Georgia's Economy Following the Civil War

Georgia’s Economy After the Civil War

        The state of Georgia was founded in 1732 by James Oglethorpe, making it the last of the Thirteen Colonies to be established. The southern state, named after King George II, was seen by settlers and the trustees as a place for new beginnings. Upon its founding, Georgia was perceived as the ideal location for the growth of almost anything (ideally silk), and the epitome for economic growth. Though, the “colony’s economic future hardly went as planned.” ^[1] While Georgia’s new settlers were disappointed in finding that they could not turn profit on silks or vineyards from what they thought was ideally lush land, the soon to be state discovered a profitable market in rice and cotton. The production of cotton along with the invention of the cotton gin and the lift on the slavery ban made for a favorable turn in young Georgia’s economy. The southern state quickly found itself “leading the world in cotton production”. ^[2]  Yet, with Georgia’s future seemingly bright, the state soon found itself in the middle of the Civil War. By 1865, a post war Georgia was in reconstruction. The aftermath of the Civil War had a devastating effect on the state’s economy. However, this would not be the last blow to Georgia’s economy, after the Civil war the economy and standard of living continued to get worse. The Great Depression was soon to follow, and it would collapse Georgia’s agricultural trade. Though, things would eventually get better for the Georgians. Relief and rebuilding would come in the form of the New Deal, an industrial change, and World War II. After Georgia’s industrial turn the economy would continue to grow and become better still. Eventually the Georgia known today would come into form thanks to events like the lottery being enacted and the Olympics taking place in Atlanta. Georgia has faced many ups and down’s in its economy to become the modern day southern state it is now.

The Fall of Georgia

Following the Civil War, “the average white male had a net worth of $4,000”.^[3] By the 1870s that number had dropped an average total of $2,000. After the war, Georgia’s economy plummeted due to the loss of slave labor and poor planning. Owed to the new freedom of slaves in the south, the workforce Georgia had once held was gone, bringing a dip in the states cotton production. This lack of production “seemed bleaker still in light of a noticeable slowdown in the growth of world cotton demand”^[4] creating a decline in the price of cotton altogether. Aside from the profit loss throughout the state, banking in the South had become scarce. By 1894 a total of 123 counties lacked a proper banking system. Because of the absence of an ordered banking system, many farmers had fortified credit through merchants and large planters. Through this new crop-lien system, farmers found themselves in a great deal of debt to those that had given them loans.^[5] With the price and demand of cotton being so low, farmers had no way to repay their debtors. Farmer had the option of growing other profitable crops, but even with its low price it remained higher priced than that of any other viable crop. Cotton prices may have been falling, but the profit that could be made from corn was still half of what could be made from cotton.^[6] The low prices of other crops forced farmers to continue to grow cotton knowing they could make very little profit. This cycle of producing cotton and selling it at a lower value than what farmers needed to pay of their outstanding amounts caused crippling debt to sweep over Georgia farmers.