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Confederate States of America (view source)
Revision as of 16:09, June 18, 2007
, 16:09, June 18, 2007→Economics - The Inevitable Clash: while this maybe true, the points needs clarification as the South never would have fought with assurance Britain would buy their cotton.
When a businessman in the North wanted to build a factory, he would obtain a loan from the bank or from a group of investors, pay the labour and material costs to erect it, and thereafter be almost assured of some level of income as his products were produced, put on trains, and shipped to markets. The capital was constantly liquid, changing hands from one individual to another, and in almost all cases, stood to increase.
When a businessman in the North wanted to build a factory, he would obtain a loan from the bank or from a group of investors, pay the labour and material costs to erect it, and thereafter be almost assured of some level of income as his products were produced, put on trains, and shipped to markets. The capital was constantly liquid, changing hands from one individual to another, and in almost all cases, stood to increase.
When a plantation or farm owner in the South wanted to expand, his capital remained highly illiquid, because it remained tied down in slaves, land, and the equipment he needed. And while new goods from Northern factories were in increasing demand, the South found itself having to compete with goods from overseas, including British cotton. While the Northern businessman grew wealthier, the Southern businessman had a very limited chance. With the scarcity of liquid capital, no banks in the South offered the loans that they did in the North, further miring the economy in stagnation.
When a plantation or farm owner in the South wanted to expand, his capital remained highly illiquid, because it remained tied down in slaves, land, and the equipment he needed. And while new goods from Northern factories were in increasing demand, the South found itself having to compete with goods from overseas. While the Northern businessman grew wealthier, the Southern businessman had a very limited chance. With the scarcity of liquid capital, no banks in the South offered the loans that they did in the North, further miring the economy in stagnation.
== Legacy - Physical/Military ==
== Legacy - Physical/Military ==