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Volume 30, No. 7 – July 2017

The President’s Message:

Thank you to everyone who brought snacks and soft drinks to the May meeting. They were greatly appreciated. Please sign the Forage List to bring refreshments to future meetings. Mary Ellen will  give the members on the sign- up sheet a reminder call a few days before the meeting.

Please tell friends, neighbors, and acquaintances about the Round Table.

Gerridine La Rovere


July 12, 2017 Program:

Our next speaker is Josh Liller.  He is the collections management at the Jupiter Inlet Lighthouse and Museum .  Supervision of archives staff, interns, volunteers, and visitors.  Duties include cataloging, data entry, organization, inventory, research, lectures/presentations, visitor tours, and generating content for social media and newsletters.  Research includes answering staff and visitor questions, conducting oral history interviews, and expanding collection content and knowledge.

June 14, 2017, Philip Leigh, Program:

Over the past fifty years historians have reinterpreted Civil War Reconstruction.  Shortly before the Centennial it was commonly believed that the chief aim of the Republican-dominated Congress was to ensure lasting party control of the federal government by creating a reliable voting bloc in the South for which improved racial status among blacks was a coupled, but secondary, objective.  By the Sesquicentennial, however, it had become the accepted view that Republicans were primarily motivated by a drive for racial equality untainted by anything more than negligible self-interest.  Consequently, the presently dominant race-centric focus on Reconstruction minimizes factors that affected all Southerners regardless of race.

Contrary to popular belief, for example, Southern poverty has been a longer-lasting Civil War legacy than has segregation.  Prior to the war the South had a bimodal wealth distribution with concentrations at the poles.  The classic planters with fifty or more slaves had prosperous estates but they represented less than 1% of Southern families.  Partly because 1860 slave property values represented half of Southern wealth, seven of the ten states with the highest per capita wealth joined the Confederacy.

Since nearly 70% of Confederate families did not own slaves, however, the South’s per capita income was 28% below the nation’s average.  A century later eight of the ten states with the lowest per capita incomes were former members of the Confederacy.  The depths of post-Civil War Southern poverty and its duration were far greater, longer, and more multiracial than is commonly supposed.  It took eighty-five years for the South’s per capita income to regain the still below average percentile ranking it held in 1860.

The war had destroyed two-thirds of Southern railroads and two-thirds of the region’s livestock was gone.  Steamboats had nearly disappeared from the rivers.  Excluding the 100% loss in the value of slaves resulting from emancipation, assessed property values in 1870 were less than half of those in 1860.  Approximately a 300,000 white Southern males in the prime of adulthood died during the war and perhaps another 200,000 were incapacitated, representing about 18% of the region’s approximate 2.8 million white males of all ages in 1860 and about 36% of those over age nineteen.

During the war, Southern farms drifted back to nature.  Since their protective levees had been destroyed, thousands of square miles of Mississippi delta cotton lands were overrun with briers and cane thickets.  Returning Confederate soldiers often found that their families were starving.  By 1870, Southern bank capital was only $17 million, compared to $61 million in 1860.  The poor economic conditions in the South after the Civil War were largely ignored by national policies until President Franklin Roosevelt commissioned a report in 1938 nearly eighty years after the war had ended. 

The Roosevelt-commissioned study disclosed that the South remained America’s poorest region.  Its 1937 per capita income of $314 was only about half of the $604 for the rest of the country.  Shortly after the Great Depression began, the president of General Motors voluntarily cut his annual salary from $500,000 to $340,000. His $160,000 cut was more than all the income taxes paid by two million Mississippi residents that year. 

Conditions were worst among Southern farmers who powered the region’s main economic engine.   During the last year of the prosperous Roaring 1920s, Southern farmers earned an average of $190, which was about 65% below the $530 average of other American farmers.   Yet their revenue was a gross income out of which operating expenses such as fertilizer, seed, and interest on debt had to be paid.  As a result, there was often little money left for food and clothing and none for such common articles as books and radios.  Cotton and tobacco provided two-thirds of Southern farm income.   Even as late as the 1930s, more than half of Southern farmers depended upon cotton alone. Yet, price fluctuations in the World cotton markets were sheer gambles.  Prices dropped from $0.20 a pound in 1927 before bottoming-out at $0.06 in 1931.  Only once during the ten years from 1927 to 1937 did the price change less than 10% annually.

Composing more than half of all Southern farmers, tenants and sharecroppers were at the bottom of the heap.  Many lived in circumstances comparable to the Russian serfs of the nineteenth century.  Sharecropper per capita incomes averaged $63 annually, which equated to $0.17 per day.  By comparison, during the depression that followed the 1873 Financial Panic sixty-five years earlier, the Ohio Department of Labor Statistics estimated the poverty line at one dollar a day.  Perhaps most surprising to present-day audiences, Roosevelt’s report disclosed that whites composed half of all sharecroppers and that they lived “under economic conditions almost identical with those of Negro sharecroppers.”

Poverty bred poor health.  Ailments such a pellagra, rickets ,and hookworm that were almost unknown in other parts of the country and could be prevented by cheap dietary changes, better sanitation and the wearing of shoes, plagued the South for almost a century after the Civil War.  Even in Southern cities an average of three-fourths of the poor did not have enough money to afford the preventive diets. S o short was the life expectancy in South Carolina that as late as 1930 half the state’s population was under age twenty.

Post-war politics and federal economic policies contributed to the South’s long delayed economic recovery.  Among such factors were property confiscations, Republican Party self-interest, discriminatory federal budgets, protective tariffs, Union veteran pensions, banking regulations, discriminatory freight rates, lax monopoly regulation, absentee ownership and the requirement that America’s most impoverished section pay for the public education of ex-slaves even though emancipation was a national—not regional—policy.

When Lee surrendered to Grant, more than two million fungible cotton bales lay scattered across the South. Given an average price of 43 cents per pound, each bale was worth about $172, putting the value of the entire inventory at nearly $350 million as compared to the trifling $15 million of US currency then circulating in the region.  The cotton might have been a resource to prime the pump of Southern recovery, but instead it was plundered.

When the Civil War ended the Republican Party was barely ten years old. Its leaders worried that it might be strangled in its cradle if the re-admittance of Southern states into the Union failed to be managed in a manner that would prevent Southerners from allying with Northern Democrats to regain control of the federal government.  If all former Confederate states were admitted to the 39th Congress in December 1865 and each added member was a Democrat, the Republican majority in the Senate would have dropped from 43-over-9 to 43-over-31.  Similarly, the Party’s majority in the House would have dropped from 152-over-40 to 152-over-81.  In short, the Republicans would have no longer held a veto-proof two-thirds majority in Congress. 

Consequently, Republicans settled on two objectives.  First was mandatory African-American suffrage in all former Confederate states.  The Party expected that such a mostly illiterate and inexperienced electorate could be manipulated to consistently support Republican interests out of gratitude for emancipation and voter suffrage.  Second was to deny the vote to the Southern white classes most likely to oppose Republican policies.

Although it is often assumed that Republican Party sponsorship of Southern black suffrage was motivated by a moral impulse to promote racial equality, the bulk of the evidence suggests the Party was more interested in retaining political power.   First, the 1866 Civil Rights Act declared nearly all blacks to be citizens but expressly denied citizenship to Indians unless they were paying taxes.  Second, Republicans recognized that many Northerners opposed black suffrage in their own states.  Upon the war’s conclusion, only five New England states with tiny black populations permitted blacks to vote. Connecticut, Minnesota, and Wisconsin rejected black suffrage in 1865. Kansas did so in 1867 as did Michigan and Missouri in 1868 and New York in 1869. As a result, the Republicans adopted a policy that would permit Northern states to reject black suffrage with only negligible consequences but would significantly penalized Southern states for doing so.  Third, a month after General Lee’s surrender at Appomattox, Union Major General William T. Sherman wrote a colleague, “I have never heard a negro ask for… [voting rights] …and I think it would be his ruin…I believe the whole idea of giving votes to the negroes is to create just that many votes to be used by others for political uses…”  Fourth, the two Republican leaders (Thaddeus Stevens and Charles Sumner) most commonly believed to be sincerely interested in black racial equality also indicated that they wanted Southern black suffrage in order to help keep their Party in power.  Fifth, after the collapse of the Carpetbag regimes in 1877, Washington Republicans virtually ignored the black electorate until the eve of the tightly contested reelection campaign of President Benjamin Harrison against Democrat Grover Cleveland in 1892.

As a result of their post-war lust for lasting political power the Republicans proceeded with a plan for universal black suffrage in the South, if not the North.  Their first step was to adopt three 1867 acts passed over President Andrew Johnson’s vetoes.  The acts imposed four requirements on the South.  First, except for Tennessee, which already had a Republican vassal state government, the remaining ten states of the former Confederacy were divided into five military districts to be governed by martial law.   Second, each of the ten states was to organize conventions to adopt new constitutions satisfactory to Congress.  Third, the states were required to let black males vote for convention delegates and simultaneously to deny the vote to many white military and civil officers of the former Confederacy defined by their type of office and prior military allegiance.  Fourth, each state constitution was to require universal black male suffrage while also blocking white suffrage at least as rigidly as it was restricted in the earlier vote for constitutional convention delegates.

The Fourteenth Amendment, which had two key provisions.  First, persons born in the United States would be American citizens and citizens of their resident states. No race could be excluded, except non-taxpaying Indians, although Asian-Americans, as noted, were also effectively excluded. Second, states refusing suffrage to male citizens of any qualified race would have their congressional representation cut by subtracting the number of members of the excluded race from the applicable state’s population for purposes of calculating its House representation and electoral votes.

More than half of federal tax revenues were applied to three items: (1) interest on the federal debt, (2) budget surpluses, and (3) Union veterans benefits.  Although compelled to pay their share of taxes to fund them, former Confederates derived no benefit from the allocations.  The budget surpluses were used to repay federal war debts, which had jumped 40-fold from $65 million at the start of the Civil War to $2.7 billion at the end.  Although their taxes were partly used to redeem the bonds and make interest payments on them, former Confederates derived no benefit from either the redemption or the interest payments.  Since the bonds and interest had to be paid in gold, the amount of paper money required to make such payments was larger than the face amounts of the bonds and their associated interest coupons.  The difference was an extra cost to the taxpayer but a sizeable bonus to the bondholder. 

The budget surpluses were caused by protective tariffs that generated more income than necessary to operate the federal government.  Protective tariffs were designed to restrict competition for domestic producers almost none of which were in the South.   Instead the federal government taxed cotton.  As prices dropped after the war the levy represented about one-fifth of the market value.  It raised $68 million in tax revenue, which was about seven times the amount of public works spending in the South from 1865 to 1873.  The tax could not be passed along to buyers since most American cotton was sold internationally where it had to compete with cotton from other countries that had no such tax.

Although the post-Civil War South badly needed re-building capital it was almost impossible for the region’s investors to organize suitable banks.  First, national bank capital requirements were beyond the means of impoverished Southerners.  Second, national banks generally could not make mortgage loans, a type loan essential to the agrarian South.  Third, national banks were prohibited from operating more than a single branch, which was a handicap in the sparsely populated South.  Fourth, even though state chartered banks might offer mortgages and/or require less start-up capital, the 10% federal tax on their banknotes burdened them with prohibitive operating costs.  Fifth, regulatory limitations on the number of national banknotes in circulation made it hard to gain authorization to open new banks thereby leaving banking concentrated in the Northeast.

Northern railroads steadily increased their ownership of Southern operators for many years after the war due to a Southern capital shortage.  They quickly began using the rate differentials to block Southern competition to principal Northern shippers such as steel producers and the makers of other manufactured goods.  When asked in 1890 why shipping rates into the North for Southern iron products was higher, one Pennsylvania Railroad agent replied, “It was done at the request of the Pennsylvania iron men.”  Yet due to its wealth and industrial concentration, the region north of the Ohio and Potomac rivers was a market that all manufactures needed to access if they were to compete on a national scale with competitive high-volume unit production costs.  As a means of impeding competition from Southern and Western manufactures the discriminatory rates were as effective as protective tariffs, which were constitutionally prohibited between states.

Southern hostility to protective tariffs was also an indirect opposition to monopolies because such tariffs were a prime cause of monopolies.  Many, perhaps most, Reconstruction students fail to appreciate the connection because industrial trusts did not become a familiar part of the business landscape until the last fifth of the nineteenth century, which was after the collapse of the last Carpetbag regimes.

The first federal response to monopolies was the 1890 Sherman Antitrust Act.  Unfortunately, the act targeted only the apparatus of monopoly instead of the cause.  Nine years later the president of New York based American Sugar Refining Company, which controlled 98% of the market through its famous Domino brand, admitted same in testimony to an industrial commission.

Tariffs breed monopolies like swamps breed mosquitoes. In 1904 John Moody’s The Truth About Trusts listed almost 320 examples.  All but about 20 were protected by tariffs.  The biggest, United States Steel, was deliberately formed to suppress competition.  Even though steel could be produced more cheaply in America than in other countries, U. S. Steel sold products overseas at lower prices than domestically.  Wire nails, for example, which sold domestically for $2 per hundredweight, were priced at $1.55 in Britain.  The beneficiaries were the steel trust and its ecosystem, which included its Northern workers.

In 1889 when Andrew Carnegie toured the emerging Southern steel industry centered in Birmingham he declared, “the South is Pennsylvania’s most formidable industrial enemy.”  About ten years later Carnegie’s mills were merged into—and became the largest component of—Pittsburgh-based U. S. Steel. Six years later U. S. Steel purchased the biggest Southern steel mills and imposed discriminatory pricing on Southern production. Thereafter, steel from the company’s Alabama mills included an incremental mark-up, termed the “Birmingham Differential,” of $3 per ton over the Pittsburgh quote.

To further penalize Alabama production, buyers of Birmingham steel were required to pay freight from Birmingham plus a phantom charge as if the shipments originated in Pittsburgh.  After Woodrow Wilson became President the Federal Trade Commission (FTC) investigated and concluded that Birmingham’s steel production costs were the lowest in the country and 26% below those of Pittsburgh.  Yet U. S. Steel continued to require a $3 per ton “Birmingham Differential,” which was raised to $5 after 1920.  Six months after the differential was finally abolished in 1939 shipbuilding plants in Pascagoula, Mississippi and Mobile, Alabama announced major expansions.

The consequences of absentee ownership lasted well into the twentieth century.  Former Virginia senator and author Jim Webb wrote in Born Fighting that after most of the post-bellum occupiers from the North left the South “they did so with their ownership of the Southern economy firmly in place so that their businesses could be controlled from outside the region thereby sucking generations of profits out of the South and into their own communities.”

President Roosevelt’s 1938 commissioned-study revealed that absentee ownership remained a problem and included such essential industries as electric utilities, railroads, steel manufacturing and even cotton textile mills.  Outsiders also controlled most of the area’s natural resources such as coal, feldspar, iron ore, zinc, sulfur, and bauxite.  Moreover, the more prosperous work of converting the raw materials into finished goods was located elsewhere.  The South typically retained only the lower economic value-added provided by extracting and shipping the raw materials.

About 90% of the 4.5 million American blacks at the end of the Civil War were living in the former Confederate states.  The great majority were illiterate ex-slaves needing public education.  Although the federally financed Freedmen’s Bureau spent over $5 million for black schools after the Civil War, Southerners essentially paid for the schools many times over through the $68 million in federal cotton taxes collected before the end of 1868.  After Congress discontinued the Bureau, the former Rebel states had to rely upon their own meager tax resources to pay for educating all their pupils, including the 40% who were black.

One effort in the 1880s to provide federal funding for public education failed to gain traction.  In an attempt to avoid cutting tariffs New Hampshire senator Henry Blair introduced a bill to provide temporary federal monies for education in all the states.  The aid was to be apportioned among the states based upon their respective rates of illiteracy.  The initial amount was to be $15 million annually, but it would decline each year until it reached $1 million.  Based upon the South’s higher illiteracy, the region would have been allocated over two-thirds of the total.

The Senate voted on the bill repeatedly over the next decade and most of the South’s senators voted in favor it.  Within three years ten Southern state legislatures also passed resolutions supporting the bill. Some Southern representatives, however, balked because they did not want to give the appearance of supporting protective tariffs, which were creating the excessive budget surpluses that funded liberal Union veterans’ pensions among other Republican political spoils.  Some Southern opponents were also concerned that once the temporary subsidies expired their states would inherit higher educational budgets than they could sustain from their own tax base.  Since most Northerners preferred to spend more money on Union veterans’ pensions instead of federal aid to education the bill never came to a vote in the House.  It died of neglect once higher Union veterans pensions absorbed the budget surplus.


In sum, while it is necessary that Reconstruction history include a thorough analysis of racism and its protracted effects, contemporary historians should also devote comparable attention to the numerous non-racial political and economic factors that are equally important.


Last changed:  07/07/17

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