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New England was the most advanced, an industrializing nation within a nation. Of all the regions of the country, it was least affected by the financial chaos that followed the destruction of the second Bank of the United States. The Suffolk Bank of Boston performed some of the functions of a central bank for New England, stabilizing the financial environment to the benefit of merchants and manufacturers.
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By the 1830s, the United States had a third of the spinning capacity of Britain, most of it in New England.
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The pioneering textile mills of Samuel Slater and Francis Cabot Lowell had given way to much more advanced factories. Waterwheels still provided almost all the power for American manufacturing, but the introduction of steam power was beginning.
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If the antebellum North is thought of as a nation, then it was already quite industrialized, with a fifth of the workforce in manufacturing.
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JEFFERSON AND THE YEOMAN REPUBLIC

An agrarian America, not a commercial and industrial America, was the utopia of Thomas Jefferson and his allies and followers. It was the Midwest, not the South, that was to come closer than any other American region to fulfilling Jefferson’s vision of a democratic republic of yeoman farmers. Influenced by Jefferson, the Northwest Ordinances of 1784, 1785, and 1787 sought to create the basis of an agrarian democracy in the states formed from the territory of the old Northwest (the present Midwest around the Great Lakes). The first two acts provided for the rapid transition from undemocratic territorial government to the status of self-governing states, which became Ohio, Indiana, Illinois, Michigan, and Wisconsin. And most consequential of all, in light of the long-term development of the United States, while the Northwest Ordinance of 1787 made provisions for a fugitive-slave law, it banned slavery from the states formed from the Northwest Territory.

Another policy of great importance for the evolution of a free society in the Midwest was the provision in the Northwest Ordinance that all government sales of land would be in fee simple. Yeoman farmers would own their land free and clear and would not suffer from the complex forms of “fee-tail,” or encumbrances, which in British law were a relic of feudalism. The importance of fee simple is evident from a brief autobiography that Abraham Lincoln wrote during his 1860 campaign for the presidency. Lincoln explained that his family was forced to migrate from Kentucky to Indiana and Illinois “partly on account of slavery; but chiefly on account of the difficulty in land titles.”
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A British lawyer who met Lincoln in the White House in 1864 reported that the president “talked of the landed tenures of England, and said we had some ‘queer things in the legal way’ at home, of which he seemed to think ‘quit rents’ as queer as any. And then he told us how ‘in the state of Kentucky, where he was raised, they used to be so troubled with the same mysterious relics of feudalism, and titles got into such an almighty mess with these pettifoggin’ incumbrances turnin’ up at evry fresh tradin’ with the land, and no one knowin’ how to get rid of ’em.’”
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The ban on slavery in what became the midwestern states prevented plantation agriculture from taking root in the region, making possible its characteristic family farms. In the slave states on the frontier, developers sold large tracts to planters who would bring in slave gangs to clear them for cotton and other crops. In the free states, land speculators had an incentive to divide land into small plots and supply them with infrastructure and public schools, in order to attract American and European immigrants. That was one reason that European immigration went disproportionately to the North. The two sections were roughly comparable in population in 1790, but by 1860 the free states outnumbered the slave states by nineteen million to twelve million.

In free Pennsylvania, most projects to promote infrastructure and industry were eventually adopted; in slave-based Virginia, most similar state programs failed to be enacted by the legislature.
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In turn, transportation infrastructure, including the Erie Canal and a network of midwestern canals, by lowering transportation costs, created markets for midwestern farm products in the East.

A virtuous circle underlay midwestern development. The absence of slavery meant that farmers had to rely on wage labor, which was expensive. That gave them an incentive to invest in labor-saving technology, such as McCormick’s reaper. Many farmers could afford such investments because of their success in raising cash crops for national and international markets. The family farmers of the Midwest also benefited from a supportive financial system, which allowed eastern bankers to finance midwestern farm mortgages.

Social equality reinforced the greater economic equality and mobility of the antebellum Midwest and North. In the early nineteenth century, American courts rejected the British inheritance of annual labor contracts, in favor of at-will employment, which could be terminated by either party, with wages paid to the point of termination.
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Semantic changes accompanied legal reforms. American workers adopted the term “bosses,” borrowed from
baas
, the word used for “master” by the Dutch in New York, because they did not like to call their employers their “masters,” and both men and women preferred to be known as “help” rather than as “servants.”

THE STEAM-AGE SOUTH

The third of the regional economies in the antebellum United States was that of the South. While northern reformers denounced its slavery-based social order as a relic of feudalism, the southern economy was quite modern, specializing in the supply of cotton, the essential raw material for the first mechanized global industry, the British textile industry. Cotton was to the global industrial economy of the nineteenth century what oil became to the machine civilization of the twentieth. In each case, reactionary oligarchs who controlled the indispensable material required by industry—the southern planters, the Saudis and other Arab monarchies—were able to enrich their class while holding off the forces of political and social modernization in the territories they controlled.

In 1784, customs officials at Liverpool seized eight bales of cotton brought from the United States. The officials took it for granted that the cotton was being smuggled from another source, because it was believed that cotton could not be grown in large quantities in Britain’s former American mainland colonies.
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In the mid-1780s only 0.2 percent of the cotton imported into Britain came from the United States, while cotton goods made up only 6 percent of British exports. By 1820, cotton surpassed tobacco as the major export of the South, and in that year 59 percent of the cotton destined for British mills came from the United States, while woven cotton goods accounted for almost an identical proportion, 60 percent, of Britain’s exports.
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By 1860, the percentage of Britain’s cotton imported for its textile mills from the American South rose more than 90 percent.
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The specialization of southern planters in cotton is usually attributed to the cotton gin that Eli Whitney invented in 1794. His model was the product of a long line of development, and had to be perfected by others over time.
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Demand for southern cotton from the textile industries in Britain and the Northeast grew by 5 percent a year from 1800 to 1860.
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Britain by 1860 was particularly dependent on Southern cotton.
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In 1858, the South accounted for 66 percent of US exports.
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Anticipating the industrial countries of later generations that would worry about their dependence on oil-exporting autocracies, in 1853, Britain’s
Blackwood’s Magazine
worried about “millions in every manufacturing country within the power of an oligarchy of planters.”
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“Oligarchy” was the correct term. In 1860, the one-fourth of southern whites who owned slaves had among them slave “property” valued between $2.7 and $3.7 billion, a sum larger than the total of railroad and manufacturing capital in the United States.
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Most white southerners did not own slaves. Slaveowners on average owned five slaves, but slave ownership was highly concentrated, with 27 percent of slaveowners controlling 75 percent of the enslaved population.
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In 1860, 70 percent of slaveowners owned fewer than ten slaves; one-quarter owned between ten and forty-nine; and only 3 percent owned fifty or more slaves.
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Apart from those who owned slaves, southern whites were relatively poor. In 1860, the average white southerner was 80 percent wealthier than the average northerner, but the nonslave wealth of the South was 40 to 50 percent beneath the level in the North.
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The historian William Scarborough examined the 339 slaveowners who owned at least 250 slaves in 1850 or 1860, adding up to more than 100,000 slaves in all. Half of this elite within the southern elite lived in three states—Alabama, Mississippi, and Louisiana—while half of the rest lived in South Carolina. The richest was Nathaniel Heyward, a South Carolina rice planter, who owned an estate worth more than $2 million.

South Carolinians were overrepresented among the politicians who belonged to this exclusive slave society elite: five US senators, seventeen US representatives, fifteen governors or lieutenant governors, and seventy-three state legislators.
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While hundreds of their slaves labored in the rice fields in the heat of a South Carolina summer, the Heyward family and their rich neighbors spent the months between April and November in the cool mountain air of exclusive resort villages like Flat Rock, North Carolina. The children of the planters went to resort village schools in the summer and played, hunted, and fished when the largely absentee landlord family returned to the plantation for a few months during the winter.
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When Heyward died in 1851, the inventory of his estate listed 1,648 slaves on fifteen plantations in South Carolina. To read their names is to wonder about the lives of so many people who were forced to labor so much so that a few could live in luxury. Clay Hall Plantation: Gabriel, Marcus, Neptune, Scipio, Ben, Judy, John, Leah, Maria. Lewisburg Plantation: July, Eve, Cudjoe, London, Di, Emanuel, Ben, Abbey, Sam. Middle House Plantation: Abram, Brutus, Joseph, Castle, Tim, William, Bess, Judy, Isaac, Sapho, Hannah.
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SLAVERY AND STAGNATION

Almost all of the five million immigrants who arrived between 1820 and 1860 went to the North. Because of its unattractiveness to immigrants, the South’s share of the total US population declined from 45 percent of 7.2 million in 1810 to 35 percent of 31 million in 1860. In a seeming paradox, the high cost of slave labor used in manufacturing further hampered the industrialization of the South. Southern slaveowners charged high prices for renting their slaves to factory owners. J. S. Buckingham, a traveler in Athens, Georgia, recorded a conversation with a manufacturer in 1839: “The negroes here are found to be as easily taught to perform all the required duties of spinners and weavers as the whites, and are just as tractable when taught; but their labour is dearer than that of whites . . . and the hope expressed by the proprietor to me was that the progressive increase of white population by immigration would enable him to employ wholly their free labour, which, to him, would be more advantageous.”
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In 1860, only one southern city was among the fifteen largest in the United States.
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A European visitor, Friedrich Ratzel, described southern cities in 1874: “The general character of Southern cities [is] . . . very different from their Northern and Western counterparts. . . . [T]he commerce of this area is still not connected to any industrial activity to speak of. For that reason, besides the big merchants here there are no big industrialists, no skilled workers, nor a vigorous white working class of any size worth mentioning. The shopkeepers and handworkers cannot make up for the lack of these hearty classes that create civilization and wealth. Therefore, . . . this society has an incomplete, half-developed profile like that which one tends to associate with the industry-less large cities of predominantly agricultural countries. In this regard, New Orleans, Mobile, Savannah, and Charleston look more like Havana and Veracruz than, say, Boston or Portland.”
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The journalist Hezekiah Niles, associated with the American School of economics of Henry Carey and Henry Clay, summed up the northern perception of the southern social order in 1829:

Free white labor is not honored;

The education of the poor is neglected;

A desire to excel is not stimulated;

Manufacturing establishments are not encouraged;

The mechanical class is degraded; and

Internal improvement is—
LET ALONE
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FROM EXTORTION TO SECESSION

The southern slaveowners could count on allies in the Midwest, the Northeast, and New York City. Populated partly by Yankee migrants from New England and culturally similar Germans and Scandinavians, and partly by white southerners moving north, the Midwest held the key to domination of the federal government. For most of the period between the 1820s and the 1860s, the southern planters used the rhetoric of Jeffersonian and Jacksonian producerism to make the family farmers of the Midwest their political allies.

The alliance between the South and the Midwest had an economic rationale, as well. In his 1855 pamphlet
Cotton Is King; or, Slavery in the Light of Political Economy
, David Christy explained that one reason that the planters opposed the growth of an urban, industrial working class in the North was their concern that northern industrial workers would compete with their own slaves for the food grown in the Midwest, forcing the planters to recoup their costs by charging higher prices for cotton and making the US cotton industry less competitive compared to its rivals in Cuba and elsewhere: “The close proximity of the [food] provision and cotton-growing districts in the United States, gave its planters advantages over all other portions of the world. But they could not monopolize the [global] markets, unless they could obtain a cheap supply of food and clothing for their negroes, and raise their cotton at such reduced prices as to undersell their rivals. A manufacturing population, with its mechanical coadjutors [an urban working class], in the midst of the provision growers, on a scale such as the protective policy contemplated, it was conceived, would create a permanent market for their products [food], and enhance the price; whereas, as if this manufacturing could be prevented, and a system of free trade adopted, the South would constitute the principal provision market of the country, and the fertile lands of the North supply the cheap food demanded for its slaves.”
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