The Southern Economy During the Civil War

Argument by McKitrick

• McKitrick’s argument seen as political
• Issues with South's societal structure affecting policies
• Planter class wielded significant control over decision-making

Financing the War

• Three main ways to finance a war:
  1. Taxation
  2. Borrowing (issuing bonds)
  3. Issuing paper money
• North and South both used these methods
• Differences:
  • Union used more taxation
  • South relied heavily on paper money

Southern Planter Class and Taxes

• Planters unwilling to pay taxes
• Major source of money: the planter class
• This reluctance harmed Confederate finances
• Tax-in-kind system introduced in 1863
  • Army appropriated goods from farms
  • Caused resentment among poorer families

Paper Money Issues

• North declared paper money as legal tender
• South did not, leading to rapid devaluation
• Legal tender meant mandatory acceptance in the North

Cotton and the Southern Economy

• Cotton as South's main economic resource
• Contentious decisions about how to use cotton
• Cotton embargo strategy aimed to coerce foreign support
  • Failed due to existing stockpiles and alternative sources
  • Led to global cotton market changes post-war

Economic Deterioration

• Northern control expanded, stripping South of resources
• Scarcity of essential goods
  • Example: Salt shortage affected meat preservation
• Use of ersatz (substitute) materials became common
• Severe inflation and other economic disruptions

Social Impact

• Mobilized bread riots due to food scarcity
  • Example: Mobile Bread Riot of 1863
  • Demonstrated impact of economic hardships on civilians