Economic%20Issues%20that%20Contributed%20to%20the%20Tensions%20between%20North%20and%20South

1
Economic Issues that Contributed to the Tensions
between North and South
2
Economic Growth of America

• 1820-1850 United States transforms from rural
  to increasingly urban
• Demographics
• Population
• 1815 8.4 million
• 1860 31.5 million
• Gross National Product doubled every 15 years
• Canals 1825 - Erie Canal
• Made NYC a major economic hub
• Sparked canal building throughout US.
• Railroads 1815 23 miles, in 1860 30,626
  miles
• NY to Philly
• 1800 2 days, 1860 less than a day
• NY to Chicago
• 1800 6 weeks, 1860 2 days
• Banks finance business ventures
• 1815 208 state banks
• 1860 1,500 state banks

3
Growth of the North Industry

• Post Revolution
• Factories in every state in the Northeast
• Produced textiles, firearms, machinery, railroad
  cars, etc
• Poor working and living conditions
• Influx of immigrants head North
• By 1860, America was the third largest industrial
  power in the world.

4
Industry in the South

• North had 5x the number of factories
• Industry in the South
• Upper South - ¾ of Souths manufacturing
  capability and nearly all heavy industry
• Most of Souths heavy industry in St. Louis,
  Louisville, and Baltimore

5
Slavery Demographics in South

• In 1860, Population of the South 9 million
• 4 million were slaves
• Only around 384,000 Southerners owned slaves
• About 10,000 big planters in the south
• 7,000 had between 50-100 slaves
• 3,000 of these had over 100 slaves
• 14 had about 1,000 slaves

6
American Economic Decisions that Divided North
and South

• Land Policy
• Chartering a National Bank
• Introduction of Protective Tariffs
• A National System of roads and canals

7
Distribution of Land

• Homestead Act of 1860
• Northerners favored
• Southerners opposed
• Spread free soil sentiment
• Cheap land would discourage large operations
  (plantations)
• Westerners
• Wanted expansion
• Rejected slaverynot on moral grounds but because
  of racist attitudes

8
Banks after 1834

• No National Bank
• Andrew Jackson
• State chartered banks - small
• Northeast lobbied for the creation of banks
  regulated by the federal government
• Southerners disagreed
• National Bank Bill of 1860 was shot down by
  Southern opposition

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Reality About National Bank

• There was a regional aspect to support for, or
  opposition to a National Bank
• Southerners fears
• Implied powers of fed govt slavery
• More a market economy/ non-market economy
  division
• Big planters liked the national bank
• Little guys did not (Panic of 1819)

10
Tariffs

• What are tariffs?
• Why would America implement tariffs?
• What problems are associated with tariffs?
• Why does the US want to implement tariffs after
  the War of 1812?

11
Tariffs and Sectionalism

• Northern view of tariffs
• Protect industry
• Southern view of tariffs
• Hurts southern exports
• Raises cost of imported goods

12
Nullification Crisis

• Between 1816-1832 Tariff rates will rise
• Tariff of 1832 Congress placed tariff on
  woolens and iron.
• South Carolina Issued Ordinance of Nullification
• Rejected tariff
• Refused to recognize it
• Organized a militia
• Threatened to secede
• Jackson didnt like this

13
Compromise with a Mailed Fist

• Tariff of 1833 (Henry Clay designed)
• Tariff reduction bill
• Force Bill
• Assemble the troops
• South Carolina quickly complied

14
Transportation

• People opposed federal funding of improvements if
  it didnt help their state
• 1850s railroad from NO to Calif was defeated
• Southerners wanted a Southern terminal,
  northerners wanted a northern one (NO v. St
  Louis, v. Chicago)
• Southerners feared the hastening of creation of
  free states
• Feared implicit power of federally-funded rail

15
States Rights

• The North was changing rapidly with the growth of
  industry, while the south remained the same
• As a result, new legislation was generally
  initiated by northern politicians trying to
  adjust to a changing economy
• Southerners argued that tariffs banks were
  unconstitutional extensions of national power
  over the states. This is one of the reasons the
  South called for stronger states rights and
  weaker federal powers.

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Putting Economics in Perspective

• Economic issues such as the tariff, internal
  improvements, banking as the heart of the issue
  of the cause of the Civil War went out of favor
  decades ago