward to reading Professor Thompson's book.
I am sure he knows of the neglected short book by William E. Dodd: ROBERT J WALKER: IMPERIALIST (1914). (Dodd of course became FDR's first ambassador to Nazi Germany and was Howard K. Beale's undergraduate teacher. Beale developed the once famous Beale thesis that gave an economic interpretation of Reconstruction. Beale in turn was C. Vann Woodward's teacher.)
Walker was born in PA in 1801 but moved to Mississippi where he rivaled Jefferson Davis for control of the Democratic Party. Mississippi's economy took off when the state took possession of Native American land in the 1831 Treaty of Dancing Rabbit. That land was coveted by cotton planters. Auction of the land was in 1833. Walker made his fortune by uniting 200 bidders in an organization that agreed not to bid against themselves. Walker became a senator and arranged a 10 million dollar loan for the state from Nicholas Biddle. When the bonds defaulted, the state legislature repudiated the debt. Then Walker became Secretary of the Treasury for pro-slavery Polk. Walker pushed for annexation of Texas and managed to finance the Mexican American. (He wanted to take all of Mexico).
By 1857 he became a supporter of Douglas. When the Civil War broke out, he, like Douglas, supported the Union and in 1862 Lincoln sent him to Europe where he outmaneuvered Confederate agents to secure bonds to finance the war. One tactic was to tell the many English who lost money when Mississippi defaulted on its loan that Jefferson Davis was responsible, even though Davis only reluctantly supported repudiation advocated by Walker.
Dodd argues that Walker was more responsible for "bringing the Confederacy to its knees" than "the general who commanded at Gettysburg, for, as is well known, Secretary Chase was at the point several times of urging recognition of the South because he could not find the money to keep up the gigantic struggle." Walker himself stated: “Our greatest peril was financial, and although the glorious deeds of our army and navy, and their gallant leaders, saved us on the ocean and the land, yet the Secretary of the Treasury was the real generalissimo of the contest.”
Dodd's account is not always accurate. For instance, he mistakenly has Charles Sumner joining Walker in demanding war with Great Britain over the ALABAMA claims in order to take Canada. Sumner--despite Ron Chernow's recent biography of Grant--never argued for taking any territory by force. I look forward to reading Professor Thompson's account of Walker and others.