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Early US Industry

The experiences of the British blockades of both the Revolutionary War and the War of 1812 impressed upon many that local manufacturing was a necessity. The nation’s founding fathers, in particular, Alexander Hamilton and Thomas Jefferson, were quick to see that the new United States, with its industrious people and rich resources, would have a role to play in this industrial revolution and the Some examples of early American manufacturing prowess include the Springfield Armory, founded by George Washington, the Kentucky Rifle and the Cotton Gin.

Today’s labels of protectionist and free trader were invented by wealthy slaveholders.

Northern states were quick to local manufacture. By 1776, nearly 14% of the world’s pig iron production was actually in the Northern states. (Citation). Remington Arms was established a few years later, as was Baldwin Locomotive Works. A number of early steel companies opened throughout Pennsylvania and into New York. A young shipbuilding industry emerged in Philadelphia, lead by William Cramp and sons. Meanwhile, the Southern states continued down the path of a slave based, rural economy.

Despite this promising start in manufacturing, there was no way the Northern states could even hope to compete with the scale, quality and affordability of British. In those days, Great Britain was the manufacturing leader of the world. To protect its industries, the North sought legislation to keep the British out.

The South did not agree.

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A Northern factory and Southern plantation, pre-Civil War. Note the steam engine and modern brick factory on the Union side, versus the manual effort of the plantation.

Southern Free Trade

When the North began to press for tariffs and other protection against British imports, the response from the South was dramatic. Why should Southerners, many asked, pay more for goods at its own detriment, to benefit the North? The North saw this Southern self interest as a sort of treason. Both sides were enraged. Today’s labels of “protectionist” and “free trader” were actually invented by wealthy Southern slaveholders. Many historials feel the economic argument of free trade versus protectionism had as large a role in instigating the civil war as the slavery itself – although the issues do go hand in hand. Free trade really isn’t possible without slave labor.

Tariff Act of 1828

The Tariff Act of 1828 was the first of many tariffs the North would either pass or try to pass over the objections of the South. This was a comprehensive set of tariffs, the original text of which can be found An Act in Alteration of the Several Acts Imposing Duties on Imports. The South bitterly opposed the Tariff Act of 1828, but southerners made a huge political error on their part allowed the Tariff Act of 1828 to pass. Southerners thought that by inserting tariffs that blocked those things the North wanted, the North would oppose the bill.

This was an enormous miscalculation. The North simply saw more tariffs as a good thing. With the support of the new western states, the act passed. Southerners in their home states were outraged. While in the North, this act was merely the Tariff Act of 1828, in the South, it was known as the Tariff of Abominations. South Carolina declared a special convention to declare states had the right to explicility nullify federal law. This Nullification Crisis nearly lead to civil war itself and was only abated by the actions of then President Andrew Jackson and congressional leader Henry Clay.

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Northern Poster Condemning the South on Free Trade.

Towards Civil War

Over the next few decades, tit for tat differences over tariffs would continue. Southern Democrats, free-traders, advocated lower tariffs, while Northern Whigs would favor higher tariffs. When the Whigs died as a political party, the newly formed Republican Party took up the cause of higher tariffs. The Democrats advocated free trade fiercely, but their cause of free trade was a losing proposition. By the time the Civil War erupted in 1861, the economic balance of the United States had swung firmly to the North.

Northern Economic Advantages

The North raised nearly a billion dollars to fight the war (citation), while the South could barely raise 100 million. Out of 128,000 manufacturing centuries nationwide, 110,000 were in the North. Of over a billion dollars invested in the American property, more than 950 million was in the North. Over 90% of the US GDP was concentrated in the North. (citation) This enormous economic advantage weighed heavily on the battlefield.

Northern production dominated the war. The North was able to produce sufficient ships to effectively blockade the entire South, crippling the Southern economy. The South produced a handful of ironclads, of which the CSS Virginia is the most famous, but the North produced a number of ironclads and turreted warships, of much greater technological sophistication, and completely cut off the South from international trade.

The Union produced thousands of cannon while the South produced none.

The North would produce 1.5 million rifles to equip the Union Army with, while the South had to purchase its 700,000 rifles from Great Britian. The North was able to equip its cavalry with Spencer and Henry rifles, but the few Southern copies were of such poor quality that Robert E Lee wrote that they had undermined his troops morale. The Union produced thousands of cannon, but the South produced none, and Southern armies were forced to rely on captured cannon for its effect. One could argue this deficiency cost the South the war by itself. A Union battery had six guns while a Confederate had but four. The famous Confederate artillery barrage of Gettysburg prior to Pickett’s charge was cut short by a lack of ammunition and the mismatch in stock caused them to miss their targets.

By the war’s final phase, the South was overwhelmed, outspent, and ultimately destroyed by a North that saw the wisdom in protecting and developing its industrial capability, while the South was doomed by the ultimate free trade economy – slaves working on farms with virtually all manufactured goods imported. By the end of the war, many Confederate soldiers did not even have adequate uniforms. All the while, the North had capacity to spare. Yankees invented the Gatling gun, but not even bothering to use it.

fortpulaskiUnion Destruction of Fort Pulaski. The Union brought advanced rifles with a range of 3 miles instead of the predicted .5 miles and forced the surrender of the fort in 40 hours. The fall of Fort Pulaski effectively knocked the Confederate port of Savannah out of the war, crippling Southern shipping.

Continuing Protectionism

After the war, victorious Republicans retained their protectionist Northern leanings for nearly another a century. America’s industrial capacity surged. The small factories that powered the North to victory in the Civil War became the sprawling industrial centers in Pittsburgh, Detroit, Cleveland, Philadelphia and New York. Those massive centers produced not only the goods that evelated the United States to the first among nations, but also lead her to victory in World War I and World War II. By then, the United States had thoroughly lapped Great Britain to become the dominant manufacturing power of the world.

b24production
 B-24 Heavy Bombers under construction.

They carefully nurture their own industrial capacity as we Americans give ours away.

The Free Trade America

Today is different, of course, the United States is a free trading nation. Democrats since the reconstruction have staunchly advocated free trade, and in the 1980s Republicans capitulated and followed suit. The great fires of the iron mills in Pittsburgh and Bethlehem have been quenched. The mighty rubber factories of Akron are being converted into apartments, and the sprawling centers of Detroit produce far fewer cars, for so many now are made in Japan, and in Korea, and China. The great electronics center of RCA in Camden is gone, while new chipmaking centers emerge in Taiwan and on the mainland.

Protectionist rivals such as China, South Korea and Japan export broadly while they invent ways to keep their own markets closed. They carefully nurture their own industrial capacity as we Americans give ours away. New York City cannot even rebuild the World Trade Center, but in China, some of the worlds tallest buildings are under construction. Chinese shipyards now turn out the 28% of the world’s merchant shipping, consisting of multitudes of modern 100,000 ton container ships. The United States produced just two commercial ships of greater than 20,000 tons. Is there any doubt that those rival shipyards might not produce more aircraft carriers, more submarines, and destroyers, than our own Norfolk Navy Yard’s one carrier every five years, or one submarine every two years?

Eerily, Americans still feel secure in their security. We are deluded into the false hope that our diminished capacity to barely claw out a dozen fighter aircraft and two ships per year will present a serious challenge to nations with the latent capacities to build them by the thousand, just as America herself once did.

forclosure

A foreclosure sign.
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