From Slave South to New South: Public Policy in Nineteenth-Century Georgia

By Peter Wallenstein | Go to book overview

11
CONFEDERATE CONTEXT

STATE FINANCE in Civil War Georgia must be viewed in the context of Confederate national finance. As in state and county finance, Southerners voiced the prevalent values and ideas regarding the extractive role of government. Taxation, as Confederate Secretary of the Treasury George A. Trenholm observed, provided "the machinery by which the general contribution is distributed and equalized."1

The Confederacy, like Georgia, found it increasingly essential to levy taxes. Taxation absorbed funds from the wealthy, who could most afford to have a portion of their purchasing power diverted. It enabled governments at all levels to control the supply of money, and with it the rate of inflation, at least a bit, by taking in some of the currency they distributed to purchase goods and services.

Like the states, however, the Confederacy obtained its funds less by levying taxes than by creating various forms of public indebtedness. Though it imposed a war tax in 1861, not until April 1863, halfway through the war, did it enact a comprehensive tax law. During its four years, the Confederate government derived from taxes only 7 percent of its total revenue.2

In fact, much more than Georgia, the Confederacy violated Secretary Trenholm's justification of taxes. Georgia's state and county governments more closely approximated the ideal of taxing citizens "in proportion to the value of their property." In contrast to the Confederacy, Georgia derived half its wartime revenue from either taxation or public investments.3

Because the Confederate government did not tax more heavily, it had to borrow funds or seize supplies. Sales of bonds, particularly in the first years of the war, produced one-fourth of total Confederate revenue. Another half came from the issue of treasury notes. When the Confederacy levied taxes insufficient to retrieve the treasury notes from circulation, it created an enormous inflation, and it turned to impressment to obtain provisions and other supplies for the military. Impressment contributed 17 percent of total Confederate receipts -- and it often resulted in the war's being a poor man's fight in financial as well as military terms.4


Confederate Finance

Before the summer of 1861, the Provisional Congress of the Confederate States levied no direct taxes. Members anticipated no war, or only a short one, and respected what they sensed to be a widespread aversion

-121-

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From Slave South to New South: Public Policy in Nineteenth-Century Georgia
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Maps, Figures, and Tables ix
  • Acknowledgments xi
  • Introduction 1
  • 1 - Society And Politics 7
  • 2 - State Power And Tax-Free Finance 23
  • 3 - The Accommodation Of The Public 32
  • 4 - Tax Upon The Time And Labor Of Our Citizens 40
  • 5 - Creating A New Revenue System 49
  • 6 - What Disposition Shall Be Made Of The Money? 61
  • 7 - Great Objects Of The State's Charity 74
  • 8 - Depriving A Whole Race 86
  • 9 - Rich Man's War 99
  • 10 - Rich Man's Fight 110
  • 11 - Confederate Context 121
  • 12 - Power And Policy 131
  • 13 - Freed Men And Citizens 140
  • 14 - All The Children Of The State 152
  • 15 - Higher Education For A New South 160
  • 16 - Railroads, Debt, And Reconstruction 170
  • 17 - A Tax Base Without Slaves 183
  • 18 - Conscripts, Convicts, And Good Roads 196
  • Epilogue: From Eighteenth Century To Twentieth 208
  • Essay On Primary Sources 215
  • Notes 219
  • Bibliography 257
  • Index 273
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