Lincoln, Abraham (Administration)

THE PRESIDENCY OF ABRAHAM Lincoln is inescapably linked with the crisis and devastation of the American Civil War, but this crisis also helped to shape and define modern America. From his inauguration in March 1861 until his assassination in April 1865, Lincoln presided over an economy and a society that were not only torn apart by unparalleled and appalling hostilities, but that in the long-term influenced national identity and public policies.

Violence and warfare invariably disrupt production and economic exchange and increase the prevalence of poverty. Given that the Civil War was the most disruptive conflict in American history, the Lincoln administration witnessed extraordinary economic distress. This was a widespread economic anguish that was pervasive and disproportionate enough, compared to earlier economic crises, that it necessitated some corresponding response.

Over the course of the 19th century, the United States was becoming more industrialized and more economically integrated, and the Civil War hastened the emergence of national markets and helped to foster a meaningful sense of the United States as an entity rather than as a compilation of discrete states. Given [Page 641]the threatening degree to which the Civil War gripped the lives of individuals and institutions across the nation, it is not surprising that the 1860s saw the appearance of some national public policies. Many social scientists look upon the midto late 19th century in both the United States and England as the heyday of laissez-faire capitalism, in the sense that as much as any time since the advent of the Industrial Revolution it was an era in which public policies and attitudes extolled the efficiencies of competitive forces along with individual liberties, and where there was minimal public-sector interference in commercial activities.

Then, as now, the issue for those who champion the free enterprise system was essentially summarized in the dictum that if private citizens can provide for themselves, then public intervention is not justified. Yet drastic circumstances often necessitate changes in attitudes and public policies. The degree of public intervention in mid-19th-century social and economic activities remains a matter of some debate, and it is likely that social scientists tend to underestimate the extent of interventionist policies in the economic and social life of people and firms throughout this time period. Nonetheless, in the Victorian Age in England, under the reign of Queen Victoria (1837–1901), as well as in Lincoln's America, there were fewer attempts to enact rules and regulations about poverty, income, and commerce than would become apparent in later years.

During Lincoln's years in office, federal government spending and federal involvement in the national economy noticeably increased. Measured as a ratio of federal government spending to the nation's Gross Domestic Product (GDP), the relative size of the federal government rose from around 1.4 percent in 1861 to the then-unprecedented level of 14.2 percent of GDP in 1865. However, the expanded size of the federal government was due to the demands of wartime expenditures and not because of a large commitment of financial resources to social welfare or other relief programs. Within just a few years after the war, this ratio dropped back into the range of two to three percent of GDP, which while somewhat larger than it had historically been in the antebellum period, was more in line with the gradual long-term growth of federal spending over the course of the 19th century.

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