Reconstruction, Expansion, and the Triumph of Industrial Capitalism 19the Northwest and West were consistently well over $100, as was the Midwest
after 1880. In 1880, total farm production in the South was still 20 percent
lower than it had been in 1860. Southern farmers also lost one-third of their
work animals and, in perhaps the worst blow, saw the demand for their cotton
decline as India, Egypt, and Brazil emerged as rival producers.
Meanwhile, manufacturing, the source of power and wealth in capitalist soci-
ety, continued to develop in the North. Aided by protective tariffs and gov-
ernment policies that favored industry, the South fell further behind. Where
southern states accounted for only 7.2 percent of manufacturing output in
1860, it shrank to a measly 4.7 percent in 1870. In 1880, not a single south-
ern state ranked in the top 30 in per capita wealth, a clear indication of the
impoverishment of the whole region. By 1900, there was $16 billion depos-
ited in U.S. banks, and only $1 billion of that, a little over 6 percent, was held
in institutions in the “Confederate” states. Such figures show clearly the
North’s domination in the national economy and how badly the war had
wrecked the South. Northern banks and landowners controlled southern
capital and agriculture, making credit hard to get, manufacturing almost non-
existent, and land more expensive and difficult to own.
Even when northern businessmen thought about opening shop in the old
Confederacy, as some textile mill owners considered, it was because, as one of
them put it, “labor is cheaper in the South.” Explaining himself, the northern
Capitalist went on, “the hours of labor are longer” and there was no legal
protection for workers, as unions in the North had fought for [a condition
that has remained consistent from that time to the present]. Even today, more
than 150 years after the beginning of the Civil War, the South remains eco-
nomically behind the North in most major categories. The Civil War marked
the triumph of Industrial Capitalism, and also proved to be a horrible blow
to the southern economy and way of life. A region that was so proud it tried
to leave the United States of America was now a poor collection of states
depending upon its conquerors to sustain itself.
The Transition to and Triumph of Industry
From the earliest days of the Republic, political and economic leaders such as
Alexander Hamilton, who presented his Report on Manufactures in 1791, and
Albert Gallatin, who produced the Report on Roads, Canals, Harbors, and Rivers