Understanding and Teaching the Roots of the Civil War, part 3

EDS 112 Summer Institute 2009

Jenny Wahl Economics Department

Carleton College

2

[I]t is the opinion of the court that the Act of Congress which prohibited a citizen from holding and owning property of this kind in the territory of the United States north of the line therein mentioned, is not warranted by the Constitution, and is therefore void . . .

-- Dred Scott v. Sandford (1857), 19 How. 393,452 (1857)

3

Distribution of Slave Population by Region,

1840-1860

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1840 1850 1860

year

per

cent slav

e pop

ula

tion

Western Border

Northern Border

Cotton South

Old South

4

Population Distribution, 1840-1860

Population Distribution Across Regions, 1840-1860

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Neng/Matl ENC/WNC/Pac (except MO) Satl/ESC WSC/MO/Mtn

1840%

1850%

1860%

Distribution of border/frontier population by region

0%

10%

20%

30%

40%

50%

60%

IL IA/WI/MN/DK WA/OR/CA KS/NE MO AR/TX MTN STATES

1840%

1850%

1860%

5

Canal and Rail Mileage, North and South, 1830-

1860

0

500

1000

1500

2000

2500

3000

3500

1830 1840 1850year

mile

s

Northern states

Southern states

0

2000

4000

6000

8000

10000

12000

14000

16000

1840 1850 1860

year

mile

s

Northern states

Southern states

Number and Price of Acres, Public Land Offices, 1850-60

1850 1851

1852

1853

18541855

1856

1857

18581859

1860

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

500 2500 4500 6500 8500 10500 12500

Number of Acres (000s)

Pri

ce p

er A

cre

7

Estimated Annual Growth Rate, Iowa Population, 1847-60

0.00

0.05

0.10

0.15

0.20

0.25

0.30

1847 1848* 1849 1850 1851 1852 1853* 1854 1855* 1856 1857* 1858* 1859 1860

8

Commodity Price Index, 1850-60

75

85

95

105

115

125

135

9

Railroad Investment and Added Mileage, 1850-56

1000

1500

2000

2500

3000

3500

1850 1851 1852 1853 1854 1855 1856

miles of rails addedinvestment index

10

% Total and Added Rail Mileage in OH, IN, IL, MI, WI, IA

5.0%

15.0%

25.0%

35.0%

45.0%

55.0%

65.0%

75.0%

1848 1849 1850 1851 1852 1853 1854 1855 1856

% total

% additional

11

Railroad Stock Indices 1850-1856

50

70

90

110

130

panamawestatlanticeastsouth

12

State Banks of Indiana (1837) and Louisiana (1821)

13

Iowa Land Prices, 1857

$0.60

$0.70

$0.80

$0.90

$1.00

$1.10

$1.20

40-acre

80-acre

120-acre

160-acre

14

Railroad Stock Indices, 1/3/57-10/10/57

20

40

60

80

100

ohiosouthatlanticpanamaeastwest

15

% Change in Railroad Earnings and % Passenger

Receipts% change earnings %passenger receipts %passenger

1855/56 to 1859 1855/56 receipts 1859

New England(ME, NH, VT, MA, CN, RI) 18 52 46North Atlantic(NY, NJ, PA) -4 41 37North Central(OH, IN, IL, MI) -16 50 45South Atlantic (DE, MD, VA, SC, NC, GA, FL) 26 32 35South Central (KY, TN, AL, MI, LA) 209 47 46

Tennessee 43 58South West (TX, MO) 1500 40 51

16

Railroad Stock Indices 1857-59

20

40

60

80

100

120

panamasouthohioatlanticeastwest

17

Stock Prices, Major Railroads, 1850-59

020406080

100120140

1850

.010

5

1850

.072

4

1851

.022

1

1851

.092

6

1852

.050

7

1852

.112

6

1853

.061

0

1853

.122

4

1854

.071

5

1855

.021

0

1855

.082

5

1856

.031

5

1856

.100

4

1857

.042

5

1857

.111

4

1858

.060

5

1858

.121

7

1859

.071

6

NY CtlB&OIll CtlMich SErie

18

Municipal Bond Prices by Region and Time Period

75

85

95

105

115

other north

south

maine/mass

illinois

19

Salient Regional Differences

NORTH SOUTH

Banking Call loans Specie reserves

Most suspended Few suspended

Commerce Depressed prices Stable prices

Failure rate 3.24% Failure rate 1.21%

$142 million loss $15 million loss

RR Stocks Speculators Local investors

High volatility Low volatility

Depressed prices Quick recovery

20

When the abuse of credit had destroyed credit and annihilated confidence;  when thousands of the strongest commercial houses in the world were coming down, and hundreds of millions of dollars of supposed property evaporating in thin air;  . . . what brought you up?   Fortunately for you it was the commencement of the cotton season, and we have poured in upon you one million six hundred thousand bales of cotton just at the crisis to save you from destruction.   That cotton, but for the bursting of your speculative bubbles in the North, which produced the whole of this convulsion, would have brought us $100,000,000.   We have sold it for $65,000,000 and saved you.   Thirty-five million dollars we, the slaveholders of the South, have put into the charity box for your magnificent financiers, your "cotton lords," your "merchant princes." . . . The South have sustained you in great measure.   You are our factors.   You fetch and carry for us. . . . Suppose we were to discharge you;  suppose we were to take our business out of your hands; -- we should consign you to anarchy and poverty. 

Source: “King Cotton” Speech by S.C. Senator James Hammond, 4 March 1858, quoted at http://www.sewanee.edu/faculty/Willis/Civil_War/documents/HammondCotton.html.

21

Brief Schema, Panic of 1857

Escalating prices for Western real estate↓

Pyramid of debt, new investment vehicles↓

Shocks: Dred Scott, Bad info about RR↓

Long-reaching effects on multiple interlocking markets↓

Sound enterprises recover quickly, shady operations experience stock price declines,

South is emboldened

22

The Costs of the Civil War (Millions of 1860 Dollars)

DIRECT COSTSGovt Physical Lost Total Perexp. destructn human cap. capita

South 1032 1487 767 3286 376North 2302 1064 3366 148Total 3334 1487 1831 6652 212

INDIRECT COSTSLost L mkt Cotton Total Percons. adj. mkt. adj. capita

South 6190 -1960 -1670 2560 293North 1149 1149 51Total 7339 3709 118TOTAL

Overall per 1860 cost capita population

South 5846 670 8.73North 4515 199 27.71Total 10361 330 31.43

Source: Ransom, (1998: 51, Table 3-1); Goldin and Lewis. (1975; 1978)