Historians still seem to be divided when it comes to identifying the causes of the American Civil War (Molho & Wood, 1998, p. 166). One of the major disparities lay in the economic principals of the Northern and Southern colonies. The colonial economy expanded at a dynamic pace throughout the seventeenth and eighteenth centuries primarily because of the spectacular growth of the free white and black slave populations. However, the 19th century saw a shift in the economic conditions of the Northern and Southern states. Economic policies of the Northern and Southern States of America played a significant role in the political system of the nation. Land policies, banking policies and tariff played of both the Northern and Southern colonies were so different, that it is safe to say they greatly contributed to start the military conflict known as the American Civil War of the 1860's.
The Northern states, also called the Union states (Fabbrini, 2005, p. 12), were greatly industrialized and urbanized. The North American colonies developed two major modes of economic production. One type of production was the subsistence economy of small-scale farmers, who were either European immigrants or their descendants. Alongside the subsistence farming economy was a profit-making commercial economy, much of which was rooted in the slave trade, slave plantation, and the commercial businesses essential to the burgeoning slavery economy. The Northern economy, rather than raising cash crops like it was common in the South, relied heavily on the Atlantic Ocean. Shipbuilding, trade, and fishing became leading industries in the region. Trade and import/export contributed to their economy, and Boston, Massachusetts became a blooming urban center for shipping and New England commerce.
The land policy of the Northern states was vastly different from the South. In the North, cheap land in small parcels was offered to free-labor families whereas the Southerners opposed this system of land distribution. They, on the other hand, ran huge plantations and maintained that the smaller parcels of land would make it very difficult to keep open vast areas for slave plantations. The Southern states relied heavily on slave labor for their agrarian economy, based primarily on cash crops including tobacco and cotton. The Homestead Act of 1860 allowed for 160 acres of free land to anyone, for settlement and farming purposes, a bill that was received warmly by the Northern states. The Southerners, however, opposed it and the representative of the slave states only managed to pass one vote in favor of the bill. It was eventually vetoed by President Buchanan.
Another economic principal of the states included the differences in terms of transportational improvements. After the openeing of the Erie Canal in 1823, the federal governement was pressured by the Northern states for a greater improvement and more government funding in the transport facilities. The Southerners were not in favor for government subsidies in favor for transport improvements and accused the federal governement for siding with the North. The Pacific Railway bill of 1860, which proposed a railway link to the West Coast, best illustrates this disparity regarding transport between the two regions. The bill received no vote from the representatives of the Southern slave states, and therefore, failed to be passed.
The final economic principal of tariff was another bone of contention between the North and the South. The South, with their economy based purely on agriculture, relied heavily on goods produced outside their lands. They, therefore, opposed tariffs on imported products. The Northern States, which were industrial, wanted to protect their interests from cheap imports, and therefore supported the imposition of high duties on imports. Taxes were the main source of federal revenue and while they were supported by the North, the South maintained that it was done at the expense of the Southern states.
The main component of the economy of the north was the contribution of the immigrant labor to the economy of the Industrial North. Railroads, industries and factories were on the rise, and the Northern economy saw a massive surge due to its industrial development. The South's reliance on stable crops like tobacco and rice led to the rise of the plantation system, which in essence were farms owned by wealthy landowners who raised cash crops. Indentured servants were put to work on the farms, a system that eventually gave way to slavery.
Needless to say both territories were the exact opposite of each other; one being in favor of industrialization and the other one resisting it in every conceivable way. The Northern states were more united, putting together resources to feed the state's economy, while the Southerners created they own wealth, buying slaves to do the labor which would increase their financial resources. It is important to understand that neither the Northerners nor the Southerners wanted the American Civil War, but it couldn't be avoided. Because of their different mindsets and lifestyles, the potential for a large scale conflict was imminent. Both parties would rather fight the other rather than allowing them to take over their territories with their beliefs and ways of life. This, many historians believed, eventually resulted in the Civil War.
References
Burton, O. V. (2008). Slavery in America. Gale library of daily life. Detroit: Gale.
Fabbrini, S. (2005). Democracy and federalism in the European Union and the United States: Exploring post-national governance. London: Routledge.
Molho, A., & Wood, G. S. (1998). Imagined histories: American historians interpret the past. Princeton, N.J.: Princeton University Press.
Ransom, R. L. (2005). The Confederate States of America: What might have been. New York: W.W. Norton &.