By the late 1700's, the southern region of the United States contained thousands of acres of cotton fields. The soil and climate in the South were ideal for growing this much-needed staple. Southern planters could barely keep up with the demand. The problem lay not so much in the growing of the plants, but in the removal of the sticky seeds from the raw cotton.
In 1793, Eli Whitney developed a model for a cotton gin. His cotton gin had teeth that separated the seeds from the fibers of the cotton. A worker using a cotton gin could do the work of 50 people! This had an enormous effect on the economy of the South. Cotton planters went from producing 6,000 bales of cotton per year in 1792, to producing over 2 million bales of cotton by 1850! By 1860 that figure had risen to almost 4 million! By that time, the South produced about two-thirds of the world's supply of cotton. It's no wonder that "Cotton is king" became the saying of the Southern plantation owners.
The downside of the cotton boom was the fact that the work was being done by slaves. As more land was developed to grow the profitable crop, more slaves were needed. By 1860, about 4 million slaves were working in the cotton fields of the South. These cotton fields were producing thousands of bales of cotton – and much income – for their wealthy landowners.
By the end of the Civil War, cotton was worth $250 per bale. A good crop could produce 1 bale per acre. Each bale weighed between 400 and 500 pounds. If the cotton had been raised by slave labor, it was taxed it at a rate of $60 per 400-pound bale, and $75 per 500-pound bale. In contrast, a bale raised without slave labor was taxed a mere 3¢ per pound.
Suppose a farmer had 100 acres of land on which he grew cotton. If he produced 500-pound bales of the cotton, what would be the difference between the amount of tax the farmer would have to pay on his total harvest if he used slave labor and the amount of tax he would have to pay if he hired free men?