As our country grew, two distinct economic systems were developing. The economy in the North was very different from the economy in the South.
In the North, the economy was based mainly on the development of businesses and industry. There was a lot of manufacturing and trade. This was due to the lack of fertile soil, a cool climate, having resources nearby, and having many ports. Northern factories grew and developed as a result of the Industrial Revolution. Few slaves were needed. The North favored economic policies that would protect our industries, encourage trade, establish and maintain a national banking system, and develop internal improvement projects such as roads and canals.
In the South, the economy was based mainly on farming. Fertile soil and a mild climate made this possible. Slavery was very important in the South. As a result, the South favored policies that protected slavery, kept protective tariffs low, and kept internal improvement projects to a minimum so taxes wouldn’t increase. The South wanted the state governments to have significant power to make decisions about what was best for the region.
As these economic differences grew, it became more difficult for each region to reach common ground on issues that separated them. Ultimately, these economic differences were one of the factors that led to the Civil War.