Cost to Buy All of the Slaves
With so much to lose on both sides of the Mason-Dixon Line, economic logic suggests that a peaceful solution to the slave issue would have made far more sense than a bloody war. Yet no solution emerged. One “economic” solution to the slave problem would be for those who objected to slavery to “buy out” the economic interest of Southern slaveholders. Under such a scheme, the federal government would purchase slaves. A major problem here was that the costs of such a scheme would have been enormous. Claudia Goldin estimates that the cost of having the government buy all the slaves in the United States in 1860, would be about $2.7 billion (1973: 85, Table 1). Obviously, such a large sum could not be paid all at once. Yet even if the payments were spread over 25 years, the annual costs of such a scheme would involve a tripling of federal government outlays (Ransom and Sutch 1990: 39-42)! The costs could be reduced substantially if instead of freeing all the slaves at once, children were left in bondage until the age of 18 or 21 (Goldin 1973:85). Yet there would remain the problem of how even those reduced costs could be distributed among various groups in the population. The cost of any “compensated” emancipation scheme was so high that even those who wished to eliminate slavery were unwilling to pay for a “buyout” of those who owned slaves.
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Cost of the War
In 1860, the year before the American Civil War started, the U.S. Government debt was $64.8 million. Once the war began, debt grew quickly. The financial cost of the war was significant, totaling an estimated $5.2 billion.
The Government had to come up with new ways to pay for this expensive war. Two ways the Government accomplished this were:
Legal Tender Act (1862) allowed the Government to:
- print paper money known as greenbacks
- sell $500 million in bonds to raise money
Before the Legal Tender Act, each bank could print its own form of paper money; paper money had value because it was backed by gold. This means that there is an amount of gold held by the Government that’s equal to the value of the paper money. The money printed by the Government after the Legal Tender Act was not backed by gold because the Government did not have that much gold at the time. The “greenbacks” could, however, be used to pay taxes and buy items from stores.
The National Bank Act (1863) allowed for the creation of:
- a nationwide banking system that loaned money to the Government to pay for the war
- a national system of paper money and coins
By the end of the war in 1865, Government debt had exploded, reaching $2.6 billion. That was more than 40 times what it was only five years earlier at $65 million.
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The current regime is printing money and making the very issues that are enslaving our children. They don’t want free people; they want war, power, debt and destruction. Note that the cost to buy the slaves only included the slaves in the South. The slaves in the North were not included. Just as the slaves in the North were not included in the Emancipation Proclamation and northern escaped slaves were captured and returned to their “owners” during the civil war.
Dear Lord,
Hear my prayer. Let your people fight a righteous war so that all of your children will be free and living in your glory.
Amen.
David DeGerolamo
