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Gods, Generals, and Tariffs
The Mises Institute ^ | 2/21/03 | Thomas DiLorenzo

Posted on 02/21/2003 9:06:49 PM PST by billbears

The anticipation surrounding the new movie "Gods and Generals," which opens today, underscores the continuing fascination that Americans (and the world) have with the meaning of the Civil War. It also reflects a growing awareness that the simple story of Northern liberators versus Southern slaveholders fails to do justice to the truth. But what continues to be missed are the economic roots of the North-South conflict—roots which represent deviations from the free-trade ideal.

In a May 10, 2002 article on mises.org ("Lincoln's Tariff War") I elaborated on the argument in my book, The Real Lincoln, that the tariff was a far more important cause of the War between the States than most historians and economists admit.  Charles Adams also makes a very powerful case for the importance of the tariff in precipitating the war in his book,When in the Course of Human Events.  Professors Robert A. McGuire of the University of Akron and T. Norman Van Cott of Ball State University provided additional support for this argument in a July 2002 article in Economic Inquiry, one of the top peer-reviewed economics journals ("The Confederate Constitution, Tariffs, and the Laffer Relationship").  

These authors note, as I do in my book, that the Confederate Constitution outlawed protectionist tariffs altogether.  Article I, Section 8 allows for the collection of "taxes, duties, imposts and excises" but only "for revenue necessary" to finance the government and not to protect any business or industry from international competition.  "Nor shall any duties or taxes on importations from foreign nations be laid to promote or foster any branch of industry . . ."  

The actual tariff rates that were put into effect by the Confederate government averaged 13.3 percent, with dozens of commodities exempt altogether.  This was lower than the 15 percent average tariff rate of 1857 that Frank Taussig said, in his Tariff History of the United States [FULL TEXT] was the closest to the free-trade ideal ever accomplished by the United States during the nineteenth century.   (Taussig was speaking of the U.S. government's tariff rates; the Confederate government's tariff policy was in reality the high water mark of free-trade policy in the nineteenth century.)

In sharp contrast, when the Republican Party gained power in the late 1850s the top item on its agenda was to increase the average tariff rate from 15% to 32% and then to over 47%.  The Republican Party would dominate national politics in America until World War I, and the average tariff rate would remain at about that level all during that time.  

Abraham Lincoln was a lifelong protectionist and owed his nomination at the 1860 Republican Party convention to the fact that he won the support of the Pennsylvania and New York delegations (the two largest) by convincing them that no other candidate was more devoted to protectionism than he was.  And, as Richard Bensel wrote in Yankee Leviathan, the protectionist tariff was nothing less than the cornerstone of the 1860 Republican Party platform.

Professors McGuire and Van Cott write of how "many longtime protectionists in the Northeast" argued that "low tariffs were responsible for the 'crisis' in financial markets and the ensuing depression" of the late 1850s.  "As a result, a drum beat for protection among various Northeasterners, industries, and labor groups commenced in late 1857."

Southerners had been battling this protectionist cabal since at least 1824.  Since they purchased the big majority of their manufactured goods from Europe or the North, and since they were so export dependent, protectionism imposed a harshly disproportionate burden on the Southern states.  There were some Southern protectionists and some Northern free traders, but still, the overwhelming majority of the protectionists came from the North, and free traders from the South.  

The U.S. House of Representatives, under the influence of this Northern protectionist lobby, "actually passed the Morrill tariff in its 1859–60 session, prior to the departure of southern congressman from the House of Representatives," write McGuire and Van Cott (emphasis added). "This vote took place on 10 May 1860, well before Lincoln's election, Confederate secession, and Lincoln's inauguration."  

This suggests that the Morrill Tariff was not a "war tariff" put into place to finance the war but the usual kind, designed to thwart free trade and plunder consumers, especially Southern consumers.

Moreover, the House vote of 105–64 was very lopsided in terms of Northern supporters and Southern opponents of the Morrill Tariff (Congressman Justin Morrill was a steel manufacturer from Vermont).  "Only one yes vote was from a secessionist state (Tennessee)" and "only 15 no votes came from northern states."  

This means

[T]hat 87% of northern congressmen but only 12.5% of southern congressmen (and just 1 out of 40 congressmen from secessionist states) voted in favor of the Morrill tariff, the year prior to secession. The handwriting was on the wall for the South, and ultimately for the Confederacy, after the Panic of 1857.

Northern newspapers that were associated with the Republican Party openly advocated protectionist tariffs as a tool of plunder directed at the Southern states.  As the Daily Chicago Times editorialized on December 10, 1860:

The South has furnished near three-fourths of the entire exports of the country.  Last year she furnished seventy-two percent of the whole . . . We have a tariff [the Morrill Tariff] that protects our manufacturers from thirty to fifty percent, and enables us to consume large quantities of Southern cotton, and to compete in our whole home market with the skilled labor of Europe. This operates to compel the South to pay an indirect bounty to our skilled labor, of millions annually.

Cognizant that the Confederate Congress was about to adopt a much lower tariff rate, the Chicago paper warned that if the North were to "let the South adopt the free-trade system," the North's "commerce must be reduced to less than half what it is now . . . leading to very general bankruptcy and ruin."

On March 12, 1861, a week after Lincoln's inauguration and a month before Fort Sumter, the New York Evening Post, another Republican Party mouthpiece, advocated a preemptive strike against the Southern free traders with a naval attack that would "abolish all ports of entry" into the Southern states.  

The Newark Daily Advertiser, meanwhile, expressed its disgust that Southerners had apparently "taken to their bosoms the liberal and popular doctrine of free trade," and that they "may be willing to go . . . toward free trade with the European powers."  "The chief instigator of the present troubles—South Carolina—have all along for years been preparing the way for the adoption of free trade," and must therefore be stopped "by the closing of the ports" by military force.  

When Lincoln was inaugurated his party had just doubled the average tariff rate and was planning on increasing it even more.  Then, in his First Inaugural Address, he promised a federal invasion of any state that did not collect the higher tariffs, as South Carolina had refused to do when it nullified the "Tariff of Abominations" in 1832.  

As he said:  "The power confided in me will be used to hold, occupy, and possess the property, and places belonging to the government, and to collect the duties and imposts; but beyond what may be necessary for these objects, there will be no invasion—no using force against, or among the people anywhere" (emphasis added).   

Collect the higher tariff rate, he said, and there will be no invasion.  Fail to collect it, and there will be an invasion.  Two years later, he would deport the most outspoken member of the Democratic Party opposition, Congressman Clement L. Vallandigham of Ohio, after Vallandigham said this in a speech:

[T]he Confederate Congress . . . adopted our old tariff of 1857 . . .fixing their rate of duties at five, fifteen, and twenty percent lower than ours.  The result was . . . trade and commerce . . . began to look to the South . . . .  The city of New York, the great commercial emporium of the Union, and the North-west, the chief granary of the union, began to clamor now, loudly, for a repeal of the pernicious and ruinous tariff.  Threatened thus with the loss of both political power and wealth, or the repeal of the tariff, and, at last, of both, New England—and Pennsylvania . . . demanded, now, coercion and civil war, with all its horrors, as the price of preserving either from destruction . . . .  The subjugation of the South, and the closing up of her ports—first, by force, in war, and afterward, by tariff laws, in peace, was deliberately resolved upon by the East.

As McGuire and Van Cott conclude:  "[T]he tariff issue may in fact have been even more important in the North-South tensions that led to the Civil War than many economists and historians currently believe."


TOPICS: Business/Economy; Constitution/Conservatism; Philosophy
KEYWORDS: dixie; dixielist; freetrade; gg; lincoln; tariffwar

1 posted on 02/21/2003 9:06:49 PM PST by billbears
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To: stainlessbanner; shuckmaster; GOPcapitalist; aomagrat; Constitution Day; 4ConservativeJustices
Dixie ping, Gods and Generals another look
2 posted on 02/21/2003 9:07:53 PM PST by billbears (Deo Vindice)
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To: billbears
I just got back from seeing the movie. FANTASTIC!

I really enjoyed the portrayal of the Southern Generals as they truly were, Godly men.

This movie should be shown in every American History class.
3 posted on 02/21/2003 9:17:42 PM PST by TSgt ("Going to war without the French is like going deer hunting without your accordion")
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To: MikeWUSAF
This movie should be shown in every American History class.

Don't hold your breath for that to happen. They are more likely to show Harry Potter. I thank God I homeschool. My son loved the movie, BTW.

4 posted on 02/21/2003 9:22:53 PM PST by Types_with_Fist
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To: MikeWUSAF
And while we in the South are constantly reminded that the Southern economy was built on the backs of slaves, nothing gets said of the sweatshops run in the Northeast during the same period of time. Those same shops existed long after the legislative abolition of slavery.
5 posted on 02/21/2003 9:25:07 PM PST by gov_bean_ counter
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To: MikeWUSAF
I really enjoyed the portrayal of the Southern Generals as they truly were, Godly men.

Godly slave holder protecting men. Oh yeah. Nice God you have.

6 posted on 02/21/2003 10:03:44 PM PST by jlogajan
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To: billbears
If the Confederates went to war over a few tariffs as well as slavery, this further demonstrates an astoundingly profligate undervaluing of human life.
7 posted on 02/21/2003 10:08:40 PM PST by unspun (HOLLYWOOD DECLARE AND DISMANTLE YOUR WEAPONS OF MASS DYSFUNCTION)
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To: MikeWUSAF
I just saw it also, and I agree with you that it should be shown in history classes. However, I have reservations whether the movie will entertain the masses. The script is faithful to history, but that isn't the recipe for cinematic success. I wish it well but doubt it will do well at the box-office.
8 posted on 02/21/2003 10:10:25 PM PST by Fifth Business
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To: jlogajan
Godly slave holder protecting men.

I thought the movie did a good job of bringing out the irony of men fighting for freedom for themselves but not for the slaves.

9 posted on 02/21/2003 10:13:14 PM PST by Fifth Business
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To: billbears
Here are two quotes that I believe sum things up rather accurately. The first is from a 7 page speech in the congressional record by a southern senator against the Morrill tariff. It is one of the many anti-tariff speeches from the secession era. The second is an excerpt from a post-war book written by Lysander Spooner - the leading philosophical mind of the American abolitionist movement. In other words, here are two quotes that yankee historians would not like you to know about and that many of their apologists here purport to be non-existant:

"Mr. President, it is very disagreeable to speak, as I do on this occasion, with a consciousness of my utter inability to prevent the passage of this bill. I have no doubt that the adoption of this measure is a foregone conclusion. I believe it has been generally understood that the adhesion of the State of Pennsylvania to the Republican party was upon the condition of the passage of this Morrill-tariff bill; and I suppose an obligation that has been incurred at such a price must be carried out. Still, I owe it, perhaps, to those whose opinions I represented on this committee, and to my constituents, to expose, if I can, the shallow pretexts on which it is sought to adopt this measure, and strip it of those disguises in the shape of specific duties, under which its enormous taxation is hidden....But pass this bill, and you send a blight over that land [of Virginia]; the tide of emigration will commence - I fear to flow outward - once more, and we shall begin to decline and retrograde instead of advancing, as I had fondly hoped we should do. And what I say of my own State I may justly say of the other southern States. But, sir, I do not press that view of the subject. I know that here [in Congress] we are too weak to resist or to defend ourselves; those who sympathize with our wrongs are too weak to help us; those who are strong enough to help us do not sympathize with our wrongs, or whatever we may suffer under it. No, sir this bill will pass. And let it pass into the statute-book; let it pass into history, that we may know how it is that the South has been dealt with when New England and Pennsylvania held the power to deal with her interests." - Senator Robert Hunter of Virginia, February 1861, Congressional Globe, 36-2, p. 898-905

"And now these lenders of blood-money demand their pay; and the government, so called, becomes their tool, their servile, slavish, villainous tool, to extort it from the labor of the enslaved people both of the North and the South. It is to be extorted by every form of direct, and indirect, and unequal taxation. Not only the nominal debt and interest--enormous as the latter was--are to be paid in full; but these holders of the debt are to be paid still further--and perhaps doubly, triply, or quadruply paid--by such tariffs on imports as will enable our home manufacturers to realize enormous prices for their commodities; also by such monopolies in banking as will enable them to keep control of, and thus enslave and plunder, the industry and trade of the great body of the Northern people themselves. In short, the industrial and commercial slavery of the great body of the people, North and South, black and white, is the price which these lenders of blood money demand, and insist upon, and are determined to secure, in return for the money lent for the war." - Lysander Spooner, "No Treason: The Constitution of No Authority" 1870

10 posted on 02/21/2003 10:50:31 PM PST by GOPcapitalist
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To: billbears; WhowasGustavusFox; sc-rms; catfish1957; THUNDER ROAD; Beach_Babe; TexConfederate1861; ...
Dixie ping!
11 posted on 02/22/2003 1:40:06 AM PST by shuckmaster
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To: billbears
T]he Confederate Congress . . . adopted our old tariff of 1857 . . .fixing their rate of duties at five, fifteen, and twenty percent lower than ours. The result was . . . trade and commerce . . . began to look to the South . . .

Yeah, the south was a real hotbed of commerce in 1861, wasn't it? I suppose that Union blockade was really a trade measure.

12 posted on 02/22/2003 7:39:00 AM PST by Non-Sequitur
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To: GOPcapitalist
The second is an excerpt from a post-war book written by Lysander Spooner - the leading philosophical mind of the American abolitionist movement.

Secessionists are now quoting anarchists?

13 posted on 02/22/2003 8:02:45 AM PST by jlogajan
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To: Fifth Business
I thought the movie did a good job of bringing out the irony of men fighting for freedom for themselves but not for the slaves.

You should always fight for freedom for yourself -- as long as you don't fight for slavery of others. Oops, I guess the "Godly" southerners missed that distinction.

14 posted on 02/22/2003 8:05:54 AM PST by jlogajan
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To: GOPcapitalist
Senator Robert Hunter of Virginia, February 1861

South Carolina, Florida, Alabama, Georgia, Louisiana and Texas had already seceded by the time this guy gave his speech. Therefore irrelevant.

15 posted on 02/22/2003 8:08:20 AM PST by jlogajan
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To: shuckmaster
dixie LIBERTY bump!
16 posted on 02/22/2003 8:24:11 AM PST by stand watie (Resistance to tyrants is obedience to God. : Thomas Jefferson 1774)
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To: billbears
Article I, Section 8 allows for the collection of "taxes, duties, imposts and excises" but only "for revenue necessary" to finance the government and not to protect any business or industry from international competition. "Nor shall any duties or taxes on importations from foreign nations be laid to promote or foster any branch of industry . . ."

This is actually something with which I could agree. Our Founders considered the tariff to be the least intrusive mode of taxation to impose upon the American People. However, there is a vast difference between a relatively low, flat-rate revenue tariff imposed on ALL imported goods and the convoluted targeted tariffs or tariff exemptions enacted by special interests. Modern "free traders" generally ignore this distinction, and erroneously promote zero-tariffs, forcing government to rely on more tyrannical means of collecting revenue.

17 posted on 02/22/2003 8:57:22 AM PST by Willie Green (Go Pat Go!!!)
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To: Non-Sequitur
have you ever heard of "King Cotton"... probably not...
18 posted on 02/22/2003 9:01:18 AM PST by arly
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To: jlogajan
Excellent point!
19 posted on 02/22/2003 9:18:15 AM PST by the_rightside
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Comment #20 Removed by Moderator

To: arly
have you ever heard of "King Cotton"... probably not...

Sure have. What's your point?

21 posted on 02/22/2003 10:30:46 AM PST by Non-Sequitur
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To: Non-Sequitur
Yeah, the south was a real hotbed of commerce in 1861, wasn't it? I suppose that Union blockade was really a trade measure.

----------
As the Daily Chicago Times editorialized on December 10, 1860:

The South has furnished near three-fourths of the entire exports of the country. Last year she furnished seventy-two percent of the whole . . . We have a tariff [the Morrill Tariff] that protects our manufacturers from thirty to fifty percent, and enables us to consume large quantities of Southern cotton, and to compete in our whole home market with the skilled labor of Europe. This operates to compel the South to pay an indirect bounty to our skilled labor, of millions annually

Yeah, I guess it was... I wonder if the Daily Chicago Times was one of the papers the tyrant shut down when he didn't agree with them?

Nah, his home state? If he didn't bother them when forcefully arguing against his own state's black codes, I guess he wouldn't now either < /sarcasm>

22 posted on 02/22/2003 11:16:58 AM PST by billbears (Deo Vindice)
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To: billbears
In December 1860 there wasn't even a confederacy for competition so I don't see how you can trot this editorial out for support. If you will recall I was disputing DiLusional's quote of Vallandigham's claim that the southern tariff posed a threat to the North. The confederate congress didn't adopt the tariff until a month after they had started the war, so suggesting at that point that they were a threat to Northern trade was a bit ridiculous, don't you think? And in the end it was the southern economy, with all that cotton, that collapsed rather than the North's.
23 posted on 02/22/2003 11:22:29 AM PST by Non-Sequitur
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To: jlogajan
South Carolina, Florida, Alabama, Georgia, Louisiana and Texas had already seceded by the time this guy gave his speech. Therefore irrelevant.

First off, you are wrong about Texas. It did not secede until a month later when its referendum was certified. Second, the speech is perfectly relevant as it demonstrates very clearly the southern contention with the Morrill tariff. Third, its characterization of senate votes is consistent with the characterization given two months earlier by Sen. Wigfall before any southern state had seceded. Like it or not, the south simply did not have the power to stop the Morrill bill from being ramroded through.

24 posted on 02/22/2003 12:58:03 PM PST by GOPcapitalist
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To: jlogajan
Secessionists are now quoting anarchists?

If you wish to call it that. Spooner is better known as an abolitionist libertarian though, and his comments about the war were made in the context of his abolitionist arguments. If you have any interest in this debate, you are free to weigh in on those comments at any time.

25 posted on 02/22/2003 1:00:44 PM PST by GOPcapitalist
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To: jlogajan
You should know about irrelevance...
26 posted on 02/22/2003 4:40:43 PM PST by Treebeard
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To: billbears
BUMP
27 posted on 02/22/2003 11:38:54 PM PST by Aurelius
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To: Willie Green
However, there is a vast difference between a relatively low, flat-rate revenue tariff imposed on ALL imported goods and the convoluted targeted tariffs or tariff exemptions enacted by special interests. Modern "free traders" generally ignore this distinction, and erroneously promote zero-tariffs, forcing government to rely on more tyrannical means of collecting revenue.

good point.

It also seems incredible to me that the antebellum south seemed unwilling or unable to diversify its own economy, to the extent that it wouldn't be so dependent on foreign imports for clothes and other manufactured goods.

28 posted on 02/23/2003 7:40:17 AM PST by mac_truck (coffee? I'll take mine black.)
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To: jlogajan
Godly slave holder protecting men. Oh yeah. Nice God you have.

Today we are so enlightened that we can denounce all the wrongs that came before us huh? Not to defend slavery but at no time in recorded human history has there not been slavery. The universal acceptance of slavery as not being legitimate is a modern one and in the late 18th up to the mid 19th centuries it was not so clear that slavery was a sin. The Bible compares Satan's hold over humans to slavery but the Bible does not list slavery as a specific sin though for sure it would seem to be at odds with "do unto others as you would have them do unto you". Since at no time since the fall from grace has there been sinless humans one should not be surprised to find sin even in those who aspire to righteousness.

BTW please check you stock portfolio and pension fund to be sure you aren't making profits from slave labor in China. It wouldn't be very enlighted to make a comfortable retirement off of forced labor you know.

29 posted on 02/23/2003 8:58:33 AM PST by u-89
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To: jlogajan

I can see by your replies that all of that damnYankee propaganda has rotted your brain. Go grow another one and come back to engage us in debate with factual evidence.

30 posted on 02/23/2003 10:19:00 AM PST by Colt .45 (Quod minimum specimin in te ingenii?)
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