Editor's note: The subject of the annual Dick
Crews Debate at the January, 2008 Roundtable meeting was: "The Southern
Victory of 1865: Was the Confederacy a Viable State?" Five
members made presentations on the topic; the article below was one
of those five presentations.
After the order of
secession had passed the South Carolina legislature in December
1860, the old anti-nullification attorney James L Petigru was asked
if he would now, at last, support his native state. “I should think
not!” he replied. “South Carolina is too small for a republic and
too large for a lunatic asylum!” And that, despite the fantastical
notions we discuss tonight, is the key to answering the question –
was the Confederacy a viable state following their victory of 1865?
Seven states had seceded by
February 1, 1861: South Carolina, Mississippi, Florida, Alabama,
Georgia, Louisiana and Texas. These seven could not form a viable
nation – their human, social and material resources made them too
small for a republic and too large for a lunatic asylum.
After the firing on Fort Sumter and
Lincoln’s call for troops, four more states seceded: Virginia,
Arkansas, North Carolina and Tennessee. Now the size might be right
– even the social, human and material make-up might be right for a
nation if allowed to depart in peace – but war was joined and the
brute fact of war ensured that the confederacy could not become a
viable nation regardless of success on the battlefield
Rural areas
The Confederate States were
overwhelmingly rural and agrarian. Towns of more than 1,000 were few
and typical county seats had a population of less than 500. New
Orleans was the only Southern city with a population above 100,000
and the only one in the list of top 10 largest U.S. cities in the
1860 census. New Orleans was captured by the Union in April 1862.
The great industrial center of Atlanta, GA had a population of 9,553
in 1860.
“Too small for a republic and too
large for a lunatic asylum”
Benson J Lossing LLD in his
3-volume book on the Civil War remarked that “The old South rested
everything on slavery and agriculture, unconscious that these could
neither give nor maintain healthy growth.”
He could have added that the old
South rested everything on States’ Rights – a disease which, along
with slavery and agrarianism, made the Confederacy non-viable as a
nation no matter what the result of individual battles.
States Rights
Mary Lyde Williams gave the
Presentation Address at the unveiling of the North Carolina Memorial
at Gettysburg on July 3, 1929. She intended to make a great
compliment when she began with the words, "They wrote a constitution
in which each state should be free." Ironically it was none other
than Zebulon Vance, the governor of North Carolina who was
notoriously hostile to the national government. Opposition to
conscription in North Carolina was intense and disastrous for
recruiting. Vance's faith in states' rights drove him to stubbornly
oppose the Davis administration. And he was not alone.
Governors and state legislatures
refused to give the national government the soldiers and money it
needed because they feared encroachment on the rights of the states.
Georgia's governor Joe Brown warned
of a deep-laid conspiracy on the part of Jefferson Davis to destroy
states' rights and individual liberty. Brown declared, "Almost every
act of usurpation of power, or of bad faith, has been conceived,
brought forth and nurtured in secret session." Giving the
Confederate government power to draft soldiers was the "essence of
military despotism."
In 1863 Governor Pendleton Murrah
withheld Texas troops claiming they were needed for self-defense of
the state and refused to send them East to defend the nation.
Vice President Stephens warned that
to allow Davis to make "arbitrary arrests and to draft state
officials conferred on him more power than the English Parliament
had ever bestowed on the king. History proved the dangers of such
unchecked authority." Stephens thought that Southerners should never
view liberty as "subordinate to independence" because the cry of
"independence first and liberty second" was a "fatal delusion."
Independence was not evidently the primary goal for Stephens.
While the Confederate Constitution
did not specifically include a provision allowing states to secede;
the Preamble spoke of each state "acting in its sovereign and
independent character". But it also declared the formation of a
"permanent federal government". The Constitution prohibited the use
of revenues collected in one state for funding internal improvements
in another state. State legislatures were given the power to impeach
officials of the Confederate government in some cases.
It is in such contradictory grounds
that the seeds of inevitable defeat were sown.
Recognition
No nation becomes a nation unless
other nations recognize it and treat it as such. For the South,
recognition was essential – and there were only two nations whose
recognition meant a hill of beans – England and France. No-one cared
if Belgium recognized the South; Mauritania was irrelevant; Germany
did not even exist.
But England’s government, anxious
as it was to strengthen any threat to U.S. hegemony in the region,
could not politically recognize a nation based upon slavery because
the working classes of England and the Christian church had learned
to detest slavery.
Louis Napoleon, although keen to
step in, would not make a move without English cooperation. Indeed,
he preferred to let the south hang alone in order to seize Mexico
while the US military was too busy to intervene
Sea Power
The growth and indeed existence of
nations in the 18th and 19th centuries was predicated upon access to
and control of the seas or full cooperation with those who had it.
Without such access, no nation could long endure. The southern
states had no navy, no finances to build or purchase one and no
tradition of sea-faring to outfit one. Innovation could not stand in
for the quantity and quality of ships, both military and merchant,
and the skilled sailors enjoyed by the North. This lack of ability
to control the seas ensured the Union a stranglehold to prevent
exports and imports desperately required by the south. The North
might lose battles but it could not lose the war as long as it
controlled the seas, ports and rivers of the continent
Foreign Trade
Prior to the war, the states that
formed the Confederacy accounted for 70% of total US exports and
paid about 60-70% of the tariffs raised in the USA prior to the war.
Far from indicating strength and
importance, these figures illuminate core weaknesses of the
confederate economy – not strengths.
Confederate leaders believed that
exports would give the new nation a firm financial basis while the
ability to shake off tariffs would strengthen their economy – after
all, it was tariffs that had driven the pre-war nullification crisis
which particularly offended South Carolina.
Cotton was the primary potential
export, accounting for 75% of Southern goods either shipped to
northern US states or exported in 1860. The Confederate States
entered the war with the hope that its near monopoly of the world
cotton trade would force the European importing countries,
especially Great Britain and France, to intervene in the war on her
behalf. In 1861, Southerners at the local level imposed an embargo
on cotton shipments. Millions of bales of cotton went unshipped, and
by summer 1861 the Union blockade closed down all normal trade. The
confederate government was forced to make a virtue of necessity –
driven into error by states’ rights enthusiasts.
The main purchasers of cotton,
Britain and France, turned to turn to Egyptian cotton. British and
French traders invested heavily in cotton plantations and the
Egyptian government took out substantial loans from European bankers
and stock exchanges. After the Civil War, British and French traders
abandoned Egyptian cotton and returned to cheap American exports,
sending Egypt into a deficit spiral that led to the country
declaring bankruptcy, a key factor behind Egypt's annexation by
Britain in 1882.
During the war cotton cultivation
in the British Empire, especially India, also greatly increased to
replace the lost production of the American South.
And the much hated tariffs? The
Union blockade solved that problem for the South. Almost all of the
essential materials to pursue an industrial war and support a
civilian population were denied landing – the South had no imports
upon which to pay duties.
Specie
The specie holdings of various
banks largely found their way into the Confederate treasury as part
of a $15,000,000 loan early in 1861. In addition, the government
seized specie from various Federal offices. However, this was soon
sent to Europe to pay for war supplies. Gold and silver in general
circulation also soon left the CSA almost entirely, much of it going
to the North. The government never secured any specie revenue, and
was driven headlong into the wholesale issue of paper money.
The first interest bearing notes
were issued in March 1861 and were soon followed by others, bearing
no interest and payable in two years, with still more payable six
months after peace. New issues were continuous, so that from
$1,000,000 in circulation in July 1861, the amount rose to $30
million before December 1861; to $100 million by March 1862; to $200
million by August 1862; to perhaps $450 million by December 1862; to
$700 million by the autumn of 1863; and to a much larger figure
before the end of the war.
This policy of issuing irredeemable
paper money was copied by the individual states and other political
bodies. Alabama began by issuing $1,000,000 in notes in February
1861, and added to this amount during each subsequent session of the
state legislature. The other states followed suit. Cities,
corporations and other business concerns tried to meet the rising
tide of prices with the issue of their individual promissory notes
intended to circulate from hand to hand.
As a result of this redundancy of
the currency, its value collapsed. Gold was already quoted at a
premium in Confederate notes as early as April 1861. By the end of
that year, a paper dollar was quoted at 90 cents in gold; during
1862 that figure fell to 40 cents; during 1863, to 6 cents; and
still lower during the last two years of the war. The downward
course of this figure, with occasional recoveries, reflects the
popular estimate of the Confederacy’s chance of winning and
maintaining independence as a viable nation.
The oversupply of currency drove
the price of commodities to exorbitant heights, and disarranged all
business. Frequent efforts were made by legislation and otherwise to
reduce the prices demanded, especially by the agricultural sector.
As a result, the production of food products fell off, or at least
farmers did not bring their products to market for fear of being
forced to sell them at a loss.
Supplies for the army were obtained
by impressment, the price to be paid for them being arbitrarily
fixed at a low figure. As a result, the army administration found it
almost impossible to induce producers of food willingly to turn over
their products, and the army suffered from want.
Under these confused industrial
circumstances, the sufferings of the debtor class were loudly
asserted, and laws were passed to relieve them of their burdens,
making the collection of debts difficult or impossible.
Government Revenues
The effectiveness of the Union
blockade and the peculiar industrial development of the Confederate
States removed the possibility of an ample government revenue.
Though import duties were levied, the proceeds amounted to almost
nothing. A small export duty on cotton was expected to produce a
large revenue sufficient to base a loan upon, but the small amount
of cotton exports reduced this source of revenue to an insignificant
figure.
There being, moreover, so few
manufactures to tax under an internal revenue system such as the US
government adopted, the Confederacy was cut off from deriving any
considerable revenue from indirect taxation. The first Confederate
tax law levied a direct tax of twenty million dollars, which was
apportioned among the states.
These, with the exception of Texas,
contributed their apportioned share to the central government by
issuing bonds or notes, so that the tax was in reality but a
disguised form of loan. Real taxation was postponed until the spring
of 1863, when a stringent measure was adopted taxing property and
earnings. It was slowly and with difficulty put into effect, and was
re-enacted in February 1864. In the states and cities there was a
strong tendency to relax or postpone taxation in view of the other
demands upon the people.
With no revenue from taxation, and
with the disastrous effects of the wholesale issue of paper money
before it, the Confederate government made every effort to borrow
money by the issuing bonds. The initial $15 million loan was soon
followed by an issue of one hundred million in bonds, which it was,
however, difficult to place. This was followed by even larger loans.
The bonds rapidly fell in value, and were quoted during the war at
approximately the value of the paper money, in which medium they
were paid for by subscribers. To avoid this circumstance, a system
of produce loans was devised by which the bonds were subscribed for
in cotton, tobacco and food products. This policy was subsequently
enlarged, and enabled the government to secure at least a part of
the armies' food supplies. But the bulk of the subscriptions for
these bonds was made in cotton, for which the planters were thus
enabled to find a market.
In the autumn of 1862, Confederate
law attempted to compel note-holders to fund their notes in bonds,
in order to reduce the redundancy of the currency and lower prices.
Disappointed in the result of this legislation, the Congress, in
February 1864, went much farther in the same direction by passing a
law requiring note-holders to fund their notes before a certain
date, after which notes would be taxed a third or more of their face
value. This drastic measure was accepted as meaning a partial
repudiation of the Confederate debt, and though it for a time
reduced the currency outstanding and lowered prices, it wrecked the
government's credit, and made it impossible for the Treasury to
float any more loans. During the last months of the war, the
Treasury led a most precarious existence, and its actual operations
can only be surmised.
As the war entered its final year,
it was becoming evident that the Confederacy's lack of industry and
the destruction of its transportation infrastructure helped to play
a part in its eventual demise.
Defeat saved the Confederacy from
total ruin. A victorious Confederate government would have collapsed
under its total inability to pay debts, obtain new loans, rebuild
infrastructure and stabilize its currency. But a defeated and
non-existent confederacy could safely repudiate debt and rely upon
the governmental and commercial acumen of the hated Yankees to
rebuild a society.
Conclusion
Abraham Lincoln liked to tell the
story of a frugal farmer who saw no need to feed a male pig all year
just to service his sow. Early one spring morning he put the sow in
the wagon, traveled to a nearby farm, and the sow was serviced.
The next morning, in order to make
more certain of the efficacy of the servicing and to make sure he
had lots of bacon come winter, he packed the sow in the wagon and
again brought her to be serviced. He did this on each of the next
two days.
On the fifth day his wife asked if
he was going to have the sow serviced. He replied “I’m too tired to
tote her down the road again.” To which his wife replied, “Well, you
ought to tell the sow, ‘cause she’s a sittin’ in the wagon.”
This question of the viability of
the southern confederacy has been long settled by history. It has
been settled here tonight. We should all be too tired to tote it
down the road again – but there it is, sitting in the wagon. I ask
for your votes tonight to remove it once and for all.
Thank you ladies and gentlemen.
CONTINUE ONTO THE FIFTH ARGUMENT>> |
