Southern Response to Economic Disparities

USS ALASKA

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#21
I recall an Union Blockade that had something to do with it.
And the decision to accept the validity of the blockade and not challenge it gives weight to the supposition that cotton wasn't going to be the 'savior' of a nation as believed. Changes were made, other resources were found. In the final cost / benefit analysis, it wasn't worth it and couldn't '...make...' anyone else do whatever was needed to sustain that nation.
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USS ALASKA

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#22
An interesting note on the movement of cotton...

"Nowhere does water dominance emerge so clearly as in the substantial cotton trade, the South's major interregional and international export. All of the cotton to supply New England's textile mills before the Civil War came by water. The railroad did carry northward 7,661 bales in 1855 and 108,676 bales in 1860 but these were for reshippment to foreign markets. The coastal trade carried 9 times more cotton than the railroads to the Atlantic ports in 1860, of which the largest part went to Boston for redistribution to the interior. There was no direct overland transportation of cotton to sites of domestic consumption in the North until 1867."

Albert Fishlow's 'American Railroads and the Transformation of the Ante-bellum Economy', noted as from 'Report on Internal Commerce for 1876'
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USS ALASKA

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#23
Designing a TRR (railroad) , which would of linked both sections would be 1 example.
Bolded change mine...to stay away from TRR off-shoots. Apologies to @uaskme

Sir, both North and South WERE linked by railroad...

1548352570417.png


http://users.humboldt.edu/ogayle/Hist 111 Images/RR1860.jpg

...and neither were linked to the 'west'.

Some AG program that would of benefited the South and the North. Something that would of had commonality with the Sections.
Like the Guano Islands Act of 1856? Was the Federal Government doing any national internal improvement program that WASN'T of benefit to both? (Asking because I can't think of any...) Improvements to the infrastructure of the North came about via Northerners and their individual states.

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USS ALASKA

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#24
South should of done large parts of this before 1860.
Sir, I would submit that the UNITED STATES '...should of done large parts of this before 1860...' Why were we, as a nation, shipping all that raw material to Europe for processing just to have to buy it back? The operation of textile mills wasn't a secret. We had them here. We had tariffs to protect iron manufacturers, no love could be found to do the same for textiles? However, if located in the South, manpower will have to be found which brings us to...

Opened the South up to more white, European Immigrants.
There weren't any restrictions on this that I know of, what could have been done to 'enhance' the South's image to entice more immigrants? (Short of the abolition of Slavery)

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WJC

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#25
Getting back to the "Southern response to economic disparities". The major disparity was that our nation's wealth was largely concentrated in the Southern states.
The North's wealthiest 1 percent in 1860 were mainly urban merchants and manufacturers whose businesses were based on wage labor, while in the South the top 1 percent were mainly rural planters whose businesses were based on slave labor. The southern plutocrats were considerably richer on average than their Northern counterparts, by a factor of roughly two to one. Indeed, nearly two out of every three males in the United States with wealth of $100,000 or more (the super rich of the era) lived in the South in 1860.
<Robert W. Fogel, The Slavery Debates, 1952-1990: A Retrospective. (Baton Rouge, LA: Louisiana State University Press, 2003), pp. 62-63.>
In 1860, the two wealthiest states in the union were Virginia followed by Mississippi. The biggest single asset in the United States in 1860 was the 4 million slaves valued as $3.5 Billion in property value. Slavery was extremely profitable. Production of cotton had doubled every decade from 1820 to 1860 and the 1860 cotton crop was a record. The slave economy was thriving.
<David W. Blight, "Lesson 2: Southern Society: Slavery, King Cotton, and Antebellum America's "Peculiar" Region," The Civil War and Reconstruction (HIST 119), at about 39 minutes.
>
 

jgoodguy

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#26
And the decision to accept the validity of the blockade and not challenge it gives weight to the supposition that cotton wasn't going to be the 'savior' of a nation as believed. Changes were made, other resources were found. In the final cost / benefit analysis, it wasn't worth it and couldn't '...make...' anyone else do whatever was needed to sustain that nation.
99

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Figuring that out in the 1840s or even as late as 1860 needs a bit of prophecy and good luck. The Northern Victory was one of many possibilities in a dark thicket of possibilities. Assuming Lincoln was a deciding factor he was not on the radar screen as a president until nearly to the Republican convention. Steward was the main contender and I contend if Steward had won the presidency Dixie would be a national anthem. Sans what Lincoln became, cotton is a darn good bet.
 

major bill

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#28
Things like railroads and ports do not develop in a vacuum. There are economic reasons for the growth of this kind of thing. The economic situation in the North caused a need for growing transportation infrastructure, while the Southern economic situation did not provide enough drive to cause as fast of growth. The river and rail transportation in the South worked well for an economy centered on the drivers of the Southern economy. The style of Northern economic factors caused the growth of rail, Great Lakes shipping, and overseas shipping.
 

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#29
Things like railroads and ports do not develop in a vacuum. There are economic reasons for the growth of this kind of thing. The economic situation in the North caused a need for growing transportation infrastructure, while the Southern economic situation did not provide enough drive to cause as fast of growth. The river and rail transportation in the South worked well for an economy centered on the drivers of the Southern economy. The style of Northern economic factors caused the growth of rail, Great Lakes shipping, and overseas shipping.
Indeed sir, and when the growing dynamic of a diverse economy became apparent to those movers and shakers in the South, they did...what? They saw and identified issues...and secession was the best response they could come up with to rectify them? That is what I'm trying to wrap my head around. They weren't stupid, they weren't weak - they observed the economic environment around them and...what? Was the inertia of their programs so overpowering that they couldn't make a course correction or did they simply choose not to? And I guess there is a third option - they felt that they ran out of time...
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uaskme

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#30
Direct trade movements late 1830s

The direct trade movement of these years was very closely related to efforts being made in the South Atlantic states to establish connections by railroads or canals with the Ohio valley. South Carolinians were the chief promoters of a great project, which ultimately had to be abandoned to build the "Louisville, Cincinnati, and Charleston Railroad." The State of Georgia has undertaken the construction of a trunk line, the Western and Atlantic, from Atlanta to the Tennessee river. Virginia had chartered the James River and Kanawha Canal Company, which, as the name indicates, was intended to provide continuous water communications between the seaboard and the Ohio. All of the direct trade conventions very heartily endorsed these projects for connecting the South and West as most promising measures for securing direct trade. The West sold to the South, it was said; if it could also buy in the South, such a demand for goods would be created in Southern seaports that there could no longer be any question of their ability to import directly. "we must contend for the commerce of the West," read Mallory's report, "the section that gets that commerce will get the commerce of the country." A resolution adopted by the Norfolk convention declared internal improvements to be the foundation of a import trade, The general committee of the Second Augusta convention said that direct trade was inseparably connected with the extension of intercourse to the West, "And when the great West shall find a market and receive their supplies through the seaports of the South, a demand will be furnished, the extent and value of which cannot be too largely estimated." Calhoun, who took a deep interest in both projects, believed that direct trade could not be established until railroads had been extended to the West." On the other hand, discussion of the establishment if direct trade with Europe would stimulate interest in projects for connecting the seaboard and the Ohio valley. Many of the members of the direct trade conventions were closely associated with the internal improvements projects, and, enough it would be inaccurate to say that the former were got up to give impetus to the latter, that was undoubtedly one of the objects of the conventions. The relation was made very clear in the message of Mayor Pinckney, of Charleston had held meetings, "giving a decided impetus to those great enterprises, the Cincinnati railroad and a direct trad with Europe, of which the latter will supply the former with its lifeblood, and of which the united operation will assuredly achieve the commercial independence of the South, and with it, the permanent prosperity of our beloved city." pp29-30 Economic Aspects of Southern Sectionalism 1840-1861 by Russel
 

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#31

DaveBrt

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#32
They weren't stupid, they weren't weak - they observed the economic environment around them and...what? Was the inertia of their programs so overpowering that they couldn't make a course correction or did they simply choose not to? And I guess there is a third option - they felt that they ran out of time...
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Yes, they could not make a course correction -- they had signed the pact with the devil and were stuck with the slave economy. Every course change that I can think of would have clashed with this fundamental basis of their society. They were terrified of anything that would set the slaves free in the South, they could see no way to operate their cotton empire without slaves, and all their wealth was tied up in land and the slave to work it.
 

uaskme

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#33
It is noteworthy that these direct trade conventions were concerned almost exclusively with economic conditions and means for improving them. The slavery question, which was being given considerable prominence about this time both in Congress and out by reason of the debates in Congress upon the exclusion of abolition literature from the mails and the treatment of abolition literature from the mails and treatment of petitions in Congress, was rarely mentioned. A decade later no direct trade convention could be held, no plan of achieving commercial independence proposed, nor, for that matter, for erecting a cotton mill, building a railroad, opening a mine, or in any way promoting the material progress of the South, without consideration of, or due advertance to, its relation to the sectional struggle over slavery and the extension thereof. The argument would then without fail be advanced that the South must develop her strength and resources and achieve commercial and industrial independence in order to be prepared to defend her rights and honor in the Union, or, if worst came to worst, her independence out of it. George McDuffie did indeed allude to the existence of caused, tariff and slavery, which made the dismemberment of the confederacy "one of the possible contingencies for which it is the part of wisdom to provide", but as yet such considerations were very infrequently advanced, at least in public. The direct trade conventions of the thirties were in the main what they purported to be, namely, bona fide efforts on the part of Southern men to promote the prosperity and progress of their states and section and particularly, their seaports. pp31 Economic Aspects of Southern Sectionalism by Russel
 

major bill

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#34
The South could have tried to diversify their economy and even increase manufacturing. The problem was the North held the advantage in manufacturing for reasons the South would have had difficulties profitably competing with. The North held an advantage in raw materials, inexpensive ways to transport the raw materials, skilled workers, liquid financing, and other advantages. Most of the financing in the South was through debt based on slaves with slaves backing the loans. it is uncertain if slave labor could profitably supported manufacturing.

I am not trying to argue about slavery, but slave labor is not as flexible as free labor. A free labor factory gets a big contract, they hire 50 new workers. The contracts dry up and the free labor factory fires 75 workers. A factory using slave labor would need to buy or rent 50 new slaves and then possibly sell 75 slaves when contract dry up, perhaps only needing them back in a couple months.
 

uaskme

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#35
Several reasons may be advanced to explain the comparatively little interest displayed in the direct trade movement outside the three states of Georgia, South Carolina and Virginia. . . .

The direct trade conventions accomplished no tangible results in the way of changing the course of Southern commerce. They afford evidence of discontent in the older states of the South with their material progress. They show that the belief was held, and no doubt they contributed to its spread, that commercial dependence was an evidence and, at the same time, a cause of "Southern decline." It is unnecessary to point out the common element in the view that the East was being enriched at the expense of the South because of the commercial vassalage if the Federal Government had been unequal in its effects upon the material progress of the two sections. The direct trade conventions were another manifestation of the economic discontent of which evidence had been given during the nullification controversy. pp32-33 Economic Aspects of Southern Sectionalism 1840-1860 by Russel

Thanks to James Lutzweiler for recommending Russel's books. So the South had build part of these Rail Roads. All of this was to establish a direct trade with the West and Europe. Economic Expansion was discussed before the 1860s. This discussion went back to the 1830s. These conventions were held in several Southern Cities. The Rail Roads were the center point of Southern Economic Expansion. They believed that direct trade with Europe wouldn't be effective until they could distribute those goods beyond the South. Also explains South Carolina and Charlestons influence. the RR from Charleston to the TN River was completed by 1850. It was actually an old trading route that went back to the Cherokee Nation.
 
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#36
Each business wants to pay its workers as little as possible. But one business' workers are the other business' customers. Where the workers are not paid, capital, land and management skill is dedicated to perpetuating a narrow amount of demand. So the all the talk about disparity which did not address upgrading basic skills and paying wages, was pointless.
A functioning wage labor economy has railroads and ship owners and a wholesale system. It developed those systems as it paid workers and merchants who were productive, and bankrupted thousands of other businesses that could not compete for labor and capital.
Functioning banks stay solvent by demanding performance and getting enforcement from a transparent legal system. The dumb merchants go out of business. The misplaced railroads lose their managers and go through insolvency.
The functioning capitalist system looks easy, but without creative destruction, it does not work.
As resources and political power become more narrowly constrained, competition fades away and the system becomes traditional, not progressive.
Development involves risk taking. The successes make it look easy, because the failures disappear.
 
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#37
If a business is not successful enough to pay its workers, it becomes a drag on the whole economy. Per capita income of white people in the south was fine. But the total volume of the northern economy, mainly in New York, Pennsylvania, Ohio, Indiana and Illinois, by 1860 produced a demand supply stimulus that the southern areas could never match.
 

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#38
No railroad crossed the Ohio or the Potomac. The two systems were not connected until after the war.
...well...the B & O had ante-bellum bridges over both but they were going east-west, not north-south, so your point being that the two regional system not being integrated, (but rather federated via water transpo) is well taken. Forgot that 'demarcation line' wasn't broken for seamless thru-put. My bad...
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USS ALASKA

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#40
Direct trade movements late 1830s

The direct trade movement of these years was very closely related to efforts being made in the South Atlantic states to establish connections by railroads or canals with the Ohio valley. South Carolinians were the chief promoters of a great project, which ultimately had to be abandoned to build the "Louisville, Cincinnati, and Charleston Railroad." The State of Georgia has undertaken the construction of a trunk line, the Western and Atlantic, from Atlanta to the Tennessee river. Virginia had chartered the James River and Kanawha Canal Company, which, as the name indicates, was intended to provide continuous water communications between the seaboard and the Ohio. All of the direct trade conventions very heartily endorsed these projects for connecting the South and West as most promising measures for securing direct trade. The West sold to the South, it was said; if it could also buy in the South, such a demand for goods would be created in Southern seaports that there could no longer be any question of their ability to import directly. "we must contend for the commerce of the West," read Mallory's report, "the section that gets that commerce will get the commerce of the country."
Bold, italic, underlined mine

Sir, in this era - 1830 - didn't they already have it via the Mississippi? And the burgeoning metropolis that was reaping these rewards was NOLA. We often speak here of the South like it was some monolithic block...this seems to demonstrate that VA, SC, GA were willing to put the fork to LA and NOLA to take what was already in Southern possession. Just like Boston / NYC / Philly / Balto were doing to each other in the North.

Many of the members of the direct trade conventions were closely associated with the internal improvements projects...
...so what became of these projects? Please correct me if I am wrong but didn't the South control the Federal Government up until right before the ACW? So they controlled funding / direction. Or wasn't there that much federal largess to complete anything of that scale?

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