Yet another section of this chapter considers the impact of the war on North and South.
In addition to westward explansion tools like the Homestead Act and a northern transcontinental railroad route, the Republican agenda, in retrospect, rested on four major pillars: (1) a vast increase of $2.5 billion in national debt to pay for the war and related economic expansion; (2) a wide new range of internal taxes -- income, inheritance, and excise -- to help meet war costs; (3) an expansion of the protective tariff to record heights to raise revenue and shelter fledgling northern manufacturing interests; and (4) the creation of a national banking system to bring banking under one roof and to displace state bank notes with uniform federal paper. Taken together, these represented an extraordinary upheaval.page 467
Many of the great American fortunes of the Gilded Age got their start in the greenback deluge of 1863 to 1865: John D. Rockefeller in the gushing Pennsylvania oil fields, J. P. Morgan in the financial district of New York, and Andrew Carnegie in the steel mills and railroad yards of Pittsburg.pages 468-69
Between the end of the Civil War and the beginning of the Spanish-American War in 1898, American agricultural produce soared -- wheat by 256 percent, corn by 222 percent, and refined sugar by 440 percent. Coal output jumped by 800 percent; oil -- new in the mid-nineteenth century -- by 1800 percent. Production of steel rails was up by 523 percent, with the miles of railway track increasing by 567 percent. The data in Figure 11.1 identify the Civil War as the great accelerator of the U.S. share of world manufacturing output.page 469
[The figure mentioned comes from Paul Kennedy, The Rise and Fall of the Great Powers. It shows manufacturing output of the United States rising from 7.2 percent in 1860 to 23.6 percent in 1900. In contrast, output of Great Britain as 19.9 percent in 1860 remained relatively constant, falling from 22.9 percent in 1880 to 18.5 percent in 1900.]
On pages 476-79, Phillips reviews the devastating impact of the Civil War on the South.
Two-thirds of Southern assessed wealth vanished during the war in what amounted to a massive regional redistribution. Prewar Northern and Southern per capita output had been about the same, and the average per capita income of Southerners, including the slave population, was about two-thirds of the Northern average (for Southern whites alone, it would have been about the same). However, by 1870, the North's lead was overwhelming -- and the rearrangement of capital availablity ensured that it would continue. According to census data, Southern agricultural and manufacturing capital declined by 16 percent between 1860 and 1870, while Northern capital increased by 50 percent. The South had contained 30 percent of the national wealth in 1860; ten years later that had dropped to twelve percent. Appomattox surrendered more than the Southern past and present. Three to four generations also paid the price.page 479The North's success -- aided by this extraordinary capital transfer -- is a matter of history. Even the post-war Civil War Republican political system, while shaken from the 1870s to the 1890s, was not toppled until the 1930s. The United States that gained the industrial leadership of the world was really the Civil War winner -- the industrial North. Eight decades after the end of Reconstruction, the National Emergency Council created to examine the Depression of the 1930s reported its findings to President Franklin D. Roosevelt: The South, it said, had been reduced to the status of a colony.