The North Had Neo-Mercantilism, But the South Embraced State Socialism with Forced Industrialization Like in Stalinist Russia

While the Civil War saw the triumph in the North of Republican neo-mercantilism, it saw the emergence in the South of full-blown State socialism. Nowhere did the Confederacy have greater disadvantages than in industrial output. A single county in Connecticut manufactured firearms in 1860 worth ten times more than that produced in all southern states. Except for the Tredegar Iron Works in Richmond, the South did not even have a cannon foundry. With little native industry to call upon, the Rebel government moved immediately and directly into its own war production.

General Josiah Gorgas, the Pennsylvania-born Chief of Confederate Ordnance, took the lead in establishing government-owned facilities. By 1863 his diary revealed justifiable pride in this forced industrialization: “It is three years ago today since I took charge of the Ordnance Department. . . . I have succeeded beyond my utmost expectations. . . . Large arsenals have been organized at Richmond, Fayetteville, Augusta, Charleston, Columbus, Macon, Atlanta and Selma, and smaller ones at Danville, Lynchburgh, and Montgomery. . . . A superb powder mill has been built at Augusta. . . . Lead smelting works were established by me at Petersburg, and turned over to the Nitre and Mining Bureau, when that Bureau was at my request separated from mine. A cannon foundry established at Macon for heavy guns, and bronze foundries at Macon, Columbus, Ga., and at Augusta; a foundry for shot and shell at Salisbury, N.C.; a large shop for leather work at Clarksville, Va.; besides the Armories here and at Fayetteville, a manufactory of carbines has been built up here; a rifle factory at Asheville; . . . a new and very large armory at Macon, including a pistol factory; . . . a second pistol factory at Columbus, Ga. . . . Where three years ago we were not making a gun, pistol nor a sabre, no shot nor shell (except at the Tredegar Works)—a pound of powder—we now make all these in quantities to meet the demands of our large armies.”

In addition to the powder mill, chemical plant, small-arms factories, and foundries belonging to Gorgas’s Ordnance Bureau, the Confederate Navy set up its own cannon foundry and powder mill, as well as numerous shipyards. The Nitre and Mining Bureau extracted and refined coal, iron, copper, nitre, and lead. The Confederate Quartermaster Bureau ran its own clothing, shoe, and wagon factories. The southern state governments also operated arsenals, powder mills, textile mills, flour mills, saltworks, and a variety of other enterprises.

When the authorities did purchase supplies from private firms, they dictated prices and profits. The Rebel government sometimes loaned one-half the start-up capital to businesses, which in turn had to sell two-thirds of their production to the government. Because rigid regulations and soaring inflation made genuine profits impossible, private owners, one after another, turned their factories over to the public officials. Right from the conflict’s beginning, the Confederacy had violated its constitution by loaning money for the completion of strategic railway links. Seven-eighths of the freight and two thirds of the passengers transported on the Virginia Central Railroad during one year, to cite just one example, were for the government’s account. Toward the very end, President Davis took possession of all un-captured southern railroads, steamboats, and telegraph lines outright, incorporating their employees and officers into the military.

—Jeffrey Rogers Hummel, Emancipating Slaves, Enslaving Free Men: A History of the American Civil War, 2nd ed. (Chicago: Open Court Publishing Company, 2014), e-book.