Postbellum America's Economy

 

The end of the Civil War and the subsequent changes that occurred as a result transformed regional economies across the United States in different ways. This was in part due to changing labor sources and the resources available.  Movement into the West allowed for the increase in resources necessary for the further industrialization of not only the North and East, but the South and West as well.  Qualitative data backs that up.  Quantitative data then shows that the changing economies following the Civil War greatly increased economic indicators and American wealth.

Changing labor sources was especially evident in the South.  In “Freedom, Economic Autonomy, and Ecological Change in the Cotton South, 1865-1880,” Erin Stewart Mauldin stated that four million slaves had been freed, but they faced obstacles to any type of financial freedom they might have expected as a result of their inability to acquire the resources necessary to take part in their own agricultural endeavors.  Following the war, the value of cotton was at an all-time high, and farmers sought to get back to pre-war production levels or beyond. Furthermore, she stated that Southern cotton planters moved beyond the pre-war numbers by exploiting the labor situation by using poor whites and blacks as sharecroppers.[1] 

Mauldin argued that as a result of the end of slavery and the beginning of the use of sharecroppers, workers refused to do the same type of work slaves had earlier done.  One example she gave was the idea of land maintenance.  Workers refused to do repair work on land and also refused to do land clearing to rotate crops to make sure that land remained solvent.  This created less suitable growing conditions.[2] Agricultural economic issues created a depressed state within the “New South” by the 1890s. These were also blamed on factors other than a lack of crop rotation such as high interest rates, the “crop lien system,” and “territorial monopolies” by rural merchants.[3]

Ballard C. Campbell wrote of the idea of the changing economy during the Postbellum United States.  He spoke of two “strands” that made up the change.  First, he addressed the movement of American settlers westward in “the settlement of agricultural land and the exploitation of natural resources.”  The second was the movement toward industrialization, though not a “mature, urban industrial society.”[4]

Campbell compared the United States to other powers who industrialized around the same time.  He argued that the United States was like the nations of Australia, Canada, South Africa and Argentina which he termed “frontier societies” because they too were opening new territory within their borders unlike other nations such as Britain, Germany, and Japan who had to ultimately turn to colonization instead.[5] Though not quantitative in nature, one could quantify that information by following the idea of Davis, Hughes, and Reiter.[6]  Places more newly settled or with greater potential for settlement had greater ability to increase their economy internally.

Campbell further noted trends in the changing American economy in a table, providing some hard quantitative data showing the potential the US had with increased internal peace. Between 1870 and 1900, the United States saw an increase in farmland going from 408,000 acres to 841,000 acres.  At the same time farmland doubled, the number of employees in manufacturing jumped from 2.5 million to 5.9 million.  The amount of railroad track went from 53,000 miles to 258,000 miles.  The amount of steel produced increased from .8 thousand tons to 11.2 thousand tons.  The GNP increased during that time from 7.4 billion dollars to 18.7 billion dollars, which was $531 per capita to $1,011 per capita (in 1958 currency).  While 1900 data was not available for a trend to show how the workforce changed from 1870, 1920 data was.  It showed that the agricultural workforce dropped from fifty-two percent to twenty-seven percent.  Manufacturing, transportation, mining, and construction increased from twenty-nine percent to forty-four percent.  Trade, finance, and public administration increased from twenty percent to twenty-seven percent.[7]

The South had seen much of the same in an attempt to keep an agrarian society.  There were major changes however as there was no involuntary servitude.  Agrarian society also expanded westward as new lands opened.  That land also provided the necessary resources as industry expanded in not only the East, but also in some areas of the South and West.  Trade and finance also increased.  New York City was “the center of long-term capital markets.”[8] Wall Street was “the nexus between local financial worlds and the emerging virtual world of financial information, which was both national and international.”[9]

There still remained a sectionalism as various parts of the United States developed differently, but that line had become more blurred.  Each part of economic life developed in a way that the US became a wealthier nation as shown in its Gross National Product.  Farmland increased.  The land from which resources were obtained increased.  Trade increased.  Production also increased.  Using statistical inference, the increases of each combined to help the economy increase even through economic cycles that included tough downturns.

 

Cited:

Campbell, Ballard C. “Understanding Economic Change in the Gilded Age.” OAH Magazine of History 13, no. 4 (1999): 16-20.  https://www.jstor.org/stable/25163305.

Davis, Lance E. Jonathan R.T. Hughes, and Stanley Reiter. “Aspects of Quantitative Research in Economic History.”  The Journal of Economic History 20, no 4 (1960): 539-547. https://www.jstor.org/stable/2114392.

Marler, Scott P. “Two Kinds of Freedom: Mercantile Development and Labor Systems in Louisiana Cotton and Sugar Parishes After the Civil War.” Agricultural History 85, no. 2 (2011): 225-251. https://www.jstor.org/stable/10.3098/ah.2011.85.2.225.

Stewart, Erin Mauldin. “Freedom, Economic Autonomy, and Ecological Change in the Cotton South, 1865-1880.” Journal of the Civil War Era 7, no. 3 (2017): 401-424. https://www.jstor.org/stable/26381451.

White, Richard. “Information, Markets, and Corruption: Transcontinental Railroads in the Gilded Age.” The Journal of American History 90, no. 1 (2003): 19-43. https://www.jstor.org/stable/3659790.

 


[1] Erin Mauldin Stewart, “Freedom, Economic Autonomy, and Ecological Change in the Cotton South, 1865-1880,” Journal of the Civil War Era 7, no. 3 (2017): 401, https://www.jstor.org/stable/26381451.

[2] Ibid., 408-413.

[3] Scott P. Marler, “Two Kinds of Freedom: Mercantile Development and Labor Systems in Louisiana Cotton and Sugar Parishes After the Civil War,” Agricultural History 85, no. 2 (2011): 226-227, https://www.jstor.org/stable/10.3098/ah.2011.85.2.225.

[4] Ballard C. Campbell, “Understanding Economic Change in the Gilded Age,” OAH Magazine of History 13, no. 4 (1999): 16-17. 

[5] Ibid.

[6] Lance E. Davis, Jonathan R.T. Hughes, and Stanley Reiter, “Aspects of Quantitative Research in Economic History.”  The Journal of Economic History 20, no 4 (1960): 546-547, https://www.jstor.org/stable/2114392.

[7] Campbell, 17.

[8] Richard White, “Information, Markets, and Corruption: Transcontinental Railroads in the Gilded Age,” The Journal of American History 90, no. 1 (2003): 25, https://www.jstor.org/stable/3659790.

[9] Ibid.

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