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Reorganization of National finances - Adoption of a protective tariff Extension of transportation and means of communication - Grants of public lands - Immigration and prosperity in the North- Economic reorganization in the South - Political extravagance — Agricultural decline — Industrial renaissance- Summary. During and after the Reconstruc- to cause a heavy tax rate. But the tion, as during the Civil War, eco- currency was uncertain, and the paynomic conditions in the North and in the South presented a sharp contrast; but there were some economic problems of National rather than sectional importance, which may be treated from the National point of view. These were the problems of National finance, the development of transportation facilities, the tariff, and the public lands.

The large National debt, about $2,800,000,000 in November of 1865, was refunded in 1870-1871 at a lower rate of interest; and had it not been for the disordered currency, the debt would have had no worse effect than

* Fleming, Documentary History, vol. ii., pp. 417-420; Hoar, Autobiography, vol. ii., pp. 105– 108; Phelps, Louisiana, pp. 387-392; Life of Benjamin H. Hill by his son, pp. 80-81, 635-711; Haworth, Hayes-Tilden Election, pp. 297-300.

* Haworth, Hayes-Tilden Election, pp. 287–297. Beside the works already mentioned, the reader should also consult the following for minor details and opinions of prominent men of opposite political beliefs: Stanwood, History of Presidential Elections, pp. 302-344; McClure, Our Presidents and How We Make Them, pp. 244-269; Curtis, Constitutional History, vol. ii., pp. 397440; Burgess, Reconstruction, pp. 280–298; Rhodes, vol. vii., pp. 219-285; Appleton's Annual Cyclopædia, 1876-77; S. S. Cox, Three Decades, chap.

xxxvi.; M. H. Northrop, A Grave Crisis in Ameri

can History, in Century Magazine (October, 1901); Manton Marble, A Secret Chapter of Political History; The Great Fraud, in Essays and Speeches of J. S. Black, pp. 312-340; A. M. Gibson, A Political Crime; Merriam, The Negro and the Nation, pp. 346-353; Bigelow, Writings and Speeches of S. J. Tilden, vol. ii., pp. 384-481; Blaine, vol. ii., pp. 567-594; McCulloch, Men and Measures, pp. 410-422; Sherman, Recollections, vol. i., pp. 550–564; Schurz, Reminiscences, vol. iii., pp. 365– 376; Hamilton's Blaine, pp. 403-413; Crawford's Blaine, pp. 405-414, 440-474; A. R. Conkling, Roscoe Conkling, pp. 516-528; B. A. Hinsdale, Works of James A. Garfield, vol. ii., pp. 393-462; and files of The Nation, the New York Times, World, Herald, Tribune, the Chicago Tribune, etc. Prepared for this History by Walter L. Flem


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ment of interest on Government securities always brought up the question of currency. When the war ended, "greenbacks" were the chief legal tender, but their constitutionality was doubtful, and the decision of the Supreme Court, first against them and then in their favor, did not strengthen the popular confidence in paper currency. Coin had practically disappeared from circulation. poorly secured paper money was heavily discounted in gold bullion, and prices were always high but never certain. The instability of the money market fostered a restless, speculative spirit, which finally resulted in the Black Friday of 1869 and in the overtrading which precipitated the crisis of 1873. Attempts between 1866 and 1869 to get back to a specie basis failed, but in the latter year Congress pledged payment in coin of all specie obligations and promised a speedy return to specie redemption of “ greenbacks." Though this steadied the money market, there was, for several years, a strong feeling in favor of an inflated currency-even of larger issues of "greenbacks "-and this feeling expressed itself in politics as the "greenback movement." Not until 1879 was it possible for the Government to return to a specie basis.

For several years taxes remained at the war rate and were reduced but

ing, Professor of History, Louisiana State University.

slowly after 1868. In 1870 the internal revenue taxes were much reduced, but, in spite of adverse sentiment, the war tariff was retained. The interests fostered by it had become so powerful that it was found impossible to revise it downward.

The extension and consolidation of transportation systems continued in the North and West and even extended to the South. In 1865, 419 miles of railway were built; in 1869, 4,102 miles; in 1872, 7,439 miles. The Union Pacific and the Central Pacific completed the great transcontinental line in 1869 and others were building or being planned. The Government aided this western railway building by lavish grants of public lands and by subsidies. The vast grants of aid by Congress, the scandals that resulted, the consolidation policy, and high freight rates aroused intense popular opposition to the railroads, expressed somewhat in the "Granger movement" of the 70's, which voiced the people's desire for Government control and regulation of transportation agencies. Out of this discussion finally came the Inter-State Commerce Commission.

The public lands were lavishly granted until by 1880 the best was gone. The greater portion went to the railways, which by 1873 held title to 180,000,000 acres. Fortunately the railways were anxious to get rid of most of the lands to farmers and sold farms at low rates, thus helping to


populate the Northwest. Under the Homestead Act of 1862, 65,000,000 acres were settled by farmers before 1880 and the frontier had disappeared. The Indians were pushed off the open lands to reservations, where they ceased to check the white advance.

The North, except for financial crises, continued to enjoy the prosperity which resulted from the stimulus of 1861-1865. State finances were generally sound, though the corruption in the larger cities was scandal


The speculative spirit and the abnormal industrial expansion resulted in the panic of 1873, after which thousands of bankruptcies occurred each year until 1878, when business began to recover. All industriesagriculture, mining, and manufacturing continued to prosper and to consolidate, except during the period following 1873. The new railroads drew hundreds of thousands to the West and from 1870-80 297,000 square miles of productive lands were added to the grain area and the United States had secured a permanent position in the world's food food and raw material markets. Immigration on a large scale prevented this Western movement of population from deranging industry in the East. From 1865 to 1880 the Northern States received 5,000,000 immigrants, who went to the Eastern cities as efficient laborers and to the West as good farmers. The Southern markets were regained, domestic markets monopolized with the aid of the protective tariff, and


some foreign trade secured. But the merchant marine was not revived.

The South during and after Reconstruction was, on the whole, much less prosperous than before 1861. There was progress, or promise of progress, in the white districts and a general decline in the black belt, where a new economic organization was partially evolved, in spite of the handicap of carpetbag and negro misgovernment.

As a result of Reconstruction, the State and local governments were bankrupted. New offices were created by the reconstructionists, salaries increased, extravagances and corrupt expenditures were made - particularly in subsidies to railroads -until in 1871 the bonded debt of the former seceded States amounted to $131,717,770 and in 1876 to $292,000,000 (more than the other twenty-seven States owed), and this in addition to crushing local indebtedness. Taxes increased in proportion. The tax rate in Louisiana in 1867 was 334 mills, in 1874 it was 212 mills. The tax rate in Texas was increased threefold; in Mississippi, fourteenfold; and so in other Southern States. Outside capital, so much needed to develop the South, was timid in the face of misgovernment, high taxes, and heavy debts. Land was cheap, but purchasers were few; mortgage sales were frequent, and it is estimated that half the original owners had lost their land by 1880. The industrial reorganization finally accomplished in the white districts of the South was superior to that of ante

bellum days. The reverse was true of the Black Belt. After much suffering and confusion, the negroes slowly adjusted themselves to an agricultural labor system which has survived, in essentials, to the present day-the share or metayer system, with the attendant credit and crop lien adjuncts. There was too little control and supervision by whites, and the Black Belt as an agricultural region declined. Improved methods, improved machinery, and fertilizers were but little used there. The annual output of all former slave grown crops declined for a time. The production of rice, cotton, and tobacco in negro districts never again equaled that of 1860. The rice production in 1860 was 186,000,000 pounds; in 1870 it was 74,000,000. In 1859, 5,387,000 bales of cotton were produced; in 1869, 3,012,000; in 1879, 5,755,000; and much of this was in the white districts.


spite of increased population, not until about 1900 did the average negro county equal its cotton production of 1860; the production per acre has not yet reached that of 1860.

On the other hand, the removal of slave labor competition and the development of the railways, mines and factories operated even during Reconstruction to elevate the economic condition of the white districts-the former backwoods, hill and mountain counties. Progress was slow on account of lack of capital and immigration, the evils of government, and of government, and

the loss by emigration of 2,000,000 of the population to other sections. But by 1880 it was clear that the white districts of the South were on the eve of an industrial renaissance. White farmers, though on poorer soil, had proven themselves superior to black in the production of cotton, rice, tobacco, corn and truck crops. By the use of improved methods, machinery and fertilizers, the whites were everywhere producing more, man for man, acre for acre, than the negroes; whites were developing the timber and mineral resources and operating the new factories; the mountain whites were expanding into more favorable regions all whites were encroaching on the former slave territory, were acquiring land, and entering occupations once monopolized by negroes. The industrial" new South" is the old backwoods region and the new States west of the Mississippi.

The period of Reconstruction was thus marked by a reorganization of National finances, by financial crises, the adoption of the protective tariff principle, the distribution of the best of the public lands and the consequent settlement of the far West, the rapid extension and consolidation of transportation systems, with resulting political and economic problems. In the North there was, on the whole, continued progress in all lines of industry, a general tendency toward the consolidation of capital and of industrial enterprises, on extension of commerce


under the protection of the tariff, a great increase of population by immigration, and a widespread organization of labor unions. In the South

there was a marked decline in the agricultural industries of the former slave-labor districts and the development in them of the share-credit-croplien system; a slow but sound progress in the white districts toward the development of railroads, natural re

VOL. IX-32


sources, manufacturing, and scientific agriculture.

* Cambridge Modern History, vol. vii. (1903); Bruce, Rise of the New South (1905); Bogart, Economic History of the United States (1908); Coman, Industrial History of the United States (1908); Bullock, Selected Readings in Economics (1907); Andrews, The United States in Our Oun Time (1903); Dunning, Reconstruction (1907); Fleming, The Economic Results of the Reconstruction, in The South in the Building of the Nation, vol. vi., pp. 12-16 (1909); United States census reports, 1860-1880.

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