Capital Destruction and Economic Growth: The Effects of Sherman's March, 1850-1920
Using General William Sherman’s 1864–65 military march through Georgia, South Carolina, and North Carolina during the American Civil War, this paper studies the effect of capital destruction on medium and long-run local economic activity, and the role of financial markets in the recovery process. We match an 1865 US War Department map of Sherman’s march to county-level demographic, agricultural, and manufacturing data from the 1850-1920 US Censuses. We show that the capital destruction induced by the March led to a large contraction in agricultural investment, farming asset prices, and manufacturing activity. Elements of the decline in agriculture persisted through 1920. Using information on local banks and access to credit, we argue that the underdevelopment of financial markets played a role in weakening the recovery.
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Copy CitationJames J. Feigenbaum, James Lee, and Filippo Mezzanotti, "Capital Destruction and Economic Growth: The Effects of Sherman's March, 1850-1920," NBER Working Paper 25392 (2018), https://doi.org/10.3386/w25392.Download Citation
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Non-Technical Summaries
- As late as 1920, agricultural investment in Southern counties in the 10-mile-wide path of devastation lagged behind investment in...
Published Versions
James Feigenbaum & James Lee & Filippo Mezzanotti, 2022. "Capital Destruction and Economic Growth: The Effects of Sherman’s March, 1850–1920," American Economic Journal: Applied Economics, vol 14(4), pages 301-342. citation courtesy of 
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