Browsing "Antebellum Economics"

From Eli Whitney to Southern Nationalism

Prior to Massachusetts inventor Eli Whitney’s gin of the mid-1790s, cotton cultivation was a labor-intensive and unprofitable operation. The gin led to New England’s cotton mills which needed slave-produced cotton and Manhattan banks offering low-interest loans to planters for expansion into the new territories. This perpetuated slavery in the South, and kept employed the African brought to America in the holds of New England slavers.

Bernhard Thuersam,


From Eli Whitney to Southern Nationalism

“Except in the rice districts, Southern opinion by 1795 was turning very definitely against slavery and the antagonism was based, not on humanitarian, but on economic grounds. The overwhelming majority of the 2,000,000 Southern people [were] agricultural, and Charleston and Baltimore were the only towns of more than 10,000 population.

But slave labor could be profitably employed only in the production of staples, and of the two staples in the South, rice was restricted to a very narrow area. Tobacco could be grown as far south as the Piedmont of Georgia and South Carolina, but by 1795 its cultivation was unprofitable in the tidewater on account of soil exhaustion and in the back county because of lack of transportation facilities.

Unless the South could find a new staple slavery would be doomed, or else the South would be forced into an extensive program of soil fertilization and internal improvements to aid the tobacco grower.

What happened was that the South obtained a new staple through the invention of the cotton gin. Cotton quickly took its place as a staple complementary to tobacco, not competitive, for the two crops were radically different in their soil and climatic requirements.

The first conquests of “King Cotton” were the upland regions of South Carolina and Georgia, the inhabitants of which had hitherto eked out an unsatisfactory existence by cattle-raising, by a production of food crops, and by a desultory cultivation of tobacco. This was followed by a demand for new lands which resulted in cotton extending its area of cultivation to the Mississippi as tobacco had already done.

It is evident from the number of slaves that Mississippi Territory was a planting community from the beginning. Cotton, in fact, had been cultivated by the Indians even before the Revolution, and the United States had in 1801 established a gin for them on the upper Tombigee at a place which thereafter was called Cotton Gin Port.

Two new States of the cotton kingdom adopted constitutions differing in many respects from those of the eastern States from which their people were drawn. Neither Alabama or Mississippi had a property qualification for voting, both elected their governors as well as their legislatures by popular vote, and both apportioned their legislatures on the basis of free white inhabitants. In all, the cotton kingdom had a population of 1,000,000 of which nearly one-half was slave.

Prior to 1820 South was an indefinite term which could only be defined, if defined at all, as the region inhabited by Southerners. Southerner could only be defined as meaning one descended from the colonial settlers below [Mason and Dixon’s] line. But the controversy over the admission of Missouri gave new meaning to these terms. It reduced the South to the limits of slavery and intensified within those limits the sentiment of unity among the people.

This new intensified feeling of unity deserves to be called [Southern] nationalism rather than sectionalism inasmuch as it was based on sentiment rather than interest. After 1820 there existed among the people of the South a “consciousness of kind” and a feeling of aloofness from the people of the North. They felt, and continue to feel, themselves a separate people: the other people of the United States they consider as aliens.

That the Missouri controversy resulted in the creation of Southern nationalism is clear . . . If northern unanimity [against slavery then] was due to a devotion to principle, it must be conceded that the devotion was of sudden growth for there is no indication of any deep-seated anti-slavery feeling in the North prior to this time.

The Northern States, to be sure, had either outlawed slavery or “put it in the course of ultimate extinction,” but their action had been the result of economic realism rather than of moral indignation. The attack on slavery was perhaps designed for the purpose of forcing Southern congressmen to give up Texas. The northeast wished to surrender Texas, not because Texas was Southern, but because it was Western; the jealousy of the East toward the West was the result of conflicting interests and had often been displayed in our early history.

(The Old South, R.S. Cotterill, Arthur H. Clark Company, 1939, pp. 108-109; 117; 125-126; 142-145)

The North's Soulless Captain of Industry

The Northern wage system was creeping southward in antebellum times and doomed the plantation system if the question of the emancipated freemen’s position could be determined. That wage system, more cruel but more efficient and cost-effective, would replace the plantation socialism which cared for its workers from cradle to grave.

Bernhard Thuersam,


The North’s Soulless Captain of Industry

“It was not until fanatics, like William Lloyd Garrison, began to burn the Constitution, preach secession and denounce as fiends all Southern slaveholders that the South began to defend slavery and stand on their rights under organic law. To stand by their dignity as men and repel insults by force of arms if need be. My father believed that slavery would die of its own weakness in the South, as it had died in the North, unless meddling fools should provoke a war over it. As they did.

He held no illusions of the moral superiority of the Northern wage system. It had been introduced into the mills of the South and he had studied it at close range. He knew that slavery was doomed because of the superior cruel efficiency of the wage system, a far deadlier instrument of oppression if used without conscience. The Yankee had discovered this tremendous fact and applied it to his whole economic system.

They could hire an able bodied white man to work in the mills for 80 [cents] a day, a woman for 30 [cents]. Working every day in the year a man could earn $200, out of which he must pay his rent, his food, his clothes and his doctor’s bills. It cost my father $300 a year to feed, clothe, and house and care for each slave and then it took two slaves to do the work one white man was doing in the North.

My father knew that no human being could live on this earth and reproduce his kind on 80 [cents] a day. And for this reason he never believed in the moral superiority of this new master who used the wage system. In the South they called a slave a slave. In the North they called him a wage earner. He knew that ethics had nothing to do with the abolition of slavery in the North. It was abolished by the Captain of Industry, not the preacher or the agitator.

The Captain established the wage system because it became a mightier weapon in his hand for producing riches and paying dividends. It was subject to but one law . . . the iron law of wage . . . of supply and demand. The system was scientific, soulless. The wage earner, driven by hunger and cold, by the fear of loss of life itself, was always more efficient in his toil than the care-free Negro in the South, who was assured bread, clothes, fuel, shelter and the doctor’s care.”

(Southern Horizons, The Autobiography of Thomas Dixon, IWV Publishing, 1984, pp. 5-6)

The Evils of Paper Money

For writing promissory notes and obligations of payment in true money of value, is the only proper use of paper for monetary transactions. The note is then worth the sum it is given for under the law. If the person writing the note is worth nothing, then the promise is worthless. The true value then is not the promissory note, but the man behind it. When persons in government begin printing money and establishing claims to its value, the entire system of value and worth is overturned and apparitions replace reality.

Bernhard Thuersam,


The Evils of Paper Money

“The currency provisions of the federal constitution were intended to “shut and bar the door” against the evils of a legal-tender paper money issued by State or national governments. For more than two generations it succeeded in accomplishing that end. Contemporaneous with the establishment of the new government, banks were introduced into the United States and spread everywhere with astonishing rapidity. As a result the American people continued as in former times to use for the most part a paper currency, consisting of the notes of these banks. They were not legal tender, as the old bills of credit had been, and could not be made so; and no one supposed that they could give rise to the evils of depreciated paper currency.

The framers of the Constitution of the United States were deeply impressed with the still fresh recollection of the baneful effects of a paper money currency on the property and moral feeling of the community. It was accordingly provided by our National Charter that no State should coin money, emit bills of credit, make anything but gold and silver coin a tender, in payment of debts, or pass any law impairing the obligation of contracts; and the power to coin money and to regulate the value thereof, and of foreign coin, was, by the same instrument, vested exclusively in Congress.

As this body has no authority to make anything whatever a tender in payment of private debts, it necessarily follows that nothing but gold and silver can be made a legal tender for that purpose, and that Congress cannot authorize the payment in any species of paper currency of any other debts but those due the United States, or such debts of the United States as may, by special contract, be made payable in such paper . . .

The provisions of the Constitution were universally considered as affording complete security against the danger of paper money. The introduction of the banking system met with a strenuous opposition on various grounds, but it was not apprehended that banknotes, convertible at will into specie, and which no person could be legally compelled to take in payment, would degenerate into pure paper money, no longer paid at sight in specie.

Still less it was expected; and it was the catastrophe of the year 1814 which first disclosed not only the insecurity of the American banking system, as then existing, but also that when a paper currency, driving away and superseding the use of gold and silver, has insinuated itself through every channel of circulation and become the only medium of exchange, every individual finds himself, in fact, compelled to receive such currency, even when depreciated more than twenty per cent, in the same manner as if it had been made a legal tender.”

( The Economic History of the United States, 1765-1860, Guy Stevens Callender, Sentry Press, 1965, pp. 564-566)

Enlightened Southern Labor Management

While the older brother of Jefferson Davis, Joseph E. Davis, was conducting enlightened labor management techniques in Mississippi, New England factory and mill owners worked young women, and children under ten, hard sixteen-hour workdays in dimly lit sweat-shops. Their meager pay was usually insufficient to cover living expenses and left nothing health care—Africans in the South enjoyed cradle to grave medical care and security.

Bernhard Thuersam,


Enlightened Southern Labor Management

“ . . . Joseph Davis demonstrated the enlightened methods of slave management that he had developed from modifications of the ideas of Robert Owen, Frances Wright, and other reformers of an earlier era. In the words of a family member, “[The cabinets] were well built, with plastered walls and large fireplaces, two large rooms and two shed rooms behind them.” Each had its own henhouse from which the slaves could sell surplus chickens and eggs and a small garden patch for their own use.

Davis was determined to make his [plantation] enterprise a model of labor management as well. As one of nine Mississippians who owned more than 300 slaves in 1860, Davis was faced with a major administrative task [and had learned] that people worked best when treated well and given incentives rather than when driven by fear of punishment.

He established a court, eventually held every Sunday in a small building called the Hall of Justice, where a slave jury heard complaints of slave misconduct and the testimony the accused in his own defense. No slave was punished except upon conviction by this jury of peers. Sitting as a judge, Davis seldom intervened except to ameliorate the severity of some of the sentences.

Davis insisted that the overseers, too, must bring their complaints before the court, and they could not punish a slave without [their] permission. In addition to self-government, Davis provided more direct incentives for his laborers. Convinced that every human being should be allowed to develop to his full potential, the master encouraged his slaves to acquire skills in areas that interested them.

He provided opportunities for training in current trades and crafts. Moreover, skilled workers were allowed to enjoy the benefits of their more valuable labor; Davis ruled that all slaves might keep anything they earned beyond the value of their labor as field hands.

Davis was sensitive to the needs of his workers and regularly rewarded them for unusual achievements, in addition to providing gifts for a birth or wedding, or in consolation for a death. He expected them to work hard for their own benefit as well as his, and he was quick to commend and encourage those who performed well.

Davis’s benevolent management methods seemed amply vindicated by the example of his most able slave, Benjamin Montgomery, who seized the opportunities Davis provided and became an invaluable assistant as well as confidant and companion to his master. Born in Virginia in 1819, the brilliant Montgomery learned to read and write along with his young master.

With access to the large (plantation] library, Ben improved his literary skills and was soon copying letters and legal briefs as the office clerk. He learned to survey land to plan the construction of levees essential for flood protection on Davis Bend. He drew architectural plans and participated in the construction of several buildings, including the elaborate garden cottage.

(Joseph E. Davis, Pioneer Patriarch, Janet Sharp Hermann, University Press of Mississippi, 1990, pp. 53-58)

Political Independence Precedes Economic Independence

The parallels between 1776 and 1861 are many, as in the latter case Americans in the South followed the very spirit of Jefferson’s words in the Declaration of Independence regarding the right of self-government and the consent of the governed. They wanted to end the galling economic dependency on the Northeastern cotton mills and financiers as their fathers ended economic dependency upon England.

Bernhard Thuersam,


Political Independence Precedes Economic Independence:

“In the [American] colonial era of hand-manufacturing most manufacturing had been of the home and domestic variety. In all regions the finer goods had been imported from England, paid for in the South by surpluses of agricultural products and in the North by the proceeds of the fur trade, ship-building, fishing, and the favorable balance derived mainly from the West India trade and to a less extent the Mediterranean.

When at the beginning of the nineteenth century commercial manufacturing began to arise, its locus became the Northeast rather than the South for a number of reasons. Among these the most important was the fact that the profits from commerce and allied enterprises during the Napoleonic Wars did not find adequate outlets for investment in the new manufacturing industries, principally textiles; while the profits derived from the older agricultural staples in the South found outlet for investment in land and slaves, in the new staple cotton which spread rapidly in the upland regions of the South Atlantic and then across the Gulf Plain of the deep South, continuing to the very eve of the Civil War when the interior of Texas and Arkansas were being penetrated by cotton culture.

As profits from manufacturing accumulated, there was a steady outlet for their reinvestment in the enlargement of plants, the creation of new plants, and the fabrication of many articles other than textiles. Of these the products of iron became most important, particularly in Pennsylvania.

The new forms of transportation – improved highways, canals, steamboats, and finally railroads – absorbed great amounts of capital in the North, and even in the South some of the profits from agriculture were invested in this sort of enterprise . . . [but] even to the end of the ante-bellum period the South bought most of its manufactured goods from the North or indirectly from Europe through Northern concerns and was to some extent dependent upon Northern credit for the financing of its own enterprises, so that in a way the South was an economic dependency and sphere of influence of the Northeast.

This condition was a galling one and was by no means negligible in bringing on the bloody conflict of 1861-65. In this respect at least, the attempt of the South to secede from the North was comparable to the earlier efforts of the American colonists to rid themselves by force of their dependence upon England. In each case it was the belief of the secessionists that political independence would prove the forerunner of economic independence.”

(The South Looks at its Past, Benjamin Burks Kendrick & Alex Arnett, UNC Press, 1935, pp. 76-78)