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New England Contemplates Secession in 1786

The Constitution which replaced the Articles of Confederation was a New England-inspired initiative intended to have a centralized government better protect its commercial and maritime interests. Had the South not compromised on that Constitution, it is likely New England would have seceded from the Confederation to form their own commercial union with its neighboring States.

Bernhard Thuersam, www.Circa1865.com

 

New England Contemplates Secession in 1786

“In view of the sectional troubles which arose during the War of Independence and continued into the period of the [Articles of] Confederation, it is not surprising that the proposed admission of new States also caused sectional dissention. Southern opposition helped prevent the admission of Vermont; and Northerners became concerned as it became ever more likely that Kentucky would seek to be recognized as a State.

If, in the years 1785-1786, when economic depression afflicted the entire Confederation, Southerners were unhappy because Northerners were lukewarm or hostile to Southern expansion, Northerners were discontented because Southerners were neutral toward or opposed to measures which would have benefited the maritime trade of the North.

Merchants of New England and the Middle States wanted protection for their shipping against British competition, especially after Parliament decided to treat the Americans as foreigners and applied the British navigation laws to them. Accordingly, New England sought to amend the Articles of Confederation so as to give Congress powers to regulate interstate and foreign commerce and to levy import and export duties toward that end.

Even though the proceeds of these taxes were to go to the States in which they were collected and power to cut off commerce was expressly reserved to them, Southerners in Congress, especially Virginians, objected strenuously. Members of the Virginia legislature also evidently protested.

They feared that Congress would use these powers to prevent British ships from coming to Southern shores and so to confer upon Northern shipowners a monopoly of the Southern overseas traffic. Certainly the Yankees wished to get as much of that business as they could; and American shipping was concentrated in the Northern ports, being relatively scarce in the Southern ones.

Indeed, by 1786, it had become seemingly impossible to make changes in the Articles of Confederation, these requiring both action by Congress and the sanction of all thirteen State legislatures. In August of that year when James Monroe reported that New Englanders were considering the formation of a separate union, he was not entirely in error. Wrote Yankee Theodore Sedgwick on the 6th of that month:

“It well becomes the [north]eastern and middle States, who are in interest one, seriously to consider what advantages result to them from their connection with the Southern States. They can give us nothing, as an equivalent for the protection which they desire from us but a participation in their commerce. Even the appearance of a union cannot in the way we now are long to be preserved. It becomes us seriously to contemplate a substitute.”

(The First South, John Richard Alden, LSU Press, 1961, excerpt, pp. 69-72)

Remember the Maine

President William McKinley had to be goaded into war against Spain by the yellow journalism and fake news of Hearst and Pulitzer, but his dispatch of the USS Maine to Cuba provided the incident, as Roosevelt’s dispatch of the US fleet to Pearl Harbor did 43 years later. Lincoln’s bludgeoning of Americans seeking independence in 1861-1865, cleverly disguised as a war to emancipate slaves, left future imperial-minded presidents with a reusable template for war.

Bernhard Thuersam, www.Circa1865.com

 

Remember the Maine

“Henry Luce coined the phrase “The American Century” as an expression of the militant economic globalism that has characterized American policy from the days of William McKinley. Luce, the publisher of Time and Fortune, was the child of missionaries in China – a product, in other words, of American religious and cultural globalism. It is no small irony that this preacher’s kid was the chief spokesman for a global movement which, in its mature phase, has emerged as the principal enemy of the Christian faith.

The approach to Christianity taken by the postmodern, post-civilized, and post-Christian American regime is a seamless garment: At home, the federal government bans prayer in school, enforces multiculturalism in the universities, and encourages the immigration of non-Christian religious minorities who begin agitating against Christian symbols the day they arrive; abroad, the regime refuses to defend Christians from the genocide inflicted by Muslims in the Sudan, while in the Balkans it has waged a ruthless and inhumane war against the Serbs of Croatia, Bosnia, Kosovo and Serbia.

The inhumanity of NATO’s air campaign against villages, heating plants and television stations reveals, even in the absence of other evidence, the anti-Christian hatred that animates the Washington regime.

Luce did not invent the American Empire, he only shilled for it. His American Century began in the Philippines 100 years ago, when the American regime refined the policies and techniques discovered in the Civil War.

The oldest and best form of American imperialism is the commercial expansion advocated by the Republicans – McKinley, Taft, Hoover and Eisenhower – who warned against the military-industrial complex. Although all of these free-traders were occasionally willing to back up the politics of self-interest with gunboats, they preferred to rely, whenever possible, on dollar diplomacy. McKinley had no hesitation about establishing American hegemony in Cuba and the Philippines, but he had to be dragged into war.

Free trade, these Babbits believed, could be the route to market penetration around the globe, and one of the early slogans of commercial imperialists was the “Open Door.” Sometimes, however, the door had to be kicked in by the Marines.

As one spokesman for American industry put it 100 years ago, “One way of opening up a market is to conquer it.” This is what Bill Clinton meant when he justified his attack on Yugoslavia on the grounds that we need a stable Europe as a market for American goods.

Even the most tough-minded Americans are suckers for a messianic appeal; it must have something to do with the Puritan legacy. Even bluff old Bill McKinley, in declaring war on the people of the Philippines, a war that would cost the lives of more than 200,000 civilians, proclaimed the aim of our military administration was “to win the confidence, respect and affection of the inhabitants . . . by assuring them . . . that full measure of individual rights and liberties which is the heritage of a free people, and by proving to them that the mission of the United States is one of benevolent assimilation.”

The new American globalism has a logic all its own, one based on universal free trade, which destroys local economies; open immigration for non-Europeans and non-Christians, who can be used to undermine a civilization that is both Christian and European; and universal human rights, which are the pretext for world government.”

(Remember the Maine, Thomas Fleming; Perspective, Chronicles, August 1999, excerpt, pp. 10-11)

 

The Southern Yankee

Beyond the New England slave trade which populated the American South with millions of enslaved Africans, there were many Yankees who moved South before 1861 to engage in agriculture and the holding of slaves.  And they had a Southern counterpart who learned the Yankee’s  close-fisted ways.  During the War and after Northern bayonets had conquered Southern regions, many industrious and profit-minded Yankees came South to try their hand at revolutionizing Southern agriculture and labor with experiments at Hilton Head and Louisiana.

Bernhard Thuersam, www.Circa1865.com

The Southern Yankee

“The name “Yankee” was originally bestowed upon New-Englanders alone, but for what reason it would be difficult perhaps to determine at this time. At present, however, with all foreigners it is used to designate the natives of any of the Anglo-Saxon States of our republic. In our Southern States all Northerners are regarded as Yankees, while the Southerner will not consent to have the name applied to themselves.

But even in the North there are those who still disclaim the appropriateness of the cognomen, when applied to any persons other than the natives of New England . . . “Yankee” with all these is looked upon usually as a term of reproach – signifying a shrewd, sharp, chaffering, oily-tongued, soft-sawdering, inquisitive, money-making, money-saving, and money-worshipping individual, who hails from Down East, and who is presumed to have no where else on the Globe a permanent local habitation.

In a sense of the word, however, we are disposed to opine that, while New-England may possibly produce more Yankees than other portions of the Republic . . . still, any numbers of the close-fisted race are to be met with all the way from the banks of the Hudson to the deltas of the Mississippi – all to the manor born too, and through whose veins courses not a drop of New-England blood.

Of these the Southern Yankee is, without dispute or cavil, the meanest. He has nothing whatever to plead in excuse or even extenuation of his selfishness; for all around him is boundless hospitality, and even the very air he breathes excites to warm-heartedness, relaxing the closed fist of more Northern latitudes into the proverbially open palm of the generous hearted South. Time was indeed, when the Southern Yankee had neither a local habitation nor a name.

During the grand old Colonial days, as well as the happy period which immediately followed the Revolution, Southerners did not dream of devoting their whole lives – all their time and talents – to the base pursuit of riches – the mere acquisition of dollars and dimes, regardless of family ties, or the duties owned to society, and the much higher duties one also owes to his God.

At the present time, the Southern Yankee is quite an institution in the South. The Southern Yankee comes of no particular lineage, but springs from all manner of his forefathers, though in most cases from persons of the middle class. Like his Northern brother, the Southern Yankee is deterred by no obstacle whatever from his tireless pursuit of riches.

In the tobacco-fields of Virginia, in the rice fields of Carolina, in the cotton-fields of Alabama, or among the sugar-canes of Louisiana, when a farmer or planter, he is in all things similar and equally bent on the accumulation of the sordid pelf: and the crack of his whip is heard early, and the crack of his whip is heard late, and the weary backs of his bondsmen and his bondswomen are bowed to the ground with over-tasking and over-toil, and yet his heart still unsatisfied; for he grasps after more and more, and cries to the fainted slave: “Another pound of money, dog, or I take my pound of flesh!”

Will it pay to press the poor African beyond what he can endure, and thereby shorten his life . . . this is the great and the only question with every Southern Yankee: “Conscience? Basta! He knows no such thing as conscience: he cares only to get gain, and get it he will, and let conscience go to the dogs. Religion? Go talk to the women and the parsons about religion.”

[The] Southern Yankee is fully as restless as the Yankees of the North – always on the move, or ready to sell out at any time if settled. Home to be loved must be made attractive, but he who is so wedded to filthy lucre as to despise all ornament that costs money, is not capable of entertaining in his selfish and narrow bosom so refining a passion as the love of home, or the love of anything else, indeed, that is pure and beautiful.

However, though often a farmer or planter, the Southern Yankee is much more frequently a trader or speculator. The slow but sure gains of agricultural pursuits are not swift enough to satisfy his inordinate craving for money; hence he speculates either in merchandise, or stocks, or tobacco, or cotton, or sugar, or rice, or grain, or lands, or horses, or men. In all which he is but the type of the Wall Street prototype. He will lie or cheat if need be, and scruples at no dirty trick provided it enables him to make a “good thing of it” – such is the chaste vernacular of these dim-witted fellows.”

(Social Relations in Our Southern States, D.R. Hundley, Henry B. Price, 1860, excerpt, pp. 130-136)

Losing the South’s Conservative Tradition

When Southern members left Congress in early 1861, nearly all conservative restraints enforced on that body were removed and the seeds of the Gilded Age were sown. The war of 1861-1865 will be forever seen as the unnecessary crime against liberty that it was, and the ending of the second experiment in government undertaken on these shores.

Bernhard Thuersam, www.Circa1865.com

 

Losing the South’s Conservative Tradition

“To those who fought and suffered during the long and fearful years of the War Between the States a tribute is always due. To the survivors of that momentous conflict – in which the South displayed unequaled bravery and marvelous determination – sincere reverence cannot too often be paid.

The young men and women who lived in the South after 1865 were tragic figures. They were the lost generation of the South, who led hard, bare and bitter lives, when young people of the South before and since were at play and in school.

That Tragic Era from 1865 to 1880 was a period when the Southern people were put to torture – so much so that our historians have shrunk from the unhappy task of telling us the truth. That was a black and bloody period – when brutality and despotism prevailed – a period which no American can point with pride. To the generation of Southerners who struggled in the years after the war in the sixties we owe the redemption of the South and the preservation of its society.

[The War and Reconstruction] cost the South heavily – but they also cost the nation. The South paid for theirs in an economic collapse and carpetbag domination extending over a period of nearly thirty years. But the nation also paid its price – it lost the powerful influence of the conservative Southern tradition.

In antebellum times the South had steadied the nation’s western expansion by its conservatism, but when the South was broken and destroyed, we saw a period of western expansion, of European immigration, of speculation, of graft, and of greed – unknown before in the annals of our history.

The nation after the war – especially the North and West – entered into an era of expansion, of worship for the new, of so-called progress, for which we still pay the price in our periodic overproduction. We should learn that economic wealth may be amassed, yet the fickle turns of business fortune can destroy it in a few years. Witness the economic collapse of our nation in the last few years after a period of unrivaled business growth.

The eternal national values are then those intangible contributions to national life such as the old South gave – not wealth, not progress, but those great qualities of tradition and conservatism and individuality which neither Depression nor hard times can destroy.

May the faith of the old South be ours, so that we can rebuild our State and Nation – and as we do so may we add the South’s contribution to American life not only its heritage of conservatism, of tradition and individuality, but also that spirit of silent strength in the hours of adversity – that spirit shown during the War and Reconstruction.”

(The Tragic Era, Dr. Julian S. Waterman, Dean, University of Arkansas Law School, Memorial Day speech at Fayetteville, Confederate Veteran Magazine, July, 1931, excerpt, pp. 275-277)

Sovereign States in a Federated Union

John Taylor of Caroline viewed the economic life of the country as being local in character and only under the jurisdiction of the individual States – that is, popular institutions. Therefore he concluded: “The entire nationalistic program of the Federal Government as to banking, funding, tariff, and internal improvements is unconstitutional.” If one sidesteps the victor’s claim that they fought to end slavery 1861-1865, one finds that the Hamiltonian drive for concentrated federal power was underlying reason for war.

Bernhard Thuersam, www.Circa1865.com

 

Sovereign States in a Federated Union

“The States, located in the center of the political landscape, perform a stabilizing function with sufficient power to protect the whole [federal] structure from the onslaughts of inimical forces that attack from two directions. They are essentially buffer States.

They represent a compromise between two types of concentrated power – one in the Federal Government, the other in the people, the turbulence of whom may lead to the reintroduction of monarchy such as followed the French Revolution.

Mobs and tyrants generate each other. Only the States can prevent the clashes of these two eternal enemies. Thus, unless the States can obstruct the greed and avarice of concentrated power, the issue will be adjudicated by an insurrectionary mob.

The States represent government by rule and law as opposed to government by force and fraud, which characterizes consolidated power whether in a supreme federal government, in the people, in factions, or in strong individuals.

Republicanism is the compromise between the idea that the people are a complete safeguard against the frauds of governments and the idea that the people, from ignorance or depravity, are incapable of self-government.

The basic struggle in the United States is between mutual checks by political departments and an absolute control by the Federal Government, or between division and concentration of power. Hamilton and Madison presented an impressive case for a strong national government, supreme over the rights of States.

They are supported by all the former Tories who benefit from the frauds of the paper system. Those who take this view are referred to as variously as monarchists, consolidators, and supremacists. The basic fallacy of their way of thinking is that they simply refuse to recognize “the primitive, inherent, sovereignty of each State” upon which basis only a federal form of government can be erected.

They assume the existence of an American Nation embracing the whole geographical reach of the country, on which they posit their argument for a supreme national government. But this is merely a fiction . . . The Declaration, the [Articles of] Confederation, and the Constitution specifically recognize the existence of separate and sovereign States, not of any American Nation or consolidated nation or people of the United States or concentrated sovereignty in the Federal Government. The word “America” designates a region on the globe and does not refer to any political entity.”

(The Social Philosophy of John Taylor of Caroline, A Study in Jeffersonian Democracy, Eugene Tenbroeck Mudge, Columbia University Press, 1939, pp. 65-66)

Binding Men to the Footstools of Depots

South Carolinian Robert Y. Hayne (1791-1839) followed Jefferson’s admonition that the national debt was not something to be passed on to future generations, and most presidents of his era and until the War endeavored to pay the debts incurred by their administrations before leaving office. In encouraging a perpetual public debt, Daniel Webster promoted the American System of Hamilton and Henry Clay which provided the government a perpetual supply of money with which to buy influence and power.

Bernhard Thuersam, www.Circa1865.com

 

Binding Men to the Footstools of Despots

“The gentleman from Massachusetts [Webster], in alluding to a remark of mine that before any disposition could be made of the public lands, the national debt (for which they stand pledged) must be first paid, took occasion to intimate [that Southerners desire to pay the national debt] “arises from a disposition to weaken the ties which bind the people to the Union.”

But, adds the gentleman, “so far as the debt may have an effect in binding the debtors to the country, and thereby serving as a link to hold the States together, he would be glad that it should exist forever.”

Surely then, sir, on the gentleman’s own principles, he must be opposed to the payment of the debt. Sir, let me tell that gentleman that the South repudiates the idea that a pecuniary dependence on the Federal Government is one of the legitimate means of holding the States together.

A monied interest in the Government is essentially a base interest . . . it is opposed to all the principles of free government and at war with virtue and patriotism. In a free government, this principle of abject dependence if extended through all the ramifications of society must be fatal to liberty. Already we have made alarming strides in that direction.

The entire class of manufacturers, the holders of stocks with their hundreds of millions in capital, are held to the Government by the strong link of pecuniary interests; millions of people, entire sections of the country, interested, or believing themselves to be so, in the public lands and the public treasure, are bound to the Government by the expectation of pecuniary favors.

If this system is carried on much further, no man can fail to see that every generous motive of attachment to the country will be destroyed, and in its place will spring up those low, groveling, base and selfish feelings which bind men to the footstool of despots by bonds as strong and as enduring as those which attach them to free institutions.”

(Speech of Robert Y. Hayne of South Carolina, January 25, 1830; The Webster-Hayne Debate on the Nature of the Union, Herman Belz, Editor, Liberty Fund, 2000, pp. 42-43.)

Grabbing Pennies Off the Southern Corpse

Sherman’s army occupied Savannah in late December, 1864 after Gen. William J. Hardee had evacuated his troops into South Carolina. Offshore and awaiting the occupation of the city by Sherman were US Treasury agents and others anxious to seize bales of cotton and other valuables for government or personal enrichment. In addition, presidential-aspirant Edwin M. Stanton presciently coveted the Negro vote in the South as Grant eventually did, and pretended concern for their future.

Bernhard Thuersam, www.Circa1865.com

 

Grabbing Pennies Off the Southern Corpse

“In making the rounds of the city [in late December, 1864, Sherman] was irritated to find that an agent of the [US] Treasury had arrived in the city ahead of him and seized a large stock of cotton there, estimated at 25,000 bales, later found to amount to 31,000 bales.

His chief annoyance . . . was from outside meddlers, agents from the North, the forerunners of the pestiferous army of carpetbaggers that swarmed into the South in the next few months and years. Some were sincere and fervent, but narrow-minded, zealots determined to impose salvation as decreed by the abolitionists upon the Negroes; many were greedy and unconscionable rascals bent upon seizing political power and grabbing the pennies off the Southern corpse.

[Sherman] . . . divined the developing purpose of the Radicals in Congress. It became apparent in the attitude suggested in hints let out here and there by the chief of the northern agents who descended upon Savannah while Sherman was there.

This was none other than Secretary of War Stanton, who hurried down by boat at the first opportunity to look the ground over. Stanton was fussy about many things, peeking here and there, prying, asking questions, seemingly deeply concerned about the Negro and his future, but in reality carefully measuring the political potentialities in this Southern tragedy, thus foretelling his action, a few months later, in joining the Radicals openly in their desperate and vicious Reconstruction program.

Sherman was most resentful when Stanton revealed his intention to quiz the Negroes about [Sherman’s] own policies . . . [and] witnesses upheld Sherman also in the firm policy he had adopted against recruiting Negroes for his army by State agents who rushed into Savannah and were trying to enlist Negroes right and left.

[Sherman] did not want to enlist any Negro soldiers, not only because of the bother of handling such unseasoned troops, but also because he had smarted under the taunts of Confederate General [John B.] Hood at Atlanta to the effect that the North had to use the South’s own Negro slaves to defeat the Confederacy.”

(The Savannah, More Than the Story of a River, Thomas L. Stokes, University of Georgia Press, 1951, excerpt, pp. 285-288)

 

Lincoln’s Inflationary Finances

It did not take long after Fort Sumter for Northern war expenditures to reach staggering proportions. James Randall in his “Civil War and Reconstruction” (1937, DC Heath) wrote: “With the treasury nearly empty, financial markets shaken, foreign bankers unsympathetic, taxation inadequate, and loans unmarketable except at a discount, the door of escape by way of paper money seemed most tempting.” Lincoln resorted to the printing press to create money.

Bernhard Thuersam, www.Circa1865.com

 

Lincoln’s Inflationary Finances

“The classic study of Union inflation was Wesley Clair Mitchell century-old “History of the Greenbacks.” Initially the war was to be financed with the use of government bonds, tax revenues would be used to pay the normal expenditures of government, and the gold standard would be retained. However, this system quickly collapsed in late 1861 and the first of three legal tender acts was passed in February 1862 with a total of $450 million in greenbacks authorized for issue.

When an economy has two types of money, such as gold and paper, and they are both defined in the same units, such as dollars, Gresham’s Law states that bad money will drive good money out of circulation. And in accordance with Gresham’s Law, greenback dollars quickly displaced gold dollars as the circulating medium of exchange.

The value of greenbacks quickly depreciated in terms of gold and fell to a low point of only 35 cents worth of gold on July 11, 1864. Amazingly, the Union currency had depreciated as much in three short years as the dollar has in the thirty years since the United States went off the gold standard. The prices of goods appreciated in terms of greenbacks from an index value of 100 in 1860 to a maximum of 216.8 in 1865.

Citizens tended to blame higher prices on business, speculators, and foreigners. Some government officials believed that speculators in the gold market were somehow causing the value of greenbacks to fall, but the real culprit for inflation was the government itself.

In addition to an ever-increasing supply of greenbacks, Mitchell showed that the value of greenbacks in terms of gold would change on the basis of expectations that in turn were based on peoples’ estimated probability that the greenbacks would be redeemed for gold after the war. Battlefield losses were associated with declines in value while victories meant higher values for the greenback.

Higher prices also meant that the Union government would have to issue more greenbacks in order to purchase war supplies and pay its soldiers [and pay enlistment bounties]. Because the Union government would eventually have to pay its war debts and redeem the greenbacks in gold, Mitchell . . . calculated that greenbacks had increased the real cost of the war to the government itself by $528 million. Of course, the politicians who borrowed and spent the money during the war were not necessarily the same ones who had to pay off the debt and redeem the greenbacks after the war.

Mitchell also found that the switch from gold to paper . . . [created] an illusory increase in property values, an increase in extravagance and the purchase of luxury goods, a crippling of economic efficiency, and a decrease in real wages for farmers, laborers, professionals, teachers and soldiers. As expected, the Union’s inflationary finances created an illusion of general prosperity that greatly upset the ability of entrepreneurs, workers, consumers, and bureaucrats to make accurate economic calculations.”

(Tariffs, Blockades and Inflation: The Economics of the Civil War; Mark Thornton and Robert Ekelund, Jr., Scholarly Resources Books, excerpts, pp. 68-69)

Dec 30, 2016 - Economics    Comments Off on French Bankers Fleece the Confederacy

French Bankers Fleece the Confederacy

At the height of Southern success in September 1862, French banker Emile Erlanger suggested a $25 million loan to the Confederacy through John Slidell, Confederate commissioner in Paris. Erlanger would raise the money in gold, in exchange for Confederate bonds at eight percent interest. For every dollar received the Confederate government would pledge its only source of wealth – cotton. Erlanger and his investors envisioned themselves upon Confederate victory the owners of $10 million worth of cotton, acquired for only one-fifth that amount.

Bernhard Thuersam, Circa1865.com

 

French Bankers Fleece the Confederacy

“Cotton on Southern plantations or in Southern warehouses hardly possessed the value that inhered in the same material deposited in Europe – that fact was recognized; yet the proffered security was very real and, at a sufficiently low price, might tempt adventurous foreigners. On this basis arose the so-called cotton bonds.

The plan was simply one to borrow money, giving as mortgage cotton lying un-transported in Southern States, owned by the Confederate Government. The plan met with indifferent success. Still, this distant cotton, — distant, that is, in European eyes, — even though it found little favor with conservative investors, presently made a strong appeal to the speculator.

A combination of events in the fall and winter of 1862-1863 gave zest to this gambling instinct. The first of these was the high price of cotton in Europe and the comparatively low price in the Confederacy. Textile areas in in Lancashire and in the northern region of France had reached an appalling depth of unemployment and misery, and millions of English workers were . . . in a state of impending or actual starvation.

The “famine” had forced cotton up to fifty cents a pound, or $200 a bale in the European market. Yet in the Southern States this same product was offered at ten or twelve cents a pound. Such possible profits would obviously justify great risks.

One preeminent fact, in the winter of 1862-1863 . . . Europe confidently believed that the war was approaching its end. The military events of 1862 . . . soon turned the balance in favor of the South. The collapse of McClellan’s Peninsular campaign, the second battle of [Manassas], and the tragedy of Fredericksburg indicated to the average Englishman and Frenchman a quick Confederate victory.

Lord Palmerston openly joked about the discomfiture of the Yankees; Gladstone made his famous speech, declaring Jefferson Davis had “created a nation”; and now, for the first and, as it proved, the only time, Great Britain seemed to be planning to recognize the Davis Government.

At this crisis – 1862 and the early part of 1863 – the Confederacy stood at its peak. If money was to be made in cotton speculation, the time to act had come. If the Union, as English observers said, was as dead as the Anglo-Saxon Heptarchy, its end would bring to the lucky holders of cotton a great increase in wealth. The eyes of European speculators dazzled at the prospect.

Out of this combination of circumstances – Federal defeats, the impending recognition of the Confederacy by Great Britain and France, the anticipated early end to the war, the low price of cotton in the South, and its extremely high price in Europe – came into being the celebrated Erlander loan. For the important fact to be kept in mind is that this was not a loan, as such governmental transactions are usually understood, but a huge speculation in cotton.”

(French Bankers Fleece the Confederacy; Statesmen of the Lost Cause: Jefferson Davis and His Cabinet, Burton J. Hendrick, Literary Guild of America, Inc., 1939, excerpts, pp. 217-219)

Public Debt, Then and Now

Abraham Lincoln was a devotee of the Alexander Hamilton/Henry Clay “American System” of public debt, tariff protectionism, government subsidies and a national bank. To finance his war in 1861, Lincoln turned to an income tax, and then succumbed to printing money. Nowhere in the United States Constitution is the federal government authorized to make paper money legal tender. By 1865, the public debt was $2.6 billion, and the direct/indirect cost of Lincoln’s war would reach $8 billion by 1900.

www.Bernhard Thuersam, www.Circa1865.com

 

Public Debt, Then and Now

“Contrary to official capitalist wisdom, debt does not create economic growth. This idea is a swindle. Interest to the very rich . . . does not produce anything. It does not multiply creatively into new enterprises and jobs; it merely diverts ever-greater proportions of earning that might be fruitfully invested.

The proof is all around us. How could the vast unpayable federal debt, which absorbs much of the government’s income just for the interest bondholders, foreign and domestic, possibly be an economic stimulus? How can the immense and near universal burden of personal mortgage and credit card debt possibly indicate a healthy economy and commonwealth?

The matter is simple, obvious to anybody except a politician, a captive economist, or a media flack, and it ought to be conveyed to the people at every opportunity. Debt is killing us. Every wise man in recorded history has affirmed that debt is not a good thing. Debt can destroy a family, a government, a society.

Alexander Hamilton, an upwardly mobile immigrant bastard with a Napoleon complex, declared that “a public debt is a public blessing.” Troubled, but not surprised, Jefferson noted a connection between debt cruel taxation that undermined the independence of the citizens, warning that “we must not let our rulers load us with perpetual debt.”

Weighed down by government debt, the people would have to labor ever harder to pay the debt-holders, leaving them “no time to think, no means of calling the managers to account.” Jefferson avowed as a core principle that “the earth belongs in usufruct to the living,” but the living had no right to consume the earnings of posterity.

Antebellum statesmen like John Taylor of Caroline and John C. Calhoun and economists like William Gouge and Condy Rageut made the same case. After the War Between the States, so did William Graham Sumner, Thomas E. Watson and countless other public men and thinkers.

Republicans (and their predecessors) have always been the party of bankers and bondholders, service to the rich being for them a natural and essential function of the federal government. Opposition to the federal debt was long a plank in the Democratic platform, but Democrats today are just as guilty as the Republicans in regard to the issue.

Lip service to the virtue of “low public debt” continued until Franklin Roosevelt discovered Keynes and declared that debt is no problem “because we owe it to ourselves” – “ourselves” being a conveniently vague and collective being.

The bipartisan bailout of misbehaving bankers and brokers that we saw a few years ago, and the failure of a multitude of presidential candidates to mention the matter, is not promising.”

(It’s the Debt, Stupid, Clyde N. Wilson, Chronicles, February 2016, excerpt pg. 16)

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