(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