Assisting the SHPG

Over at the Southern Heritage Preservation Group (aka, “The Gift That Keeps On Giving”), an erstwhile member asks a question of the group:  “One of my brother compatriots in the local SCV camp (Upshur County Patriots #2109) thinks I am an expert on 1860s history. He has been after me for months to find a certain piece of information. He wants not only the information, but documentation as well:

“What percentage of the Federal government’s income in 1860 was paid by the States that would become the Confederate States?…

“He (and I) have heard figures ranging from 50% to 80%, none of them with documentation.

“PLEASE — if you can furnish the information and documentation, do so — this brother compatriot will not let up!”

I’m happy to help.

In 1860, the vast majority of Federal revenue came from tariff revenue.  According to US Government Statistics, the US Government’s receipts were just over $56 million, almost all of it from tariff revenue.  The other major source of revenue was land sale.

In 1860, Charleston only had $2.0 million in imports, Savannah had only $800,000 in imports, Mobile had only $600,000 in imports, New Orleans had only $20.6 million in imports, and other southern ports had only $3.0 million in imports. In the same year, New York City alone had $231.3 million in imports and all other northern ports had $95.3 million in imports.

New Orleans was the southern port that collected the most in the tariff, and it was only $3.1 million. The total south only collected $4.0 million in tariff revenues, whereas New York City collected $34.9 million in tariff revenues and the total for northern ports was $48.3 million. [Source: Douglas B. Ball, Financial Failure and Confederate Defeat, p. 205, Table 18, “Trade Figures by Port in 1860” and “Customs Collections by Major Port (1860)”]

So out of$52.3 million in tariff revenue in 1860, 92.35% was paid in northern ports, while only 7.65% was paid in southern ports, which includes Baltimore, Maryland.  Andy Hall has a great visual here.

Now, wait a minute, you may say.  The place where the tariff was paid doesn’t automatically equate to the place where the goods were paid for.  After all, the consumer is the one who ultimately pays the tax, because the importer simply incorporates the cost of the tax into the cost of the goods.

Here’s what a historian who has looked into who consumed what had to say:  “There is no way of calculating accurately the value of the foreign imports consumed in territory naturally tributary to Southern seaports; but the probabilities are that it did not so greatly exceed the direct importations as Southerners generally supposed. Some Southern writers made the palpably untenable assumption that the Southern population consumed foreign goods equal in value to their exports to foreign countries, that is about two-thirds or three-fourths of the nation’s exports or imports. More reasonable was the assumption that the per capita consumption of imported goods in the South was equal to that of the North; but even that would seem to have been too liberal. A much higher percentage of the Northern population was urban; and the per capita consumption of articles of commerce by an urban population is greater than the per capita consumption by a rural population. Southern writers made much of the number of rich families in the South who bought articles of luxury imported from abroad; but there is no doubt that the number of families who lived in luxury was exaggerated. That the slaves consumed comparatively small quantities of foreign goods requires no demonstration. Their clothing and rough shoes were manufactured either in the North or at home. Their chief articles of food (corn and bacon) were produced at home or in the West. The large poor white element in the population consumed few articles of commerce, either domestic or foreign. The same is true of the rather large mountaineer element, because if for no other reason, they lived beyond the routes of trade. Olmstead had these classes in mind when he wrote: ‘I have never seen reason to believe that with absolute free trade the cotton States would take a tenth part of the value of our present importations.’ One of the fairest of the many English travelers wrote: ‘But the truth is, there are few imports required, for every Southern town tells the same tale.’ ” [Robert R. Russel, Economic Aspects of Southern Sectionalism, 1840-1861, pp. 107-108]

So the absolute upper limit of the amount of foreign goods consumed by southerners would be the percentage of southerners.  But, as Prof. Russel tells us, that is too high, because more southerners were in rural rather than urban areas, meaning they used fewer foreign products, and slaves used even fewer foreign products.  Let’s just take the 11 states that made up the confederacy.  The percentage of the population in the 11 states of the confederacy was 29% of the total US population in 1860, according to the US Census, and 40% of THAT population were slaves who didn’t use imported goods.  60% of the confederate population, then, were theoretically liable to use imported goods, so we have the most southerners in the confederate states would have paid being just about 17%, because the upper limit of southerners in the confederate states who would use foreign goods amounted to 17% of the total US population.  Again, this is most probably an overestimate because a higher percentage of that population was rural and didn’t use foreign goods.

Bottom line, southerners in the confederate states paid no more than 17% of the Federal revenue in 1860.  I hope this helps.  You’re welcome.