Growth in the Postbellum Economy

Postbellum takes place following the Civil War to 1900 America. We will look at the effects on the economy in the north and south following the war, with an emphasis on differing industries within the two areas of the United States. The dichotomy between the effects of post war southern economy and the industrious north.

After emancipation the concept of plantation and usage of slavery was abandoned and the southern planters needed to find a new way to utilize labor. Concepts utilized in countries with a similar situation utilized sharecropping or indentured immigration as an alternative to slavery. Freedmen would prefer land ownership over crop sharing or wages, but land ownership rarely occurred for freedmen of the time. Motions by governmental entities landed on deaf ears for the need of land transfer to recent freedmen and the only land available was through sales from white to black farmers. The southern states continued to keep land sales to a minimum for black farmers, and only 4 to 6 % were landowners in 1876. This was due in part to violence being perpetuated to those who sell to black farmers.

            This allowed for a weak bargaining tool for black farmers but differed from the gang labor system prevalent with plantation work. Most freemen became sharecroppers, and the terms of contract altered and adjusted in response to cost, crop prices and yield. Share cropping became market driven, and potentially more beneficial to the freemen[1]. Unfortunately, the law in the south was written in favor of landowners but subservient to the sharecroppers. It made the sharecroppers wage laborers instead of a tenant/landlord relationship. This was done to make the sharecroppers employees the landowner and gave the power of the landowner to utilize criminal and civil law to control the sharecropper.

            In the north during this time was the rise of big business and the fruition of the second industrial revolution. One industry that made its mark and put America as one of the industrial world powers was the steel industry. Andrew Carnagie started in the railroad industry and following the civil war became a philanthropist in the steel industry. Innovated the smelting of iron by utilizing the Bessemer process, by allowing the high carbon content to be burnt away quickly. This allowed for cheaper steel and utilizing his connections within the railroad industry to be the main steel producer for the railroad.

            This was a new era for business and the start of major corporations. Bureaucratic management replaced personnel management based on individuals. The promise of limited liability for investors, and the start of controlling the raw material for the finished product[2]. This allowed for the companies and investors to insulate from negative fluctuations in the market and solely maximizes profits. This created mass migration to cities in the north creating jobs in factories to meet the needs for the producers.

            Tariffs created by the United States government in 1870 made an increased fee for steel created outside of the United States if imported in. Shipping costs declined in 1870, the two factors greatly stimulated the steel production and created a monopoly for industrial tycoons within America. The second industrial revolution promoted innovation and the creation of efficient methods and the movement from manpower to machine technology. This was before child labor laws, unions and work restrictions and the advent of the eight-hour workday. Henry Ford eventually figured out an equilibrium in the work life balance for workers with a livable wage. Unfortunately, the postbellum era was wonderful for innovation and the enhancement of American corporations, but awful work conditions for the average American.

            Postbellum America had six times more citizens in urban areas located in the northeast compared to the south. The north had the benefit of waterways, canals and established trade routes that benefited them over the south. The south under Jim Crow laws and during the reconstruction era essentially operated the same as they did during antebellum, except instead of slavery they attempted to control their workers in other means to keep their thumb on them and maintain cheap labor. In 1880 the difference in financial inequality between the north and south was prevalent due to the south being agricultural, loss of skilled work force and lack of education compared to their northern counterparts. The financial disparity is due to the human capital differences between the average northern and southerner and the time needed to converge to the standard of a nation. Due to the north being so far ahead of the south it would take decades for the south to reach the same human capital as the north.

Bibliography:

Byres, T. J.. 1983. Sharecropping and Sharecroppers. Oxford: Taylor & Francis Group. Accessed November 1, 2024. ProQuest Ebook Central.

Blackford, Mansel. “American Manufacturing, 1850-1930: A Business History Approach.” OAH Magazine of History 24, no. 1 (2010): 17–22. http://www.jstor.org/stable/40506022.

Inwood, Kris, and Ian Keay. “Transport Costs and Trade Volumes: Evidence from the Trans-Atlantic Iron Trade, 1870–1913.” The Journal of Economic History 75, no. 1 (2015): 95–124. http://www.jstor.org/stable/24550596.

[1] Byres, T. J.. 1983. Sharecropping and Sharecroppers. Oxford: Taylor & Francis Group. Accessed November 1, 2024, 124.

[2] Blackford, Mansel. “American Manufacturing, 1850-1930: A Business History Approach.” OAH Magazine of History 24, no. 1 (2010): 17–22. 19.