A History of the American People

In demographic terms, the Confederacy was at a huge disadvantage. The census of 1860
showed that the eleven Confederate states had a population of 5,449,467 whites and 3,521,111
slaves. Nearly 1 million of the white males served, of whom 300,000 were casualties. The
nineteen Union states had a population of 18,936,579 and the four border states a further
2,589,533, plus 429,401 then-slaves, over 100,000 of whom served in the Union army, which
altogether numbered 1,600,000. Moreover, during the war nearly a million further immigrants
arrived in the North, of whom 400,000 served in the Union army. Some of the best Northern
troops were German, Irish, and Scandinavian, as were some of the smartest officers-Franz Sigel,
Carl Schurz (Germans), Philippe de Trobriand (French), Colonel Hans Christian Heg and Hans
Matson (Norwegian), and Generals Corcoran and Meagher (Irish). The Union economic
preponderance was even more overwhelming. If the North-South ratio in free males aged
eighteen to sixty was 4.4:1, it was 10:1 in factory production, iron 15:1, coal 38:1, firearms
production 32:1, wheat 412:1, corn 2:1, textiles 14:1, merchant-ship tonnage 25:1, wealth 3:1,
railroad mileage 2.4:1, farm acreage 3:1, draft animals 1.8:1, livestock 1.5:1. The only
commodity in which the South was ahead was cotton, 24:1, but this advantage was thrown away
by overproduction (in the South) and stockpiling (outside the South) in the endless build-up to
the crisis. Just before the war, Senator James Henry Hammond of South Carolina boasted:
`Cotton, rice, tobacco and naval stores command the world; and we have the sense to know it,
and are sufficiently Teutonic to carry it out successfully. The North without us would be a
motherless calf, bleating about, and die of mange and starvation.' The assumption in the South
was that the coming of war would lead to an expansion of its economy, and a contraction of the
North's. In fact, as was foreseeable, the reverse occurred. The South's economy shrank, the
North's expanded, even faster than in the 1850s.
The South compounded its difficulties by weaknesses in its handling of finance, diplomacy,
and internal politics, all of which had severe military consequences. First, it is a curious
historical fact that most civil wars are lost by one side running out of money, and the American
Civil War was an outstanding case in point. The South had no indigenous gold or silver supplies
and no bullion reserves, and was entirely dependent on its own paper money. The North had the
enormous advantage of a large, well-trained navy and, almost from the start, was able to impose
a blockade, often ineffective at first but progressively tighter as the war proceeded. As a result,
import and export taxes, the way of raising money traditionally preferred by the South, raised
little. Import duties brought in only about $1 million in specie during the entire war, and the
Union navy was so vigilant in running down cotton-export ships that only about $6,000 in specie
was collected from cotton exports. With its limited capacity to produce armaments, the South
was forced to shop abroad. France, always happy to supply arms to dodgy regimes, duly obliged
but insisted on being paid in specie (as did independent gun-runners).
As his Treasury secretary, Davis appointed C. G. Memminger, a local South Carolina
politician. This was an extraordinary choice: Memminger had virtually no experience of finance
and, more important, lacked the creative ingenuity to surmount the almost insuperable
difficulties of raising hard cash.' An initial war-loan of 8 percent, organized by a consortium of
New Orleans and Charleston banks, raised $15 million in specie, all of which was immediately
sent abroad to buy arms. But subsequent loans were relative, then total, failures. A cottonbacked
foreign loan, organized in London by Erlangers in January 1863, brought in disappointingly
little, as a result of high charges and an imprudent attempt to bull the market. Hence Memminger
resorted to the device of the improvident through the ages-printing paper. By the summer of
1861, $1 million of Confederate paper currency was circulating. By December it was over $30