Tariffs Forced Southern States to Secede

[Eric Calistri]

tariff tax of 1846 (which lasted thru 1857) put a 25 percent tax on exported cotton...schedule C. there is 500 pounds per bale of cotton. cotton sold for 10 to 12.5 cent per pound. let's round down (to give benefit of doubt) to 50 dollars per bale. Roughly 3 to 4 million bales were exported per year in the years leading up to the Civil war. 50 dollars per bale times 3 to 4 million bales exported equals roughly 200 million dollars exported per year 25% duty or tax on that between 1846/57 or 24 percent from 1858/60 is roughly rounded down (again for the benefit of doubt) to 40 million of the 53 million the federal government took in in taxes.....just in slave labor cotton alone....mind you...not any other southern export..

"The Tariff of 1828 was a protective tariff passed by the Congress of the United States on May 19, 1828, designed to protect industry in the Northern United States. Created during the presidency of John Quincy Adams and enacted during the presidency of Andrew Jackson, it was labeled the "Tariff of Abominations" by its Southern detractors because of the effects it had on the Southern economy. It set a 38% tax on 92% of all imported goods and a 45% tax on raw materials, such as tobacco and cotton, two of the South's strongest commodity" () and was replaced with the Walker tariff that replaced taxes with ad valorem duties and dropped the 45% tax on cotton to 25%. It appears that the 25% levied on cotton via the act of 1846 is not in fact an "export tax" "duty" out of the USA but rather to northern states in the form of "ad valorem duties".

This seems wrong to me. The tariff acts of the United States placed duties on Imports.

 

[H. B. Woodruff]

Everything I have ever read was the tariffs were only on imports. Even the "tariff of abominations" had a large import tax to raw materials like cotton and tobacco. This protected the south from any cheaper cotton imported into the United States. But as with any tariffs, there are tariffs in other countries that effect the export of cotton.

 

[H. B. Woodruff]

I would also point out that most of my reading on the tariffs in the south had to do with protecting northern factories and the high cost of goods. Lets just say a coffee pot could be imported from England and sold for $5 with no tariff. And let us also say that the north also produced that same coffee pot for $6. The northern factories received a lot of their sheet tin from England, so England made a pretty penny off of the sale of tin sheets. Also, England controlled the market on this product, so domestically it was substantially cheaper, and therefore could produce tin goods for cheaper. Now if a 25% import tariff is put on that tin coffee pot from England, that pot would sell for $6.25. That is $.25 more expensive and puts downward pressure on the economy of the south. When coupled with the fact that I would assume that the south wanted a more free trade style economy, this would definitely be a factor to the wealthier.

 

[H. B. Woodruff]

To further illustrate my point, and I have no documentation for this, but let us say that I sent $5000 of cotton to Europe. I would take that $5000 and buy cheaper goods in Europe (i.e. tin ware) and bring it back to the Americas. Then I can sell the goods at a premium locally. If a tariff is put into place making my goods that I purchased abroad more expensive than what is produced domestically, I would not be happy either.

 

[trice]

I would also point out that most of my reading on the tariffs in the south had to do with protecting northern factories and the high cost of goods. Lets just say a coffee pot could be imported from England and sold for $5 with no tariff. And let us also say that the north also produced that same coffee pot for $6. The northern factories received a lot of their sheet tin from England, so England made a pretty penny off of the sale of tin sheets. Also, England controlled the market on this product, so domestically it was substantially cheaper, and therefore could produce tin goods for cheaper. Now if a 25% import tariff is put on that tin coffee pot from England, that pot would sell for $6.25. That is $.25 more expensive and puts downward pressure on the economy of the south. When coupled with the fact that I would assume that the south wanted a more free trade style economy, this would definitely be a factor to the wealthier.

We often hear this, but like most things the generality is not 100% accurate.

For example, one day in the 1830s the planters in South Carolina discovered rice from Java being sold on the dock in Charleston for a price below what they wanted for rice floated downriver to the same dock. Next thing you know, South Carolina planters want a protective tariff on rice imports (which they got in the Tariff of 1842, iIRR).

For example, the only people protected by the tariff on sugar were southern planters (almost entirely in Louisiana and a little part of Alabama, IIRR). To the rest of the country, a tariff on sugar was a luxury/revenue tariff they were willing to pay to fund the government.

The Tariff of 1857 has been regarded as probably near to "free-trade" for the times -- but it did a terrible job of funding the expenses of the government in 1857-60 (draining the Treasury of cash, quadrupling the national debt, and turning a budget surplus into a large budget deficit). Southern opposition to raising the Tariff in 1860-61 needs to be taken with a grain of salt, since Southern leaders played a large part in the financial disaster that struck the government in 1857-61.

 

[trice]

To further illustrate my point, and I have no documentation for this, but let us say that I sent $5000 of cotton to Europe. I would take that $5000 and buy cheaper goods in Europe (i.e. tin ware) and bring it back to the Americas. Then I can sell the goods at a premium locally. If a tariff is put into place making my goods that I purchased abroad more expensive than what is produced domestically, I would not be happy either.

This was not typical behavior for a Southern planter. Usually they sold the cotton crop locally (New Orleans and Savannah being the biggest markets). The people who did the buying were usually Northerners or English (around 1860, they consumed 90% or more of Southern cotton, with the rest of the world combined buying what the Northerners and English did not)

Many Southern planters did what farmers often do: lived large right after harvest, borrowed against next year's crop to cover expenses for the next 12 months. Being farmers, they were usually cash-poor and land-rich; being Southerners, they were also slave-rich (which also pushed the cash-poor part up).

The buying and lending was done by factors (Northerners, English, French, etc.) who showed up in the market ports when the crop was in with lots of money. They bought cotton and they loaned money. They rolled last year's loans over into this year's loans. Then they went home.

The commercial banking system in "the South" was under-developed and inadequate. They didn't have access to the expertise or capital needed to support the type of economic transactions you are describing here very well.

In addition, "the South" did not have the ships nor the facilities to support the ships. They didn't have the trained crews and officers to man the ships. They didn't have the network of commercial contacts across the business world to operate with, and they did not have the year-round ports/markets to support a real shipping industry (maybe New Orleans because of the control of the Mississippi basin). It is much, much easier to run an import/export business from Boston, New York, Philadelphia or Baltimore than it is from anyplace in the Deep South.

That's not to say it would be impossible for a really sharp planter to do; it could have been possible to do -- just hard to do. It would be much cheaper and easier to buy more land and slaves, grow more cotton/sugar/etc, and repeat the traditional planter economy cycle.

 

[Patrick Sulley]

In addition, "the South" did not have the ships nor the facilities to support the ships. They didn't have the trained crews and officers to man the ships. They didn't have the network of commercial contacts across the business world to operate with, and they did not have the year-round ports/markets to support a real shipping industry (maybe New Orleans because of the control of the Mississippi basin). It is much, much easier to run an import/export business from Boston, New York, Philadelphia or Baltimore than it is from anyplace in the Deep South.

New York city had an intimate relationship with the slave cotton producers and altho you are right that southern ports did not have the "contacts" nor "shipping lanes", New York ships would leave the New York harbors and stop at southern ports to load up on southern exports and by extension the south had all of those available to them...New Orleans only had those lanes developed around 1850...Baltimore only exported Baltimorians and they didnt want to swing by savannah on their way to Europe...so Baltimore failed over time.

 

[trice]

In addition, "the South" did not have the ships nor the facilities to support the ships. They didn't have the trained crews and officers to man the ships. They didn't have the network of commercial contacts across the business world to operate with, and they did not have the year-round ports/markets to support a real shipping industry (maybe New Orleans because of the control of the Mississippi basin). It is much, much easier to run an import/export business from Boston, New York, Philadelphia or Baltimore than it is from anyplace in the Deep South.

New York city had an intimate relationship with the slave cotton producers and altho you are right that southern ports did not have the "contacts" nor "shipping lanes", New York ships would leave the New York harbors and stop at southern ports to load up on southern exports and by extension the south had all of those available to them...New Orleans only had those lanes developed around 1850...Baltimore only exported Baltimorians and they didnt want to swing by savannah on their way to Europe...so Baltimore failed over time.

Hmm. I think you have not taken the time to digest what I said -- or possibly I did not explain it well enough.

Generally speaking, there had been a race between New York, Boston, Philadelphia and Baltimore to become the dominant seaport and market of the US in the early nineteenth century. The key to winning that race turned out to be access to the interior of the country, the other side of the Alleghany Mountains.

Boston, Philadelphia and Baltimore were handicapped by geography. New York won because they had the most practical route and built the Erie Canal (opened in 1821) to connect the Great Lakes to the Hudson River and New York City. New York also had the most practical RR route (the collection of RRs that eventually became the New York Central system). Boston was handicapped because any route they could have ran through New York State. Baltimore and Philadelphia tried going up the Susquehanna, but couldn't get above Harrisburg; mountains blocked canal routes. The Pennsylvania RR's were 2nd to reach Ohio; the Baltimore & Ohio finally reached the Ohio River valley around 1850 or 1851. For about 25-30 years, New York had vastly superior access to the West and the best harbor on the East Coast. No other port could match it (and New Orleans lost a lot of trade to the East Coast as a result).

New York became the hub for shipping in the US. By 1860, almost 2/3rds of the tariff revenue collected in the US is collected in New York harbor alone. There are a lot of reasons for that, including the incomparable connections to the rest of the country, but also including the vibrant commercial environment (banking, trading, etc.)

Ships from Baltimore would go anywhere they could make a buck -- but for most of the year that did not mean sleepy Southern ports like Savannah and Mobile. The port would be crowded when the cotton crop was in -- but what reason was there to go there when the cotton crop was not? A ship makes money best when it carries goods both ways; what is the return cargo from Savannah or Mobile if it isn't cotton?

If a ship wants to transport goods from Europe to the US, most of the time the best market is New York. Go there, sell your cargo, pick up another and go back. The journey is shorter. There are more buyers and sellers in New York. It is easier to pick up cargo so you don't have to delay (time is money) or voyage empty (gack!)

Philadelphia and Baltimore survived and prospered (particularly when their RRs reached the West), but they could never make up the 25-30 year head-start that the Erie Canal gave New York. Meanwhile, prices for goods dropped in the Old Northwest as soon as the Erie Canal opened; trade exploded; immigrants rushed in. New Orleans suddenly had a great deal of competition for the trade of Ohio, Indiana, Illinois and the rest.

There is a tremendous amount of infrastructure and development needed to create the type of success New York had. "The South" generally did not want to make the type of investment (in people and infrastructure and education) that required. They wanted to exist as a type of planter society based on agriculture with little emphasis on education, a tiny middle class and a sneering attitude about northern "greasy mechanics" and "shopkeepers". Unfortunately, you need a large group of educated people with experience in arcane skills, supported by many "greasy mechanics" and "shopkeepers" to build the kind of commercial businesses they did not have.

It is one thing for individuals to overcome problems through talent and skill and great effort. It is a vastly different thing for large groups to do the same. So you might find an individual planter in "the South" who would be sharp enough and determined enough to become a big international trader -- but there'd only be a few of them, and it would be much easier for a planter to just keep doing what he was already doing than to do all that was needed to get into the shipping and trading business.

 

[Patrick Sulley]

What items were Southerners purchasing from foreign countries that they were singled out to pay high tariffs on? According to the 36th Congress, 53% of the tariff collected during 1858-1859 came from these top 10 items:

Item ............. % of tariff .. % to Slave States
Brown sugar ....... 14.8% ...... 9.6%
Silk piece goods .... 8.1% ...... 0.7%
Cotton piece goods. 8.0% ...... 7.9%
Wool piece goods .. 5.5% ...... 2.2%
Worsted woolens ... 4.7% ...... 1.4%
Cigars ................... 2.8% ...... 29.3%
Linens ................... 2.7% ...... 5.3%
Molasses ............... 2.5% ...... 11.7%
Bar Iron ................ 2.0% ...... 7.2%
Brandy ...................2.0% ...... 11.4%

The chart shows that 29.3% of the imported cigars went to the South. Just about all Southerners on this board claim that their ancestors were non-slave owning poor or just average Joe farmers. Were the poor and common Southerner the purchasers of these imported cigars? And, who payed the tariff on the other 70.7% of the imported cigars that made their way into the country? I guess a lot of poor Southerners ended up that way because they spent what little money they had on imported brandy and cigars. Virginia tobacco and local shine just wasn't good enough for them. All along the truth has been concealed by the North but it has finally come out. And to think that at all of those secessionist leaning Southern unity conventions during the 1850's such as the Montgomery Commercial Convention, the Knoxville Commercial Convention or the Vicksburg Convention, weren't about disunion to protect the institution of slavery. The Alabama platform or the disruption of the 1860 Charleston Convention and the State secession declarations weren't over slavery related issues. We now know that the likes of Yancey, De Bow, Ruffin, and other disunionists were actually advocating secession to protect the common Southerner from high tariffs on their imported brandy, cigars, and silks.

One can not discuss Tariffs on imported goods without mentioning retaliatory tariffs leveled on exported goods by European countries. Since southern exports equalled 3/4 the total exports of the time they suffered about the same if not more on retaliatory tariffs. So they suffered the brunt of tariffs both on imports and exports (tho not imposed by the USA) and if they didn't import...the high cost of transportation expenses from the North

 

[Patrick Sulley]

Everything I have ever read was the tariffs were only on imports. Even the "tariff of abominations" had a large import tax to raw materials like cotton and tobacco. This protected the south from any cheaper cotton imported into the United States. But as with any tariffs, there are tariffs in other countries that effect the export of cotton.

Yes... exported items had no tariffs from the USA but bore a retaliatory tariff from Europe

 

[Patrick Sulley]

Some here often ask "if this or that was an issue that led to secession why was it not expressed?" The tensions that led to secession were already well defined and needed not necessarily to be expressed. The issue most inflammatory being used to fire up support didn't have to be the issue the ruling class deemed most important. Slavery was well protected. Potential high Tariffs and retaliatory tariffs we're not. Protective tariffs also tended to disproportionately penalize some sectors of the domestic economy while benefitting others, prompting charge that they created an unequally administered and even regressive tax system. Merchants who were involved in the existing trade with Europe saw the potential loss of their livelihood, both in the induced decline of shipped goods and the risk that foreign powers would retaliate against American exports with protective tariffs of their own. The agriculture-heavy export industry faced similar threats from abroad as well as the burdens of what economists now call the symmetry effects of the tariff—since exporters must sell their goods at an international market price, they lose the ability to pass through some of the costs of the tariff to their buyers even as they must absorb higher domestic prices for their own consumption

 

[WJC]

One can not discuss Tariffs on imported goods without mentioning retaliatory tariffs leveled on exported goods by European countries.

Tell us more: What were those "retaliatory tariffs"? What nations imposed them? What was the amount? On what products were they imposed?

 

[trice]

Tell us more: What were those "retaliatory tariffs"? What nations imposed them? What was the amount? On what products were they imposed?

In Britain, the Corn Laws were repealed in 1846 and by 1860 the British were in a fad for "Free Trade" (not surprisingly, since on most manufactured items they were the high quality/low price leader who could usually undercut any foreign manufacturer's price) after decades (if not centuries) of protectionism.

The big change in that comes in 1860 Cobden–Chevalier Treaty between Britain and France. This starts a further passion for "Free Trade" in Europe, particularly in Britain. In this case free trade appears to mean France will not charge a tariff of more than 30% on British manufactured items; the British reduced duties on French wines and brandies. Trade on those items doubled for both sides over the next ten years. The Cobden–Chevalier Treaty remained in effect until 1892.

This moment is important in understanding why the British looked so unfavorably on the First Morrill Tariff in 1860. It is exactly the opposite of what the British want because they understand that lowering American import tariffs is a big plus for British manufacturers (a British leader about then thought the Morrill Tariff just as bad as slavery.) Britain wanted the "Free Trade" thing everywhere they could negotiate it because they understood that their status as the biggest, most-advanced industrial producer made any type of agreement for a more level playing field an advantage to Britain. Also worth noting is that mid-Nineteenth Century "Free Trade" concepts (going down to 30% Tariffs?) might not be what we imagine.

 

[WJC]

In Britain, the Corn Laws were repealed in 1846 and by 1860 the British were in a fad for "Free Trade" (not surprisingly, since on most manufactured items they were the high quality/low price leader who could usually undercut any foreign manufacturer's price) after decades (if not centuries) of protectionism.

The big change in that comes in 1860 Cobden–Chevalier Treaty between Britain and France. This starts a further passion for "Free Trade" in Europe, particularly in Britain. In this case free trade appears to mean France will not charge a tariff of more than 30% on British manufactured items; the British reduced duties on French wines and brandies. Trade on those items doubled for both sides over the next ten years. The Cobden–Chevalier Treaty remained in effect until 1892.

This moment is important in understanding why the British looked so unfavorably on the First Morrill Tariff in 1860. It is exactly the opposite of what the British want because they understand that lowering American import tariffs is a big plus for British manufacturers (a British leader about then thought the Morrill Tariff just as bad as slavery.) Britain wanted the "Free Trade" thing everywhere they could negotiate it because they understood that their status as the biggest, most-advanced industrial producer made any type of agreement for a more level playing field an advantage to Britain. Also worth noting is that mid-Nineteenth Century "Free Trade" concepts (going down to 30% Tariffs?) might not be what we imagine.

Thanks for your response.
But what were the "retaliatory tariffs" imposed on the US in response to our tariffs that @Patrick Sulley mentioned?

 

[Patrick Sulley]

Thanks for your response.
But what were the "retaliatory tariffs" imposed on the US in response to our tariffs that @Patrick Sulley mentioned?

good question. it's a real difficult stat to recover from then...since it was mentioned by politicians of the time not being able to track it down does not mean it didnt happen. will look deeper into it tho...are you suggesting there were no retaliatory tariffs?

 

[Patrick Sulley]

Tell us more: What were those "retaliatory tariffs"? What nations imposed them? What was the amount? On what products were they imposed?

I am currently researching this...again are you suggesting there was none?
England put duties upon wheat, flour, Indian corn, and other agricultural products

 

[WJC]

I am currently researching this...again are you suggesting there was none?

Thanks for your response.
I'm not suggesting anything! I am simply interested in the responses our trading partners had to our tariff policy.

 

[Patrick Sulley]

Thanks for your response.
I'm not suggesting anything! I am simply interested in the responses our trading partners had to our tariff policy.

Secretary of the Treasury Robert Walker issued a report in 1845 on the nature and effects of the tariff, observing, “At least two-thirds of the taxes imposed by the present tariff are paid, not into the treasury but to the protected classes. ... [The tariff] is too unequal, and unjust, too exorbitant and oppressive, and too clearly in conflict with the fundamental principles of the Constitution.” Walker concluded, “If England would now repeal her duties upon our wheat, flour, Indian corn, and other agricultural products, our own restrictive system would certainly be doomed to overthrow.” Walker assumed this because American protectionists had eternally pointed to English trade barriers to justify the perpetuation of high American tariffs. In 1846 the British repealed almost all tariffs on agricultural products. Yet American protectionists were not satisfied, and quickly invented new reasons that the United States should have high tariffs. For the next 40 years, anyone who advocated free trade was loudly accused of having taken “British gold.”

not wholly related to exactly what we are currently discussing i found this interesting. Early Americans recognized the issue of principle in trade restrictions far more clearly than did their successors. A Committee of the Citizens of Boston warned in 1827, “Let it never be forgotten, that the question ... is not so much what may be beneficial to manufacturers, as whether government has a right to benefit these, to the manifest injury both of the agricultural and commercial classes.” Sen. Daniel Webster of Massachusetts was one of the most eloquent opponents of trade barriers. He derided protectionism as “a policy which no nation had entered upon and pursued without having found it to be a policy which could not be followed without great national injury, nor abandoned without extensive individual ruin.”

 

[trice]

Thanks for your response.
But what were the "retaliatory tariffs" imposed on the US in response to our tariffs that @Patrick Sulley mentioned?

Not sure. I did find Customs Tariffs of the United Kingdom from 1800 to 1897. I did not see anything in particular to cite.

 

[Patrick Sulley]

Not sure. I did find Customs Tariffs of the United Kingdom from 1800 to 1897. I did not see anything in particular to cite.

Secretary of the Treasury Robert Walker issued a report in 1845 on the nature and effects of the tariff, observing, “At least two-thirds of the taxes imposed by the present tariff are paid, not into the treasury but to the protected classes. ... [The tariff] is too unequal, and unjust, too exorbitant and oppressive, and too clearly in conflict with the fundamental principles of the Constitution.” Walker concluded, “If England would now repeal her duties upon our wheat, flour, Indian corn, and other agricultural products, our own restrictive system would certainly be doomed to overthrow.” Walker assumed this because American protectionists had eternally pointed to English trade barriers to justify the perpetuation of high American tariffs. In 1846 the British repealed almost all tariffs on agricultural products. Yet American protectionists were not satisfied, and quickly invented new reasons that the United States should have high tariffs. For the next 40 years, anyone who advocated free trade was loudly accused of having taken “British gold.”