How Did The Civil War Affect The Economy

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From 1861 to 1865, the United States endured a terrible Civil War between its northern and southern states over a variety of issues. However, even though this is a civil war, various countries impacted the war, and therefore impacted the American people. The American Civil War was a total war impacting those on the homefront, abroad, as well as those on the battle because of the U.S regional economies, and U.S. and Confederate relations with Britain and France. The American Civil War impacted the economies of various regions of the United States differently. The Northern states’ economies were exceedingly more versatile than the Southern states’ economies. This is due to the fact that North was highly urbanize and industrialized when compared …show more content…

When the Union declared a blockade on the South, European nations declared neutrality instead of war against the North. In May of 1861, Britain responded to the blockade with a proclamation of neutrality, and then this proclamations allowed the South to gain belligerent status (“Preventing”). This meant that the South now had the right to acquire loans and purchase supplies in neutral nations and to utilize their belligerent rights on the seas, which really angered the North (“Preventing”). However, the North also realized that the proclamation of neutrality meant that the European powers were accepting the blockade and the war to come. In like manner, France declared a proclamation of neutrality. For both France and Britain, they experienced hardship of their economies because of the blockade. In Britain and France, the textile manufacturing cities that depended on Southern cotton suffer and have cycles of very bad unemployment, while French producers of wine, brandy and silk also experience a downfall when their markets in the Confederacy were cut off (“Preventing”). Even with these losses, none of the European powers intervened in the war, which shocked and disappointed the Confederate army. However, in 1862 France instead intervenes and establishes themselves in Mexico (“French Intervention”). This act really angered the Union, however the Union was not able to intervene on the matter because of the Civil War. This move by the French heightened the tension between them and the United States. The United States approach to the situation was to avoid direct conflict with France, and make their displeasure at French interference in Mexican affairs apparent, but basically they remained neutral in the conflict (“French Intervention”). Once France withdraws from Mexico, then the tension between the U.S. and calm

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