Restricted Facts, Fables & History

Fewer ads. Lots of American Civil War content!
JOIN NOW: REGISTER HERE!

leftyhunter

Brev. Brig. Gen'l
Joined
May 27, 2011
Location
los angeles ca
@Poorville ,

Thank you for the above source.

Appreciate you digging this out for the forum.

Sincerely,
Unionblue
To be fair myself and @Philip Leigh also dug up sources. My source said 3 million was collected by the feds from 1862 to 1865 vs sixty six million from 1866 to 1868.
As far as the legal issues apparently the US Supreme Court which had eight justices at one time simply split over the issue of the cotton tax's legality. Said tax was still being litigated as late as 1923 by Florida Governor Hardee.
Leftyhunter
 

lurid

Sergeant
Joined
Jan 3, 2019
They paid their taxes with the money they collected from the sale of the cotton to NON-confederate purchasers, and those people paid for it with greenbacks and or British pounds. They were Not selling that cotton to the confederacy.
So, how did the plantation owners get their money? Did they get paid with greenbacks? I suppose we can say that those areas of the south were back in the Union?
 

lurid

Sergeant
Joined
Jan 3, 2019
To be fair myself and @Philip Leigh also dug up sources. My source said 3 million was collected by the feds from 1862 to 1865 vs sixty six million from 1866 to 1868.
As far as the legal issues apparently the US Supreme Court which had eight justices at one time simply split over the issue of the cotton tax's legality. Said tax was still being litigated as late as 1923 by Florida Governor Hardee.
Leftyhunter
You did say $3 million, but you could never answer how the they paid those taxes. Nobody gave a definitive answer. We still don't really know how the circle exchange took place. Customers buy southern cotton in Union controlled areas with greenbacks and pounds, then the government takes its tax then gives the profits to southern plantation owners in the south where "all" money is devalued. What would have been the purchasing power of greenbacks in the south? How profitable was it for plantation owners in the business cycle? You might as well say that those part of the south that were occupied were back in the Union.

Imo, the Union should have just confiscated the entire cotton crop in those areas and just made 100% profit.
 
Fewer ads. Lots of American Civil War content!
JOIN NOW: REGISTER HERE!

lurid

Sergeant
Joined
Jan 3, 2019
I thought I would have a crack at resolving this having read the relevant part of 65th Congress - House of Representatives - Report No 1017, dated January 30, 1919.

There were four different acts of the US Congress levying a tax on raw cotton.

The act of July 1, 1862, levied a tax of 0.5 cent per pound.
The act of March 7, 1864, levied a tax of 2 cents per pound.

The third and fourth were enacted after the end of the war when the country was back under Union control, I have not concerned myself with these.

The act of July 13, 1866, levied a tax of 3 cents per pound.
The last was the act of March 2, 1867, levied a tax of 2 cents per pound.
On February 3, 1868, Congress passed an act repealing all four of the above acts.

The Act of 1862 contains the following, (the highlight is mine):
"On and after the 1st day of October, 1862, there shall be levied, collected, and paid, a tax of one-half of 1 cent per pound on all cotton held or owned by any person or persons, corporations, or association of persons; and such tax shall be in lieu thereon in the possession of any person whomsoever. And further, if any person or persons, corporation, or association of persons shall remove, carry, or transport the same from the place of its production before said tax shall be paid, such person or persons, corporation, or association of persons shall forfeit and pay to the United States double the amount of such tax, to be recovered in any court having jurisdiction thereof.”

The first year of such tax was fiscal year ending June 30 1863. The total tax was $351,311.48. This was not paid by the Confederate states but as the act states it was due on, “all cotton held or owned by any person or persons, corporations, or association of persons”. In fiscal 1863 this was paid by Union states or Union controlled states where holdings of cotton had been sold having been transported overland possibly through the Border States and/or we know there was some blockade running of cotton up the coast to the north eastern states such as New York for example where $102,041.83 of tax was levied.

Fiscal year ending June 30 1864 saw an increase in cotton moving north and becoming liable to Union tax alongside Union controlled Louisiana and Tennessee, retaken in 1862. A total of $1,268,412.56 being paid.

In fiscal year ending June 30 1865, after the end of the war, $1,772,983.48 tax was paid, once again primarily by the Union controlled Louisiana and Tennessee.

Whilst the Confederate currency was worthless we might assume any taxes levied in the southern states would have been paid for with cotton.
I agree, the taxes had to paid with cotton. Thanks for posting.
 

Poorville

Private
Joined
Jun 21, 2019
So, how did the plantation owners get their money? Did they get paid with greenbacks? I suppose we can say that those areas of the south were back in the Union?
Lurid, I think you're correct on both counts. This was black marketeering at its best and succeeded because no states were 100% Union or 100% Confederacy.
 

Poorville

Private
Joined
Jun 21, 2019
To be fair myself and @Philip Leigh also dug up sources. My source said 3 million was collected by the feds from 1862 to 1865 vs sixty six million from 1866 to 1868.
As far as the legal issues apparently the US Supreme Court which had eight justices at one time simply split over the issue of the cotton tax's legality. Said tax was still being litigated as late as 1923 by Florida Governor Hardee.
Leftyhunter
Didn't mean any slight on you and Philip, its just when I get my teeth into something there's no letting go!
 
Fewer ads. Lots of American Civil War content!
JOIN NOW: REGISTER HERE!

leftyhunter

Brev. Brig. Gen'l
Joined
May 27, 2011
Location
los angeles ca
You did say $3 million, but you could never answer how the they paid those taxes. Nobody gave a definitive answer. We still don't really know how the circle exchange took place. Customers buy southern cotton in Union controlled areas with greenbacks and pounds, then the government takes its tax then gives the profits to southern plantation owners in the south where "all" money is devalued. What would have been the purchasing power of greenbacks in the south? How profitable was it for plantation owners in the business cycle? You might as well say that those part of the south that were occupied were back in the Union.

Imo, the Union should have just confiscated the entire cotton crop in those areas and just made 100% profit.
It's not that complicated. The Union liberates land from the Confederacy. The grower who never lost his US citizenship sells his cotton in any currency but Confederate currency. The grower if he received a foreign currency in payment then converts it into US currency to pay his tax.
Since the grower is now under Union authority the Union authority the Union does not have the right to seize his property.
Leftyhunter
 

lurid

Sergeant
Joined
Jan 3, 2019
Lurid, I think you're correct on both counts. This was black marketeering at its best and succeeded because no states were 100% Union or 100% Confederacy.
I agree, there's no other answer. The exchange system seems sketchy at best.
 

lurid

Sergeant
Joined
Jan 3, 2019
It's not that complicated. The Union liberates land from the Confederacy. The grower who never lost his US citizenship sells his cotton in any currency but Confederate currency. The grower if he received a foreign currency in payment then converts it into US currency to pay his tax.
Since the grower is now under Union authority the Union authority the Union does not have the right to seize his property.
Leftyhunter
And I don't think it was that simple either. Poorville made the most sense in post #305.
 
Fewer ads. Lots of American Civil War content!
JOIN NOW: REGISTER HERE!

Poorville

Private
Joined
Jun 21, 2019
Not sure figures exist. My point to @lurid is simply that per the sources provided only paid three million dollars out of the sixty eight million dollars were collected from 1862 to 1865 and the remaining sixty five million dollars were collected in only two years from 1866 to 1868. The reason would be that simply only a relatively small area of Southern cotton land was under Union control. Said planters in the Union controlled areas would be paid in US currency. Once the ACW is over cotton growers would also be paid in US currency.
Obviously cotton grown in Confederate areas didn't pay a US tax. The Confederacy did try to tax cotton as well but per the source provided only collected five percent of all cotton exports during the ACW.
Leftyhunter
Leftyhunter, I was reading Through the Blockade: The Profitability and Extent of Cotton Smuggling, 1861-1865 by Stanley Lebergott (1981).

Whilst having researched a number of available sources, he points out that his figures are aggregated and computed but suggests that during the four years of the war;

- 6.8 million bales of cotton were produced.

- Of these 400,000 bales were used in the South.

- 500,000 bales were “exported” through the blockade to Britain and Europe.

- 900,000 bales found their way north into the Union either smuggled, captured or sold, (half to two-thirds transported overland).

- 3.8 million bales were variously destroyed.

- 1.8 million bales were sold after the war.

Your comments please?
 

leftyhunter

Brev. Brig. Gen'l
Joined
May 27, 2011
Location
los angeles ca
Leftyhunter, I was reading Through the Blockade: The Profitability and Extent of Cotton Smuggling, 1861-1865 by Stanley Lebergott (1981).

Whilst having researched a number of available sources, he points out that his figures are aggregated and computed but suggests that during the four years of the war;

- 6.8 million bales of cotton were produced.

- Of these 400,000 bales were used in the South.

- 500,000 bales were “exported” through the blockade to Britain and Europe.

- 900,000 bales found their way north into the Union either smuggled, captured or sold, (half to two-thirds transported overland).

- 3.8 million bales were variously destroyed.

- 1.8 million bales were sold after the war.

Your comments please?
Good research. Sounds about right. If the Confederacy can export less then ten percent of it's cotton to Western Europe then the Blockade was extremely effective especially as an estimated ten percent of all blockade runners were confiscated by the USN. So approximately at least 50k bales was sold at auction by the Prize Courts.
No doubt cotton brokers could buy cotton in the South and sell it to European buyers but to make a profit with all that extra travel they most likely paid realtively little to the Confederate cotton growers.
Leftyhunter
 
Last edited:

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
Leftyhunter, I was reading Through the Blockade: The Profitability and Extent of Cotton Smuggling, 1861-1865 by Stanley Lebergott (1981).

Whilst having researched a number of available sources, he points out that his figures are aggregated and computed but suggests that during the four years of the war;

- 6.8 million bales of cotton were produced.

- Of these 400,000 bales were used in the South.

- 500,000 bales were “exported” through the blockade to Britain and Europe.

- 900,000 bales found their way north into the Union either smuggled, captured or sold, (half to two-thirds transported overland).

- 3.8 million bales were variously destroyed.

- 1.8 million bales were sold after the war.

Your comments please?
It's a good article.

Keep in mind, however, that cotton increased from $0.13 a pound before the war to a high of $1.89 a pound in the summer of 1864. Thus, assuming an average price of $1.00 a pound the 500,000 wartime exported bales were equivalent to almost 4,000,000 exported bales before the war in terms of value in dollars.
 
Fewer ads. Lots of American Civil War content!
JOIN NOW: REGISTER HERE!

leftyhunter

Brev. Brig. Gen'l
Joined
May 27, 2011
Location
los angeles ca
It's a good article.

Keep in mind, however, that cotton increased from $0.13 a pound before the war to a high of $1.89 a pound in the summer of 1864. Thus, assuming an average price of $1.00 a pound the 500,000 wartime exported bales were equivalent to almost 4,000,000 exported bales before the war in terms of value in dollars.
True but with less then ten percent of Confederate cotton getting through the Blockade is quite a testament to the efficiency of the USN.
Leftyhunter
 

wausaubob

Major
Joined
Apr 4, 2017
Location
Denver, CO
It's a good article.

Keep in mind, however, that cotton increased from $0.13 a pound before the war to a high of $1.89 a pound in the summer of 1864. Thus, assuming an average price of $1.00 a pound the 500,000 wartime exported bales were equivalent to almost 4,000,000 exported bales before the war in terms of value in dollars.
The price never got that high in Liverpool. The demand was high in the US, but there was also general inflation in the US because of the rapid turnover of money.
1584903951921.png

This is Mr. Calhoun citing Mr. Donnell. https://krex.k-state.edu/dspace/bitstream/handle/2097/14956/RickyDaleCalhoun2012.pdf?sequence=1
 

wausaubob

Major
Joined
Apr 4, 2017
Location
Denver, CO
The myths proliferated because by the time people began thinking about the Civil War, the telegraph had become a routine device, and voice transmission was starting. They forgot how much smaller the country became when it was wired.
Also, the US army officers became politicians. Thus the army was written to be more important and the navy drastically under emphasized. The US also immediately cut back on naval preparedness, to save money.
People forgot how bad medical care was when the war began, for both sides. They forgot that infectious disease killed so many people in that era, because things improved rapidly after approx. 1880.
To make the story more dramatic, writers emphasized the Confederate successes, and created a much larger % chance of Confederate victory, than actually existed. Shelby Foote went along with it, as a fictional device, though he commented in reality, the US had a large reserve power.
 
Fewer ads. Lots of American Civil War content!
JOIN NOW: REGISTER HERE!

lurid

Sergeant
Joined
Jan 3, 2019
Leftyhunter, I was reading Through the Blockade: The Profitability and Extent of Cotton Smuggling, 1861-1865 by Stanley Lebergott (1981).

Whilst having researched a number of available sources, he points out that his figures are aggregated and computed but suggests that during the four years of the war;

- 6.8 million bales of cotton were produced.

- Of these 400,000 bales were used in the South.

- 500,000 bales were “exported” through the blockade to Britain and Europe.

- 900,000 bales found their way north into the Union either smuggled, captured or sold, (half to two-thirds transported overland).

- 3.8 million bales were variously destroyed.

- 1.8 million bales were sold after the war.

Your comments please?
The only problem with all this is that we don't know if this was a direct tax or an indirect tax? In your other post you cited the
Report No 1017, dated January 30, 1919 claiming there was 3 cent tax on cotton during the Civil War. However, there's no government data from the U.S. Treasury with the actual taxes collected during 1861-1865, so I'm wondering if this was an indirect tax. If it was an indirect tax, we cannot get a true fix on it.
 

leftyhunter

Brev. Brig. Gen'l
Joined
May 27, 2011
Location
los angeles ca
The myths proliferated because by the time people began thinking about the Civil War, the telegraph had become a routine device, and voice transmission was starting. They forgot how much smaller the country became when it was wired.
Also, the US army officers became politicians. Thus the army was written to be more important and the navy drastically under emphasized. The US also immediately cut back on naval preparedness, to save money.
People forgot how bad medical care was when the war began, for both sides. They forgot that infectious disease killed so many people in that era, because things improved rapidly after approx. 1880.
To make the story more dramatic, writers emphasized the Confederate successes, and created a much larger % chance of Confederate victory, than actually existed. Shelby Foote went along with it, as a fictional device, though he commented in reality, the US had a large reserve power.
Not so sure about the US having a large reserve power. Even in contemporary Prussia which had universal military service only fifty percent of military age males were physically or mentally able to do military service. As the war progressed military service was not popular on with side. The Union had to pay large bounties and there was a substantial problem of " bounty hunters " men who joined then deserted to join another regiment to get a new bounty. As bio metrics didn't exist they were impossible to spot.
Leftyhunter
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
The price never got that high in Liverpool. The demand was high in the US, but there was also general inflation in the US because of the rapid turnover of money.
View attachment 351922
This is Mr. Calhoun citing Mr. Donnell. https://krex.k-state.edu/dspace/bitstream/handle/2097/14956/RickyDaleCalhoun2012.pdf?sequence=1
Your prices in Pence above are only averages.

James L. Watkins' King Cotton (page 30) shows that the Liverpool price got as high as 31.5 Pence, which was in June 1864* when a Greenback dollar was worth only $0.35. ($2.85 Greenbacks = One Gold Dollar.) Each British Pound was worth about $5.00 in gold and there were 240 Pence in each Pound. Thus, each pence was worth $0.021 in gold. Therefore, the high Liverpool price in terms of gold dollars was $0.66, which was equivalent to $1.89 Greenbacks, then the dominant currency in the Federal Union.

*Jay Sexton, Debtor Diplomacy, 128
 
Last edited:
Fewer ads. Lots of American Civil War content!
JOIN NOW: REGISTER HERE!

wausaubob

Major
Joined
Apr 4, 2017
Location
Denver, CO
Sure, there could have been manpower difficulties.
1584912602993.png



But by March of 1863, the Confederacy was defending a shrinking territory and a disappearing tax base. The US had figured out ad hoc solutions to most of their problems. The stress on economy was heavy, but the railroads, and farmers were prospering. The ability of the US to renew a much harsher war, after an period of armistice, was unlimited.
 
Fewer ads. Lots of American Civil War content!
JOIN NOW: REGISTER HERE!
Top