economic issues that contributed to the tensions between north and south
TRANSCRIPT
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Economic Issues that Contributed to the Tensions between North and
South
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Economic Growth of America• 1820-1850 – United States
transforms from rural to increasingly urban
• Demographics– Population:
• 1815 – 8.4 million• 1860 – 31.5 million
– Gross National Product doubled every 15 years
– Canals – 1825 - Erie Canal• Made NYC a major economic hub• Sparked canal building throughout US.
– Railroads: 1815 – 23 miles, in 1860 – 30,626 miles• NY to Philly
– 1800 – 2 days, 1860 – less than a day
• NY to Chicago – 1800 – 6 weeks, 1860 – 2 days
– Banks – finance business ventures• 1815 – 208 state banks• 1860 – 1,500 state banks
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Growth of the North: Industry• Post Revolution• Factories in every state in the Northeast
– Produced: textiles, firearms, machinery, railroad cars, etc– Poor working and living conditions
• Influx of immigrants head North• By 1860, America was the third largest industrial power in
the world.
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Industry in the South
• North had 5x the number of factories• Industry in the South
– Upper South - ¾ of South’s manufacturing capability and nearly all heavy industry– Most of South’s heavy industry in St. Louis, Louisville, and Baltimore
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Slavery Demographics in South• In 1860, Population of the South – 9 million • 4 million were slaves • Only around 384,000 Southerners owned slaves• About 10,000 big planters in the south
– 7,000 had between 50-100 slaves– 3,000 of these had over 100 slaves– 14 had about 1,000 slaves
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American Economic Decisions that Divided North and South
• Land Policy• Chartering a National Bank• Introduction of Protective Tariffs• A National System of roads and canals
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Distribution of Land• Homestead Act of 1860• Northerners favored• Southerners opposed
– Spread free soil sentiment– Cheap land would
discourage large operations (plantations)
• Westerners – Wanted expansion– Rejected slavery…not on
moral grounds but because of racist attitudes
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Banks after 1834• No National Bank
– Andrew Jackson• State chartered banks - small
– Northeast lobbied for the creation of banks regulated by the federal government
– Southerners disagreed
• National Bank Bill of 1860 was shot down by Southern opposition
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Reality About National Bank
• There was a regional aspect to support for, or opposition to a National Bank
• Southerners fears– Implied powers of fed gov’t & slavery
• More a market economy/ non-market economy division– Big planters liked the national bank– Little guys did not (Panic of 1819)
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Tariffs
• What are tariffs?• Why would America implement tariffs?• What problems are associated with tariffs?• Why does the US want to implement tariffs
after the War of 1812?
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Tariffs and Sectionalism
• Northern view of tariffs– Protect industry
• Southern view of tariffs– Hurts southern exports– Raises cost of imported goods
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Nullification Crisis
• Between 1816-1832 – Tariff rates will rise• Tariff of 1832 – Congress placed tariff on woolens
and iron. • South Carolina: Issued Ordinance of Nullification– Rejected tariff – Refused to recognize it– Organized a militia– Threatened to secede
• Jackson didn’t like this
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Compromise with a Mailed Fist
• Tariff of 1833 (Henry Clay designed)– Tariff reduction bill
• Force Bill – Assemble the troops
• South Carolina quickly complied
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Transportation
• People opposed federal funding of improvements if it didn’t help their state– 1850s railroad from NO to Calif was defeated
• Southerners wanted a Southern terminal, northerners wanted a northern one (NO v. St Louis, v. Chicago)
• Southerners feared the hastening of creation of free states
• Feared implicit power of federally-funded rail
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States Rights
• The North was changing rapidly with the growth of industry, while the south remained the same– As a result, new legislation was generally initiated by
northern politicians trying to adjust to a changing economy
• Southerners argued that tariffs & banks were unconstitutional extensions of national power over the states. This is one of the reasons the South called for stronger states rights and weaker federal powers.
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Putting Economics in Perspective
• Economic issues such as the tariff, internal improvements, banking as the heart of the issue of the cause of the Civil War went out of favor decades ago