Themes of the American Civil War
Download 2.25 Mb. View original pdf
|
| The Southern War Economy When both sides went to war, they expected it to be of short duration and foresaw little economic disruption. Both predictions proved hopelessly wrong. Every significant feature of the Union and Confederate economies was touched by the four years of bitter conflict. This was particularly true of the South, which was driven by economic as well as military necessity to employ evermore drastic measures and even to consider the arming of its slave population, an idea which would have astounded every white southerner a few years earlier. Indeed, for the Confederacy the war years were ones of increasingly severe economic dislocation and, for the overwhelming majority of its white citizens, of unwontedly severe hardship. 6 The Confederate economy was plagued by problems from the outset. Although the Northern embargo and blockade were not entirely successful, they reduced the cotton trade by perhaps as much as 90 percent. (A further difficulty arose since 1860 had seen a bumper cotton crop and the British market was all but glutted) As a result, and since southerners had, on the outbreak of war, repudiated at least $300 million in debts to Northern banks and merchants, the Confederacy was starved of credit and capital. This made imports the more difficult to finance. Except in New Orleans, banks suspended specie payments for the duration of the conflict. Faced with declining revenues and mounting expenditure, the Confederate government Capitalism and the Civil War • 171 had little choice but to issue paper money in the form of treasury notes, which eventually totaled well over a billion dollars. Inevitably the money depreciated with the declining economic and military fortunes of the Confederacy so that rapid inflation and hoarding of foodstuffs occurred on an ever greater scale. Indeed, a vicious cycle was created as the Confederate government authorized army officers to seize foodstuffs and pay for them at confiscatory prices the result was yet more hoarding and a still deeper food crisis. 7 With military reversals came disruption of supplies. The railroad network, which had in any case lacked trunk lines from the outset, was starved of funds and materials for essential repairs and maintenance, partly because materials could not be imported and partly because they were needed elsewhere for the war effort. Thus even when food and other supplies were available they could not be distributed. Although there was a small shift out of agriculture in the South, with the government itself taking over the operation of factories for the processing of, for example, salt and the production of guns and other armaments, the enormous profits available from successful blockade running probably diverted productive capital out of manufacturing. On the land circumstances dictated a similar shift away from cotton towards grain and meat. This diversification was perhaps in the longer-term interests of Southern agriculture and of the Southern economy as a whole, but, once again, it was on too small a scale to do more than slightly mitigate the full effects of the economic hardship. Whilst it would be wrong to conclude that all southerners were economically injured by the war—given the windfall gains available to blockade runners and successful speculators—there can belittle doubt about its overall macroeconomic impact. It is no exaggeration to say that Southern agriculture, by far the most important sector in the Southern economy, was pauperized by 1865. The value of Southern real estate fell by half, while the value of farms, farm products, and livestock in the older states of the Confederacy (that is, all except Arkansas, Texas, and Florida) did not regain the levels of 1860 until 1900 (by which time the value of farms in the North had doubled. In the decade of the Civil War, Southern per capita output fell by 39 percent. 8 The combination of the war and the ending of slavery, together with a probable reduction in the world demand for cotton, jointly produced these effects. The abolition of slavery was itself an act of confiscation of revolutionary proportions with catastrophic effects upon aggregate Southern wealth. It is likely that the loss of somewhere between $1.5 billion and $2 billion worth of slave property represented about 30 percent of total Southern wealth. Nor were these effects of limited duration. On the contrary, Southern agriculture, and the Southern economy as a whole, sank into a position of 172 • John Ashworth weakness relative to the nation as a whole from which they would not recover until well after World War II. Despite the shift out of agriculture during the war, the South’s share of the nation’s manufacturing output, which had been a mere 7.2 percent in 1860, fell to 4.7 percent in 1870 and would not regain even the modest antebellum level until the end of the century. Indeed, a central feature of the Confederate wartime economy—its fatal shortage of credit and capital—persisted as a characteristic and a chronic problem in the postbellum South. 9 By most criteria, therefore, Southern capitalism was anything but furthered by the Civil War. Commodity output was severely damaged and Southern industrialization, lagging far behind the North in 1860, slipped still further behind. Only if we define capitalism so as to exclude slavery can it be said to have been furthered by the wartime experience. As we shall see later, this effect was of major proportions, though not perhaps primarily in the South. For the ending of Southern slavery did not produce wage labor in the region so much as a bewildering array of labor systems, including sharecropping, tenant farming, the crop lien system, and other contractual agreements generally designed to give as little true freedom to the freedmen and to perpetuate racial inequality throughout the region. Thus the South emerged from the Civil War as a backward economic region, characterized by low wages, low productivity, underdevelopment, and a chronic shortage of productive capital. Most republicans had hoped that the war and Reconstruction would together remake the South in the image of the North. By the mid-1870s, if not earlier, it was apparent that this project lay in ruins. 10 Download 2.25 Mb. Share with your friends:
|