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The Economic Revolution 1820–1860

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1 The Economic Revolution 1820–1860

2 How did industrialization affect the economy?
How and why did a transportation revolution occur before 1860? Why did Americans both migrate westward and move to cities during the first half of the nineteenth century? How did the rise of factories affect the social relationships of Americans?

3 In America, a French visitor remarked in 1839, “all is circulation, motion, and boiling agitation. Enterprise follows enterprise [and] riches and poverty follow.” Indeed, society was changing in basic ways. In 1820, the United States was predominately an agricultural nation; by 1877, it boasted one of the world’s most powerful manufacturing economies. This profound transformation affected every aspect of life in the northern and mid-western states and brought important changes to the agricultural states of the south as well.

4 People often have difficulty understanding how technological innovation developed. We can, perhaps understand this by looking at the contributions and careers of individuals such as Eli Whitney (In 1793 Eli finished his first model of the cotton gin (gin is short for engine).


6 The entire country profited greatly from Eli Whitney's idea and ability. The north profited through the growth of it's cotton manufacturing industry. The south particularly benefited it now had a crop it could export which supported the planters and helped to raise the standard of living for it's people. Everyone was beginning to make money.

7 standard of living for it's people
standard of living for it's people. Everyone was beginning to make money. In 1800 Eli Whitney began to make muskets with the threat of war with France. He did this outside of Springfield on the Mill River which he used to power the plant. ) and Robert Fulton.


9 In 1802 he contracted to build a steamboat for Robert R
In 1802 he contracted to build a steamboat for Robert R. Livingston, who held a monopoly on steamboat navigation on the Hudson. In 1807 the Clermont, equipped with an English engine, was launched. A number of men had built steamboats before Fulton, including John Fitch and William Symington. Fulton's steamship, however, was the first to be commercially successful in American waters, and Fulton was therefore popularly considered the inventor of the steamboat. He also designed other vessels, among them a steam warship.


11 Of course we need to understand technological innovation as a process of borrowing and creative adaptation, and in this vein we need to be aware of Britain’s contribution to America’s Industrial Revolution.

12 Economy Two revolutions in industrial production and the market system transformed the nation’s economy Factory owners used high-speed machines and a new system of labor discipline to boost production, and enterprising merchants employed a newly built network of canals and railroads to create a vast national market. The manufacturing sector produced an ever-increasing share of the country’s wealth: from less than 5 percent in 1820 to more than 30 percent in 1877.

13 The Coming of Industry: Northeastern Manufacturing
Between 1820 and 1860, the United States experienced an industrial and a market revolution that created a new economic structure. Merchants and manufacturers organized increasingly efficient systems of production and, aided by skilled mechanics, introduced water- and steam-powered machines to turn out huge quantities of goods. Simultaneously, merchants, traders, and shopkeepers created a vast market system in which they exchanged these manufactures for grain, meat, cotton, leather, and wool produced by a rapidly growing and westward-moving farm population.

14 Division of Labor and the Factory
Industrialization came to the United States after 1790 as merchants and manufacturers increased output of goods by reorganizing work and building factories. The “outwork system” was a more efficient division of labor and lowered the price of goods, but it eroded workers’ control over the pace and conditions of work. For tasks not suited to outwork, factories were created where work was concentrated under one roof and divided into specialized tasks.

15 Manufacturers used newly improved stationary steam engines to power their mills and used power-driven machines and assembly lines to produce new types of products. Some Britons feared that American manufacturers would become exporters not only to foreign countries but even to England.

16 British textile manufacturers were able to out-compete American manufacturers
The Americans' only advantage early in the nineteenth century was having abundant raw materials such as cotton. The British had cheaper labor, lower interest rates, and less-expensive shipping than the United States and used them effectively to keep prices lower than the prices of their American rivals.

17 The Textile Industry and British Competition
British textile manufacturers were particularly worried about American competition; Britain prohibited the export of textile machinery and the emigration of mechanics who knew how to build it, but many mechanics disguised themselves as ordinary laborers and set sail. Samuel Slater brought to America a design for an advanced cotton spinner; the opening of his factory in 1790 marked the advent of the American Industrial Revolution.

18 The Americans' only advantage early in the nineteenth century was having abundant raw materials such as cotton. The British had cheaper labor, lower interest rates, and less-expensive shipping than the United States and used them effectively to keep prices lower than the prices of their American rivals.

19 Samuel Slater is a major figure in American history and has been called both the "Father of American Industry" and the "Founder of the American Industrial Revolution."


21 Congress passed protective legislation in 1816 and 1824 levying high taxes on imported goods; tariffs were reduced again in 1833, and some textile firms went out of business. American producers used two other strategies to compete with their British rivals. First, they improved on British technology, and second, they found less expensive workers. By copying the machines of British textile mills, Francis Cabot Lowell’s Boston Manufacturing Company was able to build the Waltham factory, the first American factory to perform all the operations of cloth making under one roof at higher speeds than British mills and with fewer workers.


23 The Boston Manufacturing Company pioneered a labor system that became known as the “Waltham plan,” in which the company recruited farm women and girls as textile workers who would work for low wages. By the early 1830s, more than 40,000 New England women worked in textile mills; women often found this work oppressive, but many gained a new sense of freedom and autonomy. By combining improved technology, female labor, and tariff protection, the Boston Manufacturing Company sold textiles more cheaply than did the British.

24 The Waltham plan found a solution to competing with cheap British imports by hiring women and girls who could be paid less than men. The Waltham factory used waterpower--but was not the first to do so--and hired mostly unskilled labor, not skilled mechanics. It was a textile mill and did not produce flour.

25 Productivity Productivity is defined as output per worker. Division of labor means that each worker was given one job within the production process, which improved productivity in American factories. Cheap labor and low wages are essentially the same thing, and, like cheap raw materials, they decrease costs rather than increase productivity.

26 American Mechanics and Technological Innovation
By the 1820s, American-born craftsmen had replaced British immigrants at the cutting edge of technological innovation. The most important inventors in the Philadelphia region were members of the Sellars family, who helped found the Franklin Institute of Philadelphia in 1824. Mechanic institutes were established in other states, which disseminated technical knowledge and encouraged innovation; in 1820, the U.S. Patent Office issued about two hundred patents each year, but by 1860, it was awarding four thousand patents annually.

27 American mechanics pioneered the development of machine tools, thus fueling the spread of the Industrial Revolution. In the firearms industry, Eli Whitney and others developed interchangeable and precision-crafted parts that enabled largescale production. The expansion in the availability of machines allowed the American Industrial Revolution to come of age; the volume and availability of output caused some products —Remington rifles, Singer sewing machines, and Yale locks—to become household names. After the 1851 Crystal Palace Exhibition in London, Americans built factories in Britain and soon dominated many European markets.

28 The development of machine tools is significant because they
The development of machine tools is significant because they. Machine tools reproduced standardized parts for other machines quickly at a relatively low cost. They did not make repair of complicated equipment easier, however, and were used by mechanics, who were usually men, not women or children. The British had no such similar equipment.

29 Wage Workers and the Labor Movement
The Industrial Revolution changed the nature of work and workers’ lives as more and more white Americans left self-employment and became wage earners though they had little job security or control over their working conditions. Some journeymen formed unions and bargained with their employers, particularly in hopes of setting a ten-hour workday. The Working Men’s Party, founded in 1828, called for the abolition of banks, equal taxation, and a system of public education.

30 By the mid-1830s, building-trades workers had won a ten-hour workday from many employers and from the federal government. Artisans whose occupations were threatened by industrialization—shoemakers, printers, etc.—were less successful, and some left their employers and set up specialized shops. The new industrial system divided the traditional artisan class into two groups: self-employed craftsmen and wage-earning craftsmen. Under English and American common law, it was illegal for workers to organize themselves for the purpose of raising wages because they prevented other workers from hiring themselves out for whatever wages they wished.

31 In 1830, factory workers banded together to form the Mutual Benefit Society to seek higher pay and better conditions, and in 1834, the National Trades Union was founded. Union leaders devised a “labor theory of value” and organized strikes for higher wages; similar labor actions were taken by women textile workers as well. By the 1850s, labor supply exceeded demand, and unemployment rose to 10 percent, resulting in a major recession and the Panic of 1857.

32 The Market Revolution

33 Three streams of migrants moved into the West, transplanting the cultures of the plantation South and yeoman New England in the Old Southwest, the Ohio River Valley, and the Old Northwest. State governments promoted this westward movement and the creation of regional and national markets by subsidizing the building of roads, canals, and railroads. This infrastructure created a transportation system that was unprecedented in size and complexity. As domestic markets and production grew, urbanization accelerated in the Northeast, where industrial towns dotted the landscape, and New York City became the nation’s largest city and leading trading center.

34 Migration to the Southwest and the Midwest
People migrated to the West for several reasons; some were looking for land for their children, others hoped for greater profits from the western soil. By 1840, about 5 million people lived west of the Appalachians.

35 Migration occurred in three great streams: southern plantation owners moved into the Old Southwest; small-scale farmers from the upper South moved into the Northwest Territory; and crowded New Englanders flowed into New York and the Great Lakes Basin. Congress reduced the price of federal land in 1820, and by 1860 the population center of America had shifted significantly to the West.

36 The Transportation Revolution Forges Regional Ties
The National Road and other interregional, government-funded highways were too slow and expensive to transport goods and crops efficiently. Americans developed a water-borne transportation system of unprecedented size, beginning with the government-subsidized Erie Canal. The canal had three things in its favor: the support of city merchants, the backing of the governor, and the gentleness of the terrain west of Albany.

37 The Erie Canal altered the ecology and economy of the entire region.
The Erie Canal brought prosperity to central and western New York, linked the economies of the Northeast and Midwest, and prompted a national canal boom. The invention of the steamboat by Robert Fulton ensured the success of the waterborne transportation system.

38 The national government played a key role in the creation of this interregional system of transportation and communication; the passage of the Post Office Act of 1792 allowed letters and banknotes to be carried from one end of the country to the other and the Supreme Court encouraged interstate trade by striking down state restrictions on commerce in Gibbons v. Ogden (1824).

39 The development of the railroad created ties between the Northeast and the Midwest, and by the 1850s, railroads became the main carriers of freight. By the 1830s,Midwestern entrepreneurs were producing goods that vastly increased output—John Deere plows, McCormick and Hussey reapers—to replace the ones Americans had been importing from Britain.

40 Cyrus McCormick John Deere

41 McCormick Reaper

42 John Deere Plow

43 Southern investors concentrated their resources in cotton and slaves, preferring to buy manufactures from the Northeast and Britain. The Southern economy remained predominantly agricultural and generated less per capita income for Southerners than did the more industrial Northern economy.

44 The Growth of Cities and Towns
Due to the expansion of industry and trade, the urban population grew fourfold between 1820 and 1840. The most rapid growth occurred in the new industrial towns that sprang up along the fall line; for example: Lowell, Massachusetts; Hartford, Connecticut; Trenton, New Jersey; and Wilmington, Delaware.

45 Western commercial cities such as New Orleans, Pittsburgh, Cincinnati, and Louisville grew almost as rapidly because of their location at points where goods were transferred from one mode of transport to another. By 1860, the largest cities in the United States were New York, Philadelphia, St. Louis, and Chicago, in that order.

46 The old Atlantic seaports—Boston, Philadelphia, Baltimore, Charleston, and especially New York City—remained important for their foreign commerce and, increasingly, as centers of finance and manufacturing. New York’s growth stemmed primarily from its control of foreign trade; by 1840, New York handled almost two-thirds of foreign imports and almost half of all foreign trade.

47 Changes in the Social Structure
Economic growth prompted the delineation of the urban populace according to social class: a wealthy urban business elite of merchants and manufacturers; a prosperous, educated, and well-housed middle class; and a mass of wage-earning laborers with little or no property. Some artisans and workers formed trade unions in generally unsuccessful efforts to improve their economic welfare. Other working people, especially those without skills and those who could not obtain steady employment, lived in poverty.

48 The Business Elite The Industrial Revolution shattered the traditional rural social order and created a society composed of distinct regions, classes, and cultures. In the large cities, the richest 1 percent of the population owned 40 percent of all tangible property and an even larger share of the stocks and bonds.

49 The government taxed tangible property but almost never taxed stocks, bonds, or inheritances; thus government policies allowed the richest to accumulate even more wealth at the expense of poorer men. The wealthiest families began to consciously set themselves apart, and many American cities became segregated communities divided geographically along the lines of class, race, and ethnicity.

50 The Middle Class A distinct middle-class culture emerged as the per capita income of Americans rose about 2.5 percent per year between 1830 and the Panic of 1857. Middle-class Americans secured material comfort for themselves and education for their children, and they stressed discipline, morality, and hard work.

51 The business elite and the middle class celebrated work as the key to a higher standard of living for the nation and social mobility for the individual. The ideal of the “self-made man” became a central theme of American popular culture.

52 Urban Workers and the Poor
The bottom 10 percent of the labor force, the casual workers, owned little or no property, and their jobs were unpredictable, seasonal, and dangerous. Other laborers had greater job security, but few prospered; many families sent their children out to work, and the death of one parent often sent the family into dire poverty.

53 By the 1830s, urban factory workers and unskilled laborers lived in well-defined neighborhoods of crowded boardinghouses or tiny apartments, often with filthy conditions. Many wage earners turned to alcohol as a form of solace; grogshops and tippling houses appeared on almost every block in working-class districts, and police were unable to contain the lawlessness that erupted.

54 The Benevolent Empire During the 1820s, Congregational and Presbyterian ministers linked with merchants and their wives to launch a program of social reform and regulation. The Benevolent Empire targeted drunkenness and other social ills, but it also set out to institutionalize charity and combat evil in a systematic fashion.

55 The benevolent groups encouraged people to live well-disciplined lives, and they established institutions to assist those in need and to control people who were threats to society. Upper-class women were an important part of the Benevolent Empire through sponsorship of charitable organizations. Some reformers believed that one of the greatest threats to morality was the decline of the traditional Sabbath. Popular resistance or indifference limited the success of the Benevolent Empire.

56 Revivalism and Reform

57 To improve the living conditions and to balance the vices of the poor, upper-class Americans formed benevolent reform societies that promoted temperance, dispensed charity, and encouraged respect for the Christian Sabbath. Simultaneously, Charles Grandison Finney and other evangelical clergymen gave new life to the Second Great Awakening, enlisting missions of propertied farmers and middle-class Americans in a massive religious revival movement.

58 Protestant evangelicalism heightened the cultural conflict between native-born Americans and millions of Catholic immigrants from Ireland and Germany.

59 Nativist writers attacked Irish Catholics as anti-republican, and American workers blamed immigrant labor for their economic woes—attitudes that led to ethnic riots in many northern cities. By 1860, the United States was a more prosperous society than ever before, but also one exhibiting numerous social and economic divisions

60 Presbyterian minister Charles Grandison Finney conducted emotional revivals that stressed conversion rather than instruction; Finney’s ministry drew on and accelerated the Second Great Awakening. Finney’s message that man was able to choose salvation was particularly attractive to the middle class.

61 Finney wanted to humble the pride of the rich and relieve the shame of the poor by celebrating their common fellowship in Christ. The business elite joined the “Cold Water” movement, establishing savings banks and Sunday schools for the poor and helping to provide relief for the unemployed. The initiatives to create a harmonious community of morally disciplined Christians were not altogether effective; skilled workers argued for higher wages more than sermons and prayers and Finney’s revival seldom attracted poor people, especially Irish Catholics.

62 Revivalists from New England to the Midwest copied Finney’s evangelical message and techniques and the movement swept through Pennsylvania, North Carolina, Tennessee, and Indiana. The temperance movement proved to be the most effective arena for evangelical social reform; the American Temperance Society adapted methods that worked well in the revivals and helped the consumption of spirits to fall dramatically.

63 Evangelical reformers celebrated religion as the moral foundation of the American work ethic; religion and the ideology of social mobility served as a cement that held society together in the face of the disarray created by the market economy, industrial enterprise, and cultural diversity.

64 Immigration and Cultural Conflict
Between 1840 and 1860, millions of immigrants— Irish, Germans, and Britons— poured into the United States. Most avoided the South, and many Germans moved to states in the Midwest, while other Germans and most of the Irish settled in the Northeast. The most prosperous immigrants were the British, followed by the Germans; the poorest were from Ireland.

65 Many Germans and most Irish were Catholics and fueled the growth of the Catholic Church in America.
Because of the Protestant religious fervor stirred up by the Second Great Awakening, Catholic immigrants met with widespread hostility; in 1834, Samuel F. B.Morse published Foreign Conspiracy against the Liberties of the United States, which warned of a Catholic threat to American republican institutions.

66 Anti-Catholic sentiment intensified: mobs of unemployed workers attacked Catholics, and the Native American Clubs called for limits on immigration. Social reformers often supported the anti- Catholic movement because they wanted to prevent the diversion of tax resources to Catholic schools and to oppose alcohol abuse by Irish men.

67 In most large northeastern cities, differences of class and culture led to violence and split the North in the same way that race and class divided the South.

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