(FORTUNE Magazine) – When did big government begin? Conservatives of all ages tend to think federal spending went out of control around their tenth birthday. Commentators who have a little more historical perspective tend to date the dawn of big government to the New Deal, or possibly the Progressive Era.

Actually, Washington formed its big spending habit long before any living conservative was born, and long before Franklin Roosevelt--or even Teddy Roosevelt--became president. In fact, a case can be made that the real turn away from strong limits on federal government was the Civil War. Economic historian Jeffrey Rogers Hummel makes this case persuasively in his recent book, Emancipating Slaves, Enslaving Free Men: A History of the American Civil War.

It's true that in absolute terms, government spending really took off during the New Deal era. As a percentage of GDP, U.S. government spending lingered in the low single-digit range all the way through to the 1930s, peaked at 45% in 1944, troughed at 12% in 1948 (the first full year after World War II demobilization), and stands at 21% today. But Hummel's point is that the precedent for big government spending was set during the Civil War.

Consider taxes. The federal government's only tax before the Civil War was the tariff, and the rest of the feds' income was from land sales. During the war, President Lincoln levied real estate, excise, sales, and license taxes on a wide range of goods and services, and imposed an income tax on all incomes over $600 ($10,500 in 1995 prices) at rates ranging from 5% to 10%. To enforce it all, Lincoln introduced the Internal Revenue bureaucracy. Lincoln also raised tariffs from an average of 20% to an average of 47% by war's end, and, writes Hummel, "Republican protectionism continued to dominate trade policy...for the next three-quarters of a century."

Also leading to permanently big government were the large spending programs and new federal agencies that started with the Civil War and never ended. The federal government's first system of old-age and disability insurance was veterans' pensions, which grew from 2% of all federal spending in 1866 to 29% in 1884. The Department of Agriculture began during the war, as did the Government Printing Office, the Bureau of Engraving and Printing, and the National Academy of Sciences--set up in 1863 to seek technological innovations useful for the war effort. The first federal Department of Education wasn't created in 1980, when Jimmy Carter started one, but in 1867.

All these new government agencies and programs meant, of course, more and more government workers. During the war the number of civilian federal employees increased almost fourfold and by 1871 was still 40% above its prewar level. The armed forces remained far larger than before the war. And just as today's military, in the absence of major wars, is used for nonsoldierly duties like fighting drug wars and enforcing immigration law, the military then was used to kill Indians, stamp out polygamy in Utah, and break strikes.

The biggest increase in federal power that was never cut back substantially was in monetary affairs. Before the Civil War, the federal government was uninvolved with the money supply: the economy's currency consisted solely of banknotes redeemable in gold on demand. (And, argues Hummel, many economists are coming to agree that this "was probably the best monetary system the United States has ever had.") During the war Lincoln set up nationally chartered banks and a national currency, the "greenback." To hunt down counterfeiters, Lincoln formed the Secret Service.

Big government would have been a small price for ending slavery, but Hummel claims that slavery would have disappeared anyway had Lincoln let the South secede. The reason is that escaping from, say, Georgia to Ohio would have been much easier than escaping from Georgia to Canada. That's why, notes Hummel, abolitionist William Lloyd Garrison had advocated Northern secession.

But the war happened, and six score and ten years later, many of us long for the days when Washington was frugal. Like during the Buchanan Administration.

--David R. Henderson

DAVID R. HENDERSON is a research fellow with the Hoover Institution.