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Why
was the turn of the century South the poorest part
of the United States?
Before the Civil War the South
was one of the richest regions in the world, standing just behind
Britain and the Northern states. More than half of the richest
one percent of Americans were Southerners. Per capita income in
the South-including slaves-was higher than that in India in 1960.
Yet by the late nineteenth century,
the South had come to symbolize rural poverty. By the 1930s, President
Franklin Roosevelt considered the South America's economic problem
number 1. From the 1870s to 1930, per capita income in the region
stood at only 55 to 60 percent of the national average. The South
lagged far behind the rest of the nation in industrialization
and urbanization. It seems likely that the South's economic backwardness
and poverty contributed to such forms of anti-black racial violence
as lynching.
Why would it take almost a century
following the Civil War for the South to achieve economic equality
with other parts of the country? Was it due to a lack of skilled
labor, a highly educated workforce, and a shortage of capital?
Was it because Southerners were committed to agriculture and were
reluctant to industrialize? Was it related to the South's racial
conflicts? Or was it because northern corporations treated the
South like an economic colony, a source of raw materials and cheap
labor?
To be sure, some industries did
emerge in the South. Investors in Richmond, Va., helped organize
the Southern Railroad, one of the nation's largest rail lines.
Steel makers in Birmingham, Ala., created a steel industry second
only to Pittsburgh's. Cigarettes, liquor, textiles, and Coca-Cola
were other industries that developed in the South. During the
late 19th century, promoters of the "New South" aggressively
sought northern investment in the region.
And the South's economy was growing.
It grew rapidly after 1869, sometimes more rapidly than the rest
of the United States. The South was better off economically than
any European nation other than England. But while wealthy by world-wide
standards and seemingly growing rapidly, the South was still far
behind the most advanced sectors of the United States.
But when all this is added up,
the South still trailed the North and West significantly. Rural
poverty was greater, and the South was heavily dependent on the
sale of farm crops and raw materials (such as lumber and iron)
whose prices were falling. The region failed to develop the growth
industries of the era, such as electrical equipment, chemicals,
meat processing, and machine tools. The industries that did develop
tended to be low-value added industries, manufacturing rough textiles,
turpentine, liquor, and tobacco products. Meanwhile, southern
agriculture was much less mechanized than its northern or western
counterparts and depended heavily on low-paid farm labor and sharecroppers.
Capital was in short supply. Demand
for manufactured goods was low, in part because the South's urban
markets were small. Trained managers and skilled workers were
scarce.
But equally important, the South
apparently had fewer entrepreneurs than in other regions-which
was partly a legacy of slavery. The South's elite was less interested
in business investment than its northern counterparts. The South's
merchants and landowners had no tradition of industrial innovation
or of applying science-based technologies to production. They
had a strong stake in preserving the economic status quo. As landowners,
they benefited from the low wages and limited mobility of black
and white workers.
Trapped in a system of sharecropping,
debt, and tenant farming, African Americans were denied the opportunity
to migrate out of the rural South and to participate in the industrial
economy.
For the most part, the industries
that emerged in the South tended to be small-scale, local projects.
Investors developed a small textile factory or a small saw mill,
or one-room furniture factories. Southerners were far less likely
than Notherners to develop large-scale business enterprises. The
primary interest of southern investors was to maximize the value
of land. Much of their energies were devoted to local land speculation
and town building, rather than to investment in industry. Their
goal was increase land values, attract settlers, or raise the
level of commerce in a particular town.
In the North, in contrast, investment
was increasingly made in large-scale enterprises: in industries
that produced for national and international markets and in train,
telephone, and power systems that were regional or national in
scale.
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