This dissertation examines how the internal revenue legislation enacted during
the American Civil War fostered a new role for government in society. The delegates to
the 1787 Constitutional Convention constructed a system of fiscal federalism for the
United States. The national government relied on indirect taxes, particularly customs
duties, as its primary source of revenue. Concurrently, the states developed an array of
unique financing strategies, including taxing citizens directly. The dire need for war
funds compelled this "unperceived" government to expand beyond the constraints
imposed by this antebellum fiscal structure. Through my research, I found that the taxes
imposed during the war represent an attempt to cope with a financial crisis, rather than
impart a particular preconceived agenda. Because Congress had depended on customs
receipts as its primary source of revenue for four decades, lawmakers had few ready
options for meeting the overwhelming war costs. In developing the war revenue
measures, lawmakers borrowed policies and statutes from the past, rather than relying
upon the "free labor ideology" that united the party. The need to meet the escalating
costs of war forced lawmakers to react with more speed than deliberation. They often
sacrificed their principles to provide the means to prosecute the war and reunite the
nation. Once peace returned, the question of whether to "sink" the debt or shrink
revenues, vexed lawmakers, and kept the government from returning to its limited role in
the economy. As a result, the United States government emerged from the Civil War as
a perceived power, one that touched citizens "individually" through the new internal
revenue system. I concluded that the fiscal powers of the national government expanded
beyond the restraints imposed throughout the antebellum era. The internal revenue
measures enacted during the war played a significant role in this transformation