[DiogenesLamp]

Have you told the Chinese that?

This modern day business of running colossal trade deficits did not occur back in the 1860 era. (Not before the war anyway.) In those days, people weren't playing these money games they do now.

I'm surprised I had to tell you that, but then again, you are having a hard time grasping this "exports pay for imports" concept.

[SoCal Pubbie]

According to an out of print volume of the National Bureau of Economic Research titled Trends in the American Economy in the Nineteenth Century, data for the years 1820 to 1860 paints quite a different picture than your claim of roughly even exchange of merchandise.

http://www.nber.org/chapters/c2491.pdf

Within the chapter titled Balance of Payments 1790 to 1860, on page ten of the PDF, there is a chart showing detailed figures from 1820 to 1860. Since this period more closely aligns with our period of political friction, I have used those years for this post, and left out the time between the post Revolution era to the War of 1812 and it aftermath, which would unfairly exacerbate the deficit.

The imbalance of merchandise bought and sold totaled a deficit of $715.3 million dollars. In only eleven of those years was there any trade surplus, with only three of those years reporting more than single digit surpluses.

How do you explain that?