The impact of the American Civil War was profound upon the cultural, political and economic fabric of the United States. We all know that the Union and Confederacy battled it out, with the Union emerging victorious. We also know that, like all major wars, the economic effects were prodigious.
The Civil War had prodigious effects on the economy of the North, specifically New York, both city and state. As all states experienced a period of growth during the 19th century, including the time leading up to the war effort, there was a great supply of troops willing to fight for their respective sides. New York, being the most populous state at the time, provided more troops for the Union Army than any other state.
Almost all men from New York chose to enlist; because of this, New York suffered from one of the highest Civil War casualty rates of any state, and, according to the New York Hall of Governors, an entire generation was practically lost. This evidently caused a severe lack of jobs, crippling the economy of the city and state.
New York, as well as the rest of the Union, utilized and lost more money to the war effort than the Confederacy did. According to an analysis conducted by Harvard University, the Union’s total expenditures for the war was approximately $2,121,791 (1860 estimate), with wage bill expenses listed at $787,403.70 and capital expenditures listed at $1,334,387.30.
Compare this to the Confederacy’s, whose total expenditures for the war ended up being much less, at approximately $1,011,158 (again, 1860 estimate), with wage bill expenses listed at $547,360.80 and capital expenditures listed at $463,797.20. The difference in expenses is enormous, with the North — with a large focus on New York — losing much more capital to the war effort than the South.
The state of New York was politically divided between groups of peacemakers — especially in the years toward the end of the war — and radical Republicans who despised the Confederacy and wanted nothing more than their demise, favoring harsh treatment. Because of this, many were willing to accept the drastic economic failure that would come with the completion of the war.
According to British historian Patrick K. O’Brien, there was an “emergence of black ghettos in Northern cities after [the Civil War]” which mainly were composed of free black men, some of which were born free and some of which were previously slaves who were freed following the war. Other poorer citizens also formed ghettos in the urban sectors, and many of these developed in New York in the years following the war, but mainly disappeared when New York regained its dominant economic status in the 1870s.
Prior to New York regaining its economic stature, it was hit hard by inflation following the war. Inflation was a major effect of the Civil War, as it transferred some of the costs of the war onto workers whose incomes could not keep up with the aggressive inflation.
Throughout the mid-to-late 1860s, produced goods were often of lesser quality due to the reallocation of resources away from manufacturing use and to military use for the war, which increased total costs. In turn, consumers were impacted by these higher costs and many workers and laborers did not earn enough income to keep up with the price increases.
Additionally, due to inflation, the North’s money supply had depreciated in three years the same amount than the United States’ overall money supply depreciated in thirty years, meaning that the North alone was losing more money than the country as a whole, and at a rapid and much faster rate.
Nonetheless, the economic recovery, growth and expansion of New York following the war was inevitable, and began in the early 1870s. In 1860, before the war, the population of New York City was approximately 813,669, with the state’s population at approximately 3,880,735. During the war, however, the population of New York City briefly decreased due to most of its men enrolling in the war, and New York state’s population remained generally the same during the war, never dipping.
However, following the war, New York, both city and state, got right back on track and increased in both population and economic wealth. By 1870, the population of New York City was 942,292 — an increase of 15.8 percent— with the state’s population at 4,382,769, an increase of 12.9 percent. The growth was primarily driven by the demand for work following the war; many people still held New York City as the business capital of the nation, despite its hardships faced during the war, and sought job opportunities there.
There was, of course, a growing demand for various resources such as energy, which was mostly utilized for heat, power, and cooking, and New York had enough industry to provide that energy — there was also a sudden urge for coal and fossil fuels, which New York also provided. According to historian Edward L. Widmer, the world’s whale population also began to decline during the time, creating the need for a new oily substance, which would turn out to be petroleum, after being discovered in Pennsylvania and upstate New York following the war. This also resulted in an economic boost for New York.
New York also had a major influence on the war as the nation’s media center. The press and media of New York state, mainly based in New York City, had a major influence on both state and government politics and the public’s (city, state and national citizens’) view, and helped sway consensus on the war.
Principal media outlets based in New York City, such as The New York Times and the New York Tribune, aided this effort. Since these media agencies remained active during and after the war, and through the brief period of economic decline that followed the war, they continued to provide jobs and draw attention, which attracted people to the New York area.
New York’s political landscape was also dominant, as many politicians kept their jobs during and after the war, mostly due to the fact that they were under the control of Tammany Hall, a corrupt political machine led by William “Boss” Tweed, who controlled most of the city’s political affairs.
Even during this time, New York City was primarily Democratic, with the Republicans residing in and controlling the upstate region. This is evident in the political corruption that resided in, and to some extent, still resides in, New York City. The rapid growth of the two political parties saw the need for more people to become politicians for their respective sides, resulting in more jobs available in the political world and for the North.
Since most of New York’s men enlisted in the war, the women who remained at home became able to travel the country and explore new job opportunities, and discover a revitalized sense of economic empowerment.
These expanding economic opportunities led to a wave of citizens — including African Americans (both those born free and former slaves), European immigrants, and Americans who were left destitute following the war — who poured into New York City and upstate New York. These citizens derived from many different cultures, including people from New England (dubbed “Yankees”); Dutch, Scottish, Irish and Germans from Pennsylvania; and immigrants from Ireland, England and other European nations, respectively.
Further economic expansion was viewed as virtually impossible following the war effort, but the factors discussed in this article proved that view wrong, and growth did, in fact, occur. Growth was much more difficult to achieve in the South following the Civil War because, following their defeat, they became both economically crippled and, in Sherman’s March and the weeks following, practically destroyed.
Also contributing to the South’s stub in growth was their main source of income, cotton, which was becoming widespread throughout the world. Thus, cotton being produced in the South was no longer a necessity for the rest of the world, and they suffered economically.
Following the Civil War, it would not be long before the United States was united once again. Despite recovery initially being viewed as impossible, the North — centering around New York — was indeed able to recover, and grow economically into the powerhouse it is today.
And that, my friends, is what I call an American success.
Chris is a writer and publisher who travels America, and loves doing it. He also loves pizza, video games, and sports, and can tell you a thing or two about each. Follow him on Medium to be informed of new articles.
Sources utilized:
- Bruegel, Martin. Farm, Shop, Landing: The Rise of a Market Society in the Hudson Valley, 1780–1860.
- Gallman, J. Matthew. The North Fights the Civil War: the Home Front. I.R. Dec, 1994.
- Goldin, Claudia D. and Lewis, Frank D. “The Economic Cost of the American Civil War: Estimates and Implications.” Digital Access to Scholarship at Harvard, Harvard University, June 1975, accessed via this link.
- “New York During the Civil War — hallofgovernors.Ny.gov.” New York Hall of Governors, State of New York, accessed via this link.
- O’Brien, Patrick K. The Economic Effects of the American Civil War. Humanities Pr. International, 1988.
- Phisterer, Frederick. Statistical Record of the Armies of the United States, 1883.
- Schug, Mark C. and Caldwell, Jean. Focus: Understanding Economics in United States History, lesson 19. National Council on Economic Education, 2006.
- Thornton, Mark and Ekelund, Robert Burton. Tariffs, Blockades, and Inflation: The Economics of the Civil War. SR Books, 2004.
- Widmer, Edward L. and Kalogera, George. The New York Times Disunion. A History of the Civil War. Oxford University Press (GBP), 2017.
