Causes of the War - Economics

One of the four causes of the Southern secession and the War Between the States was economic impoverishment of the South. While it was not their main complaint, they believed that the North had pillaged them. In the Declaration of the Causes which Impel the State of Texas to Secede from the Federal Union, they said:

They have impoverished the slave-holding States by unequal and partial legislation, thereby enriching themselves by draining our substance.¹

The roots of the economic disagreements went all the way back to the United States Constitution. In the writing of the Constitution the founders had to consider how to raise money for the federal government. Rather than modern taxes such as the income tax, they chose only two, the head tax and the tariff.² A tariff is a tax on imports or exports. The federal government was not intended to have any jurisdiction inside a state. It was only allowed to regulate commerce that crossed state borders. Therefore it was only given the right to tax goods that crossed the national border. The problem with a tariff is that the government can easily use it to give advantages or punishments to particular industries or states. The Constitution specifically forbade different tariff rates for different states,³ but as we will see it still can be unfair even while charging the same rate.

Exports

The first type of tariff is on exports, where the merchant has to pay a tax to export products from the nation. Exports are rarely used because they have a direct and visible hit on a specific industry. If a Representative from North Carolina votes for a tariff on tobacco, the tobacco producers from his home state will not re-elect him because he raised their taxes.

Imports

Taxes on imports charge foreign producers to bring the product into your country. This helps in the home industry because they can raise their prices, or be less efficient. If a government charges a 20% tariff on imports of cars, when a foreign company makes a $10,000 car, in the United States they will have to sell it for $12,000 to over the import tariff. But this means that the American car manufactures will be be able to raise the prices on their cars, say 15%, and still be cheaper than the foreign car manufacturers. Their manufacturing costs can be the same, but one is $12,000 and the other $11,500. A tariff raises the price of domestic goods because the government has inflated the cost of foreign goods.

Wealth Discrepancy

Before the War for Independence, America primarily produced raw materials and shipped them to the manufacturers in England, so once they separated from England, Washington and the subsequent presidents wanted to encourage Americans to start manufacturing. To do this tariffs were placed on manufactured imports. But this created a wealth discrepancy between the Northern and the Southern states. The North was primarily manufacturing and the South mostly produced raw materials. The North were able to get more profit by raising their prices because the foreign competition had to pay the tariffs. This economic situation caused a discrepancy in wealth between the Southern and the Northern states.

Secession

The issue caused by protective tariffs was not the main cause of the war. It was less important than other issues, but it did play into the decision by the Southern States to leave the Union.

1. Declaration of the Causes which Impel the State of Texas to Secede from the Federal Union, 1861. Source.
2. “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;” Constitution, article 1, section 8. Source.
3. “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.” Constitution, article 1, section 9. Source.

The Real Causes of the Civil War

Before we can understand who was right in the Civil War and the effects that it has had on America today, we first need to understand what caused it. If you ask the average American today what caused the Civil War, he would tell you it was because the North wanted to free the slaves. But that is not true. The idea that the war was fought over slavery is the biggest misconception about it today. The war was fought over whether or not states had the right to secede. Lincoln wrote this during the war:

My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that. What I do about slavery, and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union.¹

However, as we will see through the next few weeks, Lincoln frequently lied. He did have a chance to save the Union and preserve slavery, but he rejected it. But most of the Northern soldiers were fighting to preserve the Union, not to end slavery.

If you look deeper and examine the causes of secession, then you will find slavery played a big role in causing the Southern states to attempt to leave the Union. But even that it is not as clear cut as most make it out to be. There were also economic and religious reasons that went into the decision to leave the Union.

There were four main causes of succession and the war which do overlap at some points. We will look at these as a progression, not in order of importance. First there were economic reasons that caused the South to believe that the North was robbing them. Second there were religious differences because of Unitarianism. These religious differences caused the third disagreement which was slavery, and lastly there is the idea of state sovereignty. In the coming days we will examine each of these causes and who was right in each instance.

1. Source