After James Bryce toured the United States in 1887, he described the persistence of James Madison's vision of federalism. The central government, he wrote, directed the ‘national common purpose’, including ‘foreign relations, internal commerce, weights and measures, and the post office’. ‘State governments’, Bryce continued, assumed responsibility for the ‘maintenance of [local] law and order, the creation of local institutions, the provision of education, and the relief of the poor’. The states continued in their responsibility for all the functions of government that touched citizens ‘individually’.

Federalism persisted through the nineteenth century as law as well as tradition. Not until 1941, in the Supreme Court case of Edwards v.California, did the Court declare the ‘Elizabethan poor laws’ asserting that ‘relief is solely the responsibility of local government’ no longer applied in the United States. In overturning California's ‘Okie law’ forbidding residents from aiding ‘paupers’ from entering the state, the Court declared, ‘the duty to share the burden, if not wholly to assume it, has been recognized … by the federal government’. In lamenting the forsaken aspirations for racial and economic justice in the years after the Civil War, historians have rarely considered the continuity of federalism as a strong impediment to fulfilling the ideals espoused by the Radical Republicans.

Immediately after the Civil War, surpluses accumulated in the Treasury that gave the government more financial flexibility than at any time in its history. Rather than using these funds to assist the freedmen, the Treasury, under Hugh McCulloch, initiated an aggressive debt reduction plan. However, the government did launch a politically popular Civil War veteran's pension system that, by 1890, expended $109 million a year. Instead of assisting indigent freedmen, these funds were ‘lavished on a selected subset of the working and middle-class people of both races, who by their own choices and efforts as young men had earned aid…[by] participat[ing] victoriously in the morally fundamental moment of national preservation’.

Americans had provided pensions to veterans since the American Revolution.