Economy of the Confederate States of America

The Confederate States of America had an agrarian-based economy that relied heavily on slave-worked plantations for the production of cotton for export to Europe and the northern US states. If ranked as an independent nation, it would have been the fourth richest country of the world in 1860.[1] When the Union blockaded its ports in summer 1861, exports of cotton fell 95 percent and the South had to restructure itself to emphasize food production and munitions production. After losing control of its main rivers and ports, it had to depend on a weak railroad system that, with few repairs being made, no new equipment, and federal raids, crumbled away. The financial infrastructure collapsed during the war as inflation destroyed banks and forced a move toward a barter economy for civilians. The government seized needed supplies and livestock (paying with certificates that were to be paid off after the war, but never were). By 1865 the economy was in ruins.

Agriculture

Cotton production and export from 1861 to 1865[2]
Sources and EndsBales
(mil-
lions)
Production 6.8
Ends
Used in the South0.4
to U.K. & Europe 0.5
to the North0.9
Destroyed3.3
Sold Postwar1.8

(Farming) The main prewar agricultural products of the Confederate States were cotton, tobacco, and sugarcane, with hogs, cattle, grain and vegetable plots. Pre-war agricultural production estimated for the southern states is as follows (union states in parentheses for comparison): 1.7 million horses (3.4 million), 800,000 mules (100,000), 2.7 million dairy cows (5 million), 5 million sheep (14 million), 7 million cattle (5.4 million), 15.5 million swine (11.3 million), 187 million pounds of rice, 199 million pounds of tobacco (58 million), 5 million bales of cotton, 20 million bushels of oats (138 million bushels), 31 million bushels of wheat (114 million bushels), and 280 million bushels of corn (396 million bushels).[3]

In 1862, there was a severe drought that, despite efforts to switch from cotton planting to grain farming, caused food shortages and even bread riots in 1863-64.[4] The harvests were fairly abundant after 1862, but often went to waste as they could not be harvested or moved to markets.[5] Corn was raised in large quantities, and, in general, the raising of food products instead of tobacco and cotton was a necessity.

The scarcity of food in the armies and cities was due mostly to the shortage of male labor, the disruption of transportation and finance. Compounding the problem was the ever-increasing number of refugees flooding into cities; food distribution became increasingly harder, and at times, impossible.[6]

The progressive destruction of the southern railroad network, along with rapid inflation, affected women in the cities especially hard as they found food prices too high to afford. This could be seen in the infamous Richmond bread riots of April, 1863, when a large mob of starving women in the city looted stores for food, ignoring the pleas of President Jefferson Davis who stood upon a cart to toss coins to the women, who dispersed only after he threatened to order a company of militia to open fire.[7] This and other stories of hardship on the home front greatly demoralized Confederate soldiers when they received letters from their wives, and hence "thousands of husbands discharged themselves" to save their families over the course of the war.[8]

Despite the Confederacy's strength in cotton production, it produced very little cloth or clothing, and by the end of the first year, its most productive textile manufacturing regions were in the hands of the Union.[9] Instead, the South increasingly relied on foreign sources.

Manufacturing

The Confederacy's industrial workforce, like its agricultural workforce, was characterized by its wide and extensive use of slaves.[10] In the 1850s, anywhere from 150,000 - 200,000 slaves were used in industrial work.[10] Most, almost 4/5, were owned directly by industrial owners, the other being bonded out by plantation owners.[10] Often, manual labor performed by slaves was combined with skilled white artisans to better compete with northern and foreign industry.[11]

The total number of factories in the antebellum south numbered 20,600 (100,500 in the north), 11,000 non-slave workers (1.1 million in the north) and a total value of products amounting to $155 million ($1.5 billion in the northern states).[3]

Despite the profitability of slave industry, Southern industry had been undercapitalized for years by the time of the outbreak of the war.[12] Besides a social preference for ownership of real property, agriculture in staple goods was considered the easiest route to profitability; thus agriculture always outbid industry when it came to capital allocation.[12] As early as 1830, Southern industry was a generation behind, and by the Civil War, was vastly inferior to northern and foreign manufacturing.[12]

Shipbuilding

At the outset of hostilities, only two government-owned naval yards were located in the South. Of private shipyards, anywhere from 36-145 existed, of varying tonnage and skill. While sawmills were readily available to supply the construction of wooden boats, iron processing in the South was limited.[13] The result was that few ships were built.[14] The most famous was the CSS Virginia, a steam-powered ironclad warship built in 1861-62 using the raised and cut down original lower hull and steam engines of the scuttled USS Merrimack. Virginia fought in the Battle of Hampton Roads against the Union's USS Monitor in March, 1862, in what was the world's first battle between ironclads.[15]

Iron Industry

The Tredegar Iron Works in Richmond by 1860 it was the third-largest iron manufacturer in the United States.[16] During the war it was the primary iron and artillery production facility of the Confederacy.

Gallego Flour Mills

The Gallego Flour Mills in Richmond gained international reputation for the superior type of flour which he shipped to Europe and South America.[17] At the time of their destruction in 1865, they were the largest of their kind in the world.[18][19]

Mining/Mineral Resources

Salt was a crucial resource during the Civil War. Salt not only preserved food in the days before refrigeration, but was also vital in the curing of leather.[20] The salt could be extracted from natural rock salt deposits (such as those in ancient underground salt domes) and through the boiling and evaporation of salt water, usually seawater.[21] The main salt works and known natural salt deposits of the Confederacy were located in Virginia, Louisiana, and Florida.[22]

Textiles

Early in the war, the government used cottage and home-based industry to manufacture such as shirts and shoes.[23] Finding this approach inadequate, the government moved to consolidate finished-goods production into military-run textile shops concentrated in larger cities. These textile shops, with the exception of those captured or destroyed, continued to run until the end of the war. Private mills generally supplied raw textiles to these shops for refinement.[23]

Privately owned textile mills found themselves in a very lucrative market. Ever-rising prices due to scarcity and high-levels of demand made sales to the public far more profitable than fixed-price contract sales to the military. So much so, that in the first year private mills often refused or cut back on fulfillments ordered by Confederate quartermasters. The advent of conscription, giving the government de facto control over the labor force, as well as control over railroads and other forms of transport, precluded such avoidance.[24]

Government Control

The only manufactures over which the confederate government sought control were those which directly supplied the needs of the army. These were two classes: (1)arms and munitions, which were under the charge of the ordnance bureau; and (2) a more diverse group which included clothing, blankets, tents, shoes, wagons, saddles, and harness, which for the most part were provided by the quartermaster's bureau.

Charles W. Ramsdell[25]

While the general political sentiment in the Confederacy was reluctance towards government involvement in private business, the exigencies of the war forced the Confederate government to exert a strong control over industry related to war aims.[25] The bureau of conscription, empowered by the conscription act of 1862 and 1863, dispensed exemptions to those in industry, if necessary, provided a powerful incentive to private industry to fulfill government contracts. If an owner refused, they would find themselves quickly without their labor force, free or slave.[26]

Transportation

Navigation

Before the war the South had a good system of transportation by riverboats on a huge network of navigable rivers, plus a dozen ocean ports. In May 1861 the Union naval blockade shut down almost all port activity except for blockade runners. International and coastal traffic fell 90 percent or more. In peacetime, the vast system of navigable rivers allowed for cheap and easy transportation of farm products. The vast geography made for difficult Union logistics, and Union soldiers were used to garrison captured areas and protect rail lines. But the Union Navy seized most of the navigable rivers by 1862, making its own logistics easy and Confederate movements difficult. After the fall of Vicksburg in July 1863, it became nearly impossible for all but small military units to cross the Mississippi with Union gunboats constantly on patrol. The Eastern and Western parts of the Confederacy were thereafter never satisfactorily connected.

Railroads

The outbreak of war had a depressing effect on the economic fortunes of the Confederate railroad industry. With the cotton crop being hoarded in an attempt to entice European intervention, railroads were bereft of their main source of income.[27] Many were forced to lay off employees, and in particular, let go skilled technicians and engineers.[27] For the early years of the war, the Confederate government had a hands off approach to the railroads. It wasn't until mid-1863 that the Confederate government initiated an overall policy, and it was confined solely to aiding the war effort.[28] With legislation authorizing "impressment" (commandeering) that same year, railroads and their rolling stock came under de facto control of the military.

At the beginning of the war (1861), the northern (Union) states included 20,000 miles of railroad while the Confederate states had 9000 miles (1.7 thousand miles total in the three border states of Missouri, Kentucky and Maryland).[3]

The Confederate Army of the Shenandoah did use their railroad system effectively at the First Battle of Manassas ( Bull Run) on July 21, 1861. Confederate reinforcements under Brig. Gen. Joseph E. Johnston arrived from the Shenandoah Valley by railroad and the course of the battle quickly changed.

Gen. Braxton Bragg also effectively used the southern railway system to amass forces in central Tennessee against the Union forces of Gen. Don Carlos Buell in July, 1862. The rail system was used to move some 35,000 men down the length of the state of Mississippi, then across Mobile Bay to Mobile, Alabama and then up the length of the state of Alabama arriving finally at Dalton, Georgia. This was a total distance of about 766 miles and involved "more than half a dozen" railroads. This circuitous route had to be used because the Union Army controlled a key railroad which would have offered a more direct route.[29] According to Jean Edward Smith, "Bragg had moved men farther and faster than troops had ever been moved before. He had united two Confederate armies, his own and Smith's [Gen. Edmund Kirby Smith] and stood poised to change the direction of the war."[30]

In the fall of 1863 the Army of Northern Virginia sent most of Gen. James Longstreet's First Corps, Army of Northern Virginia via rail from Virginia to northern Georgia in order to reinforce Gen. Bragg's Army of Tennessee just prior to the Battle of Chickamauga. Approximately 15,000 men[31] were transported about 900 miles[32] to the Georgia theater of operations. This operation involved sixteen different railroads[32] and took a total of seven days (9 September-16 September) for the entire corps to arrive in Georgia.[32][33]

In the last year of the war (1865), the Confederate railroad system was always on the verge of collapse. The impressment policy of quartermasters ran the rails ragged. Feeder lines were scrapped to replace iron for trunk lines, and the continual use of ill-maintained rolling stock wore them down faster than they could be replaced.[5]

Foreign Trade

Export

Cartoon mocking the initially ineffective attempts of the North to blockade the Confederacy

The states that entered the Confederate States accounted for 70 percent of total US exports by dollar value, and the Confederate leaders believed that this would give the new nation a firm financial basis. Cotton was the primary potential export, accounting for 75 percent of Southern goods either shipped to northern US states or exported in 1860. The Confederate States entered the war with the hope that its near monopoly of the world cotton trade would force the European importing countries, especially Great Britain and France, to intervene in the war on her behalf.[34] In 1861, Southerners at the local level imposed an embargo on cotton shipments — it was not the government's policy. Millions of bales of cotton went unshipped, and by summer 1861 the blockade closed down all normal trade.

A small fraction of the cotton was exported through blockade runners. In the total course of the war, 446,000 bales of cotton were exported to England and Europe.[35] Ironically, the largest amount of cotton exports went to the United States.[35] Most cotton however, would never be traded during the Confederacy's brief existence, either being destroyed during the war or hoarded till the end.[35]

Disputes over the proper tariff rate had been a sectional political issue between northern and southern states at one point almost leading to a prior dissolution of the Union. Southerners mostly opposed protectionist tariffs for finished goods, fearing they would lessen the value of their raw material exports, as foreign manufactures would be blocked sale back to the United States. Southern political pressure kept the tariffs at low levels from 1847 through 1860. The founders of the Confederate States codified this opposition in the Confederate States Constitution with a prohibition of protectionist tariffs. One of the first acts of the Confederate Congress was the lowering of import tariffs from the then current US average rate of 20 percent to 10 percent.

However the Confederacy proposed to impose its tariffs on all imports from the USA, which would have been a vast increase in taxes for the Southerners. In practice almost no tariffs were collected; the total customs revenue collected was about $3.3 million (Confederate dollars), from 1861 through 1864. [Historical Statistics (2006) series Eh201]

Import

"...the seceded South, even before the outbreak of hostilities, was faced with the necessity of securing the basic materials of war. It lacked guns, cannon, and munitions of every sort; it lacked most of the raw materials from which they could be manufactured. The South needed clothing, medicine, tools, and, later on, food. It lacked the factories, too, with which to manufacture the sinews of war, and the machinery and skilled labor with which to establish and run factories. As a result the Confederacy, at the very start, turned it eyes towards Europe."

William Diamond[36]

Just as the blockade had made export of Confederate goods prohibitive, so did it frustrate the importation of vital goods to the Confederate war-effort.[36] Importers often had to use transshipment points, such as ports in the Caribbean, transferring and splitting cargo onto smaller ships for the final leg. Thus shipments became sporadic and delayed.[37]

In the immediate aftermath of Fort Sumter, agents, headed by Major Caleb Huse, were sent abroad to Europe to procure weapons and other necessary supplies.[38] Despite these efforts, the first shipment did not leave England until August, and didn't arrive in the South till November, a full 8 months after the outbreak of hostilities.[39] The slow rate of importation continued from September 1861 to February 1862, with a grand total of 15,000 small arms procured for the Confederate's war effort.[39]

After February, however, the Confederacy's fortunes in weapons procurement changed dramatically. From April 1862 till August of that year, the Confederacy was able to procure some 48,150 arms, over three times the amount gained in the same period the year before.[39] By February 1863, the total number of guns purchased had raised to a total of 174,129.[39] While some of these weapons were caught by the Union navy in the blockade, a slight majority made it through, with 40.9 percent of all privateers being caught in 1862.[40]

Raw minerals that the South was bereft of were acquired through trade with Mexico, most notably sulphur, copper, powder, and niter.[41] Union officials recognized the extent of trade with Mexico, and aggressively tried to interrupt it.[42] Despite their efforts, and the fall of the Mississippi into Union hands, flow of goods from Mexico to the Confederacy was unabated until the end of the war.[43]

While attempts were made to engage shipbuilders on the Pacific coast, in an attempt to access ports in South America, none of the plans came to fruition.[44] Only the Confederate steamer, the Alabama, after finding the Atlantic too hostile, set sail for Pacific waters in an attempt to wreck America's Far-East trade. Though it succeeded in its mission to harass American trade interests, it did not manage to open new ports or engage in trade for the Confederacy,[45] and it was sunk before it could return home with its captured goods.

Blockade runners who sold to the public dealt almost exclusively in luxury and other high-profit items, despite the ever-present need for staple goods.[46] The practice was so egregious that the Confederate congress came to ban the import of luxury items, though the law was not effectively enforced.[46] Smuggling over land, from either Mexico or Union territory, also provided a profitable trade in luxury items, though it also become a useful means of acquiring much-needed medicine.

Finance

Most of the available capital in the confederate states was invested in slaves or cotton land. During the war there was no way to monetize it to support the war effort. The weak banking system was unable to handle the financial demands and largely collapsed. The main international bankers in Europe were reluctant to finance the Confederacy, so it turned to smaller houses and speculators who bought $15,000,000 in Confederate bonds with gold.[47] The gold was used to buy warships and supplies to be brought in by blockade runners. By highlighting Britain's economic links to the Northern states and pointing to the potential dangers of meddling in the conflict, financiers in the City of London provided Parliament with a powerful economic justification for the policy of neutrality.[48]

At the beginning of the war, the Confederacy had some $47 million in bank deposits (compared to $189 million in northern banks), and $27 million in specie (gold and silver coins) holdings (compared to $45 million worth in the northern states).[3]

Money

Bad money drives out good, and supplies of gold and silver were hoarded, driven out of circulation by the rising flood of paper money. The first notes were issued in March 1861, and bore interest. They were soon followed by others, bearing no interest and payable in two years, others payable six months after peace. New issues were continually provided, so that from an initial $1,000,000 in circulation in July 1861, the amount rose to $30 million before December 1861; to $100 million by March 1862; to $200 million by August 1862; to perhaps $450 million by December 1862; to $700 million by the autumn of 1863; and to a much larger figure before the end of the war.[49]


This policy of issuing irredeemable paper money was copied by the individual states and other political bodies. Alabama began by issuing $1,000,000 in notes in February 1861, and added to this amount during each subsequent session of the state legislature. The other states followed suit. Cities also sought to replenish their treasuries in the same way. Corporations and other business concerns tried to meet the rising tide of prices with the issue of their individual promissory notes intended to circulate from hand to hand.

As a result of this redundancy of the currency, its value collapsed. Gold was quoted at a premium in Confederate notes in April 1861. By the end of that year, a paper dollar was quoted at 90 cents in gold; during 1862 that figure fell to 40 cents; during 1863, to 6 cents; and still lower during the last two years of the war. The downward course of this figure, with occasional recoveries, reflects the popular estimate of the Confederacy's chance of winning independence.

The oversupply of currency drove the price of commodities to exorbitant heights, and disarranged all business. Savings in nominal dollars lost 90 percent or more of their value. It affected different classes of commodities differently. Imports like coffee became very expensive, and ersatz substitutes were found. (Massey 1952) Confederate asset price stabilization policies appear to have increased the velocity of circulation, and counterproductively channeled inflationary pressures into other areas of the economy. Three successive monetary reforms encouraged holders of treasury notes to exchange these notes for bonds by imposing deadlines on their convertibility. Confederate legislative efforts aimed at precipitating the conversion of currency into bonds did temporarily suppress currency depreciation. These acts also triggered upsurges in commodity prices, however, because note holders rushed to spend the currency before their exchange rights were reduced.[50]

Speculation, prices and shortages

"January 1, 1864. … The prices of everything are very high. Corn seven dollars a bushel, calico ten dollars a yard, salt sixty dollars a hundred, cotton from sixty to eighty cents a pound, everything in like ratio."
"November 16, 1864. Paid seven dollars [Confederate money] a pound for coffee, six dollars an ounce for indigo, twenty dollars for a quire of paper, five dollars for ten cents' worth of flax thread, six dollars for pins, and forty dollars for a bunch of factory thread."

Journal of Dolly Sumner Lunt Burge. Mrs. Burge, a Maine native, widow of Thomas Burge, lived on the Burge Farm near Covington, Georgia, about 40 miles east of Atlanta. The Battle of Atlanta, July 22 to September 2, 1864, ended with the city's surrender. The U.S. Army under General William T. Sherman then began in earnest the subsequent scorched-earth campaign Sherman's March to the Sea, which ended with the negotiated surrender of the city of Savannah on December 21, 1864.[51]

Speculators were continually abused for importing high-priced luxuries instead of confining themselves to supplying the government with foreign war supplies. Tobacco and cotton, which found few foreign buyers owing to the blockade, actually fell in value as quoted in gold. The great divergence of the price of these two commodities in the CSA and abroad — the New York price of cotton increased more than tenfold during the war — offered the strongest inducement to evade the blockade and export them. A small amount of cotton reached the world market by way of the Atlantic ports or Mexico, and netted those concerned in the venture handsome profits. By 1862, Treasury agents from Washington were buying cotton, offering very large sums for planters willing to do business with the enemy. Tobacco and cotton were smuggled through the military lines in exchange for hospital stores, coffee and similar articles. The military authorities tried to suppress this illicit trade, but at times even they were carried away by the desire to secure the much-desired foreign supplies.

The disturbances of prices, their local differences and fluctuations, produced wild speculation in the Confederate States. Normal business was almost impossible, and a gambling element was forced into every transaction. Speculation in gold was especially pronounced. Legislation and popular feeling were aimed at it, but without avail. Even the government itself was compelled to speculate in gold. Speculation in food and other articles was equally inevitable and was much decried. Laws were formed to curb the speculators, but had no effect.

The policy of the Confederate banks during the war encouraged speculation. The New Orleans banks had been well managed, and remained solvent until September 1861. The banks of the other states suspended specie payments at the end of 1860, and thereafter enlarged their note issue and their loans, thereby adding to the general redundancy of the currency and stimulating the prevalent speculative craze. They did a large business by speculating in cotton, making advances to the planters on the basis of their crops. The state governments also used their note issues for this purpose, the planters urgently demanding relief as their cotton could not reach a market.

The Confederate government also made advances on cotton, and secured large quantities by purchase to serve as the basis of cotton bonds. The rise in prices, which reflected the redundancy of the currency, was no advantage to the producer. The government made frequent efforts by legislation and otherwise to reduce the prices demanded, especially by the farmers. As a result, production of food products fell off—or at least farmers did not bring their products to market for fear of being forced to sell them at a loss. Supplies for the army were obtained by impressment, the price to be paid for them being arbitrarily fixed at a low figure. As a result, the army administration found it almost impossible to induce producers of food willingly to turn over their products, and the army suffered from want. Under these confused industrial circumstances, the sufferings of the debtor class were loudly asserted, and laws were passed to relieve them of their burdens, making the collection of debts difficult or impossible. The debts of Southerners to Northerners contracted before the war were confiscated by the Confederate government, but did not amount to a large figure.

Government revenues

The effectiveness of the Union blockade and the peculiar industrial development of the Confederate States removed the possibility of an ample government revenue. Though import duties were levied, the proceeds amounted to almost nothing. A small export duty on cotton was expected to produce a large revenue sufficient to base a loan upon, but the small amount of cotton exports reduced this source of revenue to an insignificant figure. There being, moreover, no manufactures to tax under an internal revenue system such as the US government adopted, the Confederacy was cut off from deriving any considerable revenue from indirect taxation. The first Confederate tax law levied a direct tax of twenty million dollars, which was apportioned among the states. These, with the exception of Texas, contributed their apportioned share to the central government by issuing bonds or notes, so that the tax was in reality but a disguised form of loan. Real taxation was postponed until the spring of 1863, when a stringent measure was adopted taxing property and earnings. It was slowly and with difficulty put into effect, and was re-enacted in February 1864. In the states and cities there was a strong tendency to relax or postpone taxation in view of the other demands upon the people.

Redeemed CSA bond coupons, bound together with "Red tape".

With no revenue from taxation, and with the disastrous effects of the wholesale issue of paper money before it, the Confederate government made every effort to borrow money by issuing bonds. The initial $15 million loan was soon followed by an issue of one hundred million in bonds, which it was, however, difficult to place. This was followed by even larger loans. The bonds rapidly fell in value, and were quoted during the war at approximately the value of the paper money, in which medium they were paid for by subscribers. To avoid this circumstance, a system of produce loans was devised by which the bonds were subscribed for in cotton, tobacco and food products. This policy was subsequently enlarged, and enabled the government to secure at least a part of the armies' food supplies. But the bulk of the subscriptions for these bonds was made in cotton, for which the planters were thus enabled to find a market.

Why did the Confederate government not undertake more external loans?...The other, more subtle, potential explanation for a small amount of external borrowing is the issuing of war debt presents a moral hazard, which rises starkly if, as in the case of the American Confederacy, lenders can expect that defeat would result in debt repudiation.[52]

The South hoped to keep the currency within bounds by having holders of paper money exchange it for bonds, which the law allowed and encouraged—but as notes and bonds fell in value simultaneously, there was no inducement for holders to make that exchange. On the contrary, a note-holder had an advantage over a bond-holder, in that he could use his currency for speculation or for purchases in general.

In the autumn of 1862, the Confederate law attempted to compel note-holders to fund their notes in bonds to reduce the redundancy of the currency and lower prices. Disappointed in the result of this legislation, the Congress, in February 1864, went much farther in the same direction by passing a law requiring note-holders to fund their notes before a certain date, after which notes would be taxed a third or more of their face value. This drastic measure was accepted as meaning a partial repudiation of the Confederate debt, and though it for a time reduced the currency outstanding and lowered prices, it wrecked the government's credit, and made it impossible for the Treasury to float any more loans. During the last months of the war, the Treasury led a most precarious existence, and its actual operations can only be surmised.

During the entire war the notion that the CSA possessed a most efficient engine of war in its monopoly of cotton (the "King Cotton" idea) buoyed up the hopes of the Confederates. The government strained every effort to secure recognition of the Confederacy as a nation by the great powers of Europe (see Cotton diplomacy). It also more successfully secured individual foreigners' financial recognition of the Confederate States by effecting a foreign loan based on cotton. This favorite notion was put into practice in the spring of 1863. The French banking house of Erlanger & Company undertook to float a loan of $3,000,000, redeemable after the war in cotton at the rate of sixpence a pound. According to one source, Baron Rothschild informed W. W. Murphy, American consul-general in Frankfort, that "all Germany condemned this act of lending money to establish a slaveholding government, and so great was public opinion against it that Erlanger and Company dare not offer it on the Frankfort bourse."[53] As cotton at the time was selling at nearly four times that figure, and would presumably be quoted far above sixpence long after the establishment of peace, the bonds offered strong attractions to those speculatively inclined and in sympathy with the Confederate cause. The placing of the bonds in Europe was mismanaged by the Confederate agents, but notwithstanding, a considerable sum was secured from the public and used for the purchase of naval and military stores. This was aided in part by the (incorrect) assumption of some investors that, even should the Confederacy lose the war, the United States government would honor and redeem the bonds. However, at the close of the war these foreign bonds were ignored by the re-established Federal authorities like all the other bonds of the Confederate government, or of state governments under the Confederacy.

Long term weaknesses

By 1863, after two years of warfare, the North was finally fully mobilizing its economy, while the Southern economy had peaked and was waning. General William T. Sherman, an acute observer of the war, had predicted this development even before Sumter, telling a rebel acquaintance in late 1860:

"The North can make a steam-engine, locomotive or railway car; hardly a yard of cloth or a pair of shoes can you make. You are rushing into war with one of the most powerful, ingeniously mechanical and determined people on earth--right at your doors. You are bound to fail. Only in your spirit and determination are you prepared for war. In all else you are totally unprepared. . . . At first you will make headway, but as your limited resources begin to fail, and shut out from the markets of Europe by blockade as you will be, your cause will begin to wane."[54]

See also

Footnotes

  1. ↑ Fred Bateman and Thomas Weiss, A Deplorable Scarcity: The Failure of Industrialization in the Slave Economy Univ. of North Carolina Press. 1981. Page 42
  2. ↑ Stanley Lebergott, "Through the Blockade: The Profitability and Extent of Cotton Smuggling, 1861-1865," Journal of Economic History, Vol. 41, No. 4 (Dec., 1981), p. 883
  3. 1 2 3 4 Flato, Charles, The American Heritage Picture History of the Civil War, Golden Press, New York. 1961 p. 29
  4. ↑ James M. McPherson, Battle Cry of Freedom (1988), p. 612
  5. 1 2 Charles W. Ramsdell, The Confederate Government and the Railroads, The American Historical Review, Vol. 22, No. 4 (Jul., 1917), p. 809-810
  6. ↑ Mary Elizabeth Massey, Ersatz in the Confederacy, (1956) pp. 55-56
  7. ↑ William J. Kimball, "The Bread Riot in Richmond, 1863," Civil War History, June 1961, Vol. 7 Issue 2, pp 149-154
  8. ↑ McPherson, The Battle Cry of Freedom p. 613
  9. ↑ Charles W. Ramsdell, "The Control of Manufacturing by the Confederate Government," Mississippi Valley Historical Review, Vol. 8, No. 3 (Dec., 1921), p. 240 in JSTOR
  10. 1 2 3 Robert S. Starobin The Economics of Industrial Slavery in the Old South The Business History Review, Vol. 44, No. 2 (Summer, 1970), pp. 131-132
  11. ↑ Robert S. Starobin The Economics of Industrial Slavery in the Old South The Business History Review, Vol. 44, No. 2 (Summer, 1970), pp. 153
  12. 1 2 3 Robert S. Starobin The Economics of Industrial Slavery in the Old South The Business History Review, Vol. 44, No. 2 (Summer, 1970), pp. 162
  13. ↑ William N. Still, Jr., "Facilities for the Construction of War Vessels in the Confederacy," Journal of Southern History, Vol. 31, No. 3 (Aug., 1965), pp. 285-7 in JSTOR
  14. ↑ Lynn Harris, "South Carolina Shipyards: Labour, Logistics, Lumber and Ladies," Journal of Maritime Archaeology Volume 5, Number 1, 17-35, doi:10.1007/s11457-010-9056-z
  15. ↑ James L. Nelson, Reign of Iron: The Story of the First Battling Ironclads, the Monitor and the Merrimack (2005)
  16. ↑ "Tredegar Iron Works National Historic Landmark nomination" (PDF). Virginia Department of Historic Resources. Retrieved 16 August 2012.
  17. ↑ "UR Scholarship Repository : History of Richmond as a port city". Schlorship.richmond.edu. Retrieved 2015-06-05.
  18. ↑ "Alexander Gardner: [Ruins of the Gallego Flour Mills, Richmond, Virginia] (33.65.11,33.65.226) | Heilbrunn Timeline of Art History | The Metropolitan Museum of Art". Metmuseum.org. 2014-06-02. Retrieved 2015-06-05.
  19. ↑ "Ruins of Gallego Flour Mills". Mdgorman.com. 2004-03-26. Retrieved 2015-06-05.
  20. ↑ MacGregor, Graham (1998). Salt, Diet and Health. Cambridge University Press. p. 49. ISBN 0-521-58352-7. OCLC 38765152.
  21. ↑ MacGregor p.49,50
  22. ↑ Heidler, David. Encyclopedia Of The American Civil War (W. W. Norton & Company, 2002) pp.708
  23. 1 2 Charles W. Ramsdell, "The Control of Manufacturing by the Confederate Government," Mississippi Valley Historical Review, Vol. 8, No. 3 (Dec., 1921), p. 231-249 in JSTOR
  24. ↑ Ramsdell, "The Control of Manufacturing by the Confederate Government," p. 239-40
  25. 1 2 Charles W. Ramsdell The Control of Manufacturing by the Confederate Government The Mississippi Valley Historical Review, Vol. 8, No. 3 (Dec., 1921), p. 231
  26. ↑ Charles W. Ramsdell The Control of Manufacturing by the Confederate Government The Mississippi Valley Historical Review, Vol. 8, No. 3 (Dec., 1921), p. 236
  27. 1 2 Charles W. Ramsdell The Confederate Government and the Railroads The American Historical Review, Vol. 22, No. 4 (Jul., 1917), p. 795
  28. ↑ Mary Elizabeth Massey Ersatz in the Confederacy University of South Carolina Press, Columbia. 1952 p. 128
  29. ↑ van der Linden, Frank. General Bragg's Impossible Dream: Take Kentucky-Civil War Times Magazine (November/December 2006 issue). http://www.civilwar.org/battlefields/perryville/perryville-history-articles/general-braggs-impossible.html
  30. ↑ Smith, Jean Edward. Grant-Simon & Schuster; Reprint edition (April 9, 2002) p. 216
  31. ↑ Report of Gen. Bragg to Gen. Cooper, Adjt. and Insp. General, C. S. Army, Richmond, Va., 29 September 1863 https://ehistory.osu.edu/books/official-records/051/0025
  32. 1 2 3 White, Lee. Chattanooga Times Free Press; The Battles of Chickamauga and Chattanooga (9 October 2013) http://media.timesfreepress.com/multimediapieces/civilwar/georgiatrains.php
  33. ↑ Muskett, Phillip. The Confederate Railroad and the Prolonging of the Inevitable (18 May 2008)-http://www.militaryhistoryonline.com/civilwar/articles/confederaterailroad.aspx
  34. ↑ Stanley Lebergott Why the South Lost:Commercial Purpose in the Confederacy p. 59-60
  35. 1 2 3 Stanley Lebergott Through the Blockade: The Profitability and Extent of Cotton Smuggling, 1861-1865 The Journal of Economic History, Vol. 41, No. 4 (Dec., 1981), p. 881
  36. 1 2 William Diamond Imports of the Confederate Government from Europe and Mexico The Journal of Southern History, Vol. 6, No. 4 (Nov., 1940), p. 470
  37. ↑ William Diamond Imports of the Confederate Government from Europe and Mexico The Journal of Southern History, Vol. 6, No. 4 (Nov., 1940), p. 472
  38. ↑ William Diamond Imports of the Confederate Government from Europe and Mexico The Journal of Southern History, Vol. 6, No. 4 (Nov., 1940), p. 474-5
  39. 1 2 3 4 William Diamond Imports of the Confederate Government from Europe and Mexico The Journal of Southern History, Vol. 6, No. 4 (Nov., 1940), p. 476
  40. ↑ Stanley Lebergott Through the Blockade: The Profitability and Extent of Cotton Smuggling, 1861-1865 The Journal of Economic History, Vol. 41, No. 4 (Dec., 1981), p. 873
  41. ↑ William Diamond Imports of the Confederate Government from Europe and Mexico The Journal of Southern History, Vol. 6, No. 4 (Nov., 1940), p. 498
  42. ↑ William Diamond Imports of the Confederate Government from Europe and Mexico The Journal of Southern History, Vol. 6, No. 4 (Nov., 1940), p. 501
  43. ↑ William Diamond Imports of the Confederate Government from Europe and Mexico The Journal of Southern History, Vol. 6, No. 4 (Nov., 1940), p. 502
  44. ↑ Brainerd Dyer Confederate Naval and Privateering Activities in the Pacific The Pacific Historical Review, Vol. 3, No. 4 (Dec., 1934), p. 440-441
  45. ↑ Frenise A. Logan Activities of the Alabama in Asian Waters The Pacific Historical Review, Vol. 31, No. 2 (May, 1962), p. 143-150
  46. 1 2 Mary Elizabeth Massey Ersatz in the Confederacy University of South Carolina Press Columbia, 1952. p. 14
  47. ↑ Marc D. Weidenmier, "The Market for Confederate Cotton Bonds," Explorations in Economic History, Jan 2000, Vol. 37 Issue 1, pp 76-97
  48. ↑ Jay Sexton, "Transatlantic Financiers and the Civil War," American Nineteenth Century History, Autumn 2001, Vol. 2 Issue 3, pp 29-46
  49. ↑ John Christopher Schwab, "Prices in the Confederate States, 1861-65," Political Science Quarterly, Vol. 14, No. 2 (Jun., 1899), p. 281 in JSTOR
  50. ↑ Burdekin and Weidenmier 2003
  51. ↑ A Woman's Wartime Journal, An account of Sherman's devastation of a southern plantation. Dolly Sumner Lunt Burge, 1988 (orig. 1927), Cherokee Publishing, Marietta GA. ISBN 0-87797-149-8.
  52. ↑ Herschel I. Grossman and Taejoon Han War Debt, Moral Hazard, and the Financing of the Confederacy Journal of Money, Credit and Banking, Vol. 28, No. 2 (May, 1996), pp. 200-201
  53. ↑ "Diamond", A Casual View of America. Stanford University Press. ISBN 0-8047-0053-2, ISBN 978-0-8047-0053-5. p. 10
  54. ↑ Quoted in Stephen B. Oates, ed. The Whirlwind of War: Voices of the Storm, 1861-1865 (1999) p. 46 from Sherman letter of Dec 1860

Bibliography

General reference

Specialized studies

Primary sources

Economic data sets

All data sets are in Historical Statistics of the United States: Millennial Edition Online (2006) available in academic libraries. See also Historical Statistics of the United States, Colonial Times to 1970 available on-line from the U.S. Census Bureau.

Historiography

External links

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