Even though there were naturally occurring differences between the north and south; for example, differences in climate or natural resources, there were also significant social differences; namely, the contrast between the forward looking north who craved more cities and more sophisticated production methods and the backward south which was made up of rich plantation owners and their slaves. The climax of these differences resulted in the American Civil war and its impact only served to separate the north and south even further. The south, being the losing side in the war, suffered much more than the north. Harold Vatter writes that, ‘The deterioration of the South’s position as late as 1880 largely resulted from the wartime destruction and post war disorganisation experienced by the dominant agricultural sector.’ (3) Historians Ransom and Sutch back this up by saying, ‘agricultural output per capita in the South declined substantially during the decade of the 1860s and it was virtually stagnant after 1872.’ (4) The Civil War affected the south in four main ways. Firstly, the abolition of slavery resulted in ex-slaves migrating to the north or elsewhere for relatively well paid jobs, women and children worked much less than they had previously and a number of plantation owners had to adopt policies of shared crops in order to maintain their position. Ransom and Sutch write that, ‘Approximately one half of the Southern population was enslaved throughout the first half of the (nineteenth) century.’ (5) so as a result southern plantation owners had to put more money into their plantations and therefore there was significant depreciation in their profits which in turn resulted in less money left for them to reinvest in the south’s economy. Secondly, the war left significant physical damage. Most of the war was fought in the south and land, which was a key source of income for the southerners, had been destroyed. Harold Vatter poignantly states that the black and poor white population of the south ‘were locked into a veritable prison, being economically, socially and politically bound to the soil.’ (6) The cost of repairing this damage would detract even further from the potential investment in industrialisation. Thirdly, exporting cotton to Europe was a key source of income for the south but during the war it was not sold and European customers went in search of alternatives. Europe found new suppliers in Egypt and India and once the war ended they continued to buy this cotton so the US’s southern cotton producers lost a huge market for its product. Finally, the Civil War had a huge detrimental effect on the south’s international reputation and this put off foreign investors and importers of goods produced in the south.
To explain the other factors that caused differing economic and social experiences between the north and south one must go back to the requirements for industrialisation. In relation to the south, they did not have all the essential elements and this goes some way to explaining why industrialisation did not take off in the south as it did in the north. There were raw materials in the south but they were not used to their full potential as they were producing cotton for a shrinking market and selling it to the north so cheaply that the northern manufacturers could sell on the finished textile for huge profits. There was also a lack of transportation to move the raw materials quickly (and therefore more cheaply) and easily from one location to another. Ransom and Sutch write that, ‘Most, if not all this (economic) decline can be explained by the abolition of slavery.’ (7) Losing the valuable resource of labour was a devastating blow to the economy as there was no more free labour and many ex-slaves headed north for better wages and improved working conditions. Technology was also less developed in the south due to a lack of innovation and investment and the general backward nature of southerners. Finally, the banking system in the south was far from sophisticated. With credit being provided on a personal basis from individual lenders, the new freedmen could not get any capital to finance any potential new business ventures and the development of new businesses was stemmed further by the conditions of the loans. Many creditors requested that their loans be spent on the production of cotton as they felt it was a well-established crop with a relatively invariable market. The problem of this shrinking market has already been mentioned but the other problem with this system was that those who received the loans were stuck in a credit system of borrowing money to grow cotton, then having to borrow more to grow food. The government had little involvement with the economy of the south as it seemed like there was little to be done to improve it. With this combination of factors, it is hardly surprising that the economy of the US south was much less developed than that of the north.
Using the model for what is essential for successful and rapid industrialisation, one can see that the north managed to fulfil most of the requirements. An abundance of raw materials were found in mines of iron; for steelworks, coal; for fuel and gold; for extra capital. Southern cotton and other imported raw materials could also be used to produce a significantly more profitable finished product, such as cloth. The transport system in the north was much more sophisticated than that of the south. The railroads were built ahead of demand and this allowed for an increased speed of industrial expansion. Harold Vatter, in his book; The Drive to Industrial Maturity, The US Economy 1860 – 1914, states that, ‘The spread of railroad transport with its dramatically declining through rates, the accompanying fall in domestic waterway and ocean freight charges, and the development of telegraphic communication opened national and international markets to the US business firm.’ (8). This opening up to international trade and investment was a very positive result for the north of the US. A more developed banking system of large banks lending to large firms and an influx of foreign investment helped encourage entrepreneurs to open new business ventures whilst the ‘unique value to the growth of industry was the attractiveness of the North Central region to the iron and steel industry.’ (9) Higher wages and better working conditions in the northern factories led to an increased availability of labour and the technological advances of production lines, standardised parts and specialisation processes enabled industries to grow. Immigration, especially from Ireland during the famine or from China provided even more labour for the firms. Feeding these workers proved easy with farms in the North West focusing on producing consumables to sell to the cities and the increase of imports from Europe or elsewhere. This importation served to improve international relations further. Finally, the government played a role in encouraging Americans to buy American products and encouraging education which would in turn result in further developments in business and increased economic growth in the future. All these developments meant increased welfare for the citizens of the north. Once these factors are taken into consideration, it is easy to see why the north experienced better economic and social conditions compared with the south.
In conclusion, economic and social experiences were significantly different between the north and south of the US during the inter-war period. The legacy of the Civil War and the different attitudes towards industrialisation in the north and south resulted in the northern half of the country rapidly developing and leaving the south behind. The relatively stark contrast between the infrastructure for industrialisation in the north and south is another factor in explaining why economic and social experiences differed.
REFERENCES:
(1) H Vatter, The Drive to Industrial Maturity; The US Economy, 1860 – 1914, Greenwood Press, 1975, Page 30
(2) Cited from
(3) H Vatter, The Drive to Industrial Maturity; The US Economy, 1860 – 1914, Greenwood Press, 1975, Page 88
(4) Market Institutions and Economic Progress in the New South 1865 – 1900, edited by Gary M Walton and James F Shepherd, Page 128
(5) Market Institutions and Economic Progress in the New South 1865 – 1900, edited by Gary M Walton and James F Shepherd, Page 129
(6) H Vatter, The Drive to Industrial Maturity; The US Economy, 1860 – 1914, Greenwood Press, 1975, Page 91
(7) Market Institutions and Economic Progress in the New South 1865 – 1900, edited by Gary M Walton and James F Shepherd, Page 137
(8) H Vatter, The Drive to Industrial Maturity; The US Economy, 1860 – 1914, Greenwood Press, 1975, Page 169
(9) H Vatter, The Drive to Industrial Maturity; The US Economy, 1860 – 1914, Greenwood Press, 1975, Page 100
BIBLIOGRAPHY:
The Drive to Industrial Maturity; The US Economy, 1860 – 1914, Harold G Vatter
Market Institutions and Economic Progress in the New South 1865 – 1900, edited by Gary M Walton and James F Shepherd
