Governor Morton's 'Finance Bureau' - NYTimes.com

Disunion follows the Civil War as it unfolded.

President Abraham Lincoln once said that Oliver P. Morton, Republican governor of Indiana, was a ?good fellow? but ?the skeeredest man I know of.? Morton had just written him a panicked letter about the results of the October 1862 state elections; Democrats had swept the contest, overwhelmingly winning the state offices and 7 of the 11 Congressional districts. They would now control both houses of the State Legislature by wide margins, threatening Morton?s control of the state?s war effort.

In response, Morton asked for federal aid to help secure the Indiana public?s support of the Union. And Lincoln, his personal opinion of Morton aside, did something surprising: he allowed the governor to establish a finance bureau that had no legal or constitutional basis.

The arrangement was unprecedented, but it worked to both Lincoln and Morton?s advantage. The historian William B. Hesseltine chronicled the ?clash of personalities? between the president and several Northern governors, including Morton, who sought to preserve their prerogatives, essentially their states? rights, against the centralizing tendencies of the wartime federal government. But Hesseltine argued that ?with many a skillful maneuver,? Lincoln ?proved that he alone could direct the war? ? by helping Morton shore up his own base in Indiana, he also tied the state even closer to the federal government.

Morton was Indiana?s first governor to be born in the state. A former Democrat, he had practiced law in Centerville. How or why he became a Republican is unclear: during the 1840s and ?50s, he had opposed antislavery positions within the Democratic Party; objected to renewing agitation over slavery; and accepted the Compromise of 1850, including its proslavery provisions. But by 1856, Morton had broken with the Democrats and joined the Republicans. As with many positions Morton took during his political career, historians have been unsure whether he acted from principle or opportunism.

Whatever the reason, Morton?s conversion served his career well. He ran unsuccessfully for governor in 1856 as a candidate for the People?s Party, as the Republicans were then called in Indiana. But four years later, he ran for office as lieutenant governor ? even though everyone knew that if Republicans gained control of the statehouse, the new majority would pick the gubernatorial candidate, Henry S. Lane, as a senator, whereupon Morton would ascend to the governorship. This is indeed what happened: Morton spent only two days as lieutenant governor.

Morton aggressively embraced his newfound Republican identity. During the secession crisis, Indiana?s departing governor, the Democrat Abram Hammond, had urged attempts to address Southern grievances. Even Lane, among the most radical of Republicans, had counseled ?conciliation? toward the South. But Morton would have none of this. Taking office as governor, he began to prepare for war. He tirelessly recruited troops, helping to make Indiana second only to Kansas in the percentage of military-age men who served three years in the Union Army. After the firing on Fort Sumter, Morton offered President Lincoln 10,000 men from Indiana alone, a significant proportion of the 75,000 that the president had called up from the entire country. Morton not only sent agents to purchase supplies for Indiana troops, including weapons and uniforms, but he also established a state arsenal to manufacture munitions.

And Morton earned the appellation the ?Soldier?s Friend? for his solicitous care of Hoosiers in the army: he visited them in camp, on the battlefield and in the hospital, and he insisted that donations from Indiana for the troops be funneled to Hoosier soldiers.

He also fought on the political battlefield. Upon taking office, Morton had made efforts to bring Hoosier Democrats into support of the war effort, and even appointed prominent Democrats to military posts. But increasingly, the state?s Democratic Party chose to oppose him. Indiana Democrats were especially disinclined to compromise after they gained a majority in the Legislature in the 1862 elections, which convinced them that voters had repudiated Morton?s war policies. Underestimating Morton?s capacity for a fight, some even expected the governor to resign.

In turn, Morton suspected that the newly elected Democrats were disloyal and might even try to take Indiana into the Confederacy ? fears that he confided to President Lincoln in a letter written shortly after the state elections. When the legislative session began in January 1863, Democrats rejected Morton?s message, preferring to endorse the opinions of Horatio Seymour, the Peace Democrat governor of New York.

Heavily outnumbered in the statehouse, Republicans first bolted ? that is, refused to show up for the session ? in an unsuccessful attempt to prevent the election of Democrats as United States senators. Anti-war Democrats introduced resolutions expressing their view that the war was ineffective as a measure to restore the Union. These resolutions did not make it to the floor for debate and so posed little threat. But other resolutions condemned the Lincoln administration?s violations of civil liberties, the issuance of the Emancipation Proclamation and the enactment of the draft. The Legislature even investigated the governor?s bank accounts, but could find no financial irregularities.

Still, it took other measures to disempower Morton: besides reorganizing the Board of Benevolent Institutions to give Democrats control of the charitable relief so important to soldiers? families, the Legislature discussed an armistice and a convention to restore the Union, which Republicans feared would make concessions to the Confederacy.

Again and again, Republicans broke the quorum in the Legislature to block what a legislator from Lafayette called ?all treasonable Legislation.? In late January, state troops deployed around the statehouse, evidently to intimidate the Democrats. The breaking point came, however, when Democrats introduced a militia bill that would have stripped military power from the governor. Rather than leave the militia under Morton?s control, the Legislature wanted to commission officers, make policy for the militia and create a four-man board to raise troops. Republicans called this a ?treasonable conspiracy? and again bolted the session.

They fled to Madison, Ind., which sits on the Ohio River opposite Kentucky, where they planned to flee if the sergeant-at-arms came for them. The Republicans were ready to come back if Democrats would drop their obnoxious measures. Democrats, meanwhile, compared the Republican bolt to Southern secession and expected that the Republicans would have to return to pass an appropriations bill. Instead, the session expired without providing funding for the state government. Democrats then expected that the governor would be forced to call a special session, which Republicans feared that Democrats would exploit ?to consummate their schemes of revolution.?

With his state in a deep political crisis, Morton chose not to call the Legislature into session ? but he still had to pay the state?s bills. The state auditor, who was also a Democrat, refused to issue funds to the governor, arguing that the state treasury could not issue them without a specific legislative appropriation. The Indiana Supreme Court, also dominated by Democrats, ruled in the auditor?s favor.

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And so, on his own authority ? but with Lincoln?s blessing ? Morton borrowed from bankers in New York to finance the state government. The governor appealed to private citizens and Republican officials for money to run the state, receiving over $1 million from bankers, corporations and local governments. Secretary of War Edwin M. Stanton provided $250,000 in War Department funds to Indiana from monies intended for states threatened with rebellion. Morton could not deposit the funds he received in these extra-legal ways into the state treasury, because the state treasurer was also a Democrat and might deny him access to the money. So he kept the money in his office safe ? which he referred to as his ?Bureau of Finance.?

Democrats accused Morton of acting like a dictator. Judge Samuel E. Perkins of the Indiana Supreme Court derided the governor for keeping ?the public treasure of the state? in his ?breeches pocket ? or in his illegal bureau of finance,? and even compared Morton to Caesar and Cromwell. Historians have agreed in condemning Morton?s actions: Frank Klement wrote that ?constitutional government collapsed in Indiana? during the period of Morton?s finance bureau.

In January 1865, a new State Legislature, dominated by Republicans, took office. W.H.H. Terrell, Morton?s military secretary, who had supervised the Bureau of Finance, submitted its expenditures to a joint legislative committee. The committee approved the expenses and the Legislature passed a bill appropriating money to repay the New York bankers at 7 percent interest. Morton?s 19th-century biographer, William Dudley Foulke, points out that Morton took a great risk in bypassing a state appropriation: had a future Legislature not upheld his actions, he might have been held personally liable for the money he borrowed. In his letter thanking Secretary of War Stanton, Morton wrote that Stanton had been ?endowed ? with soul and ability to comprehend the times and grapple with the great questions presented.?

Stanton could be forgiven for looking twice at that statement: Morton so often chided the federal government, particularly the War Department, for its slowness and inefficiency that Hesseltine called the governor ?an irritating goad? to the Lincoln administration. It is among the many quirks of the Civil War that a man once solidly in line with the Democrats would, by the middle of the war, not only fall in line behind the president, but work with him to entrench federal power in his state.

Historians have often pointed to the ways in which the Lincoln administration skirted constitutionality. Early in the war, reacting to Chief Justice Roger B. Taney?s order that he had unconstitutionally suspended the writ of habeas corpus, Lincoln asked, ?Are all the laws, but one, to go unexecuted, and the government itself go to pieces, lest that one be violated?? Morton?s actions in creating the Bureau of Finance may have been illegal and unconstitutional, but the governor, as well as the president, earnestly believed that such steps were necessary to the times and great questions of civil war.

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Nicole Etcheson is a professor of history at Ball State University and the author of the prize-winning ?A Generation at War: The Civil War Era in a Northern Community.?

Source: http://opinionator.blogs.nytimes.com/2013/06/17/governor-mortons-finance-bureau/

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