(December 31, 2016). As I continue through the YouTube lectures posted by Columbia University’s history professor Eric Foner I came to the one that explains financing of the Civil War. The following remark demonstrates the professor’s persistent blind spot about the economic reasons the North did not want the South to secede peacefully.
[Northerners] raised the tariff to enormous levels during the war. Not because Charles Beard [an earlier Civil War historian] was there in 1860 saying, “The tariff is the cause of the war” but because that’s the way you raise money . . . Now, later the tariff became a fixture to protect Northern industrialists. (Italics added.)
The professor is correct in noting that tariffs remained high long after the end of the Civil War. Tariffs on dutiable items averaged about 45% for about fifty years after the war, although they were only 19% on the eve of the war. They dropped after Democrat Woodrow Wilson became President in 1913 and then went right back up during the Roaring Twenties when the Republicans regained control of the federal government. In fact, they did not drop to levels consistent with a so-called free trade policy until after World War II. At that time there wasn’t any international competition to the industrial states north of the Ohio and Potomac rivers because the economies of Europe and Asia had been wrecked by the WW II.
Foner’s failure is his apparent inability to realize that the fifty years of uninterrupted high tariffs remaining after the Civil War was a legacy that Republican leaders had wanted from the beginning. President Lincoln, for example, favored high tariffs. The year before the Civil War started he wrote, “In the days of Henry Clay, I was a Henry Clay-tariff-man and my views have undergone no material change on that subject.” A campaign profile published in a Pennsylvania newspaper in February 1860 labeled Lincoln “a consistent and earnest tariff man from the first hour of his entering the public” stage. Even as far back as 1832 when Lincoln announced his first candidacy for the state legislature, he reportedly said, “I am in favor of the internal improvement system [public works spending]and a high protective tariff. These are my sentiments and political principles.”
Even the two Civil War Republican leaders commonly believed to be the most sincere advocates of racial equality also defended high tariffs. Pennsylvania Representative Thaddeus Stevens was one of their strongest proponents partly because he owned an iron-products company. Massachusetts Senator Charles Sumner, who admitted that there were other principles more meritorious than tariffs, was contacted by a Rhode Island Republican shortly after the war ended who wrote, “Without [black suffrage in the South], Southerners will certainly unite . . . with Democrats of the North, and the long train of evils sure to follow their rule is fearful to contemplate . . . [including] . . . a great reduction of the tariff.”
Under the influence of teachers like Foner most modern historians cannot perceive that the lengthy post-war high tariffs reflect original war aims at the North. They presume that anyone mentioning tariffs is attempting to use them as an explanation for Southern secession, in which they were only a secondary factor. They were, however, a primary explanation for why the North did not permit the Southern states to secede peacefully, as explained in this earlier post.
High tariffs generally promoted prosperity across the North until the Great Depression, but they were harmful to the South’s export economy in at least fourth ways.
First, they made it difficult for countries overseas to buy American cotton because the buyers needed exchange credits that could only be generated by selling (typically manufactured) goods into the USA. Our high tariffs made that difficult. Therefore, the overseas buyers who might have otherwise purchased more American cotton bought it from other countries.
Second, as explained in this post import duties tended to create domestic industrial monopolies. This was readily admitted by the head of the New York based refined Sugar Trust* who said under testimony in 1899, “The mother of all trusts is the customs tariff bill.” By the early twentieth century some American monopolies were so powerful—steel among them—that they sold goods in Europe a lower prices than in the USA. Since it had few manufacturing plants until well into the twentieth century, the South was particularly harmed by industrial monopolies.
Third, tariffs increased prices on domestic manufactured goods, which were primarily produced outside of the South. Southerners had to pay to buy them but got little benefit as employees or owners of the companies that reaped the rewards. Consider the example of railroad iron, which the South badly needed to rebuild her network after the war in 1865. It sold for $80 a ton in New York but only $32 in Liverpool in 1866. A huge expense for the South, which as the Confederacy had the second largest railroad network in the World.
Fourth, since the protective tariffs generated persistent trade surpluses in the late 19th century, the postbellum Republican Party used the surpluses to provide increasingly generous Union veterans pensions as a “bribe” to keep the constituency loyal to the GOP.
In sum, the protracted lingering of high tariffs after the Civil War can be traced directly to the Civil War era Republican Party. They are not something that came up inadvertently afterward as Foner suggests.
*Sugar refining was an industrial process controlled by the Sugar Trust, which marketed under the still familiar Domino brand. The vast majority of raw sugar was imported from other countries and Hawaii, while only a small amount was grown in the South. As a product category refined sugar had its own tariffs that sharply restricted imports, thereby enabling the Sugar Trust monopoly.