Was South Carolina's Secession Simply Synonymous with Debt Repudiation?

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#41
he conservatism of the North regarding property rights is further highlighted by the enthusiasm with which the Confederacy embraced confiscation as a new sovereign power. The Confederate Sequestration Act of 1861 declared all property owned by persons not loyal to the Confederate government to be the property of that government. Officials seemed to hope that the value of northern property seized would largely pay the cost of their war for independence. As in other areas of governance, the Confederacy embraced a higher degree of central state authority than did the Union government. As it happened, debts owed to northerners constituted a large part of the confiscated property. Loyal Confederate citizens came forward voluntarily to pay their debts to the government. In the postwar years, the U.S. Supreme Court viewed all of these transactions as null and defeated Confederates found themselves paying their debts twice: first in obedience to the Sequestration Act and later to their northern creditors. The doctrine of vested property rights overwhelmed Trumbull's confiscation efforts and it continued to gain strength in the post war Supreme Court. Justice Stephen Field took the lead in this regard. The case of Miller v. U.S. (1870) involved the property of a Virginian (specifically his shares in a Michigan Railroad) that were seized in 1864 and sold at auction. The court upheld confiscation, but Field joined two other justices in dissent. Field accepted instrumentalist decisions when the effort to unravel ownership of confiscated property threatened the broader stability of economic relations. But, wherever possible (e.g. Bigelow v. Forrest [1869]) Field joined majority decisions that restored confiscated property to the descendants of disloyal persons. By the end of the nineteenth century, the doctrine of vested property rights had been so thoroughly established that the older doctrine of community rights seemed anachronistic, "a remnant of Revolutionary republican fervor," writes Hamilton, that had no place in modern America (p. 107).
https://www.h-net.org/reviews/showrev.php?id=13473
Very informative. Thanks for taking the time to share this. Right on post!
 

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#42
How exactly did Southerners pay for the Gadsen purchase? There was no antebellum income tax. There was no National Value Tax. There was a very low tariff that few Southerners paid. Not seeing how your argument is logical.
Leftyhunter
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#43
My Fellow Posters,

I have long felt, without any hard evidence until today, that a major ingredient in the Rebel recipe of South Carolina's Secession was the desire of planters and other Carolinian (and Southerners in general) businessmen to repudiate debts owed to New York and to the North in general. I now have in hand one piece of hard evidence in the words of a planter in Charleston. They appear on page 134 of Paul Starobin's wonderful 2017 publication entitled Madness Rules the Hour: Charleston, 1860 and the Mania for War. Thereupon Starobin quotes an unnamed planter who owned 2,000 slaves and who told a reporter, "Most of us planters are deeply in debt; we should not be[,] if out of the Union."

And on the same page, Harvard graduate, Mercury editor, fire-eater, and world-class champion of non sequiturs, Barney Rhett, Jr., "pointed out that Charleston's shopkeepers, LIKE MANY IN THE SOUTH [emphasis mine], typically purchased their inventory of goods on credit from suppliers in the North. Those debts would be suspended IN THE EVENT OF SECESSION [emphasis mine] and 'OBLITERATED FOREVER' [emphasis mine]."

While I have suspected that debt repudiation was a major ingredient, I was not hopeful of discovering it so shamelessly and clearly stated by an ostensibly chivalrous group of Southerners whom I have been led to believe were honorable above all. Barney Rhett, if not the Father of Fake News to the Fifth Power, certainly is in that family tree of fraud, though I think he got this statement correct and for which I give him an A+.

Question: Can anyone add more examples to these quite open Debt Declarations for Secession that South Carolina's December 20, 1860, Convention failed to include in their ostensibly honest and honorable but pitifully elliptical Declarations that so many contemporary historians have swallowed --hook, line, sinker, lake, boat, trailer, truck and highway-- like the unfortunate Rebel soldiers who marched to their unnecessary deaths, believing in them?

Sincerely for truth,

James
There is a difference between debt repudiation being a cause of secession, and debt repudiation being a benefit of secession.

Clearly, not having debt might be a fortunate outcome of secession. But did that in and of itself fuel the secession decision? That has not been proven.

Question: why wouldn't southerners want to pay their debts... were they simply financial miscreants? I know that there was a financial panic in the late 1850s. But did Southerners see debt as an existential threat that required the momentous step of dissolution?

And also: was it a fact that the Confederate States were going to repudiate their debt to Northern banks, assuming that no war took place?

- Alan
 

jgoodguy

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#44
There is a difference between debt repudiation being a cause of secession, and debt repudiation being a benefit of secession.

Clearly, not having debt might be a fortunate outcome of secession. But did that in and of itself fuel the secession decision? That has not been proven.

Question: why wouldn't southerners want to pay their debts... were they simply financial miscreants? I know that there was a financial panic in the late 1850s. But did Southerners see debt as an existential threat that required the momentous step of dissolution?

And also: was it a fact that the Confederate States were going to repudiate their debt to Northern banks, assuming that no war took place?

- Alan
Any debt granted by Northerners to CSA citizens would be adjudicated in CSA courts when payment problems arose. If a planter defaulted on a mortgage, the Northern bank would have to use CSA courts for relief. Call it the Fugitive Debt problem; there are all sorts of outcomes can be imagined. Local juries find for the Southerners: Freedom Laws freeing debtors from their debt etc.
 
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#45
Any debt granted by Northerners to CSA citizens would be adjudicated in CSA courts when payment problems arose. If a planter defaulted on a mortgage, the Northern bank would have to use CSA courts for relief. Call it the Fugitive Debt problem; there are all sorts of outcomes can be imagined. Local juries find for the Southerners: Freedom Laws freeing debtors from their debt etc.
It would all have to be worked out. Just because the UK leaves the European Union, that doesn't mean that a debt which a Britisher owes to a French bank can be repudiated. It all depends.

Were secessionists proposing and building legal and economic processes so they wouldn't pay debt? And how were they going to deal with the consequences? How would they finance anything if they had a reputation for not paying debts? They wouldn't get $$ from Northern institutions, and perhaps not from Europe either. Perhaps they'd seek $$ from Russia or China or some other exotic source...

- Alan
 
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#46
The Confederate Sequestration Act of 1861 declared all property owned by persons not loyal to the Confederate government to be the property of that government. Officials seemed to hope that the value of northern property seized would largely pay the cost of their war for independence. As in other areas of governance, the Confederacy embraced a higher degree of central state authority than did the Union government. As it happened, debts owed to northerners constituted a large part of the confiscated property.
https://www.h-net.org/reviews/showrev.php?id=13473
So it seems like this debt repudiation was a consequence of the war itself, as opposed to, a process that was certainly going to occur if secession was peaceful.

- Alan
 
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#47
There is a difference between debt repudiation being a cause of secession, and debt repudiation being a benefit of secession.

Clearly, not having debt might be a fortunate outcome of secession. But did that in and of itself fuel the secession decision? That has not been proven.

Question: why wouldn't southerners want to pay their debts... were they simply financial miscreants? I know that there was a financial panic in the late 1850s. But did Southerners see debt as an existential threat that required the momentous step of dissolution?

And also: was it a fact that the Confederate States were going to repudiate their debt to Northern banks, assuming that no war took place?

- Alan
Thanks for your post.

While I freely grant there is the difference you suggest, I don't know the particulars of that difference. I can only say that if I were a planter in 1860 and owed $100,000 --or even $10,000-- to a Northern bank and if I saw the prospect of extinguishing that debt by my new nation repudiating it, I think I would incline toward the support of Secession. Note: I am not arguing that I would; however, it did seem to be a sentiment in the planter who owned 2,000 slaves and whom I quoted in an earlier thread. And, of course, even if a planter or his new nation repudiated his debt, there would be no law against a businessman attempting to repay his creditor at some point in history.

Did debt repudiation in and of itself fuel Secession? Do you mean the Secession of SC or the South in general? Either way I think it surely is one of the unspoken sparks of Secession, but how major I simply have no idea. I think it would make a topic for a good book entitled THE ANTEBELLUM SOUTH AND DEBT REPUDIATION AS A FACTOR IN SECESSION. I would read such a book word for word. I think the testimony of the planter I cited does indeed prove that it was a factor. I don't think it proves how much of a factor it was.

I don't recall even hinting that Southerners would not want to pay their debts. My best guess is that they did want to pay them but perhaps could not. Bankruptcy happens --and happened. In short, I don't know enough about tis topic and I don't know anyone who does except that Wausaubob sure provided some useful information. I think Somebody on this thread said that the South was in debt to the tune of $300,000,000. That's thirty times what the U.S. paid for the Gadsden Purchase of 30,000 square miles. Thirty times 30,000 square miles is 900,000 square miles, and a lot of that land was not worth what the Gadsden Purchase was worth. So picture yourself as the owner of only 750,000 square miles (one estimate of the Confederate states) and you have to raise $300,000,000 from it in order just to pay off your principal before buying dinner for your family, paying for your slaves, etc. Maybe someone has tied all these factorss together and made sense of them. But my guess is that if the South collectively owed $300 million to the North, the South was in touch straights. I am NOT arguing that that figure is correct. I don't know. But it deserves attention, and I will certainly be giving it such.
 
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#48
Going to war over debt repudiation makes no sense. Farmers always need credit. Who exactly will take over the credit needs of an independent Confederate nation if not the US? Why would European bankers take over supplying credit to the South if the Southern planters will repudiate their debts the same way the secessionists did to Northern financier's?
Leftyhunter
Another aspect of the proposal (debt repudiation as a cause of secession) that would need to be proved is who actually held these debts?

Southern banks were substantial lenders in the antebellum years, I understand that Southerners also borrowed from European institutions also. So what proportion of debt was held by Northern or Federal lenders? I suspect that it was large, but to what degree I haven't seen any figures on. Was it big enough to cause secession?

I suspect that secession would not have repudiated debts to Southern and European lenders.
 
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#49
I would read such a book word for word. I think the testimony of the planter I cited does indeed prove that it was a factor. I don't think it proves how much of a factor it was.
Have you considered tracking down the unnamed source from the book you mentioned? My understanding is that there were very few slaveowners with holding of over 2,000 slaves. Perhaps if you could find who this is you might be able to get a better understanding of their financial position.

But my guess is that if the South collectively owed $300 million to the North, the South was in touch straights. I am NOT arguing that that figure is correct.
As I think you're alluding to, the quest here is to prove what Southern debt was and to whom was it owed. Find that and then you start to get a better picture of whether debt repudiation might have been a factor or not.
 
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#50
Another aspect of the proposal (debt repudiation as a cause of secession) that would need to be proved is who actually held these debts?

Southern banks were substantial lenders in the antebellum years, I understand that Southerners also borrowed from European institutions also. So what proportion of debt was held by Northern or Federal lenders? I suspect that it was large, but to what degree I haven't seen any figures on. Was it big enough to cause secession?

I suspect that secession would not have repudiated debts to Southern and European lenders.
Good and useful thought on this OP. I would guess that South Carolina debtors surely would not repudiate debts to southern banks.
 
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#51
Have you considered tracking down the unnamed source from the book you mentioned? My understanding is that there were very few slaveowners with holding of over 2,000 slaves. Perhaps if you could find who this is you might be able to get a better understanding of their financial position.



As I think you're alluding to, the quest here is to prove what Southern debt was and to whom was it owed. Find that and then you start to get a better picture of whether debt repudiation might have been a factor or not.
I have posed questions like this to academic economic historians and have come up blank. Somebody must know but I know not whom; and I have been chasing the TRR too long to divert my attention. I am in search for a young pup who finds this topic interesting enough to make a name for him/herself. I think there is a name to be made with it.
 
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#52
Thanks for your post.

While I freely grant there is the difference you suggest, I don't know the particulars of that difference. I can only say that if I were a planter in 1860 and owed $100,000 --or even $10,000-- to a Northern bank and if I saw the prospect of extinguishing that debt by my new nation repudiating it, I think I would incline toward the support of Secession. Note: I am not arguing that I would; however, it did seem to be a sentiment in the planter who owned 2,000 slaves and whom I quoted in an earlier thread. And, of course, even if a planter or his new nation repudiated his debt, there would be no law against a businessman attempting to repay his creditor at some point in history.

Did debt repudiation in and of itself fuel Secession? Do you mean the Secession of SC or the South in general? Either way I think it surely is one of the unspoken sparks of Secession, but how major I simply have no idea. I think it would make a topic for a good book entitled THE ANTEBELLUM SOUTH AND DEBT REPUDIATION AS A FACTOR IN SECESSION. I would read such a book word for word. I think the testimony of the planter I cited does indeed prove that it was a factor. I don't think it proves how much of a factor it was.

I don't recall even hinting that Southerners would not want to pay their debts. My best guess is that they did want to pay them but perhaps could not. Bankruptcy happens --and happened. In short, I don't know enough about tis topic and I don't know anyone who does except that Wausaubob sure provided some useful information. I think Somebody on this thread said that the South was in debt to the tune of $300,000,000. That's thirty times what the U.S. paid for the Gadsden Purchase of 30,000 square miles. Thirty times 30,000 square miles is 900,000 square miles, and a lot of that land was not worth what the Gadsden Purchase was worth. So picture yourself as the owner of only 750,000 square miles (one estimate of the Confederate states) and you have to raise $300,000,000 from it in order just to pay off your principal before buying dinner for your family, paying for your slaves, etc. Maybe someone has tied all these factorss together and made sense of them. But my guess is that if the South collectively owed $300 million to the North, the South was in touch straights. I am NOT arguing that that figure is correct. I don't know. But it deserves attention, and I will certainly be giving it such.
As you suggest, there is a lot of evidence that needs to be gathered to flesh out this speculative argument. Maybe that scholar will come along who will tackle it; we'll see. I would just add this to the questions I raised earlier.

One of my frustrations in talking about war causality is that people will confuse or conflate the causes of secession with the benefits of secessions, which I discussed earlier. Causes and benefits are not the same. A child might benefit a lot from the death of his parents, and the huge inheritance that might result; but that benefit is almost always never enough to cause someone to commit an immoral act against his parents. But they might dream about what they'd with all that inheritance money.

When people take extreme positions or engage in extreme behavior ~ such as entering into a political process that might lead to war ~ it's vital to understand whether they believe that their actions were worth certain costs.

Southerners understood that secession could mean war. The SC Sec Dec states

...this (Republican) party will (soon) take possession of the Government. It has announced that the South shall be excluded from the common territory, that the judicial tribunals shall be made sectional, and that a war must be waged against slavery until it shall cease throughout the United States.​

SC invokes the language of war to describe the horrors attending the incoming Republican administration. The prospect of war-like ruination foreshadowed an actual war that could possibly come, and which did come.

For SC and other seceding states, the end of slavery represented economic, political, and social collapse. They were prepared to fight and die to protect the country that would protect slavery. It was a life and death issue to them, and there is a mountain of evidence to support that historical interpretation.

Was debt repudiation a life and death issue for the South Carolina elites who drafted the Sec Dec, such that they might put the lives of young Southern men at risk? The evidence is not yet in.

- Alan
 
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#53
I don't recall even hinting that Southerners would not want to pay their debts. My best guess is that they did want to pay them but perhaps could not. Bankruptcy happens --and happened. In short, I don't know enough about tis topic and I don't know anyone who does except that Wausaubob sure provided some useful information. I think Somebody on this thread said that the South was in debt to the tune of $300,000,000. That's thirty times what the U.S. paid for the Gadsden Purchase of 30,000 square miles. Thirty times 30,000 square miles is 900,000 square miles, and a lot of that land was not worth what the Gadsden Purchase was worth. So picture yourself as the owner of only 750,000 square miles (one estimate of the Confederate states) and you have to raise $300,000,000 from it in order just to pay off your principal before buying dinner for your family, paying for your slaves, etc. Maybe someone has tied all these factorss together and made sense of them. But my guess is that if the South collectively owed $300 million to the North, the South was in touch straights. I am NOT arguing that that figure is correct. I don't know. But it deserves attention, and I will certainly be giving it such.
RE: I don't recall even hinting that Southerners would not want to pay their debts.

No, you did not hint that. My point is that, if Southerners wanted to, and were able to pay their debts, then why would they feel the need for a secession to enable debt repudiation?

RE: But my guess is that if the South collectively owed $300 million to the North, the South was in tough straights.

Just because somebody has a lot of debt, that doesn't mean they can't pay it. You are speculating that this debt, on its face, put them in tough straights, but I don't see where that speculation is justified.

RE: My best guess is that they did want to pay them but perhaps could not. Bankruptcy happens --and happened...

This is speculative. In any event: people declare bankruptcy all the time, even to today, and it doesn't lead to war. If the South was in the midst of a debt payment crisis, which threatened to ruin their society, then I could see why they might, out of desperation, seek secession. But failing that type of environment, I don't see how the threat of bankruptcy was such a pervasive and destructive force throughout SC or the South that secession was the solution to it.

I'm not trying to give you a hard time. Just making the point, even speculation needs some foundational basis. The sense I get from the above comments is that debt and bankruptcies are, in and of themselves, bad and lead to secession. That view needs to be proven.

- Alan
 
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#55
RE: I don't recall even hinting that Southerners would not want to pay their debts.

No, you did not hint that. My point is that, if Southerners wanted to, and were able to pay their debts, then why would they feel the need for a secession to enable debt repudiation?

RE: But my guess is that if the South collectively owed $300 million to the North, the South was in tough straights.

Just because somebody has a lot of debt, that doesn't mean they can't pay it. You are speculating that this debt, on its face, put them in tough straights, but I don't see where that speculation is justified.

RE: My best guess is that they did want to pay them but perhaps could not. Bankruptcy happens --and happened...

This is speculative. In any event: people declare bankruptcy all the time, even to today, and it doesn't lead to war. If the South was in the midst of a debt payment crisis, which threatened to ruin their society, then I could see why they might, out of desperation, seek secession. But failing that type of environment, I don't see how the threat of bankruptcy was such a pervasive and destructive force throughout SC or the South that secession was the solution to it.

I'm not trying to give you a hard time. Just making the point, even speculation needs some foundational basis. The sense I get from the above comments is that debt and bankruptcies are, in and of themselves, bad and lead to secession. That view needs to be proven.

- Alan
Feel free to give me all the hard time you wish.

Note: No need to say "This is speculation," when I called it that to begin with. Think about that. Notice also that I asserted nothing. My OP is a question, NOT an assertion. I quoted a real live planter who expressed the viewpoint I have raised. My post asks for others. If you know of any, let me know.
 

jgoodguy

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#56
Many historians, including Eric Foner of Columbia, point out that the financial downturn in the 1850s had little effect on the South.
The escape of the South from the 1850s 'panic', resulted in confidence they had found a way to avoid such panics, slave labor and cotton.
 

OpnCoronet

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#57
My Fellow Posters,
I have long felt, without any hard evidence until today, that a major ingredient in the Rebel recipe of South Carolina's Secession was the desire of planters and other Carolinian (and Southerners in general) businessmen to repudiate debts owed to New York and to the North in general. I now have in hand one piece of hard evidence in the words of a planter in Charleston. They appear on page 134 of Paul Starobin's wonderful 2017 publication entitled Madness Rules the Hour: Charleston, 1860 and the Mania for War. Thereupon Starobin quotes an unnamed planter who owned 2,000 slaves and who told a reporter, "Most of us planters are deeply in debt; we should not be[,] if out of the Union."
Question: Can anyone add more examples to these quite open Debt Declarations for Secession that South Carolina's December 20, 1860, Convention failed to include in their ostensibly honest and honorable but pitifully elliptical Declarations that so many contemporary historians have swallowed --hook, line, sinker, lake, boat, trailer, truck and highway-- like the unfortunate Rebel soldiers who marched to their unnecessary deaths, believing in them?
Sincerely for truth,

James




You mean in reference to debt reduction being central to the theory of unilateral secession and/or the act of secession of 1860 - 1861, or merely as an example of the normal actions of most successful revolutionary gov'ts in general ?
 
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#58
You mean in reference to debt reduction being central to the theory of unilateral secession and/or the act of secession of 1860 - 1861, or merely as an example of the normal actions of most successful revolutionary gov'ts in general ?
Maybe you could break that question down just a bit and pose it one more time.
 



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