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The Industrial North and the Agricultural South: During the nineteenth century, the economies of the North and South grew increasingly different. The North developed a mixed economy of agriculture, commerce, and manufacturing. Mechanization produced a huge growth in manufacturing. Manufacturers could produce more with less labor by using the principles of the "American system." New England led the nation in manufacturing, while Pennsylvania and Ohio produced coal for industrial fuel. The North and Midwest also benefited from the railroad, as nearly two-thirds of the nation's 9,000 miles of track ran through these regions. The South, on the other hand, remained agricultural, with its primary cash crops being tobacco, sugar, rice, and cotton. Its climate and geography were ideally suited for cotton. Southerners produced nearly five million bales of cotton in 1860, nearly three-fourths of the world's supply. This cotton fueled the growth of the textile industry in the North and served as a valuable export commodity. The South failed to diversify in part because planters saw no reason to do so.
The Urban North and the Rural South: Northern industry led to great urbanization. Nearly 37 percent of New Englanders lived in cities. Northern cities also attracted European immigrants, mostly Germans who settled in the middle stratum of society and poor Irish laborers looking for industrial jobs. With its emphasis on agriculture, the South developed few cities and, with fewer urban industrial jobs, attracted fewer immigrants. In 1860, only 12 percent of southerners lived in cities.
Free Labor and Slavery: Northern society was organized around the principle of free labor, which celebrated hard work, self-reliance, and independence. Proponents of free labor argued that success was open to anyone, not just those Americans born into wealth. The South was dominated by slave labor. By 1860, the South contained over four million slaves, workers who produced 75 percent of the cotton on southern plantations. Although white planters dominated southern politics, most slave owners owned fewer than five slaves, and most southerners held no slaves at all. Plantation-belt yeomen worked small farms in the upcountry, and most poor whites were hardworking, landholding small farmers.
Overall Class Structure: Free labor did not create equality in the North. In fact, its proponents argued that economic inequalities were a natural outgrowth of freedom: Some people worked harder than others, or luck fell their way. In reality, very few workers in the North ascended into the class of self-employed producers. Many more lived as landless wage laborers. African Americans and Irish immigrants tended to find themselves at the bottom of this social ladder. In the South, divisions were typically forged around race rather than class. The gentry cultivated friendly relationships with yeomen, and yeomen depended on the gentry for political favors and for economic assistance. Poor whites rarely staged class protest because they understood that their membership in the white race ensured that they would always rank higher than any African American, free or slave.