The very necessities of the South served to bind that section to the North in a new fashion. Fluid capital had to be secured, in part at least, from the North, and northern enterprise found a new outlet in the reconstruction of the old, and the development of the new, industries in the region of the former confederacy. The number of cotton spindles in the South increased from about 300,000 in 1860 to more than 4,000,000 at the close of the century; the number of employees rose from 10,000 to nearly 100,000; and the value of the output leaped from $8,460,337 annually to $95,002,059. This rapid growth was, in part, due to the abundance of water power in the hill regions, the cheap labor of women and children, the low cost of living, and the absence of labor laws interfering with the hours and conditions of work in the factories.
Even in the iron and steel industry, West Virginia and Alabama began to press upon the markets of the North within less than twenty years after the close of the War. In 1880, the latter state stood tenth among the pig-iron producing states; in 1890 it stood third. The southern states alone now produce more coal, iron ore, and pig iron than all of the states combined did in 1870. The census of 1909 reports 5685 manufacturing establishments in Virginia, 4931 in North Carolina, 4792 in Georgia, and 3398 in Alabama.
The social effects which accompany capitalist development inevitably began to appear in the South. The industrial magnate began to contest with the old aristocracy of the soil for supremacy; many former slave owners and their descendants drifted into manufacturing and many poor whites made their way upward into wealth and influence. The census of 1909 reports more than thirty thousand proprietors and firm members in the South Atlantic states, an increase over the preceding report almost equal to that in the New England states. The same census reports in the southern states more than a million wage earners--equal to almost two thirds the entire number in the whole country at the opening of the Civil War. The percentage of increase in the wage earners of the South Atlantic states between 1904 and 1909 was greater than in New England or the Middle Atlantic states.