Browsing "Economics"

Thomas Jefferson’s “Rupture”

Author Roger Lowenstein writes that on Christmas Eve, 1825, “Thomas Jefferson let out an anguished cry. The government of the country he had helped to found, half a century earlier, was causing him great distress. It was assuming vast powers, specifically the right to construct canals and roads, and to effect other improvements. Jefferson thought of the federal government in the most restrictive terms: as a “compact” or a “confederated fabric” – that is, a loose affiliation of practically sovereign States.”

Thomas Jefferson’s “Rupture”

“He was roused at the age of eighty-two to issue a “Solemn Declaration and Protest” against what he termed the “usurpation” of power by the federal branch. Jefferson was so agitated that he declared that the “rupture” of the United States would be, although a calamity, not the greatest calamity. Even worse, reckoned the sage of Monticello, would be “submission to a government of unlimited powers.”

Though Federalists led by Alexander Hamilton had sought to establish a strong central government, Jeffersonians adamantly objected. No fewer than six of President Jefferson’s successors vetoed or thwarted federal legislation to build roads and canals, improve harbors and riverways, maintain a national bank, [and] fund education . . .”

Had Jefferson survived until 1860, the federal government of that day would not have displeased him. Its main vocation was operating the postal service and collecting customs duties at ports, [and] its army consisted of merely sixteen thousand troops scattered mostly among a series of isolated forts west of the Mississippi. The federal payroll was modest . . . the civilian bureaucracy in Washington consisted of a mere two thousand employees.

The modest federal purse was supported by tariff duties and a smattering of land sales. Federal taxes (an unpleasant reminder of the English Parliament) were reflexively scorned. Then came the “rupture.”

The Republicans – [Lincoln elected in November 1860] – vastly enlarged the federal government . . . [and] accomplished a revolution that has been largely overlooked.”

(Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War. Roger Lowenstein, Penguin Books, 2022. pp. 1-2)

Lincoln’s Tariff War

Lincoln, in his first inaugural address, promised no interference with the South’s labor system and admitted that a president lacked the authority to do so. But he did threaten to invade any State that failed to collect federal tariff revenues – despite the US Constitution’s Article III, Section 3, declaring treason to be waging war against one of “Them”, the States, or adhering to their enemy, giving them aid and comfort.

Lincoln’s Tariff War

“Once the Republicans were confident that Lincoln would win the 1860 election, and especially once the Southern Democrats began leaving the U.S. Congress, they did what they had been dreaming of doing for decades: They went on a protectionist frenzy that lasted for decades after the war.

The Morrill Tariff was passed by the House of Representatives in May 1860 and by the Senate in March 1861, just prior to Lincoln’s inauguration. Thus, the apparatus of protectionism was initiated before Fort Sumter and before the war. The Morrill Tariff was not passed to finance the war; it was passed because the old-line Whigs, who were now Republicans [including Lincoln], finally had the power to do it.

Even though it was passed before Lincoln officially took office, it is important to note that, as the Republicans’ presidential candidate, he was the leader of the party and, as such, most likely had a great deal to do with the political maneuvering on behalf of the tariff.

[In his classic 1931 book, “The Tariff History of the United States”] Frank Taussig explains that “in the next regular [congressional] session, in December 1861, a still further increase of [tariff] duties was made. From that time until 1865, no session, indeed, hardly a month of any session, passed in which some increase in of duties on imports were not made.” By 1862, the average tariff rate had crept up to 47.06 percent which “established protective duties [for Northern industries] more extreme than had been ventured on in any previous tariff act in our country’s history.”

The Republicans openly admitted that the purpose of their protectionist policy was not necessarily to raise money to finance the war but to pay off Northern manufacturers for their political support. The manufacturers were being taxed explicitly (through excise taxes) to help finance the war, and the tariff was a way to offset those losses.  Congress enacted and Lincoln signed into law tariff legislation “whose chief effect was to bring money into the pockets of private individuals.”

Long after the war, Taussig concluded, “almost every increase in duties demanded by domestic producers was readily made” and “great forces were made by changes in legislation urged and brought about by those who were benefited by them.”

(Abraham Lincon and the Triumph of Mercantilism, Thomas J. DiLorenzo. Reassessing the Presidency. John V. Denson, ed., Mises Institute Press, 2001, pp. 220-221)

Robert Hayne Lectures Daniel Webster

Famed orator and debater Robert Y. Hayne of South Carolina served as South Carolina Senator 1823-1832, governor of that State 1832-1834, and mayor of Charleston 1836-1837.  He famously debated Daniel Webster of Massachusetts in Congress in early 1830 over concerns that the federation’s government was attracting too much revenue, accumulating too much debt and trending toward consolidation. Hayne further reminded Webster of New England’s infamous trading with the enemy and threats of secession during the War of 1812.

Robert Hayne and Daniel Webster

“If there be one State in this Union (and I say it not in a boastful spirit) that may challenge comparison with any other for a uniform, zealous, ardent and uncalculating devotion to the Union, that State is South Carolina.

Sir, from the very commencement of the Revolution, up to this hour, there is no sacrifice, however great, she has not cheerfully made; no service she has ever hesitated to perform.”

“What sir, was the conduct of the South during the Revolution? Sir, I honor New England for her conduct in the glorious struggle . . . [but] I think equal honor is due the South. Favorites of the mother country, possessed of neither ships nor seamen to create commercial rivalship, they might have found in their situation a guarantee that their trade would be forever fostered and protected by Great Britain. But trampling on all considerations, either of interest or of safety, [the South] rushed into the conflict, and, fighting for principle, periled all in the sacred cause of freedom. Never was there exhibited, in the history of the world, higher examples of noble daring, dreadful suffering and heroic endurance, than by the whigs of Carolina, during that Revolution.”

And the War of 1812, called in derision by New England, said Hayne, “the southern war,” what was the conduct of South Carolina? The war was for the protection of northern shipping and New England seamen.

‘What interest had the South in that contest? If they sat down coldly to calculate the value of their own interests involved in it, they would have found they had everything to lose and nothing to gain. But sir, with that generous devotion to country so characteristic of the South, they only asked if the rights of any portion of their fellow-citizens had been invaded; and when told that northern ships and New England seamen had been arrested on the common highway of nations, they felt that the honor of the country was assailed . . . they resolved to seek, in open war, for a redress of those injuries which it did not become freemen to endure.’

The conduct of Massachusetts, declared Hayne, was in that war so unpatriotic and disgraceful, her acts in opposing the war so shameless, that “her own legislature, but a few years ago, actually blotted them out from the records as a stain upon the honor of the country.”

(The True Daniel Webster. Sydney George Fisher. J.B. Lippincott Company. 1911, pp. 254-255)

South Carolina’s Devotion to the Union

Famed orator and debater Robert Y. Hayne of South Carolina served as South Carolina Senator 1823-1832, governor of that State 1832-1834, and mayor of Charleston 1836-1837.  He famously debated Daniel Webster of Massachusetts in Congress in early 1830 over concerns that the federation’s government was attracting too much revenue, accumulating too much debt and trending toward consolidation. Hayne further reminded Webster of New England’s infamous trading with the enemy and threats of secession during the War of 1812.

South Carolina’s Devotion to the Union

“If there be one State in this Union (and I say it not in a boastful spirit) that may challenge comparison with any other for a uniform, zealous, ardent and uncalculating devotion to the Union, that State is South Carolina.

Sir, from the very commencement of the Revolution, up to this hour, there is no sacrifice, however great, she has not cheerfully made; no service she has ever hesitated to perform.”

“What sir, was the conduct of the South during the Revolution? Sir, I honor New England for her conduct in the glorious struggle . . . [but] I think equal honor is due the South. Favorites of the mother country, possessed of neither ships nor seamen to create commercial rivalship, they might have found in their situation a guarantee that their trade would be forever fostered and protected by Great Britain. But trampling on all considerations, either of interest or of safety, [the South] rushed into the conflict, and, fighting for principle, periled all in the sacred cause of freedom. Never was there exhibited, in the history of the world, higher examples of noble daring, dreadful suffering and heroic endurance, than by the whigs of Carolina, during that Revolution.”

And the War of 1812, called in derision by New England, said Hayne, “the southern war,” what was the conduct of South Carolina? The war was for the protection of northern shipping and New England seamen.

‘What interest had the South in that contest? If they sat down coldly to calculate the value of their own interests involved in it, they would have found they had everything to lose and nothing to gain. But sir, with that generous devotion to country so characteristic of the South, they only asked if the rights of any portion of their fellow-citizens had been invaded; and when told that northern ships and New England seamen had been arrested on the common highway of nations, they felt that the honor of the country was assailed . . . they resolved to seek, in open war, for a redress of those injuries which it did not become freemen to endure.’

The conduct of Massachusetts, declared Hayne, was in that war so unpatriotic and disgraceful, her acts in opposing the war so shameless, that “her own legislature, but a few years ago, actually blotted them out from the records as a stain upon the honor of the country.”

(The True Daniel Webster. Sydney George Fisher. J.B. Lippincott Company. 1911, pp. 254-255)

Jul 30, 2023 - America Transformed, Economics, Lincoln's Grand Army, Targeting Civilians    Comments Off on “This Class of People”

“This Class of People”

“This Class of People”

Of the infamous General Order No. 11, President Jefferson Davis considered Grant’s conduct as an arbitrary abuse of power; the Confederate States never issued any orders which singled out religious groups for discriminatory attack.  

“Speculators were swarming around Gen. Ulysses S. Grant’s headquarters at Holly Springs, Mississippi, and following his forces in search of cotton to be bought as cheaply as possible and sold in the north. Grant complained to Assistant Secretary of War C.P. Wolcott about “Jews and other unprincipled traders” who flouted Treasury regulations, and ordered his commanding officer at Columbus, Kentucky to deny permits to all Jews who wished to travel south.

In other correspondence he expiated on his unfavorable opinions of Jewish traders with their “carpet sacks” and pockets full of gold.” When Grant’s own father, a leather merchant who came to Holly Springs with some Jewish tradesmen in hopes of making money from the cotton trade, Grant sent him north again and in cold fury issued his notorious General Order 11 of December 17, 1862.

This read: “The Jews, as a class violating every regulation of trade established by the Treasury Department and also department orders, are hereby expelled from the department and held in confinement within twenty-four hours from the receipt of this order. Post commanders will see that this class of people be furnished passes and required to leave, and anyone returning after such notification will be arrested and held in confinement until an opportunity occurs for sending them out as prisoners.”

(The Jew in American Politics. Nathaniel Weyl. Arlington House. 1968, pp. 58-59)

The Morrill Tariff War

The Morrill Tariff War

The United States House and Senate passed on March 2, 1861, a pro-slavery amendment by the required 2/3 vote which received the endorsement of newly elected President Abraham Lincoln. This would prohibit the United States government from ever interfering with the domestic institution of African slavery in any State. The amendment was ratified by at least three States prior to Lincoln’s ill-advised attempt to reinforce and supply Fort Sumter in mid-April, after which he began raising an army which a president is forbidden to do.

The amendment, as a clear assessment of northern political feeling at the time, indicates that the ensuing war was not prosecuted by the north for emancipation. If the American South’s only interest was “preserving slavery” it need only remain in the 1789 union and join the other States in ratifying the amendment.

At the very same time in early March the northern-dominated Congress passed the oppressive Morrill Tariff Act, which imposed a 40% sales tax on imported goods shipped primarily to the Southern States. This Act protected northern commercial interests.

The only way the American South could avoid the tariff was to withdraw from political union with the north, and initially the northern press supported this. Editor Horace Greeley wrote of “erring sisters” departing the union but entitled to determine their own political future – and not “pinned to the other States with a bayonet.”

In early March 1861 the Confederate States Congress convened and passed a minor 10% tariff which would bring the world’s shipping traffic to Southern ports instead of high-tariff northern ports. This sent a veritable shock wave through the commercial north as it would bankrupt those ports and business interests.

The north’s attitude of letting the “erring sisters” enjoy their political independence changed to invasion and conquest as the only remaining path to collecting their all-important tariff.  Hence, all Southern ports from Virginia to Texas had to be brought under northern control.

As only Congress is authorized to raise and supply an army and would not convene until July, it looked the other way while State governors in the north supplied Lincoln with troops after the provocation at Fort Sumter.

 

It Was Not About Slavery

If continued black labor in the South was essential to the economic survival of the region and the ultimate reason for seeking independence, it was equally essential that the economic survival of Northern financial, textile, and manufacturing industry interests. It was not unexpected that after the Confederate States of America was formed in early February 1861 and enacted a modest 10% tariff which would have decimated northern ports, that those northern interests urged war against the South. It was not about slavery.

The following is excerpted from Mark R. Winchell’s posthumous “Confessions of a Copperhead” recently released by Shotwell Publishing. See www.shotwellpublishing.org.

It Was Not About Slavery

“If the North was fighting for an imperial vision of American hegemony rather than for the abolition of slavery, what motivated the South? The statement of South Carolina’s anti-flag scholars quotes several Confederate officials, who declared they were fighting to preserve slavery.

It would perhaps be more accurate to say that the Confederacy was formed to assure the economic survival of the American South. (The revolutionist’s declaration of independence from England was motivated by similar economic considerations.)  In 1861, African labor seemed essential to that survival [just as New England’s poverty-wage slavery held mill workers to their employment.]

Of even greater concern, however, was the agricultural tariff passed by the US Congress on behalf of Northern industrial interests. This tariff made it difficult for Southerners to sell cotton and other crops in European markets. An independent South, free of the tariff, would have prospered among the community of nations. If Lincoln was willing to assure the perpetuation of slavery, this former corporation lawyer was not willing to ease the tariff.”

(Confessions of a Copperhead, Culture and Politics in the Modern South, Mark R. Winchell, Shotwell Publishing, 2022, pg. 183)

The Triumph of Industrialism

Prior to 1861 the American union was a federation of member States which jealously guarded their own territory and sovereignty to decide upon their own internal affairs. This also included determining whether or not to continue membership in that federation and departing it for another as was done in 1789. Also, by 1861 the North had become a far different region that the American South through industrialization and the relentless immigration of foreigners lacking an understanding of American republicanism.

The Triumph of Industrialism

“The ordeal which beset the United States in 1861 was related to the upheaval on the continent in 1848, and to the spasm which shook England in 1832. In a veiled and confused yet crucial way it, too, was a test of strength between the industrial way of life and the agrarian.

When the Machine first reached this country it took root in the North, and there alone it was able to make even slow headway. The ruling elements in the South were inclined to despise the innovation, for they had black slaves to do their hard labor. In this they were merely repeating history.

The slave owners in ancient Greece had had a similar attitude toward machinery; so had the slave owners in ancient Rome and China and Mexico. These, it must be realized had not lacked the cunning to invent mechanical devices. A Greek mathematician named Hero who lived in the First Century actually built a working steam engine. But did it occur to him to put the contraption to practical use? It did not.  Instead, he installed it in a temple to amaze the worshippers by the way it worked the doors.

That was typical. The clock and the compass, gunpowder and the printing press – these were all invented in relatively ancient times. Yet until relatively modern times they were kept as mere playthings. Ingenious patricians with time on their hands were continually thinking up cunning devices; but never with the idea of applying them to save toil. They themselves did not toil, neither did any of their friends. They had slaves for that. So why bother? And that was precisely the attitude of the white gentry of the South and in their eyes an interest in machinery was vulgar.

In the North, however, the very opposite held true. Bondage had long since been outlawed in that section in part for climatic and other reasons it had too obviously failed to pay. Having no slave labor, the Northerners had naturally been forced to try to save labor. Since this could be done more easily in industry than agriculture, there had been an equally natural compulsion to favor the factory over the farm. The great boom of the 1850s was almost entirely confined to the North and it equipped that region with so much new machinery that it was able to manufacture six times as much merchandise as the South. As a result, the interests of the North, especially New England, became increasingly wrapped up in the fortunes of industrialism.

But as the collapse of that boom had revealed, those fortunes were increasingly insecure. When the Panic of 1857 finally waned and the Yankee industrialists began to pick themselves up from the dust, there was blood in their eyes.

They felt they had been betrayed. For years the industrialists had been complaining that their foreign rivals had them at a disadvantage and pleaded with Congress to come to their aid. They demanded these things: higher tariff walls to keep out cheap foreign merchandise; lowered immigration standards to admit cheap foreign labor; increase subsidies to shippers carrying Northern merchandise overseas; advance more generous loans to railroad companies; create one currency to replace the various State bank notes; and lastly, change the African slave into a free consumer who would spend his money buying Northern products.

But the Southerners had opposed that program to a man. Moreover, being superior politicians, they had always been able to make Congress vote their way. Now, however, the Northerners had their dander up and forged a political alliance with the radical farmers of the West and elected a cagey frontier lawyer named Abraham Lincoln to the presidency. Whereupon, there was war.

The South decided to secede from the 1789 Union. They decided they would rather have half a continent of their own than a whole one run by damn Yankees. Like agrarians everywhere else, their outlook on life had remained essentially provincial. They believed that a citizen’s first loyalty belonged not so much to his country as to his immediate countryside.

Rather than let the South gain independence, the North was ready to lay it to waste. With the Government furnishing the capital, and patriotism the incentive, they rushed to lay hold of more and more machinery. At the time it was called the “Civil War,” and later this somewhat sinister name was softened to the “War Between the States.” In effect, however, it was the “Second American Revolution.” The first had secured the triumph of republicanism on these shores; the second insured the triumph of industrialism.”

(Something Went Wrong: A Summation of Modern History, Lewis Browne, MacMillan Company, 1942, excerpts pp. 113-116)

Penalty for Not Re-enlisting

Lincoln was counting on a brief war with the South as he raised an army – without Congressional approval – to send southward. The army of General McDowell was full of 90-day volunteers and battle had to be joined (and won) before they went home with the government’s $100 in their pockets. The battle of First Manassas was a Northern debacle which cooled the alleged flag-insult at Fort Sumter and it became obvious to Lincoln’s War Department that generous enlistment bounties were necessary to keep men in blue uniforms.  Between 1861-1865 the North paid about $750,000,000 in bounties to fill its ranks. An excellent resource is William Marvel’s “Lincoln’s Mercenaries,” LSU Press, 2018.

Penalty for Not Re-Enlisting

Author Jonathan W. White’s book “Emancipation, the Union Army and the Reelection of Abraham Lincoln” (LSU Press, 2014) suggests that Secretary of War Edwin Stanton utilized intimidation tactics to ensure Lincoln’s election and use the soldier vote to help accomplish it. His assistant secretary, Charles A. Dana, admitted to using the full power of the War Department to ensure Lincoln’s electoral triumph. Stanton was also creative in his filling the ranks with blue soldiers as the unpopular war wore on.

By May 1864, the initial three-year enlistments had expired and strong measures utilized for re-enlisting the veterans. The hated draft was causing riots in northern cities, and Grant complained often of the useless soldiers he was sent — paid substitutes and draftees who often deserted at the first opportunity.

Desperate to retain the veterans, Stanton demanded additional government bounty money to entice them to stay, one-month furloughs home to show off their “Veteran Volunteer” sleeve chevrons, and commanders rewarded with promotions for re-enlistments obtained. Commanders unsuccessful in their re-enlistment efforts were denied promotion or cashiered.

The bounty money made soldiers wealthy men for the time, but naturally caused them to avoid battle in order to spend it. White estimates that only 15 percent of veteran soldiers re-enlisted, leaving 85 percent who walked away, as it had become an abolition war rather than the “save the Union” banner they had enlisted under. Additionally, they saw emancipation bringing many black freedmen north in search of employment, thus depressing wages and taking jobs from white northerners.

“In May [1864] the three-years’ service of the regiment had expired; and three hundred and seventy-five men who had not reenlisted as veterans were mustered out and made their way home as best they could. On arriving in New York, they drew up and adopted a series of resolutions. They began by rehearsing an order of Col. [Henry L.] Abbot, dated May 21, urging them to “stand by their colors, and not march to the rear to the sound of the enemy’s cannon.”

The reason for their non-re-enlistment seems to be stated in the charge against Col. Abbot:

“That he has spared no pains to place over us a military aristocracy, subjecting us to every variety of petty annoyance, to show his own power, and take away our manhood; subjecting men to inhuman and illegal punishments for appealing to him for justice; disgracing others for attempting to obtain commissions in colored regiments; . . . about May 4 ordering his heavy artillery men who had not re-enlisted, into the ditch for the remainder of their term of service, thus placing us on a level with prisoners under sentence for court-martial; and finally capping the climax by leaving us to the tender mercy of provost-marshals, turning us loose on the world, without pay, without officers, without transportation, without rations and without our colors.”

(The Military & Civil History of Connecticut, During the War of 1861-1865. W. Croffut & J. Morris. Ledyard Bill. 1869, pg. 558-559)

 

An Aristocracy of Color

Antebellum North Carolina was home to an aristocracy of industrious free-black merchants, craftsmen and farmers, such as barber John Caruthers, “Barber Jack” Stanly of New Bern.  Stanly invested his profits into plantations and town property, making him one of Craven County’s most prosperous citizens with over $40,000 in personal wealth. Free-black brick mason Donom Mumford of the same community owned ten slaves.  Also, Virginia-born, free-black Thomas Day of Milton, North Carolina, owned fourteen slaves and was an acclaimed master cabinetmaker in the 1850’s with an extensive clientele.  See: The Free Negro in North Carolina, John Hope Franklin, UNC Press, 1943.

An Aristocracy of Color

“The diary which William Tiler Johnson kept from 1835 to his death in 1851 reveals the remarkable life of this exceptional free Negro in a Southern community.

In the 1830s William made profits of $15 to $20 a day from his barber shop and eventually accumulated an estate worth $25,000. He invested capital in two stores which he rented out, made loans to white residents and owned a farm, which he named “Hardscrabble.”

To work his farm William owned fifteen slaves and employed a white overseer to direct their daily work. A gun owner, he hunted regularly, enjoyed the theater where he sat in the colored gallery among friends, attended horse races, and subscribed to five or six newspapers. He took a keen interest in city affairs, politics, criminal court, militia musters as well as fireman’s parades.

Maintaining terms of friendship with several of his barber patrons, William respected the community standards of the day against dining or drinking with white people. He belonged to the aristocracy of the free people of color, avoiding “darky dances and parties.”

(The Growth of Southern Civilization: 1790-1860, Clement Eaton, Harper & Row, 1961, pg. 92-93)

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