What Happened to the Southern Economy After the Civil War?

MPI/Archive Photos/Getty Images

The Southern economy remained mostly agricultural after the Civil War, but it struggled greatly with the labor transition from slave to paid labor. Additionally, many men had left for a number of years to fight for the Confederacy, and many plantations and farms were in poor shape, unable to yield much in the way of crops. Additionally, the war had damaged much of the South’s vital infrastructure, which only increased its economic burden.

Former slaves were now able to make more decisions for themselves, and although many were obligated to remain on a plantation to earn a living, many others decided to work elsewhere, which caused a shortage of cheap labor. Black women sometimes decided to focus more on domestic duties and raising a family, while black children now had the option of going to school rather than working.

White yeoman were hit very hard during the economic downturn after the Civil War. Many sold what they could of their land and started working for larger plantations. Shops in town started selling goods on lines of credit to such workers, resulting in a debt cycle that overwhelmed many every year. These problems were only aggravated by widespread cotton crop failures in the years following the war.

During the war, the Confederacy had printed nearly $800 million in its currency, and the resulting massive inflation depleted the savings of many Southern families.