Personal Finances of Abraham Lincoln
Pratt, Harry E.
Page  115

VII. Financial Views and Business Methods

Mr. Lincoln was not a very generous man, had no avarice of the get but had the avarice of the keep; he was liberal and charitable in his views of mankind in all their relations.


WM. H. HERNDON TO J. W. WEIK, Oct. 21, 1885.

LINCOLN'S apparent indifference to the acquisition of wealth was noticed by several of his associates. Joseph Gillespie, the Edwards-ville lawyer who was closely associated with him in both law and poli|tics, said he was economical without being parsimonious; that he never attempted a speculation, but always displayed commendable zeal and alacrity in obtaining business. When Gillespie asked Lincoln why he never speculated in land, at the same time pointing to a tract he himself had located with a land warrant which cost him but ninety cents an acre, Lincoln replied that he "had no capacity whatever for speculation and never attempted it." Gillespie concluded that Lincoln had no money sense; that his only use for money was to enable him to appear respectable; that he used money as he needed it and gave himself little or no concern about laying it up.1

Herndon asserted that Lincoln "didn't care who succeeded to the presidency of this or that association; who made the most money; who was going to Philadelphia, when and for what, and what were the costs of such a trip; who got to be street inspector or alley commissioner."2

Lincoln, nevertheless, was well aware of the power of money and of its profound influence upon human conduct. Avarice, in his opinion, was one of the prime causes of the perpetuation of slavery. "The plain|est Page  116 print cannot be read through a gold eagle," he said in his speech on the Dred Scott decision in 1857; "and it will be ever hard to find many men who will send a slave to Liberia, and pay his passage, while they can send him to a new country—Kansas, for instance—and sell him for fifteen hundred dollars, and the rise."3 Speaking in Congress in 1849 he asked: "what motive would tempt any set of men to go into an exten|sive survey of a railroad which they did not intend to make? What good would it do? Did men act without motive? Did business men commonly go into an expenditure of money which could be of no account to them? He generally found that men who have money were disposed to hold on to it, unless they could see something to be made by its investment."4

Four days after his election to the Presidency he castigated certain moneyed men who, in his opinion, were using their power for selfish purposes. "I am not insensible to any commercial or financial depression that may exist," he wrote in a letter to Truman Smith, a New York lawyer and former Congressional colleague, "but nothing is to be gained by fawning around the 'respectable scoundrels' who got it up. Let them go to work and repair the mischief of their own making, and then per|haps they will be less greedy to do the like again."5

Early in his life Lincoln came to be known as an honest man—honest, that is, beyond common honesty. There is ample evidence to show that he prized this reputation. The letter he wrote to a patron of the New Salem post office who had impugned his integrity has already been cited.6

In 1853 he went to great pains to disprove charges of professional dishonesty, instead of contenting himself with his accusers' failure to prove their case. After his nomination in 1860 he wrote a hot tempered letter—a rare indiscretion for him—to a woman who had insinuated that he had collected money for her husband and then failed to remit it. "I have no money collected by me for Mr. Vance," he snapped, "and I had Page  117 ceased trying to collect any for him long before his death. . . . I never keep any body's money, which I collect, an hour longer than I can find a chance to turn it over to him. If you doubt this, get some of the busy bodies who are imposing on you in this matter, to find somebody who will swear he paid me money for Mr. Vance. If there is any such man he can be found."7

The reference in the preceding paragraph to charges of professional dishonesty deserves elaboration. Robert S. Todd, the father of Mrs. Lin|coln died in 1849. His estate was settled in 1853, and the share of his four daughters in Springfield turned over to George B. Kinkead, a Lexington, Kentucky, lawyer. Todd had been a member of the firm of Oldham, Todd and Company, cotton manufacturers, which the sur|viving partners Oldham and Hemingway carried on after his death. On May 12, 1853, before the final settlement of the Todd estate, Old|ham and Hemingway filed suit against Lincoln, Ninian W. Edwards, and Kinkead alleging that Lincoln owed the firm $472.54 for claims which he had collected and failed to remit, that Edwards owed a small sum for freight, and that Kinkead had in his possession sufficient funds from the Todd estate to pay their just claims.

Lincoln was attending court in Danville when he received the first notice of the suit in a letter from his brother-in-law Ninian W. Edwards. He wrote to the Kentucky lawyer at once: "I find it difficult to suppress my indignation towards those who have got up this claim against me. I would really be glad to hear Mr. Hemingway explain how he was in|duced to swear he believed the claim to be just!" Lincoln enclosed his answer in which he demanded that a bill of particulars be filed "stating names & residences," so that he could "absolutely disprove the claim. I can really prove by independent evidence, every material statement of my answer, and if they will name any living accessable [sic] man, as one of whom I have received their money, I will, by that man disprove the charge. I know it is for them to prove their claim, rather than for mePage  118 to disprove it; but I am unwilling to trust the oath of any man, who either made or prompted the oath to the Petition."8

Lincoln denied, in his answer, that he had ever collected $472.54 or any other sum for Oldham, Todd and Company; that any claim had ever been placed in his hands by the firm for collection; "that he ever received anything whatsoever, to which said firm or said Petitioners could have a pretense of a claim." The burden of proof was on Oldham and Hemingway, but Lincoln disliked the prospect of a vindication by default. When the plaintiffs failed to push the case he wrote in "some anxiety" to Kinkead to find out how matters stood, and reiterated his desire to disprove any claim they could make.

Kinkead replied that it was his opinion that Oldham and Heming|way would abandon the suit, a view which Lincoln would not accept. On September 13, 1853, he again informed Kinkead that no claim of the Lexington firm had ever been put into his hands for collection, and declared that he would take depositions as soon as he finished the fall term on the circuit. He soon found that the claims simmered down to two. In early November Lincoln took four depositions which so com|pletely sustained the allegations of his answer that on January 16, 1854, the plaintiffs filed a motion to dismiss the suit, which was done at the opening of the next term of court on February 10, 1854.9

Personal integrity was one thing; a political perquisite was another. Only thus can one account for Lincoln's indifference to the furor over the mileage charges of congressmen which broke out while he was a member of the House of Representatives. The distance between Spring|field and Washington, as set down in the official list of post offices, was 780 miles. Lincoln charged for 1,626 miles. The law expressly said that a member should receive eight dollars for every twenty miles traveled in coming to and returning from Congress "by the usually traveled route." In order to arrive at this figure Lincoln figured his mileage by Page  [unnumbered]

[missing figure]
depiction of Sangamon County Court House

Sangamon County Court House, 1846-1876 (left), and Springfield Marine and Fire Insurance Company.

Courtesy of the Illinois State Historical Library.
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depiction of First National Bank

First National Bank, Washington, D.C.
Page  [unnumbered]Page  119 way of Chicago and the lakes to Buffalo, New York and Washington. Three Illinois members of the House charged more and three less mile|age than Lincoln: John A. McClernand was lowest with 1,227 miles; Thomas J. Turner stood at the top with 2,080 miles.

For the round trip to Washington Lincoln received $1,300.80. Un|der postal mileage he would have received $624.00, an excess of $676.80. Horace Greeley was outspoken in attacking the practice. In the New York Tribune for December 22, 1848, he wrote:

When the compensation of Congress was fixed twenty miles' travel was just about equivalent to a day's work; the average rate of travel through the country not exceeding forty miles per day, and the cost being about ten cents per mile, all things included. At present, the average rate of travel is at least one hundred miles per day and the average cost hardly more than five cents per mile. Twenty dollars per hundred miles travel now is fully equal to twenty dollars for fifty miles travel then.

Greeley foresaw trouble when California should become a state. If its representatives came to Washington "by the usually traveled route," which would be around Cape Horn, the federal government would be compelled to borrow money to pay for their mileage.

Greeley's criticism provoked discussion in the House, and an amend|ment which would have allowed congressmen ten cents a mile instead of forty cents, and $2,000 per annum salary, instead of eight dollars per day, was introduced. The measure was voted down, 36 ayes to 150 nays. Lincoln voted nay.

Lincoln's business methods were informal in the extreme. Herndon once described them in a letter to Jesse W. Weik, his literary collabor|ator.

While Mr. Lincoln and I were partners, we kept no books as to our partner|ship, though we did, for a while, as to others. Mr. Lincoln did most of the circuit court business while I stayed at the office. Sometimes I went on the circuit and, if I were with Lincoln around in the counties, all the money collected by us was instantly divided. If I were not on the circuit . . . Lincoln would collect monies due us and our fees on the circuit and divide it, putting his half in his pocket|book and using it as he wanted to; he would wrap my half up in a roll, putting Page  120 my name on a slip of paper and then wrapping it, the slip, around the roll of money and then putting it in his pocketbook and when he came home he would come to the office and hand me my money; he did this always and at last it so excited my curiosity that I asked him this question: "Why, Lincoln, are you so particular in this matter?" and to which he replied: "Well, Billy, I do it for vari|ous reasons: first, unless I did as I do I might forget that I collected money or had money belonging to you; secondly, I explain to you how and from whom I got it so that you have not to dun the man who paid; thirdly, If I were to die you would have no evidence that I had your money and you could not prove that I had it. By marking the money it becomes yours and I have not in law or morality a right to use it. I make it a practice never to use any man's money without his consent first obtained. So you see why I pursue this course."10

Lincoln's pockets and his hat were his filing cabinet. The hat was a "stove pipe" with a wide inside band, purchased of George Hall, dealer in hats, caps, and furs on the west side of Springfield's public square. On the lining was written: "A. Lincoln, Springfield, Ill." In this caver|nous receptacle its owner kept his check book and letters and papers. Once at least the practice—or more exactly, a departure from it—got him into difficulty. Charles R. Welles, a Springfield lawyer, had given him a letter containing money to deliver in St. Louis as he passed through there on his way to Washington. What happened Lincoln explained in an apologetic letter to his fellow-citizen. "To make it [the letter] more secure," he wrote, "than it would be in my hat where I carry most all my packages, I put it in my trunk. I had a great many jobs to do in St. Louis; and by the very extra care I had taken of yours, overlooked it. On the Steam Boat near the mouth of the Ohio I opened the trunk, and discovered the letter."11 He then handed the letter to a young man and asked him to deliver it in St. Louis. Whether it ever reached its destina|tion Lincoln did not know, nor do we.

But there is ample evidence to show that Lincoln's business methods were not quite so casual as Herndon's description of them and the epi|sode of the Welles letter would indicate. We know that Lincoln was Page  121 a customer of the State Bank, which operated, with its head office in Springfield, from 1835 until 1842; and we know that as a member of the legislature he was a staunch defender of that institution. After the failure of the State Bank and the Bank of Illinois at Shawneetown de|prived the people of banking facilities, Lincoln took advantage of those offered by merchants. For him, as for many others, Springfield merchants transmitted money by draft to distant points, and safeguarded funds in their heavy safes and strong boxes. Lincoln's transactions of this kind were usually handled by Robert Irwin, of Irwin & Co. There he accum|ulated money until 1849, when he withdrew $309.12

The limited banking facilities which merchants were able to offer were inadequate for the needs of a rapidly developing community, but opposition to banks, based on unhappy experiences with state banking, died hard. Despite strong pressure from commercial interests, the fram|ers of the Constitution of 1847 provided that a bank could be chartered only by a majority vote of the people of the entire state, an impractical procedure. The need for banks was so pressing, however, that a way to get around the stringent provision was found. Banks could not be char|tered, but there was nothing to prevent the legislature from chartering an insurance company and bestowing upon it most of the powers cus|tomarily exercised by banks. This is what it did when it granted a charter in 1851 to the Springfield Marine and Fire Insurance Company which, appropriately enough, opened for business in the Grecian struc|ture originally occupied by the State Bank.13

The incorporators of the Springfield Marine and Fire Insurance Company were Lincoln's friends, and its secretary, who was also cashier and bookkeeper, was Robert Irwin. But Lincoln bought none of the stock, issued at $50 a share, nor did he open an account until 1853, nearly two years after the institution's founding. However, from that time until his death he remained a customer, and after his death the Page  122 account was continued in the name of David Davis, Administrator, until May 27, 1867.

Lincoln opened his account with a deposit of $310 on March 1, 1853.14 Where he obtained the money cannot now be ascertained, but $250 of the $400 which constituted his second and only other deposit in that year was probably a retainer fee from the Illinois Central Rail|road, in the well known McLean County case. No deposits were made in either 1854 or 1858, and only eight deposits in the intervening years. Only six checks were drawn in the first four years the account was open. Checks were more numerous in 1857, there being fourteen in all, with none in 1858. The account became suddenly active in 1859, when twenty-five deposits, ranging from $27.00 to $625, were made, and eighty-four sums, varying from $1.60 to $505, were withdrawn.

Lincoln's deposits of $4,680.43 in 1860, the year of his nomination for the Presidency, were more than in any other year.

The Springfield Marine and Fire Insurance Company provided a necessary service to business men in the transfer of money from city to city. To send a personal check was impossible, for no collection pro|cedure had been devised. To pay his subscription for the Chicago Press and Tribune in 1859, Lincoln was compelled to purchase a draft for $7.00 on H. A. Tucker & Co., of Chicago. When his son Robert attended Phillips Exeter Academy, at Exeter, New Hampshire, in 1859-1860, his father sent him occasional drafts for $25.00 or $50.00 drawn on the Metropolitan Bank or Ketchum, Son & Co., both of New York City. When Robert entered Harvard in July, 1860, a draft for $150 was for|warded to pay his tuition.15

Lincoln & Herndon had a firm account at the Marine and Fire In|surance Company for several years. Very few transactions were recorded either in this or in the personal account of William H. Herndon. The firm account appears to have been used simply for the collec|tion Page  [unnumbered]

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portrait of Robert Irwin

ROBERT IRWIN Robert Irwin, Cashier of Springfield Marine and Fire Insurance Company.
Page  [unnumbered]Page  123 of drafts, withdrawals being made soon after funds were deposited.

When Lincoln left Springfield on February 11, 1861, to become President, he withdrew $400, and purchased three drafts of $100 each on the Metropolitan Bank. This left a balance of $600. Ten days after his departure the Illinois State Journal carried this notice: "The notes and papers of Mr. Lincoln are with Mr. Robert Irwin, where persons in|terested can find them. If any of his accounts were left unpaid, Mr. Irwin will pay them on being satisfied of their correctness." Irwin paid several small store bills and, during the next four years, paid the insurance and taxes on the Lincoln home and taxes on the 120 acres in Crawford County, Iowa. Clifton H. Moore of Clinton, Illinois, paid the taxes on the forty acres owned by Lincoln in Tama County, Iowa.16 Irwin was paid for his services in handling Lincoln's affairs by being allowed to borrow $4,500 from the account without interest. Irwin died a month before Lincoln, but the loan was paid by his administrator.

Before leaving Springfield for Washington, Lincoln handed Irwin a memorandum which was practically a summary of his savings of a quarter of a century.17 Listed were eleven notes, each bearing ten per cent interest per annum. Varying in amount from $150 to $3,000, they totalled $9,337.90. Of this sum, one half was secured by mortgages. With the notes and mortgages were other papers—a Springfield City Bond for $1,000 reduced by two payments to $666.67, a certificate of six shares of Alton & Sangamon Railroad stock,18 a certificate of scholarship in the Illinois State University,19 and the fire insurance policy and lease on his home. With his real estate, unproductive though it was, the accumu|lation was a respectable one, and afforded ample proof of Lincoln's abil|ity to conserve his savings.