The Cook’s Tale: Each Region makes ED using different ingredients (History, Culture, Economics) Slow-Cooked over a Century
So ED/CD Differs in each Region
From George Washington to World War II the Southern and the Northern ED Were As Different as Venus and Mars
As Two Ships spends the better part of two or three chapters outlining the evolution of the American South and its distinctive ED context. In this short introduction, I can only make several fundamental observations on that history.
Ignoring the effects of climate and economic comparative advantage, the South was settled by different ethnic/racial groupings, developed a distinctive economic base radically opposite of the hegemonic North, and logically established policy systems to accommodate its own configuration of values and priorities. These elements produced a soil from which Progressivism could not take root. Southern “First Settlers” set in place state governments that were radically different in key ED-related values and relationships. The South put in place, as early as the seventeenth century, an agricultural-export economy, based on slave (initially Native American) workforce, and a reproduction of the English and Irish medieval “manor” economy, complete with lords and damsels in distress.
The North’s cities in this time period set up an agricultural economy (that did not export and so its products were available domestically to support urbanization) supplemented by a trade economy based on ships, ship-building, extractive industries and non-agricultural occupations (sailors, fishermen for example). It was no accident that in 1792, Salem was the nation’s seventh largest city and Newport CT the eighth, Gloucester, the eleventh. NYC grew around this nexus and financing-capital markets/insurance of trade. Gee, how things change (sarcastic irony)?
The 18th and early 19th century South did not meaningfully urbanize or industrialize, and did not “enjoy” immigration as did the North. New England town-building had no counterpart in the South. The South’s largest city, New Orleans (second in per capita income to NYC), was Spain/France’s equivalent of NYC and not typical of southern cities. Aside from New Orleans the South’s largest city in 1860 was Louisville KY (68,000)–Charleston SC was 40,000 and Richmond VA only 38,000 (by comparison NYC over 1 million, and Philadelphia 565,000). Southern states did not promote city-building, relying on plantation’s (the manor) as their economic base. Such “cities” as existed served as collection points and ports of export.
Ships from Salem and New England carried the South’s cotton in the nineteenth century, just as they transported its enslaved workforce during the eighteenth century. New England’s manufacturing gazelles, its textile mills, turned southern cotton into clothes for American consumption. And so the Tidewater South was a serious player in eighteenth century America. But the South of Washington and Jefferson changed dramatically starting around the Jefferson’s post-1800 administration.
Early in our Early Republic Era (the first decade in the nineteenth century) the South’s previous tobacco-indigo-based agricultural-export economy underwent a huge transformation. Innovation in the agricultural medieval context necessarily involved agricultural production or a major shift in agricultural products. With indigo and tobacco in notable decline (both exhausted soil fertility), a new export crop was needed.
The invention of the cotton gin (in Georgia) supplied the technology necessary to switch to cotton production. Cotton production required lots of cheap labor (there was no technology for cotton-picking equivalent to a McCormick hay/grain reaper) that would work under difficult conditions. Tidewater plantation owners (Maryland, Virginia and northern North Carolina) sold their increasingly surplus slaves to a new crop of entrepreneurial Scotch-Irish migrants (remember Scarlet O’Hara’s dad, Gerald O’Hara, the founder of Tara Plantation) who had grand ideas to establish a new type of plantation around cotton production, in mostly unsettled (by whites) land suitable to cotton.
So horribly and tragically Scotch-Irish slave owners forcibly relocated the slaves into Georgia, Mississippi and Alabama (which became states in 1817 and 1819), then Arkansas (1836), Kentucky and Tennessee. This little-known “Passage to the Interior” (sometimes called the “second middle passage”) moved in aggregate over one million African-Americans (see Ira Berlin, the Making of African America, 2010). Native Americans were also physically removed from these areas (the infamous post-1830’s “Trail of Tears”).
Forced migrations populated the cotton (and Black) Belt. With technology, entrepreneurship, capital investment and workforce in place, the South’s agricultural-export economy, resting on its “gazelle” cotton plantations was revitalized, new “slave” states added to the South and “King Cotton”, in a fashion similar to today’s “Oil and Gas Industry” ruled over the South’s economy for the next one hundred years. At this juncture, the South had economically “doubled-down” on non-urban agricultural economic base. This was arguably the first “New South”.
Tidewater and Cotton Belt policy systems were dominated by plantation owners and agricultural-support businesses. Sam Bass Warner’s Privatism thus had different meaning in the South where there were no New England town/shareholder democracy or Privatist merchants/early industrialists. The predominant level of governmental administration was the state itself, and its subdivision, the county. City-building such as it was, founded thinly-populated logistics centers, the ” cotton town” (later mill and mining) which closely resembled the infamous “company town”.
Infrastructure, the key to northern ED and urbanization, was needed only to the extent of getting the goods to export ports. So while the North built industries around steel, locomotives, even steamboats and canals, the southern infrastructure was a secondary priority. By 1861, the North laid 22,000 miles of track; the South only 9,000. Export was the South’s chief ED strategy. A large expanse of fertile land and low-cost slave labor were the South’s edge in global competition. The South supplied nearly 80% of Britain’s cotton needs.
New England shippers transported the cotton, and until 1819, slaves from Africa. Without exaggeration, New England’s manufacturing revolution, and maritime sector, were closely tied to the South’s agricultural-export base. In contrast, the South relied on northern manufacturing for its manufactured goods. Only 8% of southern locomotives were made in the South by 1861. Fueled by plentiful supplies of southern wood, not northern coal, most southern railroads were shorter in length, and commenced operations only in the 1850’s.
There was, aside from a rising New England abolitionism, a divisive tension between the two regions, however. Southern global export required as close to “free trade”, low tariffs and minimal national protectionism as could be negotiated in Washington. The fledgling northern manufacturing sectors, including textile, needed serious tariffs to protect it from British competition. In an Era so reminiscent of today (albeit turned upside-down), trade (globalism) and protectionism were primary issues on our federal agenda. In 1828 the “Tariff of Abominations” took effect, cementing in place Whig protectionism. This generated a constitutional crisis. They talked not only about impeachment, but succession–the “sanctuary city” of its day.
The Divorcee’s Tale: It’s Hard to Make Relationships Last
A Case Study of Southern Gift and Loan Clauses and their Effect on the South’s ED
In this context, a southern/westerner populist leader, Andrew Jackson was first denied “his” victory in the 1824 election, only to be elected to the Presidency in 1828. An opponent of Henry Clay’s (Whig) American System, which involved protectionism and large national infusions of infrastructure, Jackson stood for state leadership and devolving finance and investment the states by terminating the federal National Bank. By the end of his second term, Jackson had succeeded in that mission and that early “deal-maker” negotiated the 1833 Tariff Compromise (tariffs were lowered persistently to the Civil War).
During and after Jackson, states acquired an increased role in the financing of investment in their economic base. The specifics of what that mean varied by region and state. Instead of promoting manufacturing and infrastructure (chiefly, railroads and roads by this point), southern states offered free land to settlers for farming (homesteading they called it in the North), and then created (state-charter) banks to finance this expansion of farm acreage at low rates and favorable conditions.
If Baltimore and Pennsylvania were using their state charter powers to form infrastructure-EDOs, a network of southern state-chartered (and partially subsidized) banks and insurance companies were the South’s response, Please see our second issue: “Use Three Wave History at your Peril” where we describe northern infrastructure/manufacturing-related sate/municipal-chartered EDOs. In that issue we introduce the state/municipal chartered EDO, linking it to political culture, and presenting the basic outline of its importance in our history of American state and local ED.
[State or municipal chartered corporations were a major first step in our history. They are the earliest example of today’s development, tax-exempt bond issuance, housing and redevelopment agency. A state charted EDO was not private, it was quasi-public, endowed with public powers including eminent domain, tax abatement, bond issuance and direct financing to private business was also common]. The state-chartered EDO was “owned” (autonomous from the state) and operated by business investors and managers to accomplish public purposes–and make a profit. It was a public-business corporation whose powers, rights, and responsibilities were defined by state legislation, usually specific to each EDO. States were on-the-hook for the debt issued by the defunct bankrupt state-chartered EDOs]
When the Panic (Depression) of 1837 deepened and persisted into the 1840’s, it created the context for a series of state legislation (gift and loans clauses) that changed the course of American state and local economic development: . A series of state legislative (followed by judicial review) and state constitutional amendments reacted to bankruptcies and instances of corruption involving the state-chartered EDOs that appeared in the decade-long aftermath of the Panic.
These gift and loan clauses established the parameters, definitions and legitimate/legal purposes of public-private partnerships for each state and creature cities and counties. Embedded in state constitutions, gift and loan clauses (albeit modified and often bypassed) persist to this day. They are a essential cornerstone and theme in our history–and as we shall see are a primary reason why Contemporary Era American state and local ED evolved into a unique, quite distinctive fifty-state system.
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Authorized by the often newly established states (many Midwestern and South Central states are less than twenty years in existence at this time), they combined the noble attributes of structural experimentation (innovation) with likely equal amounts of opportunism and favoritism. Accountability was not totally neglected, but many states took little note of their ultimate responsibility for default and bankruptcies.
In the North/Midwest primarily infrastructure-related state-chartered EDOs went belly up and while states varied in their parameters, it was not uncommon for states to remove themselves from involvement in public-private partnerships intended for local infrastructure by inhibiting or forbidding outright a state-chartered EDO–some, however, did not extend the gift and loan clauses to the local governments–thrusting upon local jurisdictions the responsibility for leadership (and debt) associated with developing finance, insurance, port, manufacturing and infrastructure to its urban jurisdictions, in effect ceding leadership in state and local ED to local jurisdictions for the next one hundred years or more.
Interestingly, hegemonic northern/Midwestern states during the 1850’s found a substitute for the state-chartered EDO. They infused public powers/financing directly into a private business, which then for its own profit-related purposes, could issue tax-exempt debt, conduct eminent domain, and enjoy and provide tax abatement. So the transcontinental railroad, the gas-power company, and later streetcar franchise came into being–that is its own story, left untold here, but revealing northern industrial Big City states proceed along their own gift and loan path over the next hundred years.
That path was not followed (mostly) by southern states–and that is the point of this article. In this atmosphere, the gift and loans phase of our economic development history (see second issue) played out in an entirely different way than the hegemonic North. Partly this was because in 1836 the export price of cotton peaked at about $.22 cents per pound. It declined after that, never exceeding $.17 cents until the 1863 Civil War northern blockade shot it through the roof.
Southern cotton-growers, and farmers who lived off of southern cotton-growers were under economic pressure–many farms and some plantations didn’t make it. Their bankruptcy took southern state-chartered banks with them. Eventually, Florida, Louisiana, Mississippi, and Arkansas defaulted–100% of the defaults were agriculture-based. If the South was agricultural-export, the reaction of southern legislatures to the Panic and its consequences was also.
Southern legislators were not mad at railroad or canal state-chartered EDOs; they were made at local bankers (often in cahoots with state legislators–crony capitalism) that loaned money to plantations and homesteaders which was not paid back and for which the state was liable. [One might add, that several Midwestern states also had the same problem–along with transportation-infrastructure EDOs]. Southern gift and loan clauses, embedded in southern state constitutions, were more anti-lobbying in their intent and purpose than de-institutionalizing a hybrid public-private partnership. They approved limitations on business influencing government officials and legislators–their gift and loan clauses were “based on a desire of keep(ing) business out of government … rather than a desire to keep government out of business” (Arthur Schlessinger Jr., quoted in As Two Ships, p. 80) as northern states intended.
In short, southern 1840 ‘s gift and loan clauses were different in context, intent and definition, and over time would have taken the South down a different path than the North.
I could now describe to the reader that path–EXCEPT …. The South lost the Civil War.
Pre-Civil War state constitutions (and their gift and loan clauses) were terminated by Radical Republican Reconstruction legislative majorities and were replaced by constitutions reflecting an entirely different electorate and state policy system. Reconstruction-era state constitutions reversed 1840’s gift and loan clauses by encouraging public-private partnerships. The idea in the late 1860’s was to revitalize the devastated south by “copying” northern prosperity, i.e. industrialization.
This meant fostering a business class, if necessary through public subsidization. It also required railroads, the principal mode of commercial transportation. Every former Confederate state constitution replaced the old gift and loan clauses to (1) permit direct subsidies to railroads and other corporations as well; (2) most authorized loans and state credit through state tax-exempt bonds, and (3) to encourage general business development approved favorable incorporation laws, and limited liability for corporate shareholders (Tarr, p. 113). Most constitutions were crafted to make them “business-friendly”, and establish a favorable state business climate. There was some measure of institutional memory, however. Some states required two-thirds approval of bond-issuance and others required tax increases to cover debt obligations.
All this worked, in its way, until the 1873 Panic, the flood of bankruptcies that followed, and then the victory of a new political movement, the Redeemers, who tossed aside the Radical Republican policy system in favor of their own. Nine southern states rewrote their constitutions between 1875 and 1902 (Tarr, p. 131).
Through a variety of requirements and subterfuges (Jim Crow laws), Redeemers constitutions disenfranchised Blacks. They also repudiated Radical Republican activist use of state and local government. Getting the state/local governments out of economic development (industrialization) was another important objective. To further these ends, many southern constitutions repudiated outstanding Radical Republican debt knowing full well this “ensured that investment capital would not be available in the future to underwrite industrial expansion, thus by default reorienting state economic development in an agrarian direction” (Tarr, pp. 131-2)
Redeemers adopted some of the most stringent, anti-business gift and loan clauses in the nation–including a complete ban of state and local direct (and indirect) assistance to business and private corporations. They took it one step further by mandating extremely low tax rates, placing severe limits of government borrowing, and capping government expenses. This was done to limit public services and government budgets as their ultimate objective was “to govern as little as possible” (Tarr,p.113). Redeemers, Jacksonian to the core, wanted limited government at all levels.
It was never Redeemer intention to create a state business climate to encourage business or industrial investment. That it ultimately had the opposite effect intended is one of our great ironies of economic development.
So with a “divided”, some would say bipolar mind, they cut a deal and outsourced ED–insulating themselves from influence by their ED contractors by re-approving much of the old gift and loan clauses. It goes on.
If the reader gets the sense she is in for heavy weather in the next issue of the As Two Ships series, she is quite correct.
Gift and loan clauses in the South did follow a different path than in the North and the implications on our history of state and local economic development, as the reader shall discover, are profound and very long-lasting. Indeed, they persist to the time of this writing.
The Tale of a Bi-Polar Economic Developer:
Just what is Southern Economic Development Anyway–the Divided Mind
As we saw with gifts and loan clause case study its not what you find in the textbooks. The various schools of post-Civil War southern history don’t help, except that they support the importance of ED as a critical theme throughout the period. That may be a first important observation in this Curmudgeon Tale of the Bi-Polar Economic Developer.
Rebuilding the burned cities and destroyed transportation infrastructure of the South is a start (postwar refugees fled to cities and some urbanization resulted), but what really is devastated is the pre-Civil War agricultural-export economy and the state and local policy systems that resulted from it. The South had to reconstruct its economic base and recast its politics. Whether of not the South possessed much of an economic base at war’s end is a key question. More than one-half of southern urban centers (towns and cities) were physically “conquered” by the Union army (New Orleans fell in 1862). Charleston, Atlanta and Richmond, leading cities were burned to the ground.
What infrastructure the South had was for all practical purposes destroyed–from bridges to rolling stock. By war’s end with few “roads”, steamboats destroyed and rail traffic impossible, export to external markets was near-impossible. Southern transport infrastructure was ruined and any return to the former export economy required massive and intense railroad-related infrastructure repair and upgrade.
About two-fifths of southern livestock was killed, and horses were in extremely short supply. Many plantations were burned, the remainder stripped of their slave workforce by the Emancipation Proclamation. In war’s immediate aftermath some Freedmen demanded of their former owners the proverbial “forty acres and a mule”–others fled to cities. Most plantation owners broke up their plantation and “struck deals” with Freedmen and poor whites to annually plant/harvest cotton for contracted acreage–evolving into a semi-formal low-wage, tenant-farming system (“sharecropping”).
Agriculture in these times was “people-intensive” and one-quarter of the southern white population of military age were killed or died during the war. An additional 200,000 were permanently maimed. The southern officer corp included many plantation owners and many were killed. Whites in southern pre-Civil War agriculture raised food produce for themselves, the plantations, and urban centers. Their small farms deteriorated and were frequently raided during the war. When soldiers returned, there was often little left to farm, no banks to lend–and no southern purchasing power to buy what could be grown. They too drifted into sharecropping, or engaged in hardscrabble subsistence farming. White per capita income, $125 in 1857, never recovered. As late as 1879, it was still only $80.
Accordingly, pre-WWII southern economic development elevated ED in most southern state and local policy agendas than did northern hegemonic states. This prioritization, I believe, not only reflects the desperate needs of the southern economy, but also reflects the relative affluence and economic growth enjoyed by the North which reduced the need for ED and permitted other policy areas to occupy prominent policy status. In the desperately poor, devastated post-Civil War South, we are not talking about decline, but rather devastation. The West is not devastated–it is undeveloped. It lacked everything, especially population. The distinction is vital in understanding how each region approached ED and defined its “tasks”, i.e. goals and strategies of ED. Obviously, the industrial hegemonic North/Midwest approached definitions and parameters from an entirely different perspective.
Reconstruction and the Reestablishment of a Southern Policy System
There were two Reconstruction periods: Presidential (1863-67) and Congressional (1867-77). During the Presidential Reconstruction the South retained most of its sub-state governments, and subject to military control, state legislatures continued. Border states and Tennessee (President Johnson from Tennessee) were admitted into the Union (1866) and Congress.
Emancipation altered forever the previous “southern” policy system, the 1865 Thirteenth Amendment ended slavery. The 1866 Fourteenth Amendment guaranteed African-American citizenship, but it did not extend voting rights. In March 1865 Congress created the Freedman’s Bureau to protect the rights of former slaves and provide them with medical care, education, and a savings bank. Over President Johnson’s veto its powers were expanded to try any who deprived Freedman of their civil rights, including the right to make/sell contracts and property. This legalized sharecropping contracts and urban employment. None of this That didn’t stopped several states from adopting the so-called “Black Codes” that castrated Freedman civil and economic rights. The KKK and other terrorist groups sprang up to control Freedman.
In frustration, the northern electorate in November 1866 swept Republicans to majorities in every northern state legislature and two-thirds majority in both houses of Congress. By early 1867 Congress broke with Johnson (later attempted impeachment), and took over the Reconstruction policy. The ten states of the Confederacy that remained outside of the Union were broken into five military districts, enforced with 20,000 Union troops.
The Black franchise dramatically changed the southern state and municipal policy system as Congress required southern states to extend the franchise to Blacks, and to permit the election of African-American office holders. In Alabama, Florida, Louisiana, Mississippi, and South Carolina (the Black Belt), Blacks were a majority. Certain Confederate officers and officials were denied suffrage and southern war debts repudiated–bankrupting many southern financial institutions and property owners.
The final “Reconstruction” constitutional amendment, the Fifteenth, which provided Blacks the right to vote was proposed in 1868 and ratified in 1870. Ratification became an intensely partisan affair with Democrats mostly opposing it, and Republicans in favor. This will be important to the reestablishment of southern state and local policy systems. A motley coalition of southern “Whigs”, i.e. Republicans, Black Freedmen, northern emigres (usually known as carpetbaggers), and opportunistic southern Democrats (usually businessmen, called scalawags) swept into victory in southern cities, towns and state legislatures. Between 1867 and 1869, this coalition dominated state constitutional conventions in the eleven former Confederate states, and subsequently led the approval of these constitutions. This post-1867 policy system created by this coalition approved several ED strategies (see below) hugely affecting the future of southern ED, and. in combination with the Panic of 1873, shaped a second round of southern state gift and loan clauses (see Canterbury Tale below or above).
Ratification was essentially required of southern states to be admitted back to the Union and readmitted to Congress. Without extending the franchise to Blacks, it was likely southern states would elect Democrats to Congress, and that threatened Democrat control over the Senate. This overlap with partisanship laid the foundation for a “wing”, the Bourbon Democrats, to develop, permitting the Democrats to achieve a majority in the House in 1874. In 1876, the Democrats came within one electoral vote of winning the Presidency–more on that later.
The Democrats became the party opposed to Republican-controlled Congressional Reconstruction, and after the 1873 Panic, Democrats ousted the short-lived Republican coalition from most southern municipal and state legislatures and my the mid-late 1870’s overthrew the earlier Republican state and municipal policy systems and replaced them with entirely new policy systems–with new state constitutions– dominated by a political coalition known today as “Redeemers”–redeeming the South from northern-imposed reconstruction (see below).
From this time on, the South, and most of its state and local policy systems would be exclusively controlled by the Democratic Party. The one-party “Solid South”, “yellow dog” Democratic Party will dominant the South, and southern ED for one hundred years–until 1980. The intensity of one-party control over such a period of time, will increasingly become a major factor in the distinctiveness of southern ED (and CD), necessarily pave a uniquely southern path that openly contested its northern industrial hegemonic conquerors.
All this came to an end with the 1876 Presidential election between Samuel Tilden (D) vs. Rutherford B. Hayes (R). Reconstruction’s “actual” end, according to historians of southern reconstruction, reflecting different definitions of Reconstruction’s correct purpose, is still debated, however. Most current historians extend the date into the 1890’s.
Tilden won the popular vote. but was one vote shy of an electoral majority. Three states were subsequently contested in the House–twenty votes in total. Hayes needed all twenty, Tilden one. An 1877 Congressional commission awarded all twenty to Hayes–the consequence of a backroom deal, dubbed the Compromise of 1877, which traded absence of a southern filibuster for removal of federal troops from the South and a federal commitment to subsidize southern railroad infrastructure, and other internal ED improvements, intended to facilitate southern industrialization and business development.
President Hayes withdrew the military, but no federal assistance for southern infrastructure or business development was ever approved.
Reconstruction and Redeemer Economic Development
As horrible as Jim Crow racism was, our history of American ED necessarily dwells on economic development. In general, the South’s post-Civil War-19th Century policy system description and evolution is a complicated, unfortunately confusing affair. As always, the story is best told through individual urban and state examples, but given that the variety of policy systems, and evolutionary paths that characterized this period would not provide anything close to a clear message.
Nevertheless, it cannot be avoided, as short as it might have been, the Reconstruction-period policy systems and the reactionary emergence of Redeemer policy systems created an immense ED legacy that underlie the next fifty to seventy-five years of southern ED–at least until the arrival of “New South Redeemers” and chambers of commerce around the turn of the 20th century (1900). This period is in such contradiction to events and developments in the hegemonic north/Midwest and those in the Pacific Coast and western interior regions, that it constitutes as the basis for understanding regional differences in our present-day Contemporary Era.
Those external to the South often think of southern politics in monolithic solidarity, simply miss, if not distort, much of what transpired. Outside of Jim Crow civil rights, there were several moving parts that shaped long-standing southern economic development during these troubled and volatile periods. From these hardscrabble post-Civil War beginnings one can follow the policy trail that leads to today’s economic and community development patterns.
On display, for example, are the cultural/demographic trends that differentiated southern urban areas and state politics creating regional and even intra-state variation. If one examines Memphis and Nashville, notably different stories would be told. They are at opposite ends of a long state, with the former an occupant of the “Black Belt”, and the latter one of the few places in the South with immigrant and ethnic cultural diversity. Tennessee state politics were an amalgam of these, and other, regional conflicts and power imbalances. Atlanta, on the other hand, was anything but typical, and dissimilar from Richmond, Charleston, San Antonio or Houston–each in their own way distinctive, while still operating within the Redeemer paradigm.
This, as brief as possible, section attempts a summary of the key trends that characterized the South in the most confusing of times. While much of Reconstruction can be described through race, civil rights and equality, there is a lot of Reconstruction that affected the formation and evolution of future southern state and local policy systems. With a few, small exceptions, the course of future southern economic development history–at least until the 1980’s reflects economic development strategies and goals that evolved from these state and local policy systems. They would look at economic development through very different lenses than western states and localities, and obviously northern hegemonic states and Big Cities.
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The basic starting point to discuss southern policy systems in these periods is the South, on the whole, chose to return to its pre-Civil War non-manufacturing agricultural/export economy–and to reconstruct its former “way of life” as much as possible. That choice was partly instinctive, and simple inertia of the past, and it certainly was led by a “planter”, former plantation-owner elite. But it also reflected a political culture best described by Almond as “traditional” in which lower, and even middle-class participation in policy-making was limited.
The planter class got its way previous to the mid-1880’s largely because the quasi-anarchy and past-system degeneration that accompanied military conquest/occupation elevated them to about the only indigenous political force capable of affecting southern policy systems. But having informally decided to recreate the past to the extent possible, post-Civil War planter-dominated southern policy systems were led mostly by the most conservative, almost medieval political elite on the continent. It is worth keeping in mind, that planters thought of themselves, despite their political activities, as fundamentally “private”, a business leadership in an agricultural economy, protecting a southern way of life. Almost inadvertently, however, ED became necessary to achieve these goals.
They wanted a predominately, but not exclusively agricultural economic base–were consciously threatened by industrial development which would inevitably change their way of life and economic base–but on the whole knew that, at minimum, a viable southern transportation system was essential to agriculture, export, prosperity, and social order. That would change during the course of these periods as “New South” business/chamber elites, northern absentee corporate managers, and even chronic “populist” movement(s) tore at the planter class’s political dominance.
The planter class goals of a revitalized rural, agricultural-export economy, with a low-wage, politically-passive workforce, with a reasonably modern transportation infrastructure did little to challenge the northern industrial hegemony–except in civil rights, and Republican dominance over federal government policy (and tariff was still a wedge issue in these years). The total lack of southern investment capital, the devastation of southern cities and transportation infrastructure meant a rebuilt agricultural economy was impossible–unless investment capital to rebuild the latter could be found.
Jacksonian to the core, desiring weak/ fragmented local and state government, low service levels to keep taxes down, planters and their allies dominated the initial period of Presidential Reconstruction. Instead of paying reparations, Southerners wanted the reverse: federal investment in southern infrastructure and business development. The North wanted revenge and radical change in southern state and local policy systems, however; the bloodiest war in American history was only over by months. Black Codes, recourse to violence, and, on the other hand, a break up of the plantation into a land/tenancy/ sharecropper production system prompted a northern Radical Republican reaction that led to a second Congressional-led Reconstruction which imposed direct military control, and ended the planter state and local policy system dominance. This is the Reconstruction described in most textbooks; it started in 1867-8.
The Radical Republican Reconstruction period witnessed the establishment of new southern state constitutions, new political players in their policy systems, and a distinctive political coalition that established state and local policy systems with a very distinctive economic development policy agenda. These policy systems were as radical a departure from past southern state and local policy systems as one could imagine.
Blacks, for instance, were about one-third of the elected political elite. Varying in proportions across the South, the Radical Republican coalition was composed of: (1) Freedmen Blacks newly enfranchised and emancipated; (2) northern emigres, often former Union soldiers and a few northern free Blacks–but sadly a large opportunistic element that lacked commitment to the local community; and finally (3) repressed southern Whigs (Republicans) out from wartime hiding, and businessmen who closely resembled northern business leaders who dealt with political machines such as Tweed (who BTW was in the process of going to jail during these years).
In the meantime, the openness of northern Democrats to a southern wing (Bourbon Democrats), needed by the latter to regain power in Congress and Presidency prompted a partisan/ideological policy battle to readmit southern states to the Union, and, pushed the various southern political elites into a “big tent” Democratic party leading to a “Solid South”, and one-party state and local policy systems. The Redeemers were what emerged from that “big tent”–and in the aftermath of the Panic of 1873, they broke the fragile Radical Republican state and local policy system installed during the Congressional Reconstruction.
Victorious, the coalition won elections, wrote and approved new state constitutions, and 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.
While newly installed Radical Republican policy systems were taking root, the openness of northern Democrats to a southern wing (Bourbon Democrats), needed by the latter to regain power in Congress and Presidency, prompted a partisan/ideological policy battle to readmit southern states to the Union, and, pushed the various southern political elites into a “big tent” Democratic party leading to a “Solid South”, and one-party state and local policy systems. Redeemers were what emerged from that “big tent”–and in the aftermath of the Panic of 1873, they broke the fragile Radical Republican state and local policy system installed during the Congressional Reconstruction.
Redeemers took over every state and local southern policy system by the end of the decade (1879)–most sooner. They sought “redemption” which mean ousting carpetbaggers, and Blacks, ending military districts and Freedman’s Bureau, implanting a one-party non-competitive policy system, reestablishing to the degree possible the previous “way of life”, and economic development-wise ending Radical Reconstruction policy system’s southern industrialization strategy, while finding a way to tackle railroad infrastructure, while institutionalizing the land tenancy system of agricultural production. All of this was no easy set of goals, but Redeemers wanted to do this “privately” where possible–not through government which they still wanted to be Jacksonian, low tax, low service levels, with considerable dispersion of power. That’s where the above discussion concerning a new round of post-1873 gift and loan clauses were injected into a new round of southern state constitutions.
By the time Redeemers acquired dominance, the South was in desperate economic straits. While economists can provide some small indicators of early growth, little of it had reached into the pockets of the average white or black southerner. The Panic, as all good panics are, was long-lasting, ending only in 1879. Southern poverty, economic/political volatility and instability, violence and economic depression became entrenched into the southern fabric. In contrast, northern immigrant standard of living, not great by our standards, was appreciably better than that of the average rural southerner. For its day, the post-Civil War South should be considered as a third-world nation. The South became the nation’s poorest region–a distinction it still holds today.
Ron W. Coan 