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Andrew Burns AP United States History Mr. Bendt January 22, 2008 The Impact of the Civil War from the Northern, Southern and Western Perspectives with Emphasis on the Economic and Political Changes which Developed Therefrom The Civil War was unquestionably the most important event of the nineteenth century in both American and world history. It solidified federal authority over states, increased the importance of manufacturing and mass production while revolutionizing warfare, vaulted the United States into the class of first-rate nations, and transformed Americans’ relationship with the government and private sector. The North, South and West found themselves in opposite positions. While the South found its economic and political bases destroyed, the North hummed with giant machines as it sailed in a sea of liquidity, and the West opened up to reveal its rich abundance. The North’s political arena was tidied after the Civil War. No longer worrying about slavery or its expansion, northern politicians first turned their attention to the South’s readmission to the Union. The Radical Republicans that controlled the Congress were pitted against President Johnson in a bloody battle but eventually Johnson’s term ended and Ulysses S. Grant was elected president. The economy was one of chiefest issues facing the country at the start of Grant’s presidency, as the greenbacks that had been pumped into the economy during the Civil War came into question. The hard money politicians demanded that greenbacks be redeemed for hard specie and specie backed notes while other soft money politicians argued that greenbacks should be allowed to circulate. When Secretary of the Treasury Hugh McCulloch started withdrawing greenbacks from circulation it started a firestorm as hard and soft money factions argued over their positions. Rapid deflation and scarcity of currency forced several moratoriums on the withdrawal, one in 1868 and then another in 1875 after the scarcity of currency had set off a recession and damaged the southern


economy. The hard money faction would eventually get its way as all greenbacks were withdrawn from circulation by 1879. The Grant administration and northern politics were perpetually haunted by the flurry of scandals that occurred during the Civil War general’s presidency.

In 1869, Jay

Gould’s attempts to corner the gold market and his enlistment of Grant’s brother-in-law in the scheme revealed the deep corruption that permeated the Grant administration. The Credit Mobilier scandal damaged the public’s opinion of the entire government as it uncovered Congressional payoffs with company stock in exchange for Congress’s imprimatur for the sale of public lands and federal grants to private corporations. The Vice-president’s involvement in the involvement shocked the political establishment and some shaken Republican Senators and Representatives broke away from the Grant-tainted Republican establishment and formed a third party in 1872 called the Liberal Republican party, promising “honest government” and “reconciliation” between the North and the South. Grant’s victory over Liberal Republican Horace Greeley spelled the doom of the newly formed party and starting a second Grant administration as equally corrupt as the first. Chief among the new corruption was the Whiskey Ring scandal, a scandal that funneled millions of dollars away from the federal treasury and into the hands of corrupt revenue officials to the benefit of large whiskey manufacturers. Postbellum northern politics was plagued with an increasingly bitter electorate which refused to trust any politician. The shady Compromise of 1877 that kept the Republican Party in control of the White House and ended Reconstruction efforts allowed southern Democrats to flood the Congressional ranks. Northern politicians were faced with both managing the increasingly barbaric tactics of southern politicians and ameliorating increasingly influential northern banking and manufacturing establishments; an environment of stalled Congressional action that promoted both a deterioration in working conditions and growth in corporate conglomeration and monopoly, the so called Gilded Age. Still, the Civil War left the northern economy both the victor and the beneficiary. Plants that had pumped out weapons for Union soldiers now exported weaponry overseas, those that made Union uniforms now manufactured civilian clothing, plants involved in military rations now


focused on average consumers. The manufacturing tycoons that had gained their wealth from government contracts during the War now had assets to invest into the economy. These investments created Wall Street firms and made the United States one of the world’s investment capitals. Railroad corporations exploded as American and European investors poured capital toward railroad expansion. The growth of the railroads spurred the growth of the iron and steel industries and created the largest corporations in the world. At the end of the Civil War, only 35,000 miles of railroad lay in the United States. By 1890, the United States had the largest railroad system in the world, with 166,000 miles of rail, most of which was funded by private capital from the Northeast and Europe. All of this rail was the product of steel and iron produced by large factories manned by immigrants. Between the 1870s and the 1880s, eight million immigrants came to the United States and settled in these factory towns to manufacture the material that would gird the country. The output by these factories was on the grandest scale, for while in 1874, the United States produced less than half as much pig iron as Great Britain by 1900, the United States produced four times as much, supplying steel for the insatiable railroad growth and architectural boom. Steel and iron were the only materials that prospered; oil became black gold as chemists found countless applications for it. John D. Rockefeller took the utmost control of this industry beginning in 1863 at the age of 24. By the time he retired, he had amassed a fortune of $900 million and had created a corporate empire. Rockefeller started a trend that would be replicated by many other corporations when he created a corporate trust to eliminate competition and ensure his corporation, Standard Oil, could assert global hegemony. By 1879, Standard Oil controlled 90 percent of all American oil-refining capacity and dominated global oil production and sale. His trust system was much maligned in Congress and led to the Sherman Antitrust Act; however, his holdings company proved more effective and revolutionized corporate organization. The mass merger of corporations allowed Rockefeller to squeeze out competition by buying it up after it had been damaged by Standard’s undercutting prices. By 1900, 1 percent of the nation’s companies controlled more than one-third of its industrial production. Now that the Civil War was over and American life returned to a


peacetime economic organization, American’s were ready to spend, spend, spend, with their growing wages. Between 1880 and 1914, American wages rose $7 a year or about $240, with the average worker making between $400 and $500 a year. This new wealth and Americans willingness to spend money created the environment for the department store. Spending on advertising jumped from $50 million in 1867 to $500 million in 1900, chain stores like A & P grocery store and Five and Ten Cent Stores flourished and generated millions of dollars in revenue. The consumer was now a very powerful force in society and corporations took extra measures to ensure that their products were the public’s choice. Branding became exceedingly important featuring prominently in newspaper advertisements and listings in mail order catalogs. By the early 1900s, Sears, Roebuck and Company printed six million catalogs a year. The products that were featured in these catalogs undoubtedly arose from the many inventions that Americans were creating. Rather than importing knowledge and ideas, Americans were now instrumental in the development of the most influential technologies of the century. The telephone, phonograph, and light bulb were all invented by Americans and these goods were quickly made available to the American public. By 1895, 310,000 telephones were in use and all of these were controlled by Bell’s corporate conglomerate American Telephone and Telegraph. The American economy grew from $16 billion in 1860 to $88 billion in 1900, growing at a rate of 4 percent per year. The Civil War had stimulated the Northern economy and provided the means to create the richest nation on Earth. In modern terms, the United States controlled an economy of $2.5 trillion, bigger than all but three of the world’s economies, the United States being one of them. The political landscape of the South was radically altered. The North’s victory and the end of the Civil War had stripped the former Confederate Democrats of their office and replaced them with Republican government’s selected by the North. Constitutional conventions were called and new, slaveless, constitutions were devised for each of the Confederate states. Still, Johnson allowed some things to remain the same, acquiescing to the South’s choice to explicitly limit suffrage to white males. Furthermore, Southern states legislatures enacted “Black Codes” to further curtail


newly freed blacks’ civil rights. A backward slide began on the progress when Johnson reneged on his promise and granted pardons to former Confederate leaders, allowing them to serve in Congress. Fearful of a reversal to antebellum policies, Congress passed the Fourteenth Amendment, in an attempt to prevent southern states from revoking blacks’ citizenship or enacting separate laws for blacks and whites. After Johnson’s fall from grace, the newly empowered Congress further ensured northern control over the South’s political process by placing reconstructing states under military rule and requiring states to allow all men to vote. In this new environment blacks were allowed to vote and hold office. Between 1870 and 1876, 633 blacks served as state legislators, 15 served as Congressman, and 2 served in the Senate. Both blacks and white Republicans joined forces to build education at the state level. Together they created public school systems in southern cities. By 1890, black state colleges began receiving federal funds as land grant schools, even under Democratic administrations. To pay for these school systems, tax hikes were instituted. Farmers rebelled against taxes that were at times outrageous. This rebellion severely weakened the Republican party’s hold on the South as many switched to the Conservative-Democrats. This anti-Republican sentiment eventually coalesced into an anti-black movement. Between 1868 and 1872, the most significant threat to southern Republican control came from the Klu Klux Klan and other white supremacy groups. These groups sought to restore white supremacy by attacking the root of the problem. Republican control had been largely maintained by the black electorate. Thus, the Klu Klux Klan used intimidating tactics to prevent blacks from going to the polls, cutting off the Republicans base and reestablishing Democratic control. The Compromise of 1877 which awarded Rutherford Hayes, a Republican, the presidency marked the end of Reconstruction. With the removal of federal troops from the South, the Redeemers were now capable of taking full control of the state governments. The Civil War marked a new beginning of southern politics. No longer was secession or King Cotton the main topic. These had been usurped by white supremacy and corruption. The devastation wrought against the South’s economy was incalculable. By 1865, the South’s per capita worth had been halved and Northern sources of capital had dried up. The federal


government’s seizure of Confederate property halted major cotton exports, sending the economy into free fall. The Civil War had successfully accomplished its goal of destroying the South’s economic base and it left southerners in abject poverty. Northern attempts to restructure the South’s economy were undermined from within as President Johnson issued pardons to Confederate leaders allowing them to retain property that had been promised to the freedmen, thus prolonging the agrarian based economy. Landless and penniless, freedmen were again forced to work as laborers, now slaves to paychecks. Systems such as sharecropping were devised to use the work of black laborers without violating the law. The collapse of the state credit system because of huge Civil War deficits and the Republican controlled government’s desire to increase spending on infrastructure and schools forced the states to ramp up property taxation. In 1869, property taxes in Mississippi were at their lowest level since 1822 at 0.1 percent. Just five years later in 1874, property taxes had increased fourteenfold, amounting to government confiscation. Outraged by the large tax burden, large plantation owners became infuriated. Conservative-Democrats took full advantage of this move and shifted their focus away from race and to taxes. Conservative-Democrats, Scalawags and carpetbaggers, coalesced and formed the Redeemers, pushing for economic modernization. The Redeemers were more amenable to manufacturing interests, allowing for the shift of fabric manufacturing from the North to the South. The untapped resources as well as destitute populace made the South a very attractive cost-effective location. Still the Redeemers courtship of big business left the poor white farmers out in the cold. The emerging factory base met its demise in the Panic of 1873. Sparked by the plunge in the Vienna Stock Exchange on May 9, 1873 and the bankruptcy of the banking firm Jay Cooke and Company on September 18, 1873 it sent the South into a deep depression. The Greenbacks left over from the Civil War were being retracted by the Grant administration making cash scarce and sparking rapid deflation. When Cooke realized it was overextended on a plan to build a second continental railroad, it quickly declared bankruptcy. 89 of the 364 railroads declared bankruptcy and 18,000 businesses failed between 1873 and 1875. By 1876, 14% of workers were unemployed. No longer holding any capital to invest in the South,


northerners shut down southern factories and northern factories as well. In response to this, sharecropping and not factory work became the predominate occupation of the lower class southern society. Republican concerns about blacks were quickly replaced worries about economic policies. In the end, the Civil War ultimately led to a continuation of a southern agrarian society, however; rather being one of the most prosperous societies of the United States, the South now occupied the poorest position, frequently in need of government handouts and northern charity, a position it would hold until the twilight of the twentieth century. The politics of the West no longer dwelt upon the issue of slavery but rather the issue of settlement and Indian removal. With the elimination of opposition to expansion, Congress had to devise a way to attain the Great Plains for the American public without sparking a war with Indian nations. It started in 1867 by creating a Peace Commission to end the Sioux War that had been waging since the close of the Civil War. A new policy of small reservations was devised to isolate Indian nations from one and other and maximize the total available land for settlement. Carrying out this new policy turned out to be sooner said than done as Indians rebelled against government efforts and sparked battles with U.S. troops. Congress pressed on, discontinuing the practice of treaty making with Indians and endorsing a policy of assimilation. Congress would continue on this same path, creating a Court of Indian Offenses in 1882 to punish Indians that had broken federal law. A breakthrough took place in 1887 when the Dawes Severalty Act passed through Congress, cutting the tribal lands into individual sections to be distributed among families and selling the remainder to the highest bidder. The program proved a success in reducing Native land holdings which dropped from 138 million acres of land in 1882 to 48 million acres by 1934. The Civil War had helped the United States develop the technology and the political acumen to handle the Indian problem. Now facing the most advanced weapons of war, Indians had no choice but to comply with the mandates of the federal government. Rather than marking an end of economic prosperity, the Civil War marked an age of immense economic prosperity in the West. With the issue of slavery’s expansion into the West


resolved and the freesoil Republicans in power, settlement of the West was opened up. In the beginning, the Great Plains acted as only a stepping stone to the West and a way to reach the gold and silver in California. Paths of settlers began to crisscross the plains as they drew further west. The Indians that lived in the plains were seen as an irritation and policies were initiated to control them. Holding a clear majority in Congress now, Republicans set out to reap full benefit of the Great Plains, passing a series of acts to both help settle the West and rake in cash for the federal government. Having already passed the Homestead Act of 1862, Congress wished to make the lands located in the desert more profitable and passed the Desert Land Act of 1877, with the idea of encouraging economic development of arid and semiarid public lands of the Western United States while raking in $1.25 per acre. The plan proved only partial successful in its economic development as fraud was quite common and the requirement for irrigation sometimes was met with pouring buckets of water over the hot ground. Still, 2.6 million acres of land was settled through this act, raking in millions of dollars into a federal treasury that had been emptied from the Civil War. Building upon the success of the Desert Land Act, Congress passed the Timber and Stone Act the next year. Premised on the idea of selling land for logging and mining to small settlers, the Act allowed large corporate bodies and speculators to buy up the land at low costs, increasing their land holdings. By 1900, 3.6 million acres of land were claimed under this act, most of which laid in the hands of railroad companies and Wall Street firms. The Civil War and the opening of the West proved a boon for American and foreign corporations as well as the federal government for when it was all said and done, half a billion acres of western land belonged to large corporations and speculators and billions of dollars had found their way to the federal treasury, funding government efforts to reconstruct the South. Cattle ranching became a major industry in the newly settled lands, and by the mid-1880s 4.5 million head of cattle occupied the plains. The great industrial advancements made during the Civil War allowed the Hannibal and St. Joseph Railroad to ship millions of heads of cattle to the hungry markets in the east. With the invention of barbed wire in 1874, northern factories began pumping out the hundreds of miles of wire that would crisscross the


West and separate cattle herders from farmers and other cattle herders. The Civil War had developed an advanced manufacturing base that made the time between invention and production incredibly short. As farmers moved into the Great Plains, the larger ones relied on this newly invented equipment from the north to work the land. By 1890, more than nine hundred corporations manufactured farming equipment. At that same time, the federal government hoped to foster this economic development by passing the Hatch Act and supporting agricultural experimentation stations to spread the latest techniques to farmers. All of these developments lead to an agricultural boom that was halted by a severe drought at the close of the nineteenth century. Still, farming had become a powerful industry in the American west, representing a large percentage of American exports. At the same time as the Great Plains was being settled, the transcontinental railroad was bringing millions of dollars worth of precious metals eastward from the West Coast. The Comstock Lode was poured out $306 million worth of gold into the U.S. economy sparking some trouble as it weighed down upon the dollar and sparked massive policy debates in Congress. The western mining boom helped create instant millionaires and brought vast numbers of immigrants to the United States in search of opportunity. In all, the Civil War helped develop and perfect the technology to settle the West. Armed with newly gained industrial power, men were able to tame the west and harvest its vast riches, not only benefiting the region but the country as a whole while sparking the interest of foreign nations who would now have to respect such a prosperous nation. It is obvious the impact the Civil War had on American society. From the economic opportunities it opened to the public’s reevaluation of their standing the Civil War and its aftermath forever changed American society. It can be said that the Civil War was a mixed bag, doling out terror in the form of war, famine and economic stagnation while advancing technology, increasing prosperity, and reinforcing America’s image of power and prestige.

The Impact of the Civil War  

A comprehensive overview of the political and economic impact of the civil war.

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