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The document provides information on the economics of European integration, including key topics such as microeconomics, macroeconomics, and various policies related to the European Union. It features a detailed table of contents outlining the structure of the book, which includes historical context, decision-making processes, and economic theories relevant to integration. Additionally, it offers links to various related publications and resources.

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f
pean

3RD EDITION

Richard Baldwin and

Charles Wyplosz

_ McGraw-HiII
_ Higher Education
London Boston Burr Ridge, IL Dubuque, lA Madison, WI New York San Francisco
SI. Louis Bangkok Bogota Caracas Kuala Lumpur Lisbon Madrid Mexico City
Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
'Ihe Ecollomics uf [iurQ/Jew/ Integratioll
3rd Edition
Richard Baldwin and Charles Wyplos1.
ISUN·13978·0·07-712163·1
ISllN·IO 0·07·712163·5

_ McGraw-HiII
_ Higher Education
Published byMcCraw .. l-liH Education
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Telephone: '14 ( 0) 1628502500
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Published by McGfi1w-Hill Educarion (UK) Limited <.111 imprint of The MeGmw-Hill Companies,
Inc 1221 Avelllle of the Americas, New York. NY 10020. Co pyrig ht © 2009 by McGraw-Hill Education
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ThL'McGrilw-Hill Companies, Inc.. induding, bllt 110t limited to, in ,my network or other ciectronic
storage or transmissioll, or broadcast for distance kilr llin g .

Fictiti()l1S names of comp<1nics, products, people, ch<lr<lcters .md/or data that may be used herein
(in case studies or in eX<1!llples) are not intended to represent any rcal individual, company,
product l)1" event.

ISBN-1397tHHl7-712163-1
ISBN -IO (Hl7-712163-5
@2009.Exclusive rightsbyTheMcGr<Jw-HiIlComp<1Ilics,lnc. for Jll<Ulllf.KturC <1nd export.
This book cnnnol be rc-exported from lhe country to which it is sold byMcGraw-Hill.

The McGraw'HIII Companies

For Sarah, Ted, Juli<l and Nick - R.ll.

In memory of my parents, whose sufferings inspired my yearning for a Europe at peace, and
who taught me the pleasure of learning - C. W.
PART I
HiSTORY, FileTS MiD INSTITUTIONS 1
1. History 3
2. Facts, law, institutions and the budget 47
3. Decision making 110

PART 11
THE 1V1ICROECONOM;CS OF ECONOMIC INTEGRATiON 139
4. Essential microeconomic tools 141
5. The essential economics of preferential liberalization 162
6. Market size and scale effects 189
7. Growth effects and factor market integration 211
8. Economic integration, labour markets and migration 233

PART III
THE MAGWECONOMICS OF MONETARY INTEGRATION 263
9. Essential macroeconomic tools 265
m. Europe's exchange rate question 288
'1'1. Optimum currency areas 314

PART IV
El! MKRO POUCIES 351
12. The Common Agricultural Policy 353
13. Location effects, economic geography and regional policy 381
14. EU competition and state aid policy 425
15. EU trade policy 449

PART V
[U tvl0NETAFY l\ND FISCAL POLiCiES 469
'16. The European Monetary System 471
17. The European monetary union 488
iB. Fiscal policy and the Stability Pact 519
19. The financial markets and the euro 547

•
Pref,;lce xi 2.7 The budget 83
Guided Toul' xvi 2.8 The Lisbon Treaty 93
Technology to Enhance Learning 2.9 Summary 105
and Teaching xix Self-assessment questions 106
Acknow!edgements xxii Essay questions 107
Further reading: the aficionado's
PART I: HISTORY, FACTS AND corner 108
INSTITUTIONS Useful websites 108
References 108
1. History 3
1.1 Early post-war period 4 3. Di':cisiun making 110
1.2 Two strands of European 3.1 Task allocation and subsidiarity:
integration: federalism and EU practice and principles 111
intergovernmentalism 11 3.2 Fiscal federalism and task
1.3 Evolution to two concentric allocation among government
circles: domino effect part I 18 levels 113
1.4 Euro-pessimism 21 3.3 Economical view of decision
1.S Deeper circles and domino effect making 121
part 11: the Single Market 3.4 The distribution of power among
Programme and the EEA 25 EU members 126
1.6 Communism's creeping failure 3.5 Legitimacy in EU decision making 132
and spectacular collapse 28 3.6 Summary 133
1.7 Reuniting east and west Europe 31 Self-assessment questions 135
1.8 Preparing for eastern enlargement: Essay questions 136
a string of new treaties 32 Further reading: the aficionado's
1.9 Summary 39 corner 136
Self-assessment questions 40 Useful websites 137
Essay questions 40 References 137
Further reading: the aficionado's
corner 41 PART I!: THE MlCROECONOMKS OF
Useful websites 42 ECONOMIC INTEGRATION 139
References 42
Annex A. Chronology from 1948 4. fssi:'ntia! microe(OnOnlie tools 141
to 2007 44 4.1 Preliminaries I: supply and
demand diagrams 142
2. facts, jaw, institutions and 4.2 Preliminaries 11: introduction to
the budget 47 open-economy supply and
2.1 Economic integration in the EU 48 demand analysis 145
2.2 EU structure: three pillars and 4.3 MFN tariff analysis 149
a roof 59 4.4 Types of protection: an economic
2.3 EU law 64 classification 155
2.4 The '8ig-s' institutions 68 4.5 Summary 159
2.5 Legislative processes 77 Self-assessment questions 159
2.6 Some important facts 80 Essay questions 160
�>"
\- vii
.,-,-;;--- ,
DETAILED TABLE OF CONTENTS

SA WTO rules 179 markets and migration 233

S.S Empirical studies 179 8.1 European labour markets:
S.6 Summary 180 a brief characterization 234
Self-assessment questions 181 8.2 Labour markets: the principles 237
Essay questions 183 8.3 Effects of trade integration 242
Further reading: the aficionado's 8.4 Migration 248
corner 183 8.5 Summary 259
Useful websites 184 Self-assessment questions 260
References 184 Essay questions 261
Annex A Discriminatory Further reading: the aficionado's
liberalization: small country case 185 corner 261
Useful websites 262
6. Market size �uld scale effects 189
PARr lIl: THE f\Ill\CROECONOM!CS or
6.1 Liberalization, defragmentation
MONI'TAEY INTEGRATION 263
and industrial restructuring: logic
and facts 190 9. Essential macroeconomic tools 265
6.2 Theoretical preliminaries:
9.1 Preliminaries: output and prices 266
monopoly, duopoly and oligopoly 192 9.2 The aggregate demand and
6.3 The BE-COMP diagram in a
supply diagram 268
closed economy 198 9.3 The short run: an /S-LM
604 The impact of European
interpretation 276
liberalization 200 9.4 The open economy and the
6.5 Summary 204 interest rate parity condition 280
Self-assessment questions 205 9.5 Monetary policy and the
Essay questions 206 exchange rate regi me 283
Further reading: the aficionado's 9.6 Summary 285
corner 206 Self-assessment questions 286
Useful websites 207 Essay questions 286
References 207 Further reading: the aficionado's
Annex A Details on the COMP and corner 287
BE curves 208 Useful websites 287
References 287
7. Growth effects and factor market
integration 211 '10. Europe's exchange rate question 288
7.1 The logic of growth and the facts 212 10.1 The impossible trinity principle 289
7.2 Medium-term growth effects: 10.2 Choices 291
induced capital formation with 10.3 What Europe did 299
SOlow's analysis 218 lOA Summary 311
DETAILED TABLE OF CONTENTS

Self-assessment questions 311 13.4 Theory part Ill: putting it all

Essay questions 312 together 402
Further reading: the aficionado's 13.5 EU regional policy 405
corner 312 13.6 Empirical evidence 412
Useful websites 313 13.7 Summary 412
References 313 Self-assessment questions 413
Essay questions 413
'11. Optimum turrency areas 314
Further reading: the aficionado's
11.1 The question, the problem
corner 414
and the answer 315
Useful websites 414
11.2 The optimum currency area
References 414
criteria 322
Annex A Agglomeration economics
11.3 Is Europe an optimum currency
more formally 416
area? 329
11.4 Will Europe become an optimum 14. EU (.ompetition and state aid policy 425
currency area? 341 14.1 The economics of anti-
11.5 Summary 345 competitive behaviour and
Self-assessment questions 347 state aid 426
Essay questions 348 14.2 EU competition policy 440
Further reading: the aficionado's 14.3 Summary 446
corner 348 Self-assessment questions 447
References 349 Essay questions 447
Further reading: the aficionado's
PART IV: W MICRO POLiCIES 351
corner 448
12. The Common Agricultural Policy 353 Useful websites 448
12.1 The old simple logic: price References 448
supports 355
12.2 Changed circumstances and 15. EU trade policy 449

CAP problems 359 15.1 Pattern of trade: facts 450

12.3 The new economic logic of CAP 366 15.2 EU institutions for trade policy 456

12.4 CAP reform 369 15.3 EU external trade policy 459

12.5 Today's CAP 371 15.4 Summary 466

12.6 Remaining problems 374 Self-assessment questions 467

12.7 Summary 377 Essay questions 467

Self-assessment questions 378 Further reading: the aficionado's

Essay questions 378 corner 468

What this book is

This is Cl textbook for courses on European economic integration. Its emphasis is on eco
nomies) covering both the microecollomics <1I1d macroeconomics of European integration,
Understanding Europe.H) economic integration) however, requires much more than economics,
so the book also covers the essential aspects of European history, institutions, laws, politics
and policies.
The book is written at a level that should be accessible to second- and third-year undergradu
ates in economics as well as advanced undergraduates and graduate students in business and
in international affairs) European studies and political science, Some knowledge of economics is
needed to absorb all the material with ease - a first-year course in the principles of economics
should suffice - but the book is self-contained in t.hat it reviews all essential economics behind
the analysis. Diligent students should therefore be able to master the material without any formal
economics background.

What is in this book

The book is organized into five parts: essential background (Part I), the microecollomics
(Part 11) and macroeconomics (Part Ill) of European integration, and microeconomic (Part IV)
and macroeconomic (Part V) policies.
Parl I presents the essential background for studying European integration,
"* An overview of the post-Second World War historical development of European integration
is presented in Chapter I. The chapter should be useful to all students, even those who are
familim with the main historical events, as this chapter stresses the economic and political
economy logic behind the events.
'* A concise presentation of the indispensable background information necessary for the study
of European integration is presented in Chapter 2. This includes key facts concerning
European economies and a brief review of the EU's legal system and principles. Chapter 2
also presents information on the vital EU institutions and the EU's legislative processes as
well as the main features of the EU budget.
")!r Chapter 3 presents an economic framework for thinking about EU institutions. The first
part explains how the 'theory of fiscal federalism' can be used to consider the appropriateness
of the allocation of powers between EU institutions and EU Member States. The second part
explains how economic reasoning - game theory in particular - can be used to analyse EU
deciSion-making procedures for their decision-making efficiency as well as their implica�
tions for the distribution of power among EU members. While these arc not classic topics in
the study of European integration, they are essential to underst<lI1ding the current challenges
facing the EU, such as the 2004 enlargement and the debates around the Lisbon Treaty.

Part II presents the microeconomic aspects of Europenll integration.

i'o( An introduction to the fundamental methods of trade policy analysis is presented in

Chap'ter 4. The chapter introduces basic supply and demand analysis in an open economy,
the key economic welfare concepts of consumer and producer surplus, and lIses these to
study the simple economics of tariff protection.

'k An in-depth analysis of European preferential trade liberalization is given in Chapter 5.

The focus is on how the formation of a customs union or free trade area affects people,
companies and governments inside and outside the integrating nations.

1<: A thorough study of how the market-expanding aspects of European integration affects the
efficiency of European firms is presented in Chapter 6. The main line of reasoning explains
how integration in the presence of scale economies and imperfect competition can produce
fewer, bigger and more efficient firms facing more effective competition from each other.

,;,. Chapter 7 gives a detailed study of the growth effects of European integration. The emphasis
is 011 the economic logic linking European integration to medium-fun and long-run growth
effects. Neoclassical and endogenous growth theory are covered, as are the basic facts and
empirical evidence.

1< Chapter 8 deals with the labour markets. It. recalls the basics of labour economics in order to
exp.lain unemployment and develop the notion that social requirements may have seriously
negative effects in terms of jobs, wages and growth. The chapter uses these insights to study
the effects of integnttion. [t deals with many controversial issues such as social dumping and
migration, trying hard to stay above the fray by presenting economic analysis as one logic,
not the Dilly one.

Part III continues the approach of Part II by providing the basic principles behind macro
economic and monetary integration.
'" The principles needed for the macroeconomic analysis are presented in Chapter 9. This
chapter provides a bird's eye view of macroeconomics, with an emphasis on the role of
capital movements and their implications lor the role of monetary policy under different
exchange rate regimes. The chapter includes a review of the Mundell-Fleming model
designed for readers who need to tool up.
* The choice of the exchange regime is the main objective of Chapter 10. I t explains how to
assess the desirability of each of the main possible arrangements. I t includes a presentation
of the two-corner strategy, which explains both why some countries have adopted the euro
and others have chosen to retain their own currencies. The usefulness of this analysis is
demonstrated through a brief overview of Europe's monetary history, from ancient times
when Europe was a de facto monetary union under the gold standard all the way to the
adoption of a single currency.
*: Chapter 1 1 presents the optimum currency area theory that helps to understand the main
costs and benefits from sharing a common currency. The theory does not provide a black
and-white answer; rather, it develops a set of economic, political and institutional criteria to
evaluate the costs and benefits of forming a monetary union. In addition, the costs and
benefits may be endogenous. Emope fulfils some criteria but not others, which explains the
unending debates on the merits of the European monetary union.
P(lrt rv presents the main microeconomic policies of the EU.
1< Chapter 1 2 looks at the Common Agricultural Policy (CAP), presenting the economics and
facts that are essential for understanding its effects. The chapter takes particular care to
examine the economic torces behind recent CAP reform in the light of international trade
negotiations (the Doha Round) anel the 2004 enlargement.
* Chapter 1 3 presents the economics that link European integration to the location of
economic activities. This includes (l presentation of the main facts on how the location
of economic activity has shifted both within and between nations. To organize thinking
about these facts - and to understand how EU regional policy might affect it - the chapter
presents the location effects of integration in the light of neoclassical theories ( Heckscher
Ohlin), as well as the so-called new economic geography. The chapter also presents the main
features of the EU's regional policy and considers the implications of the 2004 enlargement.
'\' Chapter 1 4 covers the basic elements of the EU's competition policy and state aid policy
(EU jargon for subsidies). Instead of just describing the policies, the chapter motivates and
explains them by introducing the basic economic logic o f anticompetitive practices. It
also presents several cases that illustrate the dilliculties of applying simple economics to the
complex world of international business.
* Chapter 1 5 addresses EU trade policy, i.e. its commercial policies with the rest of the
world. While trade policy is not as central to the EU as, say, the CAP and cohesion policies
are, it is important. The EU is the world's biggest trader, and trade policy is probably the
only EU 'foreign policy' that is consistently effective. The chapter covers EU trade policy
by presenting the basic facts on EU trade, covering the EU's institutional arrangements
as concerns trade policy, and finally snmm(lrizing the EU's policies towards its various
trade partners.
Part V is the counterpart to Part IV, as i t presents the main macroeconomic policies of the EU.
'* Chapter 1 6 deal." with the European Monetary System, its now defunct first version and the
new version, v.... hich is a required step towards monetary union membership. It shows that
the successes of the EMS have provided a powerful incentive to go further and create a single
currency. while its shortcomings have made the adoption of the euro look like the least bad
of all options. Its current role is also presented.
* The main features of the European monetary union are l;:1id out in Chapter 17. This includes
a description and an analysis of the institutions created by the .Maastricht Treaty. It explains
the importance attached to price stability and the me(lStlreS adopted to achieve this objective.
The chapter also provides a review of the first decade of the euro. assessing the performance
of the EClI and current debates.
* Fiscal policy is the last national macroeconomIC IIlstrumcnt remallllllg once national
monetary policy has been lost. Chapter 18 looks at the Stability and Growth Pact. designed to
deliver enough budgetary discipline not to endanger the overriding price stability objective.
As we suggested in the first edition of this book, the Pact had serious shortcomings. and they
have forced a revision. The revision and the events that made it necessary are presented.
along with remaining doubts about the chosen solution. Vve emphasize the economic and
political difficulties inherent in preserving the last national macroeconomic instrument
while ensuring fiscal discipline.
fir The last chapter deals with the financial markets. The financial services industry is being
transformed by the Single European Act 1986 and by the <ldoption of a single currency.
Chapter 19 starts with a review of what makes this industry special and then introduces
the microeconomics of capital integration. This makes it possible to interpret the changes
that have taken place and those that have not yet materialized. Financial markets are also
import,]nt for monetary policy efef ctiveness. raising delicate questions: Is the single monetary
policy symmetricaUy affecting member countries? How are financial institutions regulated
and supervised? The chapter also examines whether the euro is becoming a worldwide
currency. alongside the US dollar.

How to use this book

The book is suitable for a one-semester course that aims at covering both the microeconomics
and the macroeconomics of European integration. (f the course is long enough, the book Gll1 be
used sequentially; this is how we teach, and it works well.
Shorter courses may foclls on the trade and competition aspects; they can use only Parts 1.
II and IV. Conversely, a course dealing only with the macroeconomic aspects can use Parts lIi
and V, and finish \\"ith labour market issues as covered in Chapter 8 (which does not really
require the previews microeconomic material).
Eclectic cou rses that focus on theory and cover tracie, competition and macroeconomics,
can use only Chapters I to II. or jllst 4 to I I .
Eclectic courses oriented towards policy issues can usc, with some additional lecturing if the
students are not familiHr with basic theory, Chapters I and 2. and 12 to 19. In general. all chap
ters are self-contained but. inevitably, they often refer to results and facts presented elsewhere.
-
.. ..-•..•...•-- ...•....•....••...- .-...-----.--�.��

Each chapter includes self-assessment questions designed to help the students check how
well they master the material, and essay questions which can be given as assignments. We also
provide additional readings; most of them are easily accessible to undergraduate students
though, occasionally, when we did not find adequate references, we point to more advanced
material. Students may find some of these readings rewarding.
The third edition continues with our tradition of providing many internet links that should
allow students and lecturers alike to get the latest information on the EU's many fast-developing
areas. We have observed that the internet is an excellent way to stimulate students' interest by
bringing classroom teaching to real issues they sec every day in the media. While lecturers have
long used reference to print and broadcast media for the same purpose, the links we provide go
well beyond journalist treatments in a way that allows students to realize the usefulness of the
basics they have learned from the text.
introduction
Each pHrt and chapter opens with an
introduction which indicates the ideas
and concepts that will be presented in the
following pages.

Maps and diagrams

These are provided throughout the text to
show geographically the impact of changes
in the EU integration across the continent.

Boxes
Each chapter provides a nllm!>er of boxes that
provide further examples and explanations of
key facts, events or economic ideas relating to
the European Union.
GUIDED TOUR

Clear presentation
Economic models are clearly presented to aid
the interpretation of economic curves and
graphs, with extra notes and explanations
where appropriate.

Tables
��')�';'E-.�
)j ;n
;:.��--'" �::.- :-.:.:" Placed throughout the chapters, the tables
provide relevant statistics and current data
about the European Union and its member
states.

Summaries
Placed at the end of each chapter} they recap
the ideas introduced in the preceding pages
and emphasize key fllld i ngs
.

Self-assessment questions
Useful for testing knowledge of the economic
concepts and facts featured in the chapter.
G U I D E D TOUR

Essay questions
These offer practice examples for exams or
assessment) encouraging students to write full
answers that explore ideas in more detail.

. ,.= , .""., " .. ...'" . "p

" �"'-""" "

_.,.• _�..., ._. "'. _,_.."_.•A"'..�" _."

references
�::::;;;;::::7;:�::.:::;:.:�:.:�::··�·� All help provide direction for further research

:·2�}��ii��,:��.��;�:::··��, .. around the topics covered in the chapter.

Annex
Where appropriate Annex sections offer
further economic explanations, data or
background information. The appendices
enable further study to compliment the
chapter, covering more advanced concepts
and providing greater detail.
Visit www.m,cgra"v-hilLco,ukltextbooks/baldwin today

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development:

Nigel Allington, Cardiff Business School

Steven Brakman, University of Groningen
David Bywaters, University of Hertfordshire
Andreas Cornett, University of Southern Denmark
Norman Dytianquin, University of Maastricht
Finn Olesen, University of Southern Denmark
TomVerbeke, Ghent University
JefVuchelen,Vrije Universiteit Brussel
Rolf Weder, University of Basel
Maurizio Zanardi) Tilburg University

We are indebted to a number of colleagues for their suggestions and help. [n particular, in addi
tion to anonymous referees, we wish to thank Antonio Barbosa, ivlichael Burda, Ivar Bredesen,
Menzie Chinn, Rikard Forslid, Ivar Bredesen, Elena Kolokolova, Samuel Leiser, Henry
Overman, Volker Pabst, Armin Riess, Frederic Robert-Nicoud, Horst Siebert and Joachim
Tomaschett for catching errors, making useful suggestions or both. Thanks also go to Cristina
Molina for excellent proof reading, Pierre-LoiusVezina for equally good research assistance and
Roman Horvath for providing llS with data on optimum cl1rrency areaS. We are also grateful to
Natalie Jacobs and Caroline Prodger at McGraw-Hill, who encouraged us to undertake this new
edition and who have organized a panel of readers, and to Hannah Cooper and Tom Hill, the
Development Editors, who worked hard to produce a high quality book. We remain responsible
for any errors, of COllrse.
Every effort has been made to to trace and acknowledge ownership of copyright and to clear
permission for material reproduced in this book. The publishers will be pleased to make
suitable arrangements to clear permission with any copyright holders whom it has not been
possible to contact.
And what is the plight to which Europe has been
reduced? ... over wide areas a vast quivering mass of
tormented, hungry, care-worn and bewildered human
beings gape at the ruins of their cities and their homes, and
scan the dark horizons for the approach of some new peril,
tyranny or terror.... That is all that Europeans, grouped in
so many ancient states and nations ...have got by tearing
each other to pieces and spreading havoc far and wide.

Yet all the while there is a remedy ... It is to re-create the

European Family, or as much of it as we can, and to provide
it with a structure under which it can dwell in peace, in
safety and in freedom. We must build a kind of United
States of Europe.
Winston Churchill (Zurich, 19 September 1946)
CHft.PHR·' HISTORY
",,
"" """", ""' .-.� .. •..

Chapter contents

1.1 Early post-war period 4

1.2 Two strands of European integration: federalism and intergovernmentalism 11

'1.3 Evolution to two concentric circles: domino effect part I '/

1.4 Euro'pessimism 21

'1.5 Deeper circles and domino effect part II: the Single Market Programme
and the EEA 25

1.6 Communism's creeping failure and spectacular collapse 28

'1.7 Reuniting east and west Europe :i'I

1.8 Preparing for eastern enlargement: a string of new treaties 32

1.9 Summary 39

Introduction
Understanding Europe's economic integration today requires a good notion of Europe's recent
past. This chapter presents the rnain events of European economic integration in chronological
order, stressing, wherever possible, the economic and political economy logic behind the events.

1.1 Early post-war period

In 1945, a family standing almost anywhere in Europe found themselves in a nation which was,
or had recently been: (a) ruled by a brutal fascist dictator, (b) occupied by a foreign army or
(c) both. As a direct result of these governmental failures, tens of millions of Europeans were
dead and Europe's economy lay in ruins. Worse yet, the Second World War was not an isolated
historical event. If the parents were middle-aged, it would have been their second experience of
colossal death and destruction; the Second World War started just two decades after the cata
clysm of the First World War ( 1 9 1 4�18). Indeed, the Second World War was the fourth time in
1 30 years that France and Germany were at the core of increasingly horrifying wars.

·L1.1A climate fOf radical change

I n 1945, it was plain to all that something was desperately wrong with the W<ly Europe governed
itself. Minds were open to radical changes.
It is hard for students born in the 1980s or later to connect emotionally with the misery and
hardship that were so commonplace in Europe at the end of the Second World War. Difficult,
yet it is essential. One simply cannot understand European integration without comprehending
the mindset of Europeans in the late 1 940s.
The miracle of the web now allows students to see photos (see Fig. 1 . 1 ) , watch videos, read
original documents and Ustcn to speeches from the time. One of the best sites for all European
documents is the Luxcmbourg-based Ccntre Virtuel de la Connaissancc SUI' I'Europe. Its excellent
Another Random Document on
Scribd Without Any Related Topics
whole army corps to be moved. At another time the demand would
be equally sudden and urgent, if less vital to the Union cause. I
remember particularly the great turkey movement in November of
that year. The presidential election was hardly over before the
people of the North began to prepare Thanksgiving boxes for the
army. George Bliss, Jr., of New York, telegraphed me, on November
16th, that they had twenty thousand turkeys ready in that city to
send to the front; and the next day, fearing, I suppose, that that
wasn't enough, he wired: "It would be a very great convenience in
our turkey business if I could know definitely the approximate
number of men in each of armies of Potomac, James, and
Shenandoah, respectively."
From Philadelphia I received a message asking for transportation to
Sheridan's army for "boxes containing four thousand turkeys, and
Heaven knows what else, as a Thanksgiving dinner for the brave
fellows." And so it was from all over the country. The North not only
poured out food and clothing generously for our own men, but,
when Savannah was entered by Sherman, great quantities of
provisions were sent there for gratuitous distribution, and when
Charleston fell every effort was made to relieve destitution.
A couple of months later, in January, 1865, a piece of work not so
different from the "turkey business," but on a rather larger scale, fell
to me. This was the transfer of the Twenty-third Army Corps,
commanded by Major-General John M. Schofield, from its position on
the Tennessee River to Chesapeake Bay. There being no prospect of
a winter campaign under Thomas, Grant had ordered the corps
transferred as quickly as possible, and Mr. Stanton turned over the
direction to me. On January 10th I telegraphed to Grant at City Point
the plan to be followed. This, briefly, was to send Colonel Lewis B.
Parsons, chief of railroad and river transportation, to the West to
take charge of the corps. I proposed to move the whole body by
boats to Parkersburg if navigation allowed, and thence by the
Baltimore and Ohio Railroad to Annapolis, for I remembered well
with what promptness and success Hooker's forces, the Eleventh
and Twelfth Corps, were moved into Tennessee in 1863 by that road.
A capital advantage of that line was that it avoided all large towns—
and the temptations of large towns were bad for the soldiers in
transit. If the Ohio River should be frozen, I proposed to move the
corps by rail from Cairo, Evansville, and Jeffersonville to Parkersburg
or Bellaire, according to circumstances.
Commanders in the vicinity of the corps were advised of the change,
and ordered to prepare steamboats and transports. Loyal officers of
railroads were requested to meet Colonel Parsons at given points to
arrange for the concentration of rolling stock in case the river could
not be used. Liquor shops were ordered closed along the route, and
arrangements were made for the comfort of the troops by supplying
to them, as often as once in every hundred miles of travel, an
abundance of hot coffee in addition to their rations.
Colonel Parsons proceeded at once to Louisville, where he arrived on
the 13th. By the morning of the 18th he had started the first division
from the mouth of the Tennessee up the Ohio, and had
transportation ready for the rest of the corps. He then hurried to
Cincinnati, where, as the river was too full of ice to permit a further
transfer by water, he loaded about three thousand men on the cars
waiting there and started them eastward. The rest of the corps
rapidly followed. In spite of fogs and ice on the river, and broken
rails and machinery on the railroads, the entire army corps was
encamped on the banks of the Potomac on February 2d.
The distance over which the corps was transported was nearly
fourteen hundred miles, about equally divided between land and
water. The average time of transportation, from the embarkment on
the Tennessee to the arrival on the banks of the Potomac, did not
exceed eleven days; and what was still more important was the fact
that during the whole movement not a single accident happened
causing loss of life, limb, or property, except in a single instance
where a soldier improperly jumped from the car, under apprehension
of danger, and thus lost his life. Had he remained quiet, he would
have been as safe as were his comrades of the same car.
Much of the success of the movement was due to the hearty co-
operation of J. W. Garrett, president of the Baltimore and Ohio
Railroad. Colonel Parsons did not say too much when he wrote, in
his report of the transfer of Schofield's troops:

The circumstances, I think, render it not invidious that I

should especially refer to the management of the
Baltimore and Ohio Railroad, where indomitable will,
energy, and superior ability have been so often and so
conspicuously manifested, and where such invaluable
service has been rendered to the Government; a road
nearly four hundred miles in length, so often broken and
apparently destroyed, so constantly subjected to rebel
incursions, that, had it been under ordinary management,
it would long since have ceased operation; yet,
notwithstanding all the difficulties of the severe winter
season, the great disorganization of employees necessarily
incident to a road thus situated, its most extraordinary
curves, grades, bridges, tunnels, and the mountain
heights it scales, it has moved this large force in the
shortest possible time, with almost the exactness and
regularity of ordinary passenger trains, and with a
freedom from accident that, I think, has seldom, if ever,
been paralleled.

At the end of the war, when the department's energies were devoted
to getting itself as quickly and as thoroughly as possible upon a
peace footing, it fell to me to examine the condition of the numerous
railroads which the Government had seized and used in the time of
active military operations, and to recommend what was to be done
with them. This readjustment was not the least difficult of the
complicated questions of disarmament. The Government had spent
millions of dollars on improvements to some of these military
railroads while operating them. My report was not finished till late in
May, 1865, and as it contains much out-of-the-way information on
the subject, and has never been published, I introduce it here in full:
Washington City, May 29, 1865.
Hon. Edwin M. Stanton, Secretary of War.
Sir: I have the honor to report that I have examined the
subject of the disposition to be made of the railroads in
the States lately in rebellion, referred to me in connection
with the report of the quartermaster general, and the
rules which he has recommended to be established. The
second rule proposed by the quartermaster general
provides that no charge shall be made against a railroad
for expense of materials or expense of operation while it
has been in the hands of the military authorities of the
United States. In other words, he proposes to restore
every railroad to its claimants without any special
consideration from them for any improvements which the
United States may have made upon it.
It is true in his fourth rule he includes past expenditures
of defense and repair as an equivalent for the use of the
road while it has been in the public service, but in many
cases this does not appear to me to be sufficient. Our
expenditures upon some of these roads have been very
heavy. For instance, we have added to the value of the
road from Nashville to Chattanooga at least a million and
a half dollars. When that road was recaptured from the
public enemy it was in a very bad state of repair. Its
embankments were in many places partially washed away,
its iron was what is known as the U rail, and was laid in
the defective old-fashioned manner, upon longitudinal
sleepers, without cross ties. These sleepers were also in a
state of partial decay, so that trains could not be run with
speed or safety. All these defects have now been
remedied. The roadbed has been placed in first-rate
condition. The iron is now a heavy T rail, laid in new iron
the entire length of the line. Extensive repair shops have
also been erected, well furnished with the necessary tools
and machinery. I do not conceive that it would be just or
advisable to restore this road, with its improved tracks and
these costly shops, without any equivalent for the great
value of these improvements other than the use we have
made of it since its recapture. The fact that we have
replaced the heavy and expensive bridges over Elk, Duck,
and Tennessee Rivers, and over Running Water Creek,
should also not be forgotten in deciding this question.
The above general remarks are also applicable to that
portion of the Orange and Alexandria Railroad between
the Potomac and the Rapidan. Very extensive repair shops
have been erected at Alexandria, and furnished with costly
machinery for the use of the road, and I understand that
the iron and the roadbed are now much better than when
the Government began to use it.
The same is still more the case with the road between City
Point and Petersburg. When that road was recaptured
from the public enemy not only was the roadbed a good
deal washed away and damaged, but neither rails nor
sound ties were left upon it. Now it is in the best possible
condition. Can any one contend that it ought to be
restored to its claimants without charge for the new ties
and iron?
The case of the railroad from Harper's Ferry to Winchester
is no less striking. It was a very poor road before the war,
and was early demolished by the rebels. Not a pound of
iron, not a sound tie, was to be found upon the line when
we began its reconstruction in December last. We have
spent about five hundred thousand dollars in bringing it to
its present condition, and I have no doubt our
improvements could be sold for that sum to the Baltimore
and Ohio Company should they obtain the title to the
roadbed from the proper authorities of Virginia. Why,
then, should we give them up for nothing?
On the Morehead City and Goldsboro' Railroad we have
rebuilt twenty-seven miles of the track, and furnished it
with new iron and laid new ties on many miles more since
February last. These views also hold good, unless I am
misinformed, with regard to the railroad leading into New
Orleans, the Memphis and Little Rock Railroad, the
Memphis and Charleston Railroad, and the Mobile and
Ohio Railroad. They have all been improved at great
expense while in our hands.
In the third rule proposed by the quartermaster general it
is provided that all materials for permanent way used in
the repair and construction of any road, and all damaged
material of this class which may be left along its route,
having been thrown there during operation of destruction
and repair, shall be considered as part of the road, and
given up with it also without compensation. If this means
to give up any new iron that we have on the line of any
road, it seems to me to concede to the parties to whom
the roads are to be surrendered more than they have a
right to claim. For instance, there is now lying at
Alexandria, on the line of the Orange and Alexandria road,
iron sufficient to lay thirty miles of track. It seems
manifest to me that this iron should not be surrendered to
the road without being paid for. In my judgment it is also
advisable to establish the principle that the Government
will not pay for the damages done any road in the
prosecution of hostilities, any more than it will pay for
similar damages done by the enemy. With these
exceptions, the principles proposed by the quartermaster
general appear to be correct.
In accordance with these observations, I would
recommend that the following rules be determined upon
to govern the settlement of these matters:
1. The United States will, as soon as it can dispense with
military occupation and control of any road of which the
Quartermaster's Department is in charge, turn it over to
the parties asking to receive it who may appear to have
the best claim, and be able to operate it in such a manner
as to secure the speedy movement of all military stores
and troops, the quartermaster general, upon the advice of
the commander of the department, to determine when
this can be done, subject to the approval of the Secretary
of War.
2. Where any State has a loyal board of works, or other
executive officers charged with the supervision of
railroads, such road shall be turned over to such board of
officers rather than to any corporations or private parties.
3. When any railroad shall be so turned over, a board of
appraisers shall be appointed, who shall estimate and
determine the value of any improvements which may have
been made by the United States, either in the road itself
or in its repair shop and permanent machinery, and the
amount of such improvements shall be a lien upon the
road.
4. The parties to whom the road is turned over shall have
the option of purchasing at their value any tools, iron, or
any other materials for permanent way which have been
provided by the United States for the improvement of the
road and have not been used.
5. All other movable property, including rolling stock of all
kinds, the property of the United States, to be sold at
auction, after full public notice, to the highest bidder.
6. All rolling stock and materials of railroads captured by
the forces of the United States, and not consumed,
destroyed, or permanently fixed elsewhere—as, for
instance, when captured iron has been laid upon other
roads—shall be placed at the disposal of the roads which
originally owned them, and shall be given up to these
roads as soon as it can be spared and they appear by
proper agents authorized to receive it.
7. No payment or credit shall be given to any railroad
recaptured from the enemy for its occupation or use by
the United States to take possession of it, but its capture
and restoration shall be considered a sufficient
consideration for all such use; nor shall any indemnity be
paid for injuries done to the property of any road by the
forces of the United States during the continuance of the
war.
8. Roads which have not been operated by the United
States Quartermaster's Department not to be interfered
with unless under military necessity; such roads to be left
in the possession of such persons as may now have
possession, subject only to the removal of every agent,
director, president, superintendent, or operative who has
not taken the oath of allegiance to the United States.
9. When superintendents in actual possession decline to
take the oath, some competent person shall be appointed
as receiver of the road, who will administer its affairs and
account for its receipts to the board of directors, who may
be formally recognized as the legal and formal board of
managers, the receiver to be appointed by the Treasury
Department, as in the case of abandoned property.
I am, sir, very respectfully, your obedient servant,
C. A. Dana,
Assistant Secretary of War.

These recommendations were carried out partly in the transfer,

which was practically complete by the end of 1865. The department
decided upon a somewhat more liberal policy than I had thought
justifiable. The roads and bridges were transferred practically in the
same condition as they were in at the time of transfer. It was
believed that this generosity would react favorably upon the revenue
and credit of the nation, and there is no doubt that it did have a
good influence.
During the presidential campaign of 1864, which resulted in Lincoln's
re-election and in the further prosecution of the war upon the lines
of Lincoln's policy, we were busy in the department arranging for
soldiers to go home to vote, and also for the taking of ballots in the
army. There was a constant succession of telegrams from all parts of
the country requesting that leave of absence be extended to this or
that officer, in order that his district at home might have the benefit
of his vote and political influence. Furloughs were asked for private
soldiers whose presence in close districts was deemed of especial
importance, and there was a widespread demand that men on
detached service and convalescents in hospitals be sent home.
All the power and influence of the War Department, then something
enormous from the vast expenditure and extensive relations of the
war, was employed to secure the re-election of Mr. Lincoln. The
political struggle was most intense, and the interest taken in it, both
in the White House and in the War Department, was almost painful.
After the arduous toil of the canvass, there was naturally a great
suspense of feeling until the result of the voting should be
ascertained. On November 8th, election day, I went over to the War
Department about half past eight o'clock in the evening, and found
the President and Mr. Stanton together in the Secretary's office.
General Eckert, who then had charge of the telegraph department of
the War Office, was coming in constantly with telegrams containing
election returns. Mr. Stanton would read them, and the President
would look at them and comment upon them. Presently there came
a lull in the returns, and Mr. Lincoln called me to a place by his side.
"Dana," said he, "have you ever read any of the writings of
Petroleum V. Nasby?"
"No, sir," I said; "I have only looked at some of them, and they
seemed to be quite funny."
"Well," said he, "let me read you a specimen"; and, pulling out a thin
yellow-covered pamphlet from his breast pocket, he began to read
aloud. Mr. Stanton viewed these proceedings with great impatience,
as I could see, but Mr. Lincoln paid no attention to that. He would
read a page or a story, pause to consider a new election telegram,
and then open the book again and go ahead with a new passage.
Finally, Mr. Chase came in, and presently somebody else, and then
the reading was interrupted.
Mr. Stanton went to the door and beckoned me into the next room. I
shall never forget the fire of his indignation at what seemed to him
to be mere nonsense. The idea that when the safety of the republic
was thus at issue, when the control of an empire was to be
determined by a few figures brought in by the telegraph, the leader,
the man most deeply concerned, not merely for himself but for his
country, could turn aside to read such balderdash and to laugh at
such frivolous jests was, to his mind, repugnant, even damnable. He
could not understand, apparently, that it was by the relief which
these jests afforded to the strain of mind under which Lincoln had so
long been living, and to the natural gloom of a melancholy and
desponding temperament—this was Mr. Lincoln's prevailing
characteristic—that the safety and sanity of his intelligence were
maintained and preserved.
CHAPTER XIX.
"ON TO RICHMOND" AT LAST!
The fall of the Confederacy—In Richmond just after the
evacuation—A search for Confederate archives—
Lincoln's propositions to the Virginians—A meeting
with the Confederate Assistant Secretary of War—
Andrew Johnson turns up at Richmond—His views as
to the necessity of punishing rebels—The first Sunday
services at the Confederate capital under the old flag
—News of Lee's surrender reaches Richmond—Back
to Washington with Grant.

It was evident to all of us, as the spring of 1865 came on, that the
war was drawing to a close. Sherman was coming northward from
his triumphant march to the sea, and would soon be in
communication with Grant, who, ever since I left him in July, 1864,
had been watching Petersburg and Richmond, where Lee's army was
shut up. At the end of March Grant advanced. On April 1st Sheridan
won the battle of Five Forks; then on April 2d came the successful
assaults which drove Lee from Petersburg.
On the morning of April 3d, before I had left my house, Mr. Stanton
sent for me to come immediately to the War Department. When I
reached his office, he told me that Richmond had surrendered, and
that he wanted me to go down at once to report the condition of
affairs. I started as soon as I could get a steamboat, Roscoe
Conkling and my son Paul accompanying me. We arrived at City
Point early on April 5th. Little was known there of the condition of
things in Richmond. There were but a few officers left at the place,
and those were overwhelmed with work. I had expected to find the
President at City Point, he having been in the vicinity for several
days, but Mr. Lincoln had gone up to Richmond the day before.
I started up the river immediately, and reached the town early in the
afternoon. I went at once to find Major-General Godfrey Weitzel,
who was in command of the United States forces. He was at his
headquarters, which were in Jefferson Davis's former residence. I
had heard down the river that Davis had sold his furniture at auction
some days before the evacuation, but I found when I reached the
house that this was a mistake—the furniture was all there.
Weitzel told me that he had learned at three o'clock in the morning
of Monday, April 3d, that Richmond was being evacuated. He had
moved forward at daylight, first taking care to give his men
breakfast, in the expectation that they might have to fight. He met
no opposition, and on entering the city was greeted with a hearty
welcome from the mass of people. The mayor went out to meet him
to surrender the city, but missed him on the road.
I took a walk around Richmond that day to see how much the city
was injured. The Confederates in retreating had set it on fire, and
the damage done in that way was enormous; nearly everything
between Main Street and the river, for about three quarters of a
mile, was burned. The custom house and the Spotswood Hotel were
the only important buildings remaining in the burned district. The
block opposite the Spotswood, including the Confederate War
Department building, was entirely consumed. The Petersburg
Railroad bridge, and that of the Danville road, were destroyed. All
the enemy's vessels, excepting an unfinished ram which had her
machinery in perfect order, were burned. The Tredegar Iron Works
were unharmed. Libby Prison and Castle Thunder had also escaped
the fire.
Immediately upon arriving I began to make inquiries about official
papers. I found that the records and documents of the departments
and of Congress had generally been removed before the evacuation,
and that during the fire the Capitol had been ransacked and the
documents there scattered. In the rooms of the Secretary of the
Senate and of the Military Committee of the House of
Representatives in the State House we found some papers of
importance. They were in various cases in drawers, and all in great
confusion. They were more or less imperfect and fragmentary. In the
State Engineer's office also there were some boxes of papers
relating to the Confederate works on the Potomac, around Norfolk,
and on the Peninsula. I had all of these packed for shipment,
without attempting to put them in order, and forwarded at once to
Washington.
General Weitzel told me that he had found about twenty thousand
people in Richmond, half of them of African descent. He said that
when President Lincoln entered the town on the 4th he received a
most enthusiastic reception from the mass of the inhabitants. All the
members of Congress had escaped, and only the Assistant Secretary
of War, Judge John Archibald Campbell, remained in the fallen
capital of the Confederacy. Most of the newspaper editors had fled,
but the Whig appeared on the 4th as a Union paper, with the name
of its former proprietor at its head. The night after I arrived the
theater opened.
There was much suffering and poverty among the population, the
rich as well as the poor being destitute of food. Weitzel had decided
to issue supplies to all who would take the oath. In my first message
to Mr. Stanton I spoke of this. He immediately answered: "Please
ascertain from General Weitzel under what authority he is
distributing rations to the people of Richmond, as I suppose he
would not do it without authority; and direct him to report daily the
amount of rations distributed by his order to persons not belonging
to the military service, and not authorized by law to receive rations,
designating the color of the persons, their occupation, and sex." Mr.
Stanton seemed to be satisfied when I wired him that Weitzel was
working under General Ord's orders, approved by General Grant, and
that he was paying for the rations by selling captured property.
The important question which the President had on his mind when I
reached Richmond was how Virginia could be brought back to the
Union. He had already had an interview with Judge Campbell and
other prominent representatives of the Confederate Government. All
they asked, they said, was an amnesty and a military convention to
cover appearances. Slavery they admitted to be defunct. The
President did not promise the amnesty, but he told them he had the
pardoning power, and would save any repentant sinner from
hanging. They assured him that, if amnesty could be offered, the
rebel army would be dissolved and all the States return.
On the morning of the 7th, five members of the so-called Virginia
Legislature held a meeting to consider written propositions which the
President had handed to Judge Campbell. The President showed
these papers to me confidentially. They were two in number. One
stated reunion as a sine qua non; the second authorized General
Weitzel to allow members of the body claiming to be the Legislature
of Virginia to meet in Richmond for the purpose of recalling Virginia's
soldiers from the rebel armies, with safe conduct to them so long as
they did and said nothing hostile to the United States. In discussing
with me these documents, the President remarked that Sheridan
seemed to be getting rebel soldiers out of the war faster than the
Legislature could think.
The next morning, on April 8th, I was present at an interesting
interview between General Weitzel and General Shepley, who had
been appointed as Military Governor of Richmond, and a committee
of prominent citizens and members of the Legislature. Various
papers were read by the Virginian representatives, but they were
told plainly that no propositions could be entertained that involved a
recognition of the Confederate authorities. The committee were also
informed that if they desired to prepare an address to the people,
advising them to abandon hostility to the Government at once, and
begin to obey the laws of the United States, they should have every
facility for its circulation through the State, provided, of course, that
it met the approval of the military authorities. The two Union
generals said that if the committee desired to call a convention of
the prominent citizens of the State, with a view to the restoration of
the authority of the United States Government, they would be
allowed to go outside the lines of Richmond for the purpose of
visiting citizens in different parts of the State and inducing them to
take part in a convention. Safe conduct was promised to them for
themselves and such citizens as they could persuade to attend the
convention. They were also told that if they were not able to find
conveyances for themselves for the journey into the country, horses
would be loaned to them for that purpose. All this, they were
informed, was not to be considered as in any manner condoning any
offense of which any individual among them might have been guilty.
Judge Campbell said that he had no wish to take a prominent part in
the proceedings, but that he had long since made up his mind that
the cause of the South was hopeless. He had written a formal
memorial to Jefferson Davis, immediately after the Hampton Roads
conference, urging him and the Confederate Congress to take
immediate steps to stop the war and restore the Union. He had
deliberately remained in Richmond to meet the consequences of his
acts. He said that if he could be used in the restoration of peace and
order, he would gladly undertake any labor that might be desired of
him.
The spirit of the committee seemed to be generally the same as
Judge Campbell's, though none of them equalled him in ability and
clearness of thought and statement. They were thoroughly conscious
that they were beaten, and sincerely anxious to stop all further
bloodshed and restore peace, law, and order. This mental condition
seemed to me to be very hopeful and encouraging.
One day, after the meeting of this committee, I was in the large
room downstairs of the Spotswood Hotel when my name was called,
and I turned around to see Andrew Johnson, the new Vice-President
of the United States. He took me aside and spoke with great
earnestness about the necessity of not taking the Confederates back
without some conditions or without some punishment. He insisted
that their sins had been enormous, and that if they were let back
into the Union without any punishment the effect would be very bad.
He said they might be very dangerous in the future. The Vice-
President talked to me in this strain for fully twenty minutes, I
should think. It was an impassioned, earnest speech that he made
to me on the subject of punishing rebels. Finally, when he paused
and I got a chance to reply, I said:
"Why, Mr. Johnson, I have no power in this case. Your remarks are
very striking, very impressive, and certainly worthy of the most
serious consideration, but it does not seem to me necessary that
they should be addressed to me. They ought to be addressed to the
President and to the members of Congress, to those who have
authority in the case, and who will finally have to decide this
question which you raise."
"Mr. Dana," said he, "I feel it to be my duty to say these things to
every man whom I meet, whom I know to have any influence. Any
man whose thoughts are considered by others, or whose judgment
is going to weigh in the case, I must speak to, so that the weight of
opinion in favor of the view of this question which I offer may
possibly become preponderating and decisive."
That was in April. When Mr. Johnson became President, not long
after, he soon came to take entirely the view which he condemned
so earnestly in this conversation with me.
Toward the end of the first week after we entered Richmond the
question about opening the churches on Sunday came up. I asked
General Weitzel what he was going to do. He answered that all the
places of worship were to be allowed to open on condition that no
disloyalty should be uttered, and that the Episcopal clergymen
should read the prayer for the President of the United States. But
the next day General Shepley, the military governor, came to me to
ask that the order might be relaxed so that the clergy should be
required only not to pray for Davis. I declined giving any orders,
having received none from Washington, and said that Weitzel must
act in the matter entirely on his own judgment. Judge Campbell
used all his influence with Weitzel and Shepley to get them to
consent that a loyal prayer should not be exacted. Weitzel concluded
not to give a positive order; his decision was influenced by the
examples of New Orleans, Norfolk, and Savannah, where, he said,
the requirement had not been at first enforced. In a greater
measure, however, his decision was the result of the President's
verbal direction to him to "let the people down easy." The churches
were all well filled on Sunday, the ladies especially attending in great
numbers. The sermons were devout and not political, the city was
perfectly quiet, and there was more security for persons and
property than had existed in Richmond for many months.
On Monday morning the news of Lee's surrender reached us in
Richmond. It produced a deep impression. Even the most intensely
partisan women now felt that the defeat was perfect and the
rebellion finished, while among the men there was no sentiment but
submission to the power of the nation, and a returning hope that
their individual property might escape confiscation. They all seemed
most keenly alive to this consideration, and men like General
Anderson, the proprietor of the Tredegar works, were zealous in
their efforts to produce a thorough pacification and save their
possessions.
The next morning I received from Mr. Stanton an order to proceed to
General Grant's headquarters and furnish from there such details as
might be of interest. It was at this time that I had an interesting talk
with Grant on the condition of Lee's army and about the men and
arms surrendered. He told me that, in the long private interview
which he had with Lee at Appomattox, the latter said that he should
devote his whole efforts to pacifying the country and bringing the
people back to the Union. Lee declared that he had always been for
the Union in his own heart, and could find no justification for the
politicians who had brought on the war, the origin of which he
believed to have been in the folly of extremists on both sides. The
war, Lee declared, had left him a poor man, with nothing but what
he had upon his person, and his wife would have to provide for
herself until he could find some employment.
The officers of Lee's army, Grant said, all seemed to be glad that it
was over, and the men still more so than the officers. All were
greatly impressed by the generosity of the terms finally granted to
them, for at the time of the surrender they were surrounded and
escape was impossible. General Grant thought that these terms were
of great importance toward securing a thorough peace and
undisturbed submission to the Government.
I returned to Washington with General Grant, reaching there the
13th, and taking up my work in the department at once.
CHAPTER XX.
THE CLOSING SCENES AT WASHINGTON.
Last interview with Mr. Lincoln—Why Jacob Thompson
escaped—At the deathbed of the murdered President
—Searching for the assassins—The letters which Mr.
Lincoln had docketed "Assassination"—At the
conspiracy trial—The Confederate secret cipher—
Jefferson Davis's capture and imprisonment—A visit to
the Confederate President at Fortress Monroe—The
grand review of the Union armies—The meeting
between Stanton and Sherman—End of Mr. Dana's
connection with the War Department.

It was one of my duties at this time to receive the reports of the

officers of the secret service in every part of the country. On the
afternoon of the 14th of April—it was Good Friday—I got a telegram
from the provost marshal in Portland, Me., saying: "I have positive
information that Jacob Thompson will pass through Portland to-
night, in order to take a steamer for England. What are your
orders?"
Jacob Thompson, of Mississippi, had been Secretary of the Interior
in President Buchanan's administration. He was a conspicuous
secessionist, and for some time had been employed in Canada as a
semi-diplomatic agent of the Confederate Government. He had been
organizing all sorts of trouble and getting up raids, of which the
notorious attack on St. Albans, Vt., was a specimen. I took the
telegram and went down and read it to Mr. Stanton. His order was
prompt: "Arrest him!" But as I was going out of the door he called to
me and said: "No, wait; better go over and see the President."
At the White House all the work of the day was over, and I went into
the President's business room without meeting any one. Opening the
door, there seemed to be no one there, but, as I was turning to go
out, Mr. Lincoln called to me from a little side room, where he was
washing his hands:
"Halloo, Dana!" said he. "What is it? What's up?"
Then I read him the telegram from Portland.
"What does Stanton say?" he asked.
"He says arrest him, but that I should refer the question to you."
"Well," said the President slowly, wiping his hands, "no, I rather
think not. When you have got an elephant by the hind leg, and he's
trying to run away, it's best to let him run."
With this direction, I returned to the War Department.
"Well, what says he?" asked Mr. Stanton.
"He says that when you have got an elephant by the hind leg, and
he is trying to run away, it's best to let him run."
"Oh, stuff!" said Stanton.
That night I was awakened from a sound sleep by a messenger with
the news that Mr. Lincoln had been shot, and that the Secretary
wanted me at a house in Tenth Street. I found the President with a
bullet wound in the head, lying unconscious, though breathing
heavily, on a bed in a small side room, while all the members of the
Cabinet, and the Chief Justice with them, were gathered in the
adjoining parlor. They seemed to be almost as much paralyzed as
the unconscious sufferer within the little chamber. The surgeons said
there was no hope. Mr. Stanton alone was in full activity.
"Sit down here," said he; "I want you."
Then he began and dictated orders, one after another, which I wrote
out and sent swiftly to the telegraph. All these orders were designed
to keep the business of the Government in full motion until the crisis
should be over. It seemed as if Mr. Stanton thought of everything,
and there was a great deal to be thought of that night. The extent of
the conspiracy was, of course, unknown, and the horrible beginning
which had been made naturally led us to suspect the worst. The
safety of Washington must be looked after. Commanders all over the
country had to be ordered to take extra precautions. The people
must be notified of the tragedy. The assassins must be captured.
The coolness and clearheadedness of Mr. Stanton under these
circumstances were most remarkable. I remember that one of his
first telegrams was to General Dix, the military commander of New
York, notifying him of what had happened. No clearer brief account
of the tragedy exists to-day than this, written scarcely three hours
after the scene in Ford's Theater, on a little stand in the room where,
a few feet away, Mr. Lincoln lay dying.
I remained with Mr. Stanton until perhaps three o'clock in the
morning. Then he said: "That's enough. Now you may go home."
When I left, the President was still alive, breathing heavily and
regularly, though, of course, quite unconscious. About eight o'clock I
was awakened by a rapping on a lower window. It was Colonel
Pelouze, of the adjutant-general's office, and he said:
"Mr. Dana, the President is dead, and Mr. Stanton directs you to
arrest Jacob Thompson."
The order was sent to Portland, but Thompson couldn't be found
there. He had taken the Canadian route to Halifax.
The whole machinery of the War Department was now employed in
the effort to secure the murderer of the President and his
accomplices. As soon as I had recovered from the first shock of Mr.
Lincoln's death, I remembered that in the previous November I had
received from General Dix the following letter:

Headquarters, Department of the East,

New York City, November 17, 1864.
C. A. Dana, Esq.
My dear Sir: The inclosed was picked up in a Third Avenue
railroad car. I should have thought the whole thing got up
for the Sunday Mercury but for the genuine letter from St.
Louis in a female hand. The Charles Selby is obviously a
manufacture. The party who dropped the letter was heard
to say he would start for Washington Friday night. He is of
medium size, has black hair and whiskers, but the latter
are believed to be a disguise. He had disappeared before
the letter was picked up and examined.
Yours truly, John A. Dix.

There were two inclosures, this being one of them:

Dear Louis: The time has at last come that we have all so
wished for, and upon you everything depends. As it was
decided before you left, we were to cast lots. Accordingly
we did so, and you are to be the Charlotte Corday of the
nineteenth century. When you remember the fearful,
solemn vow that was taken by us, you will feel there is no
drawback—Abe must die, and now. You can choose your
weapons. The cup, the knife, the bullet. The cup failed us
once, and might again. Johnson, who will give this, has
been like an enraged demon since the meeting, because it
has not fallen upon him to rid the world of the monster.
He says the blood of his gray-haired father and his noble
brother call upon him for revenge, and revenge he will
have; if he can not wreak it upon the fountain-head, he
will upon some of the bloodthirsty generals. Butler would
suit him. As our plans were all concocted and well
arranged, we separated, and as I am writing—on my way
to Detroit—I will only say that all rests upon you. You
know where to find your friends. Your disguises are so
perfect and complete that without one knew your face no
police telegraphic dispatch would catch you. The English
gentleman "Harcourt" must not act hastily. Remember he
has ten days. Strike for your home, strike for your
country; bide your time, but strike sure. Get introduced,
congratulate him, listen to his stories—not many more will
the brute tell to earthly friends. Do anything but fail, and
meet us at the appointed place within the fortnight.
Inclose this note, together with one of poor Leenea. I will
give the reason for this when we meet. Return by
Johnson. I wish I could go to you, but duty calls me to the
West; you will probably hear from me in Washington.
Sanders is doing us no good in Canada.
Believe me, your brother in love,
Charles Selby.

The other was in a woman's handwriting:

St. Louis, October 21, 1864.

Dearest Husband: Why do you not come home? You left me
for ten days only, and you now have been from home
more than two weeks. In that long time only sent me one
short note—a few cold words—and a check for money,
which I did not require. What has come over you? Have
you forgotten your wife and child? Baby calls for papa
until my heart aches. We are so lonely without you. I have
written to you again and again, and, as a last resource,
yesterday wrote to Charlie, begging him to see you and
tell you to come home. I am so ill, not able to leave my
room; if I was, I would go to you wherever you were, if in
this world. Mamma says I must not write any more, as I
am too weak. Louis, darling, do not stay away any longer
from your heart-broken wife.
Leenea.

On reading the letters, I had taken them at once to President

Lincoln. He looked at them, but made no special remark, and, in
fact, seemed to attach very little importance to them. I left them
with him.
I now reminded Mr. Stanton of this circumstance, and he asked me
to go immediately to the White House and see if I could find the
letters. I thought it rather doubtful, for I knew the President received
a great many communications of a similar nature. However, I went
over, and made a thorough search through his private desk. He
seemed to have attached more importance to these papers than to
others of the kind, for I found them inclosed in an envelope marked
in his own handwriting, "Assassination." I kept the letters by me for
some time, and then delivered them to Judge John A. Bingham,
special judge advocate in the conspiracy trial. Judge Bingham
seemed to think them of importance, and asked me to have General
Dix send the finder down to Washington. I wired at once to the
general. He replied that it was a woman who had found the letters;
that she was keeping a small store in New York, had several
children, was a widow, and had no servant; that she would have to
find some one to take care of her house, but would be in
Washington in a day or two.
A few days later she came. I was not in town when Mrs. Hudspeth,
as her name proved to be, arrived. I had gone to Chicago, but from
the woman's testimony on May 12th, I learned that in November,
1864, just after the presidential election, and on the day, she said,
on which General Butler left New York, she had overheard a curious
conversation between two men in a Third Avenue car in New York
city. She had observed, when a jolt of the car pushed the hat of one
of the men forward, that he wore false whiskers. She had noticed
that his hand was very beautiful; that he carried a pistol in his belt;
that, judging from his conversation, he was a young man of
education; she heard him say that he was going to Washington that
day. The young men left the car before she did, and after they had
gone her daughter, who was with her, had picked up a letter from
the floor. Mrs. Hudspeth, thinking it belonged to her, had carried it
from the car. She afterward discovered the two letters printed above,
and took them to General Scott, who, upon reading them, said they
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Counterinsurgency in Modern Warfare 1st Edition Daniel

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Further reading: the aficionado's 7.3 Long-term growth effects: faster

SA WTO rules 179 markets and migration 233

Self-assessment questions 311 13.4 Theory part Ill: putting it all

CAP problems 359 15.1 Pattern of trade: facts 450

12.4 CAP reform 369 15.3 EU external trade policy 459

12.5 Today's CAP 371 15.4 Summary 466

12.6 Remaining problems 374 Self-assessment questions 467

12.7 Summary 377 Essay questions 467

Self-assessment questions 378 Further reading: the aficionado's

Further reading: the aficionado's Useful websites 468

Further reading: the aficionado's 18.3 Principles 528

What this book is

What is in this book

Part II presents the microeconomic aspects of Europenll integration.

i'o( An introduction to the fundamental methods of trade policy analysis is presented in

'k An in-depth analysis of European preferential trade liberalization is given in Chapter 5.

How to use this book

Maps and diagrams

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:·2�}��ii���,:��.��;�:::··��, .. around the topics covered in the chapter.

Online Learning Centre (OLe)

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Resources for students include:

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Yet all the while there is a remedy ... It is to re-create the

1.1 Early post-war period 4

1.2 Two strands of European integration: federalism and intergovernmentalism 11

'1.3 Evolution to two concentric circles: domino effect part I '/

1.6 Communism's creeping failure and spectacular collapse 28

'1.7 Reuniting east and west Europe :i'I

1.8 Preparing for eastern enlargement: a string of new treaties 32

1.1 Early post-war period

·L1.1A climate fOf radical change

The circumstances, I think, render it not invidious that I

These recommendations were carried out partly in the transfer,

It was one of my duties at this time to receive the reports of the

Headquarters, Department of the East,

There were two inclosures, this being one of them:

The other was in a woman's handwriting:

St. Louis, October 21, 1864.

On reading the letters, I had taken them at once to President

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