Civil War

The Civil War was caused by the growing tensions between the North and South because of the North's idea of preventing the spread of slavery or slavery all together and the South's desire for slavery. After the Civil War, both sides sustained heavy losses, but a more secure future. However, the initial economic effects were devastating, especially in the south due to their transportation system being annihilated and their slowed industrialization between 1865 and 1880.

The South had sustained massive blows to their economic system through their transportation system because it was demolished. During the Civil War, Northern people destroyed what little railroads the Southerners had, thus cutting off their supply line. This caused difficulties for southerners to reestablish their economic system because they couldn't transport goods. As Reconstruction was trying to help the South, Southerners still needed to make money, and they couldn't spread their goods across the country. Therefore, Southerners began to institute sharecropping, which caused freed African Americans to go back on farms and live on farms where they also worked. These African Americans, who were recently freed, still faced discrimination and were actually reintroduced ino this pseudo-slavery of sharecropping with the same reduced laws from Black Codes. Even though the Reconstruction set out to free these slaves, it failed to do so as many of their rights were removed, and they had to work on farms for very little pay. The Southerners economy was hurt by reintroducing slaves into farms as they farmers had lacked the money to do so; they lacked profits due to nonspecialization of crops, and they were spending more due to Reconstruction and paying workers. Because southerners lacked the means of proper transportation not only could they not transport goods, but they had limited mobility. Because they lacked proper mobilization, many people never developed large cities and remained in the agriculture business, causing, again, a nonspecialized economy. This limited mobility caused a sluggish advance in their economy, and thus, they were not able to properly industrialize.

During the Reconstruction Era, the South's economy faltered due to its lack of industrialization. This lack of inudstrialization was due to the tradition of farming in the South, for rapid industrialization would be too radical of a change. As well, the South lacked the funding for industrialization because they needed the funding to go towards rebuilding their towns and farms since many farms and buildings were either demolished or burned. Without a proper funding for industrialization, the South had to remain in their agrarian economy without much reform, and with the decrease in crop prices, the South had very little opportunities to expand their economy or receive ample money to achieve subsistence level. The South, however, not only suffered from this industrialization-wise,