Extending the SouthÂ’s Agony

[Straight Arrow]

After spending the last few months wandering around in the Civil War, I thought it might be fun to kick around a few suggestions that the Confederate States of America might of used to strengthen and extended its life.

Here are a few ideas to throw into the ring and start us off – Please make your disagreement known, add to an area, or go ahead and create a section topic.

Industry
The South did an amazing job of creating an industrial base. However, they could have improved their performance by using April to August 1861, when the blockade was next to nonexistent, to export large amounts of cotton and to import large quantities of metals: tin, copper and iron. This would have helped alleviate the South’s dependence on the Ducktown mine, their main source of copper, unfortunately located in Tennessee. The iron would have enabled the Tredegar to run at more than a 70% capacity.

Other critical imports would have been machinery to make machinery, cards for fabric production, wool and leather for shoes and uniforms, coal for energy, and locomotives, cars, rails and chairs to help ease the pressure on the transportation system.

Coordination between the states and different government departments was very poor. A Tsar should have been set up to manage and to prioritize resources, labor and production.


Financial
The South printed way too much money. This resulted in an inflation that ripped out the economy’s heart. Often, what goods were available ending up being held off the market in bid for higher prices. The excess cash supply could have been partly soaked up through taxation, but the Southern government did an extremely poor job of taxing. Historically, they relied on the states to provide funds through levying taxes. However, the states largely chose to not pass on the pain and raised the required funds mainly through bond issues and printing their own paper money.

The South of would have benefited from a strong currency, one people trusted to keep its value, a currency based on some thing of tangible worth, not just faith and hope. During the Confederacy’s formation, there was a proposal for the government buy up the current cotton crop. The cotton would then have been used to fund government purchases in Europe and to prop up the gray back.

Printing of state currency should been controlled and limited. Specie held by Southern banks could have been seized to fund Europe purchases. Government bonds backed by cotton could have been offered in Europe earlier and in greater numbers than they were.

Counterfeiting was a major problem. Better government control of production would have helped out here. It’s often remarked that many of the fake bills were better made then the real thing. Production was hand cranked, but signature stamps, cutting boards and a 75% cotton /25% linen paper would make it a lot harder on the forgers. In addition, if the government had invested more in quality paper, they could have ulitized watermarks and interwoven treads.


Any other areas you would care to open up for discussion?

[pgr]

Well I think the South did pretty well, all things considered.

Concerning the export of cotton, your position is of course based on hindsight. The Rebs in 1861 were pretty confident that the war would be short and that they would be able to defend their territory, so why worry about raw materials? For them, cotton was a much more important diplomatic tool. It was CSA policy to stop all export of cotton. The thought was that the cotton shortage would be so severe, and cause such industrial unemployment in Britain and France, that they would intervene.

Even after that didn't pan out, the government's cotton monopoly, and high cotton prices abroad, allowed the CSA to make arms deals abroad. Blockade runners came in with arms (muskets and cannons etc.) and left with holds filled with cotton. In a way cotton was the South's "hard currency," so even if the value of the paper money collapsed, the CSA still trade for arms. Even in 1865, enough was being run through Wilmington, that Lee's people never lacked for arms or ammunition. (And ultimately, it made a lot more sense for the south to focus on importing finished arms rather than raw materials).

As for the currency issue, counter fitting was a problem, but at a certain point it is a confidence issue. As it became increasingly clear the south would loose, the money was bound to become useless.

I'm not sure it would have made much more of a difference had the south invested more in domestic industry, because much of that industry ends up getting overrun. The beauty of blockade running is that the factories of England would always stay out of the reach of the USA.

[tripax]

Cotton prices were somewhat low in early 1861 as 1859 and 1860 had bumper cotton crops. In fact, the entire 1850s saw a large ramp up of cotton production in the US and processing in the UK and early 1860s saw a contraction of cotton production in the empire even before the war started. I don't know how high tariffs were, but cotton trade probably wouldn't have brought in significant money for the government. Also, in 1861 the Confederacy was amply funded by bond issues. On both sides during the war subscription of bonds was more a function of confidence than of the volume of bonds already issued.

So to me, if the confederacy should have imported war supply in 1861 then their failure to do so probably wasn't related to their cotton embargo, but rather to a failure of imagination that the war would last so long. Also, as far as I know and as pgr says, no battle was lost by either side due to a lack of ammunition in the wagon trains.

The financial issues you bring up sound more like problems with federated states during a war rather than simply poor performance by the central treasury. I guess these issues were important, but I wouldn't blame Richmond but rather that in this sense the large, increasingly federal Union was fighting a strong alliance of small states.

Overall, it sounds like you are suggesting a very centrally controlled economy where a central government can seize private property and sell it on the world market. I don't know how successful this policy would be - the population would hate it, international (mostly private) trade partners would be uncomfortable with it, and foreign governments would not be happy with it. I think this game presents an image where the central government has a lot of power which probably didn't and couldn't exist. In reality the war was funded almost entirely by bonds on both sides. Cities sometimes donated money to the cause, but city income didn't always have a large direct effect. Income taxes and tariff income were relatively low, no where near on par with bond income.

[pgr]

Overall, it sounds like you are suggesting a very centrally controlled economy where a central government can seize private property and sell it on the world market. I don't know how successful this policy would be - the population would hate it, international (mostly private) trade partners would be uncomfortable with it, and foreign governments would not be happy with it. I think this game presents an image where the central government has a lot of power which probably didn't and couldn't exist. In reality the war was funded almost entirely by bonds on both sides. Cities sometimes donated money to the cause, but city income didn't always have a large direct effect. Income taxes and tariff income were relatively low, no where near on par with bond income.

I'll just add that that I doubt it would have been possible for the CSA federal government to have assumed that kind of power, given how many fights there where over states rights within the confederacy.

At the end of the day though, there was never a "war supply" (using the game term for it) problem in the South, there was a general supply problem. In 65, Lee's people lacked food, uniforms, shoes. (Not to mention bread riots in southern cities). The South did achieve something of an agricultural revolution. In 61, the southern agricultural economy was geared to cash crops, while they imported foodstuffs from the North (think grain and corn).

Southern plantations did an amazing job replanting for food stuffs during the war, but they still had to deal with a limited transportation network,that was really built to facilitate trade between the North and the South, not between the states of the South. The thing that would have really helped would have been more railroads and rolling stock... but the limited iron working capacity that could have been used for locomotives was needed for arms (ditto for blockade runners). In the end, all that agricultural bounty had a hard time making it to southern troops, but it did help northern troops live off the land as they invaded!

As for the idea of importing loads of raw materials in the first months before the blockade, I'm not sure it would have been possible. It's not like the UK or France had huge surpluses lying around with legions of ships ready to run to southern ports. The south would have had to send buying agents, buy up the stuff, organize the shipping etc. It all takes time, and I think there would have been a big throughput problem in shipping the stuff to the South in the early days.