What about The South’s Sugar and Rice Tariffs?

(November 17, 2019) Some readers of my earlier “Refuting the Tariff Debunkers” post have met a desperate counter argument: “Yeah, but what about the tariffs on sugar and rice? Southerners benefited from those, so they were hypocrites about protective tariffs.” The argument is a smokescreen for three reasons.

First, as the table below documents, sugar and rice were only small parts of the Southern agricultural economy. The year before the Civil War started the market value of annual Southern cotton production was about $260 million whereas the combined value of its rice and sugar was less that $30 million. In combination, rice and sugar represented only 11% of the value of cotton.

Over 60% ($161 million) of the cotton was exported to Europe, which was nearly four times the exports of the Northern states. In order to generate the exchange credits needed to pay for the cotton, Europeans tried to sell manufactured goods to America but were hindered by protective tariffs on Northern manufactured goods. As long as such tariffs hampered the ability of Europeans to compete in America’s market, they were constantly encouraging low tariff trading partners to become cotton producers to compete against America’s South.  That’s one reason the Confederate constitution outlawed protective tariffs.

Second, the Northern tariff-protected industries were much bigger than the South’s rice and sugar markets. New England’s cotton textile manufacturing was America’s largest industry in 1860 with annual revenues of $115 million. The Ohio-centered wool industry and the Pennsylvania-centered iron industry were nearly tied for second with about $73 million each. All three were fortified by steep protective tariffs on their finished goods. In combination they were about nine times the size of the South’s combined sugar and rice businesses.*

Third, the sugar tariff originated during George Washington’s Administration, but it was not a protective tariff. In fact, it was a classic example of a revenue tariff like the one on coffee because it was consumed in every state but produced in none. After Louisiana became a state, only eighteen of her parishes benefitted from the tariffs, but the duties were never high enough to block overseas competition. On the eve of the Civil War about half of the sugar Americans consumed was imported.

Moreover, starting in 1842, America put tariffs on refined sugar, which was increasingly produced in the Northern states using either Louisiana raw sugar or imports. Thus, Yankee sugar refiners had no problem with tariffs on raw sugar as long as the tariffs on refined sugar kept overseas refined sugar out to the American market.

In sum, the “Southerners were tariff hypocrites because of the sugar and rice tariffs” is bunk.

*Gene Dattel, Cotton and Race in the Making of America, (Lanham, Md.: Ivan R. Dee, 2011 ), 82

*

Learn more about America’s antebellum and Civil War era economy in:

Trading With the Enemy by Philip Leigh

 

4 thoughts on “What about The South’s Sugar and Rice Tariffs?

  1. joenorthpal

    The South has Risen!
    Walmart is the world’s largest retailer importing all dem cheap goods. 10 cent a hour and child labor, how’s THAT working out for yam grits.

    Reply
  2. Christopher Coleman

    As with your original article on tariffs, I find your arguments right on target. All three Secession crises (the first two are generally ignored because they had nothing to do with slavery) all had economics and foreign trade as a common denominator. The current movement to place everything on slavery and slavery alone as the cause of the Civil War, I view as an example of PC driven historiography, and an attempt to further divide the American electorate on the basis of identity politics. As Faulkner said, the Past is never dead, it’s not even past. That’s why the study of the Civil War is not just about commemorating a national tragedy; understanding the changes that occurred and WHY they occurred also gives us insight into the present, This is not to deny that slavery–or more properly, the SLAVE-BASED ECONOMIC SYSTEM, was not a major factor; but it was part of a complex mix of factors which included protective tariffs, England and French political and economic influence, as well as the growth of Capitalism, both here and in Europe.

    How much influence England–and English bankers–had in promoting discontent in the South may be a debatable point, but there is no doubt that both England and France encouraged Secessionism and would have welcomed an excuse to intervene on the Confederacy’s behalf. Mind you, the British had outlawed slavery decades before (1833) but the sugar plantations of the Caribbean were not as crucial to the Industrial Revolution (=Capitalism) as cotton was. As a journalist resident in England phrased it, cotton was the “pivot” upon which Britain’s industrialization and economic expansion grew. Lord Palmerston in particular was keen to intervene and would have had not Prince Albert personally intervened and Lincoln been willing to back off in the Trent Crisis.

    Regarding tariffs, opposition to protective tariffs was not a simple North-South thing either. The Free Soil Party of the 1850’s was opposed to slavery, but they were also opposed to protective tariffs, although they were ok with tariffs for purely revenue purposes. During the earlier Nullification Crisis, which arose in opposition to the “Tariff of Abominations,” it was Andrew Jackson, a slave owner, who threatened to invade South Carolina and hang all its state legislators over their political defiance of the tax. So while slavery was an important factor in the sectional crisis, there were other factors at play as well. Trying to reduce such complexities to simple nostrums does not help us understand them any better.

    Reply
    1. Phil Leigh Post author

      Well said. I encourage you to keep expressing your viewpoints because those who want to take the Confederate statues down seem to believe that those who want them to stay in place are racist and ignorant.

      Reply

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