U.S. Civil War - History of Business in the U.S.
The Event: Conflict between the Northern states (the Union) and the Southern states (the Confederacy)
Date: April 12, 1861-April 9, 1865
Place: United States
Significance: During the U.S. Civil War, the Union government demonstrated its capacity to raise large sums of money, and it established a national currency, a national banking system, and the nation’s first income tax. The war promoted the economic growth of the Northern states, while it retarded development in the states of the Confederacy.
Confederate and Union Territories
With the outbreak of the Civil War, the Northern states experienced a severe recession (then called a “panic”). There were several causes for the downturn, including the disruption of trade with the South, inadequate banking reserves, and uncertainties about how the war would affect business. More than six thousand banks and commercial firms were forced to close their doors in 1861. Southerners owed Northern creditors more than $300 million, most of which was a complete loss. The prices paid for agricultural commodities dropped precipitously. In Illinois, for example, corn fell fromalmost $1 to as little as 10 cents per bushel. The recession continued into early 1862, but by the fall of that year, the Northern states were beginning to experience a wartime boom.
- Gallman, J. Matthew. The North Fights the Civil War: The Home Front. Chicago: Ivan R. Dee, 1994. A study of how the North mobilized and how it was changed by events and economic forces.
- Goodwin, Doris Kearns. Team of Rivals: The Political Genius of Abraham Lincoln. New York: Simon & Schuster, 2005. A lively written account of Lincoln’s cabinet members, their policies, and their disagreements.
- McPherson, James C. Battle Cry of Freedom: The Civil War Era. New York: Oxford University Press, 1988. Although this outstanding text emphasizes military conflict, it provides excellent introductions to economic and political aspects of the war.
- Massey, Mary Elizabeth. Ersatz in the Confederacy: Shortages and Substitutes on the Southern Homefront. Charleston: University of South Carolina Press, 1993. A study of the South’s attempt to deal with desperate shortages of manufactured items and essential commodities.
- Pauldan, Phillip Shaw. A People’s Contest: The Union and Civil War, 1861-1865. New York: Harper & Row, 1988. An excellent source of detailed information about domestic affairs in the North.
- Richardson, Heather Cox. The Greatest Nation on Earth: Republican Economic Policies During the Civil War. Cambridge, Mass.: Harvard University Press, 1997. Argues that the Republicans’ probusiness policies established preconditions responsible for the growth and modernization of the postwar years.
- Wagner, Margaret, Gary Gallagher, and Paul Finkelman, eds. Civil War Desk Reference. New York: Simon & Schuster, 2002. A concise and useful guide to almost all topics relating to the war, including business and finances.