255 views  Dec 6, 2022
(December 6, 2022) California Governor Gavin Newsom remarked last week on his state’s progress toward providing reparations for blacks who can trace their ancestry to slaves, or to any free black that lived in America during the nineteenth century. Newsom’s task force has identified five victim classes supposedly requiring reparations. The biggest single category is composed of the descendants of blacks who were victims of housing discrimination from 1933 to 1977. The total reparations slated for all five categories is $570 billion, to be distributed among 2.6 million blacks for an average of $220,000 each. By comparison, California’s entire annual budget is $515 billion.

There are plenty of arguments to make against such reparations. For example, blacks disproportionately benefitted from subsidized government housing during the last seventy years. They still do. Few people, however, know that the former Confederate soldiers and his descendants have already paid a form of reparations, if not for slavery, then for losing the War Between the States.

For twenty-five years after the end of the War a combination of three line-items accounted for over half of the Federal budget.

Interest Payments of Federal War Debt
Budget surpluses used to retire Civil War debt.
Union Veterans Pensions.

None of the three benefitted former Confederate soldiers and their descendants.

During the first twenty-five postbellum years, Union Veterans Pensions amounted to 12% of the Federal budget whereas the combination of budget surpluses to retire the War debt and interest on that debt totaled 40%. Ultimately, however, Union Veterans Pensions became the larger and more protracted factor. In 1893 alone Union Veterans Pensions represented over 40% of the Federal budget. The annual disbursements of pension checks did not stop growing until 1921, fifty-six years after the War had ended.

The postbellum Republican Party could not resist the temptation to bribe veterans to support high tariffs by arguing that tariffs were the chief funding source for the pensions. Such tariffs were beneficial to the Northern industrial states but injurious to the South’s export economy. Today’s Democrat Party likewise cannot resist the temptation bribe key constituencies such as youthful and black voters with student loan forgiveness and reparations.

After Democrat Samuel Tilden almost won the presidency in 1876, the Republicans started liberalizing the pensions to strengthen their voter constituency. The 1879 Arrears Act enabled new applicants to collect pensions in arrears back to the date of military discharge as opposed to the date the veteran applied for benefits.

The mean arrearage was $1,000, which compared to the average American worker’s annual income of $400. When editorializing about the Act one New York City magazine editor wrote “the effect of this law is to stir-up a multitude [one hundred forty-one thousand] of people to apply for pensions . . . who had not realized they were disabled until the Government offered a premium of $1,000 or more.”

The 1890 Dependent’s Amendment greatly liberalized the dependency qualifications. Passed during Benjamin Harrison Presidency it was deliberately targeted at eliminating years of budget surpluses to eradicate the Southern case for lower tariffs.  Additionally, in 1904, President Theodore Roosevelt transformed the pensions into an old age retirement program, instead of a disabilities platform, by declaring all Union veterans age 62 and over to be disabled. The Act was originally intended to compensate wounded warriors, not old soldiers.

By 1917 $5 billion had been spent on Union Veterans Pensions, an amount twice as large as all the Federal and state expenditures made to fight the Civil War.  By 1942 such spending had aggregated to $8 billion. The last of the monthly payments was made in May of 2020. Confederate soldiers got none of this money but had to pay their share of the taxes to fund them.