Confederate mismanagement Flashcards
Topic sentence
Some historians such as Merton Coulter argue that the Confederacy’s experienced economic difficulties because of Confederate mismanagement.
Evidence 1 - direct tax act
The Confederacy’s sought to fund the war through measures such as an increase in taxation. The Direct Tax Act was enacted in the 19th August 1861, putting a 1 ½ tax on major categories of assets such as slaves, property and real estates. However this attempt to fund the war failed because Southern states found loopholes in this act, they could avoid the tax by paying the required amount in Confederate notes or in specie (money in coins). This meant that only $17 500 000 was raised in 1861 – 1862 with the annual Confederate budget being $16 000 000.
Therefore, Confederate mishandling cause a significant toll on Southern wartime economy as despite states avoiding vital taxes, the Confederacy did little to remedy the situation up until 1863, 2 years after the measure was introduced. This not only meant that states could avoid paying taxes for years, it also meant that crucial funding to the war was lost.
Counter analysis
However, some historians argue that the affects of Confederate mismanagement weren’t so significant, as in 1863 a comprehensive tax was introduced which combined an income levy, a licensed tax, and a general internal revenue measure, it also included a graduated income tax on income, which made them significantly harder to avoid as taxes where now compulsory.
Evidence 2 - not used to high taxes
As well as the Confederates mismanagement of introducing higher taxation being a significant reason for worsening their wartime economy, their was open resentment to increasing taxes as Southeners were not used to paying high taxes and many states did not even tax their citizens. Indeed, there was open opposition to taxation in North Carolina, and even Davis himself recognised that blatant unfairness of taxation measures, although he justified it as an ‘absolute necessity’.
Evaluation
To evaluate, it is clear that Confederate miss management was the main reason for the South’s worsening wartime economy. Indeed, their policies on taxation were mainly a failure and their lack of initiative to fix these issues suggests mismanagement. Therefore, historian Merton Coulter argues that the Confederate Government was far too cautious in their tax measure, given the uncontrolled nature of inflation, which meant that they only raised about 1% of their income through taxes.
