Union Governance

Following the secession of the Southern states, the absence of Southern Democrats in
Congress allowed the Republican Congress in Washington to enact legislation that
reshaped the nation's financial, tax, land, and higher-education systems. Prior to secession,
the South had resisted policies that would hurt the plantation economy, including tariffs to
promote industry and land grants for family farms. With the establishment of the
Confederacy, Republicans in Congress enacted sweeping federal changes, including
implementation of the Morrill Tariff and passage of the Homestead Act, Pacific Railroad Act,
and National Banking Act. The latter established a system of national banks in 1863, and
promoted development of a national currency backed by bank holdings of U.S. Treasury
securities.

Justin Smith Morrill: The Morrill Tariff, named for Vermont Representative Justin Smith Morrill, was strongly
opposed by the South.

By taxing British imports, the Morrill Tariff provided an additional source of revenue and
encouraged the establishment of domestic factories. The Morrill Tariff also impacted
immigration, as tens of thousands of Europeans were drawn to America for high-wage
factory and craftsman jobs.

The Pacific Railroad Act of 1862 promoted the construction of the transcontinental railroad
in the United States. The government provided land grants to railroad companies and
issued government bonds for financing. These opportunities encouraged railroad-
construction companies to open up the western plains and California. Railroads were also
encouraged to sell tracts for family farms at low prices with extended credit.

The 1862 Homestead Act opened up public-domain lands for family farms at no cost. This
act was unpopular among Southern slaveholders, who wanted to see more land dedicated
to plantations. Agriculture prospered during the war due to the demand from Union troops
and Britain, which was heavily reliant on U.S. wheat. The government also sponsored
agricultural training programs during this period, through the newly established Department
of Agriculture and the Morrill Land Grant College Act.