New South Capitalism: Textiles, Railroads

New South Capitalism: Textiles, Railroads


Before the Civil War, the
South’s white cotton planters had been, by any measure, the
wealthiest people in the United States. They had had disproportionate
control of the nation’s politics, they’d been able to use a
disproportionate amount of the nation’s credit and capital, and they were
very, very wealthy as a result. The Civil War was obviously a
devastating defeat for them. They lost the biggest
portion of their property, with the redefinition of enslaved
people as fully free human beings, who could no longer be held as property. Their land lost a lot of its value,
given the devastations of war. And they were simply no longer able to
extract the same kind of forced labor that they’d been able to
extract from enslaved people. So the cotton that they
produced was simply not going to be produced in
the same kind of quantity. They had a lot of rethinking to do. And over the 10 or 15
years after the Civil War, they came to some fairly
coherent conclusions, and most of the political
and economic leaders of the former Confederate states would
have agreed to these propositions. First of all, they thought that
white supremacy had to be maintained. They simply could not conceive of a
society in which former slaves were political equals, much
less economic equals. And so they would spend
years going to great lengths to make sure that the
reconstruction amendments, which mandated the end of
slavery and the equality before the law of African
Americans, were simply not going to be enforced in any
systematic way in the South. And by doing this, they were going to
be able to bring less wealthy whites into the circle of political support. By giving them the sort of psychological
wage of a higher political status, a higher social status
than former slaves. They were going to be able to
count on their political support. And this would help support, in
turn, the second proposition. And that was that the South should
have, what they often called, home rule. The South should be able to
control its own political, and to some extent, its
own economic destiny. With the end of Reconstruction in
1876, with the bargain that historians disagree about whether
it’s written or unwritten, that is signed between northern
Republicans and southern Democrats. The South gets a lot of that
independent political control, and they would be able to wield
that control for over 100 years, to maintain the South
as a segregated domain. But the third proposition might seem to
work at variance with these first two. And that is the idea that the lesson
to be taken from the Civil War, was that an industrialized
society was going to be more powerful and more
wealthy, over the long run, than a primarily agricultural society. The idea of a New South–
which is a phrase that comes to be more and more current
on the lips of the promoters and politicians of the South from the
1870s onward– the idea of a New South, is a South that in some ways
is much more like the North. It is going to be, they
believe, an industrialized society, a modern society. A society that no longer has
the institution of slavery, but a society that is increasingly
focused on industrial labor. We’ll see how well that worked out. So maybe the most articulate
exponent of the New South idea, was an Atlanta newspaper
editor named Henry Grady. Grady’s father had been
killed by a union soldier. Atlanta itself had been
burned to the ground. But by the 1870s, Grady had
become the most prominent writer in what was becoming one of the
most prominent New South towns. Rising, as it were, from the
ashes of the Confederacy. But the problem Grady
identified in the South, can probably be best summed up
by this one apocryphal story that he used to tell again and
again in editorials and speeches. Advocating for the South to become
more of an independent, industrialized economy. So Grady said. “I attended a funeral once
in Pickens County in Georgia. And this was a particularly sad funeral. The farmer who was
getting buried was so poor that his overalls only had one strap. They buried him in the
midst of a marble quarry. They cut through solid
marble to make his grave, and yet the little tombstone they
put above him was from Vermont. They buried him in the
heart of a pine forest, but the pine coffin was
imported from Cincinnati. They buried him within touch of an
iron mine, but the nails in his coffin and the iron in the shovel the dug his
grave were imported from Pittsburgh. They buried him by the side of the best
sheep grazing country on the earth, and yet the wool in the coffin
bands and the coffin bands themselves were brought from the North. The South didn’t furnish
a thing for that funeral, but the corpse and the
hole in the ground. There they put them away, and the
clods rattled down on this coffin, and they buried them in a New York
coat, in a Boston pair of shoes, and a pair of britches from Chicago,
and a shirt from Cincinnati, leaving him nothing to carry into
the next world with him to remind him of the country in which he lived, and
for which he fought for four years, but the chill of blood in his
veins, and the marrow in his bones.” All right, so what did
southern elites propose to do about this real divergence in
economies of the North and South? For one thing, they looked
at the North and they saw that the North’s railroad network
was much more extensive, and dense, and technologically advanced
than that of the South, even before Sherman and other
Union generals had gone through, and they burned up all the railroad
ties, and bent the rails around trees. As they go through the process of
rebuilding, they look for more capital. They try to import
credit from the North. They try to make links between
their own local railroad companies, and the larger railroad
companies which had become so powerful in
the northern economy. And to a large extent,
they succeed in doing so. In fact, northern
railroad corporations find that it’s really politically
advantageous for them to do things like this. Create a local branch of
their larger corporation, and have the president be a
former Confederate general. Those guys look really good on
posters and in company reports, and they make the companies really
popular with the local population. So that’s one thing that they do. Another thing that’s
southern elites do, is they get Congress to change
the taxation laws on textiles. And these create a tax
incentive for textile factories to be located near cotton fields. Now the South has lots of cotton fields,
they also have lots of cheap labor. And they even have water power
to drive textile factories. So northern textile factories literally
pack up, disassemble their factories, and move them down to North Carolina,
South Carolina, Georgia– Atlanta, for instance, Henry Grady’s
Atlanta, becomes a major textile center– and other southern states. By about 1900, the South has become the
center of textile production in the US. Now, the cheap labor that works in
those factories, is almost all white. These factories follow
segregation practices. And they promote themselves as a way
to literally get white labor away from black labor. To make it so that poor whites do
not have to work with poor blacks. And this leads to a third policy, which
is the idea that black labor is going to continue to be segregated and pushed
into the worst paid, most difficult, most degraded kinds of jobs. Now there are laws that actually
help to implement this, including laws that literally
rent out convict labor from the south segregated
plantations, to some of the most difficult kinds of
road building and mining kinds of enterprises. And the death rates among
African American convict laborers are extremely high. And that, in turn, leads to another
major phenomena, and probably the key and final component of the
southern elite’s economic plan. And that is the use,
not just of cheap labor, but the extraction of natural resources. Southern timber is cut down in huge
swathes, in the late 19th century. Once, for instance,
the great, big lumber mills in Michigan and
Wisconsin and Minnesota have exhausted the
local forest, attention turns to the southern
longleaf pine forests. And those are devastated in the
late 19th and early 20th century. It turns out that the southern
Appalachians are full of coal, and those are mined in huge
amounts, starting again in the late 19th century. A process that continues
with strip mining today. Through all of these kinds of extractive
industries, many people in the south become very wealthy. And some southerners,
some southern laborers, move out of the agricultural
sector into these other areas. But these are also cheap labor sectors. These are also areas
that do not necessarily lead to the kind of
increasingly complex economies that you see with true
industrialization. Especially when many of the profits are
actually exported out of the region. So by the early 20th
century, despite the attempts of people like Henry Grady and others
to organize new systems of production and consumption, new networks of
credit in the South, what you see is that the South is still, to a large
extent, still a colonial economy. And it remains the case that
9 or 10 million southerners are trapped, in what is
nearly a form of peonage, as cotton sharecroppers
in the cotton fields that still stretch from
South Carolina to Texas. All of these phenomena would keep
the South distinct, separate, and increasingly more poor
than the rest of the country. So that by the 1930s– 70
years after the Civil War, 50 years after Henry Grady crusaded
for a new kind of southern economy– Franklin Roosevelt, the
President of the United States, would still be labeling the South the
nation’s economic problem number one.

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