Economics of the Civil War

Economics of the Civil War Lesson 18 Why Did the South Secede” Lesson 19 An Economic Analysis of the Civil War

Why Fight a War You Know You’ll Lose? • In light of the economic advantages of the North over the South, it seems in retrospect almost irrational for the South to have engaged the North militarily. Why did the South secede?

Visual 18.1 Why Did the South Secede from the Union? • Was the South irrational to fight the Civil War? Some people thought so. William Faulker, a distinguished novelist from Mississippi, put the question in these terms: • Who else would have declared a war against a power with: • 10 times the area? • 100 times the men? • 1,000 times the resources?

Visual 18.2 Advantages of the North At the outset of the Civil War, the North had many material advantages over the South. • The North had a population of 22 million. • The South had a population of 9 million which included 3.5 million slaves. • The North had 92 percent of the nation’s industries. • The North had 22,000 miles of railroad track. The South had 9,000. • The North controlled the U.S. Navy and the merchant marine.

Visual 18.3 Advantages of the South While the South had fewer material advantages, some elements were in its favor. • The South had a clear war objective – to win independence. The North fought for the somewhat less definite goals of preserving the union and eliminating slavery. • The South needed only to defend its territory. The North had to carry out an invasion. • The South had a strong military tradition. Many U.S. Army and Navy officers had been recruited from the South. Great arsenals and army bases were located in the South. • The South believed that its cotton trade with Great Britain and France would cause these nations to provide aid.

Visual 18.4 Eliminating Slavery: Alternative Approaches and Their Probable Consequences 1. Emancipation of the slaves by the owners without compensation. • How might this alternative affect slave owners? 2. Emancipation of slaves with compensation paid to slave owners by the federal government. • How might this alternative affect slave owners? • How might this affect taxpayers in the North? In the South?

Visual 18.4 Eliminating Slavery: Alternative Approaches and Their Probably Consequences 3. Fighting to eliminate slavery. • Did additional compromise on slavery appear to be likely? • What might the benefits be of fighting to eliminate slavery? • What might the costs be of fighting to eliminate slavery?

Visual 18.5 Was Compromise Possible? • The Missouri Compromise of 1820 admitted Missouri and Maine to the Union. Missouri was a slave state and Maine was a free state. • This dual admission - - one slave and one free state - - allowed the nation to preserve the existing balance between slave states and free states.

Visual 18.5 Was Compromise Possible? • The Kansas-Nebraska Act of 1854 overrode the Missouri Compromise. • It authorized voters in portions of the Louisiana Purchase to decide whether or not to permit slavery. • In the case of Dred Scott v. Sanford (1857), the U.S. Supreme Court ruled that Congress could not prohibit slavery in any U.S. territories.

Economic Analysis of the Civil War Lesson 19

Visual 19.1 Did the U.S. Civil War Cause Industrialization? • Many individuals believe that the Civil War brought unprecedented economic growth to industry. • Simulated by increased demand for wartime goods, many industrialists charged ahead to produce the goods and services Production of iron and steel are examples. • Taking the Civil War as one example, how does way seem to affect a nation’s economy? Does war foster economic growth or retard economy growth?

Northern Production Increased • New war factories • Labor saving machines were invented • Sewing machine • Agriculture production increased • Reaper • Railroads expanded

Visual 19.2 Benefits and Costs of the U.S. Civil War Benefits of the U.S. Civil War • End of slavery • Protection of the Constitutional structure of U.S. • Increased industrial production of war-related goods • Higher military employment

Visual 19.2 Benefits and Cost of the U.S. Civil War Costs of the U.S. Civil War • Human death and dismemberment • Destruction of capital (tools, factories) • Loss of livestock • Reconstruction • Economic decline of the South • Uncompensated loss of capital investment in slaves • Inflation • Production inefficiencies • Decreased production of civilian goods and services • Loss of rights of states to secede or claim independence from the Union when in disagreement with the President or the Congress.

What Was the Opportunity Cost of War?

Counterfactual: What if the U.S. Civil War Had Not Been Fought • 600,000 lives would not have been lost. • Hundreds of thousands of workers would have been released into the economy. • One in four persons in the North went into military service. They might otherwise have been employed in the private sector. • Without the war, investment would not have been diverted from civilian into military production.

Economics of the Civil War