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Capital Destruction and Economic Growth: The Effects of Sherman's March, 1850–1920

Author

Listed:
  • James Feigenbaum
  • James Lee
  • Filippo Mezzanotti

Abstract

Using General Sherman's March through Georgia, South Carolina, and North Carolina during the Civil War, we study the effect of capital destruction on medium- and long-run local economic activity, and the role of financial markets in recovery. We show that the march's capital destruction led to a large contraction in agricultural investment, farming asset prices, and manufacturing activity compared to neighboring counties. Elements of the decline in agriculture persisted through 1920. Exploiting variation in local access to antebellum credit, we argue that the underdevelopment of financial markets played a role in weakening the recovery.

Suggested Citation

  • 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, American Economic Association, vol. 14(4), pages 301-342, October.
    • Handle: RePEc:aea:aejapp:v:14:y:2022:i:4:p:301-42
    DOI: 10.1257/app.20200397
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    Cited by:

    1. Alix-Garcia, Jennifer & Schechter, Laura & Valencia Caicedo, Felipe & Jessica Zhu, S., 2022. "Country of Women? Repercussions of the Triple Alliance War in Paraguay," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 131-167.
    2. Elena Esposito & Tiziano Rotesi & Alessandro Saia & Mathias Thoenig, 2023. "Reconciliation Narratives: The Birth of a Nation after the US Civil War," American Economic Review, American Economic Association, vol. 113(6), pages 1461-1504, June.
    3. Graff Zivin, Joshua & Liao, Yanjun & Panassié, Yann, 2023. "How hurricanes sweep up housing markets: Evidence from Florida," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    4. Yannick Dupraz & Andreas Ferrara, 2025. "Fatherless: The Long-Term Effects of Losing a Father in the U.S. Civil War," Journal of Human Resources, University of Wisconsin Press, vol. 60(4), pages 1126-1174.
    5. Hanlon, W.Walker & Heblich, Stephan, 2022. "History and urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    6. Valencia Caicedo, Felipe & Tur-Prats, Ana, 2020. "The Long Shadow of the Spanish Civil War," CEPR Discussion Papers 15091, C.E.P.R. Discussion Papers.
    7. Victoria Gierok, 2023. "The Thirty Years’ War and the Decline of Urban Germany," Oxford Economic and Social History Working Papers _210, University of Oxford, Department of Economics.
    8. Kohei Takeda & Atsushi Yamagishi, 2024. "The economic dynamics of city structure: Evidence from Hiroshima's recovery," CEP Discussion Papers dp1988, Centre for Economic Performance, LSE.
    9. Barsanetti, Bruno, 2024. "Capital as an anchor of agricultural employment: Evidence from the 1975 frost," Regional Science and Urban Economics, Elsevier, vol. 108(C).
    10. Edward L Glaeser, 2022. "Urban resilience," Urban Studies, Urban Studies Journal Limited, vol. 59(1), pages 3-35, January.
    11. Carol H. Shiue & Wolfgang Keller, 2024. "Elite Strategies for Big Shocks: The Case of the Fall of the Ming," NBER Working Papers 33121, National Bureau of Economic Research, Inc.
    12. Philipp Ager & Leah Boustan & Katherine Eriksson, 2021. "The Intergenerational Effects of a Large Wealth Shock: White Southerners after the Civil War," American Economic Review, American Economic Association, vol. 111(11), pages 3767-3794, November.
    13. Petach, Luke, 2024. "That Old Time Religion: Christianity and Black Economic Progress After Reconstruction," GLO Discussion Paper Series 1480, Global Labor Organization (GLO).
    14. Carol H. Shiue & Wolfgang Keller, 2025. "People versus Places: Elite Persistence after the Fall of the Ming," NBER Working Papers 34451, National Bureau of Economic Research, Inc.
    15. Natalya Naumenko, 2024. "Economic Consequences of the 1933 Soviet Famine," Working Papers 0270, European Historical Economics Society (EHES).
    16. Juan Felipe Riaño & Felipe Valencia Caicedo, 2024. "Collateral Damage: The Legacy of the Secret War in Laos," The Economic Journal, Royal Economic Society, vol. 134(661), pages 2101-2140.
    17. Sanford C. Gordon & Hannah K. Simpson, 2020. "Causes, theories, and the past in political science," Public Choice, Springer, vol. 185(3), pages 315-333, December.
    18. Hoch, Georg & Pondorfer, Andreas & Shkola, Viktoriia, 2025. "Conflict and social capital: Evidence from the Russian War against Ukraine," Journal of Comparative Economics, Elsevier, vol. 53(2), pages 461-471.
    19. James J. Feigenbaum & Soumyajit Mazumder & Cory B. Smith, 2020. "When Coercive Economies Fail: The Political Economy of the US South After the Boll Weevil," NBER Working Papers 27161, National Bureau of Economic Research, Inc.
    20. Christian Ochsner, 2023. "Hostility, Population Sorting, and Backwardness: Quasi-Experimental Evidence from the Red Army after WWII," CERGE-EI Working Papers wp768, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    21. Giuliano, Paola & Matranga, Andrea, 2020. "Historical Data: Where to Find Them, How to Use Them," CEPR Discussion Papers 15362, C.E.P.R. Discussion Papers.

    More about this item

    JEL classification:

    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913
    • N51 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: Pre-1913
    • N52 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: 1913-
    • N61 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: Pre-1913
    • N91 - Economic History - - Regional and Urban History - - - U.S.; Canada: Pre-1913
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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