Unknown. One possible source is Algonquin cawaassough or caucauasu. A popular folk etymology attested in Great Leaders and National Issues of 1896 stated: "In the early part of the eighteenth century a number of caulkers connected with the shipping business in the North End of Boston held a meeting for consultation. That meeting was the germ of the political caucuses which have formed so prominent a feature of our government ever since its organization." American Heritage Dictionary states the term is taken from the Caucus Club of Boston in the 1760s, possibly from Medieval Latin caucus ("drinking vessel").
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