Confederate Blockade of the South

0:00On the blockade, that's certainly a big part of the overall scheme of things. But in terms of the southern shipbuilding effort, they laid down many of these vessels, the iron-clad vessels with the coal-fed engines, but most of those were never completed. Every time it got close to completion, it seemed the Union would show up to destroy it or capture the ships. That really wasn't a very effective endeavor. And as I said, they largely dropped the idea of buying ships from Europe, whether it was because Great Britain wouldn't provide them with a ship because of politics, or whether they weren't willing to pay the money that would have gotten in the ships, maybe through surreptitious means, and some of the ships that they did receive were through surreptitious means where they would buy a ship and then bring it out to sea and then another ship would show up with the guns and combine the two to create warships.

1:17One of the big problems that we've discovered in our research that's in this book and in some of our articles, is that the Confederate policy was not only productive in the sense of building ships to test the blockade fleet, but it was actually mostly counterproductive. And this is something we label in the book, and it's the title of one of our articles in the quarterly Journal of Austrian Economics, The Confederate Blockade of the South, where where the South refers to the Southern economy and where the Confederacy refers to the Confederate government. Essentially, what we find is that they were making a bad situation worse. In other words, the blockade was a bad situation for the Southern economy and Confederate policy essentially made things worse.

2:39And so what we did was we looked at some of the policies that are either directly or indirectly related to the blockade and see what economic theory would predict would happen. So what would these policies cause? And then of course we looked at the evidence to see if theory was guiding us in the right One of the things you look at that occurs at the beginning of the war is the policy of impressment. Impressment is a policy where basically the government grants itself the right to buy your goods at whatever price they decide.

3:30Not what price it's worth, not what price you would agree to, not the price that's actually in the market, but the price that they set. And very often, officers of the Army would basically take your products and give you a certificate that says the Confederate government owes you so much money. So they're buying goods at below market prices. Now, whenever you have a situation where a big buyer gets to buy products at below market prices, that sends negative signals to the producers of these products. So if the Confederate government is buying grain at half the market Market price, grain producers are going to be discouraged from growing more grain.

4:30What's ever is left over, of course, is actually going to pump up the market price because there's less left for the civilian population. It also creates a lot of bad feelings. And when a government is going to war, the last thing you want is for your population to have bad feelings towards the government. You don't want that. You want people to feel good about your government, you want them to feel patriotic, you want all the support possible and you don't want any dissension in the ranks of the civilian population. So you get bad feelings, you get lower supply in the future because suppliers are being and People are even reluctant to bring their products to market.

5:20And the problem with that is if you're a farmer in the South during the Civil War and you're out in the country someplace and you're growing grain and raising hogs and raising chickens and all this kind of stuff, the officers of the Confederate government may never come

6:09Often, some of the worst situations for the Confederate government, for the South, is when the Army would get trapped, right? When the Army would get trapped in a place like Vicksburg. And what happened? Well, they didn't have enough food to survive the holdout, or being surrounded by Grant's It turns out there was tons and tons of food and provisions in the countryside, which is how Grant and Sherman survived. So this is just an isolated example that I'm going through here, but I think it's worthwhile Now, something's not in the book, but I think it's pretty instructive, okay?

7:12This is the Mississippi River, my art teacher would be so proud. And this is Vicksburg. Now the problem with attacking Vicksburg is it was well defended, militarily it was well defended. They couldn't breach the city of Vicksburg under really almost any circumstances. And also in addition to this, there were tributaries and I think like swampland that made it very They're difficult to get to Vicksburg.

7:57There was a railroad line and a way in, but they tried that before. They tried the land route, and what would happen would be the Southerners would go behind their backs, cut off their supplies, destroy the railroad, and Grant would have to turn back around and go back up to Memphis, up here someplace. So, and they couldn't really use this side of the river, and so this was basically their only way in, where they could keep a large army, 50 to 100,000 soldiers involved in this effort to capture Vicksburg and open up the entire Mississippi. This was part of the Anaconda Plan, remember, that we would surround, the Union would surround The South cut the Mississippi through so that they would control that along with all of the cotton growing area that that would entail and so at that point the Union would have possession of all of the best cotton land and the ability to export it back to the North through New Orleans, which they had already captured, and it would prevent reinforcements

9:19and commodities moving from the Trans-Mississippi territory of the Confederacy, basically Louisiana, parts of Louisiana, Texas, and Arkansas, and so on. So what Grant does is he decides on a very, very unusual strategy. He's going to get his ships with his soldiers, a big armada, and he's going to run them past Vicksburg, and Vicksburg has guns trained on these things, but still ironclad ships can get through, but prior to this strategy they didn't want to get through, they didn't want to get past Vicksburg and then have to go back up, that's no good, eventually you're going to lose What he did was he landed the troops. Tens and tens of thousands of troops behind enemy lines, essentially cut off without any provision for new supply. But what they were able to to do is live off all this land. They were able to live off the land, they were able to live off all of the commodities, all of the foodstuffs that were available on all

10:47the farms. But very little of that had been brought into Vicksburg and of course the Confederate The army there held out for quite a while, but it was reduced to basically no rations, very little food, the soldiers were starving to death, and so they had to surrender. I think they surrendered on July 3rd or 4th, 1863, is that right? Same day as Gettysburg. Yes, well it was an important moment, it was probably one of the pivotal moments of the land battle, but basically the loss resulted from the fact that Grant and Sherman could live off the land, the soldiers could not.

11:46If all of those provisions had been brought into Vicksburg, those soldiers could still be fighting out there in Vicksburg. And Grant would have never been able to breach the city without massive, massive casualties. So when you say impressment, you first start thinking, oh, you know, that doesn't seem like that would have much to do with anything. But in reality I think it plays a pivotal role in events and in the economy. Now... Well, yeah, you can, and that can be conscription too.

12:31But impressment is anytime the government is basically taking things without paying for them, or without paying the full market price. Was there a vote in the country? I mean, was there a representation for their representation, the Confederates, about the lawfulness of it? Did the Confederate Congress exceed the idea that the government should take commodities at low prices?

13:09Law. But I don't know what happened in subsequent, you know, legal proceedings, because I'm almost positive, like in any other case, that legal proceedings would have resulted from this kind of law because of abuses of the law. And, you know, there's a lot of commentary that this policy in certain places would break down into sheer robbery where the military officers would not be taking things because they were necessary, but taking things because they just wanted to take them and they had the authority to do so, and so the military in some cases would take too much, they would hoard these resources, they would waste some and resources because they had this extraordinary legal authority, power, to get resources at much reduced rates.

14:08The end of it, I think, is the Fed had to go back to the Fed again, and then they were talking about Georgia, because they were still in the uniform, but they were going to be harder to come to, and they were learning how to do other things, so it made them a little bit less.

14:38Apparently the government and the governor of Georgia was more emphatic about states' rights. And so he and a couple of the other governors were on the front lines in terms of advocating states' rights and trying to block the Confederate government from doing certain things. And so they were very activist when it came to provisioning their soldiers. That's definitely true. One of the things that the Confederate government did at the beginning of the war was they impressed ships. After the foreign ships left the South at the beginning of the war, there were only about 10 ocean-going, iron-based, ocean-going ships.

15:35Now these all could have been used for trade, if they had been put to that use. They could have been outfitted like a blockade runner and put to use running Confederate cotton to Europe and bringing things back, like marine engines and weapons and weapon building equipment that would have been very easy to get into. Yeah, exactly. And like we have here on the Auburn campus. They could have gotten that stuff in on a, you know, just one or two runs would have made a big difference at the beginning of the war. If they could have brought in heavy capital equipment into the South, that would have made a big difference.

16:27And remember, at the beginning of the war, the blockade was mostly a paper blockade. So there were a lot of open ports and not many Union vessels patrolling. But they were all impressed either by state navies or by the Confederate Navy. And they were almost all not put to any good use at all. Most of them really didn't do anything during the war. And so they were wasted and very often destroyed. Amongst the best ships, the biggest and most powerful of the ships, one was sunk as an obstruction in the James River to protect Richmond against any possible naval run at the city of Richmond that may or may not have been a good idea.

17:19Another one was used for the Confederate Naval Academy to train sailors. I think that was probably a particularly nonsensical use to train sailors for ships you don't even have and you're using one of your best ones in that capacity. Another one, the Nashville I think it was, really wasn't of any use to the war effort until after it was sold back to private interest in 1862. So not only did Impressment really do anything for the war effort, really it was a waste of resources, but it also would have discouraged anybody from trying to bring new ships in.

18:05I mean if the Confederate government has the authority to confiscate new ships, then by By running a new ship into the Confederacy, you're putting yourself at a lot of risk, a lot of cost, and you may end up just losing your ship to the Impressment Policy. Now another thing that was done was that the governments actually got into the business of blockade running. The Confederate government and the state governments got into the business of running the blockade themselves, competing against the blockaders.

18:53And anytime government comes in and competes with private enterprise, the private enterprise people get pretty nervous because they know that the government can operate at a loss and drive down your profits and essentially ruin your business. They can ruin your business simply by being in business. And so that was also a problem. Later on, the Confederate government would declare that 50 percent of all cargo space on blockade runners had to be allocated to the Confederate government. So this further discouraged private blockade running.

19:39As a matter of fact, a lot of private blockade runners made special deals with state governments to become state enterprises, you know, of the state of Georgia, North Carolina. They were really private enterprises, but they wanted to be called state enterprises so they wouldn't have to be subject to that confederate 50% of your cargo because the The state ships were essentially supposed to be immune to that tax. The case in the book here in Chapter 2 of the Little Ada, which was a blockade running ship out of Savannah, I believe, is very instructive here.

20:27Governor Brown of Georgia refuses to allow the Confederate government to get 50% of the cargo space on this blockade run, the Little Ada. As a result of that, President Davis refuses clearance to allow Little Ada to leave harbor because the Confederate soldiers are guarding the entrance to the harbor. So Governor Brown doesn't let the Confederates use the ship. So the Confederates say, well, you're not going to get to leave the harbor, we'll fire on you. I thought Davis was a great performer in the states, right? So he's up against the state of Georgia?

21:18Yeah. Well, I mean, these are politicians. And you know, you may be a great person for states' rights if you're the senator from Mississippi, but if you find yourself as president of the Confederate states, you know, all of a sudden your little deal starts to change. You know, we see that in politicians all the time. A governor from Texas, for example, may say certain things while he's governor, but if he becomes president of the United States, all of a sudden he looks like it's day and night. George. Oh yeah, limited government, you know, you have to have the authority to do everything and he just said, well it looked good at the time, so I just acquired something of a billion square acres.

22:11Yeah, so that kind of thing happens all the time, so this ship, this little ADA is in In the harbor, and while the confederates and the Georgians are debating all this issue back and forth between the capitals, the Yankees come in and capture the ship. I think this was middle late period. So the Yankees see an opportunity, this boat is just sitting there, loaded down with cargo, without much crew there because they don't have the authority to leave, so they come in and take the ship.

22:59You cut it out like the British used to do in the past? No, they tried to run it out of the harbor, but they found that the Confederates were blockading it in, so they had to turn around and run back out the way they came. So that gives you some idea of the state, of what the states and the Confederates were up to with respect to trade. Now when we get into 1864, the Confederate government becomes a lot more draconian with respect to trade. In February of 1864, Confederate Congress is in session and they're getting desperate.

23:45But both sides are actually getting pretty desperate at this point. Lincoln has also had a lot of troubles in his facing reelection, so things are bad on both sides. In 1864, in February, the Confederate Congress passed a prohibition on importing luxury goods. Now like the policy of impressment, I forgot to mention with impressment, historians have I've always said, you know, it was a good policy, but it was just too little, too late. They just didn't do enough impressing to give the supplies to the army. So historians think that it was, impressment was a good idea, but they just didn't do enough of it. And likewise, with this prohibition on luxury goods, you very often find them saying, you know, this is a good idea, but they did it too late in the war, they should have done it right away.

24:34And they should have eliminated many, many more luxuries than they actually eliminated. We provide a list in the book, in chapter 2, page 50 and 51, of all the things that were prohibited, large classes of things, all kinds of alcohol products, all kinds of jewelry items, perfumes, paintings, playing cards, clothing, wines, manufactured good glasses, dolls, toys, cabinets, household furniture, the list goes on and on. Well in economics, in contrast to the historian's view, in economics, this kind of prohibition on Luxury Goods had a doubly negative effect.

25:32One of the things that was really unnoticed or unknown to the Confederate Congress was a lot of these luxury goods came into the South in the hands of the blockading running crew. Okay, so they weren't, it wasn't necessarily the cargo of the ship, it was the crew's own stuff. If you're on a crew... They bought it on their own. Right, they bought it on their own. Well, now, it's very, very important. Now, you're on the crew of a blockade-running vessel, and you get to bring your own bag on board.

26:17You get a little space for your own stuff. That's true on any ship. They have to have place for stuff. Now, they really didn't need it on a blockade running thing because you would just go from, you know, Nassau to Wilmington in one or two days. And sailors don't have to change their clothes or anything like that. So, but what they did was they would have had these luxury items in their hold or in their bag. So they would be bringing in, you know, prized goods, luxury goods, medicines, playing cards, all sorts of things, tea and coffee. And then when they got to port, they would sell those things on their own account.

27:07And that essentially was their profit. So their rationale for doing this, the captain and Human Crew was based not as much on pay as it was on this idea that you could bring your own stuff in and you could make a lot of profit off of it. So this really took away a lot of the incentive of the Captain and the Crews. It also cut off the whiskey supply, wine, whiskey, alcohol, products of all sorts. And many states passed prohibitions on making alcohol because they thought, well, we need the grain for bread. We need to sustain the local population of bread if we started, you know, making whiskey with it. Well, that's frivolous and, you know, people might get upset and so on and so forth.

27:54So they, alcohol was in very short supply and, you know, when you first think about it, you know, this is wartime, we don't need alcohol, you shouldn't be drinking anyways. I mean, this is a serious situation. But of course, that ignores the fact that alcohol is very important for military effort. Not in terms of getting the troops juiced up, but just in the fact that alcohol has traditionally been in the rations of all armies and all navies. Until modern times, alcohol, in the classic example, is the rum ration for the British navy. It's a compact way of carrying around lots of calories in a little thermos or a little jug or a little something.

28:46You can carry around the equivalent of a whole giant bag of bread in a little liquid container of alcohol. It doesn't have a lot of nutrition, but it has the calories there that can sustain troops. It's a morale booster too. There's no doubt about that. And thirdly, it's very important for medicines. It's very important for the medical profession in terms of sterilization. Of course, they didn't know much about that. In terms of reducing pain, there was a lot of amputations and they didn't have a lot of great anesthesia at the time, and alcohol was often used to dull pain.

29:38And thirdly, most medicines were produced in some form or another with alcohol, tinctures and all sorts of medical drugs were required in the era of human life. As a doctor, I would say looking at the armamentary medicine between 1850 and 1850, I think the people in the countryside making their own medications, We're swallowing down the rural bark and things like that effectively, except we're looking at 10,000 or 50, 20,000 men or something.

30:27But in the south, I'm sure a lot of them don't need medicine, as every business was, to do the commercial products. and they did, for a long time, one other thing I want to mention, I was reading about the battle of Antietam in Kathmandu, that the Union soldiers were going for the battle, and Lee and McFarlane were getting together, these soldiers were coming off of the first battle before Antietam that they had actually won, and they all felt good about, and they were marching through the country, Maryland country, they looked to see The death of Confederate soldiers and they all had a lot of remarks that, what a terrible thing these guys were killing themselves.

31:19They really had a lot of respect for Confederate soldiers, considering the supplies they had and the equipment they had, and standing up against the Union, and in the end of 1862, they were already feeling the effects of starvation.

32:01in the South. And a lot of that would have been greatly amplified if people had access to alcohol, which they didn't. Now, except for the quinine, I don't think they could make that. And that was something that was actually brought in through the blockade in pretty good numbers because people needed it so badly for malaria. Now in 1864, February, they also had a regulation on on Trade. This is when the one half of the cargo space requirement comes into play so that the Confederate government is essentially commandeering half of your cargo space. Now you still got to export cotton. I mean you were still going to be exporting cotton but you were going to be doing it for the Confederate government. Now one of the things we looked at here to try to see what would be the result of this is we looked at Wilmington North Carolina, which before February of 1864 there were some open ports in the south. After 1864 Wilmington was one of the very few that was open on the eastern seaboard. So it was the only game

33:24Human Town, so to speak, after this cargo requirement was put into place. Also after February of 1864, there were a lot of new ships that were coming online. The Confederate government had ordered some blockade running ships which were put into service and a lot of private blockade runners had acquired new blockade running ships that were faster, sleeker, better blockade running ships. So we would have expected to see the number of blockade runs in and out of Wilmington to be much greater after February of 1864. It turns out it was only about the same number.

34:13So you have fewer ports to run into, more ships to do the running, and yet the runs stay the same. And so we think that that's good evidence that this requirement where the Confederate government gets one half of your ship, combined with the fact that you're not allowed to run in Luxuries was the reason that they didn't get any excess or any increase in runs. February 1864, another piece of legislation, also established price controls on imported goods. So there was a whole class of goods, mostly clothing and textiles, that the Confederate government You can bring it in, but you can only charge so much for it.

35:04So that was a big disappointment to the blockade runners. Now, how do the blockade runners think about this? Well, that's actually a pretty good piece of evidence. It's not necessarily reliable. I mean, business people, if you say, well, what do you think of the government? Government. How do you like your taxes? Of course they're going to complain. It's always a bad thing for you. So you're never getting a fair deal. You're either getting rooped or you're getting some kind of special deal. So we went in and we looked at prominent blockade runners who wrote their memoirs and had official records of what they said at the time as to and how they felt, to see if it complied with what we thought would be told based on our understanding of economic theory. Well, Captain Roberts was one of the most successful blockade runners during the Civil War. But after this 1864 legislation, he ceased all blockade running Banking Activities, saying, quote, the game indeed was fast drawing to a close.

36:21Its decline was caused in the first instance by the ______ behavior of the people at Wilmington who, professively acting under orders from the Confederate government at Richmond, pressed the blockade runners into their service to carry out cotton on government account in in such an arbitrary manner that the profit to their owners who had been put to an enormous expense and risk in sending vessels in was so much reduced that the ventures hardly paid. So basically what he was saying is taking your cargo space that running the blockade was no longer a paying or profitable operation.

37:09Now we also quote from Thomas Taylor, and Thomas Taylor is reputed to be the real life model for Rhett Butler. So this is somebody's memoirs that Mitchell apparently read and absorbed a lot of her character content from this particular person, but he was also a He was a famous blockade runner with close ties to the Confederate government. Let's see. Now, he did continue to run the blockade after Roberts had ceased, after this legislation went into effect.

37:55But he had a special deal, a secret deal with the Confederate government so that he would run in their supplies and be paid handsomely for doing so. So he was sort of an insider with the Confederate government. Let's see, writing to his superiors on January 15, 1865, he said, I never saw things look so gloomy, and I think spring will finish them, the Confederates, unless they make a change for the better. And as he put it, had blockade running been encouraged, quote, instead of having obstacles was thrown in the way, I am convinced that the condition of affairs would have been altered very materially and perhaps would have led to the South obtaining what it had shed so much blood to gain independence.

38:52So Taylor thought this was the pivotal issue, that the South was falling, it was doing poorly, but that if blockade running had been encouraged rather than discouraged, that it would have made literally all the difference in the world. As Captain Roberts, our first captain, explained, the enterprise had lost much of its charm. For unromantic as it may seem, much of that charm consisted in making money. Which I think is very, very true, it's very, very real, and I think that's very, very meaningful.

39:45I don't think people were running the blockade for their health, it wasn't the most dangerous thing in the world, but as a business enterprise it was very dangerous. You could make a lot of money, you could also lose a lot of money because of the risks of being captured or destroyed or just running a blockade running ship at night. You can imagine trying to get into Wilmington harbor in the middle of the night without you know any lights or anything and ships firing at you, the risks, the currents, yeah. At the beginning of the war there were a fair number of sailboats, sail powered boats running And by the end of the war, almost all blockade running into the major ports was under steam power.

40:49Coal fed, steam powered. They would still use sailboats out of smaller places and that kind of thing, but the sailboats were not very effective against when the other side had steam powered boats and they were Undependable, you know, if there wasn't wind, you were sunk. And so we saw that at the beginning of the war, but a lot of those ships would get captured and weeded out, and by the end of the war, we're talking basically about sail power boats being out of the picture. Yes? Yes, that's a good question.

41:48That's a very good question. There were a lot of independents, let's say, who were basically a one ship, one craft operation and they would pick up their cargo in the Bahamas, Bermuda, possibly places like Mexico or Cuba. That didn't happen very often. They needed to make that run. Things were most needed on the eastern seaboard and Bermuda and the Bahamas were the closest to that. And they would run in and sell all that stuff, buy cotton and run back out to the Bahamas and then bigger boats would take the stuff to Europe, back and forth to Europe.

42:44There were larger companies, most of them southern companies from the south or firms that developed the blockade running businesses, financial houses, shipping houses, things and other things of that nature, who would attract capital from a large number of individuals and buy several ships running lots of cargo into multiple ports. I think that there was a big advantage to that, you were pooling the risk of investment, You were basically calculating a certain number of your ships would be captured, you'd get a certain number of ships captured, whereas the individual, if the ship was captured on the first run, they were out of business and bankrupt.

43:41But the larger companies could make more of a science of it. They had the wherewithal to take advantage of market situations, contacts in England, contacts in Bermuda and the Bahamas, agents who were working for them to get the harbor and so I think that those firms, those operations tended to do better and stay in operation longer than the independents did. Although there were some very successful independents who ran the blockade over and over and over again very successfully.

44:32So they found a way which could not be beaten. For example, running into Wilmington on certain nights with certain weather conditions was almost a sure thing. But you had to know what you were doing. You had to have a pilot on board who knew all the aspects of the harbor and that kind of thing. So, it's a very good question. There's both, essentially, but I think there's a big advantage to the larger firms that had multiple votes. Yes?

45:24You know, I really don't know.

45:29yeah the no be weeks yeah probably probably at least 20 days but I'm not really I'm not really sure yeah the the large boats would come unobstructed from England to Nassau, to Bermuda, to the Bahamas, places like that. And so they could run slower, they could run heavier, they were basically normal operations. Stuff would get to those places and then be put on the blockade running ships. And the blockade running ships, I think, were depending upon where they started and where In the time they ended up, they could probably run it in a couple of days.

46:39If you could run from the Bahamas into Savannah, it could be done in just a couple of days. One thing to conclude if I would run across is the fact that Matthew Murray was a naval officer. He was between about 1840 and 1850. He was injured in a stagecoach accident, and he threw on to his career in the Navy, so he became interested in motion science. and he plotted these things from about that time to about 1850, from Melville, Mises, this big story won't be depth about the whales being in certain areas of the ocean for one time of the year and then the other time of the year and he went over to the south and he took all this data that he could and gave it to the south so they have an invaluable Mass of the current kinds of things, we would mention in this book, a man with all the country by the author, as being one of the arch-beams of his Confederacy, because he contributed so much to their shipping.

47:58He was a naval captain, wasn't he? He had his own ship. I think it was a... Like the Coast Guard and the Coast, like they had NOAA. He was chartered and got all this together from all around the world. It went years and years after. He was the first person to develop those currents, and all that stuff, and I think he was a ship captain on one of those ships that went out to destroy Union commerce, commerce raider. and was I think if I'm not I get these fellows mixed up sometimes because the Secretary of the Navy has a very similar name to that but I think he was one of the most successful of the the commerce raiders out of the Confederacy that was another problem they had because they allowed the blockade to become so effective their commerce raiders had a hard time of it because if they captured The idea was you had to bring it back to port to claim your prize, and then you'd have to sell it.

49:15But the problem is if you got a commerce ship and tried to run it back into the Confederacy, you'd have a hard time with it. A lot of the European powers didn't want to be involved in this, so they didn't have the access of commerce rating and the commerce rating that really might have been the basis of a very effective naval force. You know, prior to the Civil War, and with the exception of some European powers like England and France, and even in their cases, most naval power was actually in private hands. Larry Seacrest has a wonderful article in a new book out that we have called The Myth of National Defense, edited by Hans-Hermann Hoppe, and he goes back and gives you a very nice summary of some important historical facts, which basically show that most of the fighting, most of the capturing, most of the destroying, in terms of naval power was done by private enterprise and the the government's ships were therefore shows of authority shows of force to to support the colonial empires and that kind of

50:44thing but when they went to war with one another they would authorize these private ships become

51:20I'll get his name for the next class, I'll try to remember. No, the submarine was not of Columbus. They have a Confederate naval yard here and they were trying to build ships which were based with wood and then iron clad so that they were using existing ships.

52:09were very good at making ships and the only good places were in Virginia and most of those people left and Pensacola Union maintained control of that throughout the war and in New Orleans which the Union got a hold of very quickly so places like Columbus were the next sort of line of defense and so they had ships there for repair but they tried to create these ironclads I don't know.

53:06I think that there was, there was something, some obstacle that they, between Columbus and New Fall, but I think they had a way around that where they could get around that somehow. These were not large boats though, these were not going to be going out into the ocean as far as I know. Did they have a lock system there to get them up and over or whatever? Not back then, no. Now, the, but it wasn't long after that though, and so the, but the Union came in late in the war, of course they came through Alabama, through Selma, in Montgomery I think, to Auburn, no no, they're coming from Mississippi, and they're coming from the west to the east, and they basically came through I think Selma, Montgomery area, Auburn area and into Columbus and I think the ships were sunk by the Confederates because they weren't complete and they didn't want the Union to get their hands on them and they were later raised and what's left

54:27of them is in the museum so that was a very common occurrence. They would start these projects. They really weren't very good at making ships. They really didn't have the materials like iron. The type of iron that was needed to withstand a rifle cannon was two inches thick. And I think the only place that you could roll two-inch thick Cladding for these ships was in Richmond and yeah now how do you transport it from Richmond to Columbus now you've got you know you've got railroads but with railroads those railroads were busy with other things and they were wearing out you know back now we have right Right now we have steel rails that last a good long time. Back then there were iron rails and would wear out like iron horseshoes and have to be replaced, but they didn't have any replacement rails. So they would have to cannibalize part of their railroads in order to keep the existing ones going. You know, Lee said that if we only had a railroad from,

55:51I can't remember one harbor up to Richmond or something where they could have gotten more supplies up there that he could have held out forever, but there wasn't any labor or materials to do such a thing, because those things just weren't available, so this use of autarky to try to overcome the blockade, of trying to produce everything on your own, is really self-defeating. It really doesn't get you anywhere. You really can't produce much when you don't have the expertise, when you don't have the resources and the comparative advantage. The British had the comparative advantage in building ships, and of course the Union had some, a lot of ship building capacity as well.

56:41and but the South never really managed to get enough European shipping in its own in its own cause. Because of the evolution of the ship, I mean the cargo ship from wood to steel frames and wooden decks and things, but as time went on, they were more and more toward the steel that they are today. Yeah, but they were part wood and part steel, steel frame and wood between, but as you move into the 20th century, they wouldn't be able to support.

57:49and of course with iron guds and in many cases even iron decking.

58:19It's a steel step with a flat back, it's just a big flat back with one break in it, three breaks on it, and a bunch of dopey old-fashioned cannons sitting on wooden trucks running on the deck. You know, the real classic part of that, you know, the engine, the engine would be there, and the engine would be the carer. A minimum of the carer would be the driver, the very shit is top of the water. So we've got the Federal Reserve leading with a great engine. This is the confederate ship? No, this is the union ship.

59:26Well, you know, the logistics of all this... ...or the... ...items for the armistice... Yeah. Yeah, which wasn't the best solution, but the Confederates even in Texas, in Galveston Harbor, The Union had taken over Galveston Island and made that a very effective blockade of the Houston area, which was the export-import place for basically all of Texas. It had to go through Galveston, and so they took over the island, effectively cutting that off.

1:00:15The Texans outfitted a ship clad in cotton, so they just wired cotton bales all around the outside of the ship, and the Union fired their cannons at it, and it didn't do anything to the ship, so the ship was able to land, get its soldiers off, and they were actually able to retake the island and break the blockade in Texas for quite a while, I'm not sure if they used that opportunity effectively, but the southerners were very inventive people. They tried everything and things like technology, things like inventiveness were not the problem.

1:01:05There wasn't anything that the Confederates didn't try in terms of technology, so that's really not the answer. I think the answer is really just this basic resource problem that shows incomes declining and resources declining, all the while southern capital is being depreciated, whether it's the railroads, or the guns that existed in the South that were being worn out. That was all being depreciated and there was nothing there to reestablish all this stuff. Another good example of the technology was the submarine.

1:01:53The Confederates built the first submarine, there was a lot of trial and error with that. It was done privately, I believe, and it was successful at sinking a very large ship, and probably would have been more successful if they had continued to do that kind of thing. But I believe it was a privately funded effort, and there was a naval person who was actually They didn't have the technology that the union shipbuilders had. They couldn't test stuff and give it all in all ways. It was a manufacturer. I mean, they just didn't have that.

1:02:46They did not have the capital, they did not have the expertise, they did not have the facilities, but they were not... But they were just as inventive as the Northern inventors in America. Yeah, so there was no lack of trying, there was no lack of inventiveness or entrepreneurship. They just basically, every time you open a door, you find not enough men, not enough food, not enough iron, not enough resources. of Money, The Theory of Money and State, The Theory of Money and State, The Theory of Money

1:03:44As bad as things were, the issue was still in doubt. Even late in the war, if they had turned their policy instead of these stupid things that they did in February of 1864, if they had done the right things, things were not looking good for, for example, Abraham and Lincoln in the election of 1864. Lincoln just barely won that election by a very, very close margin. The Democrats were very strong. There was a candidate running for governor, I think in Ohio, was a peace Democrat. In the Midwest, if the Midwest had walked out on Lincoln, Lincoln, the Union war effort would have been in serious, serious danger, and if two economists, Gary Anderson and Robert Tolleson, looked at the electoral situation for that presidential election, found it was very close, that a small number of votes swung some very important states like Pennsylvania, and that Lincoln actually had to do some very unscrupulous In these things, he and his generals, to get the vote to come out the way it did, for example,

1:05:08they found a tendency for generals to throw regiments from democratic areas into battle, more often in 1864, and to withhold troops from republican areas. There was also, they talked about misreporting the votes and things of that nature, sending and the troops home, you know, to vote. The soldier vote was going down. Yeah. Absolutely. These guys, you know, I'm close to not to die. Right. He could have lost that. And there was a lot of northern people, the landing-hands, those guys were for an all-nighter.

1:05:54Anderson and Taliesin is just a little journal article in a journal called Defense Economics and there's a quote from them near the end of the chapter and there's a reference to the article. It's not an obscure journal, but it's a very specialized journal, so it's not going to be something you're going to find at Books-a-Million, that's for sure. But it might be in the Auburn Library or be available online someplace. It's very, very interesting stuff that they report in there, though.

1:06:42They're public choice economists, they're always thinking that politicians are, you know, always trying to rig a vote here and there, and so they started looking around and they found some pretty good evidence that, you know, Lincoln was not sitting back idly, waiting for events to play out, that he and Republican generals and Republican leaders were very active You know, just as politicians are today, you know, they're always looking for the key state and what's the key issue and what will drive our voters out and what will drive their voters home. You know, if we can just rig that one election, the presidential thing will all fall in our way.

1:07:28and they found pretty much the same thing except in Lincoln's case you know they're finding you know essentially them sending the Democrats out to be killed more often than the Republicans and so it's very interesting that other people have also looked at that same issue too. You know, Lincoln's election of 1864 is something a lot of scholars should take another look at in the Confederacy. You know, the Confederates adopted the U.S. Constitution with some changes.

1:08:15And we're going to look at some of those changes towards the end of this course. One of the things they did differently was, they said a president would have a six-year term and could only have one term in office. So Jefferson Davis could not seek re-election and did not have to seek re-election in 1864. So politically the situations were very different for Lincoln and for Davis and politically things were very different for both North and South or should I say both Union government and Confederate government.

1:09:01From the beginning of the war, 1864 and 1865, both of those political climates changed rather dramatically. and President, and so on. This is a really important part of his life. He lost this month and year when he lost most of his money. That's more than he's worth. I think was Well, I mean Stevens was more more idealistic than Davis and everybody else and I'm pretty sure he's a real, true classical liberal and who these ideas really meant something to and he was most interested in establishing Peace and most everybody else was just headlong into the war and Stevens was making efforts to try to re-establish peace to negotiate and as far as he was concerned the solutions were we're all open to debate including re-entering Union, and no one would really pay attention to him or give him the authority, and I think he did try to negotiate, set up negotiations with the North a couple of times, but essentially

1:10:42he was somebody who was not listened to, and his only opportunity would be basically as He saw it as if Davis was killed, captured or died of natural causes and so I think going back home was his statement that he wasn't going to leave the office, but that he wasn't going to condone, condone what was going on. When asked a few questions, what was the style sort of, uh, and put incentives in all privateers to do the running?

1:11:30Blockade? Blockade running. Maybe from somebody else in some other country. Well, yeah, I mean Halliburton is a government contractor, and in a sense, privateers are are government contractors and that they're private and that they're working for the government, but privateers are a little different and it's an important sense that privateers have an incentive. They basically are paying all the cost of running that ship, of paying those soldiers, and they get all of the benefit of capturing ships and of claiming prizes.

1:12:34Calvertin is much different than that in the sense that they are getting paid to do a stated task and so, yeah, they're both privatizing but they're privatization in a very different and the Halberton type of privatization of government contracts doesn't have the same type of incentive structure. With Halberton they're given a million dollars let's say to supply toilet paper in Iraq and they might or might not get in trouble if everybody doesn't have toilet paper but basically that's their job and they're going to get paid a million dollars, no matter what. Well economists see that situation that has some problems in the sense that Hal Burton might not get the toilet paper to the right people at the right time, they might use inferior quality toilet paper, you know, those sorts of things, they'll cut not cost and yes and that's that's the other thing is it wasn't bid out

1:14:18Right. Exactly. That's the kind George likes. But notice there are two very, very different types of privatization, where one is open and costs are controlled for rational reasons and there's a profit incentive to do a really good job, whereas the other type, the cost incentives are skewed and biased and there's no incentive to do a really good job.

1:15:07So those are two different approaches, but before we get out of here, I do want to go I want to go back to the point that you raised originally, because I think that that was a solution that the Southerners should have, could have, and done, which is, you mentioned just briefly, is to offer prizes for the sinking of blockade ships. If the southerners offered a significant monetary prize for the sinking of certain ships in these blockade forces out there in front of the harbors, and they had their own mediocre ships in the harbor, but if they could get somebody like the little submarine that sunk With that warship, if you sink a few warships in these blockaded fleets, the rest of the blockade fleet is just a bunch of ships.

1:16:15I mean, they're not that powerful, they're not that well-armed, they're just ships out there. In fact, some of them were even wooden ships. So you know, if you sink a few warships and then send your moderate, mediocre Navy ships

1:17:00I think this is shit first. That doesn't cause a lot of big government. And if you open up the harbor to cotton exports and imports, the economy will benefit tremendously even in the short run. So I think that that would have been the best solution possible. The most immediate, you know, you could have done it right off the bat. and it doesn't require any resources other than the gold itself. So I think that that would, that's about it, ladies and gentlemen. I'm afraid I've talked our way through another hour and a half. And the next week, we're going to move on to the topic of inflation in both the North and South, which is probably the most important economic phenomenon, amazing economic phenomenon of the war itself.