Investigators in movies and television dramas often advise their colleagues to “follow the money.” If you really want to understand the War Between the States, this is sage advice indeed. In Part I, I explained why the abolition of slavery could not have been the principal motivation for the war. So what was? I noted in that post that economic historian Charles Adams specialized in the history of taxation.
Those familiar with U.S. history may recall that one of the most famous acts of nullification (though far from the only one) was South Carolina’s attempt to block enforcement of the “Tariff of Abominations” in 1828. Throughout the early history of the United States, the tariff system worked hardship on the South, because the Southern economy depended on the export of cotton to Europe. However, the Congress wished to protect “infant industries” in New England, the Mid-Atlantic States, and increasingly, the Midwest, by levying high tariffs on European manufactures. This meant that the South had to pay a higher price (requiring the sale of more cotton) for either Northern or European goods. The South would be forced to sell that cotton with a cash discount to Europe, since the tariff made European manufactures unaffordable. In addition, some 83% of its revenues were distributed in the North, with the same percentage having been collected from the South. *
With this in mind, it is clear that the “Civil War” could have been avoided simply by negotiating a tariff that was fairer to the South.
The Tariff of 1828 is not the only example of Northern repression toward the South. We could talk about the Morrill Tariff of 1861, which triggered the secession of additional Southern states. Charles Dickens, a British author who opposed both slavery and high tariffs, published this comment in his magazine All the Year Round in December 1861:
If it be not slavery, where lies the partition of the interests that has led at last to actual separation of the Southern from the Northern States? …Every year, for some years back, this or that Southern state had declared that it would submit to this extortion only while it had not the strength for resistance. With the election of Lincoln and an exclusive Northern party taking over the federal government, the time for withdrawal had arrived … The conflict is between semi-independent communities [in which] every feeling and interest [in the South] calls for political partition, and every pocket interest [in the North] calls for union … So the case stands, and under all the passion of the parties and the cries of battle lie the two chief moving causes of the struggle. Union means so many millions a year lost to the South; secession means the loss of the same millions to the North. The love of money is the root of this, as of many other evils… [T]he quarrel between the North and South is, as it stands, solely a fiscal quarrel.
Since the mortgage collapse of 2008, we have become aware how the decisions of New York bankers – naturally in their own interest — have influenced the economy of the rest of the nation. We are seeing how the Federal Reserve’s “Quantitative Easing” policies have helped businesses “too big to fail,” while failing to reduce unemployment and building the inflation we all suffer at the supermarket and gas pump – facts that few mainstream politicians are willing to acknowledge, let alone remedy. We need to understand, as the critics of the Federal Reserve Bank did a century ago, that the interests of New York financiers have nothing to do with those of Ohio – or the South, Texas, the Great Plains, or the West. New York’s banking interests are more closely tied to Europe, which helps to explain why they favor a European-style welfare state in this country.
In addition, we are rediscovering some deep-seated cultural fissures in the American landscape, gaps that have been patched over for 150 years with a patriotism fueled by a largely false rendering of history. “Red state vs. blue state” is part of it; but that explanation does not account for “purple states” like Ohio, which see no benefit from “progressive” economics, but have little desire to embrace the strictures of religious and social conservatism.
To assert that the “Civil War” settled these issues for the last time is to say that might makes right. And if might did make right, what would that say about the rule of law or maintaining our God-given natural rights?
Far from being praised, Abraham Lincoln deserves our condemnation for systematically destroying Constitutional government, as it was understood prior to his Presidency. Instead, he began the drive to replace the Founders’ federal system with the centralized national government that serves most of us less and less with each passing day.
In writing this, I am not defending the desire by many Confederates to retain slavery, nor am I defending in any way the despicable regime known as “Jim Crow” that prevented Southern blacks from enjoying real freedom for nearly a century. If the South is one day to regain its independence with the culture it desires, its advocates will have to work proactively to ensure that citizens of all races in the new Southern republic enjoy human and political rights to at least the same degree as they do now.
The Confederate government made serious mistakes, both politically and militarily, during the war. However, none of this diminishes the virtue the Confederates had of wanting to preserve the federal system they inherited from the Founders, one that effectively protected the rights of the states and the people from an overbearing “federal” government.
* Violating, at least in spirit, the first clause of Article I, Section 8 of the U.S. Constitution, which provides that “all Duties, Imposts and Excises shall be uniform throughout the United States.”