Table 4 Per Capiia Income by Region for‘1840 and 1860 (in 1860 prices)’ AVERAGE ANNUAL RATES OF CHANGE 1840 1860 (PERCENT) National Average 35 96 $128 1.4 North: 109 141 1.3 Northeast 129 181 1.7 North Central 65 89 1.6 ;, \\—~ South: 74 103 1.7 South Atlantic 66 84 1.2 East South Central 69 89 1.3 West South Central 151 184 1.0 ’ soum ATLANTIC ’°‘ See appendix B for a discussion of the construction of these esti- mates. The per capita income figures are for the entire population, free and slave. ECONOMIC GROWTH IN rm: sou-rn, 1840-1860 / 249 by disaggregating the North into two subregions: the North- east, and the north central subregions. This is done in table 4, which shows that the northern advantage over the South was due entirely to the extraordinarily high income of the Northeast. Per capita income in the north central states was not only less than half as high as in the Northeast; it was I4 percent lower than per capita income in the South. If the South was a poverty-ridden “colonial dependency,” how are we to characterize the states that occupy the territory run- ning from the western border of Pennsylvania to the western border of Nebraska — states usually thought of as examples of high prosperity and rapid growth during the antebellum era? Far from being poverty—stricken, the South was quite rich by the standards of the antebellum era. If we treat the North and South as separate nations and rank them among the countries of the world, the South would stand as the fourth richest nation of the world in 1860, The South was richer than France, richer than Germany, richer than Denmark, richer than any of the countries of Europe except England (see table 5). Presentation of southern per capita income in 1860 dollars instead of 1973 dollars tends to cloak the extent of southern economic attainment. The South was not only rich by antebellum standards but also byrTIahVely recent standards. Indeed, a country as advanced as Italy did not achieve the southern level of per capita income until the eve of World War II. The last point underscores the dubious nature of attempts to classify the South as a “colonial dependency.” The South’s large purchases of manufactured goods from the North made it no more of a colonial dependency than did the North’s heavy purchases of rails from England. The true colonial dependencies, countries such as India and Mexico, had less than one tenth the per capita income of the South in r860. The false image of the South as a land of poverty emerged out of the debates on economic policy among southern E E 4