Two Heads (May 19, 1864)

Senator John Sherman. His resemblance to his older brother, the general, is striking (via Wikipedia).

Senator John Sherman. His resemblance to his older brother, the general, is striking (via Wikipedia).

Another double-header today, with letters from both Meade and Theodore Lyman. I’m especially taken by the end of Meade’s letter. It’s an interesting analysis of his role under Grant. He does chafe at his subordinate role and will later become increasingly agitated over not receiving the recognition he feels he deserves, but here he accepts the situation for what it is. Of course, by the time the article he mentions appeared, Horatio Wright replaced John Sedgwick at the head of the VI Corps, and Sedgwick had joined the thousands of soldiers who lie moldering in the grave. The Coppée he mentions is Henry Coppée, a West Point graduate and Mexican War veteran who went on to become the first president of Leheigh University in Bethlehem, Pennsylvania. He also wrote biographies of Ulysses Grant and George Thomas. The magazine Meade cites is the United States Service Magazine.

Senator John Sherman was William T. Sherman’s younger brother. Senator William Sprague was also a former governor of Rhode Island.

All goes on well up to this time. We did not have the big battle which I expected yesterday, as, on advancing, we found the enemy so strongly entrenched that even Grant thought it useless to knock our heads against a brick wall, and directed a suspension of the attack. We shall now try to manoeuvre again, so as to draw the enemy out of his stronghold, and hope to have a fight with him before he can dig himself into an impregnable position.

We have recent Richmond papers containing Lee’s congratulatory address to his army, so you see both sides claim having gained the advantage. Lee, however, seems to think they have gained their point when they check us.

Yesterday I had a visit from Senators Sherman, of Ohio, and Sprague, of Rhode Island; both were very complimentary to me, and wished me to know that in Washington it was well understood these were my battles. I told them such was not the case; that at first I had manceuvered the army, but that gradually, and from the very nature of things, Grant had taken the control; and that it would be injurious to the army to have two heads. I see one of the newspaper men is puzzled to know what share we each have in the work, and settles it by saying Grant does the grand strategy, and I the grand tactics. Coppée in his Army Magazine says, “the Army of the Potomac, directed by Grant, commanded by Meade, and led by Hancock, Sedgwick and Warren,” which is a quite good distinction, and about hits the nail on the head.

In his letter from May 19, Theodore Lyman continues his account of the campaign so far. A journal entry added as a footnote to the letter mentions the altercation that occurred between Meade and Philip Sheridan at Todd’s Tavern.

To continue my history a little—I had struggled with much paper to the morning of the 8th. It proved a really hot day, dusty in the extreme and with a severe sun. We staid till the morning was well along, and then started for Piney Branch Church. On the way passed a cavalry hospital, I stopped and saw Major Starr, who had been shot directly through both cheeks in a cavalry fight the day before. He was in college with me, and when I first came to the army commanded the Headquarter escort, the same place [Charles Francis] Adams now has. . . .

Near Piney Branch Church we halted, pitched tents and had something cooked. Meanwhile there was firing towards Spotsylvania, an ill omen for us. The Rebels were there first and stood across the way. Warren attacked them, but his were troops that had marched and fought almost night and day for four days and they had not the full nerve for a vigorous attack. General Robinson’s division behaved badly. Robinson rode in among them, calling them to attack with the bayonet, when he was badly shot in the knee and carried from the field. They failed to carry the position and lost a golden opportunity, for Wilson’s cavalry had occupied Spotsylvania, but of course could not keep there unless the enemy were driven from our front. . . .

A little before two we moved Headquarters down the Piney Branch Church road, south, to near its junction with the Todd’s Tavern road. Meantime the 6th Corps had come up and formed on the left of Warren, the lines running in a general easterly and westerly direction, a mile and a half north of Spotsylvania. There was a high and curving ridge on which was placed our second line and batteries, then was a steep hollow, and, again, a very irregular ridge, or broken series of ridges, much of them heavily wooded, with cleared spaces here and there; along these latter crests ran the Rebel lines in irregular curves. Preparations were pushed to get the corps in position to attack, but it was plain that many of the men were jaded and I thought some of the generals were in a like case. About half-past four what should Generals Grant and Meade take it into their heads to do but, with their whole Staffs, ride into a piece of woods close to the front while heavy skirmishing was going on. We could not see a thing except our own men lying down; but there we sat on horseback while the bullets here and there came clicking among trunks and branches and an occasional shell added its discordant tone. I almost fancy Grant felt mad that things did not move faster, and so thought he would go and sit in an uncomfortable place. General Meade, not to be bluffed, stayed longer than Grant, but he told me to show the General the way to the new Headquarters. Oh! with what intense politeness did I show the shortest road! for I had picked out the camp and knew the way.

Hobart Ward (Library of Congress).

J. Hobart Ward. After the Wilderness, Winfield Scott Hancock had him relieved for being intoxicated in the face of the enemy (Library of Congress).

Well, they could not get their attack ready; but there was heavy skirmishing.* … I think there was more nervous prostration to-day among officers and men than on any day before or since, the result of extreme fatigue and excitement. General Ward was relieved from his command, for misbehavior and intoxication in presence of the enemy during the Battle of the Wilderness. I had always supposed him to be a brave but rough man. . . .

*”Sheridan now came to Headquarters—we were at dinner. Meade told him sharply that his cavalry was in the way, though he had sent him orders to leave the road clear. S. replied that he never got the order. Meade then apologized, but Sheridan was plainly full of suppressed anger, and Meade too was in ill temper. S. went on to say that he could see nothing to oppose the advance of the 5th Corps; that the behavior of the infantry was disgraceful, etc., etc. Maybe this was the beginning of his dislike of Warren and ill-feeling against Meade.”—Lyman’s Journal.

Meade’s correspondence taken from The Life and Letters of George Gordon Meade, Major-General United States Army, Vol. 2, (New York: Charles Scribner’s Sons, 1913), pp. 197-8. Available via Google Books.

Theodore Lyman’s letter is from Meade’s Headquarters, 1863-1865: Letters of Colonel Theodore Lyman from the Wilderness to Appomattox, pp 104-106. Edited by George R. Agassiz. Boston, Massachusetts Historical Society, 1922. Available via Google Books.


Death and Taxes

Today is tax day so I felt it would be appropriate to say something about the American Civil War’s role in the creation of the national income tax. I’ve adapted this from an article I wrote several years ago when I was doing some P.R. work for the National Civil War Museum in Harrisburg, Pennsylvania.

“Nothing in this world is certain but death and taxes,”” said Benjamin Franklin. The American Civil War was responsible for plenty of both.

Congress passed the first Federal income tax in 1861 to help fund the Union effort. Although Great Britain already had an income tax and some states had experimented with the concept, it was a first for the U.S. government. But the times cried out for innovation. South Carolina had seceded from the Union in December 1860, starting a chain reaction as other Southern states followed its lead. On April 12, 1861, Southern guns in Charleston, South Carolina, opened fire on Union-held Fort Sumter. The Civil War had begun.

Few realized how much it would cost—by 1863 the Union was spending more than $2 million a day on the war. The country’s previous methods of raising money, primarily from tariffs and the sale of public land, were inadequate to handle this new crisis.

Salmon P. Chase, Lincoln's secretary of the treasury and a member of his "team of rivals." Young George Gordon Meade had once been a student at a school that Chase ran. When he later met the treasury secretary during the Civil War, Meade declined to point out their former connection (Library of Congress).

Salmon P. Chase, Lincoln’s secretary of the treasury and a member of his “team of rivals.” Young George Gordon Meade had once been a student at a school that Chase ran. When he later met the treasury secretary during the Civil War, Meade declined to point out their former connection (Library of Congress).

President Abraham Lincoln’s Treasury Secretary was Salmon P. Chase, a former Ohio governor and senator who had been Lincoln’s rival for the Republican nomination in 1860. When Congress returned to Washington in July 1861 Chase told it the government needed $318 million—six times what it had spent the year before. He expected most of it would come from loans and some from land sales and tariffs, but Chase estimated a $20 million shortfall. He asked Congress to use its “superior wisdom” and close the gap.

The income tax was just one way to do that. In August Congress passed a bill that imposed a flat 3% rate on net earnings after an $800 exemption, with taxes due by June 30, 1862. It also introduced the nation’s first tax loophole: Interest from government bonds was taxed at only 1.5%, in an attempt to spur sales.

The 1861 tax was one everyone could love, because Congress created no system to collect it. By the next spring the realities of the war’s costs were obvious to all, and Congress set out to tax with a vengeance. It passed an internal revenue bill that was seventeen pages long—119 sections of tiny type printed in three columns. It included stamp taxes, excise taxes, inheritance taxes, license taxes—taxes, it seemed, on just about everything. President Lincoln signed it on July 1, 1862.

The bill taxed incomes at a rate of 3% on earnings between $600 and $10,000, and 5% above that, with deductions allowed for other taxes paid. The progressive rate was merely a point of practicality. As John F. Witte pointed out in The Politics and Development of the Federal Income Tax, “[P]rogressivity was introduced not out of concern for equity, but rather to increase revenues.” Only a small percentage of Americans paid the income tax, because relatively few earned more than $600 a year. For example, a private in the army earned a mere $13 a month.

To collect all the new taxes, Congress established the first Bureau of Internal Revenue, and Chase asked George S. Boutwell, a former Massachusetts governor, to serve as its first commissioner. Boutwell did not lack self-esteem. “Mr. Chase’s mental processes were slow,” he said of his boss, “but time being given, he had the capacity to form sound opinions.” The new commissioner set himself up in a small office in the Treasury Building and oversaw the creation of a growing bureaucracy that would employ almost 4,000 people by war’s end.

One of Boutwell’s first hires was a cashier to handle the millions of dollars in incoming revenue. The cashier started at a salary of $1,200 a year, $600 of it subject to income tax. As a federal employee, his taxes would have been withheld directly from his paycheck—something we take for granted today.

Non-federal employees dealt with tax collectors, who handed out four-page forms of personal questions. If that weren’t bad enough, until 1870 newspapers printed individuals’ incomes and payments for everyone to see. As one taxpayer wrote, “The satisfaction of knowing how much our neighbor was worth was no compensation for the exposure of our own affairs.”

The Confederacy, in increasingly dire financial straits, passed its own income tax in April 1863, even though it ran contrary to its states’ rights philosophy. The Confederacy’s tax had a $1,000 exemption, a 1% rate for the first $1,500 after that, and 2% for incomes above $2,500. It was too little, too late.

Congress revised the federal tax in 1864. By then the national debt had ballooned to $1.8 billion, so the new tax raised rates to 5% for incomes between $600 to $5,000; 7.5% for $5,000 to $10,000, and 10% above that. Now the idea of progressivity sparked some serious debate. “It is seizing the property of men for the crime of having too much,” protested Vermont Representative Justin Morrill.

Congress began to find ways to fiddle with the tax laws—adding new deductions (for example, rent) and adding exceptions for farmers. And as an emergency measure in 1864 it raised rates for the previous year’s incomes, to 8% for earnings between $600 and $10,000.

Income tax revenues trickled in slowly at first. In 1863 the tax raised only $2 million—enough to fund the war for a day. In 1866 it raised $73.5 million. In the end income taxes accounted for only about 20% of government revenue during the Civil War. By 1867 the war was over and income tax revenues were declining, as Congress raised exemptions and lowered rates, and as more and more citizens simply stopped paying. “Does anybody believe that out of the whole 40,000,000 people in the United States there are only 272,843 who have incomes exceeding $1,000, that only about half that number have incomes not above $1,400?” sputtered an outraged Congressman in 1870.

Congress also began hearing from an ever-increasing variety of “special interests” who wanted the income tax repealed. “They speak through the daily press, from high official stations, from great corporations, from cities where wealth accumulates, and with all the advantages of social, personal, and delegated influence,” complained Ohio Senator John Sherman.

Congress finally killed the income tax in 1872. It lay dormant until 1894, when Congress, after much heated debate, passed a flat 2% tax. The Supreme Court struck down the bill as unconstitutional. Ratification of the 16th amendment in 1913 ended any questions about the tax’s constitutionality and Congress passed a limited income tax that ushered in the age of Form 1040.

The income tax has been with us ever since.