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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