The Cotton Boom

While the pace of industrialization picked up in the North in the 1850s, the agricultural economy of the slave South grew, if anything, more entrenched. In the decade before the Civil War cotton prices rose more than 50 percent, to 11.5 cents a pound. Booming cotton prices stimulated new western cultivation and actually checked modest initiatives in economic diversification of the previous decade. The U.S. cotton crop nearly doubled, from 2.1 million bales in 1850 to 3.8 million bales ten years later. Not surprisingly, given these figures, the southern economy remained overwhelmingly agricultural. Southern capitalists sank money into cotton rather than factories or land. More precisely, they invested in slaves; the average slave owner held almost two-thirds of his wealth in slaves in 1860, much less than he held in land. Economic historians have concluded that returns on capital in antebellum Southern...