The Cotton Economy in the South

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The Cotton Economy in the South


The Cotton Boom. While the pace of industrialization picked up in the North in the 1850s, the agricultural economy of the slave South grew, if anything, more entrenched. In the decade before the Civil War cotton prices rose more than 50 percent, to 11.5 cents a pound. Booming cotton prices stimulated new western cultivation and actually checked modest initiatives in economic diversification of the previous decade. The U.S. cotton crop nearly doubled, from 2.1 million bales in 1850 to 3.8 million bales ten years later. Not surprisingly, given these figures, the southern economy remained overwhelmingly agricultural. Southern capitalists sank

money into cotton rather than factories or land. More precisely, they invested in slaves; the average slave owner held almost two-thirds of his wealth in slaves in 1860, much less than he held in land. Economic historians have concluded that returns on capital in antebellum Southern manufacturing were reasonable and sometimes lucrative, but they simply failed to attract investors in any numbers. By 1860, while northeastern states such as Massachusetts and Pennsylvania had nearly $100 million each invested in manufacturing enterprises, even Virginia, the most industrialized of the Southern states, had invested less than $20 million, and the figure dropped below $5 million elsewhere in the South. A comparison of the value of goods manufactured in each region is similarly lopsided: more than $150 million each for Massachusetts and Pennsylvania, less than $30 million for Virginia, and less than $5 million for Alabama.

Antebellum Railroads. The South did participate in the boom in railroad construction of the 1850s, more than quadrupling its total mileage. Results were less impressive and, more important, less transformative than they proved in the North and Midwest, however. By 1860 the railroad mileage per thousand square miles in the seven most populous Northern states had reached sixty-two; in the seven most populous southern states, the figure was twenty-two. In other words, the southern rail network was less developed by a factor of nearly three. Moreover, Southern railroads tended to run fewer trains and make fewer stops than Northern ones. In addition, most Southern lines were built to connect plantation districts to southern ports; that is, they did not open new territories or serve new industries, as railroads did in the North.

Preindustrial Structures. The dominance of the slave plantation in the southern economic landscape had mul-tifaceted consequences for Southern economic development, including key social and cultural ramifications. As businesses, the plantations channeled economic functions that went well beyond cotton (or sugar or tobacco) cultivation. For example, larger plantation owners either procured or produced on site goods and services that, in the free-labor economy of the Northern states, were produced and exchanged as part of the wider economy. Thus, few towns or villages emerged in the South. Much of the regions commercial exchange operated through the larger plantation owners or through businessmen known as cotton factors, usually agents of Northern or British firms, set up at river landings to market crops and provide planters with imported manufactured goods. The ideology of slaveownership probably inhibited key industrial values, fostering a fiercely defensive agrarianism and a sharp distaste for Yankee commercialism, industry, and wage labor, particularly as proslavery advocacy grew more insistent in the late-antebellum period. More tangibly, slavery cut off the potential immigration of free labor; while strong immigrant flows were feeding into the Northern economy in the 1850s, the South remained a largely closed society. Whether or not slaveowners can be called profit-minded entrepreneurs and capitalists (a question still under debate), the world they made was distinctly preindustrial, even anti-industrial.

Exports. The Southern economy was not undynamic or unproductive, though. During the period before the Civil War, Southern staples made up three-fifths of total American exports, and cotton was by far the countrys largest export. Southern plantations and farms supplied three-fourths of the world cotton cropthe mainstay of textile manufacturing in both Great Britain (the worlds leading economic superpower) and the United States. Southern planters saw themselves, and accurately so, as a key component in the Industrial Revolution and a critical part of an international economic system. As one planter bragged in 1853, Our Cotton is the most wonderful talisman in the world. By its power we are transmuting whatever we choose into whatever we want. James Hammond, speaking in the U.S. Senate five years later, was even more trenchant: The slaveholding South is now the controlling power of the world. Cotton, rice, tobacco, and naval stores command the world.... No -power on earth dares . . . to make war on cotton. Cotton is king.

Cotton Farms and Plantations. The image of the large cotton plantation dominates popular impressions of the antebellum South and Southern economy, and to be sure it was the preeminent economic unit of the region, but it was hardly the norm. Nearly three-fourths of free families in the South did not own slaves. The typical Southern white was a small farmer. Many of these families grew cotton, which unlike sugar or rice did not require heavy capital to cultivate. The crop was basically nonperishable and survived relatively rough handling, so it tended to survive transportation to distant markets in better shape than other crops. Small farmers often devoted at least part of their acreage to cotton, and small slaveowners could be found working alongside their slaves in the field throughout the region. Still, most slaves lived onand the bulk of the cotton crop came fromplantations worked by twenty or more slaves. On the largest plantations, fifty or more slaves were divided into gangs, run by drivers and sometimes, though not always, by overseers. On these large plantations, complex divisions of labor evolved. The most developed plantations came to resemble village economies: one Virginia planter in 1854, for example, owned and managed eight plowmen, ten hoe hands, two wagoners, four oxcart drivers, a carnage driver, a hostler, a stable boy, and various craftspeople, including two carpenters, five masons, two smiths, a miller, two shoemakers, five spinners, a weaver, and the owners household staff.

Wartime. The Civil War destroyed this economic world. Emancipation (coupled with Union victory) formally dismantled slavery, of course, but even before the Union army liberated slaves in a particular region, plantation and farm discipline eroded rapidly as African Americans, taking advantage of wartime conditions, began asserting control over their labor and, once Northern armies approached, ran away in large numbers. Whatever the mechanism of abolition, the war left the South devastated. Military destruction cut deep gouges into the regions infrastructure, farms, and white population. More basically, emancipation wiped out the bulk of Southern capital and the basis of its economy and society. In the decades that followed, the central facts of Southern economic life were social turmoil, a dearth of capital, and poverty.


The antebellum South was not all cotton plantations and riverboats. Small-scale industry did emerge in Southern towns such as Lynchburg, Virginia. By 1858 three railroad lines intersected there, and like railroad connections in the Midwest, the industrial infrastructure boosted manufacturing in the town. On the eve of the Civil War, Lynchburg held eleven grist mills, several coppersmiths, a fertilizer manufacturer, and four coachmakersone of which employed twenty-five workers making freight and passenger railroad cars for the Virginia and Tennessee Railroad. Lynchburgs most important industry, though, was tobacco manufacturing: in 1860 more than one thousand slaves and free blacks worked in tobacco factoriessteaming, stemming, and dipping leaves in syrup, then spicing the tobacco, molding it into plugs, and packaging it for delivery to the North. Most slaves were hired/ or rented from their masters, on an annual basis. Some of these slave workers managed to negotiate with employers on their own behalf; lucky ones earned cash incentives for overwork. During the war the curtailment of tobacco planting in the surrounding countryside shut down the industry, and postwar conditions fluctuated wildly. Freed workers tested their autonomy in several strikes during this period and wrested modest concessions from factory owners (all of whom were white). Meanwhile, in the wake of emancipation small black businesses proliferated in the town: by 1880 African Americans owned and operated groceries, liveries, produce stalls at the city market, saloons, bathhouses, and artisinal shops.

Source: Steven Elliott Tripp, Yankee Town, Southern City: Race and Class Relations in Civil War Lynchburg (New York: New York University Press, 1997).

Postwar Development. In aftermath of the war, the Southern economy began slowly to diversify and commercialize. Agriculturally, land-use patterns grew even more cotton-intensive as new stretches of upcountry shifted from food production, such as corn and pork, to cotton. But the region (like other parts of the nation) also underwent a boom in railroad construction, and enthusiastic boosters and carpetbaggers also started manufacturing enterprises in the 1860s. The rate of manufacturing growth leveled off in the following decade but redoubled in the 1880s and 1890s. These enterprises included cotton mills, commercial fertilizer manufacturing plants (by 1877 South Carolina phosphate mines were shipping more than 100,000 tons to foreign markets), and iron forges. Whereas antebellum Southern ironmakers had relied on outdated and inefficient charcoal-burning operations, their postwar counterparts ran modernized coal mines, coke ovens, and blast furnaces. The town of Birmingham, for example, became an industrial center during this period. Organized in 1871 as part of a land speculation project by the Louisville and Nashville Railroad, the town rapidly developed substantial iron- and eventually steelworks, contributing to a statewide coal output of nearly 200,000 tons in 1877 and pig-iron production of nearly 37,000 tons.

Stores, Towns, Cities: A New South. Other changes, equally far-reaching and much more widely distributed, overhauled southern demographics and commercial patterns. Within a few years after the end of the war, a network of stores and towns began to spread through the region. We have stores at almost every crossroad, a South Carolina correspondent reported, and at the railway stations and villages they have multiplied beyond precedent. Indeed, the number of towns in that state doubled in the 1860s, then tripled in the 1870s. By 1880 more than eight thousand stores had sprouted across the South. Railroad connections made larger towns such as Selma and Macon key market connections, channelling the flow of commercial goods from the North out to the country stores. Atlanta, which proclaimed itself the capital of the New South, grew even more dramatically, prompting a visitor in 1870 to report that the city contained more of the life and stir of business than in all the other Southern cities. Capital and the credit on which the new commercial enterprises operated traced back to Northern sources, but even so, the transformation profoundly reoriented southern habits of buying and selling, tying the region into new, national commercial markets.

Free Labor. As they adjusted to new commercial structures and infrastructures, Southernerswhite and blackbegan to hammer out new systems of labor. The most radical economic change of the postwar period was the elimination of slavery and the necessary definition of what free labor would mean in the cotton economy. The transition was not smooth, uniform, or peaceful. Former slaveowners retained their land, for the most part, and struggled to impose as much control as possible over the people who worked it. The freedmen, for their part, bargained for higher wages, insisted on the freedom to shop their labor, and refused to work in gangs as they had on the plantations. Plantation owners were forced to either pay wages (though few had money or access to it, in the postwar economic chaos) or, increasingly, to break their landholdings into family-sized plots and let African Americans farm it on a share basis.

The Emergence of Sharecropping. By the early 1870s the sharecropping system was solidifying. From the point of view of the freedmen, sharecropping permitted them to operate as family-sized economic units and to function with some measure of economic autonomy, but their measure of autonomy soon began to shrink. As they entered the new marketplace and began purchasing clothing, farming supplies, and other store goods, blacks put themselves under the control of storekeepers and former planters, who took out liens on future crops and thus bound the freedmen ever more tightly to cotton farming. One Alabama merchant gloated, I have sold Jack Peters negroes more goods this year than ever I sold Peters, and he owned 450 negroes. Ultimately in the postwar South, the entrenchment of a free market undid much of the gains of freedom itself.


Eric Foner, Reconstruction: Americas Unfinished Revolution, 1863-1877 (New York: Harper & Row, 1988);

Gavin Wright, Old South, New South: Revolutions in the Southern Economy Since the Civil War (New York: Basic Books, 1986).

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The Cotton Economy in the South

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