The colonists were left to build their own governments and their own economy. Although the colonies provided an export market for finished goods made in Britain or sourced by British merchants and shipped from Britain, the British incurred the expenses of providing protection against piracy by the British Navy and other military expenses.
An early tax was the Molasses Act of In the s the London government raised small sums by new taxes on the colonies. This occasioned an enormous uproar, from which historians date the origins of the American Revolution. The issue was not the amount of the taxes—they were quite small—but rather the constitutional authority of Parliament versus the colonial assemblies to vote taxes. Historians have debated back and forth about the cost imposed by the Navigation Acts , which were less visible and rarely complained about.
Americans in the Thirteen Colonies demanded their rights as Englishmen , as they saw it, to select their own representatives to govern and tax themselves — which Britain refused. The Americans attempted resistance through boycotts of British manufactured items, but the British responded with a rejection of American rights and the Intolerable Acts of The American Revolution — brought a dedication to unalienable rights to "life, liberty, and the pursuit of happiness", which emphasize individual liberty and economic entrepreneurship, and simultaneously a commitment to the political values of liberalism and republicanism , which emphasize natural rights , equality under the law for all citizens, civic virtue and duty, and promotion of the general welfare.
Congress and the American states had no end of difficulty financing the war. The British made the situation much worse by imposing a tight blockade on every American port, which cut off almost all imports and exports. One partial solution was to rely on volunteer support from militiamen, and donations from patriotic citizens. Another was to delay actual payments, pay soldiers and suppliers in depreciated currency, and promise it would be made good after the war. Indeed, in the soldiers and officers were given land grants to cover the wages they had earned but had not been paid during the war.
Not until , when Robert Morris was named Superintendent of Finance of the United States , did the national government have a strong leader in financial matters. Morris used a French loan in to set up the private Bank of North America to finance the war. Seeking greater efficiency, Morris reduced the civil list, saved money by using competitive bidding for contracts, tightened accounting procedures, and demanded the federal government's full share of money and supplies from the states. Congress used four main methods to cover the cost of the war, which cost about 66 million dollars in specie gold and silver.
This paper money would supposedly be redeemed for state taxes, but the holders were eventually paid off in at the rate of one cent on the dollar. By , the paper money was "not worth a Continental", as people said, and a second issue of new currency was attempted. The second issue quickly became nearly worthless—but it was redeemed by the new federal government in at cents on the dollar. In effect, the paper money was a hidden tax on the people, and indeed was the only method of taxation that was possible at the time. The skyrocketing inflation was a hardship on the few people who had fixed incomes—but 90 percent of the people were farmers, and were not directly affected by that inflation.
Debtors benefited by paying off their debts with depreciated paper. Starting in , the Congress sought to raise money by loans from wealthy individuals, promising to redeem the bonds after the war. The bonds were in fact redeemed in at face value, but the scheme raised little money because Americans had little specie, and many of the rich merchants were supporters of the Crown. Starting in , the French secretly supplied the Americans with money, gunpowder and munitions in order to weaken its arch enemy, Great Britain. When France officially entered the war in , the subsidies continued, and the French government, as well as bankers in Paris and Amsterdam loaned large sums to the American war effort.
These loans were repaid in full in the s. Beginning in , Congress repeatedly asked the states to provide money. But the states had no system of taxation either, and were little help. By Congress was making requisitions for specific supplies of corn, beef, pork and other necessities—an inefficient system that kept the army barely alive. The cities played a major role in fomenting the American Revolution, but they were hard hit during the war itself, — They lost their main role as oceanic ports, because of the blockade by the British Navy.
Furthermore, the British occupied the cities, especially New York —83, and the others for briefer periods. During the occupations they were cut off from their hinterland trade and from overland communication. When the British finally departed in , they took out large numbers of wealthy merchants who resumed their business activities elsewhere in the British Empire. The U. Constitution , adopted in , established that the entire nation was a unified, or common market, with no internal tariffs or taxes on interstate commerce.
The extent of federal power was much debated, with Alexander Hamilton taking a very broad view as the first Secretary of the Treasury during the presidential administration of George Washington. Hamilton successfully argued for the concept of " implied powers ", whereby the federal government was authorized by the Constitution to create anything necessary to support its contents, even if it not specifically noted in it build lighthouses, etc. He succeeded in building strong national credit based on taking over the state debts and bundling them with the old national debt into new securities sold to the wealthy.
They in turn now had an interest in keeping the new government solvent. Hamilton funded the debt with tariffs on imported goods and a highly controversial tax on whiskey. Hamilton believed the United States should pursue economic growth through diversified shipping, manufacturing, and banking. He sought and achieved Congressional authority to create the First Bank of the United States in ; the charter lasted until After the war, the older cities finally restored their economic basis; newer growing cities included Salem, Massachusetts which opened a new trade with China , New London, Connecticut, and Baltimore, and Maryland.
The Washington administration under the leadership of Secretary of the Treasury Alexander Hamilton set up a national bank in , and local banks began to flourish in all the cities. Merchant entrepreneurship flourished and was a powerful engine of prosperity in the cities.
World peace lasted only a decade, for in a two decades of war between Britain and France and their allies broke out. As the leading neutral trading partner the United States did business with both sides. France resented it, and the Quasi-War of —99 disrupted trade. Outraged at British impositions on American merchant ships, and sailors, the Jefferson and Madison administrations engaged in economic warfare with Britain — , and then full-scale warfare to There were very few roads outside of cities and no canals in the new nation.
In it was reported that the cost of transport of many crops to seaport was from one-fifth to one half their cost. In the mid s Oliver Evans invented a fully automatic mill that could process grain with practically no human labor or operator attention. This was a revolutionary development in two ways: 1 it used bucket elevators and conveyor belts, which would eventually revolutionize materials handling, and 2 it used governors , a forerunner of modern automation, for control.
Cotton was at first a small-scale crop in the South. Cotton farming boomed following the improvement of the cotton gin by Eli Whitney. Soon, large cotton plantations, based on slave labor, expanded in the richest lands from the Carolinas westward to Texas. The raw cotton was shipped to textile mills in Britain, France and New England.
In the final decade of the 18th century England was beginning to enter the rapid growth period of the Industrial Revolution , but the rest of the world was completely devoid of any type of large scale mechanized industry. Britain prohibited the export of textile machinery and designs and did not allow mechanics with such skills to emigrate.
Samuel Slater , who worked as mechanic at a cotton spinning operation in England, memorized the design of the machinery. He was able to disguise himself as a laborer and emigrated to the U. Slater determined that the machinery was not capable of producing good quality yarn and persuaded the owners to have him design new machinery. Slater found no mechanics in the U. Eventually he located Oziel Wilkinson and his son David to produce iron castings and forgings for the machinery. According to David Wilkinson : "all the turning of the iron for the cotton machinery built by Mr.
Slater was done with hand chisels or tools in lathes turned by cranks with hand power". In Slater and Brown opened a factory in Pawtucket, Rhode Island, which was the first successful water powered roller spinning cotton factory in the U. See: Slater Mill Historic Site. David Wilkinson went on to invent a metalworking lathe which won him a Congressional prize. The First Bank of the United States was chartered in It was designed by Alexander Hamilton and faced strenuous opposition from agrarians led by Thomas Jefferson, who deeply distrusted banks and urban institutions.
They closed the Bank in , just when the War of made it more important than ever for Treasury needs. The United States was pre-industrial throughout the first third of the 19th century. Most people lived on farms and produced much of what they consumed. A considerable percentage of the non-farm population was engaged in handling goods for export. The country was an exporter of agricultural products.
The textile industry became established in New England, where there was abundant water power. Steam power began being used in factories, but water was the dominant source of industrial power until the Civil War. The building of roads and canals, the introduction of steamboats and the first railroads were the beginning of a transportation revolution that would accelerate throughout the century.
The institutional arrangements of the American System were initially formulated by first Secretary of the Treasury, Alexander Hamilton , who proposed the creation of a government-sponsored bank and increased tariffs to encourage industrial development. Specific government programs and policies which gave shape and form to the American School and the American System include the establishment of the Patent Office in ; the creation of the Coast and Geodetic Survey in and other measures to improve river and harbor navigation; the various Army expeditions to the west, beginning with Lewis and Clark's Corps of Discovery in and continuing into the s, almost always under the direction of an officer from the Army Corps of Topographical Engineers , and which provided crucial information for the overland pioneers that followed; the assignment of Army Engineer officers to assist or direct the surveying and construction of the early railroads and canals; the establishment of the First Bank of the United States and Second Bank of the United States as well as various protectionist measures e.
Thomas Jefferson and James Madison opposed a strong central government and, consequently, most of Hamilton's economic policies , but they could not stop Hamilton, who wielded immense power and political clout in the Washington administration. In , however, Jefferson became president and turned to promoting a more decentralized, agrarian democracy called Jeffersonian democracy. He based his philosophy on protecting the common man from political and economic tyranny.
He particularly praised small farmers as "the most valuable citizens". However, Jefferson did not change Hamilton's basic policies. As president in Madison let the bank charter expire, but the War of proved the need for a national bank and Madison reversed positions. The Second Bank of the United States was established in , with a year charter. The Louisiana Purchase greatly expanded the size of the United States, adding extremely good farmland, the Mississippi River and the city of New Orleans.
Wars from to caused withdrawal of most foreign shipping from the U. Seizure of U. States built roads and waterways, such as the Cumberland Pike and the Erie Canal , opening up markets for western farm products. The Whig legislation program was blocked at the national level by the Democrats, but similar modernization programs were enacted in most states on a bipartisan basis.
The role of the Federal Government in regulating interstate commerce was firmly established by the landmark Supreme Court ruling in Gibbons v Ogden , which decided against allowing states to grant exclusive rights to steamboat companies operating between states. President Andrew Jackson — , leader of the new Democratic Party, opposed the Second Bank of the United States, which he believed favored the entrenched interests of rich. When he was elected for a second term, Jackson blocked the renewal of the bank's charter. Jackson opposed paper money and demanded the government be paid in gold and silver coins.
The Panic of stopped business growth for three years. Although there was relatively little immigration from Europe, the rapid expansion of settlements to the West, and the Louisiana Purchase of , opened up vast frontier lands. The high birth rate, and the availability of cheap land caused the rapid expansion of population. The average age was under 20, with children everywhere. The population grew from 5. By , the population had reached 17,, on the same land. New Orleans and St. Louis joined the United States and grew rapidly; entirely new cities were begun at Pittsburgh, Marietta, Cincinnati, Louisville, Lexington, Nashville and points west.
The coming of the steamboat after made upstream traffic economical on major rivers, especially the Hudson, Ohio, Mississippi, Illinois, Missouri, Tennessee, and Cumberland rivers. They were the transportation centers, and nodes for migration and financing of the westward expansion. The newly opened regions had few roads, but a very good river system in which everything flowed downstream to New Orleans. With the coming of the steamboat after , it became possible to move merchandise imported from the Northeast and from Europe upstream to new settlements.
The opening of the Erie Canal made Buffalo the jumping off point for the lake transportation system that made important cities out of Cleveland, Detroit, and especially Chicago. The labor shortage was attributed to the cheapness of land and the high returns on agriculture. All types of labor were in high demand, especially unskilled labor and experienced factory workers. Labor prices in the U. Women factory workers were especially scarce. The elasticity of labor was low in part because of lack of transportation and low population density.
The relative labor scarcity and high price was an incentive for capital investment, particularly in machinery. Westward expansion plus the building of canals and the introduction of steamboats opened up new areas for agriculture. Much land was cleared and put into growing cotton in the Mississippi valley and in Alabama, and new grain growing areas were brought into production in the Midwest. Eventually this put severe downward pressure on prices, particularly of cotton, first from to and again from to Before the Industrial Revolution most cotton was spun and woven near where it was grown, leaving little raw cotton for the international marketplace.
World cotton demand experienced strong growth due to mechanized spinning and weaving technologies of the Industrial Revolution. Although cotton was grown in India, China, Egypt, the Middle East and other tropical and sub-tropical areas, the Americas, particularly the U. Sugar cane was being grown in Louisiana, where it was refined into granular sugar.
Growing and refining sugar required a large amount of capital. Some of the nation's wealthiest people owned sugar plantations, which often had their own sugar mills. Southern plantations, which grew cotton, sugar cane and tobacco, used African slave labor. Per capita food production did not keep pace with the rapidly expanding urban population and industrial labor force in the Antebellum decades. There were only a few roads outside of cities at the beginning of the 19th century, but turnpikes were being built.
A ton-mile by wagon cost from between 30 and 70 cents in Robert Fulton's estimate for typical wagonage was 32 cents per ton-mile. The cost of transporting wheat or corn to Philadelphia exceeded the value at and miles, respectively. Following the Louisiana Purchase the need for additional roads to the West were recognized by Thomas Jefferson, who authorized the construction of the Cumberland Road in Mail roads were also built to New Orleans.
The building of roads in the early years of the 19th century greatly lowered transportation costs and was a factor in the deflation of to , which was one of the most severe in U. Because a horse can pull a barge carrying a cargo of over 50 tons compared to the typical one ton or less hauled by wagon, and the horse required a wagoner versus a couple of men for the barge, water transportation costs were a small fraction of wagonage costs. Canals' shipping costs were between two and three cents per ton-mile, compared to 17—20 cents by wagon.
Only miles of canals had been built in the U. The early canals were typically financially successful, such as those carrying coal in eastern Pennsylvania, where canal building was concentrated until Wagon cost from Buffalo to New York City in was By Erie Canal c. The Delaware and Raritan Canal was also very successful. Also important was the 2. The success of some of the early canals led to a canal building boom, during which work began on many canals which would prove to be financially unsuccessful.
As the canal boom was underway in the late s, a small number of horse railways were being built. These were quickly followed by the first steam railways in the s. In the United States had three major steam engines, all of which were used for pumping water: two in mines and one for New York City's water supply.
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Most power in the U. By when the North River Steamboat unofficially called Clermont first sailed, there were estimated to be fewer than a dozen steam engines operating in the U. Steam power did not overtake water power until sometime after Oliver Evans began developing a high pressure steam engine that was more practical than the engine developed around the same time by Richard Trevithick in England. The high pressure engine did away with the separate condenser and thus did not require cooling water.
It also had a higher power to weight ratio, making it suitable for powering steamboats and locomotives. Evans produced a few custom steam engines from to , when he opened the Mars Works iron foundry and factory in Philadelphia, where he produced additional engines. In he produced a successful Colombian engine at Mars Works. As his business grew and orders were being shipped, Evans and a partner formed the Pittsburgh Steam Engine Company in Pittsburgh, Pennsylvania. Steam engines soon became common in public water supply, sawmills and flour milling, especially in areas with little or no water power.
In Paul Moody substituted leather belting for gearing in mills. In the factory boom of the late 19th century it was common for large factories to have many miles of line shafts. Leather belting continued in use until it was displaced by unit drive electric motors in the early decades of the 20th century. Shipbuilding remained a sizable industry. The British gained the lead in shipbuilding after they introduced iron-hulled ships in the mid 19th century.
Commercial steamboat operations began in within weeks of the launch of Robert Fulton 's North River Steamboat , often referred to as the Clermont. The first steamboats were powered by Boulton and Watt type low pressure engines, which were very large and heavy in relation to the smaller high pressure engines. In Robert L. Stevens began operation of the Phoenix , which used a high pressure engine in combination with a low pressure condensing engine.
The first steamboats powered only by high pressure were the Aetna and Pennsylvania designed and built by Oliver Evans. In the winter of to , the New Orleans became the first steamboat to travel down the Ohio and Mississippi Rivers from Pittsburgh to New Orleans. The commercial feasibility of steamboats on the Mississippi and its tributaries was demonstrated by the Enterprise in By the time of Fulton's death in he operated 21 of the estimated 30 steamboats in the U.
The number of steamboats steadily grew into the hundreds. There were more steamboats in the Mississippi valley than anywhere else in the world. Early steamboats took 30 days to travel from New Orleans to Louisville, which was from half to one-quarter the time by keel boat. Due to improvements in steamboat technology, by the time from New Orleans to Louisville was halved.
In freight rates for keel boats were five cents per ton-mile versus two cents by steamboat, falling to one-half cent per pound by The SS Savannah crossed from Savannah to Liverpool in as the first trans-Atlantic steamship; however, until the development of more efficient engines, trans-ocean ships had to carry more coal than freight. Early trans-ocean steamships were used for passengers and soon some companies began offering regularly scheduled service. Railroads were an English invention, and the first entrepreneurs imported British equipment in the s.
By the s the Americans had developed their own technology. The early lines in the s and s were locally funded, and connected nearby cities or connected farms to navigable waterways. They primarily handled freight rather than passengers. One such locomotive was the John Bull which arrived in While awaiting assembly, Matthias W. Baldwin , who had designed and manufactured a highly successful stationary steam engine, was able to inspect the parts and obtain measurements.
Baldwin was already working on an experimental locomotive based on designs shown at the Rainhill Trials in England. Baldwin produced his first locomotive in ; he went on to found the Baldwin Locomotive Works , one of the largest steam locomotive manufacturers. In when there were few locomotives in the U. In there were locomotives recorded in the U. Ohio had more railroads built in the s than any other state. Ohio's railroads put the canals out of business.
Railroads appeared at the time of the canal boom, causing its abrupt end, although some canals flourished for an additional half-century. Starting with textiles in the s, factories were built to supply a regional and national market. The power came from waterfalls, and most of the factories were built alongside the rivers in rural New England and upstate New York. Before , most cloth was made in home workshops, and housewives sewed it into clothing for family use or trade with neighbors. In the secretary of the treasury estimated that two-thirds of rural household clothing, including hosiery and linen, was produced by households.
Samuel Slater secretly brought in the plans for complex textile machinery from Britain, and built new factories in Rhode Island using the stolen designs. These were all small operations, typically employing fewer than 50 people, and most used Arckwright water frames powered by small streams. They were all located in southeastern New England. To meet increased demand for cloth several manufacturers resorted to the putting-out system of having the handloom weaving done in homes. The putting-out system was inefficient because of the difficulty of distributing the yarn and collecting the cloth, embezzlement of supplies, lack of supervision and poor quality.
To overcome these problems the textile manufacturers began to consolidate work in central workshops shops where they could supervise operations. Taking this to the next level, in Francis Cabot Lowell of the Boston Manufacturing Company built the first integrated spinning and weaving factory in the world at Waltham, Massachusetts, using plans for a power loom that he smuggled out of England.
This was the largest factory in the U. It was a very efficient, highly profitable mill that, with the aid of the Tariff of , competed effectively with British textiles at a time when many smaller operations were being forced out of business. By there were 10 cotton mills in the Fall River area, which soon became the country's leading producer of printed cotton cloth. The shoe industry began transitioning from production by craftsmen to the factory system , with division of labor. Low return freight rates from Europe offered little protection from imports to domestic industries.
Standardization and interchangeability have been cited as major contributors to the exceptional growth of the U. The idea of standardization of armaments was originated by French General Jean-Baptiste Vaquette de Gribeauval , who in began instituting the Gribeauval system. Jefferson wrote a letter to John Jay about these developments in Corps of Artillerists and Engineers where he taught artillery and engineering he learned in France.
At the suggestion of George Washington, Tousard had been working on an artillery manual, which he published as The American Artillerist's Companion Tousard's manual, which was a standard textbook for officer training, stressed the importance of developing a system of standardized armaments. Two notable recipients of these contracts associated with interchangeable parts were Eli Whitney and Simeon North. Although Whitney was not able to make interchangeable parts, he was a proponent of using machinery for gun making; however, he employed only the simplest machines in his factory.
North eventually made progress toward some degree of interchangeability and developed special machinery. North's shop used the first known milling machine c. The experience of the War of led the War Department to issue a request for contract proposals for firearms with interchangeable parts. Previously, parts from each firearm had to be carefully custom fitted; almost all infantry regiments necessarily included an artificer or armorer who could perform this intricate gunsmithing. The requirement for interchangeable parts forced forward the development of modern metal-working machine tools, including milling machines , grinders, shapers and planers.
The Federal Armories perfected the use of machine tools by developing fixtures to correctly position the parts being machined and jigs to guide the cutting tools over the proper path. Systems of blocks and gauges were also developed to check the accuracy and precision of the machined parts. Developing the manufacturing techniques for making interchangeable parts by the Federal Armories took over two decades; however, the first interchangeable small arms parts were not made to a high degree of precision.
It wasn't until mid century or later that parts for U. In when the British Parliamentary Committee on Small Arms questioned gun maker Samuel Colt , and machine tool makers James Nasmyth and Joseph Whitworth , there was still some question about what constituted interchangeability and whether it could be achieved at a reasonable cost. The machinists' skills were called armory practice and the system eventually became known as the American system of manufacturing.
Machinists from the armories eventually spread the technology to other industries, such as clocks and watches, especially in the New England area. It wasn't until late in the 19th century that interchangeable parts became widespread in U. Among the items using interchangeable parts were some sewing machine brands and bicycles. The development of these modern machine tools and machining practices made possible the development of modern industry capable of mass production; however, large scale industrial production did not develop in the U.
The charter for the First Bank of the United States expired in Its absence caused serious difficulties for the national government trying to finance the War of over the refusal of New England bankers to help out. President James Madison reverses earlier Jeffersonian opposition to banking, and secured the opening of a new national bank. The Second Bank of the United States was chartered in Its leading executive was Philadelphia banker Nicholas Biddle. There were three economic downturns in the early 19th century.
The first was the result of the Embargo Act of , which shut off most international shipping and trade due to the Napoleonic Wars. The embargo caused a depression in cities and industries dependent on European trade. The other two downturns were depressions accompanied by significant periods of deflation during the early 19th century. The first and most severe was during the depression from to when prices of agricultural commodities declined by almost 50 percent.
A credit contraction caused by a financial crisis in England drained specie out of the U. The Bank of the United States also contracted its lending. The price of agricultural commodities fell by almost 50 percent from the high in to the low in , and did not recover until the late s, although to a significantly lower price level. Most damaging was the price of cotton, the U. Food crop prices, which had been high because of the famine of that was caused by the year without a summer , fell after the return of normal harvests in Improved transportation, mainly from turnpikes, significantly lowered transportation costs.
The third economic downturn was the depression of the late s to , following the Panic of , when the money supply in the United States contracted by about 34 percent with prices falling by 33 percent. The magnitude of this contraction is matched only by the Great Depression. In order to dampen speculation in land, Andrew Jackson signed the executive order known as the Specie Circular in , requiring sale of government land to be paid in gold and silver. Branch mints at New Orleans ; Dahlonega , Georgia; and Charlotte , North Carolina, were authorized by congress in and became operational in Gold was being withdrawn from the U.
Canal projects began to fail. The result was the financial Panic of In there was a brief recovery. The business cycle upturn occurred in Economic historians have explored the high degree of financial and economic instability in the Jacksonian era. For the most part, they follow the conclusions of Peter Temin , who absolved Jackson's policies, and blamed international events beyond American control, such as conditions in Mexico, China and Britain.
A survey of economic historians in show that the vast majority concur with Temin's conclusion that "the inflation and financial crisis of the s had their origin in events largely beyond President Jackson's control and would have taken place whether or not he had acted as he did vis-a-vis the Second Bank of the U. The government was a very poor manager during the war, with delays in payments and confusion, as the Treasury took in money months after it was scheduled to pay it out. Inexperience, indecision, incompetence, partisanship and confusion the main hallmarks.
The federal government's management system was designed to minimize the federal role before The Republicans in power deliberately wanted to downsize the power and roles of the federal government; when the war began, the Federalist opposition worked hard to sabotage operations. Problems multiplied rapidly in , and all the weaknesses were magnified, especially regarding the Army and the Treasury.
There were no serious reforms before the war ended. Its absence made it much more difficult to handle the financing of the war, and cause special problems in terms of moving money from state to state, since state banks were not allowed to operate across state lines. The bureaucracy was terrible, often missing deadlines. On the positive side, over new state banks were created all over the country, and they issued notes that financed much of the war effort, along with loans raised by Washington.
Some key Republicans, especially Secretary of the Treasury Albert Gallatin realized the need for new taxes, but the Republican Congress was very reluctant and only raised small amounts. The whole time, the Federalists in Congress and especially the Federalist-controlled state governments in the Northeast, and the Federalist-aligned financial system in the Northeast, was strongly opposed to the war and refused to help in the financing. Across the two and half years of the war, —, the federal government took in more money than it spent.
The economy grew every year —, despite a large loss of business by East Coast shipping interests. Wartime inflation averaged 4. Per capita GDP grew at 2. The Boston Manufacturing Company built the first integrated spinning and weaving factory in the world at Waltham, Massachusetts, in The middle 19th century was a period of transition toward industrialization, particularly in the Northeast, which produced cotton textiles and shoes.
The population of the West generally meaning from Ohio to and including Wisconsin, Minnesota, Iowa and Missouri and south to include Kentucky grew rapidly. The West was primarily a grain and pork producing region, with an important machine tool industry developing around Cincinnati, Ohio. The Southern economy was based on plantation agriculture, primarily cotton, tobacco and sugar, produced with slave labor.
The market economy and factory system were not typical before , but developed along transportation routes. Steamboats and railroads, introduced in the early part of the century, became widespread and aided westward expansion. A machine tool industry developed and machinery became a major industry. Sewing machines began being manufactured.
The shoe industry became mechanized. Horse drawn reapers became widely introduced, significantly increasing the productivity of farming. The use of steam engines in manufacturing increased and steam power exceeded water power after the Civil War. The combination of railroads, the telegraph and machinery and factories began to create an industrial economy. The longest economic expansion of the United States occurred in the recession-free period between — Railroads opened up remote areas and drastically cut the cost of moving freight and passengers.
As transportation improved, new markets continuously opened. Railroads greatly increased the importance of hub cities such as Atlanta, Billings, Chicago, and Dallas. States awarded charters, funding, tax breaks, land grants, and provided some financing. Railroads were allowed banking privileges and lotteries in some states. Private investors provided a small but not insignificant share or railroad capital.
Railroad executives invented modern methods for running large-scale business operations, creating a blueprint that all large corporations basically followed. They created career tracks that took year-old boys and turned them into brakemen, conductors and engineers. Due to these radical innovations, the railroad became the first large-scale business enterprise and the model for most large corporations.
The most important technological innovation in mid 19th century pig iron production was the adoption of hot blast , which was developed and patented in Scotland in Hot blast is a method of using heat from the blast furnace exhaust gas to preheat combustion air, saving a considerable amount of fuel. It allowed much higher furnace temperatures and increased the capacity of furnaces. Hot blast allowed blast furnaces to use anthracite or lower grade coal.
Anthracite was difficult to light with cold blast. High quality metallurgical coking coal deposits of sufficient size for iron making were only available in Great Britain and western Germany in the 19th century,  but with less fuel required per unit of iron, it was possible to use lower grade coal. The use of anthracite was rather short lived because the size of blast furnaces increased enormously toward the end of the century, forcing the use of coke , which was more porous and did not impede the upflow of the gases through the furnace.
Charcoal would have been crushed by the column of material in tall furnaces. Also, the capacity of furnaces would have eventually exceeded the wood supply, as happened with locomotives. Iron was used for a wide variety of purposes. In large consumers were numerous types of castings, especially stoves.
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The value added by stoves was equal to the value added by rails. Coal displaced wood during the mid-nineteenth century. In wood was the major fuel while coal production was minor. Wood was a byproduct of land clearing and was placed along the banks of rivers for steamboats. By mid century the forests were being depleted while steamboats and locomotives were using enough wood to create shortages along their routes; however, railroads, canals and navigable internal waterways were able to bring coal to market at a price far below the cost of wood.
Coal sold in Cincinnati for 10 cents per bushel 94 pounds and in New Orleans for 14 cents.
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Charcoal production was very labor and land intensive. It was estimated that to fuel a typical sized ton of pig iron per week furnace in at a sustained yield, a timber plantation of 20, acres was required. The trees had to be hauled by oxen to where they were cut, stacked on end and covered with earth or put in a kiln to be charred for about a week.
Manufacturing became well established during the mid 19th century. Labor in the U.
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In the early 19th century machinery was made mostly of wood with iron parts. By the mid century machines were being increasingly of all iron, which allowed them to operate at higher speeds and with higher precision. The demand for machinery created a machine tool industry that designed and manufactured lathes, metal planers, shapers and other precision metal cutting tools. The shoe industry was the second to be mechanized, beginning in the s. Sewing machines were developed for sewing leather. A leather rolling machine eliminated hand hammering, and was thirty times faster. Blanchard lathes began being used for making shoe lasts forms in the s, allowing the manufacture of standard sizes.
By the s much progress had been made in the development of the sewing machine , with a few companies making the machines, based on a number of patents, with no company controlling the right combination of patents to make a superior machine.
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To prevent damaging lawsuits, in several important patents were pooled under the Sewing Machine Combination , which licensed the patents for a fixed fee per machine sold. The sewing machine industry was a beneficiary of machine tools and the manufacturing methods developed at the Federal Armories. By two sewing machine manufacturers were using interchangeable parts. In the textile industry was the largest manufacturing industry in terms of workers employed mostly women and children , capital invest and value of goods produced.
That year there were 5 million spindles in the U. The Treasury Department's steam engine report of was the most valuable survey of steam power until the Census. The Corliss steam engine , patented in , was called the most significant development in steam engineering since James Watt. The Corliss engine was more efficient than previous engines and maintained more uniform speed in response to load changes, making it suitable for a wide variety of industrial applications. It was the first steam engine that was suitable for cotton spinning. Previously steam engines for cotton spinning pumped water to a water wheel that powered the machinery.
Steam power greatly expanded during the late 19th century with the rise of large factories, the expanded railroad network and early electric lighting and electric street railways. The number of steamboats on western rivers in the U. Total registered tonnage of steam vessels for the U. Until the introduction of iron ships, the U. The design of U. The screw propeller was tested on Lake Ontario in before being used on ocean ships. Iron ships became common and more efficient multiple expansion engines were developed.
After the introduction of iron ships, Britain became the leading shipbuilding country. Congress approved funds for a short demonstration telegraph line from Baltimore to Washington D. The telegraph was quickly adopted by the railroad industry, which needed rapid communication to coordinate train schedules, the importance of which had been highlighted by a collision on the Western Railroad in Railroads also needed to communicate over a vast network in order to keep track of freight and equipment. By there were 22, miles of telegraph lines in the U.
Urbanized industry was limited primarily to the Northeast; cotton cloth production was the leading industry, with the manufacture of shoes, woolen clothing, and machinery also expanding. Most of the workers in the new factories were immigrants or their children. Between and , some , European immigrants arrived annually.
Many remained in eastern cities, especially mill towns and mining camps, while those with farm experience and some savings bought farms in the West. In antebellum period the U. The westward expansion into the highly productive heartland was aided the new railroads, and both population and grain production in the West expanded dramatically.
Increased grain production was able to capitalize on high grain prices caused by poor harvests in Europe during the time of the Great Famine in Ireland  Grain prices also rose during the Crimean War , but when the war ended U. Low grain prices were a cause of the Panic of Cotton and tobacco prices recovered after the panic. Agriculture was the largest single industry and it prospered during the war.
John Deere developed a cast steel plow in which was lightweight and had a moldboard that efficiently turned over and shed the plowed earth. It was easy for a horse to pull and was well suited to cutting the thick prairie sod of the Midwest.
He and his brother Charles founded Deere and Company which continues into the 21st century as the largest maker of tractors, combines, harvesters and other farm implements. Threshing machines, which were a novelty at the end of the 18th century, began being widely introduced in the s and s. Mechanized threshing required less than half the labor of hand threshing. The Civil War acted as a catalyst that encouraged the rapid adoption of horse-drawn machinery and other implements.
The rapid spread of recent inventions such as the reaper and mower made the work force efficient, even as hundreds of thousands of farmers were in the army. The Homestead Act opened up the public domain lands for free. Land grants to the railroads meant they could sell tracts for family farms 80 to acres at low prices with extended credit.
In addition the government sponsored fresh information, scientific methods and the latest techniques through the newly established Department of Agriculture and the Morrill Land Grant College Act. In , there were 4. In the aftermath of the Panic of , which left many northern factory workers unemployed and deprived to the point of causing bread riots, supporters of slavery pointed out that slaves were generally better fed and had better living quarters than many free workers. After the expiration of the charter of the Second Bank of the United States , federal revenues were handled by the Independent Treasury beginning in The Second Bank of the U.
One of the main problems with banks was over-issuance of banknotes. These were redeemable in specie gold or silver upon presentation to the chief cashier of the bank. In there were over 8, state chartered banks issuing notes. In the U. Banks began paying interest on deposits and using the proceeds to make short term call loans , mainly to stock brokers. New York banks created a clearing house association in in which member banks cleared accounts with other city banks at the close of the week.
The clearinghouse association also handled notes from banks in other parts of the country. The association was able to detect banks that were issuing excessive notes because they could not settle. The recovery from the depression that followed the Panic of began in and lasted until the Panic of A manager in the New York branch, one of the city's largest financial institutions, had embezzled funds and made excessive loans. The company's president announced suspension of specie redemption, which triggered a rush to redeem banknotes, causing many banks to fail because of lack of specie.
The United States had been running a trade deficit, draining gold out of the country. Because of the tariff revenues, the U. Treasury held a considerable amount of gold, which kept it out of circulation. Secretary of the Treasury Howell Cobb came to the aid of New York mercantile interests by buying back some of the national debt. On September 25 the Bank of Pennsylvania suspended specie payment, starting a nationwide bank run.
The danger of interest bearing deposits became apparent when bankers had to call loans made to stock brokers, many of whom were unable to pay. Banks then had to curtail credit to commercial and industrial customers. Many business were unable to pay workers back wages because they held so many worthless banknotes. The Crimean War , which had cut off Russian wheat exports, ended in The war had caused high wheat prices and overexpansion in the U.
Good harvests in England, France and Russia caused collapse in demand for U. This caused railroad shipments from the West to fall, which resulted in the bankruptcy of some railroads. The inability of the West to sell its crops hurt businesses in other regions, such as New England, which manufactured shoes sold in the West. Cotton and tobacco prices fell, but unlike grains, soon recovered. The panic left many northern wage earners unemployed, most temporarily, but high unemployment lingered for a couple of years.
Immigration to the U. There were about 3 million immigrants during the decade of the s. They were mainly from Germany, Ireland and England. The wartime devastation of the South was great and poverty ensued; incomes of whites dropped, but income of the former slaves rose. During Reconstruction railroad construction was heavily subsidized with much corruption , but the region maintained its dependence on cotton.
Former slaves became wage laborers, tenant farmers , or sharecroppers. They were joined by many poor whites, as the population grew faster than the economy. As late as the only significant manufacturing industries were textile mills mostly in the upland Carolinas and some steel in Alabama. The industrial advantages of the North over the South helped secure a Northern victory in the American Civil War — The Northern victory sealed the destiny of the nation and its economic system. The slave-labor system was abolished; sharecropping emerged and replaced slavery to supply the labor needed for cotton production, but cotton prices plunged during the Depression of , leading Southern plantations to decline in profitability.
Northern industry, which had expanded rapidly before and during the war, surged ahead. Industrialists came to dominate many aspects of the nation's life, including social and political affairs. From the s to , Congress repeatedly rejected Whig calls for higher tariffs, and its policies of economic nationalism , which included increased state control, regulation and macroeconomic development of infrastructure.
The tariff was lowered time and again before the Civil War. Proposals to fund massive western railroad projects, or to give free land to homesteaders , were defeated by Southerners afraid these policies would strengthen the North. The Civil War changed everything. Territorial expansion of the United States to the area of the Lower 48 States was essentially completed with the Texas annexation , the Oregon Treaty , the Mexican cession and the Gadsden Purchase In the Treasury was a small operation that funded the small-scale operations of the government through the low tariff and land sales.
Chase showed unusual ingenuity in financing the war without crippling the economy. The government paid for supplies in real money, which encouraged people to sell to the government regardless of their politics. By contrast the Confederacy gave paper promissory notes when it seized property, so that even loyal Confederates would hide their horses and mules rather than sell them for dubious paper.
Overall the Northern financial system was highly successful in raising money and turning patriotism into profit, while the Confederate system impoverished its patriots. Second came much higher tariffs, through several Morrill tariff laws. Third came the nation's first income tax; only the wealthy paid and it was repealed at war's end. Apart from taxes, the second major source was government bonds. For the first time bonds in small denominations were sold directly to the people, with publicity and patriotism as key factors, as designed by banker Jay Cooke.
Add to cart. Be the first to write a review About this product. About this product Product Information This book offers an analytical explanation for the origins of and change in property institutions on the American frontier during the nineteenth century. Its scope is interdisciplinary, integrating insights from political science, economics, law and history. This book shows how claim clubs - informal governments established by squatters in each of the major frontier sectors of agriculture, mining, logging and ranching - substituted for the state as a source of private property institutions and how they changed the course of who received a legal title, and for what price, throughout the nineteenth century.
modernpsychtraining.com/cache/high/zoq-kik-tracker-smartphone.php Unlike existing analytical studies of the frontier that emphasize one or two sectors, this book considers all major sectors, as well as the relationship between informal and formal property institutions, while also proposing a novel theory of emergence and change in property institutions that provides a framework to interpret the complicated history of land laws in the United States.
Additional Product Features Dewey Edition. His detailed analysis of the role of claims clubs in lowering the price paid to purchase government land raises interesting questions about the reasons why the federal government chose not to maximize its revenue from land sales. Murtazashvili's arguments are based on considerable historical research, making an important contribution to the study of the impact of institutions and to understanding American economic and political history. Show More Show Less. Any Condition Any Condition.
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