1. Industrial Revolution

2.   During the 1800’s manufacturing moved from households and artisan workshops to factories where mass production took place. (factory system)
The Industrial Revolution began in Britain
Prior to the War of 1812, most Americans earned a living in agriculture or international trade. (agricultural exports). The Embargo Act of 1807 and the War of 1812 both punished exporters. Thus, many businessmen searched for alternative ventures.

3. Industrialization in the US began in New England.
Sam Slater built the 1st mechanized textile factory in the US in Pawtucket, Rhode Island.
Lowell, Massachusetts became the center of textile production in the US by 1820.
Eli Whitney introduced an assembly system for guns using interchangeable parts.

4. North and South – two distinct economic systems
Agriculture in the north was focused on crops that were not labor intensive (thus, little demand for slaves), such as grains and cattle. Most farms tended to be relatively small.
Eli Whitney’s invention of the cotton gin resulted in huge demand for cotton in manufacturing centers in Europe and the northern US.
Cotton Kingdom – planters built huge plantations across the south
 Demand for slaves surged.

5. The American System – President James Madison and Congressional leaders like Henry Clay recognized the need unify the interests of the north and south.
Clay believed the North would produce manufactured goods that farmers in the south and west wanted while farmers in the south and west would produce the grain, meat, and cotton, needed in the North. This would help The US become economically independent of Europe.

6. The American System had three key components.
1. Transportation systems designed to facilitate trade
Turnpikes – toll roads  
National Road – extended from Maryland to Illinois 
Erie Canal – “The Big Ditch” – linked the Atlantic Ocean to the Great Lakes – its success sparked the building of several other canals
Railroads – 1st US steam locomotive was built in 1825
2. Tariff of 1816 – Protective tariff made imported European goods more expensive. Welcomed by the North, but opposed by some in the South. Support from Clay (Kentucky) and Calhoun (South Carolina) helped it pass
3. Second Bank of the US
-Jefferson had severally weakened the first bank
-Most Americans recognized the need for a nationally accepted currency, so the Second Bank of the US had broad approval.