The South’s Economy

Slavery was highly profitable but had a negative impact on the southern economy. It derailed the development of cities and contributed to high debts, soil exhaustion, and lack of technological innovation. The south did not develop urban centers for commerce, finance and industry as the North had. The southern cities were small because they did not develop varied economies.

The southern cities rarely became processing or finishing centers and the ports rarely engaged in international trade. Their primary function was to market and transport cotton and other agricultural crops, supply local planters with agricultural tools and produce a small number of manufactured goods, such as the cotton gins needed by farmers.

As a result of focusing on slave-based agriculture, southerners neglected industry and transportation improvements. This was in contrast to what the North was doing. In 1860, the north had approx. 1.3 million industrial workers, where the south had 110,000. The northern factories manufactured nine-tenths of the industrial goods produced in the US. The South’s transportation network was behind that of the North.

The southern states kept taxation and government spending at much lower rates than the North. As a result, the south lagged behind in their support for public education making people illiterate. In 1850, 20% of all southern white adults could not write nor read. The wealth was more layered than in the North as large slaveholders owned most of the region’s slaves. In the Deep South, the middle class held a relatively small proportion of the region’s property. Soil erosion lessened the availability of cotton land, and scarcity and heavy demand forced the price of land to rise out of reach for most.

Source: The South’s Economy
Copyright 2016 Digital History

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