Exports, Imports, and Banks
While this is closely related to the section before, it deserves a section on its own. It is often quoted as being a huge reason why the North won the Civil War. When it comes right down to it, the North relied less on imports than the South did. There are many statistics that support this. While the South had to create a manufacturing industry from the ground up (and import anything they didn’t produce), the North had the manufacturing strength already in place.
Products like iron, leather, firearms, and woolen textiles are all areas that the North had a significant advantage in. What does this really mean outside of not having their own supplies? The answer comes down to money.
The North controlled the majority of the nation’s wealth in 1860. Depending on where you get your statistics, the numbers range anywhere from 65% to nearly 85% of U.S. money was located above the Mason-Dixon line. While the Northern government could raise tons of money by raising taxes and tariffs, the South had to struggle to do the same. Some of this came down to existing structure, which we’ll talk about in another section, but a lot of it came down to banks.
The North had the majority of the nation’s banks in 1860. Depending on which sources you look at, the South had between 10 and 20 percent of the nation’s banks at the beginning of the war. This meant less money in the economy, therefore less money to lend and tax. Money is almost always one of the most important factors in any war, and the South was at a huge disadvantage directly from the start.
By the time the war was going full force, the South was stymied by a Northern blockade, which caused imports and exports to fall nearly 80% by some sources. This meant even less money coming into the government to support the war effort.