Let’s continue to examine the Neo-Confederate contention that the states of the Confederacy had been economically enslaved to the North before the Civil War. Is there any truth to the idea that Northern interests, particularly New York bankers, took 60% of the profits of Southern agricultural production? Did nefarious Yankees really demanded an unfair “vigorish” from the genteel people of the South?
In order to reach a logical conclusion on these matters one must cut through many misconceptions and distortions of history. I for one shall follow the advice of one well known poster on this topic with whom I do not always see eye to eye. I do my own research, and think for myself. I will not be brainwashed by a small cabal of those with hidden interests and ulterior motives.
We must first consider the entire distribution chain of Southern products. We will look at the grower, those who purchased the crops from the grower, those to whom the middleman sold that crop, how it was transported, and who bought the crop from the middleman. After that it was simply a matter of distribution of finished goods as the crop was converted into useful products to eventually reach the hands of individual consumers.
So today let’s examine how the Southern planter sold his crops, who bought those crops, and how those products moved through the chain of distribution. In this post we will look at cotton, since cotton was king in the antebellum South. I purchased the 1966 book King Cotton and His Retainers by Harold D. Woodman, and draw information from its pages. He was one of the first to research this topic in depth, pouring through old letters and invoices found in dusty archives.
Almost all cotton farmers, both large and small, sold their crops through a middleman called a factor. Who were these factors that were so critical to the success of plantation owners? Were they all Northerners? Was the cotton trade, as has been alleged here, controlled by New York?
On the contrary. Major factor houses existed all across the South. For example, a major New Orleans factor house was the firm of Buckner and Stanton. The Buckner mansion still stands today and is an historical tourist attraction in the Crescent City area.
Some factors had offices both in New York and one or more southern cities. Savannah native Robert Habersham ran the house in that city while I. Rae Habersham headed the New York arm of his family firm.
English factor houses also had agents or arrangements with houses in many parts of the American South. Baring Brothers and Company arranged to receive cotton direct from factors in Southern cities. Brown, Shipley and Company was a London firm also dealing directly with Southern factors.
Why would a cotton grower sell to a factor instead of directly to agents overseas? For two reasons. First, and probably the most important reason, was the fact that a factor house could sell to any buyer offering the highest price. When selling direct the planter was subject to whatever price was prevalent in that one market at that one time.
The second reason was that the relationship between grower and factor was a symbiotic one. The factor would loan money to the grower, advise on the best time to sell for the greatest profit, and offer a host of other services that benefited both parties. In many ways the factor acted as a banker and advisor in addition to sales agent.
So what percentage was the factor charging? The usual fee was 2.5% of the gross proceeds from the sale of the crop. In addition, the same fee was added when the factory made purchases on the behalf of the planter. Money was usually loaned to the planter at a rate of between 5 and 8%. In Louisiana it had been as high as 10% until 1844 when it was lowered to a maximum of 8%.
So as we can see, at least in regards to the cotton factorage system, there was no “vigorish” at play. Whatever profits the factor houses earned largely remained in the hands of Southern financial interests, not Northern ones. At the very least no one can honestly say that New York had any sort of stranglehold on the selling of Southern cotton.
The workers of the factor house, the warehousemen who handled the cotton bales, the steamboat owners who shipped the cotton downriver to ocean ports and their captains and deck hands were all Southerners. The dock workers were sons of Dixie too.
Only when the cotton was loaded onto ocean going vessels did money begin to flow into hands outside the region, be they Northern or European. Of course the shipping fees were paid by the buyer, not the seller so it added no cost to planters or brokers.
As we have seen, the Navigation Act of 1817 established no prohibition on Southerners owning ships. They were free to build their own fleets. There were shipbuilders in at least two Southern ports, but they chose to build riverboats, not deep water ships. Even if Northern shipbuilders were clannish, there was no reason European shipwrights could not have been lured to bring their expertise to Dixie. Of course the slaves utilized in Southern shipyards depressed wages, but that was a self inflicted wound. No, one cannot honestly say that Southerners were forced to use Northern ships.
As we have seen, the Lost Cause mythology crumbles under impartial scrutiny. The illusion of unfair tariffs is revealed as the falsehood that it is and always was. One third of the population could not have bought three-quarters of the imported goods.
This leaves the fear of the abolition of slavery as the ONLY POSSIBLE motive for secession.
But, but, but, Corwin Amendment!
Seriously, yours was a nice write-up - very thoughtful. Unfortunately DegenerateLamp is hidebound and impervious to reason, persuasion, or common sense. It doesn't help that he is one of those who learned everything he knows by talking.
The simple truth is the slavers were making money hand over fist. Their primary concern was maximizing profits and crushing anything - or anyone who interfered. They saw the writing on the wall - and ignored its very plain import. They gambled everything, and lost.
The 1860 white population of Confederate States was about 5.5 million, or 17% of the U.S. 31 million total.
Of those 5.5 million, around 350,000 owned slaves and of those maybe 35,000 (10%) were in the Jefferson Davis class of wealthy planters.
These wealthiest Southern planters did account for a significant percent of US cotton exports (1860 -- $200 million total), exports were not taxed, but they purchased only a tiny percentage of total US imports ($400 million) which were tariffed.
Average Southerners in 1860 did "import" about $200 million in manufactured products from the North -- items like finished woolen & cotton clothes, shoes, iron stoves, railroad iron & farm equipment.
Luxury items like wine & silk cloth accounted for only a few percent of the totals.
Our FRiend DiogenesLamp likes to claim average Southerners were forced by unjust Whig & Republican tariffs to put American products first over potentially cheaper European products and that was the "real reason" for secession.
But these protective tariffs started in the 1790s under President Washington and Virginia Congressman James Madison.
They considered protective tariffs a good idea, so when did putting America first suddenly become bad?
In 1860, U.S. tariffs were among the world's lowest and the lowest they'd been since the time of President Madison.
Bottom line: outside a small number of very wealthy Southerners, no economic issue except slavery was powerful enough to motivate average Southerners to declare secession & war on the United States.
Let's take another look at maritime interests in the antebellum South. Were they really excluded from that industry, as the dogma of the Lost Cause claims? What does research reveal?
“Certainly one North Carolinian, Miles White, who moved to Elizabeth City in 1830, built up a “large coasting and West India trade” from which he made a comfortable fortune. In 1849 he retired and moved to Baltimore, where he engaged in land business.”
Southern Investments in Northern Lands Before the Civil War
Paul Wallace Gates
The Journal of Southern history
Vol. 5, No. 2, May 1939 pp. 155-185
But that's not all! “From 1849 to 1860 they (White and son) spent a good deal of their time in Iowa and Northwestern states looking over lands for investments...” They were buying land in the North for profit!
So as we see more and more, they was no conspiracy of New York bankers (that sounds a little suspicious, doesn't it?).
But what about shipbuilding? It was closed to Southerners, wasn't it?
“André Séguin, a French immigrant from Le Harve, opened the state's first marine ways there (Algiers, near New Orleans) in 1819. The first dry dock, the New Orleans Floating Dry Dock Company, opened in Algiers in 1837. Twenty years later the west bank community boasted a dozen dry docks, including one over 400 feet in length.”
Much activity was ship repair, rather than construction. Still, “A thriving coasting trade existed along the shores of the Gulf of Mexico...it appears that in Louisiana the two-masted schooner was built and used at a ratio of 5:1 over all other self-propelled craft.”
Maritime Shipbuilding and Related Activities in Louisiana, 1542-1986
William Garrett Piston
Louisiana History: The Journal of the Louisiana Historical Society
Vol.29, No. 2, Spring 1988 pp. 163-175
Hmmm, I thought the coastal trade was a Northern monopoly. In any case, the author goes on:
“Several hundred schooners, most in the forty-fifty foot range, were constructed in antebellum Louisiana, with peaks of building activity from 1811 to 1820 and from 1831 to 1840...a high percentage of these saw maritime use.”
Hmmm....
“Five major maritime streamers were built in Louisiana during the 1850s and 1860s...In 1860 the state possessed ten shipyards and two firms specializing in ship carpentry.” The author includes examples of ships by name, their sizes, and a local manufacturer of steam engines for the marine trade.
So the last leg of the three-legged stool of Neo-Confederate revisionism is kicked away. Tariffs, as we have seen, were not unfairly assessed on Southern consumers. New York did not have a monopoly on the cotton trade, nor were planters denied their share of profits from their labors (or more accurately, the labor of their slaves). Finally we see that there was nothing forcing shipping into Northern hands. Not the Navigation Act of 1817, nor any collusion of New England shippers to exclude the men of Dixie.
What remains then for the cause of secession? The fear of Republican abolitionists and their desire to end slavery.
This line reminds me of the "Build your own facebook" and build your own twitter" advocates around here.
It goes further. Some even go so far as to say "build your own internet, and build your own banking and finance infrastructure" to stop being deplatformed and denied banking and credit card services.
How do you feel about conservatives being excluded from prominent internet platforms such as face book and twitter as well as being denied credit card and banking services by dominant suppliers?