In 1857 bitterness arose between the sections increased, as millions of Southerners - including slaves - remained prosperous and well-fed, but in the North some 200,000 had lost their jobs, and "Bread" riots occurred in the North, not the South. Parson Brownlow of Tennessee stated that Northen industrialists should refrain from attacking slavery, and instead find means to feed the starving Northern poor.
The net result of the Panic of 1857 [the worst up to that point in time] was a massive shift in fortunes, as money vanished from Northern pockets and found it's way South.
Anyone wanting to understand the economic motivations of Lincoln and the North should study the Panic of 1857 and it's aftermath, and understand the increased bitterness and hatred of Southerners and slavery.
Their resistance became labeled rebellion ...
Of course it must, otherwise the secessionists were morally and legally correct, and Lincoln and his cadre were the despots and dictators.
Again, during the convention, one James Madison, motioned for the power of the militia to PREVENT SECESSION, and force the secessionists to rejoin the union. Giving credit where it is due, the framers REJECTED his insane motion overwhelmingly.
Those framers knew that they had seceded from Great Britain, and were about to secede from the Articles of Confederation and Perpetual Union.
Also: http://www.wisconsinhistory.org/libraryarchives/ihc/cyrus.asp
The panic of 1857 was caused by shifts in the world market as a result of the conclusion of the Crimean war and by corruption-induced business troubles at home in America.
Specifically, as the war concluded, the wheat demands it had created bottomed out.
With the end of the war, the Russians were able to send their grain crops to market. Needing to raise quick cash, they under priced their crops, and depressed American grain product prices. Demand for US grain dropped, and soon Northern exports dwindled.
With overproduction in the mid-west, the wheat market collapsed, causing an economic depression in the West.
At the exact same time the continental European banks were being adversely affected by the war's conclusion. The British were withdrawing specie from US banks, further compounding the problems.
Simultaneously, several major railroad embezzlement scandals were exposed, shaking up their creditors on Wall Street, all of them already uneasy due to the wheat problem and shaky banking state in France.
The banks then panicked and a recession set in.
Northern politicians at the time fraudulently used the panic as an excuse to promote their tariff policies that would be detrimental to the recovery.
“Government is instituted for the common good; for the protection, safety,
prosperity, and happiness of the people; and not for profit, honor, or
private interest of any one man, family, or class of men.”
-—John Adams
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8/24/1857 The New York Branch of the Ohio Life and Insurance Company failed. This was important because it was the largest bank in Ohio, and purveyor of Eastern credit and hard currency to the West. It failure jarred the national banking system.
As a result, 4,932 U. S. firms eventually failed.
The next month, one of the largest banks in Philadelphia, alarmed by the drains on its coin reserves, suspended specie payments. Most Northern banks reacted by hoarding reserves, and tightening credit. Soon, many banks in the North began to close.
9/11/1857 Northern banks relied heavily on newly mined gold sources from California.
On this date the Steamship SS Central America sailed directly into the path of a severe hurricane. The ship carried $1,000,000 in commercial gold and a secret cargo of 15 tons of California gold valued at $20 per ounce ($9,600,000). New York banks were waiting for the gold to meet depositor withdrawal demands.
9/12/1857 The SS Central America sank with the loss of 400 passengers. The loss of the ship and its important cargo, devastated the banking and financial system of the country.
Fall/1857 Tens of thousands of Americans were thrown out of work. Over 800 banks collapsed. The sale of public lands nearly stopped altogether. Numerous wealthy manufacturers and investors went bankrupt. The panic turned into national depression that lasted for several years.
The banking failures were due to several reasons, primarily insolvency due to overextended credit to land speculators and railroad construction.
Cotton and tobacco production was not affected by the economic downturn. The South survived the 1857 panic, in large part, because of Europe’s continued demand for cotton.
Due to the fact that Southern cotton and tobacco producers took European manufactured goods in trade and were thus not dependant upon specie for payment, they were further removed from the financial crisis. Production increased, and the South prospered.
In the North, there was a flood of people to the industrial cities because of the failure of the farms as a employment option. Many believed that the great jobs and money were to be made in the factories.
Industrialization was having an impact on the northern and western farms - no longer were large crews needed.
By 1858 the McCormick Harvesting Machine Company was the largest farm equipment manufacturer in the United States, with assets totaling over one million dollars.
The family farm was beginning to disappear because of the economics of the time. Railroads were charging more for transporting their grain and a farm had to be large and mechanized to survive.
Vagrancy laws were enacted to keep the newly relocated workers, not on the farm but in the factories. Laws were enacted that forbid people to leave a town if they owed any debt.
With rising personal debt, these former farm hands either worked or went to prison. The father worked, the mother worked and the kids worked. Most often it still was not enough wage earning to survive without debt to the Company Store
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Results of the Recession
The slavery issue was re-ignited since Cotton was mostly unaffected by the depression. Slavery flourished.
The success of slavery incited the abolitionists to renew their attack on the institution. A huge religious movement occurred in both the North and South. In the South, some believed that the South was mostly untouched by the depression as a sign of God’s validation of the rightness of slavery.
A Senate report by Senator Johnson showed that the Daily wages for bricklayers in New Orleans and Charleston averaged $3. Wages for bricklayers in Chicago and Pittsburg was $1.50.
Carpenters in New Orleans/Charleston earned $2.50 a day. The same in Chicago/Pittsburg earned $1.50.
General laborers in these Southern cities earned $1.25. Their counterparts in the North earned $.75.
Marxism took hold in the country as the division between rich and poor widened.
The Central Government gained more power using the excuse of preventing future recessions and depressions.
Many Southern farmers realized that if the tariffs were removed, they could ship their cotton directly to European markets for greater profit.
More importantly, sectional denunciation became common.
South Carolina Senator James Hammond stated,
“When the abuse of credit had…annihilated confidence, when thousands of the strongest commercial houses in the world were coming down and hundreds of millions of dollars of supposed property were evaporating in thin air, when you came to a deadlock and revolutions were threatened, what brought you up? Fortunately for you it was the commencement of the cotton season, and we have poured upon you 1,600,000 bales of cotton…to save you from destruction.”