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Capital Destruction and Economic Growth: The Effects of Sherman's March, 1850-1920

Author

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  • James J. Feigenbaum
  • James Lee
  • Filippo Mezzanotti
Abstract
Using General William Sherman’s 1864–65 military march through Georgia, South Carolina, and North Carolina during the American Civil War, this paper studies the effect of capital destruction on medium and long-run local economic activity, and the role of financial markets in the recovery process. We match an 1865 US War Department map of Sherman’s march to county-level demographic, agricultural, and manufacturing data from the 1850-1920 US Censuses. We show that the capital destruction induced by the March led to a large contraction in agricultural investment, farming asset prices, and manufacturing activity. Elements of the decline in agriculture persisted through 1920. Using information on local banks and access to credit, we argue that the underdevelopment of financial markets played a role in weakening the recovery.

Suggested Citation

  • James J. Feigenbaum & James Lee & Filippo Mezzanotti, 2018. "Capital Destruction and Economic Growth: The Effects of Sherman's March, 1850-1920," NBER Working Papers 25392, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25392
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    4. Philipp Ager & Leah Boustan & Katherine Eriksson, 2021. "The Intergenerational Effects of a Large Wealth Shock: White Southerners after the Civil War," American Economic Review, American Economic Association, vol. 111(11), pages 3767-3794, November.
    5. Hanlon, W.Walker & Heblich, Stephan, 2022. "History and urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    6. Valencia Caicedo, Felipe & Tur-Prats, Ana, 2020. "The Long Shadow of the Spanish Civil War," CEPR Discussion Papers 15091, C.E.P.R. Discussion Papers.
    7. James J. Feigenbaum & Soumyajit Mazumder & Cory B. Smith, 2020. "When Coercive Economies Fail: The Political Economy of the US South After the Boll Weevil," NBER Working Papers 27161, National Bureau of Economic Research, Inc.
    8. Elena Esposito & Tiziano Rotesi & Alessandro Saia & Mathias Thoenig, 2023. "Reconciliation Narratives: The Birth of a Nation after the US Civil War," American Economic Review, American Economic Association, vol. 113(6), pages 1461-1504, June.
    9. Dupraz, Yannick & Ferrara, Andreas, 2021. "Fatherless: The Long-Term Effects of Losing a Father in the U.S. Civil War," CAGE Online Working Paper Series 538, Competitive Advantage in the Global Economy (CAGE).
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    13. Petach, Luke, 2024. "That Old Time Religion: Christianity and Black Economic Progress After Reconstruction," GLO Discussion Paper Series 1480, Global Labor Organization (GLO).
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    More about this item

    JEL classification:

    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913
    • N41 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: Pre-1913
    • N51 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: Pre-1913

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