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The Post-Bellum Recovery of the South and the Cost of the Civil War

Published online by Cambridge University Press:  11 May 2010

Peter Temin
Peter Temin
Affiliation:
Massachusetts Institute of Technology
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Abstract

In the last half of the nineteenth century the economy of the American South experienced three separate shocks which have been analyzed separately by different authors. This note synthesizes the literature and presents an integrated story in which the decline in the rate of growth of the demand for cotton (noted by Wright) and the results of emancipation on the southern labor supply (noted by Ransom and Sutch) had equal impacts on measured income in the post-bellum South. The Civil War itself had a much smaller and less lasting effect on southern income than Coldin and Lewis assumed; in the long run, it was the least important of the three shocks.

Type
Articles
Information
The Journal of Economic History , Volume 36 , Issue 4 , December 1976 , pp. 898 - 907
Copyright
Copyright © The Economic History Association 1976

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References

1 Wright, G., “Cotton Competition and the Post-Bellum Recovery of the American South, The Journal Of Economic History, 34 (09 1974), 610–35CrossRefGoogle Scholar.

2 Ransom, R. and Sutch, R., “The Impact of the Civil War and of Emancipation on Souther Agriculture,” Explorations in Economic History, 12 (1975), 1–28.CrossRefGoogle Scholar

3 Goldin, C. and Lewis, F., “The Economic Cost of the American Civil War: Estimates an Implications,” The Journal Of Economic History, 35 (06 1975), 299–326CrossRefGoogle Scholar.

4 , Wright, “Cotton Competition,” pp. 630–31Google Scholar.

5 , Wright, “Cotton Competition,” p. 612Google Scholar.

6 This follows the lead of Temin, P., “The Causes of Cotton-Price Fluctuations in the 1830's,” Review of Economics and Statistics, 49 (1967), 463–70CrossRefGoogle Scholar, and Wright, G., “An Econometric Study of Cotton Production and Trade, 1830-1860,” Review of Economics and Statistics, 53 (1971), 111–20CrossRefGoogle Scholar.

7 , Wright, “Cotton Competition,” p. 635.Google Scholar

8 , Ransom and , Sutch, “The Impact of the Civil War,” pp. 20–21Google Scholar.

9 , Ransom and , Sutch, “The Impact of the Civil War,” p. 5Google Scholar.

10 Easterlin, R., “Interregional Differences in Per Capita Income, Population and Total Income, 1840-1950,” in Trends in the American Economy in the Nineteenth Century, A Report of the National Bureau of Economic Research (Princeton, 1960), pp. 73–140Google Scholar.

11 Ransom and Sutch, p. 4n; Lerner, Eugene M., “Southern Output and Agricultural Income, 1860-1880,” Agricultural History, 33 (07 1959), 122–23Google Scholar. For some areas and some time periods, the share of agricultural labor used in cotton cultivation rose after the war. Taking the into account complicates the division of the analysis between cotton and other income, but does not materially alter the results.

12 Treating a (hypothetical) rise in the export price of cotton as an increase in real income is not nearly so faithful. Southern real income, as the term is used here, includes the normal concept of income in 1860 prices plus any (hypothetical) net capital inflow in constant prices resulting from (hypothetical) changes in the terms of trade.

13 This simplification does some violence to Wright's argument which is cast in terms of rates of change, but the gain in clarity outweighs the distortion of the argument. The calculations are faithful to Wright's argument, not the graph.

14 DeCanio, S., “Cotton 'Overproduction' in Late Nineteenth-Century Southern Agriculture,” Journal Of Economic History, 33 (09 1973), 608–33CrossRefGoogle Scholar.

15 To the extent that Ransom and Sutch talk only of agricultural output, Figure 1 shows that they are correct in attributing the fell from Q0 to Q1 entirely to the shift in the supply curve. But if this is the focus of their discussion, how are we to interpret their references to “the relative economic backwardness of the South” (p. 2) and “the aggregate economic performance of the post Civil War South” (p. 21)?

16 , Wright, “Cotton Competition,” Table 7, Column 1, p. 631Google Scholar.

17 , Easterlin, “Interregional Differences,” p. 100Google Scholar. The five states are those used by Ransom land Sutch: Alabama, Georgia, Louisiana, Mississippi, and South Carolina.

18 , Wright, “Cotton Competition,” p. 630Google Scholar. Wright appears to think that this may be an [overestimate. To the extent it is, income at D is overstated.

19 , Ransom and , Sutch, “The Impact of the Civil War,” Figure 1, p. 4Google Scholar. The fall in cotton output vas about the same as the fall in total output. Lerner, “Southern Output,” 1959.

20 Ransom and Sutch, p. 2n.

21 Income in the five states would have risen to be four-fifths of the previous national I average. But the rise in the incomes of these states would raise the national average, so they! would still be about one-quarter below the national mean.

22 It is not clear how to aggregate these two effects since the system is non-linear. Adding one-quarter to one-quarter gives a decline of one-half. Squaring three-quarters gives a decline of about 45 percent. They are both slightly larger than the actual fall of 40 percent.

23 , Goldin and , Lewis, “The Economic Cost of the American Civil War,” p. 310Google Scholar.

24 Goldin and Lewis, p. 312.

25 Goldin and Lewis, pp. 313-15.

26 Goldin and Lewis, p. 315n.

27 , Wright, “Cotton Competition,” pp. 632–33Google Scholar.

28 Goldin and Lewis made an allowance for the depression of the 1870's in their calculationl for the North, attributing it to factors other than the aftermath of the war. A similar correctiorf for the South reduces the cost of the war by less than three percent.

29 Goldin and Lewis, pp. 313-14. Since their estimate of the costs of the war plus emancipation was so large, the cost of emancipation alone seemed relatively small. Their estimate of the per capita cost of emancipation ($220) is almost equal to the per capita cost of the war as calculated here.