Origins of the American Civil War (4/4)

The panic of 1857 and the coming of the Civil War

Historiography

Dating back to the conflicts pitting Alexander Hamilton and Thomas Jefferson against each other, there had been a tug-of-war between agrarians and urban and financial interests over banking, trade, land grants, and internal improvements. Not until the 1920s, however, had the idea of the war as an irrepressible economic conflict, rather than a moral conflict, receive full expression in the historical literature on the subject.

In The Rise of American Civilization (1927), Charles and Mary Beard argue that slavery was not so much a social or cultural institution as an economic one (i.e. a labor system). The Beards, along with Louis Hacker in his The Triumph of American Capitalism: The Development of Forces in American History to the End of the Nineteenth Century (1940), cite inherent conflicts between Northeastern finance, manufacturing, and commerce and Southern plantations, which competed to control the federal government so as to protect their own interests. According to the economic determinists of the era, both groups used arguments over slavery and states rights' as a cover.

Recent historians do not accept the so-called Beard-Hacker thesis wholeheartedly. But their economic determinism has influenced subsequent historians in important ways. Modernization theorists, such as Raimondo Luraghi, have argued that as the Industrial Revolution was expanding on a worldwide scale, the days of wrath were coming for a series of agrarian, pre-capitalistic, "backward" societies throughout the world, from the Italian and American South to India. Luraghi relates the expansion of capitalism on a world scale to the emergence of an anti-slavery movement in the United States, placing the Civil War in the context of the general abolition of unfree labor systems in the nineteenth century, from slavery in the Western hemisphere, to serfdom in Russia and robot in the Austrian empire.

Barrington Moore, in Social Origins of Dictatorship and Democracy (1966), however, disagrees, arguing that conflict, rather than compromise, depended on a certain set of historical conditions at a certain time. Using a comparative historical framework, Moore stresses how landed aristocracies were able to maintain their political and economic power into the modern era in certain societies. In this regard, the German historical record is suggestive. The political and economic links were there for an agreement between the German landed aristocracy and the nation's rising bourgeois classes. Unlike the Southern planter class, the Prussian Junkers, under the tutelage of Reichskanzler Otto von Bismarck, managed to draw the independent farmers under their influence and to form an alliance with sections of big industry that were happy to receive their assistance in order to keep the trade unions and the socialists (see Sozialdemokratische Partei Deutschlands) in their place with a combination of repression and paternalism. Special historical circumstances, thus, had to be present in order to prevent agreement between an agrarian society based on unfree labor and a rising industrial capitalism. Unlike in Germany, Northern capitalists - at least comparatively - were able to align with other groups in American society.

The panic of 1857 and sectional realignments

Abraham Lincoln
"Vote yourself a farm - vote yourself a tariff," read a campaign slogan for Abraham Lincoln in 1860.

Specifically, the serious financial panic of 1857, and economic difficulties leading up to it, strengthened the Republican Party and sectional tensions. Before the panic, strong economic growth was being achieved under relatively low tariffs. Hence much of the nation concentrated on growth and prosperity. For example, for the few years after the Compromise of 1850, sectional conflict abated until the passage of the Kansas-Nebraska Act.

Against this backdrop, however, the iron and textile industries were facing acute, worsening trouble each year after 1850. By 1854, stocks of iron were accumulating in each world market. Iron prices fell, forcing many American mills to shut down. Soon afterwards, Western farmers emerged as another distressed group. The Crimean War had propped up demand for American exports of food, but when the conflict ended in 1856, demand for food fell, resulting in a steep decline in prices.

Western farmers and Northern manufacturers would come to blame the depression on the domination the low-tariff economic policies of Southern-controlled Democratic administrations. But at least when the panic started, the depression revived latent, deep-seated suspicion of Northeastern banking and trading interests not only in just the South, but also in the West. As a result of spiraling interest payments to lenders, many settlers in the West who lost their land through foreclosures cursed "Boston plutocrats" and "New York Shylocks." In the South, where the impact of the panic was relatively slight, commercial centers in the North were the objects of similar derision. Some Southern commentators even regarded the plight of Northern manufacturers as evidence of the superiority of Southern economic institutions.

Instead, a deepening chasm would arise between slave states and free states. Eastern demand for Western farm products changed this situation, shifting the West closer to the North. Propelled by the "transportation revolution" (canals and railroads) and advancements in communication (especially telegraphs), there was a gradual redirection of wheat, corn, and other staples of Western produce toward the Northeast - once difficult to haul across the Appalachians.

However, the high cost of transportation caused wheat bought for $.70 in the West to be sold at a price of $1.20 in New York. In this context, the depression raised demands in the West for federal subsidies and internal improvements in transportation (e.g., roads, canals, and harbor facilities). Improvements in transportation would drive down prices of wheat transported by rail to the East. Above all, the depression suggested to industrialists and traders that nothing was more important than the rapid development of Western markets for goods - and homesteaders would furnish markets and respectable profits.

The panic calmed the fear of Northern manufacturers of future labor shortages resulting from westward migration, thus bolstering the case made by advocates of free land - and hostile Southern reactions to these prospects. Meanwhile, the free soil press and the Republican Party encouraged a strong popular reaction. Noting that Southern plantation interests in the Senate had killed the Homestead Bill of 1852, free soil newspapers in the West often promulgated the dubious claim that the high prices of land sold by the government had been the main cause of the depression.

The existence of free land in the United States united workers and capitalists in the United States. Not threatened by the revolutionary sentiments of the urban proletariat and uprising peasantry, industrial and agrarian elites lacked the incentives to unite as in Germany or Italy. Instead, the connection between Northern capitalism and Western farming meant it was unnecessary for the elites of North and South to unite in common interest; a union which could have averted the war.

As a point of comparison, less than a decade earlier, unemployed workers across the Atlantic, with the emphatic cry of "bread or lead!" hoisted the red flag - the first time that the red flag emerged as a symbol of the proletariat - and erected barricades to overthrow the French Second Republic.

Although bread lines and soup houses were emerging in the North after the panic of 1857, U.S. cities were not teeming with artisans and sans culottes; nor were there European-style peasant wars. While Europe was seeing the rise of radical movements, trade unions, and revolutionary programs, the United States saw schemes designed to provide free farms to needy Eastern workers after 1857. In sum, the American frontier strengthened the forces of early competitive and individualist capitalism by spreading the interest in property.

Aside from the land issue, economic difficulties strengthened the Republican case for higher tariffs for industries in response to the depression. Republican proclamations that the backward, agrarian, and feudalistic South dominated the national government, of course, played well with many constituencies across the North. It was during the Democratic Polk administration, after all, that Southern votes had been chiefly responsible for the low Walker tariff of 1846.

The Southern response

Meanwhile, many Southerners grumbled over "radical" notions of giving land away to farmers that would "abolitionize" the area. While the ideology of Southern sectionalism was well-developed before the panic of 1857 by figures like J.D.B DeBow, the panic helped convince even more cotton barons that they had grown too reliant on Eastern financial interests. Thomas Prentice Kettell, former editor of the Democratic Review, was one agitator to enjoy a great degree of prominence between 1857-1860. Kettell gathered an array of statistics in his book on Southern Wealth and Northern Profits, to show that the South produced vast wealth, while the parasitic North, with its dependence on raw materials, sucked up the wealth of the South. Arguing that sectional inequality resulted from the concentration of manufacturing in the North, and from the North's supremacy in communications, transportation, finance, and international trade, his ideas paralleled old physiocratic doctrines that all profits of manufacturing and trade come out of the land. Political sociologists have noted that these forms of romantic nostalgia tend to crop up whenever industrialization takes hold.

Such Southern hostility to the free farmers gave the North an opportunity for an alliance with Western farmers. After the political realignments of 1857-1858, manifested by the emerging strength of the Republican Party and their networks of local support nationwide, almost every issue would now become entangled with the controversy over the expansion of slavery in the West. While questions of tariffs, banking policy, public land, and subsidies to railroads did not always unite all elements in the North and the Northwest against the interests of slaveholders in the South under the pre-1954 party system, they would now get translated in terms of sectional conflict—with the expansion of slavery in the West involved.

As the depression strengthened the Republican Party, slaveholding interests were becoming convinced that that the North had aggressive and hostile designs on the Southern way of life. The South was thus increasingly fertile ground for secessionist extremism.

While the Republicans' Whig-style personality-driven "hurrah" campaign certainly helped whip up hysteria in the slave states upon the emergence of Lincoln and intensify divisive tendencies, Southern "fire eaters" certainly gave credence to notions of the slave power conspiracy among Republican constituencies in the North and West. And new Southern demands to re-open the African slave trade certainly did not help to assuage sectional tensions.

From the early 1840s until the outbreak of the war, the cost of slaves had been rising steadily. Meanwhile, the price of cotton was experiencing marked fluctuations (typical of raw commodities). After the panic of 1857, the price of cotton fell, while the price of slaves had continued its steep rise. At the next year's Southern commercial convention, William L. Yancey of Alabama called for the reopening of the African slave trade. Only the delegates from the states of the Upper South, who profited from the domestic trade, opposed the reopening of the slave trade — a potential form of competition to them. The convention in 1858 wound up voting to recommend the repeal of all laws against slave imports, despite some reservations.

The emergence of Lincoln

Elections of 1860

For further details see the main articles U.S. presidential election, 1860, Lincoln-Douglas Debates of 1858, and Abraham Lincoln.

U.S. Electoral College breakdown in 1860

The schism in the Democratic Party over the Lecompton constitution caused Southern "fire-eaters" to oppose frontrunner Stephen A. Douglas' bid for the Democratic presidential nomination. Southerners left the party and supported John C. Breckinridge, while Northern Democrats supported Douglas. As a result, the Southern planter class lost a considerable measure of sway in national politics. Because of the Democrats' division, the Republican nominee would face a divided opposition.

Initially, radicals William H. Seward of New York, Salmon P. Chase of Ohio, and Simon Cameron of Pennsylvania were the leading contenders for the Republican presidential nomination. But Lincoln, a former one-term House member who gained fame amid a a series of debates with Stephen Douglas in 1858, out-maneuvered his opponents. On May 16, he received the Republican nomination at their convention in Chicago, Illinois.

Adding to Lincoln’s advantage, ex- Whigs from the border states formed the Constitutional Union Party, nominating John C. Bell for president. Thus, party nominees waged regional campaigns. Douglas and Lincoln competed for Northern votes, while Bell and Breckinridge competed for Southern votes.

"Vote yourself a farm - vote yourself a tariff" was a slogan for the Republicans in 1860. In sum, business was to support the farmers' demands for land (popular also in industrial working-class circles) in return for support for a higher tariff. In this sense, the Republican platform that elected Abraham Lincoln in 1860 was touted as a "marriage of iron and rye." The Civil War has been called a "second American revolution." To an extent, after all, the elections of 1860 bolstered the political power of new social forces pent up by the nascent Industrial Revolution.

Southern secession

See Fort Sumter and American Civil War for coverage of events after South Carolina's secession from the Union.

With the emergence of the Republicans as the nation's first major sectional party, by the mid-1850s, politics became the stage on which sectional tensions were played out. Although much of the West - the focal point of sectional tensions - was unfit for cotton cultivation, Southern slaveholding interests were still encircled to a greater extent than ever in national politics. Before, the slave system had been buttressed to an extent by the Democratic Party, which was increasingly seen as representing an increasingly pro-Southern position that unfairly permitted Southerners to prevail in more and more of the nation's territories and to dominate national policy before the Civil War. But they suffered from a significant disruption in the electoral realignment of the mid-1850s. 1860 was a critical election that marked a stark change in existing patterns of party loyalties among groups of voters; Abraham Lincoln's election was a watershed in the balance of power of competing national and parochial interests and affiliations.

Once the election returns were certain, a special South Carolina convention declared "that the Union now subsisting between South Carolina and other states under the name of the 'United States of America' is hereby dissolved," heralding the secession of ten more Southern states by May 21, 1861.