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There are two, instead of one, major factors being lost on our friends who are attempting to minimize the value of Southern exports...and the first is that the carrying charges, i.e. freight, taxes, cartage, insurance income was going to immediately be lost in direct proportion to the amount of goods shipped from the South directly and on European shipping. That would cost the private sector over half of their annual revenue....immediately upon secession.

But by far the biggest loss to not only the businesses, but primarily the government treasury was the loss of goods, i.e. tariff producing items, that would now be direct shipped South from Europe, and bypassing New York, Boston, and Philly. Remember that about 85% of the annual treasury income was from tariffs. If dutiable items even shriveled by 50%, you can imagine the pending damage to the Treasury.

Here is a contemporary article describing this situation:

“GOODS ENTERING FREE AT ST. LOUIS.

The St. Louis Republican, of the 23d says: “Every day our importers of foreign merchandise are receiving, by way of New Orleans, very considerable quantities of goods, duty free. The goods are landed at the port of New Orleans-no Custom-house notice is taken of them-no bonds are executed for the payment of duties on their arrival there; and on many articles the saving of one half the duty only, would afford a handsome profit. If this thing is to become permanent, there will be an entire revolution in the course of trade, and New York will suffer terribly. Our merchants have capital enough to justify them in making their purchases in Europe, and shipping to New Orleans, and in that city, because of the difference in the tariff, goods can be bought cheaper than in New York. With these advantages, we shall be able to sell cheaper than any other city in the Valley of the Mississippi.”

~Harper's Weekly, April 6, 1861.

You can see very clearly how vulnerable the entire shipping empire of the North was upon secession, and the fear these people would have.

That is an excellent example. I've seen several other Newspaper/Magazine articles warning of the dire consequences to the North if the South takes over European trade.

You can see very clearly how vulnerable the entire shipping empire of the North was upon secession, and the fear these people would have.

These people with whom we are arguing simply do not get it. Economic independence of the South from the North very badly damages the Northern economy in many disparate ways that are not obvious to people who are not accustomed to thinking in these terms, but the Businessmen of New York/New England area were not fools. They knew very well that a major source of economic power was shifting out of their grasp, and it would spell ruin or severe attenuation of their finances if the South remained independent.

An additional 40% of direct cash flow to the South, (cutting out New York middlemen) plus the added economic impact of lower prices from the reduced tariff on imports would have initiated boom conditions in all areas of the South from which such profits could be made.

This would quickly result in investments in businesses such as textiles and machine factories, because the capital to make such investments would be there.

Not only would the North lose the immediate revenues from the trade, they would be facing an arising competition against their own existing industries, such as steel and textiles.

Southern independence was a financial nightmare for these men, and they were intelligent enough to realize that Southern independence would spell economic doom if it was allowed to continue.

And I submit that what you are overlooking as well is the fact that that cotton still had to get to market somehow. There was no domestic Confederate shipping industry to take up the slack so why is there any reason to believe that Northern shippers would not continue to provide transportation? And continue to charge freight, taxes, cartage, and insurance fees? After all what other alternative was there? Do you think that the European countries had the excess capacity to replace the U.S.?

Our merchants have capital enough to justify them in making their purchases in Europe, and shipping to New Orleans, and in that city, because of the difference in the tariff, goods can be bought cheaper than in New York.

The problem being that once those goods crossed the border into the U.S. from the Confederacy then they would by subject to U.S. tariffs as well, so the would be double taxed. And just because there was no custom house in St. Louis in April of 1861 that doesn't mean that one would not have been established if the South was independent. Like all the other doom-and-gloom predictions that an independent Confederacy would suck the vast majority of trade from Northern ports, it doesn't stand up when looked at it logically.

You can see very clearly how vulnerable the entire shipping empire of the North was upon secession, and the fear these people would have.

But if you look at it dispassionately you can see those fears were badly overblown.

PeaRdige: "...first is that the carrying charges, i.e. freight, taxes, cartage, insurance income was going to immediately be lost in direct proportion to the amount of goods shipped from the South directly and on European shipping.
That would cost the private sector over half of their annual revenue....immediately upon secession."

What you guys are forgetting is that transatlantic trade, in those days, took the shape of a triangle:

Leg #1: US owned ships take Southern cotton & tobacco from ports mainly along the Gulf Coast to European customers.
Now DiogenesLamp claims these ships were all Northern built, owned and operated, but I dispute that.
First, DL has no data to support his claims and second the Confederacy proved capable of building & operating its own ships during the Civil War, so they must have learned necessary skills well before.
Therefore I think it far more reasonable to suppose that some significant portion of those ships were Southern built, owned & operated.
How much?
Maybe 20%, maybe 30% enough to break DL's claim that "Northerners" had a monopoly on Southern exports.
Leg #2: After delivering cotton to European ports, these ships looked for returning cargoes.
Such cargoes were of two main kinds: manufactured goods and immigrants.
Both of these naturally went to Northern ports like New York because that is where they could find customers and employers.
Key point: nothing about secession would drive immigrants or goods to smaller Southern ports which had no use for them.
Leg #3: After delivering their products and immigrants in New York, ships sailed South to load up on next year's cotton crop.
Yes, some merely waited in New York for packets to bring cotton up the Atlantic Coast to them, but over half went to New Orleans and another 30% to Gulf Coast ports like Mobile and Galveston.
With them they brought such products as Southerners might wish to buy, especially to New Orleans.
However customer demand in smaller ports was quite limited.
That's why some ships remained in major harbors & let packets bring the cotton -- it was cheaper for them.

Point is: none of basic economics changed with secession, with a possible exception of now European owned ships competing for Southern loads.
But immigrants and the vast majority of imports would go to Northern ports because that's where demand was for them.
If we assume normal, peaceful relationships between Union & Confederacy, then some adjustments would be made and life would go on.

If we assume a war-time relationship, then we know what would happen, because it did during Civil War.
Economic adjustments were made and life went on.

PeaRidge: "But by far the biggest loss to not only the businesses, but primarily the government treasury was the loss of goods, i.e. tariff producing items, that would now be direct shipped South from Europe, and bypassing New York, Boston, and Philly. Remember that about 85% of the annual treasury income was from tariffs.
If dutiable items even shriveled by 50%, you can imagine the pending damage to the Treasury."

But the key point you must remember is that we already know precisely what would happen given a 100% loss of Southern cotton & tobacco exports.
Northern cities made economic adjustments, the Federal Government made tax adjustments, and life not only went on but the economy prospered and the Union prosecuted the Civil War.

Point is: all this talk about trade & economics was certainly important, but not as important as you might have imagined.

PeaRdige: "The goods are landed at the port of New Orleans-no Custom-house notice is taken of them-no bonds are executed for the payment of duties on their arrival there; and on many articles the saving of one half the duty only, would afford a handsome profit.
If this thing is to become permanent, there will be an entire revolution in the course of trade, and New York will suffer terribly."

Or, New York's duties might be adjusted to compensate.
But the far more likely result is that Confederates would begin collecting their own tariffs (set at pre-Morrill rates of 15%) and so economics would balance out.

Now the Lost Causer argument here is that these economic factors were serious enough to drive Northerners to war.
I'm saying such concerns were not that serious and there's no evidence they "drove" anybody to war.