Economic Differences Between Augusta, Virginia and Franklin,
Pennsylvania in the Antebellum Period
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The United States'economy has always varied by region. Most notably, during the period leading up to the Civil War, the markets of the North and the South grew at markedly different rates and in considerably different directions. Different occupations combined with local market practices produced varying growth rates of the economy in the two regions. For example, the economies of Augusta, Virginia and Franklin, Pennsylvania, differed not because of geographical or agricultural necessity, but rather because of cultural practices. Political officials in Franklin, Pennsylvania favored protective trading policies in order to enable manufacturers and merchants of an industrialized society to play a larger role in the economy, whereas those of Augusta, Virginia did not vote to protect industry. National protectionist policies promoted industry and helped the banks of Franklin grow stronger than the banks of Augusta. The effects of an influential business class and strong banks combined with the diversity of the Northern economy created enormous amounts of available capital and greater market growth in Franklin than in Augusta.
The lack of diversity in Augusta's economy, which, similar to most Southern counties, relied heavily on the exportation of cotton, did not create a larger market economy. For example, an article published in the Franklin Repository and Transcript in 1859 states that Southern leaders "favored the Free Trade policy of the English Merchants and Manufacturers." The article mentioned their views only in passing, while mainly focusing on Pennsylvania's Governor Packer's Annual Message. The Southern leaders favored the free trade abroad because the large plantations of the South, the concentration of most of the South's wealth, exported, according to an article published in the Valley Spirit in 1860 twice the dollar value of goods that the North exported. Cotton, according to historian, Mary Beth Norton, in her book A People and A Nation, became the primary Southern export. As the largest and most widespread crop, according to Norton, the South exported raw cotton to many foreign countries. The incoming money, however, did not spread throughout the economy. Furthermore, according to historian Robert William Fogel in his book The Rise and Fall of American Slavery: Without Consent or Contract, only the top one percent of the wealthy Southern planters controlled over twenty five percent of the wealth in the South. Normally, an economy benefits when the manufacturing or producing sector exports many goods. But in the case of the South, where relative to the size of the population few people owned large plantations, most of the money coming into the economy stayed in the hands of a select few, limiting the available capital for other productive investments in a more diverse economy. The few plantation owners, Norton writes, although unrepresentative of the majority of Southern society, held much of the Southern political power. Farmers sold most of their products abroad, as opposed to selling them to local merchants, decreasing the potential amount of money that could have been generated within the Southern economy, whereas in the Northern economy encouraged trade that was both more diverse and more regional and domestic in nature. Money in the Southern economy primarily ended up in the hands of the the few powerful landowners. The free trade with foreign nations put money in the hands of a small wealthy class but hindered the circulation of money in the economy, limiting the entrepreneurial opportunities for the rest of Southern society.
In contrast to its effects in Augusta, in Franklin the protective tariff helped to widely circulate money. Political officials, such as Pennsylvania Congressman, General Foster, favored the importation tax to win the support of his constituents. An article published in the Franklin Repository in 1860 refers to his vote in Congress for protective policies to benefit Pennsylvania manufacturers. The article also mentions that the state of Pennsylvania as a whole wanted to have a protective tariff. The national protective policies created incentives for people to go into business and produce goods for others in the market for purchases in Franklin County, by promoting the sale of finished goods as well as raising their market prices in the North. Conversely, the tariff hurt Augusta because the farmers exported raw goods, especially cotton, to foreign countries, while purchasing finished goods, the price of which was driven up regardless of the origin - domestic or foreign. In Franklin, as a result of more localized production and trading, the amount of capital circulating in the economy increased. An 1860 census of the two counties, shows that the typical worker in Franklin County was worth more than he was worth in Augusta. The economy of a more industrialized Franklin County benefited from national trading policies as its citizens had easier access to capital than their counterparts in a comparable Southern county.
As more capital circulated in the economy, the incentive to go into business led the manufacturers and merchants to play a larger role in the economy of Franklin, Pennsylvania than they played in Augusta, Virginia. In addition to the aid businesses received from the federal government's protective tariff, the local government of Franklin helped the manufacturers and merchants, according to an issue of The Valley Spirit in 1859, by organizing a County Fair in which farmers had the opportunity to display their seasonal products, and to purchase the newest farm machinery, allowing increased production during the next season. Augusta County, whose productivity staggered behind Franklin's, had no such fairs. An1860 survey of manufacturers from Augusta county and Franklin county shows that the total number of manufacturers in Franklin county, 317, exceeded that of Augusta, 197, by 120. Franklin's factories not only exceeded Augusta's in number, but more meaningfully, in efficiency as well. The efficiency of the manufacturers in Franklin amounted to $5,434.15 per business, while that of Augusta trailed at only $4,648.29. The profits of manufacturers in Franklin county exceeded those of Augusta in industries such as metal working, clothing and footwear, food and beverage, and wood products. Franklin's industrialized economy thrived with the help of the national protective policies, as they proved quite efficient.
The manufacturers of the booming economy reaped greater profits, and as the value of their goods increased, the merchants, or the middlemen, who needed to profit as well, had to raise their prices in order to compensate for their now larger expense. According to an 1860 population census of the two counties, the wealth of the typical merchant or trader of Franklin County exceeded that of Augusta's merchant by $250.00. The merchants of Franklin County bought goods at higher prices and employed a large marketing markup, selling them at higher prices than those of Augusta. For instance, a goods used by many, watches and clocks, sold in March of 1859, in Augusta at prices ranging from twelve to forty-five dollars, while in May of the same year, businesses in Franklin advertised watches and clocks for prices between forty and one-hundred dollars. The prices, taken from the same year, varied because of the regional economic differences. The marketing markup brought about by the merchants of Franklin made the economic pie larger. Everyone prospered with increasing amounts of money circulating in the economy. People paid more for goods and thus, raised the prices they charged for whatever good or service they provided to the public. The large amounts of capital flowing through the market naturally found its way into the banks of Franklin County.
As the banks of Franklin County prospered, they proved much more credible than those of Augusta. An article published in The Vindicator on July 15, 1859 encouraged farmers to "require their Commission Merchants to send them checks on the Richmond Banks in payment" and to bring the checks to the Staunton Bank located in Augusta to make the Staunton Bank a creditor of the Richmond Bank, in order to strengthen the Staunton Bank. One might interpret the article saying that Augusta tried to strengthen its local economy, but if its markets were as powerful as Franklin's, then the money would have naturally found its way into banks without any urging. The local banks of Franklin County prospered as the surrounding economy grew strong, and they did not have to compete with each other for credit power. Furthermore, in 1859, The Vindicator asked people who paid their subscriptions in wood to do so immediately. Many still relied on bartering as a means to pay for certain goods in Augusta. The credible banks of Franklin, unlike those of Augusta, provided a stable currency that circulated throughout the economy.
Unlike the banks of Augusta, those of Franklin maintained monetary credibility, even in times of financial panic. An article published in the Valley Spirit in 1860 states that even though many people worried about the financial state of the country, "sworn and public statements of [the Bank of Chambersburg] show that it is in very sound condition." The paper assured readers that "No one, we are sure, will refuse its notes." The banks' strength allowed for individuals to have easier access to loans in order to go into a business venture or another sort of investment. As the merchants and manufactures prospered and deposited their money in the banks, they created increasing opportunities for others to prosper as well. A strong market economy must have a strong currency to bolster it, and Augusta's weak markets did not provide for the emergence of a strong banking system and currency. An article in the Vindicator in 1859 refers to the failure and replacement of the town market house, in which trading took place -- a symptom of a cash-strapped Augustan society. With a weaker market, the banks did not grow as strong as they did in Franklin. One can measure the strength of an economy by the strength of its currency, and by taking this approach, the market growth of Franklin surpassed that of Augusta.
The entrepreneurial opportunities in Franklin continued to grow, as did the overall production of the county. In Augusta, a small elite group of plantation owners continued to take in most of the cash in the economy, whereas in Franklin manufacturers and merchants helped to circulate money in the hands of many individuals, thus strengthening the Franklin currency. In general, the differences between the market in Franklin Augusta mirrored the differences between the North and the South as a whole. The economic differences between the North and South in the antebellum period lead to a strong hatred between the two regions. What began as economical diversity, could only lead to social conflicts and political differences. These differences were the basis of the bloody war that would inevitably follow. The disparity of economical, social, and political charactersitics between the two regions negated the possibility of peaceful reconciliation.
