SLAVERY or TARIFF?
"It is curious how indifferent historians have been to the South's complaint about the tariff, often dismissing it as a scapegoat for the section's own economic shortcomings or as a disguised form of slavery conflict," writes historian Clyde N. Wilson (in his section of "Slavery, Secession, and Southern History"). "But the plain truth is that [John C.] Calhoun was entirely correct in his opposition to the tariff. Debates about the actual macro- and micro-economic effects of antebellum protection are beside the point. The South, providing the bulk of the Union's exports, sold in an unprotected world market, while all American consumers bought in a highly protected one. And this was to the benefit of one class, no matter how plausibly disguised as a public boon.
"Such exactions are hard to justify at any time, but especially so in a federal Union in which economic interests are regionalized in such a way that the exploitive effect is concentrated. Americans had fought a revolution for smaller grievances. Not to mention, as Calhoun pointed out in the South Carolina Exposition, to the agreement of free traders, that the tariff's 'tendency is, to make the poor poorer and the rich richer.'
"But the tariff, like abolition, was also a question of honor. The disingenuous arguments of the protectionists tended, like those of the abolitionists, to dwell upon the moral inferiority and stupidity of southerners in comparison with wise, righteous, industrious New Englanders. Calhoun did not engage in that type of polemic, but he replied to it, again in the Exposition: '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 commercial and industrial rise of New England in the early 19th century was not an accident. It was a deliberate scheme, in which the South at first willingly participated. All was outlined at the inception of the republic by Alexander Hamilton, and the goal was to increase the prosperity and independence of the whole nation. But the result, from the South's point of view, turned out rather differently.
Southern New England was the first section of America to become overcrowded. At the end of the Revolution, it had too many families, not enough farmland, and too few jobs. The federal government set out deliberately to encourage there the commercial trades, especially ship-building and shipping, to save the region from sinking into poverty. The raw material for Northern factories, and the cargoes of Northern merchantmen, would come from the South.
Washington's "Farewell Address" makes this economic trade-off the chief practical argument for a continued union of the sections:
"The North, in an unrestrained intercourse with the South, protected by the equal Laws of a common government, finds in the productions of the latter, great additional resources of Maratime [sic] and commercial enterprise and precious materials of manufacturing industry. The South in the same Intercourse, benefitting by the Agency of the North, sees its agriculture grow and its commerce expand."
The July 4, 1789, tariff was the first substantive legislation passed by the new American government. But in addition to the new duties, it reduced by 10 percent or more the tariff paid for goods arriving in American craft. It also required domestic construction for American ship registry. Navigation acts in the same decade stipulated that foreign-built and foreign-owned vessels were taxed 50 cents per ton when entering U.S. ports, while U.S.-built and -owned ones paid only six cents per ton. Furthermore, the U.S. ones paid annually, while foreign ones paid upon every entry.
This effectively blocked off U.S. coastal trade to all but vessels built and owned in the United States. The navigation act of 1817 made it official, providing "that no goods, wares, or merchandise shall be imported under penalty of forfeiture thereof, from one port in the United States to another port in the United States, in a vessel belonging wholly or in part to a subject of any foreign power."
The point of all this was to protect and grow the shipping industry of New England, and it worked. By 1795, the combination of foreign complication and American protection put 92 percent of all imports and 86 percent of all exports in American-flag vessels. American shipowners' annual earnings shot up between 1790 and 1807, from $5.9 million to $42.1 million.
New England shipping took a severe hit during the War of 1812 and the embargo. After the war ended, the British flooded America with manufactured goods to try to drive out the nascent American industries. They chose the port of New York for their dumping ground, in part because the British had been feeding cargoes to Boston all through the war to encourage anti-war sentiment in New England. New York was the more starved, therefore it became the port of choice. And the dumping bankrupted many towns, but it assured New York of its sea-trading supremacy. In the decades to come. New Yorkers made the most of the chance.
Four Northern and Mid-Atlantic ports still had the lion's share of the shipping. But Boston and Baltimore mainly served regional markets (though Boston sucked up a lot of Southern cotton and shipped out a lot of fish). Philadelphia's shipping interest had built up trade with the major seaports on the Atlantic and Gulf coasts, especially as Pennsylvania's coal regions opened up in the 1820s. But New York was king. Its merchants had the ready money, it had a superior harbor, it kept freight rates down, and by 1825 some 4,000 coastal trade vessels per year arrived there. In 1828 it was estimated that the clearances from New York to ports on the Delaware Bay alone were 16,508 tons, and to the Chesapeake Bay 51,000 tons.
Early and mid-19th century Atlantic trade was based on "packet lines" -- groups of vessels offering scheduled services. It was a coastal trade at first, but when the Black Ball Line started running between New York and Liverpool in 1817, it became the way to do business across the pond.
The trick was to have a good cargo going each way. The New York packet lines succeeded because they sucked in all the eastbound cotton cargoes from the U.S. The northeast didn't have enough volume of paying freight on its own. So American vessels, usually owned in the Northeast, sailed off to a cotton port, carrying goods for the southern market. There they loaded cotton (or occasionally naval stores or timber) for Europe. They steamed back from Europe loaded with manufactured goods, raw materials like hemp or coal, and occasionally immigrants.
Since this "triangle trade" involved a domestic leg, foreign vessels were excluded from it (under the 1817 law), except a few English ones that could substitute a Canadian port for a Northern U.S. one. And since it was subsidized by the U.S. government, it was going to continue to be the only game in town.
Robert Greenhalgh Albion, in his laudatory history of the Port of New York, openly boasts of this selfish monopoly. "By creating a three-cornered trade in the 'cotton triangle,' New York dragged the commerce between the southern ports and Europe out of its normal course some two hundred miles to collect a heavy toll upon it. This trade might perfectly well have taken the form of direct shuttles between Charleston, Savannah, Mobile, or New Orleans on the one hand and Liverpool or Havre on the other, leaving New York far to one side had it not interfered in this way. To clinch this abnormal arrangement, moreover, New York developed the coastal packet lines without which it would have been extremely difficult to make the east-bound trips of the ocean packets profitable."
Even when the Southern cotton bound for Europe didn't put in at the wharves of Sandy Hook or the East River, unloading and reloading, the combined income from interests, commissions, freight, insurance, and other profits took perhaps 40 cents into New York of every dollar paid for southern cotton.
The record shows that ports with moderate quantities of outbound freight couldn't keep up with the New York competition. Remember, this is a triangle trade. Boston started a packet line in 1833 that, to secure outbound cargo, detoured to Charleston for cotton. But about the only other local commodity it could find to move to Europe was Bostonians. Since most passengers en route to England found little attraction in a layover in South Carolina, the lines failed.
As for the cotton ports themselves, they did not crave enough imports to justify packet lines until 1851, when New Orleans hosted one sailing to Liverpool. Yet New York by the mid-1850s could claim sixteen lines to Liverpool, three to London, three to Havre, two to Antwerp, and one each to Glasgow, Rotterdam, and Marseilles. Subsidized, it must be remembered, by the federal post office patronage boondogle.
U.S. foreign trade rose in value from $134 million in 1830 to $318 million in 1850. It would triple again in the 1850s. Between two-thirds and three-fourths of those imports entered through the port of New York. Which meant that any trading the South did, had to go through New York. Trade from Charleston and Savannah during this period was stagnant. The total shipping entered from foriegn countries in 1851 in the port of Charleston was 92,000 tons, in the port of New York, 1,448,000. You'd find relatively little tariff money coming in from Charleston. According to a Treasury report, the net revenue of all the ports of South Carolina during 1859 was a mere $234,237; during 1860 it was $309,222.
The commercial boom collapsed in 1807 when the war of nerves with Britain began and American merchant ships no longer enjoyed immunity. Coincidentally, the clock ran out on the lucrative slave trade. New England capital shifted from commerce to manufacturing ventures that exploited wage labor. The textile mill system of southern New England grew up under the embargo and the subsequent British blockade during the War of 1812. Capitalists hired whole families displaced by agricultural disruption and quickly reduced them to debt peonage.
The product was sold in large lots to Southern slaveowners or to "slop shops" that clothed the urban poor. The mechanics' old values gave way to the new ones of cost-cutting, access to merchant capital, and willingness to subdivide work and exploit unskilled labor. The boom turned a few mechanics into bosses and many into wage laborers. By 1816, 100,000 factory workers, two-thirds of them women and children, produced more than $40 million worth of manufactured goods a year. Capital investment in textile manufacturing, sugar refining, and other industries totaled $100 million.
The war ended in 1815, and American markets reopened to the cheaper, better made British products. In spite of the protective Tariff of 1816, the American economy collapsed in 1819. Fortunes vanished. Recovery took years. And Northern capitalists vowed never again to be without protection. From then on, they used political power for protection purposes; they convinced the voters that the crumbs that dribbled from the industrialists' tables were their essential interests, and had to be protected at all costs.
"Commercial boom made government promotion of economic growth the central dynamic of American politics. Entrepreneurial elites needed the state to guarantee property; to enforce contracts; to provide juridical, financial, and transport infrastructures; to mobilize society's resources as investment capital; and to load the legal dice for enterprise in countless ways. Especially they strove for a powerful gentry-led national state, through whose developmental policies they dreamed of rivaling British wealth and might."
Once they were in place, protective duties accounted for an estimated three-fourths of textile manufacturing's value added. Without them, half the New England industrial sector would have gone bankrupt. It took until the 1840s for the New England regional market to really emerge. But sectional divergence of the boom-bust cycle was apparent by 1825-6, when cotton prices tumbled and the North suffered no ill effects. Economically, America was two nations at war with one another from this point on.
Calhoun and other Southerners had supported the tariff of 1816 as a fair recompense to New Englanders whose interests had been damaged by the embargo and the war. "This support was part of his pursuit of harmony and reciprocity," Wilson writes. "... Had reciprocity been forthcoming from the other side, how different might the course of American history have been."
Statistical tables can't compete with harrowing narratives of runaway slaves. Perhaps that's why economic history isn't taught in our schools. Yet the economic picture is essential for anyone who wants to really understand, rather than simply be entertained. Turner's image of ante-bellum America was an empire like the British, whose "sections" took the place of "individual kingdoms." The role of the South was to devote itself to pouring out the raw material for New England's looms and for the bulk of America's export trade. This was laid out by Alexander Hamilton's "Report on the Subject of Manufactures" (1791, the blueprint for young America's economic program), and enshrined in Henry Clay's "American System," enacted in the mid-1820s with the support of Midwestern farmers as well as North Atlantic manufacturers.
That this was done most effectively by slave labor plantations was, after about 1800, no secret to anyone -- North, South, American, British. Robert Russell, the observant British traveller, wrote that slavery was "a necessary evil attending upon the great good of cheap cotton."
The shift of so much land and effort into cotton-growing meant that the people of the South relied on the West for much of their food and livestock, and on the North Atlantic states for most of their clothing and machinery. In turn, they provided more than two-thirds of the entire nation's exports, which brought in the specie that allowed commerce and growth in all sections.
"After 1830 the industrial North had become wedded, not only to the South's production of cotton, but to the institution of slave labor which made such valuable production possible." Northern factories based their profits on a steady flow of cotton. The price of raw cotton was low during this period, and lagged behind the price of cotton goods. Northern bankers grew rich by extending liberal (but risky) credit to Southern planters against next year's crop. Cotton was already America's leading export by 1821. By 1850, Southern cotton accounted for nearly 60 percent of the nation's total exports, and was a major factor in Northern shipping prospects. While the looms of Lawrence and Lowell sucked up raw cotton, the ships of Boston bulged with it as they crossed the Atlantic, and their owners looked forward to increasing production on the slave plantations, which meant increased profit for them.
Northern politicians were ever ready to sacrifice whatever anti-slavery sentiments they had for the sake of a tariff deal. Rumors after the Compromise of 1850 linked it to logrolling for tariff protection. Illinois votes for the Compromise were connected to railroad land grants that Illinois obtained in 1850. Southern congressmen claimed to have won over Pennsylvania's delegation by promising to repay a vote for the Compromise with "adjustments" in the tariff rates. At the same time, the Pennsylvania legislature voted to repeal laws that handicapped efforts to recapture fugitive slaves.
In the 1820s or '30s, no one would disagree that the tariff was the chief political issue disturbing the United States. But it was not then purely a regional split: many Northern farmers and merchants joined the Southern planters to oppose high tariffs. After the Missouri Compromise, slavery was a deeply troubling, but minor, irritant on the political scene. So how, in 25 years or so, did this national conflict shift to Southern slavery -- which was the same thing it had been in 1820 and '30 -- so much so that the declarations of independence of the various Southern states in 1860 and '61 seem to make it their chief reason for secession?
The answer is the combination of economic self interest and political machination which was itself, rather than slavery, the power that split the country. In opposition to the Democratic Party, the Whigs made a high tariff their strongest plank. But it wasn't enough.
"[T]he values of a dominant national party had to represent more than the transparent self-interest of the manufacturer in having a good transportation system, a protective tariff, a stable currency, and a dependable work force. In order to achieve national support, the manufacturers' values had to be anchored in a social issue of paramount national concern. That issue was the politicization of the moral struggle between North and South over the extension (or contraction) of slavery."
The Free Soil movement of the late 1840s began the shift. Manufacturers needed a steady flow of laborers from overseas to man their machinery. The wages weren't better than in Britain, and the work was just as back-breaking. But in America, immigrant workers were willing to endure a few years of drudgery, secure in the knowledge that they could then take their small savings and set up as homesteaders in the Western territories. "The availability of free soil was functionally necessary to the manufacturing interests because it contributed to the maintenance of a highly productive factory labor force with high morale. Thus the initial transformation of the tariff issue was into a regional issue that involved free soil as well as protective tariffs."
"With northern manufacturers and workers solidly aligned on the tariff and free soil issues, all that was needed to cement the alliance was a sense of moral outrage at the South." And office-seekers on plenty were ready to help whip it up.
The addition of slavery to the prevailing economic issues was fuel on the pyre of the Union. This was what Robert Toombs (right) outlined in his report to the Georgia convention considering secession in 1860:
The material prosperity of the North was greatly dependent on the Federal Government; that of the South not at all. In the first years of the Republic, the navigating, commercial and manufacturing interests of the North, began to seek profit and aggrandizement at the expense of the agricultural interests. Even the owners of fishing smacks, sought and obtained bounties for pursuing their own business, which yet continue -- and half a million of dollars are now paid them annually out of the Treasury.
1. Clyde N. Wilson, "Calhoun's Economic Platform," in Slavery, Secession, and Southern History, Robert Louis Paquette & Louis A. Ferleger, eds., Univ. of Va. Press, pp.87-88.
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