Following the passage of the Kansas-Nebraska Act, American politicians began to eschew party loyalty to the national Democratic or Whig parties, and align themselves more by geographical location. Sectional tension in the Democratic Party strained political unity but did not lead to a permanent schism or collapse. The Whig Party, however, had already been in a state of decline since the Compromise of 1850 and largely disintegrated after the Kansas-Nebraska Act, especially in the North. Some northern Whigs shifted their focus away from the sectional crisis and joined the Know-Nothing movement but others, like Abraham Lincoln, were motivated to adopt a more strident opposition to slavery's expansion. Some formed political organizations explicitly to oppose the Kansas-Nebraska Act--such as Illinois's Anti-Nebraska Party--while others began to align themselves with the already existing Free Soil political movement. In the aftermath of the Kansas-Nebraska Act, a new coalition began to form between abolitionists, Free Soil advocates, industrialists, and eventually former Know-Nothings, that became the Republican Party.
The party's initial focus was on preventing the spread of slavery, opposing Stephen A. Douglas's "popular sovereignty" principle, and, later, Roger B. Taney's Dred Scott Decision. Anti-slavery sentiment was widespread among Republicans, although it varied in degree from staunch abolitionists to committed white supremacists who simply favored a wage-labor industrial economy over a slave society. Regardless, southern Democrats quickly labeled it as an abolitionist party and a direct threat to their economic and social system. This heightened both the stakes and the rhetoric of the next two presidential elections.
The nascent party did well in the 1854 congressional election but the fully-formed Republican Party dramatically asserted itself in the 1856 election. Although the American Party had served as a viable alternative to the Republicans in 1854, it had gone into steady decline by 1856--a process capped by Millard Fillmore's disastrous run as the party's presidential candidate. The Republicans, however, maintained their status as the primary opposition party to the Democrats and won substantial support for their first presidential candidate, John C. Fremont. The party continued its rise through the election of 1858, in which it gained control of the House of Representatives. As Democrats continued to splinter over sectional tension, the northern-centered Republicans held together and capitalized on the Democrats' electoral split in 1860 by running moderate candidate, Abraham Lincoln, and winning the presidency. Adhering to their longstanding fears of Republican abolitionism, most southern states reacted by seceding, resulting in the Civil War.
With the secession of the southern states, Republicans held decisive control of the federal government for the duration of the Civil War. Party members used this power to manage the war effort but also to implement a northern, free labor, industrial society. The Homestead Act, Morrill Act, and 13th Amendment best represent the party's policy goals. In 1864, Republicans re-branded themselves as the Union Party, in part to distinguish themselves from the Democrats who they characterized as Confederate sympathizers. Lincoln won reelection and the party remained in control of both congressional houses.
Eric Foner, Free Soil, Free Labor, Free Men: The Ideology of the Republican Party Before the Civil War (New York: Oxford, 1970); William E. Gienapp, The Origins of the Republican Party, 1852-1856 (New York: Oxford, 1987); Lewis L. Gould, Grand Old Party: A History of the Republicans (New York: Random House, 2003), 3-41; Michael F. Holt, The Political Crisis of the 1850s (New York: John Wiley & Sons, 1978), 153-54, 155, 156-57, 159, 162-63, 169-71, 172, 175-81, 183, 184-85, 187-89, 189-91, 197-98, 198-99, 200-201, 202-203, 206, 208-14, 214-17, 224-27, 236-37, 240-43, 257-58.