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In contrast to the slave South, northerners praised their region as a land of free labor, populated by farmers, merchants, and wage laborers. It was also home to a robust market economy. By 1860, northerners could buy clothing made in a New England factory, or light their homes with kerosene oil from Pennsylvania. The Midwest produced seas of grain that fed the country, with enough left over for export to Europe. Farther west, mining and agriculture were the mainstays of life. Along with the textile mills, shoe factories, and iron foundries, the firms that produced McCormick’s wheat harvesters and Colt’s firearms displayed the technical advances of northern manufacturers. Their goods crisscrossed the country on the North’s growing railroad network. An extensive network of banks and financial markets helped aggregate capital that could be reinvested into further growth. The Civil War, like all wars, interrupted the rhythms of commercial life by destroying lives and property. This was especially true in the South. From 1861 onward, the Confederate government struggled to find the guns, food, and supplies needed to field an army. Southerners did make astonishing gains in industrial production during this time, but it was never enough. The Union’s blockade of the Atlantic prevented the Confederacy from financing the war with cotton sales to Europe. To pay their troops and keep the economy alive, the Confederate Congress turned to printing paper money that quickly sank in value and led to rapid inflation. In many cases, Confederate officials dispensed with taxes paid in cash and simply impressed the food and materials needed from their citizens. Perhaps most striking of all, in the vast agricultural wealth of the South, many southerners struggled to find enough to eat. The war also pushed the U.S. government to take unprecedented steps. Congress raised tariffs and passed the first national income tax in 1862. In late 1861, Congress created the nation’s first fiat currency, called greenbacks. At first, the expansion of the currency and the rapid rise in government spending created an uptick in business in 1862–1863. As the war dragged on, inflation also hit the North. Workers demanded higher wages to pay rents and buy necessities, while the business community groaned under their growing tax burden. The United States, however, never embarked on a policy of impressment for food and supplies.
512 The factories and farms of the North successfully supplied Union troops, while the federal government, with some adjustments, found the means to pay for war. None of this is to suggest that the North’s superior ability to supply its war machine made the outcome of the war inevitable. Any account of the war must consider the tangled web of politics, battles, and economics that occurred between 1861 and 1865. But the aftermath of the war left portions of the Confederacy in ruins. State governments were mired in debt. White planters had most of their capital tied up in slaves, and so lost most of their wealth. Cotton remained the most significant crop, but the war changed how it was grown and sold. Planters broke up large farms into