Monthly Archives: December 2017

President Grant Responds to 1873 Economic Depression

(December 14, 2017) On September 18, 1873—a few days after he hosted President Ulysses Grant as a houseguest at his estate outside Philadelphia—Jay Cooke’s banking firm became insolvent. Cooke was not only the head of America’s most prestigious investment bank but was also the single largest contributor to Grant’s 1872 re-election campaign. There could hardly have been a bigger surprise to the public confidence than the failure of Jay Cooke & Company. One Philadelphia newspaper reported, “No one could have been more surprised if snow had fallen during a summer noon.”

Led by Cooke’s Ponzi-scheme-financed and government-subsidized Northern Pacific, railroads had overbuilt. The industry’s total bonded indebtedness was over $2.2 billion, which was nearly equal to the entire debt of the federal government. Huge blocks of railroad securities were quickly put on the market and price declines of 50% were common. Brokers called customers for more securities margin but too many did not have enough cash or liquid collateral to meet the calls. Cooke’s failure triggered a financial panic. The New York Stock Exchange amplified the distress by closing for ten days. Business failures in 1873 climbed to 5,000, from 4,000 in 1872 and 3,000 in 1871. Cooke’s bankruptcy was a tocsin for five ensuing years of depression.

Track construction declined by a third in 1874, causing 500,000 layoffs within the railroad ecosystem including the iron and steel industry. Prices fell. Philadelphia pig iron dropped from $56 a ton in 1872 to $17 five years later. Wages fell between 40% and 60% in the 1873 to 1877 interval.  The country seemed to be overrun with hoboes and vagrants.

Consequently, Grant’s Republican Party lost heavily in the 1874 “off year” elections. The House of Representatives switched from a 65% Republican majority in 1873 to a 62% Democratic majority in 1875. Since the Democrats elected in 1874 would not take their seats in the first session of the Forty-Fourth Congress until December 1875, Grant and the Republicans rushed through their own economic response in the closing months of the Forty-Third Congress while they still controlled both chambers. Each of their two responses would defy the accepted economic theory of the 21st century but in combination they would absolutely confound modern economists.

First, was to raise taxes. Although Republicans lowered tariffs by 10% in advance of the 1872 election in an attempt to win votes, after losing the election they pushed tariffs up again and broadened the customs duty list to cover basic consumer favorites such as coffee and tea. They also raised some domestic taxes including those on distilled spirits. Notwithstanding that the federal budget was in surplus for the preceding year as well as the projected year, Grant wanted higher taxes.

Second, was to shrink the money supply. Despite pleas to increase the money supply in order to stimulate the economy, Grant’s interpretation of  a wording ambiguity in the Specie Resumption Act cut the supply of paper currency even though the act was intended to modestly increase it.*

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*There were two types of paper currency at the time: greenbacks and banknotes. Greenbacks were similar to present day Treasury Notes. Banknotes were similar to Federal Reserve Notes, except that they were issued by private banks and backed by the government bonds those banks held as reserves.

The act required that the greenbacks be reduced by 80% of the amount of new banknotes. Thus, if $100 million in new banknotes were issued and $50 million were retired the net increase of $50 million in banknotes would require a $40 million (80%) reduction in greenbacks. Consequently, there would be a modest $10 million increase in all types of paper money circulating.

In contrast, President Grant’s interpretation applied only to the gross amount of new banknotes issued. Thus, if $100 million of new banknotes were issued and $50 million were retired, Grant would require that greenbacks be reduced by $80 million—80% of $100 million—thereby exceeding the $50 million net increase in banknotes by $30 million. In short, Grant’s interpretation virtually assured that the greenbacks in circulation would drop, even if the amount of banknotes in circulation also declined. The combined greenback-banknote money supply was certain to decrease.

Grant and fellow Republicans wanted to reduce the amount of greenbacks outstanding because the U. S. Treasury was obligated to start redeeming them for gold four years hence.

—  Charles Calhoun, The Presidency of Ulysses S. Grant, 485

How to Get Copies of Southern Reconstruction Book

(December 13, 2017) Presently Amazon and Barnes & Noble Online are out-of-stock of my latest book, Southern Reconstruction. Although my publisher has ordered a second printing, the production run will not be completed before Christmas.

Meanwhile, some physical Barnes & Noble stores do have them in stock. Go to this link, and click on the “Want it today? Check Store Availability,” which is in small print to the right of the picture cover. The link will prompt you to enter your zip code and afterward display a list of stores nearby and will also indicate which ones have Southern Reconstruction in stock. Some other independent physical stores may also have the title in stock.

You can also buy the eBook versions at both Amazon and Barnes & Noble online.

Finally, you may choose to first buy one of my other books online and simultaneously order Southern Reconstruction for later delivery.  All of my other books are in stock at Amazon and will be delivered before Xmas if ordered soon. Check My Amazon Author Page below.

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To Speak in Sarasota, Florida

(December 11, 2017) Tomorrow night I will be speaking to the Sarasota Civil War Roundtable as detailed below.

Speech Topic: Southern Reconstruction
Host Group: Civil War Roundtable of Sarasota
Date: Tuesday: December 12, 2017
Time: 7:00 PM
Location: Adult Education Building
Grace Church
8000 Bee Ridge Road
Sarasota, Florida 34241
Host Ph. Contact: Pat McInerney, 941-351-5022


Although my latest book, Southern Reconstruction, is temporarily out of stock at Amazon, it is available at Barnes & Noble online as well as at some of their physical stores.  

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A Civil War Historian’s Christmas Fantasy

(December 6, 2017) One February night in 1938 Philip Van Doren Stern had a dream. Like most of us, his morning memories of it were vague and conflicting. But the 38-year-old Civil War historian also had an interest in fantasy and the macabre, to which the dream seemed somehow connected. The story had something to do with a man who had never been born, or wished he had never been born.

Stern decided to promptly write down his recollections. A narrative began to take shape, which with later revisions became a short story he titled The Greatest Gift. The finished tale leaves many of us with a renewed appreciation for everyday relationships that we have come to habitually take for granted.

Regrettably Stern failed to interest a publisher over the next four years. Consequently, toward the end of 1943 he printed two hundred copies at his expense and enclosed one in each Christmas card envelope he mailed that year. One recipient was a Hollywood agent who asked if she might show it to some studios. To Stern’s surprise RKO bought the film rights for $10,000 in the spring of 1944. By December, Good Housekeeping magazine finally published the story.

Hollywood screenwriters set to work on the manuscript until the essence of Stern’s fantasy shrank into the Third Act. Eventually it would pass through nine writers, including, Jo Swerling, Frances Goodrich, Albert Hackett, Dorothy Parker and Frank Capra after Capra purchased RKO’s rights for $50,000.

The movie was finally released in 1946 but fell short of break-even on its first run. It rose to 26th place in 1947 box office receipts. Although nominated for five Oscars it failed to win any. Thereafter the rights passed through a series of owners, ending-up at Viacom.

During the 1980s local TV stations began to run it during the Christmas season. They exploited it as opportune low cost programming for time slots not allocated to the network shows. In 1984 an aged Frank Capra commented that the film’s rise in popularity “was the damnedest thing I’ve ever seen.” He felt like “the parent of the kid who grows up to be President—but it’s the kid who did the work.” He never expected his kid to become “President.”

By 1998 the American Film Institute ranked It’s a Wonderful Life as the eleventh best movie of all time and rated George Bailey as the 9th most popular hero.


Although my latest title, Southern  Reconstruction is temporarily out of stock at Amazon and Barnes & Noble online, you can use this feature to find a Barnes & Noble store near you that has it in stock.  Click the “want it today?” box.

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Christmas Reflections of a Civil War Historian

(December 5, 2017) At the thirty-five minute and forty-five second mark in the audio below, Andrew Klavan provides three minutes of insight into two popular Christmas stories, one of which is based on a fantasy written by Civil War historian Philip Van Doren Stern (1900 – 1984). Stern wrote The Greatest Gift, which became the basis for the Jimmy Stewart movie It’s a Wonderful Life. Part of Klavan’s insight is to recognize that it is the mirror image of Charles Dickens’s A Christmas Carol.

Klavan explains, “In A Christmas Carol a greedy man is visited by spirits who teach him about the damage he has done in the world. In It’s a Wonderful Life a spirit visits a generous man to show him what the world would be like without him. It is the exact opposite tale and as every storyteller knows the opposite story is really the same story.”

As background, Klavan elaborates that the Dickens novella was so well received that it was sometimes praised as the “Fifth Gospel” after it was published in 1843. Klavan readily endorses the metaphor, although he suggests that A Christmas Carol might also be viewed as the “Fifth Book of Wisdom” to accompany Psalms, Proverbs, Ecclesiastes and Song of Solomon.

The true story of Christmas, says Klavan, is the good news of eternal life. He suggests that A Christmas Carol brilliantly integrates the concept of eternity with time as we humans experience it. By exploring the past, present, and future Scrooge learns that he must live in all three because eternity occupies all three.

Andrew Klavan is a novelist, Hollywood screenwriter, and political commentator. Tomorrow’s post shall explain how Philip Van Doren Stern turned a dream about a man who wished that he had never been born into the tale that became It’s a Wonderful Life.


Presently, my latest book, Southern Reconstruction is out of stock at Amazon. Although my publisher is preparing an second printing, if you want to buy the book before Christmas you can get it at Barnes & Noble. Although is it temporarily out-of-stock at Barnes & Noble online, you can use the zip code search feature here to find it at a Barnes & Noble store near you.

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Getting *Southern Reconstruction* by Christmas

(December 4, 2017) Amazon is temporarily out-of-stock of my latest book, Southern Reconstruction. Buyers who want the title delivered before Christmas can, however, get a copy at Barnes & Noble online, or at their stores. My publisher is currently in the process of completing a new print run, so Amazon should soon be in stock again, but not likely for Christmas deliveries.

I personally have two copies the I can sell, and sign, if desired. Anyone interested may contact me at phil_leigh(at)

All of my other books are presently in stock at Amazon and shipments will arrive before Christmas.

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