Economy of the Confederate States of America

The Confederate States of America (1861–1865) started with an agrarian-based economy that relied heavily on slave-worked plantations for the production of cotton for export to Europe and to the northern US. If classed as an independent country, the area of the Confederate States would have ranked as the fourth-richest country of the world in 1860.^[1] But, when the Union began its blockade of Confederate ports in the summer of 1861, exports of cotton fell 95% and the South had to restructure itself to emphasize the production of food and munitions for internal use. After losing control of its main rivers and ports, the Confederacy had to depend for transport on a delicate railroad system that, with few repairs being made, no new equipment, and destructive raids, crumbled away. The financial infrastructure collapsed during the war as inflation destroyed banks and forced a move toward a barter economy for civilians. The Confederate government seized needed supplies and livestock (paying with certificates that were promised to be paid off after the war, but never were). By 1865, the Confederate economy was in ruins.^[2]