Economic Issues that Contributed to the Tensions between North and South

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Economic Issues that Contributed to the Tensions between North and South Slide 2 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 Slide 3 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. Slide 4 Industry in the South North had 5x the number of factories Industry in the South Upper South - of Souths manufacturing capability and nearly all heavy industry Most of Souths heavy industry in St. Louis, Louisville, and Baltimore Slide 5 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 Slide 6 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 Slide 7 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 slaverynot on moral grounds but because of racist attitudes Slide 8 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 Slide 9 Reality About National Bank There was a regional aspect to support for, or opposition to a National Bank Southerners fears Implied powers of fed govt & slavery More a market economy/ non-market economy division Big planters liked the national bank Little guys did not (Panic of 1819) Slide 10 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? Slide 11 Tariffs and Sectionalism Northern view of tariffs Protect industry Southern view of tariffs Hurts southern exports Raises cost of imported goods Slide 12 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 didnt like this Slide 13 Compromise with a Mailed Fist Tariff of 1833 (Henry Clay designed) Tariff reduction bill Force Bill Assemble the troops South Carolina quickly complied Slide 14 Transportation People opposed federal funding of improvements if it didnt 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 Slide 15 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. Slide 16 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