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Capital Goods and Southern Economic Development

Published online by Cambridge University Press:  03 March 2009

Louis Ferleger
Louis Ferleger
Affiliation:
The author is Associate Professor of Economics, University of Massachusetts at Boston, Boston, Massachusetts 02125.
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Abstract

Studies of the postbellum South have neglected the development of the capital goods industry within the region. The argument of this note is that where the capital goods industry was limited or not present, economic development was inhibited. Within the South, I focus on regional differences in the development of the industry. Evidence is presented that indicates that the development of the capital goods industry and the pattern of inventive activity (as measured by patents) varied considerably within the South. One key finding is that the plantation Old South had fewer patents per capita compared with the nonplantation South.

Type
Papers Presented at the Forty-fourth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 45 , Issue 2 , June 1985 , pp. 411 - 417
Copyright
Copyright © The Economic History Association 1985

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References

1 Mitchell, Broadus, The Rise of Cotton Mills in the South (Baltimore, 1921);Google ScholarOates, Sister Mary J., The Role of the Cotton Textile Industry in the Economic Development of the America Southwest: 1900–1940 (Ph.D. diss., Yale University, 1969);Google ScholarDavis, Lance, “The Investment Market, 1870–1914: The Evolution of a National Market,” this JOURNAL, 25 (09 1965), pp. 355–99;Google ScholarSylla, Richard. “Federal Policy, Banking Market Structure and Capital Mobilization in the United States, 1863–1913,” this JOURNAL, 29 (12 1969) pp. 657–86;Google ScholarJames, John, Money and Capital in Posibellum America (Princeton, N.J., 1978).Google Scholar

2 Rosenberg, Nathan, “Capital Goods, Technology and Economic Growth,” Oxford Economic Papers, 15 (11 1963), pp. 217–27.CrossRefGoogle Scholar

3 The first systematic breakdown of the South by plantation and nonplantation regions was done by the U.S. Census. See U.S. Census Bureau, Plantation Farming in the United States (Washington, D.C., 1916). The study divided each state by plantation and nonplantation counties. The Census Bureau identified seven states (Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina) as plantation states. Mandle reexamined the census study and found that only six southern states should be designated plantation states (he dropped North Carolina).Google Scholar For an elaboration of the census report and additional evidence see Mandle, Jay R., The Roots of Black Poverty: The Southern Plantation Economy after the Civil War (Durham, N.C., 1978), pp. 39–70. Parker in a recent article used the term “deep plantation areas” to distinguish one subregion of the South from others. While Parker does not explicitly identify these states, my research indicates that these states are Alabama, Georgia, Mississippi, and South Carolina, the subregion I refer to as the plantation Old South. These states dominated the region in the number of farms organized on a plantation basis, number of sharecroppers, and in cotton production.Google Scholar See Parker, William, “The South in the National Economy, 1865–1970,” Southern Economic Journal, 46 (01 1980), p. 1042.CrossRefGoogle Scholar

4 The plantation Old South consistently had the fewest patents granted per habitant in the United States and ranked in the bottom six in every decade. Only one state in each of the other subregions is listed in the bottom six: North Carolina (nonplantation South) and Arkansas (plantation New South). See U.S. Patent Office Gazette, census years.Google Scholar

5 The survey is quoted in Rosenberg, Nathan, “Technological Change in the Machine Tool Industry, 1840–1910,” this JOURNAL, 23 (12 1963), p. 14.Google Scholar The original map of machine-tool building establishments in the U.S. is from American Machinist, 40 (January 29, 1914), p. 210.Google Scholar

6 Kuznets, Simon and Thomas, Dorothy Swaine, eds., Population Redistribution and Economic Growth, United States, 1870–1950 (Philadelphia, 1957), vol. 1, p. 683;Google ScholarPerloff, Harvey S. et al. , Regions, Resource, and Economic Growth (Lincoln, Neb., 1960), pp. 622–23. The same trend emerges when we examine the capital stock of these firms and the gross value of Southern manufacturers.Google Scholar See Kuznets and Swaine, above, 698–99, and Clark, Victor S., “Manufacturers,” in The South in the Building of the Nation (Richmond, Virg., 1909), pp. 263, 303.Google Scholar

7 Rosenberg, “Capital Goods”; Jay Mandle, “Caribbean Dependency and its Alternatives” (forthcoming, Latin America Perspectives).Google Scholar

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9 Ransom, Roger and Sutch, Richard, One Kind of Freedom (New York, 1977), pp. 42–43, table 3.2.Google Scholar

10 Woodward, C. Vann, Origins of the New South, 1877–1913 (Baton Rouge, La., 1951), pp. 117, 124.Google Scholar

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12 Clark, “Manufacturers,” p. 282.Google Scholar Mitchell states that “Exemptions of factories or new machinery from state or local taxation made more appeal to the investor as such than to promoters and shareholders participating in community enterprises …” See The Rise of Cotton Mills in the South, p. 149.Google Scholar

13 Mitchell, The Rise of Cotton Mills in the South, pp. 76, 93, 134, 203.Google Scholar On attempts to restrict black mobility and in particular the emigrants agents laws passed in Georgia, South Carolina, and Alabama, see Harris, William, The Harder We Run: Black Workers since the Civil War (New York, 1982), p. 53;Google ScholarMandle, The Roots of Black Poverty, pp. 16–27.Google Scholar

14 A recent study states that “The promises of continuity offered by the New South spokesmen reflected … enduring planter influence … The New South's industrial investors seldom objected to the plantation style of government and politics, … In the long run it was not only the strength of conservative planter influences but the compatibility of these influences with the goals and preference of the region's industrialists that kept the plantation at the center of the New South's political and economic order.” See Cobb, James C., Industrialization and Southern Society, 1877–1984 (Lexington, Ky., 1984), pp. 16–17.Google Scholar

15 Parker, “The South in the National Economy, 1865–1970,” pp. 1042–43;Google ScholarMandle, Jay, Patterns of Caribbean Development (New York, 1982), pp. 45–47, 50–51. The large number of cotton mills in the South may appear to contradict the evidence previously presented; however, North Carolina accounted for close to 50 percent of all textile mills between 1900 and 1920 and had the fastest growth rate over these years compared with mills in the plantation Old South (South Carolina, Georgia, and Alabama).Google Scholar See Oates, The Role of Cotton Mills, p. 14.Google Scholar

16 During this period, the nonplantation South utilized more advanced farm implements—new capital goods—in the production of corn than the plantation Old South. See Ferleger, Louis, “Self-Sufficiency and Rural Life in the South,” Agricultural History, 58 (07 1984) pp. 314–29.Google Scholar