- 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 1859ö60 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 105ö64 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
-
- That 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:
- The 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: "The
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."
-
- Thomas DiLorenzo is the author of The Real Lincoln: A
New Look at Abraham Lincoln, His Agenda, and an Unnecessary War (Random
House, 2002) and a professor of economics at Loyola College in Maryland.
See his Mises.org Daily Articles Achive.
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- http://www.mises.org/fullstory.asp?control=1168
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