WI: War of 1812 lasted five more years?

Typo

Banned
I don't think the US can be kept of the west indefinitely, there might end up been a Texas-type scenario in at least some of it.

Also the US without New England means there's going to be a lot less internal division, it is going to be a majority slave-holding nation now.
 
Oh, definitely. The Spanish "presence at the table" is window dressing - the Louisiana Purchase is returned to Spain because a whole lot of British troops say so, and no other reason. But Spain isn't in a position to govern it or really settle it and Britain isn't interested in formal suzerainty (and has plenty of other more important places to settle), so Louisiana is settled by Americans, who will eventually declare their separation from Spain. The question is, will they attempt to confederate with what's left of the US? Honestly, I don't see that they gain anything by trying to.
 

Typo

Banned
Along the same reasons as the Texas Republic

Assuming that enough of the territory goes America's way, the rump US will definitely expand far more than OTL to the south.

But then again this idea seems to be like a variation of Decades of Darkness
 

Typo

Banned
Much more of Mexico at least, after all, this TL's US wouldn't have to deal with the debate over expansion of slavery as much. American Cuba might be in the cards if it is very economically profitable to expand slavery there.
 
Much more of Mexico at least, after all, this TL's US wouldn't have to deal with the debate over expansion of slavery as much. American Cuba might be in the cards if it is very economically profitable to expand slavery there.

I can understand Cuba and some parts of Northern Mexico (by this I mean California and Texas). But without New England how far can the US really get? Lets not forget New England is where all the guns are ships are made. Also this POD is prior to Mexican Independence (achieved in 1821) so the conditions in which Mexico achieves independence are quite different, which could result in a radically different Mexico quite easily.

The rump US would have to secure Louisiana and the Old Northwest (if possible) first before even trying to take Texas let alone the rest of Mexico. By the time it gets to it it might be too late to make major expansions. I know DoD says its possible but DoD expansion is major ASB. Also is Britain wanted to keep the war going for so long then its interests in North America must be greater than in OTL. Britain probably wants to see an independent Texas if possible or even keep most of it in Mexico and maintain Mexico as a protectorate.

The US's best possibility would be to expand on the Caribbean and parts of Central America not under British control (Yucatan would actually be a good option if you alter the Caste War a bit). But American presence in the area would only increase tensions with the British. A second war could be a possibility. And - once again - how far can the US get without New England?
 
FROM THE NORTH POLE TO THE SOUTH POLE!

FROM SPAIN TO CHINA!

AMERICA RULES THE WORLD, AMERICA RULES ALL!



cough cough


You'll have to excuse me. It's definitely time for me to find a decent tasting decaf brand...:eek:
 
The war couldn't have lasted 5 more years. By 1814/5 the US was broke, and it couldn't realistically have carried on.

The US was running a PEACETIME deficit before the war started in 1812, and the major source of Federal income was Customs. The war cut the volume of imports to tax, and so, despite taxes and tariffs being raised, the US income went DOWN the first year of the war.

They financed most of the war on debt - but it was getting harder and harder to find people willing to buy the debt, and the US currency was already losing value. As early as Harrison's campaign in the winter of 1812/3, he was having a REAL problem buying supplies. Local merchants and banks in Ohio wouldn't take bankdrafts from Philadelphia, let along New York city, and they ended up having to ship gold out west to buy provisions. OTL there as a major financial crisis when all banks suspended redeeming their notes for gold in the fall of 1814, and while they papered over the cracks, if the war had continued for 1 full year more, let alone 5, the US would have been a total basket case.

Don't forget that while Britain's debt was much larger, 1) so was her economy, and 2) she had mechanisms to raise taxes.



Here's some notes I accumulated: Look at how the debt grows - tell me that's sustainable for 5 years.




Financial History of the United States
http://books.google.com/books?id=_0UqxH-5fdkC&pg=PA80&lpg=PA80&dq=1814+suspend+specie&source=bl&ots=6yjorsjlGb&sig=WefHL5I0lPNSjzzkj__1L-cLcVo&hl=en&ei=gN2OSr-CC4uXlAe5m7SnDA&sa=X&oi=book_result&ct=result&resnum=2#v=onepage&q=1814%20suspend%20specie&f=false


By the start of the war, the Republicans had finished overhauling the US financial system along Jeffersonian lines, removing all internal taxes and killing off the Bank of the United States. This meant that the US government was mostly dependent on tariffs for its income, and with the decrease in trade with Europe, that dropped a lot. The failure to recharter the BUS (whose charter expired in 1811) meant a loss of specie reserves (??why???), and an inability to support expanded currency in circulation with any safety. The war was unpopular in NE, which was the only part of the country with ample pocketbooks. So, while the war was bungled militarily, it was bungled even more financially.


Gallatin, in 1807, proposed that taxes, etc., be sufficient to cover peacetime expenditures, and that any future hypothetical war be funded with loans – to be repaid in peacetime. He did propose some new taxes to shore up the public accounts (salt tax, Mediterranean fund, doubling tariffs) , but didn't present his case forcefully. Besides, he had enough enemies that he likely couldn't have gotten new taxes through. He actually expected to have reserves of $11M in 1808 (enough to fight one years war).


By January 1812, Gallatin tells that his previous remedies won't do, that expenses have exceeded income, and that the reserves are all gone. Not only does the tariff need to be doubled, but there needs to be internal taxes, too. He proposed $3M direct tax and $2M indirect tax (e.g. tax on sugar, liquor, auctions and documents (a Stamp Tax!!), being measures that the Federalists had proposed earlier). Measure passed in the house, failed in the Senate. Many republicans called it “truly odious”, and while War Hawks wanted war, they didn't want to raise money to pay for it.


So, when war broke out, income didn't even meet peacetime requirements, let alone war.


Although the war started slowly, expenses rose to 2.5 to 4x peacetime levels.


Finally, in July 1812, Congress doubled tariffs, added a few taxes (like on foreign owned ships). But fell FAR short of what was needed. March 1812, Congress authorised a 11M$ loan. But by June, desperate for money, Gallatin convinced Congress to authorise 5M$ in Tnotes (only one step away from the paper currency issued during the ARW). A total of 37M$ was issued, although only a max of 17M$ in circulation at any one time. Term, 1 year, most had interest of 5 2/3%, although some non-interest bearing. Denominations as low as $3. By end of 1812, Treasury had sold 13.1M$ of loans, 3.9 to individuals, 9.2 to banks. Since banks tended to pay with their own notes (often a fresh issue), and since many Tnotes passed into circulation, this increased the money supply and thus inflation.


In February 1813, Congress authorised a $16M loan – but since NE wasn't interested, it was mostly sold at a discount. Most of it was finally purchased by David Parish, Stephan Girard, and John Jacob Astor at 88.25 cents on the dollar.


In July 1813, Congress finally passed a system of internal taxes (that Gallatin had asked for a year before), but because it took time to set up the system, no taxes were received that year. The taxes were SUPPOSED to bring in $5M each year, but the first year was only 3.9M$. Moreover, because of the blockade, customs went down massively, so the total income of the government went DOWN instead of up.


Meanwhile, political opposition to Gallatin was increasing, so he was sent on a diplomatic mission, and formally resigned Feb 1814. His successors William Jones and George W Campbell couldn't handle the complexities, and it wasn't until October 1814 with the appointment of Alexander J Dallas that there was a competent Treasury Secretary.


All together, there were 5 loans that raised a nominal $55M, but actual 49M$, and even worse, only 28M$ in specie-equivalent as so many were paid for by bank-notes which averaged 65% face value. In September 1815, total debt was 119.6M$ as opposed to 45.2M$ at the beginning of 1812.


Without a BUS to act as a restraint, State banks proliferated during the war years. Between 1811 and 1815, the number of State Banks rose from 88 to 208, their combined capital from 42.6 to 82.3, but their currency in circulation rose from 22.7 to 99.0M$. Soon the public lost faith in bank notes, and presented them for redemption (in specie). Even bankers lost faith in notes, and refused to take out-of-state notes. So, what little specie was left went into hoards, and the entire financial situation collapsed. In the summer of 1814, banks started to suspend specie payment.


The treasury couldn't demand specie for the payment of taxes, so had to take what it could get. Again, since there wasn't any national depository, the Treasury had deposits in as many as 94 different banks. What's worse, they had to maintain 4 different accounts – in-state notes, out-of-state notes, interest bearing Tnotes, and non-interest bearing Tnotes. What was even worse, was that, because state banks wouldn't take out of state notes, taxes raised in e.g. South Carolina could only be spent there!




1812
1813
1814
1815
total
Receipts










customs
$9.00
$13.20
$6.00
$7.30
$35.50
Direct tax




$2.20
$2.20
$4.40
Internal excise




$1.70
$4.70
$6.40
other
$0.80
$1.10
$1.30
$1.40
$4.80
total
$9.80
$14.30
$11.20
$15.70
$51.00












expenditures










army
$11.80
$19.70
$20.40
$14.80
$66.70
navy
$4.00
$6.40
$7.30
$8.70
$26.40
other
$2.00
$2.00
$2.40
$3.50
$9.90
interest
$2.50
$3.60
$4.60
$5.80
$16.50
total
$20.40
$31.70
$34.70
$32.70
$119.50












deficit
-$10.50
-$17.30
-$23.50
-$17.00


Total debt
-$56.00
-$81.50
-$99.80
-$127.30




48.04%
45.11%
32.28%
48.01%




Faced with a total financial crisis, Madison recalled Congress for a special session in September 1814. Dallas got Congress to accept an additional 7M$ in taxes, $6 of which were direct (actually only half that amount was collected during the war). While the new taxes, and an increase in customs collection did increase revenues, they only reached 48% of expenses. In 1815, Dallas tried to pass an income tax on salaried officers and lawyers. Turned down.


Many people wanted to return to paper currency, but Dallas refused. Instead, he suggested re-establishing the BUS, with a capitalization of 50M$, of which 30M$ would be loaned to the government. Bill passed January 1815, but vetoed, because it wasn't what Dallas had proposed.
 
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