How Did The Civil War Affect The Economy

Financing the war was also a problem. Americans had been unaccustomed to paying taxes to the national government, but both sides had to end the tradition of hard money and minimal government by raising taxes, issuing war bonds, and printing paper money. Inflation was serious in the North and devastating in the South by 1865.

The Union blockade did not take full effect for many months, allowing the Southerners time to export their cotton harvest, and reap the financial benefits. Alexander Stephens had a plan at the start of the war that he estimated would net around $800M for the Confederacy, providing a sound financial base for the war effort. Although somewhat optimistic, and affected by practical difficulties, it is fair to say that the cotton crop would have been far better exported than stockpiled or burnt. Secondly, the Confederate government displayed an unwillingness to tax her citizens, preferring instead to print money, and suffer the rampant inflation that resulted. The Union financed its war effort mainly from taxation and bonds, while 60% of Southern funds came from unbacked paper money. The problems associated with this are clear to see: prices rose 100-fold over the four years of war, wiping out southerners' savings, and devastating the economy. The government's reaction to this, the third mistake, was to impress public goods for military use. However, rather than curbing inflation, this merely acted as a disincentive to supply, making essential items increasingly scarce. This, coupled with the poor infrastructure and parochialism of some State governors, meant that the army went hungry in a nation with the capacity to produce plenty of food. Finally, it is argued that the Confederate government should have done more to improve infrastructure and

The civil war was a period of American history in the 180s in which the southern states succeeded from the union because of slavery. Many believe the war no effect on the industralization of the country. However due to the civil war the economy was drastically changed, there were many social changes in The economical effects were that the souths economy was completely destroyed. Since the south no longer had free labor mending their plantations, the production of king cotton went downhill.

The Civil War may not have been as damaging to the economy of the North but it had a catastrophic effect on the South . The South's economy was brought to a halt. Businesses and banks were locked up due to inflation. Factories were still and silent with no workers and no sign of smoke to show even the slightest amount of

The Effect of The American Civil War on The Economy (North and South) Before 1800, the American economy was mostly agricultural, with many families owning their own farm and working and living on it, save for some people owning small shops, or craftsmen like writers or painters, though these people would likely still have a farm of some sort at their home. This all started changing rapidly after 1800, with the United States, and by extension, the world, going through an industrial revolution. This brought wealth largely to the North, who saw an influx of refugees and locals looking to work in the growing mills. The South, contrastingly remained largely agricultural, becoming one of the worlds largest producers of cotton. This was influenced in part by how fertile the soil was in the South, and greatly by the fact that slavery was still legal and extremely commonplace.

From the money spent during the war to the money they had to invest in later financial situations. The overall cost of the war was estimated to be around 15.5 billion dollars. The north and south both contributed to the total cost of the Civil War. In 1863 they were estimating 1.5 million dollars a day to invest in the war.

Transportation in the South collapsed during the Civil War. The North's water blockade severely hampered the South's economy. Cotton capitalism had lost out to industrial capitalism. Before the war, the South had been dependent on imports and trade for many everyday things. When the federal blockade began to limit Southern access to these products that included food, medicine and clothing, the Confederate army began to suffer, and their battle ability deteriorated as well.

In the period after the civil war there were many consequences in the economy in such categories as agriculture, labor, industrialization, and transportation. Many of these economic categories took a hit because many suppliers, work areas, and and employees were hurt or destroyed during the war. It took many years after the end of the Civil War for the agricultural industry, labor industry, industrial industry, and transportation industry to regain their footing in the economic world. Even then some of the industries would forever be changed by the things that the great Civil War caused in our country.

The economic changes were quite devastating for both sides but mostly towards the South. Much of the Southern plantations were destroyed along with many big cities, such as Richmond and Vicksburg. Another economic change which had a large impact on the South was due to the loss of slaves. Slaves were what had made their economy prosper and post-war, slavery had been abolished and southerners had lost their work force. War needs led to expansion and centralization of Southern government control over the economy. The economic setback to the South lasted for decades. Although the United States remained as one country, a number of Southern states through the 20th century have had to receive an inconsistent amount of federal aid and intervention. This intervention by the Federal government has caused disagreement and resentment between

The main economic hurdle the country faced was centered in the south. After the war many Southerners were dependant on federal aid subsistence and the emancipation proclamation cost the South $2 billion of it’s capital (Farmer). Furthermore, agriculture had been what maintained southern economy but post-war most farms and plantations were desolate and many of the few railroad tracks that were there before had been destroyed. Historian Charles Beard looks at the war as, “the triumph of the forces of industrialism over plantation agriculture.” However this is not entirely true. While there was some movement towards industry, the south was still primarily agriculturally based and had adopted a system of sharecropping to do so. It took until 1867 for

“…The new American nation-state that emerged during the Civil War was committed to rapid economic development.” (p.533) Large sums of money and land were dedicated to the building of railroads, which stimulated the economy and connected the nation more. The financial policy was changed a lot during the civil war. The government needed more money, so tariffs were raised and new taxes were imposed, including the income tax. The government borrowed a lot of money as well as printed a lot of money, called “greenbacks”.

After the Civil War, the Southern economy was affected in many ways. The Southern economy was devastated with Over 258,000 Confederate soldiers who lost their lives. The war put thousands of soldiers homeless and jobless. Before the war, the southern economy was once powered by rich farming plantations that dependent upon slave labor, but preceding the war, this inhumane system was disrupted. Four million African Americans were also without homes and jobs because of the abolition of slavery.

Since most of the slaves in the southern region moved up the northern region after the abolition of slave trade, this created a huge gap in the workforce of the southern region which strained the southern region. As a result the south printed huge amounts of money which caused inflation and subsequently plunged the region into debt. This region could not recover from the debts because it could not receive any foreign aid. In the aftermath of slave abolition, there was reduced demand for cotton which was a main source of revenue in the south which limited the region’s ability

There was an increase in slave workers in conjunction with the increase of cotton production, which successfully transitioned the south into an economy built solely on cotton production, creating a feudal system (Hammond 1897); upon the outbreak of the Civil War, the South planned on using cotton as a bargaining chip in an effort to gain help from Great Britain (Dattel 2009). The south burned approximately two million barrels of cotton in an attempt to create a shortage, however there was an abundance of cotton at the time and therefore Britain was not appealing to the needs of the South. After 1862, cotton had become low and the price of cotton escalated from $0.10 to $1.89 per barrel. Cotton prices helped the south to be financially secured, helping them to acquire ships and weapons to battle with (Dattel

The Civil War is the central event in America's history; while the Revolution created the United States, the Civil War determined what kind of nation it would be. The war was key to resolve two fundamental questions left unresolved by the revolution: whether the United States was to be a dissolvable confederation of sovereign states or an indivisible nation with a sovereign national government; and whether this nation, born of a declaration that all men were created with an equal right to liberty, would continue to exist as the largest slaveholding country in the world. At the beginning of the Civil War the North seemed to have the clear advantage, yet they were far less prepared than the South had been, by 1861 it seemed the South to have evident advantages. They needed time though to makes these advantage a reality. Three of these advantages include: a strong economy, superior military preparation, and the size and position that the South had possessed. Yet these did seem to give the South the upper hand in the days leading up to the war; it also caused issues within the days of battle.