Taxes are paid on grain that cows eat. Taxes are paid again on the milk (and the meat) that the cows make from that grain, so of course, if you buy the manure that’s taxed too.
But if you like you can think of America as a horse. Southerners sold cotton to Europe. The Southerners used the money to buy things from the North and to invest in Northern banks, industries, and railroads. The Northerners used that money — and the money they got from exports of gold, timber, and grain — to buy things from Europe. It’s at that stage that the Federal taxes were imposed and collected, not on the early activities.
His numbers did not actually reflect that claim. He tried to cherry pick his data to make it look like that was what was happening, but at the time I went through the work of unraveling all the misdirection and I showed that this wasn't what was happening at all.
You have to look at all the years to figure out what role specie played in the exchange.
As this is a lot of work and complex, most people won't put out the effort to do it and would prefer to just declare what they wish to believe to be true.
People often hide lies in complexity, and this is one of those examples.
I try to make it simple.
The South produced 72% of the export value. The North produced 28% of the export value.
Assuming balanced trade, which is the norm, this would mean that the South should have been able to purchase 72% of the total value of imports, and the North should have been able to purchase 28% of the imports.
The reality is a little different because of how everything was structured back then.
The North actually controlled the cotton trade, and all the other Southern trade. They controlled shipping, they controlled the banking, they controlled the insurance, warehousing, Packet lines and everything else.
They had gotten themselves into such positions of power, partially because of natural advantages such as New York harbor being ideally situated, but to a greater extent because of their ability to create protectionist laws that benefitted the North at the expense of the South. Also Federal subsidies for Northern industries such as fishing, and mail delivery.
But to break it all down to the point where we can track every dollar as to origin and eventual destination is a dauting task for any person.
But I am thinking an AI might be able to wade through all the data and come up with the most accurate answer possible, and I believe if such was done, it will show the North was raping the South financially.