254 / parmnoxns or 1-‘oacx-:1) Laiaoiz

of their incomes, and their savings rates were probably far
in excess of the national average. Given what we now know
about the relationship between income and savings, it is
quite possible that savings in the South were higher than
they would have been with a less skewed income distribu-
tion.

In any case, recent work on the southern wealth distribu-
tion reveals that previous scholars have generally exaggerated
the degree of inequality. Certainly the Cairnes contention
that 70 percent of nonslaveholding whites lived at the
border of starvation is untenable. While the wealth distribu-
tion among southern farmers was more unequal than among
northern farmers, it was less unequal than the wealth dis-
tribution in urban areas. Since the North had a much larger
proportion of its population in the cities than in the country-
side, the overall inequality of the wealth distribution was
roughly the same above and below the Mason—Dixon line for
the free populations.

This finding strikes at the heart of the claim that the
skewed southern income distribution made the southern
market too small to support large—scale manufacturing firms
of the type which existed in the Northeast. Even if the in-
come distribution had been more unequal than it was, the
fact that planters purchased large quantifies of clothing and
shoes for slaves from northern firms suggests the existence
of a large market for manufacturing goods on plantations. It
can, indeed, be argued that the products ordered by planters
were more standardized and amenable to mass production
techniques than would have been the situation if slaves were
themselves the source of demand.

Manufacturing appears to be the only area in which the
antebellum South lagged seriously behind the North in
physical capital formation. The South did not falter in the
financing of railroad construction. The region had 31 per-
cent of the nation’s railroad mileage, with per capita mileage
only slightly below the national average. This network was

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ECONOMIC GROWTH IN THE sourn, 18404860 / 255

financed predominantly by indigenous capital. While the
track-to-area ratio was lower in the South than in the rest
of the nation, the southem economy was endowed with an
unusually favorable system of navigable streams and rivers.
Nor were planters lagging behind the rest of the nation in
the application of machinery to farming. Expenditures on
farming implements and machinery per improved acre were
25 percent higher in the seven leading cotton states than
they were for the nation as a whole.

To draw the conclusion that the South was industrially
backward, merely because it compared unfavorably with
the North, is to repeat the error referred to in the discussion
of income levels. Table 6 helps to put the South’s position
as an industrial nation into perspective. In railroad mileage
per capita she was virtually tied with the North, and both
were far ahead of their nearest competitor. As a manufac-
turer of cotton textiles, the South ranked sixth in the world,
well below Great Britain and the northern United States,
but ahead of Germany, Austria-Hungary, and Russia. Of
the available indexes of industrial production, the South
ranked poorly only in the output of pig iron, falling behind
all of the leading nations of Western Europe. The poor show-
ing in iron production, was, of course, due to the South's
relatively meager endowments of iron ore and coal. Her
resources in these minerals came nowhere near those of the
North, Great Britain, France, or Belgium. Thus the South's
lag behind the North in industrialization is fully consistent
with the proposition that during the antebellum era the
South’s comparative advantage was m e rather
than in manufacturing.

For the most part, it was natural resource endowments
which gave the South a comp ntage in agricul-
ture. But the existence of slavery may also have played a
role. To the extent that slavery permitted economies of large
scale and raised agricultural productivity, it might have
created an economic incentive to shift resources away from