Replies

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?

Looking at your chart, I see our trade balance for 1860 was -32.4 million dollars. This is from around a 300 million dollars worth of trade, which means it is a little more than 10% of the total.

We had positive cash flow in Specie and in Services, and we come out that year in the positive. 7.3 Million to the good.

The numbers are roughly equal. Did you expect them to be absolutely perfectly equal year after year?

They go up, they go down, but over time, they are roughly equal.

The imbalance of merchandise bought and sold totaled a deficit of $715.3 million dollars.

I don't see where you got that number. The Chart you showed says our indebtedness was 379.2 million dollars in 1860. That represents a little more than a years worth of trade value collectively for 40 years worth of trading.

It works out to a trade deficit of .98 million deficit each year, which is not a large percentage of the total trade.

To make your point that export value and import value must be regarded as different, you have to show a lot worse trade deficits than this. We were running a long term trade deficit, but on a year to year basis it wasn't very much.

This looks to me like an attempt to deliberately get the discussion into the weeds where the complexities of accounting for all the pennies allow you to ignore the larger reality that the South was producing most of the Trade with Europe, and that the North was going to lose a huge amount of money if they allowed the South to be free of them.

SoCal Pubbie: "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?"

Two items: California gold and Nevada silver.
They balanced everything quite nicely.

But please remember: when I say cotton was 50% of US exports, I'm including specie.
When DiogenesLamp & others say "Southern products" represented (tak your pick) 75% or 80% or 90%, they exclude specie from their calculations and add in a lot more than just cotton.