What impact did the economic differences between the North and South have on the course of the Civil War?

Answer 1

It was not only a matter of producing more guns, etc.

"The failure of the Confederacy, though predicatble from the start, was immediately attributable to errors of judgment in not anticipating and justly estimating its inability to supply certain indispensable necessities."

Ella Lonn

The economic differences between the North and the South had a substantial effect on the course of the war: the South failed to expolit cotton promptly as a basis for foreign credit, it was unwilling to tax its people, and it relied on the issue of paper money in the form of treasury notes.

A comparison of the Union and the Confederate financing reveals that 60% of the Confederacy's income was derived from the issue of paper money, about 30% from the sale of bonds, and less than 5% from taxation (the remaining 5% came from miscellaneous sources). Of the Union's income, 13% was raised by paper money, 62% by bonds, and 21% by taxes (the 4% came from other means).

The Confederacy suffered from the worst inflation since the Revolutionary War. The Confederate Secretary Memminger and the Congress had little choice but to resort to the requisition upon the states, which the states raised by borrowing instead of taxing.

"The North, during the war years, devoted a large part of her energies and resources to non-military enterprises."

Richard N. Current

Answer 2

Economics was the key factor of the Civil War. The South was an agriculture based economy, the North was an industrialized based economy. However the South had the cotton that was needed in making clothing and the North had the textile factories the South sorely lacked. The South also had the Port of New Orleans which never froze over unlike the ports of the North. Throw in the value of the Mississippi River and the Port of New Orleans as both an economic plus for the South if they had taxed the imports properly, but since they didn't it also became a burden. The Civil War was an economic war and slavery was the catalyst that set it off.

Answer 3

Of course, the north was the economic powerhouse and home of heavy industry, as opposed to the south's agrarian economy. During the war, this difference resulted in the north being able to lay more railroad, manufacture more arms, and ultimately afford the war. One importance difference during the war resulted from the north's naval blockade of southern ports. The entire basis of the Confederacy's economy was the export of cotton to the north and to Europe. Mix that with the south's crippling loss of manpower, poor means of transport, and the inability of its government to allocate resources, and you have total economic ruin by the end of the war.

Answer 4

The more industrialized north was able to produce more guns, etc. in order to win the war.