=The Homestead Act of 1862.=—­In the immigration measure guaranteeing a continuous and adequate labor supply, the manufacturers saw an offset to the Homestead Act of 1862 granting free lands to settlers.  The Homestead law they had resisted in a long and bitter congressional battle.  Naturally, they had not taken kindly to a scheme which lured men away from the factories or enabled them to make unlimited demands for higher wages as the price of remaining.  Southern planters likewise had feared free homesteads for the very good reason that they only promised to add to the overbalancing power of the North.

In spite of the opposition, supporters of a liberal land policy made steady gains.  Free-soil Democrats,—­Jacksonian farmers and mechanics,—­labor reformers, and political leaders, like Stephen A. Douglas of Illinois and Andrew Johnson of Tennessee, kept up the agitation in season and out.  More than once were they able to force a homestead bill through the House of Representatives only to have it blocked in the Senate where Southern interests were intrenched.  Then, after the Senate was won over, a Democratic President, James Buchanan, vetoed the bill.  Still the issue lived.  The Republicans, strong among the farmers of the Northwest, favored it from the beginning and pressed it upon the attention of the country.  Finally the manufacturers yielded; they received their compensation in the contract labor law.  In 1862 Congress provided for the free distribution of land in 160-acre lots among men and women of strong arms and willing hearts ready to build their serried lines of homesteads to the Rockies and beyond.

=Internal Improvements.=—­If farmers and manufacturers were early divided on the matter of free homesteads, the same could hardly be said of internal improvements.  The Western tiller of the soil was as eager for some easy way of sending his produce to market as the manufacturer was for the same means to transport his goods to the consumer on the farm.  While the Confederate leaders were writing into their constitution a clause forbidding all appropriations for internal improvements, the Republican leaders at Washington were planning such expenditures from the treasury in the form of public land grants to railways as would have dazed the authors of the national road bill half a century earlier.

=Sound Finance—­National Banking.=—­From Hamilton’s day to Lincoln’s, business men in the East had contended for a sound system of national currency.  The experience of the states with paper money, painfully impressive in the years before the framing of the Constitution, had been convincing to those who understood the economy of business.  The Constitution, as we have seen, bore the signs of this experience.  States were forbidden to emit bills of credit:  paper money, in short.  This provision stood clear in the document; but judicial ingenuity had circumvented it in the age of Jacksonian Democracy.  The states had enacted and the Supreme Court, after the death of John Marshall, had sustained laws chartering banking companies and authorizing them to issue paper money.  So the country was beset by the old curse, the banks of Western and Southern states issuing reams of paper notes to help borrowers pay their debts.