Ballpark Estimate: $7 Billion (1860 dollars); $75 Billion (2008 dollars)
In historical terms, the American Civil War was undoubtedly the most significant single event in the formation of a young, divided, and struggling nation. And like all wars there was a cost both in economic losses and in human suffering. Unlike other wars, however, it was particularly devastating to the infant country as a whole since both adversaries were American citizens, and in many cases, brothers fighting brothers, sons fighting fathers.
By 1861 the country was irrefutably divided into two opposing political, cultural, and economic ideologies. On one hand, the North was a bustling metropolis and the leader in industrialization, educational facilities, financial institutions, rail transportation, and economic growth. In addition, European immigrants by the hundreds of thousands, many with valuable and needed skills, had inundated the northern section of the country thereby increasing the political, economic, and territorial growth of the North.
In stark contrast, the South was a relatively sparse and backward section of the country. Mostly agricultural, to drive its economy southern aristocracy was infected with an enormous cancer that had grown from over Cost Of The American Civil War200 years of perpetuating the exploitation of human bondage. To most northerners, slavery and its debilitating side effects influenced and skewed the cultural, political, and social values of southern society and to some extent prejudiced the entire country, a condition that was an extreme contradiction to northern religious and moral principles. Consequently, the South was continually forced to defend slavery and their way of life. A slave-based society was the economic means by which the wealthy southern aristocrats could continue to survive in the style they were accustomed to and, they insisted, it would be defended to the death.
While many people of the two regions did, in fact, enjoy numerous common interests and enjoyed their mutual contributions and friendships, the net impact of their interwoven differences resulted in political hostility, bitter jealousies, accusations, controversies, and resentment. Finally, after years of quasi-attempts to resolve their difference, in the end the Civil War was the only means to settle the long and bitter disputes that divided the two peoples.
Hostilities began in April of 1861 with the Confederate artillery attack on Fort Sumter in Charleston Harbor, South Carolina. Over the following four years, major land battles were fought throughout the South and on battlefields as far as Gettysburg, Pennsylvania in the North and Galveston, Texas in the West. With the advent of ironclad ships, the Union Navy was also instrumental in the ultimate victory by gaining superiority over the make-shift Confederate Navy on the Mississippi and southern rivers, the Gulf of Mexico, and the Atlantic coastline.
By April 1865, the Civil War had reduced the Confederate army to mere shadows of their former glory. With no food to eat, grossly outnumbered, and surrounded by Union troops under General Ulysses S. Grant, the last fighting contingent of General Robert E. Lee’s Army of Northern Virginia surrendered at Appomattox Court House, Virginia.
In monetary terms, what was the direct cost of this conflict? The direct costs relates to the expenditures of the governments, the losses from Cost Of The American Civil Warproperty destruction, and the loss of human capital from the casualties. While estimates have varied for years, the most comprehensive study on the costs of the Civil War was done in 1975 and 1978. Keep in mind, however, that because of the fragmented data available from those times and even the uncertainty of that data, no matter which study or figures are presented, they are at best only rough estimates. According to the work done by Claudia Goldin and Frank Lewis, the direct costs include the following estimations in 1860 dollars:
- Government Expenditures – $2.3 Billion for the North and $1 Billion for the South
- Property Destruction – $0 for the North and $1.5 Billion for the South
- Loss of Human Capital – $1.1 Billion for the North and $767 million for the South
Since the population of the South was much less than that of the North, on a per capita basis, the Civil War cost the South about $375 per person while in the North it was approximately $150 per person.
Human Costs: estimated deaths from all causes:
- Union – 370,000 lives
- Confederate – 258,000 lives
Note: The Civil War holds the dubious distinction of having the highest costs in total American deaths of any war in American history including World War I, World War II, the Vietnam War, and the Korean War combined.