The New South

In the period before the American Civil War (1861–65; a war between the Union [the North], who were opposed to slavery, and the Confederacy [the South], who were in favor of slavery), the South had remained a largely rural society, reliant for the most part on one crop, cotton, which was by far the nation's largest export. Southern plantations and farms supplied three-fourths of the world's cotton to textile manufacturers in both the United States and Great Britain. Attempts to diversify (give variety to) the Southern economy had nearly ceased in the decade before the war because cotton prices rose more than 50 percent, stimulating even more new cultivation. Not surprisingly, the Southern economy remained overwhelmingly agricultural. Southern capitalists (people who invest their money into businesses) invested much more money in cotton than in factories or even land. More precisely, they purchased slaves who provided the necessary labor for the cotton business. In 1860 the average slave owner had invested almost two-thirds of his wealth in the purchase of slaves.

The pre-Civil War economy

The outcome of the Civil War was heavily influenced by the advantages the North gained from its industry. In 1859 the North had about 21,900 miles of railroads compared to the South's 6,600. In the North, railroads connected the farming and manufacturing centers, but in the South railroads lacked direct connections between major cities. During the war the Southerners had problems getting supplies where they were needed and failed to get needed food to the armies in the field. The North had 90 percent of the nation's industrial capacity. By 1860 northeastern states such as Massachusetts and Pennsylvania had nearly $100 million each invested in manufacturing enterprises. Virginia, the most industrialized of the Southern states, had invested less than $20 million in manufacturing, and other Southern states had invested less than $5 million apiece in industry. The South's lack of manufacturing industries made it nearly impossible to provide its army with sufficient arms and ammunition.

Words to Know

capital:

Accumulated wealth or goods devoted to the production of other goods.

capitalism:

An economic system in which the means of production and distribution are privately owned by individuals or groups and competition for business establishes the price of goods and services.

Confederate states:

The eleven Southern states that withdrew from the United States in 1860 and 1861.

hydroelectric power plants:

Plants that produce electricity from waterpower.

industrialization:

The development of industry.

magnate:

A powerful and influential person in an industry.

philanthropy:

The desire or effort to help humankind, as by making charitable donations.

sharecropper:

A tenant farmer who works the land for an agreed share of the value of the crop, minus the deductions taken out of his share for his rent, supplies, and living costs.

tenant farmer:

Someone who farms land owned by someone else and pays rent or a share of the crop for the use of the land.

Yankee:

A Southern word for Northerners.

Before the war there were no significant financial institutions in the Confederate states (the Southern states that withdrew from the United States in 1860 and 1861). Most cotton farmers had to borrow money annually to prepare their crops, and they were forced to borrow it from Northern bankers at high interest rates. Processing and shipping cotton were handled by Northern industries. Even the slave trade was controlled mainly by Northern merchants. The South's agricultural economy made it difficult to raise large sums of money. During the war the Confederate government ran out of cash and finally resorted to printing paper money, but the currency came to have so little value that people eventually turned to the practice of bartering, or trading goods. In the end the South was unable to raise the capital (accumulated wealth or goods devoted to the production of other goods) it needed to support the war effort. This inability to raise capital continued long after the war was over.

The plantation system of the South resulted in a very different type of economy than the industrial economy developing in the North. Large plantation owners had sizable workforces on their estates and often produced their own goods and services on site. Since the plantations were in some ways self-sufficient communities, there were few towns in the pre-war South. Most Southern plantation owners wanted it that way. They strongly preferred their rural, agricultural society to the commercialism, industry, and wage labor of the Northerners, whom they called Yankees.

Large cotton plantations with slave workforces created a great deal of the South's wealth, but they were not the norm. Nearly three-fourths of families in the South were small farmers who did not own slaves. Still, most slaves lived on plantations, and the bulk of the cotton crop came from plantations worked by twenty or more slaves.

After the Civil War

The South was economically devastated by the Civil War. Its major cities, such as Richmond, Virginia, and Charleston, South Carolina, had been badly damaged. Its banks had failed, its currency was worthless, the transportation systems were unreliable, and many plantations and farms lay idle. About 258,000 Southern men had died and many who survived were maimed for life and incapable of supporting themselves. Farmers in the South lost much of their livestock and farm tools. The largest financial shock to the South was the loss of its slave labor force. The Southern slave owners had invested most of their capital in the purchase of slaves. An estimated $4 billion had been invested—more than the value of all the land in the South.

During the Reconstruction Era, the period from the end of the war until 1877, the Confederate Southern states were reorganized as free (nonslave holding) states and brought back into the United States. During Reconstruction federal troops were stationed throughout the South to ensure that blacks were allowed to participate in the political system. The former Southern elite did not accept the new laws imposed by the federal government. Most were hostile to the civil rights of the African Americans to vote and participate in government. Although President Rutherford B. Hayes (1822–1893; served 1877–81) withdrew the last federal troops from the South in 1877, the attempt to make a smooth transition for the freed slaves into the Southern economy and society failed. Soon the Southern states instituted racial codes that discriminated against African Americans in the South for many years to come. The experience of the Reconstruction Era left both Northerners and Southerners bitter and hostile toward one another.

The economy in the South was still in poor shape in 1880. According to Sean Dennis Cashman in America in the Gilded Age, the average per capita (per person) wealth in the United States outside the South in 1880 was $1,086. In the South it was only $376. Some Southerners began to talk about industrialization (the development of industry) as a means to recover, and foremost among them was journalist Henry W. Grady (1850–1889), the editor of the weekly newspaper Atlanta Constitution. In his column and in speeches made throughout the country, Grady preached the virtues of a "New South," calling for the development of local resources, the diversification of crops, and, most importantly, the development of manufacturing. Grady urged embittered Southerners to seek reconciliation with the North and to strive for new relations with African Americans. Southerners had long cultivated the image of being too easygoing and refined to compete in the business world. Grady and other advocates of the New South urged Southern businessmen to emulate the Yankees and create new industries that would provide much-needed jobs and wealth in the South.

The new industries

The South had a lot of unclaimed federal land in the late 1870s that was reserved for people who were willing to settle there and farm it. Several states changed their laws so they could distribute federal lands to speculators who could invest in extracting the South's great natural resources, particularly lumber, iron, and coal. Millions of acres fell into the hands of Northern and European capitalists who rushed in to dig mines and strip the hills and valleys in order to ship the resources to the factories in the North.

By the 1880s the South was experiencing a boom in railroad construction. From 1880 to 1890 the number of railroad track miles jumped from 16,605 to 39,108. Small competing railroad lines successfully combined with each other. In the 1890s wealthy financier J. P. Morgan (1837–1913), with his millions of dollars of investment capital, reorganized railroads nationwide through a strategy that became known as "Morganization." Morgan acquired bankrupted railroads, funded them with enough new capital to survive, cut costs, and negotiated agreements between competing lines to reduce unnecessary competition. In this way Morgan built up the Southern railway system, opening the way for more industrial expansion in the region.

Manufacturing increased significantly in the South in the 1880s and 1890s. New enterprises included cotton mills, iron forges, and commercial fertilizer manufacturing plants (by 1877 South Carolina alone was shipping more than 100,000 tons of fertilizer to foreign markets). The number of cotton mills rose from 161 in 1880 to 400 in 1900. Cottonseed oil also became a major Southern industry. Southern iron makers began to run modernized coal mines, coke (a hard, dry carbon substance produced by heating coal to a very high temperature in the absence of air) ovens, and blast furnaces. The town of Birmingham, Alabama, became a major industrial center during this period, boasting substantial ironworks that eventually became steelworks.

James Buchanan Duke and the tobacco industry

In 1874 Washington Duke (1820–1905), a former tobacco farmer, set up a tobacco factory in Durham, North Carolina. His son, James Buchanan Duke (1856–1925), soon joined him and began transforming the business. In 1884 James Duke acquired the Bonsack cigarette-rolling machine, which allowed mechanized mass production of cigarettes. Once he had firmly established the production system, he opened a company office in New York City and began a series of marketing strategies. He offered free samples of his cigarettes to new immigrants, hoping they would come back for more as paying customers. He advertised on billboards and in newspapers and magazines. He used the company name to support sporting events and included coupons inside packets of his cigarettes. Duke's aggressive marketing techniques were highly unusual in his day and proved hugely successful. By 1889 W. Duke, Sons and Company, produced 45 percent of all cigarettes sold in the United States. That year the company merged with four other major tobacco manufacturers. With Duke as its president, the new American Tobacco Company controlled 90 percent of all tobacco sales in the United States.

Duke followed in the path of the notorious Northern industrialists, such as John D. Rockefeller (1839–1937), who founded the Standard Oil Trust. First he cut costs by closing less efficient factories, discontinuing unpopular cigarette brands, and hiring nonunion labor at low wages. Then he undercut the prices of his competition. He also signed a contract with the Bonsack Company to restrict the sales of its automatic cigarette-making machine to any company other than the American Tobacco Company. By 1898 the American Tobacco Company had almost eliminated its competition. The U.S. government watched the company's business practices and in 1907 began to file lawsuits alleging violations of antitrust regulations (laws enacted to protect trade from monopolies and other unfair business practices). In 1911 the U.S. Supreme Court ordered the American Tobacco Company to break into four smaller firms: the American Tobacco Company, Liggett and Myers, P. Lorillard, and R. J. Reynolds.

Duke's attention by that time had turned to other industries. He invested in hydroelectric power plants (plants that produce electricity from waterpower), founding the Southern Power System in 1905, and then used the power from them to run family-owned textile mills producing cotton and wool. Eventually the Southern Power Company supplied electricity to more than three hundred cotton mills, as well as cities, towns, and factories in North and South Carolina. The company came to be known as the Duke Power Company and is still operating today. In his later years Duke, like Rockefeller, devoted a large portion of his fortune to philanthropy (efforts to promote human welfare, often by giving money), notably providing critical funding to Trinity College in Durham, North Carolina, which today is called Duke University.

Sharecropping and tenant farming

The most radical economic change brought about by the Civil War was the elimination of slavery. Suddenly hundreds of thousands of freed people needed homes and jobs. In the first Reconstruction initiatives, the Union army confiscated (took) land from the Confederate landowners and gave them to former slaves in 40-acre parcels along with a mule. But by the end of the Reconstruction Era, the confiscated land had been returned to its former owners. Gradually the hopes of the freed people for the "forty acres and a mule" promised to them disappeared and they sought other ways to maintain themselves. Most of the former plantation owners had neither the resources nor the equipment to continue the plantation system that had supported the South before the war. Some tried to adjust to the new era by paying wages to their workforce, but most were unable to do this because the war had seriously depleted stocks of money in the South. The planters, unable to hire farm labor, resorted to breaking their estates into small farms and contracting with farmers in two different arrangements: sharecropping and tenancy.

In the sharecropping system, the landowner furnished the farmer and his family with a house and a plot of land, along with seed, fertilizer, and other necessary supplies and equipment to start a crop. The sharecropper and his family did the cultivating, planting, tending, and harvesting. After the harvested crop was sold, the costs of the supplies provided by the owner were subtracted from the proceeds, and the remainder was divided between the owner and the farmer. Frequently the entire crop was insufficient to meet the farmer's obligations to the owner, and the sharecropper fell into debt that was difficult or impossible to repay.

Tenant farmers owned everything necessary for farm production except the land. In exchange for the use of the land, they paid the landowner with cash or part of their crops. Tenant farmers had more independence in the operation of their farms than sharecroppers, but there were traps in that system as well. When tenant farmers did not have the money to buy necessary supplies to run the farm, they usually applied to a local storekeeper or merchant for a loan secured by the future crop. Throughout the year the farmer would buy groceries, clothing, seed, fertilizer, and other supplies on credit. After the crop was harvested the storekeeper/merchant would sell the crop and pay up the farmer's account. If there was anything left the farmer received it in a cash payment or in additional credit. Often the crop did not bring in enough to meet the bills, and the farmer consequently found himself in constant debt.

Tenant farmers and sharecroppers almost always grew cotton because it brought in the cash that Southern landowners desperately needed. With most farms producing cotton and little else, more cotton began to hit the market than was needed. This resulted in a fall in cotton prices. In 1866 cotton sold for 43 cents a pound. Between 1882 and 1902, it never went above 10 cents a pound, and in 1894 it fell to 4.6 cents a pound.

Sharecropping and tenant farming resulted in an increase in the number of farms in the South and a reduction in their size. In 1860 there were 672,313 farms in the South. In 1910 there were 3,097,547. The average size of farms during this time fell from 335 acres to 114 acres, and many were less than 50 acres. Tenant-operated farms in the South grew from about 36 percent of all farms in 1880 to between 60 and 70 percent in 1910. About 80 percent of African American farmers and 40 percent of white farmers were either sharecroppers or tenant farmers struggling to survive the system.

Booker T. Washington and the Tuskegee Institute

For many African Americans in the South, the end of slavery led to lowly work, debt, and dire poverty. There were few avenues through which they could improve their circumstances. Southern education systems suffered from lack of funding, yet it was clear to many black leaders that education was vital to improving the lives of the former slaves. The leaders, however, did not always agree on the type of education that was needed.

Educator Booker T. Washington (1856–1915) had been born of a slave mother and a white father on a Virginia farm. After experiencing many hardships in his early life, he entered Hampton Normal and Agricultural Institute, one of the early Negro vocational schools in Virginia. General Samuel Chapman Armstrong (1839–1893), who headed Hampton, believed that blacks should do without liberal education (arts and humanities) and not strive for political and civil rights until they had improved their own economic status. Hampton was there to provide its students with what Armstrong called "industrial education," practical learning that would help them enter a trade like carpentry or stonemasonry. Students were expected to support themselves while attending Hampton.

In 1881 Washington was selected to be the principal of a new school to be founded at Tuskegee, Alabama. When he arrived on the site of the campus, however, he found only an abandoned plantation—the school had not been built yet. Over the next few years, Washington supervised the planting of crops and the making of bricks. By 1888 the buildings of the Tuskegee Normal and Industrial Institute (now Tuskegee University) spread out over 550 acres. Over four hundred students were enrolled in such trade programs as farming, carpentry, printing, shoemaking, tinsmithing, and cooking. Washington emphasized manual and industrial education, as well as practical trades such as carpentry, farming, mechanics, and teaching. He also emphasized discipline and cleanliness to his students, seeking to pass on a philosophy of African American self-sufficiency. By 1915 the school had fifteen hundred students and more financial donations than any other black institution.

In 1895 the Cotton States and International Exposition was held in Atlanta to exhibit the commercial and industrial growth of the South. Before an all-white audience of about two thousand people, Washington gave a speech that has come to be known as the "Atlanta Compromise," in which he outlined his proposal for racial harmony in the United States. He explained that self-improvement of African Americans in economic and educational matters would make them more law-abiding and less resentful toward white Americans. Washington spoke out against the public protests of African Americans occurring at that time; he believed economic advancement was a more effective solution for African Americans than political demonstrations. Ultimately, he accepted racial segregation (separation) in exchange for economic opportunities. As he said in the speech: "In all things that are purely social we [blacks and whites] can be as separate as the fingers, yet one as the hand in all things essential to mutual progress."

The African American Migration North

At the end of the Civil War, approximately 92 percent of all African Americans lived in the South, and, despite the harsh circumstances in the years following the war and Reconstruction, few left the region for the remainder of the century. One exception was a migration between 1879 and 1881, when about sixty thousand African Americans moved to Kansas and the Oklahoma Indian Territories. European immigration may be one explanation for the slow start of the migration of African Americans from the South to the North. A great many of the urban factory jobs were filled first by Irish and German laborers and later by immigrants from southern and eastern Europe, so black Southerners had no assurance of getting jobs in the North. It is also likely that some Northerners, displaying their own racism, did not welcome blacks or make it easy for them to obtain jobs.

A large migration of African Americans from the South to Northern industrial cities began in the first decade of the new century. Between 1900 and 1910, 366,880 African Americans migrated to Northern cities from the South. From 1910 to 1920 between five hundred thousand and one million African Americans made the trip north. By 1930 more than one in five blacks resided outside of the South.

By 1930 Chicago's South Side and New York's Harlem had become the capitals of African American life in the North. Chicago drew African Americans because it was the major industrial city of the Midwest and the nation's great railroad hub. Chicago's leading black newspaper, the Defender, circulated widely in the South, and the paper's editors urged Southern blacks to come work in Chicago's meatpacking plants and railroad yards. Between 1916 and 1919 about sixty thousand Southern blacks moved to Chicago, and most joined the city's industrial workforce.

A second and even larger migration of Southern blacks occurred between 1940 and the 1960s with a net migration totaling between four million and five million people. The mechanization of Southern agriculture after World War II (1939–45; a war in which Great Britain, France, the United States, and their allies defeated Germany, Italy, and Japan) decreased the demand for low-wage labor and gave further cause for African Americans to leave the South's agricultural areas.

Washington's speech was very popular among white Americans, and he soon developed strong ties with Northern philanthropists such as Andrew Carnegie (1835–1919) and George Eastman (1854–1932), both of whom appreciated Washington's business-like approach to race issues. But the late 1800s were a difficult time for African Americans. Lynchings (killings) increased, Jim Crow laws enforcing racial segregation in public were passed, and whites in the South found ways to stop African Americans from voting. Black intellectuals like W. E. B. DuBois (1868–1963) felt that Washington's educational proposals discouraged African Americans from striving for a higher education and taking their place as equals in American society. He urged talented African Americans to obtain a college education and serve as leaders of the black community so that they could better fight the discrimination that surrounded them.

Southern Alliance

In the end the concept of the industrial New South was more a way of thinking held by a few idealists than a reality. In 1890 only about 10 percent of the Southern population was urban, compared to 26 percent of the population in the North. Agriculture supported the South. Unfortunately, it was not doing a very good job.

Southern farmers were at a disadvantage in securing fair rates with the railroads, grain-elevator owners, and money-lenders. They had no control over the overproduction of cotton or the consequent drop in prices. Southerners were frustrated with prolonged poverty and wanted to do something to better their lot. In the South, as in the American West, they began to organize.

The National Farmers' Alliance emerged in 1875, splitting into two groups: the National Farmers' Alliance (Northern Alliance) in the Midwest and West, and the National Farmers' Alliance & Industrial Union (Southern Alliance) centered in Louisiana, Texas, and Arkansas. By the end of 1887, the Alliance had spread to every Southern state and claimed more than three million members. It appealed to farmers because it was portrayed as a cooperative business venture, that is, one that is jointly owned by all the people who participate. One benefit of cooperatives was that many farmers could join together and buy their farm supplies and equipment in large amounts, thus getting a price break from the manufacturer. They could also band together to try to get better transportation rates.

It seemed that only by joining together in large numbers could the nation's farmers achieve their goals. By the end of the 1880s, there was talk of uniting the Southern Alliance with the Northern, but this never occurred, in large part due to the fact that the Northern Alliance allowed black farmers to join and the Southern Alliance did not. Racial issues also divided another group with similar goals, the Colored Farmers' Alliance. Established in 1886 the Colored Farmers' Alliance was the largest organization of black farmers and farmworkers of its time. By the mid 1890s, it had a membership of over one million farmers and represented every state in the South. At first the Colored Farmers' Alliance advocated cooperation with Southern white farmers, but the Southern Alliance, as well as local authorities, resisted it so fiercely that the Colored Farmers' Alliance became active in its own interest.

In the 1890s Southern farmers, both black and white, did join with others nationwide to establish a third political party, the Populist Party, to fight against the powerful industrialists and railroad magnates (powerful and influential people in the industry) in the interest of the common rural farmer (see Chapter 12).

For More Information

Books

Cashman, Sean Dennis. America in the Gilded Age: From the Death of Lincoln to the Rise of Theodore Roosevelt. New York and London: New York University Press, 1984.

Fishel, Leslie H., Jr. "The African-American Experience." In The Gilded Age: Essays on the Origins of Modern America. Edited by Charles W. Calhoun. Wilmington, DE: Scholarly Resources, 1996.

Foner, Eric. Reconstruction: America's Unfinished Revolution, 1863–1877. New York: Harper & Row, 1988.

Wright, Gavin. Old South, New South: Revolutions in the Southern Economy Since the Civil War. New York: Basic Books, 1986.

Web Sites

"America's Reconstruction: People and Politics after the Civil War." Digital History. http://www.digitalhistory.uh.edu/reconstruction/index.html. (accessed on June 30, 2005).