The Economics of the North & South Before the Civil War

0:00 [Music] while slavery was the dominant issue that led to the Civil War tensions between the north and the south had begun due to other issues such as bitter

0:21 debates about federal tariffs in infrastructure infrastructure or internal improvements as they were called in the early and mid 19th century were the major domestic transportation projects paid for by Congress and which included canals Turnpike’s and ports placed particularly in the western portion of the country stretching out to

0:41 the Great Lakes in the Mississippi River the flipside of the internal improvements was the tariff the list of taxes on specified imported goods in theory the tariff would raise the revenue to pay for the internal improvements the tariff would finance the infrastructure for goods and services to travel in a nationally

1:01 linked market in the economy would prosper independent of foreign trade in general northern business interests and shop owners supported this arrangement along with northern statesmen such as Kentucky’s Henry Clay John Quincy Adams of Massachusetts and Abraham Lincoln of Illinois this arrangement of tariffs on the one hand in infrastructure

1:21 development on the other was called the American system however the south and the developing Democratic Party were against the American system both the internal improvements and the tariffs President James Madison vetoed an early internal improvements bill as did Andrew Jackson because they believed it was

1:42 unconstitutional for the federal government to fund such projects John Calhoun the South Carolina Senator and for a time vice president reversed his earlier support of internal improvements and became a leading opponent the tariff was the most hotly contested issue from 1815 to 1835 given that the tariff

2:02 appeared to be permitted by the Constitution in article 1 section 8 supporters argued that it was useful in helping young American industry to grow protected from mature British competition Calhoun and other tariffs opponent many from the South argue that a protective tariff was actually a violation of the Constitution they argued that to be protective a tariff

2:24 had to curtail imports from flowing into the country and this was inconsistent with the constitutional mandate to raise revenue through the tax if imports trailed off because of the tariffs then the government would not raise revenue and the tariff would not qualify as a tax given that the North had a larger industrial base than the South the South was also concerned that the American

2:45 system enhanced the power of the north at the expense of the agrarian south and that tariffs meant the South would pay more for protected goods they bought from the industrial north the politics of the tariff became most heated with the great bitterness over the protective tariffs that southerners called the tariff of abominations of 1828 John

3:07 Calhoun wrote a treatise denouncing the tariff called the South Carolina exposition and the convention was held in South Carolina that claim to nullify the federal law officials in South Carolina based this power of nullification on Thomas Jefferson’s 1798 Kentucky resolution for States to declare federal laws null and void in

3:28 response to this challenge Congress passed a force bill to enforce federal law and compelled tariff collections in South Carolina President Jackson threatened to execute it nonetheless a compromise tariff with lower rates came in 1833 brokered by Henry Clay and Congress in the crisis passed at this

3:48 point in the mid 1830s slavery became the dominant political issue dividing the north and the south slavery just about died out in the north in the 1830s but in the south given the rising demand for gin cotton it had expanded substantially this made the south economically dependent on slavery and fearful of the growing efforts of

4:08 northern abolitionists to end it by 1860 there were over 3.5 million slaves in the United States as the nation expanded West the question of whether new states would permit slavery caused great tension as southern slaveholding states feared being outnumbered by free states in Congress this led to the Missouri Compromise of

4:28 18:20 in the compromise of 1850 but these compromises were only temporary solutions for the growing tensions other proposed solutions included plans to compensate slave owners in order to convince them to accept abolition but those plans were far too costly in the end it was the question of slavery more than anything else even the tariffs that

4:49 drove the south to secede as was made clear in the southern secession convention statements of 1860 and 1861 [Music]