If you go to this source, you will see a section on
The “Costs” of the War. It seems there are several ways to think about how much the war cost.
I do not believe we owe anybody anything for the cost of the Civil War. Although I do believe there are actually 2 or 3 persons who are drawing CW pension checks.
- Alan
From the source noted above:
The “Costs” of the War
The Civil War has often been called the first “modern” war. In part this reflects the enormous effort expended by both sides to conduct the war. What was the cost of this conflict? The most comprehensive effort to answer this question is the work of Claudia Goldin and Frank Lewis (1978; 1975).
The Goldin and Lewis estimates of the costs of the war are presented in the Table below. The costs are divided into two groups: the
directcosts which include the expenditures of state and local governments plus the loss from destruction of property and the loss of human capital from the casualties; and what Goldin and Lewis term the
indirect costs of the war which include the subsequent implications of the war after 1865.
Goldin and Lewis estimate that the combined outlays of both governments — in 1860 dollars — totaled $3.3 billion. To this they add $1.8 billion to account for the discounted economic value of casualties in the war, and they add $1.5 billion to account for the destruction of the war in the South. This gives a total of $6.6 billion in direct costs — with each region incurring roughly half the total.
The Costs of the Civil War. (Millions of 1860 Dollars) IMPORTANT NOTE: The following is an abridged version of the table of data in the source document.
(1) Direct Costs:
Government Expenditures. 3,334 (ie, 3.334 billion dollars)
Plus Physical Destruction. 1,487
Plus Loss of Human Capital. 1,831
= Total Direct Costs of the War. 6,652. (
Per capita: 212)
(2) Indirect Costs:
Total Decline in Consumption. 7,339
Less:
Effect of Emancipation. 1,960
Effect of Cotton Prices. 1,670
= Total Indirect Costs of The War. 3,709. (Per capita. 118)
(3) Total Costs of the War. 10,361 (Per capita. 330)
US Population in 1860 (Million). 31.43
Source: Ransom, (1998: 51, Table 3-1); Goldin and Lewis. (1975; 1978)
While these figures are only a very rough estimate of the actual costs, they provide an educated guess as to the order of magnitude of the
economic effort required to wage the war, and it seems likely that if there is a bias, it is to understate the total. (Thus, for example, the estimated “economic” losses from casualties ignore the emotional cost of 625,000 deaths, and the estimates of property destruction were quite conservative.) Even so, the direct cost of the war as calculated by Goldin and Lewis was 1.5 times the total gross national product of the United States for 1860 — an enormous sum in comparison with any military effort by the United States up to that point.
What stands out in addition to the enormity of the bill is the disparity in the burden these costs represented to the people in the North and the South. On a
per capita basis, the costs to the North population were about $150 — or roughly equal to one year’s income. The Southern burden was two and a half times that amount — $376 per man, woman and child.
Staggering though these numbers are, they represent only a fraction of the full costs of the war, which lingered long after the fighting had stopped. One way to measure the full “costs” and “benefits” of the war, Goldin and Lewis argue, is to estimate the value of the
observed postwar stream of consumption in each region and compare that figure to the estimated
hypothetical stream of consumption had there been no war (1975: 309-10). (All the figures for the costs in Table 3 have been adjusted to reflect their
discounted value in 1860.) The Goldin and Lewis estimate for the discounted value of lost consumption for the South was $6.2 billion; for the North the estimate was $1.15 billion. Ingenious though this methodology is, it suffers from the serious drawback that consumption lost for
any reason — not just the war — is included in the figure. Particularly for the South, not all the decline in output after 1860 could be directly attributed to the war; the growth in the demand for cotton that fueled the antebellum economy did not continue, and there was a dramatic change in the supply of labor due to emancipation. Consequently, Goldin and Lewis subsequently adjusted their estimate of lost consumption due to the war down to $2.56 billion for the South in order to exclude the effects of emancipation and the collapse of the cotton market. The magnitudes of the indirect effects are detailed in the Table.
After the adjustments, the estimated costs for the war totaled more than $10 billion.
Allocating the costs to each region produces a per capita burden of $670 in the South and $199 in the North. What the above table does not show is the extent to which these expenses were spread out over a long period of time. In the North, consumption had regained its prewar level by 1873, however in the South consumption remained below its 1860 level to the end of the century.