HY2000_Unit4.docx - Question 1 The South was not in an...

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Question 1: The South was not in an economic position to wage a successful war. Thoroughly explain why they were not, and judge if you think this had an impact on the overall course of the war. Your answer should include a comparison of the economic situations and motivations of the Northern and Southern armies, and it should describe the South's ability to benefit from a defensive position. The southern states were not in an economic position to wage a successful war. The revenue of southern states was primarily agricultural which depended on purchases of their crops. Additionally, the Confederacy lacked the cash assets to make purchases. Because of the agrarian focus, there was a lack of industrialization in the South. Most of the South’s assets were in the form of land and slaves. With limited banking institutions, or the experts to run such facilities, property assets did not readily convert to cash. Further exacerbating the problem was the inability to sell their agricultural products. Northern states and European nations were the primary purchasers of southern products such as cotton, tobacco, and crops. Through the use of naval blockades, and a lack of interest from Europeans to become involved in the war, the South lost nearly all their consumer cash. The lack cash flow made it difficult to buy weapons, ammo, and supplies for the war effort. The South was cash poor and turned to printing money to solve this problem. The South lacked gold to give value to its currency, so the currency was only as valuable as the confidence people had in it. The lack of a stable currency added to the difficulties faced by the Confederacy when they tried to raise money through bonds and taxation. The South only managed to raise

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