The United States entered the nineteenth century as an agrarian nation of five million residents. Within one hundred years, the United States transformed itself into the world's leading industrial power with a population of nearly seventy-six million. While America's transformation from an agrarian nation to an industrial power is noteworthy because of the pace at which it occurred, it is more remarkable because it did not transpire in all regions of the nation. Indeed, by 1900 the United States effectively contained two separate economies—the industrialized North and the agrarian South. To understand America's economic transformation it is necessary to examine three separate snapshots of the American economy: The antebellum economy, the American economy during the Civil War, and the postbellum economy.

The Antebellum Economy

In 1800, the United States was a nation of farmers. Manufacturing was completed at home, in small mills (for...