With the passage of the national banking legislation, the Republicans completed process of building a new infrastructure that would allow them to fi nance the war. Although their measures did not dismantle fi scal federalism,  they did push the limits of antebellum fi nance in new directions. As the war continued, they would have to learn how to meld the past with the future in order to carry the nation through this crisis. Th e policies they enacted did not represent a new, innovative, or uniquely Republican way of looking at the economy. Instead, at each turn, they had turned to precedents. In the process, they altered the course for the public economy and fi nancial structure of the government.

For a fixed income investor the best investments will be in sectors whose life cycle is in stages 3 and 4. Stage 1 is characterized by high business and financial risk. The rewards can be substantial but fatal losses can occur as well. The traditional financing sources for early stage industries are venture capital, private equity followed by the equity market. In stage 2 an industry will experience accelerating growth in sales and profits, but it can be assumed that all generated funds will be reinvested to grow the business, and financial discipline will not be a priority to management. Bondholder unfriendly corporate actions across the industry will increase the downside potential for corporate bond investors.