Northern Industry In The Civil War
The Civil War's effect on Northern industry was uneven, ambiguous, even Contradictory. A wealth of economic data offers evidence that the industrial capacity of the North was greatly expanded by the conflict. Other statistical information, equally abundant, suggests that the war exercised no major influence on Northern industry or actually retarded its growth.
One major economic result of the war was that it helped change the U.S. from a country with an essentially agrarian society to one dependent on mechanization and a national market system. Only the North possessed an industrial base, small as it was, before the shooting started. During the fiscal year ending 1 June 1860, the country possessed some 128,300 industrial establishments. Of these, 110,274 were located in states that remained in the Union. The most heavily industrialized states, New York and Pennsylvania, each had more industry than all the seceding states combined. In 1860, too, America had a total of $1,050,000,000 invested in real and personal property devoted to business, with $949,335,000 concentrated in the North; Pennsylvania, New York, and Massachusetts each had a larger investment than the South as a whole. Finally, the North contributed 92.5% of the $1.9 billion that comprised the total value of annual product in the country in 1860.
One body of evidence indicates that the war widened this sectional disparity by destroying the South's minute industrial base and expanding that of the North to prodigious dimensions. Statistics on specific industries provide what appears to be convincing proof. While the loss of the Southern crop produced a steep war-long decline in production in the North's largest industry, cotton textiles, its woolen industry enjoyed a 100% production rise during the conflict. The second largest consumer industry in the Union, shoes and leather, also enjoyed tremendous growth, thanks to army contracts that more than offset the loss of the Southern market. Other war related industries, especially firearms, gunpowder, and wagon manufacturing, grew rapidly on the strength of military contracts. Meanwhile, iron production in the North experienced a slump early in the war but boomed 1863-64, in the latter year reaching a production level 29% higher than that of the entire country in the busiest prewar year, 1856. The coal industry experienced similar growth, in 1861-65 enjoying an expansion rate 21% higher than that for the nation as a whole during the 4 years immediately preceding civil strife.
The war years stimulated production of new inventions and accelerated the growth of established technology. Due to a deluge of government contracts, sewing machines became an integral part of the clothing industry, and the 50-year-old system of machine-made interchangeable parts became firmly entrenched in the production system. Agriculture-related industrial goods also witnessed production spurts attributable to the war: Gail Bordens condensed-milk process, patented in 1856, became essential to the diets of many Union soldiers, while implements including the thresher and the rotary plow experienced sales booms as machinery took over work abandoned by farm hands gone to war. In other ways, such as by easing unemployment and by promoting the enactment of protective tariffs, the war encouraged wide-scale industrial expansion. No wonder that by 1864 the Unions manufacturing index had risen to a level 13% greater than that of the country as a whole in 1860.
But the war gave rise to no important new industries and, despite the statistics quoted above, generated no unusual increase in basic industrial production. It did not, as some economists later asserted, spawn an American industrial revolution; most of the innovations that did revolutionize American industry later in the century originated in the period 1820-60. Sharp declines marked the production expansion of many Northern industries during wartime. The nations railroads, for example, increased their trackage by 70% during the 1860s, as against over 200% in a brief period prior to the 1860s. The war saw only a 10% rise in the production of pig iron, though that industry had experienced a 17% increase 1855-60 and in the 5 years following Appomattox grew by 100%. Though the coal industry as a whole expanded, bituminous coal production failed to increase during the conflict, while the copper industrys rate of growth was dramatically low, especially given its importance to war materiel production. Perhaps a more revealing ratio is the 22% increase in total American commodity output in the 1860s, compared to a 62% growth rate in both the 1850s and 1870s. Another striking comparison is the 3% decline in American output per capita in the 1860s, as against an average decennial increase of 20% for the balance of the period 1840-1900.
The war may also have exerted a negative influence on Northern industry in more generalized ways. The state of the wartime economy, which inspired the issuance of paper currency throughout the Union, produced a steady inflation, a general rise in commodity prices, and a decrease in purchasing power. It also gave rise to trade unions, work strikes, and other conditions considered injurious to industrial growth. By discouraging immigration, the war reduced a source of cheap labor. The conflict also helped unsettle business conditions by drawing off capital and labor from North and South alike, a trend whose impact on the economy lasted well into the 1870s. Predictions early in the war of a quick Union victory hindered industrial growth by making entrepreneurs wary of over expanding. As late as Aug. 1 862, the New York Tribune complained about "our paralyzed industry."
But wartime statistics, positive or negative, fail to tell the full story of the Civil Wars impact on Northern industrialism. Perhaps the primary economic effect of this period of upheaval was to prepare the U.S. for an intense industrialization in the decades following 1865. The conflict helped do away with industry-stifling government regulation; nationalized the regional market system of antebellum years; created a generation of war-weary young men motivated by the acquisitive ethic; reduced the energy-sapping political strife that had adversely affected industrialism prior to 1861; and brought to long-term power a political party that favored business growth. Thus, regardless of the immediacy of its effects, the war contributed much to the long-term economic climate that made a reunited America the industrial giant of the 20th century.
Source: "The Historical Times Encyclopedia of the Civil War" Edited by Patricia L. Faust
This Page last updated 02/16/02