Theme 3:
Mini-Series D: Module 2
Civil War and Reconstruction:
the Hinge Connecting the Antebellum South to Redeemer New Souths
working copy theme 3 and sout1 autosaved is where i put cut and paste
The Dog that Did Not Bark
The nub of my argument in support of the above assertion is that to the extent Reconstruction exhibited any coherence, it constituted an essentially political and civil rights transformation by dictum, i.e. constitutional amendments focused in their entirety on ending slavery and enfranchising southern Blacks. Having accomplished this (imperfectly, temporarily at best), the northern victors simply moved on and left the South (and Blacks) to their own devices. The result was as predictable as it was counterproductive.
What was missing from Reconstruction? The “dog that did not bark” was a functional equivalent to World War II’s Marshall Plan–a path into regional economic modernity. What the North wanted, and got, was revenge and ending slavery. What the South got was an imposed political, economic, and social revolution by external dictum–creating near chaos in its wake. Had the South been offered a guided path into the modern industrial world after Appomattox, along with a sustained political and civil rights revolution is a fascinating alternative history book yet to be written.
After Reconstruction the South received semi-benign (I’m being charitable) northern neglect, and de facto colonization by our emerging northern “Big City” Gilded Age industrial capitalist hegemony which injected modernization where it could make profits from it. Left to fabricate its own future, reconstruct its own policy systems and economic bases, the South, went “back into the future” with agriculture, a sharecropping/Jim Crow workforce, and its old cheap labor export economic base.
Northern Radical Republicans were concerned primarily with African-American civil and political rights, not economic growth, confronting inequality, or integrating northern and southern economic bases. They made no major effort to impede the South’s desire to return to its antebellum agricultural and cotton-dominated economic base. Reconstruction exclusive emphasis on civil, political, and electoral rights necessarily meant significant change in southern policy systems–but left economic development to the vagaries of whatever those reactive policy systems wrought.
Politically and militarily conquered, the South’s economy effectively leveled, the Reconstruction forced upon the South a cultural and societal transformation so rapid and transformative, if short-lasting, that for both understandable and ignoble reasons, resulted in a massive cultural and political blow back. The blow back not only wasted a decade, but led to the Region’s establishment of a shared, if individually distinctive, set of state/local policy systems whose collective decisions regarding economic growth and economic development continued the South’s “regional separateness”, and isolated it economically, politically, and culturally so that it could benefit little from the economic growth in other regions. Over the next hundred years, a region so isolated and chronically-depressed could survive only through an exodus of its desperate young and its repressed African-Americans.
Organization of Module
We start off with the devastation that was the 1865 South. Then we spend a great deal of effort outlining two Reconstruction Era dynamics (reconstituted southern policy systems and troubled MED strategies whose heritage only made post-Reconstruction worse).
Unconditional Surrender: Economic and Cultural Effects of the War on the South
At war’s end, Reconstruction was imposed on the South–inserting military rule, terminating southern Confederate constitutions (which had replaced older Early Republic ones), and, despite its well-known limitations, ended slavery and restructured old-style pre- Civil War “Tara” plantations on which the South’s pre-Civil War agricultural base rested. James Cobb, for example, describes the impact of the Civil War and subsequent Reconstruction on the most prosperous region in the Cotton Belt: the Mississippi Delta:
The upheaval of the Civil War and Reconstruction destroyed the Delta’s prospects as a large slave-holder’s paradise and confronted its planters with the reality of their dependence on a huge black labor force suddenly free to exert its newfound economic leverage and exercise its recently acknowledged political rights as well … [Even post-1875] redemption [see below] brought no immediate restoration of planter hegemony … Freedmen continued to use demand for their labor to secure more advantageous terms for their labor … Not until the 1880’s when federally-funded levee rehabilitation and privately financed railroad expansion triggered a land and population boom, did the region begin to reclaim its antebellum identity as the undisputed domain of the planter [1]
During the war one-quarter of military age southern white males died. An additional 200,000 were permanently maimed–18% of the population and 36% of those over 19 years of age. The war destroyed white yeoman farming–and farmers–leveling as well as the planter-dominated officer class, creating a lost generation and a “lost cause” as its immediate heritage.
Prior to the war the South had a bimodal wealth distribution … the classic planter [fifty or more slaves] … only about 8,000 families … [made their states among] seven of [the nation’s] ten states with the highest per capita wealth…. However, since 70% of southern families did not own slaves, the 1860 per capita income of the region was only slightly ahead of the north central states, and well-behind the average northeastern state. It took eighty-five years for the South’s per capita income to regain its below average 1860 percentile ranking. …. Excluding the total loss in the value of slaves … assessed property values at the end of the war were more than 40% lower than in 1860. [2]
As the reader today scans newspapers and sees images of war-torn destroyed cities and countryside, the 1865 South was no better, comparable to 1945 Europe. Phillip Leigh summarizes the devastation–and its chronic persistence into the 21st Century:
The war had destroyed two-thirds of southern railroads and two-thirds of the region’s livestock … Steamboats had nearly disappeared from the rivers … since their protective levees had been destroyed, thousands of square miles of Mississippi delta cotton lands were overrun with briers and cane thickets … By 1870 southern bank capital totaled only $17 million compared to $61 million in 1860 … the region’s currency in circulation dropped from $51 million to $15 … Not until 1879 did cotton production return to pre-war levels, … by 1900 the South had barely recovered to the level of economic activity prior to the Civil war. [3]
What little modern connect-the-dots transportation infrastructure–and factories–the South had possessed were destroyed. Many of its few cities burned down. Without transportation infrastructure, it was expensive and time-consuming to get interior-grown cotton to southern ports. For an export-based agricultural system, relying on King Cotton’s global markets already challenged by Civil War disruptions, the South soon faced economic ruin. As far as consumer disposable income it was non-existent. While ninety percent of American Blacks still lived in the South in 1870, former slaves, now Freedmen/women, got rights, at least initially, but not money, education, or power. Their Reconstruction electoral success
That ruin transformed the South into a chronically-depressed economy, miring its population, both white and black, into an unendurable and seemingly perpetual rural poverty. Southern white per-capita income, $125 in 1857, never recovered until the 20th Century. In 1879, it was only $80. If the North, despite its immigrant inequality had entered into Gilded Age prosperity and economic growth, the South suffered from pervasive economic stagnation characterized at best by grudging incremental, if volatile, normalcy that characterized the gradual restoration of the cotton/agricultural-dominated economy.
That difference was fundamental to the ED path each followed after the Civil War. To even imagine the 1870 southern economic developer confronted the same set of problems as did his northern counterpart is, simply put, ridiculous.
Two Reconstruction Era Dynamics that Shed Light on Post-Reconstruction Southern ED
Instead of being a brief, if turbulent and controversial interlude in our ED history, Reconstruction profoundly affected the South’s future. The North shifted its priorities from Blacks and the South as the Gilded Age unfurled. So negative was the southern reaction to Reconstruction, from both whites and blacks, that however various innovative/disruptive, but often corrupt and poorly implemented Reconstruction MED/CD strategies never gathered sufficient momentum to deliver serious benefit for the region as a whole. Worse these strategies/initiatives became linked with the despised Reconstruction in the eyes of its white political elite. Whatever potential these promising strategies might have had, they were rejected or seriously downplayed when Reconstruction ended.
This Reconstruction Era module concentrates almost exclusively on two major Reconstruction dynamics that decisively shaped the post-Civil War South.
The first dynamic, the reconfiguration of the antebellum state and local policy system to incorporate post-Civil War realities. That set of decisions was compelled by a new reality created by Reconstruction: emancipation of the slaves, extension of the political franchise to them and the consequent destruction of the antebellum southern state and local policy system. That southern political revolution, caused by Reconstruction, potentially changed everything in the South
From the perspective of our Chapter One model, emancipation and enfranchisement potentially, but fundamentally, transformed southern policy systems which made future ED policy. The post-1880 southern economic development path was the consequence of decisions and strategies made by this reconstituted postbellum policy system.
The second dynamic was the Reconstruction Era attempt to import/develop northern industrial and commercial sectors to diversify from the southern agricultural economic base. Included in that dynamic is post-Civil War migration to southern cities, urbanization, which for the first time in that region’s history promised some sort of balance between the city and countryside.
The remainder of the module will discuss each dynamic. The intent is to provide sufficient background to explain the context of the reconstituted southern political consensus, its internal dynamics, and introduce why it made the ED decisions it did. As such it will serve as an introduction to the next module: the Divided Mind.
(1) the Reconstruction Era State and Local Policy System
It will become increasingly obvious in this history that southern policy systems have been consistently different from northern/Midwest, but also western, policy systems. In that Reconstruction launched a political revolution, and did not attempt an economic one, the long-term effects of Reconstruction are indirect–through the policy systems indirectly created as a reaction to Reconstruction–but these indirect effects were sufficiently powerful, if incremental, to initiate a meaningful new thrust, new directions into southern economic development.
As far as its northern conquerors imagined, slavery had to end; whatever its consequences. The Freedman’s Bureau was as far as the North went in providing a tool, a CDO, to manage the liberation of slaves economically, and individually. Whatever implications that had on the southern economy, and society for that matter, was not on their agenda. They never contemplated anything like a post-WWII Marshall Plan. What was missing was an equivalent to the federal Economic Development Administration.
The southern economy for all practical purposes in 1865 had ceased to function. With plantations burned, their owners, debt-ridden to the point of bankruptcy, owners often disenfranchised, and now lacking a workforce, the plantation was in crisis. Its white yeoman workforce shattered and would soon join Blacks into sharecropping or urban migration. Except for the Union Army there was little that provided any cohesion to any southern policy system in the earliest years of the Reconstruction .
Succession policy systems coped until the 1867 Reconstruction Congressional Phase commenced, and then the cumulative impact of the three newly approved articles of the Constitution took effect. Congress devised a path to re-admittance to the Union that required their acceptance–which meant new state constitutions, legislatures and governors. The South had to devise a new political order and a new set of state and local policy systems.
A situation such as fundamental as this is an anomaly in American history. That is why we have devoted a module to it.
In a democracy. of course, elections are how these things things get done. That is why the Reconstruction is, at its core, a political revolution for the South. The southern electoral franchise, whoever was in it, would make the decisions and set up the policy systems. One by one each state and local policy system made those adjustments that got federal approval. Generally, the body that devised the new state constitution was the starting bloc for building the new policy system.
Simply put, the inclusion of Blacks dramatically changed southern state and municipal policy systems, and requiring election of Freedmen or Free Black office holders meant at minimum white elected delegates no longer controlled policy making. In Alabama, Florida, Louisiana, Mississippi, and South Carolina (the Black Belt), Blacks were a majority in these constitutional conventions. High-ranking Confederate officers and officials were denied suffrage, and southern war debts repudiated–bankrupting many southern financial institutions and property/plantation owners. The native white antebellum political elite, still in existence, was decimated at best, often replaced by new elements from the white community. These included a motley coalition of southern “Whigs”, i.e. Republicans, Black Freedmen, northern emigres (aka “carpetbaggers“), and opportunistic southern Democrats (mostly opportunistic businessmen, called scalawags) swept into victory in southern cities, towns and state legislation.
Reconstruction policy systems eclectically adopted any number of MED strategies and initiatives. Such initiatives often came from cities, burnt or otherwise. Several Theme 3 modules, on Atlanta and Knoxville, will recount that city’s experience during this period. Much of Reconstruction Era MED went bad, flagrant corruption and scandals galore meant millions of dollars of state debt that had to be dealt with when Reconstruction ended for each state. On top of this the Panic of 1873, like all panics described in this history was worse, and more long-lasting than previous panics, exacted additional devastation, including fiscal on southern policy systems. The well-told tale of the KKK and the later imposition of Jim Crow laws offers vivid testimony that racial strife was also intense. The Reconstruction policy systems, without exception were replaced after Reconstruction’s end–and that is the tale of the next module.
(2) Reconstruction Era MED
Urbanization–In 1860 the South’s urban population was 9.6% (up from 4.6% in 1820) compared the Northeast’s nearly 36% (11% in 1820). Despite the reality the 1870 South had few sizable cities at all, and that many had been burnt or seriously damaged by the war, southern urbanization had increased to over 12% by 1870. Stagnant during Reconstruction and the ensuring Panic of 1873, the South after 1880 urbanized incrementally every decade to the present. During the antebellum South, the principal force and policy-maker in southern ED was the state–and a couple, literally a few major cities (New Orleans, arguably Charleston and Richmond). After the Civil War and Reconstruction, southern cities evolved into ever more impactful players in the making of southern ED policy. This was a game-changer.
War and Reconstruction pushed hinterland refugees into cities. More precisely, they negatively altered the South’s agricultural economic base, affecting plantation owners, yeoman farmers and Freedmen. That sent a constant stream to the city in search of employment; it created what economists call surplus labor–what economic developers refer to as cheap labor. In the 20th Century war and a second reconstruction would return to the South to complete the task of southern urbanization.
MED during the 19th Century, be in South or North, Midwest or West centered around urban areas, major urban areas when possible. By definition, American MED is capitalist economic development, and during the 19th Century, capitalism focused principally on several key industries, including railroad, steel, communication, but above all manufacturing. Nearly all these sectors radiated from, and gravitated to sizable urban areas. The major thrust of the Early Republic MED was three-fold: city-building, connecting the urban dots with External MED developmental transportation infrastructure, and the development of market areas sufficient to support growth in emerging manufacturing sectors.
Reconstruction Era MED strategies were not a radical departure from those practiced during the antebellum period, but they were consciously directed at diversifying the southern economic base, making it similar to the North. In hindsight they were vastly less impactful than the incremental rise of southern urbanization that followed the Civil War. That southern cities emerged after the war, survived the hard realities of the Reconstruction and transition periods that followed, is truly remarkable and fundamental to the future of southern ED.
Even during Reconstruction itself, cities and the slightly larger towns developed into policy systems with a strong MED priority. In that these urban centers concentrated whatever power they had, they were able to play a role in the reconstituted state policy systems as well. MED, perhaps surprisingly, would do very well during the Reconstruction Era. Unfortunately, MED often had to be approved and implemented by extremely troubled, and deeply-flawed, poorly-accountable state policy systems dependent on a highly-fractured political consensus In the near anarchistic and economically desperate times of the decade after the Civil War. MED policy, while potentially transformative, did not enhance its reputation, or prove its effectiveness.
The South as we have discovered was not entirely immune to External MED, nor to the development of manufacturing and service sector. For all practical purposes it was fairly immune to serious urbanization–at least until the 1850’s. City-building was NOT the South’s middle name. The agricultural economic base, and in particular the decision to embrace cotton and create a cotton empire with King Cotton as the critical sector in the southern economic base did not foster large urban areas, and biased manufacturing to sectors that produced or processed agricultural goods and commodities. So the South did not reject capitalism or industrialization–but it seriously was uncomfortable with them. In particular, key sectors such as finance and banking conflicted sharply with the South’s predominant political cultures–and development transportation infrastructure had a troubled and complex history in the antebellum years.
War/Reconstruction, by literally burning down cities, and yet having them serve as home base for the conquering Union army, while often driving out previous residents–or killing them in consequence of the war–in effect gave southern cities and little towns the potential to acquire new meaning and purpose, and new residents as well. Despite their wretched condition, urban population increased if only because of hinterland devastation, and northern emigres.
What is known today as carpetbaggers, northern emigres, settled principally in cities–many middle class and a good deal former officers/soldiers from the Union army, imperfectly mirrored the Deborah Stone-ish image we have of these folk. Many, certainly not all were legitimate entrepreneurs, and many had access to northern capital–so desperately needed. As our Knoxville/Atlanta case study module will suggest, these folk provide a new infusion into southern urban business communities/chambers, and were often key players in urban MED–and the state as well. Having said all this, the period is known, with good reason, for its incredible corruption and incompetence. Some carpetbaggers, Freedmen elected officials, native southern Whigs (scalawags) and traditional elites saw golden opportunity during these near-anarchistic years.
External MED: Railroads–Scandals
It has been said that corruption flourishes when there is money to be protected or money to be made. In terms of MED, the obvious potential in railroad infrastructure (financing, construction, operation)–the need to connect the northern economy to southern agriculture as the Illinois Central had proven–was a legitimate opportunity and a legitimate public goal. The South lacked capital, external investments a sine qua non, and a favorable incentive-laden business climate an-almost inevitable element of a “deal”. So were kickbacks, outright bribery (shares for votes), and lack of administrative oversight-bookkeeping by novice administrators in a state bureaucracy less than a year old an open invitation. Due diligence for developmental transportation infrastructure is complicated at best, and the subsequent development of market demand to justify investment an unknown–being wrong meant being bankrupt.
It is likely every southern state in this period got involved with railroad development, not all proved negative. North Carolina enjoyed its own railroad scandal. Atlanta, on the other hand, was awash in railroads and it survived Reconstruction without serious blemish. The cumulative effect of these scandals, however, totaled many millions of dollars, which did little to increase railroad’s (developmental transportation infrastructure strategy) standing with reputable politicians, taxpayers, and those predisposed to separate public from private ED. This legacy, as we shall see was an important element in the overall post-Reconstruction legacy which will be discussed in the next module.
The State of Alabama offers an example of how all this could, actually did, go wrong. In 1867, the state legislature authorized the governor to issue railroad mortgage bonds at the rate of $12,000 (in 1868 raised to $16,000) per mile, so long as the railroad connected to another state–that meant laying at least twenty miles of track in another state before being eligible. There was no market analysis required, so demand and future traffic did not enter the calculation. The state would enjoy a first lien, and hence could take over the asset in bankruptcy.
Well, the Alabama and Chattanooga Railroad, after paying $200,000 in bribes for a state charter floated over $4. million in state bonds, which it secured by laying track mostly in Tennessee. Running out of funds, the Railroad went back to the Alabama legislature for an additional $2 million, which it subsequently used to build a hotel, and an opera house–in Chattanooga. Surprisingly, the endeavor soon went belly up, and the state acquired the assets in a auction sale–reversed by the courts because legally the state already owned the assets through the first lien. So the state bought the bankrupted $1 million mortgage debt to formally seize the assets [4]
South Carolina had its own example, the 1870 Greenville and Columbia Railroad was a scam that involved a who’s who of current state politics–including ex-Governor Orr. The Railroad went bankrupt, the state had to take it over, and since it guaranteed over $1.5 million of state bonds, had to pay off the debt [5]. South Carolina also suffered through another railroad scandal, our old friend the defunct state-owned Blue Ridge Railroad became victim to its own bribery created scam. Instances such as these were found in several other states–and BTW railroads were far from the only source of such corruption.
I might toss in for good measure, this was the period in which the Federal Government enjoyed its own railroad corruption scandal: the Credit Mobilier. Operating railroad track in the South dropped by 20% during the 1870’s [6]. Whatever new rail lines were built, most were so fragile the Panic of 1873 killed them. The reader may be shocked to hear that northern railroads and investors picked up these lines at bargain prices in foreclosure [7].
As bad as the Alabama/South Carolina examples, typical of the South, might seem, it gets worse. Through the 1870’s railroad corporations, then perceived as the essential infrastructure for southern economic recovery, were increasingly taken over by northern and foreign investors–becoming major players in state politics [8]. The External MED policy “tail”, was threatening to take over the state policy system “dog”. That’s not the way the policy “wag” is supposed to work.
External MED: a railroad that succeeded in spite of itself: Birmingham
Birmingham was another beneficiary of the Radical Republican period. Pre-Civil War geologists had ascertained the area around present-day Birmingham AL possessed sizable iron ore and coal deposits–but lacked access to the outside world. Alabama entrepreneurs Frank Gilmer and John Milner accordingly saw opportunity if a rail hub could be developed in central Alabama, near Chattanooga. Starting construction in what will become Birmingham, efforts were blocked by rivals and only in 1869 were they able to start laying track. They soon ran out of dough sixty-six miles from Decatur AL. A lack of southern capital and the weakness of the South’s financial infrastructure doomed the startup.
They were bailed out by the southern-owned Louisville and Nashville Railroad (L&N). L&N sought access into Alabama in its quest to extend its network. Track to Decatur was installed, connecting multiple settlements on the fringes of the iron/coal deposits to the outside world. Birmingham was first on that block to incorporate (1871) triggering nearly a decade of spectacular growth (1880) during which Birmingham’s population catapulted to unheard of levels, just over 3,000. As we shall see in a latter module, simultaneously its unincorporated “suburbs” attracted foundries and mills that processed coal and ore from nearby mines.
When the Panic of 1873 hit, L&N invested its limited capital acquiring bankrupted mines and factories, thereby vertically integrating its railroad, ensuring both traffic and profits. It also in these hard times laid new track as it could to connect to Mobile, and then to New Orleans. Anchored by the growing Birmingham industrial base, L&N and Birmingham were among the few examples of successful railroad/industrial development during the Reconstruction/Panic decade.
Wrap Up and Segue Way
Victorious, the Reconstruction coalition won S&L elections, wrote and approved new state constitutions, and ultimately backed by the military government ran state and local governments. The Freedman’s Bureau, a federal agency, was a major player in local governments. Radical Reconstruction policy systems decisively moved to industrialize southern cities by encouraging local manufacturing startups, and working with northern companies to import branch firms. They were decidedly business-friendly, so friendly in fact many cities quickly mirrored the rather corrupt use of public funds to finance businesses and investment that to put matters nicely, had weak business plans and complex flow of funds that somehow got lost in transit.
Southern Radical Republican policy systems shared, on the surface, the planter class southern transportation infrastructure strategy. Repairing and installing railroads was arguably their top-ranked policy/strategy of both. Railroad startups in many Radical Republican southern jurisdictions were a prominent strategy with public funds an essential element. But it was all in the details–how implemented, who benefited from installing railroads, and who ultimately would dominate future state and local policy decisions. Like sausage in the making, this was not pretty to watch. The onslaught of the destructive Panic of 1873 could not have come at a worse time. These public/private investments, even those of merit, collapsed, leaving the taxpayer with the bill. This added fuel to the fire of the newly-formed Redeemer Democratic coalition that followed Reconstruction–the topic of our next module: the Divided Mind.
The next module dwells on how Reconstruction led to the formation of post-Reconstruction southern policy systems that in effect “doubled-down” on the the South’s 1800 decision to embrace an agricultural path in the modern era, and to organize its policy system and economic base to best achieve that end. That post-Reconstruction southern policy system will be examined in the next module: the Divided Mind. That module tackles how the post-Reconstruction southern policy system reconstructed itself, how it fabricated a new alliance between planter and yeoman–again at the expense of Blacks–and why it made the decision on the future direction of the southern economic base. That policy system and the ED decision it made was heavily influenced by the Reconstruction Era legacy. Reconstruction was the ‘hinge” period that explains much of what the post-Civil War was, why it did things–and how it differed from its antebellum past.
Ron W. Coan 