“if an intelligent angel would drop down in one corner of this room and sit there for two weeks hearing all that is said to me, I think that he would come to the conclusion that this war is being prosecuted for the purpose of obtaining cotton from the South for the Northern cotton mills. So General Banks has to go to Louisiana to get the cotton. My situation is such that I am not free to resist this demand. I am so dependent on New England, and those using cotton, for money, men and supplies, that I cannot do as I wish under the circumstances.”
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In the decades prior to the Civil War, the south was constantly hampered by protectionist tariffs. In 1828, the Whigs employed the Tariff of Abominations, which destroyed the agrarian economy of the south. This was such a controversial issue that Andrew Jackson encouraged the passage of the Force Bill, which would allow him to invade South Carolina to enforce the tariff. When it came to the 1860s, the issue reared its ugly head again in the form of the Morrill Tariff, which raised the rates to a huge extent and caused additional controversy in an already fractured time. For many in the south, enough was enough. British sentiment at the time corroborated this, as the policy served to punish free trade with European powers as well.
The South attempted to buy federal property from the Union peacefully, and for a time this seemed like a plausible course of reconciliation. The top ranking union military commander, Winfield Scott, urged Lincoln to allow the seceding states to “depart in peace.” Scott communicated informally to the southern states that Fort Sumter would be abandoned, and a peaceful solution could be achieved. Secretary of State William Seward pled with Lincoln to sell the union property to the south to avoid war and to avoid an incendiary action that would start war.
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The official insistence that tariffs did not enrich the North at the expense of the South and that tariffs were irrelevant to why the South seceded and the North invaded is just factually untrue. Whether the experts are frauds or fools – and at least in McPherson’s case, both are impossible – the fact is that in the Congress, the newspapers, the party platforms, the secession conventions, and the Confederate Constitution, the issue of tariffs remained divisive. In short, plenty of ‘someones’ were thinking about tariffs at the time.
Two of such ‘someones’ were Sydenham Moore and George S. Houston, two Representatives for the State of Alabama. Moore began his career with a law practice in Greensboro and eventually served as a judge for his local county and federal circuit as well as a captain in the Mexican War. Houston was a longtime Jacksonian (he had served in the Congress off and on since 1831) with a law practice and plantation in Athens.
On 30 April 1860, Moore spoke against the Republican Party’s Morrill Tariff, a record-breaking tax increase which protected key industries in swing States from foreign competition – ‘scarcely less oppressive than did the memorable tariff act of 1828, known throughout the South as the bill of abominations.’ Moore admitted that the ongoing crisis of slavery – a ‘question of far more perilous import’ – was more absorbing at the moment, but held that so long as ‘selfishness or avarice finds a lodgment in the human breast,’ the issue of the tariff was ‘never to be at rest.’
‘Who introduces it here now, as it seems to me, so unnecessarily and so unseasonably?’ Moore asked of the Morrill Tariff. ‘Not those upon whom the taxes are most heavily imposed by the tariff laws, and who might be expected to be weary of bearing, like Issachar, their endless burden, but the manufacturers themselves, for whose support and profits nearly every individual and industrial interest in the country is not compelled to contribute,’ he answered, adding that these moneyed interests had long-lobbied for such privileges. Moore rejected the Republicans’ profession that they wished to raise taxes in order to pay down the national debt, pointing out that pushing taxes too high actually lowered revenue and that they were resistant to cutting spending on anything. ‘From the manner in which the Republicans usually vote on all questions involving the appropriation of money,’ observed Moore, ‘it really seems as if they designed to swell the expenditures of the government so highly as to create the necessity of higher duties.’
Moore rebuked the Congressmen of the swing States – particularly Pennsylvania – for auctioning off their votes. ‘In the glowing pages of Gibbon we read that, when public and private virtue and true patriotism had become extinct at Rome, and liberty itself had sought a more congenial dwelling-place, far away from the corruptions of that imperial city, that Empire, the then-mistress of the world, was put up and sold to the highest bidder,’ explained Moore. ‘Have we so far degenerated that the chief honors of this great Republic, and the control of its destinies, are also to be offered to the highest bidder?’
Responding to the Republicans’ call for ‘protection for protection’s sake,’ Moore refuted the old mercantilist theory of protection and defended the classical-liberal theory of free trade. ‘The honourable gentleman from Vermont endeavors to ridicule the doctrines of free trade,’ explained Moore, referring to the bill’s author, Vermont Republican Justin Morrill. ‘The principles of free trade have been approved by the ablest statesmen and public economists in the world; by such men as Jeremy Bentham, Adam Smith, and Sir Robert Peel.’ As an example, Moore cited the economic case of Great Britain, which had increased her prosperity and power by repealing her restrictive trade policy. ‘Though sternly opposed by those interested in maintaining the system of protection, and despite the forebodings of ruin and disaster which were to follow, these principles were partially adopted by England years ago, and their success has vindicated the wisdom of those who first incorporated them into her legislation,’ argued Moore. ‘The monarchies of the Old World are abandoning these antiquated notions of monopoly and restriction, and are now opening wide their ports to the commerce and free exchanges of the world.’ Free trade even cultivated peace between rival world powers such as Great Britain and France, noted Moore, replacing military conflict with economic cooperation. Moore cited the United States as another example, showing that the reduction of tariffs in 1846 was followed by an increase in imports and tax revenue – that is, as trade increased, so did the revenue collected from taxes on trade. Moore suspected, however, that the Republican Party’s official position on protective tariffs was a ‘sectional’ question rather than a ‘financial’ question – that is, a form of rent-seeking for its section. ‘The gentleman well knows that while the chief burdens will fall on the South, his constituents will be benefited by a high protective tariff,’ Moore remarked of Morrill. ‘No wonder, then, that self-interest has blinded his clear understanding, and made him so earnest an advocate of the protective policy.
Hoisting the Republican Party (which called for higher internal improvements in addition to higher tariffs) on its own petard, Moore objected that protectionist tariffs, by increasing the price of coal and iron, in turn reduced the number of internal-improvements projects which could be undertaken – in particular, the railroads. ‘Is it not enough that for every mile of railroad which may be constructed, over one thousand dollars have now to be paid to the iron manufacturers of this country?’ asked Moore. ‘Can gentlemen be so blind as to believe that the mechanics and agriculturalists of this country will be content to pay to the manufacturers more than twenty-four dollars of their honest earnings out of every $100 expended in the purchase of iron?’
Moore denounced the Morrill Tariff’s policy of levying ‘specific duties’ on particular items rather than a uniform duty, objecting that this concealed the tax burden from the people. ‘Specific duties do very well in those governments where every expedient is resorted to to procure money from the people,’ remarked Moore. ‘Where their expenditures are upon a gigantic scale, and a certain amount is absolutely necessary to preserve the public faith and credit. Moore believed, however, that American representatives should not deal with their constituents through ‘fraud,’ but in ‘an open and manly manner.’ According to Moore, ‘The laws ought to be so plain and simple that they may be comprehended by every individual, even of the commonest understanding.’ Moore then highlighted the difference between direct and indirect taxation, the latter of which he considered ‘at best a contrivance to tax the people, and, at the same time, keep them in ignorance of the amount that is levied on them.’ Imagine, suggested Moore, if instead of the tariffs’ ‘invisible tax-gatherer,’ a ‘common tax-gatherer’ demanded that each man pay to the industrialists a bounty of $24 for every $100 he spent. ‘Yet this is the amount of tribute now levied on the consumers for that favoured class,’ Moore pointed out, ‘and still they clamour for more.’
‘The people whom I have the honour to represent do not object to bear their full share of the taxation necessary to support this government,’ explained Moore. ‘They are also willing for the manufacturers to derive all the benefits which may accrue to them from the incidental protection afforded under a revenue tariff.’ Moore made clear, however, that his constituents ‘are not content to be taxed beyond what the wants of the government may require.’ As examples of such illegitimate wants, Moore listed ‘the ironmongers and manufacturers of the North,’ ‘the thousand and one cormorants who feed and fatten on public spoils,’ ‘marble palaces for custom-houses, court-houses, post offices, and light-houses,’ ‘New England seamen for catching codfish,’ ‘a large standing army in time of peace,’ and ‘printing and publishing costly books which few can get and none ever read.’
When Morrill accused Southerners of an ‘ignorant impatience of taxation,’ Moore protested that ‘the taxing power has always been viewed with jealousy by every free people’ and that ‘no free people of the same intelligence and spirit ever submitted to such unjust and oppressive taxation.’ According to Moore, taxation in the United States had always been unequal. ‘While one section has contributed much the largest share of revenue, it has received back but little in the way of appropriations,’ explained Moore. ‘While it has been a heavy burden to one, it has been a bounty to the other.’ If the ‘onerous taxation’ of the tariffs of 1816, 1824, 1828, and 1842 had ‘been imposed by a monarch,’ suggested Moore, then ‘he would have shared the fate of Charles I of England: “the block would have drunk his gore and his head have saddened in the sun.”’ Moore traced the belief ‘that taxation without consent was tyranny’ from the Declaration of Independence to the Magna Carta, adding that ‘the doctrines of passive obedience and unconditional submission’ had fallen into disgrace after the Glorious Revolution rejected the despotic reigns of Charles II and James II. Moore denounced the ‘system of iniquitous legislation’ that produced the Morrill Tariff and lamented the South’s minority status within the Union. ‘Go on, then, gentlemen; pass this odious protective tariff bill; legalise the robbery of the South,’ exclaimed Moore. ‘We are in a small minority here, and therefore powerless to protect our constituents.’ Moore warned, however, that despite the South’s ‘past forbearance,’ the ‘old revolutionary fire’ may soon be rekindled. ‘God grant,’ prayed Moore, ‘that the example of Hampden, in resisting the illegal tax on ship money, and of our fathers is resisting the illegal though trifling tax of threepence per pound on tea, and of all those who have periled life and fortune in the cause of liberty and independence, may not be lost upon the South; but that every son of hers may so set in the future as to prove to the world that they “know their rights, and knowing, dare maintain them.”’
The next week, on May 8th, Houston also spoke against the ‘exorbitant and unjust’ Morrill Tariff. ‘The taxing power of the government, and its duty growing out of the exercise of that power, in view of the constitutional grant, present questions which, in my judgment, are not surpassed in importance by any ever agitated in an American Congress,’ declared Houston. Although Houston admitted that the ‘fate of the government’ depended on the resolution of the ongoing slavery crisis, he avowed that ‘no question connected with the government can be of more interest or importance than those growing out of the bill under consideration.’
With sarcasm, Houston complimented the Ohio Republican John Sherman (brother of the Yankee warlord W.T. Sherman) for conceding that ‘a duty levied upon imports is a tax upon those who consume such imports.’ This concession, remarked Houston, clarified the question before the people: ‘Whether they are willing to be thus taxed in their necessary consumption, not because the government needs to money, but to prosper and enrich the manufacturing interests.’
‘An effort is now being made to increase the duties to a point much higher than they were under the law of 1846, upon the alleged ground that our receipts in the Treasury are too small,’ claimed Houston. Specifically, Houston warned that the Republicans were facetiously arguing for a return to the tariff of 1846 over the tariff of 1857, the latter of which had reduced rates and been followed by a reduction in revenue. The reduction in revenue, however, resulted from the Panic of 1857. ‘Under such circumstances, how could we expect the usual amount of imports or the usual amount of receipts into the Treasury?’ asked Houston. ‘A prudent man in a case like this, and at a time like this, would reduce his expenses and husband his means so as to be able to weather the storm and pass safely through the crisis.’ Indeed, Houston found the idea of permanently raising taxes during a recovery from a recession in order to recoup a temporary shortfall in revenue to be perverse: the government should ‘bring its expenditures to a point where they could be met by its income’ and ‘avoid an increase of taxation.’
Furthermore, continued Houston, revenue under the 1857 rates was growing each year and in 1860 was estimated to exceed the average revenue under the 1846 rates ($56 million and $50 million, respectively). By 1861, revenue was estimated to reach $60 million. ‘You can but discover,’ noted Houston, ‘that as the country recovers from the very disastrous effects of the crash of 1857, as confidence is restored, commerce and trade become more healthy and active, business of all kinds is becoming prosperous, and, of course, increasing largely the revenue from imports.’ Moreover, under the rates of the Morrill Tariff, 1859’s revenue would have totaled $72,113,135.25 – over $20 million the average revenue under the 1846 rates! ‘Let me ask gentlemen what they propose to do with $72,113,135.25 per annum?’ Houston asked the Republicans. ‘Why take it out of the pockets of the people?’ To Houston, the answer was clear: ‘Their object is not an increase of revenue, but protection.’
Houston defended the classical-liberal theory of free trade, which had taken deep root in the South due to her trade-based economy. ‘The true policy of the United States is to have its commerce as free as possible and unshackled as may be consistent with a proper revenue tariff,’ maintained Houston. ‘The trade of nations consists in their interchange of products, and such trade should be encouraged instead of restrained by an unnecessary duty.’ Houston answered some of the most persistent objections to free trade. Trade deficits? ‘Who authorised Congress to say, by law, how much and what the people should wear or eat? That is their business to determine, not ours.’ Foreign debts? ‘I could wish the purchases could have been made at home, yet I have no right to controul them as to the market in which they trade, nor has Congress such power.’
Houston welcomed protection from foreign competition which domestic industries naturally gained from tariffs – ‘I would gladly see them all prosper’ – but objected to tariffs which were erected to restrain trade rather than collect revenue. ‘We all know that any duty upon foreign goods imported into the United States affords an incidental benefit to the manufacturers of like goods here,’ explained Houston. ‘All I ask, as a representative of the consumers, is that, while the present policy prevails, you make a fair and proper assessment of the duties in the true sense of the Constitution; and let the incidents be as beneficial to other interests as they may, if the duty is a fair one, the incidents are legitimate. Yet according to Houston, the Morrill Tariff was the opposite of this compromise between free trade and protection. ‘The friends of this bill intend to compel the people to trade at home, at much higher prices, by driving away foreign competition,’ concluded Houston, ‘by fettering and restricting our trade.’
Lincoln also balked at the prospect of losing Southern tariff revenue which accepting secession entailed. ‘But what am I to do in the meantime with those men at Montgomery? Am I to let them go on and open Charleston, etc. as ports of entry with their ten-percent tariff?’ Lincoln asked one of the Virginians sent to persuade him of peace. ‘What, then, would become of my tariff?’ When another Virginia commissioner recommended the abandonment of Fort Sumter, Lincoln exclaimed, ‘If I do that, what would become of my revenue? I might as well shut up housekeeping at once!’ Accordingly, in his First Inaugural Address, Lincoln threatened ‘invasion,’ ‘force,’ and ‘bloodshed’ against any States which resisted federal laws – in particular, the Morrill Tariff.
After provoking the Confederates into firing the first shot at Fort Sumter – under the pretense of reinforcing federal forts and collecting federal taxes – Lincoln unilaterally declared war, driving the Upper South out of the Union and into the Confederacy. ‘It is impossible to doubt that it was Mr. Lincoln’s policy, under the name of reinforcing the laws, to retake the forts, to collect the revenue of the United States in our ports, and to reduce the seceded states to obedience to the behests of his party,’ warned the former Alabama Unionist Robert H. Smith. ‘His purpose, therefore, was war upon and subjugation of our people.’
‘Southern Congressmen were not being stupid or delusional in voting almost unanimously against protectionist tariffs in 1824, 1828, and 1860, or in outlawing protectionist tariffs altogether in the Confederate Constitution,’ argues DiLorenzo. ‘They were voting their economic self-interest, and the basic economics of international trade…bear this out.’
Indeed, the great Southern statesman, John C. Calhoun, was often exasperated with Yankees who lectured Southerners on economics while themselves clinging to tariffs for protection:
The case, then, fairly stated between us and the manufacturing States is, that the tariff gives them a protection against foreign competition in our own market, by diminishing, in the same proportion, our capacity to compete with our rivals, in the general market of the world. ‘They who say that they cannot compete with foreigners at their own doors, without an advantage of 45 percent, expect us to meet them abroad under disadvantage equal to their encouragement.
We are told, by those who pretend to understand our interest better than we do, that the excess of production and not the tariff, is the evil which afflicts us […] We would feel more disposed to respect the spirit in which the advice is offered, if those from whom it comes accompanied it with the weight of their example. They also, occasionally, complain of low prices; but instead of diminishing the supply, as a remedy for the evil, demand an enlargement of the market, by the exclusion of all competition.
The economic cost of tariffs was fairly straightforward: tariffs drove up the price of the European goods primarily imported by Southerners, which as a result drove down Southern exports to Europe and the exchange-value of Southern exporters’ foreign-currency holdings. Jeffrey R. Hummel, in his groundbreaking libertarian-revisionist history of the Civil War, Emancipating Slaves, Enslaving Free Men, concurs with Calhoun and describes the futile efforts of historians and economists to prove otherwise. ‘At least with respect to the tariff’s adverse impact, Southerners were not only absolutely correct but displayed a sophisticated understanding of economics,’ argues Hummel. ‘The tariff was inefficient; it not only redistributed wealth from farmers and planters to manufacturers and laborers but overall made the country poorer.’
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The tariff was mentioned in both Georgia and South Carolina by prominent leaders in 1860 as an important factor in their determination to secede from the Union. It had been so for years. George Mason proposed a prohibition on “Navigation Laws” in Philadelphia in 1787 precisely because he thought the North would eventually tax the South out of existence. His prophecy had finally came to fruition in 1860.
1 May 1861, the Confederate Committee on Foreign Affairs produced a document designed to persuade foreign powers on the justness of the Confederate cause. The timing is important. This was only two weeks after the firing on Ft. Sumter and a shade under two months since Lincoln’s inauguration. The passage below was from the first full paragraph:
On the fiscal operations of the government in the laying and the expenditure of the taxes, they were previously not sufficiently united, completely to rule the South. The party weight of the South, and the ability and skill of its public men, kept them at bay; whilst the people of the North-West, being like the people of the South, an agricultural people, were generally opposed to the protective tariff policy — the grand sectionalising instrumentality of the North. They were allies of the South, to defeat this policy. Hence it has been only partially, and occasionally successful. To make it complete, and to render the North omnipotent to rule the South, the division in the North must be healed. To accomplish this object, and to sectionalise the North, the agitation concerning African slavery in the South was commenced. This institution was purely sectional, belonging to the South. Antagonism to it in the North must also be sectional. The agitation would unite the South against the North, as much as it united the North against the South; but the North being the stronger section, would gain power by the agitation. Accordingly, after the overthrow of the tariff of 1828, by the resistance of South Carolina in 1833, the agitation concerning the institution of African slavery in the South was immediately commenced in the Congress of the United States. It was taken up by the Legislatures of the Northern States; and upon one pretext or another in and out of Congress, it has been pursued from that day to the fall of 1860, when it ended in the election of a President and Vice President of the United States, by a purely sectional support. The great end was at last obtained, of a united North to rule the South. The first fruit the sectional despotism thus elected produced, was the tariff lately passed by the Congress of the United States. By this tariff the protective policy is renewed in its most odious and oppressive forms, and the agricultural States are made tributaries to the manufacturing States. It has revived the system of specific duties, by which, the cheaper an article becomes, from the progress of art or the superior skill of foreign manufacturers — the higher is the relative tax it imposes. Specific duties, is the expedient of high taxation, to enforce its collection. This tariff illustrates the oppressive policy of the North towards the South, and abounds in high taxation by specific duties. It is a war on the foreign commerce of the country, in which the Southern people are chiefly interested. Exclusively an agricultural people, it is their policy, to purchase the manufactured commodities they need, in the cheapest markets. These are amongst the nations of Europe, who consume five-sixths of the agricultural productions of the South. The late tariff passed by the Congress of the United States, was designed to force the Southern people, by prohibitory duties to consume the dearer manufactured commodities of the North, instead of the cheaper commodities of European nations. What is this but robbery? Does it not take from one citizen or section and give to another? The foreign trade of the United States, has always been carried on, by our agricultural productions. Our exports, are the basis of the imports, of the United States. Upon what principle of justice or of the Constitution, have the people of the North intervened between us and our natural customers, and forced us by the use of the Federal Government — laying prohibitory duties on the production of foreign nations — to consume their productions? Shall we not have the right to deal directly with those who consume our agricultural productions and who in return can supply us with their cheaper manufactured commodities. If foreign nations can sell us freelv their manufactured commodities, in consequence of their greater cheapness — can they not afford to give us more for our cotton? And if we pay less for their manufactured commodities— are we not so much the richer by the trade? The tariff alone, would have been ample cause for a separation of the Southern from the Northern. The reign of sectional oppression and tyranny, anticipated by the seceding States, is fully inaugurated at Washington, by the passage of this act [emphasis added].
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