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Without political organization that sought concerted effort for common interests based on Southern realities, the South would remain under-
developed.

The South's political leadership can assume much of the burden for having permitted Southern culture to lead the region astray...once more....




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PIVOT POINTS



THE POLITICAL ECONOMY OF THE SOUTH, 1863-1900:

THE ERRATIC QUEST FOR

MODERNIZATION AND ECONOMIC JUSTICE

IN A DEFEATED AGRICULTURAL SOCIETY

Summarized, connected and critiqued by Jerry Murley

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PUBLISHER'S NOTE:

This document was submitted in April 1990 as an assignment for a college course. No effort has been spent to edit it in order to make it something it is not and was not. The author does not apologize for the fire and the air of synthetic knowing that infuses the many paragraphs to follow.

* * *


Reconstruction was the first in a series of shattered economic promises that habituated Southerners to underdevelopment – a condition variously considered as the reflection of inherent regional attributes or as redeemable by the wholesale emulation of Northeastern examples. The concept of the New South, as a prescription for the economic regeneration of the old slave states, broke ground and reached its first comprehensive articulation and enthusiastic reception in the 1880s. The proponents of this economic springtime for the South asserted that the burdens of Reconstruction had first to be lifted to allow the region's natural leaders – a new breed of political economists, entrepreneurs, industrialists and agriculturalists – to guide an economic transformation of the South, taking advantage of and remolding its purportedly unique characteristics. But the roots of the new vision had their origins in the thinking of North and South during Reconstruction – and as some of its proponents in the '80s insisted, stretching back before the abolition crusade into the early decades of the 19th century. The New South program was propagated season after season, decade after decade, gradually helping to reshape and build up the South according to the modernized model envisioned by its creators – and in ways unforeseen, painfully slow and ironic.

In some respects the program can hardly be faulted as a deceptive device but seen rather as a sober, long-term goal delayed by larger forces outside of anyone's control. In others, this network of ideas constrained other possible remedies: it reflected analysis and engendered policies which, if not erroneous and outright counterproductive, were at minimum often premature and distractive. As a projection of realities and priorities the new political economy was often distorted and injurious – a fault of special import because the improvement and political rights of the South's mass of marginal citizens depended on the effective restructuring of the entire Southern economy.

No policy at all would have been an abuse of authority and a further abdication to the economic feudalism that was spontaneously generated during Reconstruction. But the New South economic policy seemed another discouraging deception to that mass of Southerners at the fringes and became a factor in the growing rancor between men of different circumstances and outlook. There are few better illustrations of this image of dashed hope and the damage it inflicted than the critique posed by the Populists in the 1890s, following as it did on the heels of the agricultural calamities set in motion during Reconstruction, the glowing preachments of the New South prophets, the upsurge of the cotton mill campaign, and the transformation of the Southern railroads.

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Eric Foner's Reconstruction is an attempt to establish a broader interpretation of the early post-emancipation years in the South: one that incorporates new information and those aspects of earlier 20th-century appraisals which have managed to withstand the test of subsequent research and the rigors of a drastically revised perspective on race relations in America. [1] The author offers a compromise of sorts between the revisionists' resurrection of the idealism and salutary achievements of the Radicals and the post-revisionists' critique of the conservative bent of Republican policy and its implementation. While modifying both schools of thought, he takes issue with the latter's insistence on the continuity between Old South and New South. Drawing upon recent specialized scholarship into the social ramifications of Reconstruction, he defends the view that Reconstruction comprised a series of connected societal changes which were revolutionary in their dimensions and in their long-term impact.

Partly as a step to make amends for the traditional neglect of black aspirations, positive capacities, and influences, but largely owing to his view that emancipation and the further efforts to secure black rights were the significant catalysts to subsequent change, Foner dates the beginning of Reconstruction from 1863. The modes of black participation in change, the processes by which black institutions were built and affected by change, black perils and black advances – all serve as the author's standard for measuring the successes and failures of Reconstruction.

Emphasis is also given to the reorganization of Southern society, with special attention to the new system of labor, new class distinctions and political alignments, the new pattern of land tenure, the new credit system, and the attempts to broaden the use of government for novel social and economic purposes. Foner demonstrates the close link between the patterns of race relations in the South, and the tensions arising from labor and land arrangements. These evolving relationships are shown to be related to attitudes about race in the North and to the growing concerns about the place of labor, capital, and government in the postwar national scheme. In describing the shifting economic conditions and ideas about economic matters in the North – especially the conflicting uses of the free-labor ideology in rationalizing emancipation, suffrage, and civil rights for blacks while constraining government action on behalf of the freedman – Foner weaves a continuity between the forces impelling initiatives for change in the South and those ultimately leading to a withdrawal of interference for primarily class and economic considerations. Further elaborating on the national context of Reconstruction, he examines the increasing exertions of the national state and the conflicts encountered in defining the principle of national citizenship while at the same time the nation tried to promote capitalism, maintain the principle of federalism, and eschew the notion that national legislation should serve privileged interests.

The components of this study though comprehensive are seldom divergent, for one finds at the core of Foner's work two inseparable human objectives: political and economic participation without artificial hindrance. One can hardly discuss Reconstruction without an expanded reference to the free-labor ideology. It figures in the debate regarding the moral and prudent extent to which the state should mediate the relations of its citizens and redress their standing amid the nation's institutional and commercial structures. This debate was nothing less than the process of defining freedom – a process of identifying Americanism and describing the framework of the good society. According to this doctrine of free labor, there were no inherent conflicts between labor and capital, rather there was a harmony of interests. A determined worker, unhindered by artificial barriers such as slavery, was a participant in an American system that would eventually facilitate his acquisition of the capital necessary to make himself an independent producer. The process was seen by its Radical adherents as crucial to the maintenance of republicanism, and the doctrine was sold as a formula that would ensure prosperity. The North employed this doctrine as a reason for the war, but says Foner, the very manner in which the war was prosecuted, with its stimulating economic consequences in the North, meant that this "social vision [was] already being rendered obsolete."

Far from being a passive mass of freed slaves, blacks are assigned a major role by Foner in shaping Reconstruction policy and the institutions of the South. One of the first manifestations was black service in the Union army. It was the free blacks and freedmen of Louisiana that in 1864-65 lent urgency to the debate in Congress over suffrage. Likewise the Union Leagues were active in petitioning Congress to terminate President Andrew Johnson's appointed governments. When black suffrage and the legislation stimulating the formulation of new state constitutions and governments in the South did come, they were supported by Northern Republicans with mixed motives, but mainly Northern actions were a response to the campaign of intimidation against freedmen and Southern Republicans, and with a view toward averting a prolonged guardianship of the freedmen and toward staving off a reassertion of political hegemony by planters. The significance of these events notwithstanding, it was primarily in the reorganization of the South's economy that the meaning of black and white freedom was to be defined. Conflicts in aims were soon evident, as was the decisive influence of black desires. Before the war's end the freedmen on South Carolina's Sea Islands made it known that most rural freedmen defined freedom as the possession of land and the attainment of self-sufficiency, apart from white supervision. To the Treasury Department in that instance, and to General Nathaniel Banks, the Freedmen's Bureau, and Southern landowners in others, freedom in the early stages meant at best a tutelage of freedmen under a modified plantation system governed by a wage contract – and at Southern instigation, by mobility-impairing Black Codes.

Foner's description of the economic order that emerged from makeshift experiments is sufficient but somewhat more summary than the concentrated explication by Roger Ransom and Richard Sutch which shall soon be discussed. A significant portion of his examination focuses on economic factors derived from the North which were transmitted to Southern politics. It is noteworthy that Northern capitalists were initially supportive of President Johnson's lenient policies in hope that earlier reconciliation would bring a faster resumption of cotton production, the payment of debts to Northern manufacturers, and the restoration of textile mills to full production. The Radicals had a larger vision that was built around "equality of civil and political rights" for all citizens; however, except for the few like Thaddeus Stevens, who was determined to refashion the structure of Southern society by redistributing its wealth, they had no economic plan as a group. The momentous steps in civil rights, nonetheless, reflected much economic policy in that equality before the law was intended "to secure to a poor, weak class of laborers...the proceeds of their toil" by ensuring them access to the courts. As early as March 1867 mainstream Republican sentiment was hesitant to press further with "class legislation" for blacks, agreeing with the New York Times "that 'fear of confiscation' had paralyzed Southern business."

Though the new Republican governments in the South expanded the responsibility of the state and removed the state somewhat as a bulwark for landowner control over the labor force, they were inhibited from redistributing land not only by the interests of their often conservative white leaders, but also because the "boundaries of change" were set by Washington in an essentially "'colonial' pattern" of governmental and party relationships. Republican leaders over-relied on the freedmen acquiring property by way of the market and "invested their hopes [for economic progress] in a program of regional development, with railroad construction as its centerpiece." When Southern Democrats embarked on their New Departure experiment, they for the most part agreed with the Southern Republican policy of modernization; however, their limited conception of the potential of black labor kept them close to the goal of obtaining a disciplined black labor force confined to agricultural tasks.

By the early 1870s the growing political backlash against the debts, taxes, and methods of machine governments in the North, and against the marketplace imbalances being created by rapid economic growth, spelled doom for the Southern Republicans. Meanwhile, in the South, freedmen were becoming restless as Southern Republican politicians courted their foes with the conciliatory dispensation of patronage. Blacks demanded a larger role in office-holding right at a time when Republican fiscal policies were beginning to damage the very social programs that had helped make Republican regimes a positive force for the improvement of freedmen.

Foner's narrative caps the demise of the free-labor ideology with the growing class divisions that also helped end Reconstruction. He says the Liberal reformers' criticism, taken up by mainstream Republicans after the 1872 election, did the most damage to the Southern policy by advocating a return to fiscal purity, limited government, and restraint on the political participation of the "lower orders." A parallel development in the South on the part of Southern Democrats thus acquired legitimacy and was benefited by a weakened Northern resistance.

* * *


In One Kind of Freedom, Roger Ransom and Richard Sutch focus specifically on the economic structures of the post-emancipation cotton South, but these are identical with those reviewed by Foner as generally applicable to the entire region. [2] Their work is similar to Foner's in another important respect: they use an examination of the improvement in the welfare of the freedman to gauge the relative merits and deficits of postwar economic policy and institutions. Initially freedmen – and a large segment of the white population as well – had reason for hope that their living conditions would improve, but the authors' statistical analysis shows that these conditions did not improve fast enough, primarily because of the "flawed economic institutions" that were hastily established after the war.

The authors spend some time explaining the deficiencies with which blacks emerged from slavery, saying that as slaves they had "never negotiated a contract, borrowed on credit, determined a crop mix, [or] marketed a cotton crop." Freedmen were usually without tangible assets or freedom dues, entering the marketplace unprepared but optimistic. The burdens of these conditions soon revealed themselves: the percentage of the black population engaged in work as skilled artisans dropped from 5.6 in 1860 to 3.5 in 1870. The freedman's eagerness for education was matched and subverted by white hostility to the point where only 7% of school-age blacks were enrolled in school in 1869 in the five cotton states from which much of the authors' sampling data comes – South Carolina, Georgia, Alabama, Mississippi, and Louisiana.

Using this census data Ransom and Sutch show that black sharecroppers in 1880 received a gross compensation of 56% of their total per capita output as compared with the 22% share received by slaves in 1859. However, under the new agricultural system that had evolved since the war, there was a 50% decline in total per capita output in Southern agriculture, meaning the freedman gained [little more] in material income – and [half as much again] in terms of real income if he purchased as much as 60% of his provisions on credit at a rural general store. A crucial aspect of the freedman's new condition, though, is that he gained discretion in making consumption decisions, and many blacks, especially women and children, chose to consume "leisure" time or time away from field work and white supervision – gain not reflected in the figure stated above. The hours worked show a cumulative decline of about 28% or 36%, and this had a tremendous impact on postwar agriculture in that it created a labor shortage.

The authors dispute the notion that the South's slow growth over the last three decades of the 19th century was significantly exacerbated by war damage. The supply of land and work stock relative to the supply of labor did not decline they say, pointing to the 50% decline in the cotton value of a mule from 1859 to 1870 as evidence that the one-third decline in draft animals in the 1860s was of negligible effect in reducing crop output. Therefore, the authors confine their intensive investigation to the impact the scarcity of labor and the scarcity of liquid capital had on the rise of tenancy and on the changes in marketing and financial mechanisms in the rural South. All of these developments are linked and are shown to have been deleterious to the efficient functioning, and therefore to the growth, of the Southern economy.

For a degree of autonomy and the knowledge that the returns of their product of labor would be proportionate to their own efforts, freedmen struck a compact with landowners. Sharecropping offered to blacks with "superior skills and diligence" higher incentives than did the wage system. With the price of cotton at 83 per pound in 1865, planters committed themselves to high levels of wages and production in subsequent years. Aggravated by drought, the collapse of prices to 43 in 1866 and 32 in 1867 inflicted heavy losses. This vulnerability induced planters to experiment [with] new labor arrangements that would permit them to retain some control [over the] cultivation [of their land] while reducing their risks. They found in tenancy, with its payment of rents stipulated by contract in the form of either cash or crop shares, a system that provided returns roughly equivalent to those from a wage system. By 1880, 80% of the farms in the cotton South comprised 50 acres or less, and 60% of [those] were operated by tenants. After a lengthy analysis of the economies of scale in agriculture at the time, the authors conclude that there were no such economies making small-scale farming inherently less productive for the region.

Though the share of output was early standardized at 50%, one of the most important variables in the sharecropping agreement was the "number of acres allotted each tenant family," a device by which landowners controlled the emphasis on high yield per acre or on high yield per man. Exchanging more acreage for supervision rights, the landowner affected the efficiency with which resources were employed, and the authors say this decision was highly susceptible to prejudice. Moreover, there was a more detrimental effect in sharecropping in the diminution of soil quality due to built-in disincentives for either the tenant or the landowner to make long-term investments in land improvement – beyond the stop-gap measure of purchasing fertilizers to sustain current yields but without increasing overall productivity. By the early 1870s, agriculturalists were warning farmers of such effects.

These dangers notwithstanding, the most potent one developed without initial alarm in the emerging financial and marketing network. The prewar intermediaries in finance and marketing, the factors, were unable to revive their former services. In part this happened because the prewar credit network relied on the factor's intimate knowledge of his planter clients, a relationship which could not be replicated in a system with a multitude of small-farm operators. In part the ruin of the banking system in the South was responsible. And in part the opening of the interior due to transportation improvements was the reason. Cotton could be shipped directly to the North from rural centers, and supplies could be shipped directly to interior furnishers. When cotton prices were high at the end of the war, rural Southern merchants established links with Northern capital to provision planters, but the authors strongly emphasize that the rural business was left to the locals, who were advanced goods on consignment. The new credit rating procedures developed by the R. G. Dun Merchantile Agency in New York – whose records are extensively used by the authors – worked to gain credit for the rural merchants and to forestall the expansion of rural banking services.

The rural merchant became the point supplier of credit to landowners and to tenants. And the damage of this credit system was manifold. For one, the implicit interest rate built into the credit prices for supplies was patently unfair, requiring customers to pay a 53% markup or more on goods when a 22.4% charge would have been adequate to cover costs and a good profit. As rural merchants, armed with legalized crop liens, gained territorial dominance in areas confined in size by the supervision required to ensure the security of their loans, they were able to compel indebted farmers to increase cotton cultivation. Often the role of merchant and landlord merged, augmenting the creditor's control.

That the merchants coerced farmers into self-defeating cotton cultivation can be deduced from the precipitous decline in the per capita production of grains and other foodstuffs in 1870, which stayed below 1860 levels until 1890. The merchants had multiple interests in eroding farmer self-sufficiency. When cotton values leveled off relative to corn values in the mid-1870s, farmers continued to displace corn acreage with cotton, despite their need for corn and the high credit prices they would have to pay for any deficit in self-sufficiency. The authors estimate that 70% of the "small farms in the Cotton South did not produce enough grain to meet their food requirements." Further, they estimate, using average farm gate prices for cotton and corn in 1878-80, that the farmer buying corn on credit would have gained 29% in income by shifting cotton acreage to corn acreage to the extent required to meet food needs. Even the self-sufficient farmer suffered from the merchant monopoly, because he endured "a self-imposed reduction in economic efficiency designed solely to evade exploitation." The aggregate income of Southern agriculture was correspondingly reduced, as the farmer's real income and control, his soil and his ambition, all suffered.

"In light of subsequent events," say Ransom and Sutch, "the failure to carry forward plans for land redistribution appears as a great tragedy of this era." They offer ample circumstantial evidence, to which Foner adds contemporary testimony, that discrimination was routinely employed to hinder equal access for blacks in education, landownership, crop supervision, and credit. These trends serve to bolster the argument that prevailing racial antagonisms were thwarting the functioning of the market and adding irrational distortions to the optimal process by which the pursuit of economic self-interest would have contributed to the growth of the region's economy as a whole.

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There were men in the South in the 1880s who looked for remedies outside the productivity and purchasing power of the region's mass of agricultural workers. They formulated an explicit statement of Southern economic policy which sometimes ignored the vague but no less real policy at work in the cotton fields. Paul Gaston's The New South Creed explores this attempt at a coherent economic conception of the postwar South; it contained potent social and political objectives which had long-term ramifications. [3]

The formulation of the new creed found motivation and unity in the South's recognition, [given] the thorough defeat of its old order, amid the weakened conditions of an incipient one, that a new system was inevitable if the South's will was to reassert itself again in the nation. In creating a New South, the image of the Old South was given a grooming by those who would excise its flaws while avoiding a division of purpose and loyalty, and avoiding the loss of a charming ally. Gaston examines the origins and fate of the New South program for self-regeneration. But his is also a study of how myths evolve and how they influence perceptions of reality when what begins as a formulation for what ought to be is framed in such a way, and with such resonance, that it is mistaken as an accurate description of reality.

The rationalization for slavery having been invalidated by defeat, the way was left open for the reconsideration of the ideas of the lonely dissenting antebellum voices that had argued that real independence for the South lay in industrialization and urbanization – developments which had been thwarted by "staple-crop agriculture, plantation aristocracy, and Negro slavery." The antebellum Southern mind had concocted defenses of its institutions claiming they preserved class harmony and republican virtue over against economic individualism. Counter arguments came from DeBow's Review in support of prewar Southern nationalism and as propositions for regeneration after the war: in 1866 the editor recognized "that the shortage of capital and skilled labor, combined with difficult marketing problems", presented obstacles for Southern development, but he assured readers that manufacturing was the first step toward establishing the "diversified employment" that would attract immigrants. Readers were told that, due to the South's bountiful resources and cheap labor, capital would naturally flow from the North and from Europe to the region. One contributor even advocated the dismemberment of large plantations with state aid "in order to make land available to immigrants."

In the main, Gaston reconstructs the creed by compositing the views of its principal publicists in the 1880s: Henry Grady, Daniel Tompkins, Richard Edmonds, Walter Page, and Henry Watterson. Rendering a comprehensive program in this manner, Gaston hastens to point out that these men occasionally had sharp differences in emphasis. Grady tended to the more conservative end of the spectrum, while Page stood at the other. They all sought sectional reconciliation, economic redevelopment and a harmonious adjustment to the race question with a view to socially modernizing Southern life. State-supported education was endorsed by most of these promoters; however, the building of industry and the establishment of scientific agriculture had priority. The immediate educational need that they pursued was the reformation of attitudes. Page goaded the South to open up to competing ideas. But growing out of frustration and failure, the New South doctrine had also to instill self-confidence in Southerners.

This advocacy of a new value system to accommodate national habits and principles was to present an apparent conflict with Old South values and an immediate hurdle to progress. The New South men had to repudiate many old patterns without humiliating the esteemed men who still clung to them. To build confidence, to redirect the attention of Southerners, and to win sympathy for the region, the New South advocates chose to conspicuously scold that old mule, the Old South, for its economic errors while they coaxed their reluctant vehicle into the future. The growing disparity between the wealth of the South and the rest of the nation fed their eagerness and prodded many others to the New South advocacy. The New South men wanted non-interference in the South's racial policy, but they also wanted Northern investment and were willing to offer generous terms to obtain it. Therefore, it was a difficult but essential first task to undermine entrenched practices where practicable and desirable while at the same time projecting the image of regional opulence and stability.

How to realize the economic objectives of their program was not so easily formulated. Apparently the inflated advertisement of the presence of raw materials, a mild climate, a cheap labor force, and the Southern will to have change, were considered sufficient ingredients to guarantee investment from the outside and the influx of skilled immigrants of the right sort needed for salubrious results. Lecturing Southerners and offering visions of the future were primary occupations of the New South men in print and in speeches. Henry Grady repeatedly urged a reduction in cotton acreage and the development of subsistence farming. Industrialization and its concomitant feature, urbanization, were cited as prerequisites to the rise of small farming due to the need to generate local markets. The practical man of business and technical know-how was honored over the politicians. For the most part the New South men can be said to have adhered to laissez-faire economics – insofar as that doctrine "did not preclude government aid to business" and rejected unionism. Monopoly was not one of their immediate concerns.

Racial policy is a particular concern of Gaston, as it was for the New South advocates. If the cause was to restore the South to a place of pride and allay Northern suspicions that might hinder the flow of investment, the South had to cleanse itself of those associations that offended democratic principles and stigmatized the South. The advocates could concede that slavery was not a "positive good," but the strong attitudes that persisted regarding race relations were a very high hurdle requiring considerable finesse. The New South spokesman as strategist of renewed Southern political power saw only the path of white supremacy in regional politics, while the spokesman as diplomat and optimist saw the need to embrace the goal of a "just and humane society." To the chagrin of the New South men, many a reactionary dressed himself in the uniform of the Old South – a tattered garb of which they sought to deprive him in order to refurbish it into a costume of charm and good intentions. To the true believer, both black and white would be raised and society harmonized by material prosperity. The reaction to Grady's speeches in the North show how eager his audiences were to believe; without apologizing for the past, he made promises for the future. Grady charged his Northern friends of having erred in the past, as they had "unwittingly created...racial friction" in the South. And he skillfully tied the security of Northern investments with the South's being allowed "self-determination in racial policy," in order that the region's whites, armed with superior experience, might fulfill their responsibility toward the black man while maintaining social harmony.

Within New South circles the notion that the black man was inferior was common currency. While accepting the black voter, the New South men also utilized the "myth of Negro rule after the war" to argue the need for preparation of the black man for his future role in society. Moderation in race relations was a double-duty sword: it assuaged Northern apprehensions and helped capitalists gain dominance over the black vote. There was an inconsistency in Grady's racial ideas that G. W. Cable had the bad form to point out: inherent racial deficiencies were espoused at the same time that training was claimed to be efficacious. Cable saw in this logic the foreshadowing of a caste system. The New South program prized social solidarity as a necessity to forward the region. Appealing to justification by practical results rather than by abstraction, proponents argued that justice would be more surely served by the gradual advancement of blacks due to material improvement, training, and widening opportunities. To the discomfort of Cable and Page, Grady blurred the distinction between social equality and civil rights, but he evidently did believe separate could be equal. One of the problems with this path taken by the program to win Northern sympathy was that it did not have the merit of ensuring the retention of better intentions in future days. Whether they led the South down a road that was a long and costly detour or a cul-de-sac rather than a shortcut remained to be seen in decades to come.

By the mid-1880s, says Gaston, Grady and Edmonds were proclaiming the successes already achieved by the New South program. Playing up the image of a stable social, political, and financial atmosphere, they implicitly encouraged state legislatures to enforce the appearance of such conditions despite facts. To serve as further inducement to outside investors, they urged legislatures to offer tax-exemptions and grants of state lands to capitalist enterprises. Local conditions went unobserved or glossed over; in preference for a confident appearance, attempts to mitigate economic imbalances and racial problems that might foster social conflicts were deferred. Sharecropping was held out as an attractive entree into farming for immigrants without the initial capital for land.

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As shall be seen later, Gaston shows that the New South had a long career. For a picture of its immediate economic impact, one might best look to Southern postwar industry. Broadus Mitchell's The Rise of Cotton Mills in the South focuses on the development of industry and its relationship to the New South economic program. [4]

The late-19th-century cotton-mill campaign closely paralleled the New South movement in timing and in spirit. Mitchell goes to extraordinary lengths to establish that the substantive beginning of the cotton textile industry in the South occurred around 1880. In the process of argument, the characteristics of cotton mills prior to 1880, especially mills functioning in the antebellum period, are meticulously differentiated by the author from those that prevailed in the mills that arose in the 1880s and 1890s. Much emphasis is put on the factors in the prewar South that inhibited the growth of industry and on the restrictive nature of the prewar mills that rendered them inadequate foundations for the later development. Mitchell then explores the spirit of social uplift that helped propel the rapid rise of the industry, and he analyses the advantages that elicited the concentration on cotton mill building and the obstacles that confronted manufacturers. Extensive attention is given to the arrangements of capital and labor that governed the establishment of the mills and their economic impact on the region.

Mitchell subscribes to Tompkins' economic history of the South, inasmuch as it disputes the "conception of continuity" in Southern industrial development from 1800 to 1880 and emphasizes that the promising manufacturing steps in the early decades of the 1800s were thwarted by the introduction of the cotton gin and the expansion of cotton cultivation and slavery. According to Mitchell's findings, slave labor was employed in the small-scale domestic industry which characterized the plantation economy thereafter, and it pushed the free white laborer out of the larger Southern society. Moreover, the plantation system further militated against the growth of industry because it fostered sectional antagonism and because slave labor deadened economic competition, repelling both skilled immigrant labor and outside capital investment in industry.

Mitchell's mention of William Gregg is particularly fascinating, in that Gregg was a somewhat more sober precursor of the New South economic thinking. For Mitchell's purposes, Gregg was a prewar anomaly. In the 1840s and 1850s, this South Carolina manufacturer and legislator urged the state to adopt the corporate form of commercial organization, opposed railroad subsidies which did not open up interior markets, informed Charleston residents of New England industrial remedies to a shifting shipping trade, and condemned Charleston wealth for flying to the North rather than dedicating itself to diversifying the state economy. Dismissing Edmonds' industrial investment statistics for the period 1850 to 1860 as inflated with slave costs, Mitchell says that Southern politicians – all save the valiant Gregg – were moving away from a balanced economy, with their rigid political formulas and antagonism to the tariff, not toward one.

After the war former slaveholders invested in manufacturing, but in the mills during Reconstruction, blacks were often employed, as were operatives from outside the region – native poor whites were not. The atmosphere after the war was conducive to "wholesome introspection and material upbuilding." The South was on hold but planning change, goaded and informed by the press. The 1870s' depression, the late redemption of South Carolina, the shortage of currency, the high price of cotton and machinery – all are reasons forwarded as influencing the delay of rapid, large-scale industrialization until 1880. Capital investment in mills jumped from $17.4 million in 1880 to $53.8 million in 1890 in the South. A rise in the price of yarn from 14 cents to 28 cents in 1880 certainly helped fuel the rush to build mills. Edward Atkinson was trying to encourage the South to focus on the "'preparation' of cotton rather than on its manufacture." The South embarked on its mill buildup before the Atlanta Exposition of 1881; the exposition served mainly to stimulate the rate by notifying Northern manufacturers and Southerners alike of the potential.

There was an altered spirit in 1880, says Mitchell. "Self-help" was seen as key to revival; community stock subscription was seen as the way to social regeneration. In 1881 the New York press observed that "poor whites" were being assimilated into Southern society. Rather than the politician, the professional and business men joined the "economic publicists" in leading the campaign. Mitchell argues that "generosity and cooperation and social-mindedness" were behind the policy of child employment. "Economic inertia was overcome with moral incitement." H.P. Hammett, in 1881, urged restraint in promotions for fear that "popular enthusiasm" might lead to hasty preparations and a mill failure that would discourage the whole movement.

Mitchell asserts that in some cases the community "spirit of social service" was not accompanied by a "commercial prompting." One campaign participant told him that local people subscribed to the mill stock in small quantities to build up the town: "The average man at first didn't give a thought to dividends." The "at first" is the caveat, but Mitchell's point is well made: many of these new mills were begun as spirited corporate enterprises that looked to benefit the community as an economic system. For property owners, a mill was a way to employ the idle, and it was hoped that the payroll would prime the economic pump for the community. The employment of the poor was a prime factor in prompting a segment of the mill building, and not just any poor – the moral opportunity was for poor whites "to provide an escape from competition with the blacks."

Mitchell focuses his study on the Carolinas and Georgia, but South Carolina is cited as having exhibited the impulse earliest – a lead attributed to the greater reserve of capital in Charleston. South Carolina factories were fewer and larger than those in North Carolina, he says. With "less social unity in North Carolina" there was a reluctance to pool resources, therefore accounting for the smaller projects initiated by a few merchants.

With the availability of steam, mill locations were not restricted by the availability of water power any longer. In later development, the promoters often located "outside the corporation to escape town taxes." The personal incentives of the owners of old mills were unlike those of the new owners, perhaps, but the old mills also participated in the upbuild, and served as sources of technical assistance for the largely inexperienced new owners. The Hammett Piedmont Factory, begun in 1876, was said to have served as a model and training ground for the "up-country for twenty years." Cotton factors headed many mill operations initially; they had money and commercial connections. Merchants, more than others, became mill builders, being in a pivotal position because of their Northern connections and command of credit. After the first decade, Mitchell concedes, some manufacturing concerns were developed with a mind to exploit cheap labor supplies. He dates the supplanting of the public interest thrust by the economic motive at around 1895.

Ironically, the "presence of the raw material" was an initial reason for the would-be New South to turn to cotton manufacturing. Mill building may have fostered diversification for the provisioning of the mill village or expanded town market, but it also emphasized the importance of cotton cultivation in the upcountry. Mitchell found that to their dismay the founders discovered that "contiguity to cotton" could be a hindrance, as local cotton prices were driven up, and higher freight charges than those faced by their New England competitors had to be paid to ship cotton in from the Delta. For some promoters, the cotton mill was but an extension of commercial cotton production – another consumer of cotton in a time of fluctuating world demand. It was not rare for mill management to incur serious financial difficulties while trying to supplement mill income with speculation in cotton. More will be said shortly about mill labor and capital.

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But first it would be well to turn to another important industrial sector of the postwar South to further assess the New South program against economic realities. John F. Stover's The Railroads of the South, 1865-1900 offers a detailed overview of the transition of a substantial industry of the South from Southern to Northern financial and managerial control. [5] He distills an array of independent railroad activity into a shared process – one including rehabilitation, financial prosperity and stagnation, fierce competition and cooperation, new construction, combination, and consolidation – all under steadily increasing Northern participation, resulting in the welding together of Southern railroads into an efficient transportation network by 1900. The geographical area taken into consideration is confined, however, to the Confederate states east of the Mississippi, together with the state of Louisiana and the border state of Kentucky.

In 1860 only one-third of the South's railroads had attained a length exceeding one hundred miles; those that had, taken in aggregate, comprised two-thirds of the region's rail mileage. The Southern railroads of this period varied from those in the North in many ways – few favorable, except perhaps for the lowland terrain: the routes were limited, construction standards were not uniform, rails were cheaply constructed, the "rolling stock and motive power" was less substantial, bridges and other facilities were poorly maintained, and their financial structures were weak. These problems were exacerbated by war damage; the disparity between Northern and Southern railroads was also widened due to the former's prosperity during wartime and the collapse of the South's currency and its credit facilities at the end of the war. The federal government helped some to rehabilitate Southern railroads by performing repairs and by granting credits for the purchase of its rolling stock. In the 1870s Congress absolved the railroads of some $3 million in debt on those purchases, but the railroads had pre-existing debt on top of which was added the debt incurred in the rebuilding effort.

Stover perceives four major phases in the transformation of growth, integration and control of Southern railroads. In the first phase, lasting less than a decade after the war, Southern lines were rehabilitated and carpetbaggers initiated schemes for new lines and the takeover of old ones. But there were [as] few [as] 21 lasting acquisitions by Northern interests. The early development of the Southern Railway Security Company demonstrates some initial inroads toward Northern management in the first phase that were only partially rebuffed by the depression, but more typical are the corrupt, state-debt-engendering carpetbagger activities in states such as Georgia and Alabama. With the Panic of 1873, until the year 1880, in excess of one-half of Southern railroads fell into a process "of default, receivership, and either foreclosure or reorganization"; the results were often significant inroads by Northern financial interests. The Illinois Central's move south illustrates vividly the development from brief carpetbagger venture, through the stages of default, on to Northern absorption. From 1880 until 1890, the Southern lines experienced rapid expansion in the form of new construction and/or corporate consolidation – again increasing Northern influence in a number of rail lines. The history of the Louisville and Nashville line shows the rapid expansion and consolidation during the prosperity years. With the rise in receiverships in the early 1890s and intensified corporate merger and acquisition activity, Northern financial interests succeeded in gaining corporate dominance in the majority of Southern lines. The Richmond and Danville, having grown rapidly in the 1880s, went into receivership in 1892 and emerged as the core of J.P. Morgan's six-thousand-mile Southern Railway system.

Northern financial prowess effected its absorption in a variety of ways beyond those just mentioned. One such approach was the gradual infusion of Northern financial assistance into established lines for expansion or as part of a new railroad-building enterprise. The solicitation of outside assistance in reorganizing a financially strapped line led to Morgan's ascendancy in Southern railroads. Another, quieter, growth of Northern influence derived from the infusion of experienced Northern men into directorships, presidencies, or other management roles in Southern lines. Stover says that financial interest, more frequently than not, was a concomitant aspect of the presence of Northern men in prominent positions in Southern railroads. The growth in directorships is amply illustrated by the finding that in the 1860s the 25 major Southern roads had a 4% Northern directorship, while by 1900 the ten major systems, comprising 73% of Southern mileage, had a 69% Northern directorship.

By 1860 Virginia led the South in mileage, with Georgia close behind. Georgia will be of particular interest hereafter so it is worth remarking that Georgia had a very cautious prewar policy regarding the state subsidy of railroad construction. Therefore, the bulk of Georgia's railroad building in the 1850s was funded by municipal and private stock subscriptions. However, the Western and Atlantic line from Atlanta to Chattanooga "was constructed and owned by the state," and the state granted Georgia railroad companies the privilege of conducting banking operations. Otherwise Southern states were often liberal in their support of railroad construction. Stover says it was "honestly administered," but it did build huge state indebtedness in states such as Tennessee. Southern railroad stock was Southern owned, but English and Northern investors did put their money into state railroad bonds.

During postwar rehabilitation, Georgia railroads bounced back to strength early, partly because of their banking affiliations and partly because of the prudent prewar management of lines such as the Central of Georgia, which had laid away earnings in London investments. Most of the postwar railroad corruption was concentrated in the Carolinas, Georgia, and Alabama, beginning in 1868 and coming under intense scrutiny by 1872 or '73. Georgia took the lead in mileage and held it for the rest of the century. The ill effects of Reconstruction-era corruption and malfeasance were long lasting in several respects: for one, the opportunistic carpetbaggers' roads, if built, were "poorly built...and...poorly financed"; for another, the high debt incurred in railroad construction led states such as Virginia and North Carolina to divest themselves of large blocks of railroad stock, ushering in more cutthroat political intrigue and causing states to relinquish early and direct control of railroad policy. The railroads damaged by the Reconstruction policies of Democrats and Republicans, whites and blacks, Southerners and Northerners, left Southern railroads susceptible to bondholders should a downturn in traffic or the business cycle occur.

Beginning in the early 1870s, the Pennsylvania-dominated Southern Railway Security Company captured the Richmond and Danville for Northern interests. Eventually it relinquished control to the Clyde Syndicate, but only after forging a 2,100-mile system by combining contiguous railroads. Though it succumbed to 1870s retrenchment, it had established a model for the future development of Southern lines.

Of the 45 Southern railroads consisting of more than 100 miles – the author's standard for a "major" line – 25, representing 60% of the region's mileage, were in receivership in the 1870s. At the time only 28% of the directors on the defaulting lines were Northern. Nineteen of the 25 lines lost their local control during receivership and foreclosure. Afterward all 25 either remained under pre-existent Northern control, fell under Northern management, or were absorbed into a combination which was Northern dominated. The four rail combinations at the time were the Richmond and Danville system, the inchoate Plant System, the Louisville and Nashville, and the Georgia group. Two of the 25 lines passed through Northern hands, purchased by the latter group of two locally controlled and independent lines, thus returning to Southern management. In 1877 the Illinois Central acquired the newly renamed New Orleans, St. Louis and Chicago Railroad with lines from New Orleans to Cairo, making the latter line the only major road to follow the default sequence and end up annexed to a Northern railroad company.

During the 1880s Southern railroads prospered and undertook rapid new construction, augmented by merger and consolidation, but still Northern influence grew apace. The decade set a record for new construction. The reorganizations of the late 1870s and early 1880s, the business optimism of the 1880s, and the clearly perceived economic "advantages of cooperation and combination" – all influenced the move to "concentrated financial control" among Southern railways. Over the decade, eleven large lines of over 400 miles each, initially comprising 7,006 miles of rail, combined to create nine systems, which by 1890 held 55% (16,051 miles) of the region's mileage. The Central Georgia was the only one of these large systems that was locally controlled, but by 1888 it succumbed to the Richmond and West Point Terminal Company.

In the larger railroads, consisting of over 500 miles of track, Northern directorships in 1890 were up to 66% for older roads and 78% for newer ones. Roads comprising between 100 and 500 miles of track had 42% or fewer Northern directors. About 66% of these directors lived in New York City, followed in order of rank by Baltimore, Boston and Philadelphia. With other modes of influence taken into consideration, such as leases, stock ownership, or receivership, Stover concludes that by 1890 only fifteen of the 58 major Southern railroads were actually Southern managed – their cumulative mileage representing only 12% of the mileage of all the major roads combined.

The 1890s were characterized by defaults and receiverships, as well as by a continuation of consolidations, but with a much lower rate of new construction. Half of the region's rail mileage was in receivership in the 1890s. Most of these troubled lines were absorbed into the larger systems: the Southern Railway, the Louisville and Nashville, the Illinois Central, the Plant System, or one of the two new systems emerging in the decade, the Atlantic Coast Line and the Seaboard Air Line. These reorganizations, says Stover, were probably the only way to solve the persistent operating and fiscal ills plaguing all of the nation's railroads.

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Having surveyed many of the economic conditions prevalent in the South in the postwar years – the rise of the merchant credit system and tenancy, the over-dependence on staple agriculture, the formulation of the New South economic and social program, the surge in cotton mill building, and the expansion and coalescence of Southern railroads – it is fitting to round out this survey, preparatory to a critical evaluation of the scholarship, by looking through the eyes of another source at the bulk of the population in the rural South, and to their political representatives, in order to discover how they fared and reacted to the 1880s' prosperity and the 1890s' economic downturn. Georgia and the political culmination of the Farmers' Alliance movement in Populism is as rich a place as any to obtain a perspective of human affairs, and a remedial thrust, that counterbalances the New South view. One finds by such a search a society woefully inadequate in economic and political mechanisms. In recounting the political experiences of the preeminent Southern Populist is his biography Tom Watson: Agrarian Rebel, C. Vann Woodward delineates and artfully recomposes the "impersonal forces of economics and race and historical heritage" at work shaping the development of the South – at work thwarting the aspirations and wasting the lives of many a rural Southerner. [6]

Born in 1856 in the "plain house" on his grandfather's plantation outside of Thomson, Georgia, Edward Thomas Watson witnessed the demise of the solid Georgia squirarchy during and after the Civil War. Memories of stateliness and self-reliance were among the few treasures of his childhood paradise that Tom carried with him through the years of "insecurity and poverty" to follow the war; however, from an early age Tom supplemented his sense of want with a love of literature and history. Living in the vicinity of such models as Robert Toombs and Alexander Stephens, he studied Southern politics by observation. In Tom's home county the population was 60% black. In 1868 the KKK helped reduce the Republican vote to a total of one, until 1869 when the U.S. military took supervision of the area. By 1868 the family plantation was lost to creditors. Despondency beset his father as the family moved from one small farm to the next.

Woodward paints a portrait of a sensitive youth who was astute in noting the complex relationships around him; he was a youth inclined to a dramatic rendering of his perceptions, including imaginings of indignities that he felt derived from his family's reduced circumstances. Insults, supposed and real, quickly raised his ire. Says Woodward, Tom was "a myth-hungry boy groping for nourishment." Beginning in 1872 his activity at Mercer University focused on oratory. Having spent some time teaching in a rural community in Screven County – and entertaining the folk with his fiddling – he read law and in 1876 established a practice in Thomson, the county seat of McDuffie County.

Though susceptible to impulsive actions and evangelical enthusiasms, Watson set out on a decorous and industrious path to emulate the big men of Georgia law and politics, and to rescue his family from humiliation. By 1887, together with his wife and three children, he had acquired $30,585 in assets, including a 700-acre farm on which he settled his father. By 1891 he had become one of the highest paid country lawyers in his state, and his specialty was criminal defense. Woodward liberally peppers this account with examples of Watson's use of humor and irony, his references to class differences and his mastery of logic and folk idioms, in his proud endeavor to command the "popular tide" in courtroom and stump debates before his largely rural audiences. Woodward meticulously reconstructs this agrarian milieu, embedding Watson firmly in the middle of it, despite his professional, intellectual and financial status.

In postwar Georgia the Democratic party was the binding medium for greatly divergent political tendencies. Woodward traces the tensions between the agrarian and industrial factions from the resistance of Toombs and Stephens to the New Departure accommodation movement in 1872. The friction intensified at the Constitutional Convention of 1877, when Toombs convinced delegates to prohibit "state aid to railroads and public corporations" and "monopolistic combinations of railroads." The New Departure Democrats were dominated by men of commerce and industry who vehemently contested Toombs' arguments. Toombs' agrarian critique of capitalistic influences and the new constitution notwithstanding, the politicians that redeemed Georgia were New Departure men, and they did not share the spirit of the old ruling class, nor did they represent "the great body of small and middle-class farmers who made up the state." Some 90% of the population was left out of the Georgia Democrats' affiliation with Eastern capitalism. "Submissive loyalty" is seen by Woodward as the key to the new political order. It was said that because of threats to the home rule of Southern whites – much of which centered on black suffrage – "white men could not divide on lines of class interest" and expect to retain local control. This issue, a heritage of Reconstruction, perpetuated the operation of a political machine which had empowered itself to act as guardian of political and electoral activities. Independent movements met with fierce opposition, because the ruling Democratic line held there could not be dissent and white supremacy. Tom Watson appeared on the political stage in 1880 and gained instant notoriety. He joined a challenge to the nomination of Governor Alfred Colquitt to another term on the grounds that Colquitt's affiliations with the railroads had fostered corrupt political practices. A protest against the machine methods used to force Colquitt's nomination transformed itself into a rump-convention nomination of an opposition candidate. This campaign brought condemnation down on Watson's head, because it was said the black vote would once again be enlisted to settle a political issue between Southern whites. Watson hit the stump with conviction, and his participation in the insurgency won him admirers. Henry W. Grady led the campaign for the business faction, and Colquitt won with the black vote, obtaining only a minority of the white vote. The theme and methods of future confrontations were set: the one-party, capitalist forces would oppose the insurgent agrarian forces, and the latter would be beaten down by a machine using every method of electoral fraud and intimidation used in the South since the beginning of Reconstruction. Watson had shown his inclinations and seen his constituency, but for another decade the conservatives managed to close the breach in the Democratic ranks as the New Departure became the New South, with the encouragement of an improving economy and the sunshine of Henry Grady.

With the endorsement of black voters, Watson fought his way to the Georgia House in 1882 as the defender of the farmer against the betrayal of the Jeffersonian ideal by the capitalist machine. When his legislative initiatives to aid troubled farmers were rejected he became irritated and resigned his seat after the first session. Meanwhile regeneration in the region was touted by Grady. Woodward does not deny that gains were made or that the whole of the South was desperately eager to grab a piece of prosperity; he finds it hard "to condemn utterly the motives and hopes" of the New South literature. The "romanticism of the Southern middle class" almost enticed Watson, but he clung to the traditions of his class and section. The Atlanta enthusiasts failed, however, to inspect the hinterland; poverty was growing, and with it a dissatisfaction that was willing to make a spirited fight for a share in the prosperity the New South men claimed existed. In 1888 Watson's biting humor was already back at work in rural speeches, arraigning banking laws that denied currency to farmers, the bankruptcy laws that bailed out the railroads at public expense, and the tariff laws. Watson's reception in the hinterland refuted Grady's image of the contented, diversified farmer.

Between its entry into Georgia in 1887 and 1890 the Farmers' Alliance movement, which organized whites and blacks, landowners and tenants, for an array of cooperative undertakings, grew to 100,000 members in the state. The movement elicited a semi-religious intensity as it began to teach business and political techniques to farmers, and to collect and disseminate statistics describing agricultural and financial conditions in the region and in the nation. In this revolution of the soil, totally attuned to his disposition, Watson sensed a principled fight that could break the grip of the Georgia Democratic machine. In 1890 the Southern Alliance decided to use its platform as a measure of the worthiness of Democratic candidates for Alliance electoral support. In 1889 Watson embraced the platform for his run for the Congress in 1890. He enthralled his rural audiences with the purity and passion of his principles and with his homespun, fact-laden retorts to criticisms of Alliance aims. While the press lashed out at the platform and anti-business fulminations that might erode the confidence of outside investors, the Democratic leaders believed they could control the Alliance politicians from within the party organization. Although Alliance-pledged candidates won in 1890, there were soon signs that the Democratic party meant to consume the Alliance without delivering the promised results. Watson was the lone Southerner among six Congressmen from the West whose defense of platform purity led to a confrontation with the Democratic caucus, resulting in the congressional split and the South-West political alliance that created the Populist party. Watson had already launched his weekly, the People's Party Paper, giving him direct access to his constituency and beginning his long and powerful journalistic career.

In his floor speeches, as in his fulminations on the stump and in print, Watson was adept at generating outrage among Southern Democrats. After one session in Congress he had propelled himself into the political leadership of the Georgia Alliance constituency. Watson said that Populism stood "for the yearning, upward tendency of the middle and lower classes," and that Populists were "the sworn foes of monopoly...of power, of place, of privilege, of wealth, of progress." The old weapon of the color line had to be overcome: Watson argued that racial antagonism shackled reform and strengthened the forces of capital and machine politics. With its old war cry of white supremacy and its arsenal of electoral abuses, the Southern Democrats smothered Watson and the Populists in 1892 and 1894, yet the ranks of Populism were growing and Populists were winning more offices.

In 1894, the worst year of the depression, unrest among the rural mass of jobless industrial workers and indebted farmers increased, as did concerns among Southern Democrats, as President Cleveland's seemingly callous inaction and concentration on preserving the value of the dollar offered no relief. Watson saw "nationalism" as the proper alternative to individualism in controlling industries of a "public nature." He noted and criticized the militancy of the capitalist reaction to signs of unrest. However, his rhetoric became more conciliatory as he watched with amusement the alarm and disarray within the Democratic party. In the rematch of 1895, arranged after the machine's electoral outrages in his congressional race of 1894, the Democrats began to embark on new tactics to suppress dissent: they used a new registration law – a disfranchisement tactic – to deprive him of his old seat once again.

The free-silver and fusion debacle of 1896 finally squandered the credibility of the Populist organization and all but destroyed it. If the events of 1908 were the coup de grace in Populist hopes, then the year when the Democrats coopted the Populists with silver and fusion offices was the year of the coup d'etat. Woodward opens a panorama on the debasement of Southern politics in the 1890s, but it would be difficult to argue that the descent was complete. For one thing the Populists did inject a discussion of principle into Southern politics,and they did remind Southerners of the possibility of alternatives to the pernicious strangle hold of a one-party system. For another, the nadir of politics for Tom Watson clearly lay in the future. In 1896 Watson held to the "middle-of-the-road" policy of the hardline Populists, eschewing the dilution of principles and strengthening the trust in himself by those still hopeful of real reform. He had the following to recover, if he could maintain his political bearings.

Retiring from politics to renew his finances and to write, Watson had, by 1904, acquired some 9,000 acres and settled into a genteel plantation life, but he remained a restless soul beneath his personal concessions to "capitalist acquisitiveness." He was abandoning his dream of the South-West alliance as he turned to an ideal of renewed sectional autonomy. His taste for revolt was as strong as ever – his political ambition perhaps stronger. After his 1904 run for the presidency on the Populist ticket, he won new allies in the Northeastern urban protest movement; the progressives derived much from the agrarian reform impulse, but they would pursue orderly change within the major parties. Watson put his personal touch on the muckraking genre of journalism: he, too, criticized abuse and named names, but he too frequently neglected to document his exposes, which were laced with violent overtones and repetitive ridicule.

His 1904 campaign met with the usual charges of race betrayal. But this time Watson turned on that traditional Southern Democratic bugaboo with a chilling political logic that boded ill as a measure of his temperament: he challenged the Democrats to disfranchise the black voter, pledging his support to the gubernatorial candidate who would pledge to a reform platform and to the disposal of the much-abused black vote by constitutional amendment. His strategy was to position himself and the Georgia Populists as the arbiters of state politics. Hoke Smith took up the coalition in 1906 and carried through with practical reforms compatible with Populist calls to curb machine corruption and to rein in the railroads and public utilities with a stronger railroad commission – and he disfranchised many of Watson's black farmers.

Watson's enlarged influence had an unsettling effect on his predisposition to willfulness and vindictiveness. His nightmare of political disorientation that followed in 1908 was reflective of a larger condition, as American politics entered a period of realignment that obliterated established guideposts. In danger of alienating his constituency and losing his influence, Watson used his personal publications to attack the old cast of capitalist villains, venturing as well into a diffuse castigation of all manner of threatening or merely vulnerable entities – religious, racial, ethnic, and commercial loosely connected by his lurid, excitable imagination to the problems of frustrated Southerners. Watson stood at the crossroads of political crisis, attacking capitalism and socialism; he struck out on a path of moral and cultural purity – the defense of agrarian individualism, private property, Southern womanhood, and white supremacy, but without a practical reform program. He managed to rebuild a political following of men whose decreasing chances of economic redemption made them thirst for even vicarious revenge. But with his accession as a state power broker without his restraining principles, he was held at arm's length by Democratic politicians – his having long before become incomprehensible to his Northeastern progressive friends.

The war and Watson's protest against it did elevate his thinking to a higher plane – just as the war and the Russian Revolution worked to lower federal policies in some areas to a plane more commensurate with Watson's suspicious mode. With the advent of Wilson's war powers and Watson's outspoken stance in defense of civil liberties, Woodward says Watson "seemed to experience a reborn sense of responsibility." He certainly enjoyed a resurgence in popularity that lifted him from the brink of delirium in 1917-18 to a spirited attack on the proscriptive madness of 1919 and into the U.S. Senate in 1920. Until his death in 1922 his fulminations against imperialism, his growing truculence in relations with colleagues and the Harding administration, and his advocacy of the recognition of the Soviet Union filled his public life. He attacked U.S. policy for attempting to crush Soviet commerce and lambasted politicians for their incessant condemnation of revolutionists. Until safely buried away, he succeeded in baffling the pundits of his era – and in allowing complacency little ground.

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Much ground has been covered on this topic of post-Civil War economic development in the South. Before concluding, something should be said in evaluation of the historiographical method and style of the six sources from which this material has been drawn.

Eric Foner's narrative approach is lucid and his argument almost always cogent. The work's primary organizational weakness can hardly be considered avoidable, given the work's scope and the integrity with which a great mass of primary and secondary documentation has been woven into it: there is a loss of continuity in the exposition of particular topics – for instance, the distinctive development of the individual Southern states is elusive. Most distressing is the fragmentation of the all-important reorganization of the South's economic structure. Nevertheless, the interlocking nature of all the rapidly evolving Southern institutions is not sacrificed, and is probably enhanced, by this dispersion.

Only rarely does the tinge of moral indignation that accompanies every thwarting of black advancement during Reconstruction manage to subvert the dominance of economic issues. Occasionally, when commenting on instances where the perfidy of Northern Republicans or the obstructionism and hateful acts of Southern whites impeded the freedman's progress, Foner's historical detachment drifts toward the perimeters of objectivity: "The end of Reconstruction would come not because propertyless blacks succumbed to economic coercion, but because a politically tenacious black community, abandoned by the nation, fell victim to violence and fraud." Such a statement seems inconsistent with the economic criticism he takes pains to level at Reconstruction policy, and it undermines credibility by making everyone blameworthy but the blacks.

There is obviously much justice in compensating the prime victims of reaction, but one must not so enlarge the place of the black that the travails of the white segment of Southern society are submerged, otherwise scholarship and synthesis succumb to the disproportionate considerations of earlier benighted times. However much vitality he gives to his survey by his healthy distribution of grass-root human illustrations – usually offered in the form of social history pertaining to the emergence of the black community and black organizations – Foner is deficient in his elaboration on the plight of the white upcountry men. But it must be conceded that he makes a strategically sound organizational decision in starting Reconstruction during the war, because he is thus enabled to establish a foundation for policy in the grass-roots initiatives and makeshift solutions of wartime occupation, thus better laying the groundwork for relating the impact of larger policy decisions on the daily lives of the humble and for connecting the aspirations of the minor men with the greater tide of events.

As intimated, Foner wastes no sympathy on the resistance of white Southerners to the social upheaval in which they, too, were caught. He admits no legitimate human aversion to abrupt changes which also happen to bring loss of power and economic well-being. He says: "An enduring consequence of Reconstruction's failure, the Solid South helped define the contours of American politics and weaken the prospects not simply of change in social matters but of progressive legislation in many other realms." One might take exception to such a statement without even wielding the fine arguments to the contrary offered by C. Vann Woodward: one might ask why should not the Southerner, just as the back-sliding Northerner, take part in defining the national identity. By his own excellent work he has shown Reconstruction to have been an experiment for which the country was only partially prepared institutionally, technologically, and psychologically. The "politics of development" in the uncharted West were not the same as imposing an economic program for the redevelopment of a conquered but proud agricultural society.

One concession should be accorded Foner on the matter of his extensive coverage of the welfare of blacks: he does a fine job in starkly drawing a portrait of the terror engendered by the Ku Klux Klan from 1868 to 1871. His sense of balance is readily apparent when he reveals that from many Northern Republicans the violence of the early 1870s did not rally support for Reconstruction governments but rather brought further scorn down on their heads from those who judged "the capacity of a people for self-government...by its inclination and capacity for self-protection." Of course black citizens were trapped: self-defense was attempted at Colfax, Louisiana, in 1873 and 280 blacks died. The Ku Klux Klan Act of 1871 was the last major measure to fortify the beleaguered camp of Southern Republicans and those blacks that Liberal Republicans feared were becoming permanent "wards of the nation."

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The Roger Ransom and Richard Sutch study of the cotton South draws on 27 counties selected from the eleven former Confederate states for its statistical sampling. Where information was not available by county they, drew data from the five prominent cotton states previously mentioned. They go into extraordinarily detailed information about their methodological approach: their statistical procedures, basic calculations, and information pertaining to the quality of archival sources are elaborated upon in a large section of appendices and in extensive footnotes. This is done for good reason: they have drawn their often dramatic and unequivocal conclusions from samples and interpolations, which are then used to construct a model of typical conditions in the cotton South. Furthermore, they intend for this paradigm to be of use in evaluating the entire Southern economic system.

Frankly acknowledging the potential their approach may have for obscuring deviations by reducing individuals to economic units compared in the aggregate, Ransom and Sutch proceed to communicate patterns of social relations quantitatively, which tends to have the merit of instilling confidence in their interpretations; coupled with their thoroughness in reviewing various angles of historical problems, this produces an effect which is much more than the sum of the authors' words and figures. As Foner has done, they inject just enough interpretive indignation at the waste of the post-emancipation economic system that they breathe a pertinence and warmth into what might otherwise result in just a complicated compilation and analysis of census data. The value such economic and demographic statistical analysis has for detecting and verifying the historical drift of social relations is time and again illustrated in this study. Of all the studies reviewed herein, this one, by virtue of the novelty of its methodology and the freshness of its logic and perspective, stands out as a groundbreaking enterprise – but it is not without its troubling features.

The most disquieting aspect of their interpretation is that it relies so heavily on estimates to connect the gaps in raw data and render the numbers meaningful. Moreover there are instances where pertinent questions seem insufficiently addressed or where an alternative interpretation seems equally as inviting. In arguing the insignificance of war damages on work implements, the authors do not attend to the problem of how liquid capital or credit was to be procured to make replacement purchases. They simply say, "the same regenerative mechanisms that prompted the rapid rebuilding of the South's manufacturing sector" could have been employed to acquire the $25 worth of implements required per worker. This seems like a small sum until one recalls their estimate that immediately after the war "a farm of 40 acres with one mule would cost...$250 to $300." Elsewhere they simply dismiss the amount of Northern investment in the South as insignificant and not an adverse factor of itself. Another puzzling aspect is the decline in wages by 1868 by as much as 25 to 40% in the midst of a labor shortage in which blacks are said to have gained leverage in their negotiations with landowners.

The revelations of Ransom and Sutch compensate for such momentary discomforts, for they impart a commonsense appraisal of human economic activity that delights in that it makes economic decisions seem solidly founded in reasoned motivations. An efficient economy is made to appear to be an automatic partner in the march toward freedom and justice. Perhaps their model economic system is a bit too rational – but analysis has few other intellectual instruments with which to work.

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The organization of Paul Gaston's study is well designed to build, in a direct and deceptively easy manner, a thesis that is remarkably complex in its social dimensions and in the structure of its exposition. Referring to ideas of C. Vann Woodward, the author sets out to explain the path of persuasion taken by the New South advocates. Gaston conforms the thinking of the advocates to that of Woodward when the latter said that the South's principal claim to peculiarity was the contrast of its "poverty, frustration[,] defeat and...moral dilemma" with the American legend "characterized by economic abundance and opportunity, success and invincibility, and...moral innocence." Proceeding from its roots to an appraisal of its legacy, Gaston elaborates, in a pattern corresponding to Woodward thoughts, how the New South creed worked to replace Southern deficiencies with an image of opulence, triumph, and innocence.

In his analysis of how the Old South myth helped gain credence for the New South creed in both the North and South, Gaston parts company with W. J. Cash by asserting that there were yet real distinctions between the two concepts. Gaston is particularly effective in addressing what he considers a major misreading of the differences between New South and Old South. Bridging the supposed enmity between two of the most potent intellectual and emotional forces in Southern history while hold them distinct is of strategic benefit to his explanation. His enthusiasm on this subject adds an extra burst of vitality to his work.

While pockets of obtuse resistance from diehard adherents to the memory of the Confederacy rhetorically sparred with the new movement, the New South spokesmen and their far-flung associates in the publishing world managed to reconstitute the image of the Old South. The new program served as a medium for mythmaking, and the revised Old South concept served as a vehicle for winning sympathy from some important quarters – the North and the more sentimental of the Confederate diehards. While explicitly pointing out what was no longer economically viable in the old ways, the New South men related their creed in terms compatible with certain "values and aspirations" ascribed to the past. The persuasive impact of the New South campaign was dependent on the successful marketing of the two Souths outside of the region without offending Northern principles and inside the region without violating cherished allegiances.

Daniel Tompkins could not afford to be as blunt as William D. Kelley was in castigating Southern aristocrats. Gaston explains precisely how Tompkins' formula of seeking traces of manufacturing interest within the antebellum South served the purpose – along with Edmonds' account of Southern history – of rendering industrialization an indigenous rather than an alien development. The popular Southern literary flowering of the 1880s, and Northern interest in it, served admirably the blending of the two conceptions of the South. Gaston explores the prevalence of the "theme of reconciliation" in these romanticized interpretations of Old South life as it encountered the North. Where gallantry, happiness, and humor abounded, the New South doctrine found a cozy venue for attaching commercial courage, unlimited capacity, and optimism to Southern roots. For Gaston, the most convenient and pernicious aspect was the pervasive portrayals of the mutual devotion between slaveholder and slave and the contentment of the latter. Gaston convincingly demonstrates that it was but a small step from plantation paternalism to cotton mill philanthropy.

The Old South and the New South performed a vital function for one another even though the two were distinct: Northerners hungrily consumed and came to admire the romantic Southern attitudes absent from their own culture, says Gaston, and with their admiration Southerners won both renewed pride and sympathy. Gaston suggests, perhaps too strongly, that C. Vann Woodward fell short of perceiving this symbiosis and its persistence in Southern history into the 20th century. However, Gaston's elaboration does tend to strengthen his assertion that the mythmaking was less conscious and cynical, and that the alliance was more mutually beneficial and long lasting than previously thought.

* * *


The structure of Broadus Mitchell's study seems simple and straightforward, but the convolution of argument within his four basic divisions is distracting and a disservice to his unusual but not unthorough brand of scholarship. The difficulty lies in his tendency to lose the focus of each area of examination and his neglect of an overarching theme to relate these areas to one another and to make of his work more than a survey. Frustratingly long digressions in pursuit of arguments with secondary sources or in presenting the point of view of a primary source – which are often subsequently refuted or qualified with vagueness – are a feature that can undermine an otherwise cogent and unique historical document. On several vital topics, which he pursues with much-deserved energy, he allows his argument to stray or fade into inconclusiveness: cases in point are the topics pertaining to black labor in the mills, wages, dividends, and the social origins of poor whites.

Oddly, much of the substance of this work is found in the footnotes, where long passages of primary-source material can be found. There, too, are extensive segments of personal interviews with men who were first-hand participants in the cotton mill buildup; these convey a vivid sense of the spirit in which the campaigns were waged and a feel for the way in which business of the day was conducted. Long quotations of such original quality can provide color, but if overdone the technique can also add displeasure that thoughts are not logically unfolding. At times Mitchell seems overly adamant to prove that there was no industry before the war or during Reconstruction to match that of the 1880s – or to convince his reader of the noble impulses behind the mill campaign. Such a determination or belaboring casts doubt on the comprehensiveness of the evidence being presented.

One interesting aspect of Mitchell's dissertation is Mitchell himself: through his father and his own experiences he imbibed the patterns of thought and enthusiasm of New South industrialism in its fresher form. He displays his astuteness of insight in remarking upon the motivations behind the historical assessments of men like Tompkins, Edmonds, and Edgar Murphey: he says they were efforts aimed at giving industrialism prewar Southern antecedents. He does not himself object to endowing the South, old and new, with men of strong "social morality"; he does however insist on phased changes in economic ideas and circumstances.

Mitchell's study has its weak edges and outdated sentiments. Where one is earlier told that "political and social reforms...are really contingent upon economic reorganization," Mitchell turns around and asserts that a "change of heart" overcame Southern attitudes regarding work and poor whites, prompting the South's abrupt move to reorganize its economy with industrialization. Taking undue advantage of the old profligate-Negro-rule myth in order to show dramatic improvement in the fiscal responsibility of 1880s-era leaders, he says: "Reconstruction governments, under radicals, outsiders and blacks, had attempted a political display through wasteful, ruinous expenditures." The new program represented a "Real Reconstruction." Still, such passion does much to compensate for other flaws. His applause for a struggling industrial democracy, still mired in agricultural colonialism in 1921, at the time this work was written, is certainly as justifiable as the original New South advocacy, intended to hearten Southern persistence. And his method is a good deal more scientific.

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To avoid swamping his reader with the histories of a multitude of railroads, while yet achieving comprehensiveness, John Stover applies a methodology, sparingly laced with maps, charts, and statistical comparisons, that is worthy of commendation. A litany of railroad defaults and absorptions would have benumbed the most ardent of railroad buffs, if presented without the imposition of a simple order, restraint in selecting data, and the reduction of the historical process involved to an overarching pattern. Stover does a masterful job in organizing a mass of data into a coherent theme. Unlike Mitchell, he employs redundancy strategically in order to reiterate that theme.

First, he limited his research to railroads of a length of at least 100 miles. Second, he gleaned from his data a pattern of phased changes which permitted him to delineate the transformation in a few major steps; these phases reflect both fluctuations in the overall economy and the internal dynamics of corporate survival, expansion, and maturation. The salient process is one of appropriation of weaker railroad units by more able financial groups, followed by growing coordination among facilities with shared objectives and financial components, thus moving toward an integration of larger rail systems within a regional network. Third, he illustrates each of his major phases with an expanded history of the railroad system that best explains developments that characterize that phase – however, many of the systems experienced to some extent all the phased steps of development.

As interesting as the personalities, financial and managerial statistics, and the explication of the takeover process are, Stover's attention to the strategic planning of these railroads is of value because of what it reveals about the economic environment and prevailing trends of the time. Stover points out that New Orleans by the 1850s was concerned that river trade with the upper South was being threatened by the railroads to Baltimore and Philadelphia, that Louisville merchants were attempting to divert this Northern trade, and that Louisville in the early postwar period gained over its railroad-stranded rival Cincinnati by the appearance of the general-store system in the South. Like Mitchell's mill campaign, the enthusiastic subscription of railroad stock by local individuals and public entities conveys the impression of a cooperative, commercial spirit – somewhat belying Mitchell's convenient casting of the South in a mold of rigid rural isolation. It is unfortunate that Stover's design did not permit an exploration of the impact of Southern railroad development on the Southern population and on the Southern economy as a whole.

Stover's fondness for the minutiae of technical improvements in railroads, in everything from bed building, to locomotive design, to passenger conveniences, and for recounting the histories of the major systems, is evident and contagious, but by no means excessive. The details are just sufficient to give a picture of distinguishing features and to add life to an account otherwise peopled with railroad tycoons of all colorations and degrees of scrupulousness. His excursions into these topics are parceled out so as to stimulate an understanding of his theme rather than to overcome it. The first chapters on the roads in the 1850s and 1860s are full of captivating tidbits. The problem the South had with transfer points is a good example: Stover says the Southern manager was reluctant, even in wartime, to allow his road's cars to pass beyond the terminus of his line, causing easily imagined delays in the transport of soldiers and supplies. That the entire South had less capacity to build replacement cars than did the state of Pennsylvania speaks clearly of the failure of Southern economic planning and public mechanisms. That the South found itself without sufficient iron for replacement rails, thus necessitating the stripping of branch lines to repair main lines, conveys in full force the irony of misapplied attention that would continue to taunt Southern economic development. Sherman, of course, made short work of anything left in his vicinity from Georgia through South Carolina. This and the rest of Stover's catalogue of war damages and wear make for an effective injection of lively military history while building a foundation by which to compare subsequent developments.

Stover is very cautious in stirring harsh judgments in his account of North and South financial and managerial rivalry. A rivalry spices up the analysis, but in the end he delivers an image of Northern domination that provided a financial stability and orderly management largely unknown to the region's postwar railroads – a Northern domination that permitted the region, for the first time, to benefit from a functioning, maintained, coordinated, and efficient transportation network with lower rates than before.

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All of the merits of C. Vann Woodward's biography of Tom Watson cannot be enumerated here. Nevertheless, there is an achievement deserving special mention: Woodward's depiction of ideological nuances over time. By patiently tracking the shifts, in ideas in Watson's writings and speeches, couching them in a solid analytical narrative, Woodward reconstructs a complex transitional phase in Southern history, expressing a comprehensible flow of historical relationships with such artistry as to transmit a feeling for the emotional undercurrents that accompany economic, political, and social events. Nowhere is this more poignantly executed than in the descent of Tom Watson's integrity around the year 1908.

Woodward, having taken the reader from the persecution and splintering of the Populists through the withdrawal of Watson into literary efforts and rapid financial advancement, comes to the years when Watson arrived at practical influence in the way Georgia functioned, beginning in 1906 via the Democratic machinery but made possible by his loyal Populist followers. Watson recklessly employs his powers for personal interests, damaging the very reforms he has purportedly labored for in the name of farmers and the public interest. Woodward wonderfully documents the full meaning of Watson's behaviour when he briefly reviews the letters from old Populist loyalists who are disillusioned and grief stricken by Watson's support of a rich railroad capitalist against Hoke Smith in the state's gubernatorial race in 1908. One follower calls the event "this mean hour of fate." Another calls Watson one of those "trading politicians" who had "become a menace to the state." In this moment Woodward engenders sympathy for Watson, even as he makes a moving revelation of the impact of Watson's betrayal of these desperate, trusting men in flagrantly disregarding the reform principles and the promise that had stood as the hallmark of Populism.

To a large extent Woodward permits Tom Watson to tell his own story. Woodward's documentation is limited for the most part to citations drawn from Watson's insightful and colorful writings. But he also provides a parallel historical essay and psychological analysis of Watson that enlarges the understanding of both the man and his times. In compositing the roller-coaster career of Tom Watson, Woodward summons exemplary discretion in selecting his material. The tight synthesis of the man's behaviour with its historical context produces a chronology that is palpable, that combines apparently meandering and distinct events into a continuous dialogue of figures and forces that is replete with logic and contradiction, verve and despair – into an image of humanity struggling against the debilities of social forms and personal flaws. A balance is usually maintained between sympathy and criticism of the principal figure.

Yet all is not perfect. Woodward could have devoted several more pages to the crucial shift in economic circumstances from 1896 to the mid-1910s. In this regard he leaves one hungry, but in fairness, the basic information is present, however in a form that takes more of an effort to assimilate than it should. Woodward's treatment of the ironies embodied in the "Bourbon Triumvirate" is one of the rare instances where his argument acquires a surfeit of contempt perhaps directed less at the historical figures than at traditional interpretations of their significance.

Woodward convinces his reader that the key to an understanding of the South's history is an appreciation of a culture which has imbued the region's people with inconsistencies which are nonetheless valuable in their separate purposes. The postwar South was led by men groping for new forms. Tom Watson and his political opponents vividly demonstrate the complexity and inadequacy of Southern leadership – of men in general. Even at Watson's lowest point, judged by present-day standards, when he luridly – perhaps for financial reasons – exploited the Leo Frank case, Woodward handles events forthrightly and dispassionately. Woodward's finesse and detail permit one to conjecture that behind Watson's growing political truculence lay the development of a professional contrarian – a self-made captive of irascibility, a restive ambition, and an errant intellectual acuity, who through force of habit restricted his audience to the perpetually troubled, who persisted in formulaic descriptions of reality without regard to the incongruity of the component parts, and who possessed an overabundance of pages to be filled with his personal appraisals of Southern life.

* * *


The pertinence of these sources to the topic under discussion has by no means been exhausted. Having established a familiarity with the authorities being used and having fulfilled the preliminaries of building a solid background for discourse, it is time to embark on a conclusion by drawing on the salient data which has been held in reserve that deals explicitly with the economic policies of the South between 1863 and 1900 and with their practical ramifications.

Eric Foner illustrates well that neither Abraham Lincoln nor Andrew Johnson nor the U.S. Congress fully realized the depth of institutional modification that would be required to produce a new South based on ideological terms which the Union had not itself fully resolved. He shows that Southern Republicans and Democrats were not acting in a vacuum but were responding to debates in the Northern press and in Washington – that there were larger economic factors beyond either party's control. Given that most of the liquid capital and control of financial and marketing mechanisms were dominated by a single section of the country, it is not surprising how often attempts were made to emulate that dominant section. But the South's economy required expert management of a different nature – a redevelopment economics that did not yet exist. The nation had not yet reordered its own economic house. The Southern Democrats failed for many of the same reasons that Foner says disposed the Republican regimes to failure: "the nature of the national credit and banking system," cyclical economic depression in the U.S., and the fluctuating cotton market. Still one has to scrutinize a postwar Southern leadership that seemed to look over the heads of real, daily problems, while hoping – and making the mass of Southern men wait on that hope – that some salvation would descend from over the horizon, from the North and Europe. One has to look closely at a leadership that seemed to be willing to transfer permanent title to their region's natural resources for little return and that seemed unable to grasp the economic significance of worker wages and farm credit.

During Presidential Reconstruction, Southern governors launched a new South economic program which worked to undermine marginal planters and white yeomen. Andrew Johnson often appointed as governors men of Whiggish sentiments, largely inimical to the interests of his own natural constituency, the upcountry yeoman farmers. Poll taxes, heaped on top of wartime losses and crop failures, helped prod the yeoman into the cultivation of cotton and dependency on fertilizers that eventually locked him in the grip of debt. To reassure Southern commercial interests and to instill confidence among potential outside investors, these governments resisted pleas for debt relief and enacted crop-lien laws. Several initiated the practice of having the state endorse railroad bonds and embarked on state-sponsored development which paralleled such activities in the North during the war. These efforts were largely unproductive. Foner says one reason was the divided purposes in Southern councils: they wanted and believed they needed immigrant labor, but immigrants were unattracted to a region where the leaders were bent on commanding a cheap labor force – in addition, the leaders were unable to conceive of a new role for black laborers, and the planters demanded that modernization not interfere with the needs of staple agriculture.

After the ascendence of the Radicals and the enactment of the Reconstruction Act of 1867, the Southern Republicans moved toward their own development programs – again with many former Whigs in the lead. Yeomen, desiring first and foremost debt relief – and then the debilitation of the planter class – were generally averse to programs that raised taxes and that were deferential to the financial security needs of outsiders. William Brownlow of Tennessee hoped to solve the yeoman's problems by bringing the railroads, and with them capitalistic development, to the upcountry.

The Southern state constitutional conventions of 1867-69 and their products are enlightening as to the political alignments at work to establish economic policy. In the resulting constitutions "the developmental spirit prevailed" and provisions for "extensive public aid" to capitalist ventures were incorporated. Foner says it was the carpetbaggers, constituting only 2% or less of the states' populations but one-sixth of the delegates, who led on this issue. With black support, homestead exemptions were provided for by most of the new constitutions, while stay laws were avoided. General property taxes replaced the hated poll tax, except where blacks – against upcountry sentiment – supported special poll taxes earmarked for schools. The land question was addressed in a substantial and creative way only in South Carolina, where the constitution "authorized the legislature to establish a state commission to purchase land for resale on long-term credit."

The new regimes emulated the policies of Presidential Reconstruction in important respects: the exemptions granted in the pre-1871 phase to capitalist ventures and the adjustment of usury and corporate property laws to bring them into better conformity with financial and commercial interests. In large measure it was this very "state-sponsored capitalist development" that badly damaged confidence in the Republican regimes; ironically, it was "the rapid spread of market relations" into the upcountry, with the penetration of railroads, that pulled the yeoman deeper into cotton cultivation and the cycle of debt. As early as 1873, the Alabama Labor Union was urging positive state remedies to the system of credit entrapment in such forms as the removal of taxation from farms that planted food crops and the heavier taxation of monopolistic and speculative holdings.

Foner, therefore, has ferreted out for presentation the recurrent and interrelated conditions that would burden Southern politics and retard the South's economic advancement for decades. He appears to be on sound footing when he attributes the characteristics of the postwar labor and tenure system in part to conflicts between labor and capital. The clash of principle regarding state activism appears to be just as crucial. The dearth of institutions in the South, including large business enterprises, made it all the more imperative that state and local leaders fill the organizational breach – that they supply indigenous solutions to local problems and demand federal assistance in providing a fair marketplace. Leaders and laborers got sidetracked. Racial competition and suspicion, coupled with the dispersed population, few occupational alternatives, and utter poverty, deterred Southern labor from uniting as a class to demand state help or to challenge the new concentrations of capital.

If Foner informs students of the primacy of economics in setting the parameters of the New South and demonstrates the importance of state activism, then he also puts the Southern statesman in a role of extraordinary responsibility, the equal of or superior to that of the capitalist in restructuring the Southern economy. Without political organization that sought concerted effort for common interests based on Southern realities, the South would remain underdeveloped. These factors were key to progress in the realization of the revolutionary promise of Reconstruction, yet state activism often elicited much of the opposition to Reconstruction. Nevertheless, Reconstruction had alerted Southern blacks and the marginally empowered white agrarians – just as it had the newspapermen and capitalists – to the positive potential of state involvement in mediating the systemic problems of the society. Neither agrarianism nor industrialism was subverting a free labor mechanism – the impenetrable barriers of finance and marketing, coupled with inadequate information and political arrangements, were.

* * *


Roger Ransom and Richard Sutch pinpoint agriculture as the most realistic source of hope for the growth of the Southern economy after the Civil War. Self-sufficiency it seems would have been preferable to the drain on resources that followed emancipation. Despite the six-fold increase in the output of manufacturing from 1869 to 1899 in the five cotton states on which their study focused, at century's end manufacturing only accounted for 6.5% of total employment. Without economic growth, they say, "no group [could] advance its position except at the expense of other groups."

The Southern economy was full of institutional rigidities that immobilized the labor force and obstructed the development of advantages. The withholding of education and incentives from a large segment of the labor force bled the system of its potential increase in productivity. Resources were misallocated. Among the discouragements specifically afflicting blacks were the 50% lower allotment of untilled acreage to black tenants – acreage required to restore soil – higher credit costs for items such as fertilizer, and a lower average acre allotment per worker, necessitating more intensive cultivation.

A subject that deserves expansion, in view of conclusions implied in Woodward's Origins of the New South, is the productivity of black farmers relative to white farmers. [7] Allotted 32% less crop acreage per worker, black-operated sharecropped farms in 1880 averaged an output per worker that was about 20% lower than the output on white-operated sharecropped farms, but the average value of output per acre was 3% more on the black-operated farms. That black-operated farms had a higher percentage of acreage in cotton indicates to the authors that blacks were more subject to purchased provisions. This combined with other signs of discrimination suggests that there was in operation a strategy to preserve an inequality of status that was not founded on performance, which impeded the economy, hurting whites as well as blacks.

The Southern economy needed excess income for investment, but the agricultural system removed both extra income and the incentives to invest. Had the South had the organizing capability, it could have learned a lesson from the war period and influenced cotton prices to its benefit by regulating output. A double gain would have accrued as acreage was shifted to food. The standard of living could have been raised by cotton production, but too much attention was given to cajoling for diversification and too little to organizing farmers. Industrial sector development was needed to stem the loss of capital for goods, and chiefly as an employment refuge for displaced workers. But Ransom and Sutch hypothesize that "if the agricultural sector had been able to improve labor productivity of its own, the expansion in agricultural incomes might have stimulated industrialization."

The South still had no free labor system in the last quarter of the 19th century, as evidenced by the lack of area growth and the sparsity of outmigration. Illiteracy and indebtedness were a morass that prevented innovation and mobility. Only the shock of the boll weevil, improved rural transportation, parcel post, and war were effective in unleashing labor. With the advent of "a new kind of freedom" – an economic freedom – the authors note a shift in the spheres of discrimination to ensure that blacks were kept in check once the economy could not be relied upon anymore to thoroughly do the job.

* * *


The New South advocates put the long-term management of resources in a position secondary to immediate exploitation on their list of economic priorities – that is except for the problems of soil depletion and inadequate crop mix, for which wrong-thinking, hide-bound planters and farmers were harangued. Many actual Southern conditions and characteristics were deprecated or neglected in their appraisals and proposed solutions. It is difficult to determine just what segment of the population subscribed to the doctrine, but concerning its shortcomings as a prescription for economic redevelopment and prosperity, Paul Gaston is most enlightening.

To Gaston the New South's arguments contained glaring contradictions. While asserting that the South's deficient institutions had retarded economic development, they overrelied on the region's resources to automatically bring success. Their plan was dependent on skilled immigrant labor, but they showed a proclivity to reject those immigrants that might have been available. Independence was sought through dependence on Northern investment and the emulation of Northern forms. Just as the black man's freedoms were to be placed in the safe keeping of white supremacy, the welfare of the small farmer and laborer was to be turned over to what Daniel Hill saw as an unwholesome capitalistic oligarchy.

The interdependence and reconciliation they espoused was eminently sensible, as was industrialization, agricultural diversification, and the need for renewed confidence. But dangerously high expectations rose with a confidence built on incomplete information and solutions neglectful of fundamental structural and cultural changes based on local needs. Edmonds made some of the most egregious claims contrary to fact regarding the progress of the South's economy, and Lewis Blair indicted Edmonds' journal for them in 1889. Based on such boasts, men of marginal means might well have asked where the proceeds of success were going. Walter Page was less sanguine about the gains, and his modernism disposed him to be less willing to accommodate Old South values. With distance, succeeding generations carried on the New South assumptions, which became ever more mythic in their removal from economic, political, and social realities. Digressions, marred judgment, and exacerbated internal divisions resulted from discrepancies, as claims persisted that a program for action was an accomplished fact. Page warned that glossy assessments of a practical experiment might create rigid formulas which were less than fully practical. From 1880 to 1900 the South's per capita wealth grew in dollar terms from $376 to $509, but it remained at 56% below the national average – and the 1900 figure includes the sizable increase in the dollar value of Southern properties held by outside investors.

Edmonds justified the New South's concentration on material prosperity by asserting that it was "an essential factor in ethical advancement." That is worth pondering in view of current events in Eastern Europe. There is a validity to the argument, but it might be qualified by adding that there can be no prosperity in a market economy without the institutional structures that incorporate certain ethical principles and management skills that foster regulated growth.

Gaston applauds the overall efforts and achievements of the New South spokesmen in redirecting economic attitudes and creating a vision of the future, but he lays much of the blame for the program's failures on its too close alliance with Old South concepts and arrangements. The South's natural resources and fixed assets were soon largely captive, in one way or another. The institutions and the people were ill prepared to produce and control a sudden industrialization. That the New South advocates perpetuated the Old South standard of an inexpensive and tractable labor force stands out as most harmful to the economy in that it forestalled the emergence of a vigorous worker-consumer society. Regarding its handling of resources and race, it can be said that the New South program helped erect contemporary and future barriers to Southern redevelopment. But Gaston does reveal a doctrine of far more subtlety than mere boosterism – and a vision of continuing utility – however much it was undermined by self-deception and offered promise long postponed.

* * *


Broadus Mitchell's cotton mill study is pertinent to this discussion for its insights into the development of labor beyond the farm and for its provision of another perspective on financial factors at work outside and within the South in the late 19th century. Regarding labor relations, Mitchell says it is necessary to know that the white factory owners and the poor white operatives were of a homogeneous stock, a factor which purportedly retarded the growth of social divisions along the lines of economic interest. Whites without property in plantation society had been dispossessed of their place in society, and the mill campaign was intended to bring them back. He does not deny that economic developments after the Civil War had pushed [them] even more to the margins of society. In his day, William Gregg tried to argue that "the thousands of poor, ignorant, degraded white people" in his state had a capacity the equal of blacks to serve as industrial workers; Gregg was speaking of a class of people said to number "one in every five of the whole population."

After 1880 the workers came immediately from cotton agriculture; some families were engaged in farming and left for the mills because the prospects seemed brighter. There was an ample labor supply in the vicinity of most of the mills, and the people were willing to move to work at the mills. At Batesville, South Carolina, many operatives were drawn from the women who had lost their men in the war. The ex-tenant was sometimes pulled back into farming, especially near a town, but the mountain people, when they came down to the mill, were less inclined to pull out and return.

At first, some mill projectors in the 1880s failed to see the pool of operatives available in poor whites. The "absence of cottages" sometimes caused a scarcity of labor in a town mill. Charleston had the most difficult problems with labor, because the community did not look with favor on white women and girls working in a factory, and operatives from outside felt the "censure of [the] non-industrial population." There was also alternative, good-paying work for men in Charleston. In other locations the problem was the prejudice against working for a boss evinced by rural people; when conditions in the rural community improved, labor became more scare. Where black labor was tried it was watched closely, but many had doubts about the adaptability of free blacks to large-scale mechanized factories. The primary problem was that of getting whites to work together with blacks in the factory setting.

Arguing that by and large the real wages of Southern mill workers were equivalent to those of their New England counterparts, in view of the lower cost of living in the South, Mitchell says that the paternalistic attitude of Southern management induced it to furnish goods and services [to supplement financial] wages – such as a rent-free house, firewood, and a garden plot. The primary reason was that cash was short. Wages reflected what the companies could economically afford to pay, says Mitchell. Workers and employers were often unaware of wage rates and conditions at other factories. That said, he then confesses that his judgment of rough equivalence does not make allowances for the "social disutilities" of such Southern mill characteristics as the greater use of "child labor, long hours of work, poor schooling, mischievous abetting of harmful politics [or] a contracted economic outlook." With more mills and greater competition in the early 20th century, the mills competed for labor using welfare work to avoid additional and inflexible – [and] precedent-setting – cash outlays. When they came at all, wage increases came whenever mill management was forced by scarce labor to pay more. Either paid in scrip of full value only for purchases at a company store or paid in cash for purchases at the town store, the millworker's spending power was severely constrained for decades to come.

The marshaling of capital for the new mills was, says Mitchell, one of the chief achievements of the campaign period. The methods used also proved to be a long-lasting burden. The large initial community sacrifice to provide start-up capital is of central interest to Mitchell, but the final resting place of earnings on production, and of plant control, is an essential consideration bearing upon the spending power of operatives and Southern investors, and ultimately on the growth of the economy. "Most Northern support came not from investors as such, but from commission men, machinery makers and from manufacturers establishing plants in the cotton fields." However, the founding of plants by Northern capital was not common in the 1880s. Most common was the raising of "home money" for land and plant construction first; the promoter then used that local commitment to induce machinery makers to exchange equipment for stock and to induce commission firms to subscribe to the mill's stock in exchange "for the agency" of the product. The promoters learned to be wary of the strings attached to the latter's investment; unlike the machinery makers, commission houses held on to their stock in the new mills, thus retaining a say in the mills' operations. Overtime, stocks tended to gravitate into fewer hands. New stock issues purchased by a few investors – including commission men – were the common path to plant expansion. If the New England mills were threatened by Southern activity, the New England machinery shops were not; agents of machinery makers, especially if the market was slow elsewhere, helped encourage mill development – sometimes to the point of overexpansion and risky indebtedness.

Working capital was a persistent shortcoming in mill planning; as a result mills often resorted to consigning their product to commission firms and borrowing on a part of its value at a cost in excess of normal bank charges, had such loans been available from Southern banks. The primary draw on working capital was cotton purchases. The reliance on commission firms for this purpose meant that the Southern mill that defaulted often ended up in Northern hands. Mitchell says that an initial bond issue to cover operating expenses would have increased profits by reducing the special fees paid to the commission house that purchased stock and advanced loans, and it would have given the mills greater control over their selling agent.

Much like the rural merchant, the commission house seemed indispensable to the credit and marketing system, but the arrangement worked as a continual drag on the returns to the Southern economy by virtue of the agent's financial and market power. The commission house controlled selling prices and the timing of product sales to a considerable degree. Additional commission-agent exploitation could be effected by hasty sales at below-market prices, the sale of futures on mill products beyond mill advantage, market manipulation for the purpose of speculative purchases of the product by the commission house with knowledge that prices would rise, or the practice of serving the buyer's interest to the detriment of the mill's. Mitchell's final appraisal on this point is typically mild: "Whether participation of commission men was damaging or beneficial, it was necessary and...the industry owes its establishment as much to them as to any other factor."

Because of variations in calculating dividends, Mitchell finds it difficult to arrive at a reliable average for the purposes of comparing the profitability of New England and Southern mills. But he does say that given the advantages – "newness of equipment, nearness to raw cotton, cheapness of power and labor, length of working hours, [and an] unexploited home market" – the new mills were "extraordinarily profitable." "Long hours of labor and low wages" made up for the early lack of skill in mill management in producing those profits. This system performed well except in the years 1884, 1893 and 1896, but by 1900 a new mill with inexperienced management could rarely enter the industry and survive.

The cotton mills, much as the cotton fields, became entangled in a financial and marketing system deleterious to self-sufficiency and growth, and without governmental or industry devices for correction. The earning and purchasing power of the Southern laborer was held low and inert for Southern and Northern enterprises alike – as a matter of Southern business and political policy. The laborer's immovable wage was his contribution to regional development – his memorial to the original cotton mill uplift of poor whites.

* * *


In John Stover's study one find signs of strenuous capitalistic activity in the South throughout the postwar years which harbored the promise for good as well as the potential for ill. Between 1865 and 1900 the South experienced a growth in its railways from 9,000 miles of track to 35,000 miles. By 1902, 60% of this total mileage was held within five major Northern-controlled systems. In the 1890s, when the 58 major lines were consolidated into 31, accounting for 87% of the South's mileage, Northern men held 60% of the directorships, but Georgia supplied "as many as all of the other [Southern] states combined" to the minority portion of the management roster. Of the 31 roads with over 100 miles of track, eight – which were much shorter than the others (4% of the total [mileage]) – showed much less Northern influence. And five of those were in some part Georgia roads.

Rather than dwell too much on the debilitating potential of this Northern control in an environment of capital and managerial consolidation – a position forcefully argued by C. Vann Woodward – one could take note of another perspective of promise made available in Stover's corporate history. The integration of Southern lines internally, and with Northern lines, opened a wider market for Southern produce, as shown by William Walters' exploitation of coastal garden and fruit transport in the 1880s that helped build the Atlantic Coast Line.

In a reference to the early postwar years, Stover comments that Southern freight rates under Southern ownership and management ran two and three times higher than rates in Pennsylvania – a differential carried forward into the 1870s. Postwar financial problems, light commercial traffic, and little, if any, return freight from coastal terminals were all cited by Southern management as reasons for these higher rates. However, one finds that railroads running parallel to river carriers were constrained by competition to maintain lower charges. By the late 1860s, Southern railroads were leading the nation in experimenting with cooperative arrangements to control rates and to make freight traffic move more efficiently. The Southern Railway and Steamship Association, formed in 1875, initiated the freight-rate classification system.,

Pooling operations and cooperation, both aimed at rationalizing the railroad network, continued with consolidation – though not without occasional rate wars. First competition in the 1870s, and then the advent of state railroad commissions in the 1880s, significantly lowered passenger and freight rates – particularly in Alabama, Georgia, and South Carolina. Passenger rates declined – over bitter railroad company protestations – from 4 or 5 per mile in the 1870s to 2-1/2 per mile in the 1890s – and service improved. Freight rates dropped from between 1-1/2 to 3 per ton-mile in the 1870s to 1 or less per ton-mile in the 1890s. The average rates remained higher than Northern rates; the South Atlantic states had rates that averaged lower than the national average yet higher than those for the Middle Atlantic states. Despite the fact that by 1900 90% of the South's rails were steel, Southern railroad equipment and rolling stock – like the rate differential and the whole economy – had not improved at a pace substantial enough to approach the national standard.

Not unlike Mitchell's findings, Stover observes the prevalence of small, local investment in prewar railroad stocks – even by farmers who exchanged work on roadbeds for stock. He points out that prewar charters of Southern railroads often carried devices to limit the power of larger investors in what was then a quasi-public enterprise. Sometimes investors who exceeded a certain portion of shares were allowed only one vote per ten shares, or some other graduated formula was employed to a similar purpose. Northern investors after the war often succeeded in removing these checks that had magnified the voice of small investors – and perhaps the public interest. Thereafter regulation would be left to the politicians – and if they fell into cahoots with the capitalists, the emboldened men of the Farmers' Alliance and the Populist party reminded them of the public interest from the agrarian point of view.

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C. Vann Woodward's Tom Watson contributes insight into the political economy of the late-19th-century South in several ways beyond those already mentioned. For one, much can be sifted from the economic doctrine and political platform of the Populists. For another, Woodward's background material informs this discussion with economic data that concisely summarizes the ramifications of economic conditions and policies on the general welfare of the agricultural sector of the South and on Southern politics. Much is said in refutation of the New South program of Henry Grady, for as Woodward says, by 1889 Torn Watson's program was the exact reverse of Grady's.

In 1882, as a one-term Georgia legislator, Watson condemned the convict lease system. He proposed measures to allow tenant farmers to retain the use of their personal property while they contested landlord claims against them based on allegations of unpaid debt. He sought tax relief for farmers and attempted to initiate a personal property tax to correct the disproportionately low taxes levied on urban commercial interests. Discriminatory freight rates favoring urban interests and the exemption from county taxes of railroads were other issues viewed as unfair by Watson's rural constituency. A corrective bill addressing the latter complaint was championed by him only to be defeated with the help of a liberal distribution of passes to legislators by the railroads. The pro-business machine argued that such measures would deter investment in the state.

Says Woodward: "The Southern farmer...listened apathetically to preachments on diversified crops...[, for he] had lost his independence, his industrial autonomy." The lien system was at the heart of the problem: "eighty to ninety per cent of the cotton growers" were locked in the "strait-jacket" of the debt cycle. As the value of the farmer's land declined, he moved step by step to poorer land, from landowner to tenant. Watson was sensitive to this pattern from family experience; he looked behind the lien and cotton prices that had fallen from 20 in the 1870s to 7 in the 1890s, and he saw manipulative and unrestrained bankers, financiers, railroads, manufacturers, and merchants – and unresponsive or corrupt public officials. At issue were lending laws, speculation on crop futures, corporate and urban tax evasion, tariffs, middlemen, currency laws, and the commercial "class favoritism" that permeated the federal and state governments and both national political parties. The New South men were not attending to these issues and were exacerbating the problems. They were helping to disempower the farmer and lower the prestige of the agrarian life in the value system of Georgia.

The Farmers' Alliance platform of 1889, formulated in St. Louis and endorsed by the Knights of Labor, highlights agrarian and labor grievances. Beyond a doubt it was a program containing radical elements: the end of national banks, the prevention of futures speculation, "the free and unlimited coinage of silver, reclamation of excessive lands granted or sold to corporations or aliens[,] decrease of the tax burden on the masses, fractional paper currency, and government ownership and operation of means of transportation and communication." One essential point worthy of special note is that while these allied individualists were engaged in unprecedented cooperative and organizational activities for self-help, they saw ultimate relief as depending on an expansion of government activism. They were not opposed to private property; theirs was a critique of raw capitalism, offering the corrective of a regulated capitalism compatible with democracy and workable on a broad, open front rather than on an exclusive one. As was proven in subsequent progressive legislation, it was a corrective that strengthened capitalism for agrarian and urbanite alike by bolstering consumer purchasing power and public confidence, and by building public management skills and local markets.

In Watson's first year in Congress in 1891, he introduced resolutions "to levy an income tax," to regulate the use of corporate strike-breaking militias, and to implement the Alliance's cherished subtreasury plan – a commodity warehousing and credit system which was subsequently created in a modified form over twenty years later during the Wilson administration. All either never left committee or were summarily defeated with little debate. He called for a direct vote for U.S. Senators and an eight-hour labor law, and he opposed military appropriations, saying that the people of America needed instead protective legislation to defend them "from corporations and wage slavery." In 1896, Watson's view of monetary policy was focused on the management of the currency so as to stabilize prices – free silver, like fusion, he knew would not redeem the farmer.



Watson's political transformation by 1908 speaks directly to the shifting circumstances reflected in his personal "overtones of a landed aristocracy." The middle-class members of the new Farmers' Union were representative of the altered economic and political landscape of the South also. The old dichotomy of industrialism over against agrarianism had been altered by the differentiation that had occurred within the category of farmers – and by the growth of middle-class urban interests. Says Watson defensively in 1910, in terms that recall Foner's thesis: "Unfounded are the statements that poor men can not acquire landed property." The cotton economy was changing: Watson doubled his net worth between 1904 and 1908, as the price of cotton and land values rose in the first decade of the century; however, in the same period, tenancy grew from 59.9% of farm operations to 65.4%.

* * *


C. Vann Woodward's examination of the Populist experience accomplishes well the chore of inextricably binding politics and economics in the plight of the South after the Civil War and in implicating larger American systems in the delayed recovery of the South. There remained far into the twentieth century a large category of rural Southerners and industrial workers who were afforded only the most diminished portions of American plenty. Every year of deprivation removed them further from the category of men who had succeeded in earning a bit more than a subsistence wage, in learning a bit more than their fathers. With Reconstruction, Populism, and progressivism, the South moved with the nation inexorably – but slowly – toward systemic reform through organization and a sense of equity. The fitting epitaph to the systemic ills of the postwar years is Watson's political derangement. The South's political leadership can assume much of the burden for having permitted Southern culture to lead the region astray to once more fall hostage to a confusion of ideals and the suppression of cooperative order.



1. Foner, Eric. Reconstruction: America's Unfinished Revolution, 1863-1877. The New American Nation Series. New York: Harper & Row, 1988.

2. Ransom, Roger L. and Richard Sutch. One Kind of Freedom: The economic consequences of emancipation. Cambridge: Cambridge University Press, 1977.

3. Gaston, Paul M. The New South Creed: A Study in Southern Mythmaking. New York: Alfred A. Knopf, 1970.

4. Mitchell, Broadus. The Rise of Cotton Mills in the South. The American Scene, Comments and Comentators. New York: Da Capo Press, 1968.

5. Stover, John F. The Railroads of the South, 1865-1900: A Study in Finance and Control. Chapel Hill: The University of North Carolina Press, 1955.

6. Woodward, C. Vann. Tom Watson: Agrarian Rebel. London: Oxford University Press, 1963.

7. Woodward, C. Vann. Origins of the New South: 1877-1913. Baton Rouge: Louisiana State University Press, 1951. [In the original document, this reference was omitted because the assignment was aimed at readings beyond the required course booklist. When I read this book, I was filled with rage (apparently, a necessary ingredient for my learning). But from that moment, I had a conceptual framework to help me more fully comprehend the postwar South – and American history in the one hundred years that followed that cataclysmic struggle.]



 

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