Sixty Percent of 1860 U.S. Export Income From Cotton

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
Interesting, figured if you sell $354 million worth of product and only buy $334 million worth of product you should have about 20 million left in your wallet, thus a trade surplus.
With your reasoning, If I used your bank, all of the money (not really much in fact) that I didn't spend and put into the bank for the future, would actually be a debt???
Think I will stick with mine for the time being.

The source data provided in my post undeniably demonstrates that product exports were $334 million and product imports were $354 million, thereby resulting in the $20 million trade deficit mentioned. Unfortunately, I accidentally transposed those two numbers although I correctly identified the $20 million deficit.
 
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mobile_96

First Sergeant
Joined
Feb 20, 2005
Location
Ill.
The difference is that specie and bullion "exports" had the unique capability (and requirement by convention) to serve as a settlement medium for international trade imbalances.
Capability I agree, used as a settlement medium, yes again, But you have not proved that the $60 million in gold, or any portion of it, was Not sold, as a product, much as cotton, wheat, corn, and pork was done, and only used to pay an imbalance. Until the actual Use of that gold has been proven, you can not prove it was only for a trade balance. Beside, we have already seen that there was apparently a $20 million surplus in '60, so why send 60 million to pay for a surplus.
 

jgoodguy

Banished Forever
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is a terrible thing...
Don’t feed the Mime
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The source data provided in my post undeniably demonstrates that product exports were $334 million and product imports were $354 million. Your captious response to my accidental transposition of the two numbers is revealing.
As host.
Be careful about captious lingo and focusing on other members rather than defending your assertions or attacking theirs.
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
Capability I agree, used as a settlement medium, yes again, But you have not proved that the $60 million in gold, or any portion of it, was Not sold, as a product, much as cotton, wheat, corn, and pork was done, and only used to pay an imbalance. Until the actual Use of that gold has been proven, you can not prove it was only for a trade balance. Beside, we have already seen that there was apparently a $20 million surplus in '60, so why send 60 million to pay for a surplus.

Nope, there was a $20 million trade deficit in 1860.
 

mobile_96

First Sergeant
Joined
Feb 20, 2005
Location
Ill.
Your captious response to my accidental transposition of the two numbers is revealing.
You made the error, not me.
So now we can say we had to send $60 million to pay for a $20 million expense?
Still does not prove business men in the north created the war to prevent the loss of Southern money.
Would really like to see the correspondence between these men that proves your theory. Where is the smoking gun.

edited to remove part of response
 

major bill

Brev. Brig. Gen'l
Forum Host
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Aug 25, 2012
The theory that the South, in the years leading up to the Civil War, was the economic engine driving the growth of the nation is false. When the nation first formed the South did lead the nation in economic growth but this had changed by the start of the Civil War. The North, especially New England, was producing more wealth per person (GNP per capita) than the Southern states. From an economic stand point the North was becoming richer as the South was lagging behind.
 

jgoodguy

Banished Forever
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is a terrible thing...
Don’t feed the Mime
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The argument seems to be of the form.

Something valuable could be lost if the Union allowed the South to secede.
Therefore the Union fought for that Something.

However:
Fighting for something is different than going to war to fight for it.
There are a lot of somethings to preserve for a soverign in a war by a soverign to suppress a rebellion.
Without confirming evidence we have no way which somethings were more important than other somethings.
The Union went to war because it was attacked and pride was an issue.(Davis attacked the US)
The Union went to war because it was attacked and politics was an issue.(Lincoln's career was over if he wimped out)
The Union went to war because of patriotism.
The Union went to war because of nationalism.
The Union went to war because of a possible loss of national territory.(moonlight and magnolias)
The Union went to war because of a possible loss of national population.(Southern Women, men, blacks)
The Union went to war because of a possible loss of national resources.(Corn meal, grits, coon dogs, cotton, turpentine)
The Union went to war because of a possible loss in trade.
There are doubtless more reasons.
Coincidence is not causality
Therefore we need something other than blind facts of a potential coincidental loss to determine causality.
 

WJC

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As a matter of fact, partly over trade differences, a significant number of Yankees were inclined to conquer Canada including President Grant.*

James Thompson, Making North America, 31-32
The situation with Canada is not analogous to the alleged 'trade war' between northern and southern states prior to the Civil War. Nor was it a simple case of threatened "Yankee" aggression.
In fairness to Grant, Mr. Thompson points out that the animosity between US and Britain over trade with our northern neighbor long preceded his administration.
Following the War of 1812, the US was eager to trade with Britain's North American territories. Britain refused to allow US trade with those territories. It was not until 1854 that a trade reciprocity treaty was negotiated. That agreement was maintained by the US during the Civil War in spite of growing animosity caused by Britain's "cordial relations with the Confederacy". By the end of the Civil War, "this animosity played an important part in compelling the US Congress to subsequently abrogate the reciprocity treaty" in 1866.
Grant himself opposed the Fenian movement and other attempts by private paramilitary organizations to 'liberate' British North America.
However, the clear animosity and the threat of invasion prompted confederation of the British territories into the Dominion of Canada.
By 1869, Canada was eager that the "reciprocal trade be re-established" as they realized how much they had benefited from reciprocal trade. The US was not interested, and reciprocal trade would not return until 1947. In fact, the situation worsened because of disputes over fishing rights. It was this new issue- fishing rights- that prompted consideration of war: Grant, indeed, was- as Thompson says- "inclined to invade Canada." Fortunately, cooler heads- including his Secretary of State, Hamilton Fish- prevailed.
But Fish was very much in favor of annexing Canada by peaceful means, seeing it as needed to protect our northern border. It is worth noting that as late as 1929, the US Army was war-gaming possible British invasion from Canada....
 

cedarstripper

First Sergeant
Joined
Mar 16, 2005
Location
western New York
I need to keep this reply from dragging on. I think that history demonstrates that indeed the US did not suffer economic consequences when cotton exports were diminished during the Civil War. Our imports during that period were halved with little consequence that could not be due to a war in progress.
.....(2) merchandise sales from the Northern states to the Southern states as Southerners switched from Yankee to European suppliers.
I contend that your prediction of replacement of European for Northern suppliers is merely your conjecture. I have every reason to believe that most ships carrying imported goods and immigrants would be bound for northern ports where the bulk of commerce was and that southern buyers would continue to buy goods at the North. We will never know what a southern tariff would have become under the actual task of raising required revenue, nor what reciprocal treaties might have been made with the US.
It would also likely have faced the threat of Northern freebooters above the Ohio and Potomac Rivers smuggling European goods out of the Southern states
I also contend that smuggling is not as profitable a venture as might be thought. It use today as a means of moving drugs for instance is only made possible by a 1000% markup in price. How little can you pay a smuggler to transport your goods by a roundabout way, transport them across a border under threat of going to jail and forfeiture, and you can still get an appreciable profit on that 10% margin you beat Uncle Sam out of? And that's if You don't get caught! Eh....not seeing it.

I am unsure of your meaning, but it is obvious that the American trade deficit would have been gigantically larger without Southern cotton exports.
Gigantic trade deficits? Didn't happen. As exports decreased, so we decreased our imports, with little suffering.
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
The Theory of the Balance of Trade, Charles J Bullock, The North American Review, page 121
https://www.jstor.org/stable/25105193?seq=11#page_scan_tab_contents

"From 1851 to 1860, the aggregate production of gold in the United States equaled $550,000,000, and this was five or six times the estimated species circulation of the country in any year before the discoveries in California. The money in circulation in 1850, including bank notes as well as specie, was no more than $285,000,000, or about $12 per capita. If the new gold could have been retained in the country, our circulating medium would have risen to $835,000,000 for the year 1860, or $26.60 per capita. Such a sudden inflation as this would have raised prices far above the level prevailing in other parts of the world, put an end to the exportation of many products and attracted imports from all corners of the globe. Therefore, the new gold began to flow out of the country, after prices had been raised to a point at which the import trade could increase sufficiently to produce this result; and, from 1851 to 1860, we exported a net balance of $417,608,000. By 1860 our specie circulation had risen to $235,000,000, an increase of $81,000,000 in ten years; while the issues of bank notes had grown to $207,000,000, giving the country a supply of money that averaged $14.06 per capita. The United States had become one \of the leading gold producing regions, and the course of the exchanges was inevitably altered."

That's a lot of words without any clear meaning. Other data you fail to mention in your cited article reveal the simple truth.

1. From 1850 to 1860 US imports exceeded exports by $356 million. During the same decade US gold production totaled $550 million. Thus, gold production exceeded the amount of specie and bullion exports needed to settle America's merchandise trade deficit. Specifically, about 65% of gold US gold production during the 1850s was applied to pay for the merchandise trade deficit. (pp. 120-21)

2. The situation became radically different during the next thirteen years. Specie and bullion exports were used entirely for trade deficit settlements. In fact, they were even insufficient to settle them completely.

From 1861-1873 US imports exceeded exports by $1,155 million whereas net exports of specie and bullion totaled $680 million and represented almost 90% of domestic gold production. Thus, during that 13 year period the full amount of specie and bullion exports was a monetary settlement—and only a partial one—of America's merchandise trade deficit. (p. 122)
 
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cedarstripper

First Sergeant
Joined
Mar 16, 2005
Location
western New York
As explained earlier, my citations about the shipping and financing patterns of cotton were to refute R. S. Kennedy's claim that the "Union" did not profit from cotton. Although you made an ambiguous response to my citation, you never clarifies whether you were agreeing or disagreeing with Kennedy. It is impossible to discuss that matter further until you state whether or not you agree with Kennedy.
I completely agree with rpkennedy. The OP refers to Lincoln not giving up paychecks and a link to a graph showing cotton exports. I'm not aware that Lincoln was personally invested in cotton plantations, so I assume Drew is actually referring to the US government not giving up its paycheck due to cotton exports. What I assume rpkennedy was pointing out for anyone is that those exports were not taxed and that the Federal government didn't raise any revenue on them. (you just wouldn't believe how many people have been mislead to think that Southerners were mad because of their cotton exports being charged duties and them Yankees were getting it all)

Isn't that what you got out of it?
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
I need to keep this reply from dragging on. I think that history demonstrates that indeed the US did not suffer economic consequences when cotton exports were diminished during the Civil War. Our imports during that period were halved with little consequence that could not be due to a war in progress.

I'd like to keep it from dragging on as well, but you keep making misleading and unsound claims.

The economy at the North during the Civil War benefitted from huge government spending deficits. The federal government alone increased annual spending from $78 million to $1,133 million, which translates to a 1,450% increase. Similarly, the federal debt grew from about $65 million to $2,500 million. Such massive artificial stimulus masked the adverse impact of the decline in North Atlantic trade.

I contend that your prediction of replacement of European for Northern suppliers is merely your conjecture.

And y0ur contrary claim is also mere conjecture. In contrast, however, I explain why Southerners could be expected to switch their merchandise purchases from the the Northern states to Europe. Specifically, lower Confederate import duties would enable Southerners to buy generally higher quality European goods at lower prices than those available from inefficient tariff-subsidized Northern manufacturers.

I have every reason to believe that most ships carrying imported goods and immigrants would be bound for northern ports where the bulk of commerce was and that southern buyers would continue to buy goods at the North.

Perhaps, but you neglect to provide any of those reasons.

We will never know what a southern tariff would have become under the actual task of raising required revenue, nor what reciprocal treaties might have been made with the US.

Jefferson Davis said in his inaugural address that he wanted them as low as possible in order to promote international trade. Moreover, the Confederate constitution outlawed protective tariffs and permitted only revenue tariffs.

I also contend that smuggling is not as profitable a venture as might be thought. It use today as a means of moving drugs for instance is only made possible by a 1000% markup in price. How little can you pay a smuggler to transport your goods by a roundabout way, transport them across a border under threat of going to jail and forfeiture, and you can still get an appreciable profit on that 10% margin you beat Uncle Sam out of? And that's if You don't get caught! Eh....not seeing it.

Maybe, but contemporary newspapers during the secession crisis revealed that duty free goods were showing up in St. Louis, among other places.

Gigantic trade deficits? Didn't happen. As exports decreased, so we decreased our imports, with little suffering.

To repeat, during the Civil War the Yankee economy benefitted from massive government spending as documented above. Even after cotton went back into production at the end of the war America still had trade deficits during nine of the first ten postbellum years.
 
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cedarstripper

First Sergeant
Joined
Mar 16, 2005
Location
western New York
Both sets of numbers are technically correct, but cedarstripper's are misleading.

Her numbers include $66 million in "specie and bullion exports," which basically represents the payment of gold and silver to settle America's balance-of-payments deficit. Her numbers also include about $17 million in merchandise exports originally obtained from other countries. By comparison the entire federal debt that year was only about $65 million and total federal spending was about $78 million.

Foreign exports properly belong in the category of Total Exports. The are commodities of foreign origin that are re-exported in the same condition, but because they are entered in the Import category when they entered the US, they are counted as an export when they leave.
 

cedarstripper

First Sergeant
Joined
Mar 16, 2005
Location
western New York
That's a lot of words without any clear meaning. Other data you fail to mention in your cited article reveals the simple truth.

1. From 1850 to 1860 US imports exceeded exports by $356 million. During the same decade US gold production totaled $550 million. Thus, gold production exceeded the amount of specie and bullion exports needed to settle America's merchandise trade deficit. Specifically, about 65% of gold US gold production during the 1850s was applied to pay for the merchandise trade deficit. (pp. 120-21)

2. The situation became radically different during the next thirteen years. Specie and bullion exports were used entirely for trade deficit settlements. In fact, they were even insufficient to settle them completely.

From 1861-1873 US imports exceeded exports by $1,155 million whereas net exports of specie and bullion totaled $680 million and represented almost 90% of domestic gold production. Thus, during that 13 year period the full amount of specie and bullion exports was a monetary settlement—and only a partial one—of America's merchandise trade deficit. (p. 122)
What's your point?
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
That's a lot of words without any clear meaning. Other data you fail to mention in your cited article reveals the simple truth.

1. From 1850 to 1860 US imports exceeded exports by $356 million. During the same decade US gold production totaled $550 million. Thus, gold production exceeded the amount of specie and bullion exports needed to settle America's merchandise trade deficit. Specifically, about 65% of gold US gold production during the 1850s was applied to pay for the merchandise trade deficit. (pp. 120-21)

2. The situation became radically different during the next thirteen years. Specie and bullion exports were used entirely for trade deficit settlements. In fact, they were even insufficient to settle them completely.

From 1861-1873 US imports exceeded exports by $1,155 million whereas net exports of specie and bullion totaled $680 million and represented almost 90% of domestic gold production. Thus, during that 13 year period the full amount of specie and bullion exports was a monetary settlement—and only a partial one—of America's merchandise trade deficit. (p. 122)

What's your point?

My point is that during the cumulative period from 1850 to 1873 specie and bullion exports were used entirely as a means to settle America's international trade deficit. In fact, in aggregate amount they were not even adequate for that. It is, therefore, specious to suggest that they were merely another conventional product export.
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
I completely agree with rpkennedy. The OP refers to Lincoln not giving up paychecks and a link to a graph showing cotton exports. I'm not aware that Lincoln was personally invested in cotton plantations, so I assume Drew is actually referring to the US government not giving up its paycheck due to cotton exports. What I assume rpkennedy was pointing out for anyone is that those exports were not taxed and that the Federal government didn't raise any revenue on them. (you just wouldn't believe how many people have been mislead to think that Southerners were mad because of their cotton exports being charged duties and them Yankees were getting it all)

Isn't that what you got out of it?

I had assumed that he was suggesting that Northerners did not profit from cotton trade.

However, even the narrow claim that the federal government did not obtain revenues from cotton is faulty.

The federal government obtained revenues primarily from taxes. Prior to the Civil War about 90% of such taxes were import duties. Imports, in turn, were a function of North Atlantic Trade and cotton was the single most important component of North Atlantic Trade. Take away cotton, and the trade declines, including imports, thereby reducing tariffs.
 

Eric Calistri

2nd Lieutenant
Joined
May 31, 2012
Location
Austin Texas
I cannot make out what the figures in the table above represent because there are no headings on them.

Nonetheless, both you and cedarstripper have cited "Specie and Bullion Exports" without clarifying that they were partly required settlements to pay for merchandise trade deficits. That omission is misleading.

I've already posted that twice with the links, thats the limit.

There is nothing misleading about following the treasury departments standards for total exports.
 
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