The Wealth of the American People
An immense distance lay between the styles of life of the master and the slave, as it did between those of the merchant and the unskilled laborer. Then and later, observers speculated about who did better, the hireling or the slave, an interesting question but one not as relevant as the question of why some slaves longed to be hirelings, but no hireling ever yearned to be a slave. The answer to the latter question lies not in the balance sheet of rewards reckoned in dollars, but in the difference between the uses of wealth in the two labor systems. Freedom opened and the lack of it narrowed the range of opportunities available to all. The distinction set the odds on everyone's chances of advancement. The North used its riches to stimulate growth, the South did not. Northern growth multipled goods and lowered costs by utilizing labor-saving machines and new production techniques; the South increased the output of cotton by expanding the area devoted to plantation slavery.
Merchants in the North treated their income as potential capital; underconsumption remained general down through the Civil War and left large surpluses for further investment. And the numerous middle classes, even artisans and craftsmen, swayed both by the ideals of saving and the temptations of speculation, also accumulated the little hordes which nestled in banks or went into the stocks of turnpikes, canals, and railroads or into the purchase of real estate.
The greatest share of Southern wealth went to planters, whose manners and attitudes encouraged high levels of expenditure. Except in the very largest holdings of absentees, the plantation was also the home of the master, and even the best-managed of these enterprises did not successfully separate the expenses of production from the privileges and perquisites of the household. Primitive bookkeeping, or none, obscured from the owner the margin of his profits and the scale of his expenses. Dependence upon factors who marketed the crop but also made purchases for the planter's family had the same effect. Since aristocratic aspirations encouraged extravagant outlays, often only the year's end, if then, informed him whether he enjoy a surplus or suffered from a deficit.
The planters blessed with a surplus did not think of it in the abstract as a means toward further investment. Their thoughts ran usually to more lavish ways of consuming it. Joseph Davis of Mississippi had no patience for visionary railroad schemes. But he did not count the costs of his tremendous three-story house which easily accommodated twelve guests and their body servants; and he did not hesitate to bring mechanics down from Cincinnati to install an enormous tank in the attic, into which slaves every morning pumped enough water to supply all the bathrooms. Then too, in recurrent trips to spas and to the largest cities of the North and of Europe, living on 'dainties & riding on railcars and steamboats,' the planter forgot where his money came from and champagne seemed moderate, very, at two dollars a bottle.
If a surplus nevertheless remained, the planter usually lacked the habit of calculating the merits of alternative methods of disposing of it. Choices existed; the South, like other regions of the country, had its share of promoters and of schemes for launching banks, railroads and factories. There was also advice in abundance on how to improve agriculture. But the temptation was well-nigh irresistible to sink whatever funds were available into the additional land and slaves which brought with them a good immediate return and the additional esteem of a society that measured worth by the size of those holdings. Little capital was therefore available for diversification and development.
Perennial shortages of cash and a marketing system controlled by factors and bankers, whether close at hand or in Northern or European cities, drew into unproductive debt even those rich in land and in slaves. A.A. Lawrence, Yankee merchant, in 1849 noted that he sold fabrics to Southern buyers on six to ten months' credit, while the planters were in no condition to give the same terms for the staples shipped North and had to sell for cash or very short terms. Years of falling prices and gluts as in the early 1840s caught many short, without reserves or the means of meeting fixed charges for interest and for the upkeep of slaves. On the whole, before 1861, the periods of distress were of brief duration, so that the unlucky could usually ride out the storms. But the effort to do so without cutting back on familiar luxuries left them without a disposable surplus.
In bad times or good, planters struggled against distinctive obstacles to attain efficient management. Overseers and drivers, haphazardly selected, trained and promoted, were careless and dilatory unless strictly supervised by the owners. The slaves, like most yeomen, North and South, were largely unskilled and lacked the opportunity to learn. But unlike the free farmers, the bondsmen had few incentives to improve their performance.