Choice C is the best answer. In the first sentence of the second paragraph of Passage 2, Lincoln raises a question about how the consequences of the division of the United States into slave states and free states compare with the consequences of the other ways in which states differ from each other: "But has it been so with this element of slavery?" In this context, the word "element" most nearly means factor.
Choices A, B, and D are incorrect because in the context of Lincoln's discussion of the "element of slavery," the word "element" most nearly means factor, not ingredient (choice A), environment (choice B), or quality (choice D).