Posted on 01/31/2004 11:18:21 AM PST by GOPcapitalist
DILORENZO IS ESSENTIALLY CORRECT that the tariff supplied ninety percent of federal revenue before the Civil War. For the thirty years from 1831 to 1860 it was eighty-four percent, but for the 1850s as a decade it was indeed ninety percent.
But the idea that the South paid about seventy-five percent of tariff revenues is totally absurd. DiLorenzo bases this on pages 26-27 of Charles Adams, When in the Course of Human Events, but Adams comes up with these figures out of thin air, and worse, appears to be measuring the South's share of exports, and then transposing that percentage to their share of dutiable imports. Exports, of course, are not subject to taxation and never have been, because such taxes are prohibited by Article I, Section 9 of the US Constitution -- which Adams appears not to know. In any case, Adams claims that about eighty-two percent of exports from the U.S. were furnished by the South -- he cites no source for this, and it is in fact wrong -- the true figure was about sixty percent on the average, most of that cotton -- and then by a slight of hand claims that this proves the South paid a similarly disproportionate share of tariffs. But of course the tariffs were only on imports.
The idea that the South would pay a disproportionate share of import duties defies common sense as well as facts. The majority of imports from abroad entered ports in the Northeastern US, principally New York City. The importers paid duties at the customs houses in those cities. The free states had sixty-two percent of the US population in the 1850s and seventy-two percent of the free population. The standard of living was higher in the free states and the people of those states consumed more than their proportionate share of dutiable products, so a high proportion of tariff revenue (on both consumer and capital goods) was paid ultimately by the people of those states -- a fair guess would be that the North paid about seventy percent of tariff duties. There is no way to measure this precisely, for once the duties were paid no statis tics were kept on the final destination of dutiable products. But consider a few examples. There was a tariff on sugar, which benefited only sugar planters in Louisiana, but seventy percent of the sugar was consumed in the free states. There was a tariff on hemp, which benefited only the growers in Kentucky and Missouri, but the shipbuilding industry was almost entirely in the North, so Northern users of hemp paid a disproportionate amount of that tariff. There were duties on both raw wool and finished wool cloth, which of course benefited sheep farmers who were mostly in the North and woolen textile manufacturers who were almost entirely in the North, but it was Northern consumers who ultimately paid probably eighty percent of that tariff (woolen clothes were worn more in the North than the South, for obvious rea sons). Or take the tariff on iron -- it benefited mainly Northern manufacturers (though there was an iron indus try in the South as well), but sixty-five percent of the railroad mileage and seventy-five percent of the railroad rolling stock were in the North, which meant that Northern railroads (and their customers, indirectly) paid those proportions of the duties on iron for their rails, locomotives, and wheels. One can come up with many more examples.
SOURCE: North & South, January 2004, Vol. 7, Number 1, page 52
Wrong. By standards of the pre-war US tariffs 25% wasn't high at all. It is only 4% more than the average national tariff rate from 1846-57 and about 7% more than the average rate from 1857-60.
Same goes with sugar.
Wrong again. The CSA sugar tariff was actually about 1% lower than the average tariff rate from 1846-57 and only about 2% more than the average rate from 1857-60. By the standards of the time it simply wasn't protectionist.
Look at the CSA import tax on coffee ---- zero percent. How come? Do you think it could be that there was no coffee grown in Dixie?
More likely it has to do with the fact that southerners had resented tariffs on coffee since Alexander Hamilton first installed them in the 1790's. The U.S. didn't have many coffee growers then either, yet that didn't stop tax and spend Hamilton.
You just pulled that out of your hat. Quit making things up as you go along.
It's a hypothetical example, ditto. It does however accurately reflect how trade works. It also accurately reflects what was going on in New York circa 1860. They called it "reexporting" and "reshipping." It happened when merchants using the Warehousing Act withdrew items from NYC warehouses after buyers had been located elsewhere in the country or even elsewhere the world. In the late 1850's something to the tune of $50 million worth of goods annually went into NYC warehouses only to be removed a few months later for reexportation INTERNATIONALLY to the carribean and south america. I'll even give you the sources on that and the exact figures when I get home tonight of you like. In light of that activity the issue is self evident: If British merchants were willing to store their stuff in NYC for a couple months then ship it all the way down to Brazil why would they not be willing to do the same with Charleston, which was just up the coast? The answer is simple: they were willing to do the same with Charleston and did exactly that. Merchants are not like passenger liners, ditto. They do not operate back and forth between the same two cities. They go where the cargo needs to go with a goal in mind of (a) carrying whatever cargo will maximize their profits and (b) ensuring that as few legs of the trip as possible are made without profitable cargo.
You should be aware that foreign registry vessels were not, and are still not allowed to participate in the inter coastal trade
That's where warehousing comes in, Ditto. It's not technically "intercoastal trade" when you are carrying imports that have only been warehoused in the country but did not originate there. If I unload a shipment of swiss clocks and put them into a NYC warehouse they are still my clocks and still imports.
As to the Warehousing Act, I'd say that the Southerners must have been pretty damn stupid if they could not have built a warehouse
Why would they need to? It was more profitable to simply go to New York where there already were warehouses. Boston and Philadelphia and Baltimore generally did not invest in warehouses of this type for the same reason: New York already had em and New York's warehouses were more profitable than those elsewhere.
BTW. Do you realize that in 1860, the farthest south a train could go from New York was Baltimore?
That is simply not true. The famous Baltimore and Ohio railroad moved southward from there and crossed the Potomac into Virginia at several spots. It passed through Harper's Ferry at a major train intersection today. A quick glance at an 1860 railroad map that I have also indicates that railroads connected every single major city on the east coast. Southern railroad lines were continuous between Alexandria, Virginia just outside of DC all the way down to Pensacola, Florida. Westward connections could take you from the east coast as far as Monroe and New Orleans, Louisiana in the south and almost to Little Rock on the northern routes.
From there, every piece of freight needed to be unloaded and hauled by horse and wagon across the city to reach the next rail line heading south. You would think that folks would have figured out that was not too damn efficient
I don't know what their plans were for building a connector between the two, but it is not necessarily as inefficient as you think. Railroad hubs are used for sorting goods as well as transfering them to connecting routes, so unloading may be of necessity anyway. There were, after all, several different railroads that went through Baltimore, some southbound and others westbound. I also know that to this day when I go to New York City I have to get off the first train at Grand Central and travel by other means to another train a couple miles away at Penn with reasonably substantial inconvenience. You'd think by now that they would build a connector between the two (and don't tell me they have - that subway line only gets you part of the way and then you have to transfer off of it).
We are talking about population, not land mass. Trees and mountains don't buy imports. People do.
As for poverty, I seem to recall that virtually all the per capita wealth figures from that era ranked the southern states at the top of the list.
Show us just one.
Some other exempted food items (even some with domestic producers to protect): "Bacon, pork, hams, lard, beef, wheat, flour and bran of wheat, flour and bran of all other grains, Indian corn and meal, barley, rye, oats and oatmeal, and living animals of all kinds, not otherwise provided for; also, all agricultural productions, including those of the orchard and garden, in their natural state, not otherwise provided for."
Then why was the tariff on Cuban cigars higher than the tariff on any other good? It's a hypothetical example, ditto. It does however accurately reflect how trade works.
You said that European ships for some reason stopped in New York, paid tariffs then took those goods to the south. You were wrong. Besides the fact that it was illegal, it is not how trade worked then or now. You ship goods to the port closest to your market to save on more expensive overland transportation. Foreign ships dock at both the east, west and south coasts today depending on the destination of their cargo. Folks back then did the exact same thing which is why all ports had custom houses. Most custom houses in the south back then barely raised enough revenue to cover their own costs of operations.
It happened when merchants using the Warehousing Act withdrew items from NYC warehouses after buyers had been located elsewhere in the country or even elsewhere the world. In the late 1850's something to the tune of $50 million worth of goods annually went into NYC warehouses only to be removed a few months later for reexportation INTERNATIONALLY to the carribean and south america.
They sat on $50 m worth of goods for "months" and managed to ship it to the Carribean, pay whatever tariff was due in those ports, sell them at some price competitive to what the natives would spend if they bought direct from Europe, and still make a profit? I think you are just making 'stuff' up again. Try to think your dodges through before you post them. They're getting silly.
The famous Baltimore and Ohio railroad moved southward from there and crossed the Potomac into Virginia at several spots.
The famous B&O did not go north of Baltimore. The B&O yards were on the west side of Baltimore harbor (about where Camdam Yards ballpark sits today. The only line from the north which went to Philadelphia and on to New York terminated on the East side of the harbor (their main station is now a nice little Civil War museum.) South bound goods, or passengers, had to quite literally get off the train from Philly and take wagons or carrages about 12 blocks down Pratt St. to reach the B&O terminal. It is Pratt street where the first casualties of the civil War occurred when Union troops heading for Washington were attacked while marching to the B&O station to get the train to Washington.
You are wrong --- again!
Not true. There was an April 15, 1861, incident in Texas several days before the unrest in Baltimore (First deaths):
It happened in southeast Texas in a little known incident begun by a Tejano, Antonio Ochoa (pronounced as in O'Choa), who declared himself a Unionist. Ochoa began to organize men and declared publicly against the Confederacy. Most of his followers were sympathizers of Juan Cortinas. On April 12, 1861, Ochoa's men went to the Zapata County seat, Carrizo (the name was later changed to Zapata), and delivered to County Judge Isidoro Vela and County Sheriff Pedro Diaz, a copy of Ochoa's pronounciamento (declaration). Ochoa said he would hang either of them or any other county official that took the oath to the Confederacy.Colonel Ford sent his Confederate cavalry unit under Captain Matt Dunn to Zapata County. The 22 Rangers under Dunn's leadership and with Judge Vela and Sheriff Diaz along, rode to Clarendo where Ochoa had a ranch. At the ranch an announcement was made that the Rangers had warrants for the arrest of various named individuals starting with Ochoa, and asked them to step forward. The Mexicans began to file out of the main ranch building in an orderly manner when someone fired a shot. In the next few minutes, nine of the Mexicans lay dead.
From the Picayune report of this affair (they printed an April 15, 1861, report of their correspondent on May 3, 1861):
Nine Mexicans were killed in the charge, and several wounded; the rest made good their escape in the chaparral. To the credit of the Rangers, be it said, although there were a large number of women and children on the rancho, none were injured or molested in any way, nor a cents worth of property carried off. This prompt sort of treatment on the frontier will, I think, tend to check this disease in its primary stages.
The non-Confederates eventually succeded in hanging Judge Vela.
Some people actually value open land. Forgive me for thinking that you might be one of them. Show us just one.
I believe that PeaRidge posted them fairly recently and pinged him to this post. Pea: do you still have the income or wealth stats by state from the 1860's Thanks!
Because the entire history of taxation is testament to the fact that luxury goods are often ideal items to tax. Cigars are a pure luxury good, thus they are taxed.
You said that European ships for some reason stopped in New York, paid tariffs then took those goods to the south. You were wrong. Besides the fact that it was illegal, it is not how trade worked then or now.
It was NOT illegal at all because the goods were still IMPORTS when they were shipped down the coast. Heck, Congress passed a law specifically allowing and encouraging just that:
"And be it further enacted, That any goods, when deposited in the public stores in the manner provided for in the foregoing section, may be withdrawn therefrom, and transported to any other port of entry, under the restrictions provided for in the act of the 2d March,1799, in respect to the transportation of goods, wares, and merchandise, from one collection district to another, to be exported with the benefit of drawback; and the owner of such goods so to be withdrawn for transportation shall give his bond with sufficient sureties, in double the amount of the duties charge-able on them, for the deposite of such goods in store in the port of entry to which they shall be destined, such bond to be cancelled when the goods shall be re-deposited in store in the collection district to which they shall be transported: Provided, That nothing contained in this section shall be con-strued to extend the time during which goods may be kept in store, after their original importation and entry beyond the term of one year." - 1846 Warehousing Act, Section 2 (emphasis added)
You ship goods to the port closest to your market to save on more expensive overland transportation.
Not always. Overland transportation itself by the 1860's was not prohibitively expensive (if it was nobody would have lived in virtually landlocked places like tennessee, minnesota, and kentucky before the automobile, yet they did). In some cases overland shipment by railroad actually had cost advantages to shipping (they were faster, more reliable, less susceptable to natural disasters and storms, and could easily reach areas that ships couldn't). Nor was it always inherently beneficial to ship direct from starting point X to ending point Y. In fact the overwhelming majority of shipping was NOT of this kind and the stats show it. By 1848 after warehousing went into widespread use approximately $15 million in goods were shipped into New York City warehouses from Europe, taken out months later, and shipped down to South American and the carribean. The figures climbed dramatically almost every single year after that until the system was repealed by the Morrill Bill.
They sat on $50 m worth of goods for "months" and managed to ship it to the Carribean, pay whatever tariff was due in those ports, sell them at some price competitive to what the natives would spend if they bought direct from Europe, and still make a profit?
By the 1860's, yes they did. It was actually an economic benefit for them. Think about it: if you are a merchant carrying 1000 crates of clocks and you show up in NYC with your cargo the tariff house is gonna expect you to have cash up front to pay the taxes at the dock. That becomes a problem for you if you don't carry large sums of cash on you and don't have somebody waiting there immediately on the dock to buy everything you have in your cargo. It all changes though when the government permits warehousing under their laws as happened in 1846. Now you can put your goods in a warehouse until buyers are located, collect payment from those buyers, and use the payment to pay the tariff when the goods are removed from warehousing. This effectively frees up capital for merchants and allows non-wealthy merchants who don't carry large bags of cash on them to import with greater efficiency. So yes - it is entirely profitable to warehouse goods for a couple of months while a buyer is arranged.
I think you are just making 'stuff' up again.
Look it up in the statute books if you doubt me. It's called the Warehousing Act of 1846. It was also modelled directly on an extremely successful warehousing system used by Britain and developed by Walpole in the previous century. His economic writings on the concept of warehousing are found in virtually any good compilation of his works.
South bound goods, or passengers, had to quite literally get off the train from Philly and take wagons or carrages about 12 blocks down Pratt St. to reach the B&O terminal.
In other words, kinda like Penn and Union today in NYC. Is that inconvenient? A little if you like to make direct trips but no more difficult than changing airport terminals today. Moving goods only a couple blocks over land is not an inherently prohibitory task itself either. In fact circa 1860 San Antonio, Texas was the largest city in the state and its surrounding agricultural regions supported a population of a couple hundred thousand people. They were a good hundred miles or more from the nearest rail head, which ended in Columbus to the west of Houston. Yet they got all the goods they needed over land. If they could do it over a hundred miles railroads in the east could do it over a mere 12 blocks.
Thanks for remembering. :)
Re the arrest warrant for Taney, Chief Justice Taney himself discussed it with the mayor of Baltimore, George Williams Brown [noted in Baltimore and the Nineteenth of April 1861], and it's also reported in the memoirs of his associate on the court, justice Benjamin Robbins Custis.
Thanks for the reference to the Brown book. I see that a cheap reprint is available. I'll pick one up the next time I order some books.
ML/NJ
Documentation?
... and the people of those states consumed more than their proportionate share of dutiable products...
Documentation?
... so a high proportion of tariff revenue (on both consumer and capital goods) was paid ultimately by the people of those states
Documentation?
McPherson comes up with these figures out of thin air.
Whatever it was, I have no doubt he will only return later and begin spreading the same lies. That UC Davis article he linked to is an old favorite of his. He posted it a few months ago and I tore it to shreds then - it truly is a shoddy piece of history and is further testament to the fact that historians should not attempt to play economist.
I found an interesting speech from a southern senator today. It was made during the secession winter on tariffs. He described in detail virtually everything I had posed in that hypothetical example about shipping. He described how ships used to stop in New York, exchange their warehoused goods into various stores, then ship out down the coast to Charleston. I suppose I could direct Ditto to it, but it is doubtful he would either read or understand what was said...and not because he isn't capable of doing so. No, he simply does not want to do so.
Anyway, you oughta check out this thread:
http://www.freerepublic.com/focus/f-news/1070371/posts
Another veritable gasbag from the Wlat Brigade, x, is over there making apologia for protectionism. He also bought into Jimmy McPherson's claims about Adams' source material without checking for himself or even asking any questions. He triumphantly declared that McPherson had called DiLorenzo to task over a bad citation and assumed the matter was settled. I just pointed out to him that McPherson didn't prove anything and in fact lied about Adams. Time will tell if he either responds or acknowledges this, but I'm expecting the normal response over there as well, viz.: get caught in a corner by documented facts and make a dash for the vasty deep in which non-sequitur maintains his abode.
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