The American Civil War Economics: Northern Economy

Figure 1.-- The Northern states were rapidly industrializing at he time of the Civil War, but the the coutry was still largely rural--about 80 percent. The South was much more rural than the rest of the country--about about 90 percent. Even so, farm production was increasing because of improved farming methods and the increasing mechinization. The whole United Stattes reports a record crop (1859). And the wheat harvest if just the Uniion was even larger. There were also major increases, in corn, pork and beef. Unlike the South, agricultural harvests i the north were not dominated by a single cash crop. The image here was a sketch Winslow Homer entitled the 'The last days of harvest'. It appeared in 'Harper's Weekly' (December 6, 1873). This was a decade after the War, but the image would not have been much different.

The economy of the North and South were both most rural and largely agricultural when the Unite States was founded (1780s). Gradually the economies began to develop along different lines. Commerce, finance, and manufacturing, and manufacturing were already more developed in the northern states and increased more rapidly in the North. Industrialization began to develop (1820s) and grew much more rapidly than in the South. The first industry was textile mills, benefiting from the expanding cotton production in the South. A major factor was the coming of the rail roads (1830s). This led to the development of heavy industry, iron and steel was needed for the rails, bridges, and locomotives. And the railroads greatly facilitated the transport of the necessary raw materials and farm produce. This primsrily occurred in the northern states. Agriculture remained the major sector of the economy and most American still lived in rural areas, although cities were growing rapidly and urbanization increased with every decade. The North was also an engine for innovation and invention. Capitalism drove the economy. There was a steady drive for increasing productivity in sharp contrast to the South where slave labor meant there was little incentive to innovate and invent. The economic expansion of the United States was well underway at the time of the Civil War. The War proved to be a huge stimulus. Surprisingly with so many men mobilized for war, production not only was not adversely affected but actually increased substantially, both agricultural and industrial production. Agricultural production increased to unheard of levels, despite the mobilization of men and the loss of production from the 11 states seceding from the union--a remarkable achievement. Increasing prices were a factor. In addition, improvement in farm equipment and the invention of labor saving machinery helped to increase productivity. This enabled the Union to not only feed and equip the massive army mobilized, but to fully meet civilian needs. As a result, the Union military and civilian population was not only well fed, but the armies were well equipped and supplied. Of particular importance was the production of artillery that played such an important role in Civil War battles. .Industrial production was already substantial, but the War resulted in an enormous expansion of industrial production.

Created: 9:53 PM 8/29/2023
Last updated: 9:53 PM 8/29/2023