American History Question: How did the North develop differently from the South in the Colonial Period onward?

Because the South has a milder climate and a longer growing season, the South remained largely an agricultural economy. This was enhanced by the fact that the South could support two major crops that could be exported for hard currency (cotton and tobacco which were not available in Europe, so gold would be paid for them). To support this, they developed an infrastructure to enhance this, including keeping all of their major and minor rivers for transportation.

In the North, however, with a much harsher climate and a shorter growing season, they moved more towards an industrial economy. This was enhanced by the fact that the major crops that would grow successfully in the North (ceral grains like wheat, corn and barley) were protected in Europe against importation (corn laws). To support this, the North used most of its rivers for power (water wheels to turn machinery in mills etc) and built canals for transportation.

Before sectionalism (ie-North vs South politically) this difference worked well for everyone, as the South would bring in hard currency for its exports and then invest the proceeds in the North to develop industry and the production of manufactured goods. As the North became self-sufficient after independence, however, the money from the South was no longer so necessary that it would help to divert people's attention from the social ideosyncracies of the Peculiar Institution in the South.