John Kuhl, a Hunterdon historian of the Civil War, pointed out to me in an email that

“Bonds and loans initially financed the war, the 5-20s, 7-30s, and 10-40s as advertised in the local newspapers. And the increased taxes took it from there. Besides your income tax, there were hefty boosts in real estate taxes to especially cover the local soldier bounties paid by the municipalities.”

His mention of the newspapers sent me to the Hunterdon Gazette where I found exactly what John was describing, a lengthy advertisement for sale of 5-20s, complete with explanation of what they were, which is good for me since I am always confused by these financial instruments. The interest income was taxed at a very low rate, on people whose total income exceeded $600. Otherwise, they were tax-free. And the government had to pay back in gold, not paper. No wonder they were popular. Of course the Wall Street firm that placed the ad saw a way to make money out of this, which explains their eagerness to sell these bonds. Note that the Hunterdon County Gazette was digitized by William Hartman and a troop of devoted volunteers, and that the whole series can be purchased from the Hunterdon Co. Historical Society.

From the Hunterdon County Gazette, 13 January 1864:

The Secretary of the Treasury has not yet given notice of any intention to withdraw this popular Loan from Sale at Par, and until after ten days’ notice has been given, the under-signed, as Agents for the Sale of the Bonds, will continue to supply the public.

The whole amount of the Loan authorized is Five Hundred Millions of Dollars. Nearly Four Hundred Millions have been already subscribed for and paid into the Treasury, mostly within the last seven months. The large demand from abroad, and the rapidly increasing home demand for use as the basis for circulation by National Banking Associations, now organizing in all parts of the country, will, in a very short period, absorb the balance. Sales have lately ranged from ten to fifteen millions weekly, frequently exceeding three millions daily, and as it is well known  that the Secretary of the Treasury has ample and unfailing resources in the Duties and Imports and Internal Revenues, and in the issue of the Interest Bearing Legal Tender Treasury Notes, it is almost a certainty that he will not find it necessary, for a long time to come, to seek a market for any other long or permanent Loans, the Interest and principal of which are payable in gold.

Prudence and self interest must force the minds of those contemplating the formation of National Banking Associations, as well as the minds of all who have idle money on their hands, to the prompt conclusion that they should lose no time in subscribing to this most popular Loan. It will soon be beyond their reach, and advance to a handsome premium, as was the result with the “Seven Thirty” Loan, when it was all sold and could no longer be subscribed for at par.

It is a Six per Cent Loan, the Interest and Principal payable in Coin, thus yielding over Nine per Cent. per annum at the present rate of premium on coin.

The Government requires all duties on Imports to be paid in Coin; these duties have for a long time past amounted to over a Quarter of a Million of Dollars daily, a sum nearly three times greater than that required in the payment of the interest on all the 5 20’s and other permanent Loans. So that it is hoped that the surplus Coin in the Treasury, at no distant day, will enable the United States to resume specie payment upon all liabilities.

The Loan is called 5 20 from the fact that while the Bonds may run for 20 years yet the Government has a right to pay them off in Gold, at par, at any time after 5 years. The Interest is paid half yearly, viz: on the first days of November and May.

Subscribers can have Coupon Bonds, which are payable to bearer, and are $50, $100, $500, and $1000; or Register Bonds of same denominations, and in addition, $5,000 and $10,000. For Banking purposes and for investments of Trust monies, the Registered Bonds are preferable.

These 5 20’s cannot be taxed by States, Cities, Towns, or Counties, and the Government tax on them is only one and a half per cent. on the amount of income, when the income of the holder exceeds Six Hundred Dollars per annum; all other investments, such as income from Mortgages, Railroad Stock and Bonds, etc., must pay from three to five per cent. tax on the income.

Banks and Bankers throughout the country will continue to dispose of the Bonds; and all orders sent to us direct by mail, or otherwise, will be promptly attended to.

The inconvenience of a few days delay in the delivery of the Bonds is at times unavoidable, the demand being so great; but as interest commences from the day of subscription, no loss is occasioned, and every effort is being made to deliver the Bonds as promptly as possible.



John Kuhl mentioned that local taxes had to be raised to pay the bounties to volunteers, another cost of war. This was demonstrated by this little item in the same paper as the offer of 5-20s:

BOUNTY  OFFERED.   We understand that Readington Township has resolved to pay volunteers $350, and if the men are not forthcoming, and a draft should take place, to give to each drafted man in the Township $275 towards paying his exemption. This action must certainly set the hearts of the “Redentown boys” at ease, for $25 is a small sum to add to make up the $300.

“Redentown” must be the way Readington was pronounced by the locals in 1864.

After reading this I, once again, turned to John Kuhl for enlightenment. If a man was drafted, he could pay a $300 commutation fee and be given exemption from that particular draft. He would still be eligible for future drafts. If a town could come up with enough volunteers, it would avoid the draft altogether. Since many (but not all) towns decided that their taxpayers would share the cost of paying commutation fees, it made sense to offer volunteers a little extra. In some cases, it was left to the men to come up with the money. John Kuhl mentioned instances in which the costs were shared by the men who were eligible for the draft. As an example, if three men out of fifteen were drafted, all fifteen would chip in to pay the $900 needed for commutation fees.

Raritan Township dealt with the issue in a forceful way. Here is a report on the Raritan Town Meeting of January 13, 1864, which shows exactly how municipalities went about financing their wartime obligations:

THE  TOWN  MEETING.  The action of the tax payers of this Township on Wednesday afternoon last, at the special meeting then held, was all that could be desired by the most ardent devotee of “a vigorous prosecution,” and at once, and in the most emphatic manner, declares that Raritan is determined to evade “that draft.” The proceedings were not characterized by empty speech-making, quibblings, or a stingy desire to shirk responsibility. At the opening one might have detected a discord, but we, the people, soon subdued those notes, not harmonizing, and the object was carried out instanter [sic]. There was an effort made by the Moderator, in the outset, to bring action upon the bill, as promulgated by the Town committee, announcing the objects of the meeting, but in the excitement, and intense loyalty of the assembled multitude, the wind was taken out of his sails, and in lieu thereof the following preambles and resolutions were adopted:

WHEREAS—By the Town Meeting held on the 7th day of December last, it was voted that the sum of $300 be paid to each person volunteering, who shall be credited to the Township of Raritan on the quotas of said Township, and

WHEREAS—A Town Meeting has again been called, to meet this day, (January 13,) at the Court House, in Flemington; and in said call it is set forth that the said Township—among other things—is called to determine— “1st. Whether any additional Bounty shall be offered and given to persons who shall volunteer to fill up the quota of said Township:” and

WHEREAS—We have the assurance from the Adjutant General of this State, that if the Township of Raritan furnish thirty-two men—the number required to fill up the last call of Three Hundred Thousand Men—that the Township of Raritan will be exempt from the pending draft: therefore be it

Resolved—That the Town Committee, in behalf of said Township, be and are hereby directed to pay a Bounty of $420 to thirty-two volunteers, each to be credited to Raritan Township, in addition to the volunteers already paid.

Resolved—That the Town Committee of the Township of Raritan be authorized, empowered and directed to borrow the sum of Nine Thousand Dollars, to pay for said volunteers and that the taxable property of said Township be pledged for the payment of the same; and that an assessment of a poll tax on each male taxable inhabitant of one dollar be made and that a sum sufficient to raise the sum of Eighteen Thousand Five Hundred dollars, be assessed on the taxable property of said Township, (less the poll tax) and that it shall be the duty of the Assessor of the Township to make said assessment within ten days, and the Collector of said Township to immediately proceed to collect said taxes, upon his receiving the assessment from the assessor.—And that all persons having paid their bounty tax under former assessment be credited on present assessment, to the amount of their assessment, and that the ballance [sic] over and above present assessment having been paid be refunded back to the persons who have overpaid on former assessment.

Resolved—That the tax payers of this Township now in the service of the United States as soldiers or officers be and are hereby exempted from the payment of any part of the Bounty Tax assessed or to be assessed.

Resolved—That the Township Committee be instructed to apply to the present Legislature to legalize the acts of the present Town Meeting, and to compel the payment of taxes of every delinquent who may refuse to pay the same.

Resolved—That Anthony L. Case, Charles Tomlinson, and E. [Edward] R. Bullock, be appointed a Committee to assist the Town Committee in filling up said quota required.

[from the editor:]  These resolutions need no comments. All that is necessary now is to pay in the bounty tax, and wipe the debt out. Immediately after the breaking up of the town meeting, those empowered borrowed the necessary amount of money, proceeded at once to Trenton, and for the sum voted to be paid to each volunteer, procured TWENTY-EIGHT. This leaves four [men] for the Township to raise, which, when furnished, on the assurance of the Adjutant General of the State, relieves Raritan Township from the pending draft.

This summary of measures taken by one local government to deal with the demands made upon it by the federal and state governments shows how determined the tax payers were to maintain their solvency under trying conditions. The town assessor was ordered to make the new assessments on property owners within ten days, which must have been a challenging deadline to meet. I do not know if the assessments were saved in the county archives—something worth looking into.

Things were not necessarily resolved by the meeting in January, for on February 23, 1864, Raritan Township held another special meeting on the subject of bounties. Apparently, the Town Committee had not yet committed themselves to offering a bounty for 32 volunteers. They agreed to borrow $16,000 for the purpose, and to apply to the Legislature for an act allowing them to collect taxes earmarked for repayment of the loan. Recruitment of volunteers was left to a committee composed of Charles Bartles, Anthony L. Case, Charles Tomlinson and Edward R. Bullock, with a bounty not to exceed $425 per man. Apparently, the Legislature acted promptly on the request, and Raritan was exempted from the draft for this year.1

Meanwhile, Lambertville was struggling to fill its quota of 47 volunteers, having only gotten half the number needed or less. This was seen as ironic by the editor of the Gazette, a Flemington (Raritan) man, who wrote gloatingly:

Certain it is, that the Borough of Lambertville is in a very unpleasant fix, in this matter of furnishing men for the army. If we are not very much mistaken, it is not many weeks ago that certain persons in the Borough of Lambertville made great rejoicings, shouted hallelujahs, and kicked up a great fuss, over anticipated results in the prompt furnishing of men; and withal they decided neighbor Raritan on her slow movements. Now, don’t you think that was a little naughty, in you fellers, down there? Why, we didn’t resent it, but in the even tenor of our way, at two different times adopted certain plans and resolutions, which after a time produced wonderful results for our township. Raritan Township is free from the coming draft, how are you all down at Lambertville!2

And finally (at least for now), here is the list of Hunterdon County’s quota of volunteers for the President’s call for 500,000 men. The Hunterdon Gazette acquired the list from by New Jersey’s Adjutant General and published it in the March 2, 1864 paper. I was confused about the difference between ‘enrolled’ and ‘quota,’ but John Kuhl explained to me that enrolled meant all the men in the town who were eligible for the draft. The quota is the amount each town must supply to meet the federal goal. And I should also note that John Kuhl is working on a book on Hunterdon County’s role in the Civil War, including a list of over 2,000 names of men who served. He is hoping to have it published by the end of the year, and I for one am eagerly awaiting it.

Town Enrolled Quota
Alexandria 584 67
Bethlehem 260 43
Clinton 394 82
Delaware 441 73
East Amwell 276 46
Franklin 126 38
Kingwood 320 53
Lambertville 482 72
Lebanon 344 57
Raritan 505 84
Readington 453 76
Tewksbury 327 54
Union 174 30
West Amwell 155 26
Totals 5027 837
  1. Hunterdon Gazette, 2 March 1864.
  2. Hunterdon Gazette, 2 March 1864.