Dred Scott V. Sandford - Consequences

Consequences

Perhaps the most immediate consequence of the decision was to trigger the Panic of 1857. Economist Charles Calomiris and historian Larry Schweikart discovered that uncertainty about whether the entire West would suddenly become either slave territory or engulfed in combat like Bleeding Kansas immediately gripped the markets. What was unusual about the initial panic, though, was that it only struck the railroads running east and west—where the impact of the Dred Scott decision would be greatest (the territories). The bonds of east/west railroads collapsed immediately (although north/south-running lines were unaffected), causing, in turn, the near-collapse of several large banks and the runs that ensued. What followed these runs has been called the Panic of 1857, and it differed sharply from the Panic of 1837 in that its effects were almost exclusively confined to the North. Calomiris and Schweikart found this resulted from the South's superior system of branch banking (as opposed to the North's unit banking system), in which the transmission of the panic was minor due to the diversification of the southern branch banking systems. Information moved reliably among the branch banks, whereas in the North, the unit banks (competitors) seldom shared such vital information. In the broader scope, the Panic convinced the South that "Cotton is King" and that it had nothing to fear economically from the North unless a move was made to end the system of slavery.

Prior to Dred Scott, Democratic Party politicians had sought repeal of the Missouri Compromise, and were finally successful in 1854 with the passage of the Kansas-Nebraska Act. This act permitted each newly admitted state south of the 40th parallel to decide whether to be a slave state or free state. Now, with Dred Scott, the Supreme Court under Taney sought to permit the unhindered expansion of slavery into the territories.

The Dred Scott decision, then, represented a culmination of what many at that time considered a push to expand slavery. Southerners at the time, who had grown uncomfortable with the Kansas-Nebraska Act, argued that they had a right, under the federal constitution, to bring slaves into the territories, regardless of any decision by a territorial legislature on the subject. The Dred Scott decision seemed to endorse that view. The expansion of the territories and resulting admission of new states would mean a loss of political power for the North, as many of the new states would be admitted as slave states, and counting slaves as three-fifths of a person would add to the slave holding states' political representation in Congress.

Although Taney believed that the decision represented a compromise that would settle the slavery question once and for all by transforming a contested political issue into a matter of settled law, it produced the opposite result. It strengthened Northern slavery opposition, divided the Democratic Party on sectional lines, encouraged secessionist elements among Southern supporters of slavery to make bolder demands, and strengthened the Republican Party.