Economic Causes of the Civil War

By 1860, the North and the South had developed into two different regions; the North was an industrial society while the South was an agrarian society dependent on “King Cotton” and slave labor. The Northern industrial economy was comprised of a mutual relationship of wheat and the expansion of railroads –the marriage of iron and rye. German, Irish, and British immigrants created not only a diverse community, but help build Northern railroads and settled in the West. The South, in contrast to the North, resisted industrialization and manufactured little, requiring the importation of all manufactured goods.

James Hammond stated it best, touting the power of the slave-based economic system: “You dare not make war on cotton…Cotton is king.” Thanks to Eli Whitney’s invention, the cotton gin provided a more efficient way to handle cotton and gain a sizeable profit. To accompany the profit, more slaves were needed to work the machines and land. Planting, cultivating, and harvesting was huge undertaking, large workforces were required.

Slave labor was the best and most profitable for slaveholders because slave labor was more productive than free labor. Highly profitable cotton accounted for 57% if all U.S. exports. The backbone of the Southern plantation system was slave labor and without slavery, the economy would have suffered because the South had nothing to fall back on. With the Panic of 1857, “King Cotton” proved to be superior. While the Northern economy suffered badly due to false projections in railroads and faulty banking practices, the Southern economy remained stable.

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The demand for cotton soared during the Panic of 1857, proving the superiority. Though superior, an end to slavery would translate into an end to the Southern economy. Before the Civil War, federal government’s chief source of revenue was the tariff. The North favored a loose interpretation of the United States Constit…

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Economic Causes of the Civil War. (2019, Oct 09). Retrieved from

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