Factors of Production: Per capita expansion was what had to be considered.Some historians believed that causes of economic growth were: the various "factors of production"the "inputs" of labornatural resourcesskillscapitaltechnologySome thought the most dynamic elements in economic expansion were: the increasing "demand' for goods and services that comes with: population growthchanging consumption patternsgovernment taxspending policies.Some were impressed by the cultural elements that encourage societies to alter their investment and consumption patterns and their attitutes toward profit, wealth, and private property.In reality, to understand how the U.S. increased its output enough to create relative abundance for its people, we must look at each of these, for all seem to have contributed to the outcome: ResourcesTechnologyGrowing MarketsCapitalBanks and BankingGrowth of the Banking SystemGovernment ActionsLaborPublic Schools and Economic GrowthResources: From the outset the U.S. was richly endowed by nature.The nation in 1815 stretched over one billion acres.Wood was a major source of fuel, used by steamboats, locomotives, factory steam engines, and by most householders to cook their food and heat their homes.America was also rich in minerals.The ores of the Appalachian region from central Vermont to the Carolinas formed an "iron belt" that as early as 1800 was dotted with forges, smelters, and mines.Copper and lead deposity were found in Michigan and Missouri.Pennsylvania and Ohio had excellent coal and - though as yet unused - the country possessed vast petroleum reserves.In water power, too, the U.S. was blessed. The Appalachian chain was the source of many rivers that emptied into the Atlantic.Along the fall line, where the Piedmont plateau drops abruptly to the Atlantic coast plain, scores of swift cascading streams offered a vast reserve of water power to turn mill wheels.In 1815 relatively little of the country's land was being farmed.In the West white famers were found only in the regions adjacent to the Ohio Valley and a few other pockets.Almost all of Mississippi valley was forest except some tracts in present-day Indiana, Illinois, and Iowa, covered with tall prairie grass.Even in the Atlantic coast states forests and unused farm woodlots covered the landscape, especially in northern New England, New York, western Pennsylvania, and the mountain regions of the southern states.Nor were the nation's power resources much used. Aside from some gristmills for grinding wheat and corn into flour and meal, and sawmills for slicing logs into boards, the waterpower of the fall line went largely to waste.Also neglected was the coal of eastern Pennsylvania;al long as wood was cheap, people had no incentive to exploit the unfamiliar black stone for fuel.As for petroleum, though people knew "rock oil" would burn, they did no know how to guarantee a steady supply, so it remaind a curiosity sold by quacks and hucksters as medicine.In the forty-five years following the War of 1812, the accessible and usuable resources within the country's 1830 boundaries were greatly expanded.Growing population and easier access to consumers induced farmers to expand their cultivated acreage.Increasingly, similar incentives moved businessmen to build water-powered mills and exploit coal deposits.In 1859 Edwin L. Drake, backed by New Haven capitalists, found that by drilling into the ground, an abundant supply of petroleum could be assured. Drake's well at Titusville, Pennsylvania, set off a "rush" to the oil regions that resembled the earlier gold rush to California.But besides learning to exploit its existing resources, the country added to these resources by enlarging its boundaries.Between the Louisiana Purchase in 1803 and the Gadsden Purchas fifty years later, the U.S. grew by 840 million acres.A large part of the new territory was arid, but it also included great tracts of fertil eland in the Central Valley of California, in east Texas, and in Gulf Coast Florida;vast deposits of copper, silver, gold, lead, and zinc in the Rocky Mountain area; and unique timber resources along the coasts of California and Oregon.Labor: The U.S. was a sparsely populated country in 1815.With 8.5 million people spread over 1.7 million square miles, it had under 5 inhabitants for every square mile of land, compared with over 90 per square mile today.In 1820 the population reached 9.6 million, including some 1.8 million blacks.Though legal importation of slaves had ceased in 1808 (when Congress implemented the constitutional provision allowing it to end the Atlantic slave trade), African Americans remained about 19 percent of the country's population.With so few people spread over so much land, the United States suffered from a chronic labor shortage.The shortage was alleviated somewhat by the youth of the population.In 1817 the median age was 17.In an era when people began work for a living at 13 or 14, such a young population was a distinct economic asset.Offsetting this demographic advantage, however, were the problems of disease and ill health. There were majore cholera epidemics in 1832 and again in 1849-1850 that killed thousands and disrupted economic life.In low-lying swampy areas many people suffered each summer from "fevers" or "agues," probably mosquito-borne malaria.In addition, typhys, typhoid, whooping cough, and tuberculosis killed or disabled vast numbers or working people every year.After 1815 the potetial labor force was further reduced by individual efforts to limit family size.The American birth rate dopped sharply, so that by 1850 it was below that of many countries in Europe.As in the past, the Old World helped to offset the New World's labor shortage.Between independence and 1808 the South's labor force was augmented by a large number of slave imports.Then, on January 1, 1808, the African slave trade became illegal.Some smuggling of captive Africans continued, but the number of slaves who arrived in the U.S. from abroad was drastically cut.Europe added to America's population, however, with each passing year. In the period 1776-1815 no more than 10,000 Europeans had entered the U.S. annually.In the next 25 years the number rose to over 30,000 each year.Then, in the 1840s and 1850s, economic dislocations in Germany and Scandinavia and the potato blight in Ireland made life hard, in some cases intolerable, for hundreds of thousands of European peasants.During the 1840s and 1850s a staggering average of 200,000 Europeans arrived each year at American Atlantic and Gulf Coast ports.Many of these immigrants were in their most productive early adult years.Europe had nurtured them through their dependent childhood period, and they added their brawn and their skill to the American labor pool at scarcely any cost to their adopted nation.Almost all of these additions accrued to the North.European newcomers perceived the South as an alien place where slaves competed with free labor and the chances of economic success were limited.They avoided Dixie.All told, by 1860, the nation's labor force, as a result of both natural increase and transatlantic immigration, had grown to over 11 million people.Public Schools and Economic Growth: Modern economic development has depended as much on the improvement of labor force quality - the enhancement of "human capital," as economists call it- as on the sheer growth of workers' numbers.In America the upgrading of labor force skills, literacy, and discipline was the result of the system of public education.Education standards had been relatively high in colonial America, especially in New England, but they had declined during the half-century following the Revolution.In 1835 Professor Francis Bowen of Harvard complained that New England's once-celebrated school system "had degenerated into routine ... [and] was starved by parsimony."But even as Bowen - and the "scholars" - wrote, labor leaders, philanthropists, businessmen, and concerned citizens were struggling to improve the country's educational system.The most effective worker for better schools after 1835 was Horace Mann, a lawyer who gave up a successful legal practice to become secretary of the Massachusetts Board of Education in 1837. Mann believed that an educated body of citizens was essential for a healthy democratic society.His colleagues also believed, as one of his successors on the Board of Education noted, that "the prosperity of the mills and shops is based quite as much upon the intellectual vigor as the physical power of the laborers."During Mann's twelve years as secretary of the board, Massachusetts doubled teachers' salaries, built and repaired scores of school buildings, opened fifty public high schools, and established a minimum school year of six months.Other states, especially in the North, soon followed the lead of the Bay State.The new school systems taught useful values as well as useful skills.Children learned punctuality, good hygiene, industriousness, sobriety, and honesty - all valuable qualities for an emergine industrial society.Many gaps remained in the country's educational system even after the advent of the state-supported primary school.Secondary education, except in Massachusetsts, remained the privilege of the rich who could afford the tuition of private "academies" for their children.One of the most serious deficiences was in the education of girls and young women. At the elementary level young girls were treated the same as boys.Beyond the first few grades, however, female education was often inferior.American women could not attend college until Oberlin admitted its first female student in 1833.The typical secondary school or academy for young women in 1815 was a "finishing school" where the daughters of businessmen, professionals, and wealthy farmers or planters were taught French, music, drawing, dancing, and a little "polite" literature.Then, in the period of 1820-1840, educational reformers, both men and women, began to conceive of a new sort of secondary schooling for women.These reformers attacked the idea that women should be mere ornaments or drudges.In a busting progressive society, they said, women had a vital role to play as mothers and teachers, educating the leaders of the nation in all areas of life.This "cult of domesticity" did not assert women's equality with men. But it did insist that in their own "spheres" women were an immense neglected resource and that this waste must not continue.The new idea that women's role was important transformed female education, especially in the Northeast.Under the leadershipe of Emma Willard, Mary Lyon, Joseph Emerson, and Catharine Beecher, female "seminaries" were established throughout the region.Schools such as Willard's Troy Female Seminary (1821) and Lyon's Mount Holyoke Female Seminary (1836), unlike the earlier finishing schools, taught algebra, geometry, history, geography, and several of the sciences. These more "muscular" subjects were now thought appropriate for the mothers-to-be of statesmen, soldiers, and captains of industry. The most important role of these schools, however, was to provide a flood of trained women to fill the ranks of the burgeoning theaching profession.Though the educational system still had many failings, by 1860 the United States had a highly skilled and literate labor force. It was ahead of every nation in the world except Denmark in the ratio of students to total population, and New England was even ahead of the advanced Danes.Literacy made it possible for workers to read plans and compose written reports, and gave them access to new ideas and new ways of doing things.It is no accident that the ingenious Yankee tinkerer became a legendary figure or that New England, with the best educational system in the country, became a beehive of shops, mills, and factories, producing cloth, clocks, shoes, hardware, and machinery for the rest of the nation.Technology:During the years between independence and the Civil War, the U.S. became a world leader in useful invention.In the 1780s Oliver Evans invented a new flour mill that introduced grain at the top and automatically cleaned, ground, cooled, sifted, and barreled it as it descended to the bottom of the structure.In the 1790s Eli Whitney perfected the "gin," a machine that cleaned the sticky seeds from the cotton boll and revolutionized cotton growing in the U.S.In 1787 John Fitch first hitched steam power to navigation, created the first steam boat.Twenty years later, Robert Fulton's paddle-wheeled steamboat, the Clermont, made the trip from NY to Albany in a record-breaking 32 hours.In the 1840s a NYU professor, Samuel F.B. Morse, developed a practical telegraph system to transmit information instaneously over long distances.While the men who advanced technology in these years were well educated in the arts and humanities, few had formal technical education.Most of the country's first civil engineers, for example, learned their trade by working on the early turnpikes and canals.Gradually, however, more formal means to train technicians and scientists were developed.West Point (founded in 1802), Norwich University (1820), Rensselae Polytechnic Institute (1825), and the Lawrence Scientific School at Harvard (1847) eventually established engineering schools to train men to build the canals, bridges and railroads that would knit the country together.Growing Markets:We can treat the expanding and ever-more-skillful population of the country as an addition to the supply side of the economic growth equation.It was also a facor on the demand side, however.As population increased, so did the market for everything from babies' cribs to old folks' canes.Americans were already well supplied with food, clothing, and shelter, and each addition of family income provided additional money for modest luxuries.Before the Civil War the finer industrial goods were commonly obtained from Britain or France, but with each passing year American industry expanded to meet the growing home market for jewelry, furniture, carriages, carpets, writing paper, clocks, fine cloth, and a thousand other sophisticated manufactured articles.Capital: The growing labor force of the United States was matched by a growing supply of physical capital.Capital, as economists use the term, is not money as such, but money transformed into machines, barns, factories, railroads, mines - that is, money invested in "tools" that produce other commodities.It comes ultimately from the savings of the society, what it sets aside out of its total income.When employed productively, capital becomes the bases for increasing the output of goods and services and the rate of economic growth.During the colonial period, most capital came from abroad in the form of implements, credits, and cash brough by immigrants or lent to Americans by European promoters and merchants.After independence the United States continued to rely on foreign sources of capital.The increasing flood of immigrants brought some capital to America, but loans extended by British, French, Dutch, and German bankers and businesspeople were a larger source of foreign capital.The toatl amount of the nation's outstanding foreign loans went from under $100 million in 1815 to $400 million by the eve of the Civil War.Foreign trade was yet another source of capital.The U.S. in this period exported vast quantities of raw materials and farms products to foreign nations.Cotton from the South alone represented almost half the value of the country's total annual exports in the mid-1850s.Profits from these sales enabled the country to buy not only European consumer goods, but also machinery, iron rails, locomotives, and other tools.At the same time the American merchant marine earned income for the U.S.Europeans often preferred to hire America's swift clipper ships to send their exports to Australia, South America, and the Far East.Foreign trade created fortunes for American merchants, particularly in the middle states and New England, much of which was reinvested in domestic industry.And finally, as a source of capital, after 1849 there was gold from California. The millions of dollars of precious metals extracted from the streams and hills of the gold rush country also helped pay for the capital goods imported from the advanced industrial nations of Europe.Banks and Banking: The country's commercial banking system also contributed to the growth of private capital in these years.They did so by creating money or credit and lending it to business borrowers.Commerical banks keep only a small reserve of money against the debts they owe to their depositors and the loans they make to borrowers.On a small amount of paid-in capital or deposited savings, they can lend a large amount to investors.In effect, commercial banks are money machines that transmit the cash or credit they create to businesspeople who need it and can put it to productive use.This system depended on prudence to work successfully.If bankers lent to unreliable borrowers or made loans far beyond what a cautious reserve policy required, they jeopardized their firms and often the economy as a whole.Depositors, or other creditors, fearing for the safety of their savings, might demand immediate repayment.If enough of a bank's creditors simultaneously asked for their money back, the bank might be forced to "suspend payments" and close its doors.That in turn could trip off a broad "panic," with everyone demanding cash and insisting their creditors pay their debts.Serious national panics occurred in 1819, 1837, and 1857, and each ushered in a long economic downturn.For a time businesspeople would not invest and consumers would not buy.Economic activity slowed, and workers lost their jobs.In the pre-Civil War period, banks also provided the paper money that people used in their daily buying and sellings.The U.S. Treasury issued gold, silver, and copper coins, but this was not enough to do the people's business.Instead, in all but minor transactions, the "bank note," issued by some banking corporation, served the public as money.By law these notes were usually backed by a reserve of gold to redeem each note when presented, but the requirement was often laxly enforced.The Second Bank of the United States, chartered in 1816, had little trouble keeping its circulation of paper notes "as good as gold."Many of the state-chartered banks, however, issued excessive amounts to maximize their profits.When a bank could not redeem its notes - as when it could not pay its depositors - it was forced to suspend operations.Those who held the bank's notes now found themselves with worthless paper, much as depositors in defaulted banks found themselves with worthless bank accounts.Growth of the Banking System: Despite these failings, the country's banking system proved adequate to the job of increasing the nation's pool of capital.The first modern American commercial bank was the Bank of North America, charted by Congress in 1781 and located in Philadelphia.In 1784 the legislatures of NY and Massachusetts chartered two additional banks.Congress, acting on Hamilton's financial program, chartered the first Bank of the U.S. (or BUS).Like any other commercial bank, the BUS lent money, but before its demise in 1811, it took on some of the functions of a central bank.That is, it sought to control and stabilize the entire economy by providing extra funds to state bank lenders when credit was scarce and by limiting their loans when credit was excessive.The Second Bank of the United States, chartered in 1816, was even larger than the First, with $35 million in capital compared to the $10 million of its predecessor.It, too, sought to provide a blance wheel for the economy.At times, however, it blundered badly.Under its first president, it initially followed an easy-credit policy, lending freely to businessmen and speculators. This practice helped fuel a western land boom after 1815.Then, when it tightened credit in 1819, the Bank triggered a major panic and depression.Meanwhile, a large state banking system was growing up alongside the BUS.In 1820 there were 300 state banks;In 1860, almost 1,600.At first most state banks were established by charters granted individually by state legislatures.By the 1840s, however, banks could secure charters by applying to designated state officials and meeting general legal requirements (free banking).In some states, especially in the Northeast, these requirements were strict.In the new parts of the country they were often slack.There the need for capital to clear land, build barns, construct railroads, and lay out towns was most acute, and interest rates - the price of money - was therefore high.Under the circumstances, it is not surprising that many western states' banking laws were lax and enforcement even more lenient.This led to large issues of "wildcats," paper money backed by hope and faith rather than "specie" (gold and silver).The practices of western banks encouraged a boom-and-bust pattern, but their free-and-easy policies undoubtedly facilitated rapid capital growth in the emerging parts of the country.All told, economic historians conclude, the banking system of this period, for all its faults, worked well for an enterprising people.Government Actions: Americans disagreed about the rold of the government in the American economy.Jeffersonians continued to fear federal and state intrusion into private affairs as a danger to political freedom.Citizens influenced by the laissez-faire ideas of Adam Smith believed that government intervention would only hamper economic progress.And private captial was in face the predominant source of economic growth during the pre-Civil War period, but we must not ignor the rold of government in the country's pre-Civil War expansion.Through laws favorable to the easy chartering of banks and corporations, the states encouraged private capitalists to pool their savings for investment purposes.The federal tariff system, proposed by Hamilton and implemented by the Republicans in 1816, by making imports more expensive, protected American manufacturers against foreign competition and so encouraged capitalists to risk their money in factories and mills.The legal system, buffered by lawyers, contributed to the growth surge that marked these years.Never far removed from the commercial realm, lawyers came to identify ever more closely with the entrepreneurial spirit.Increasingly, judges and lawyer-dominated legislatures proved more attentive to the right to earn a profit than to individual rights under the common law.Governments also contributed to capital formation more directly.Many investments, such as canals, required so much capital and posed so many risks that private investors hesitated to undertake them.Yet they promised to confer economic benefits on man y people or whole regions.Profit on a railroad through a wilderness area, for example, might take years to realize, though the road might open an underdevloped region for settles and eventually benefit the whole nation.To encourage growth in these instances, state and local governments in the years before 1860 joined with private promoters to build roads, canals, and railroads.Sometimes the states lent money to private capitalists; in the case of the canals, they often financed projects directly.NY State put up the $7 million for the Erie Canal after efforts to secure federal funds failed.Federal revenues built the National Road, begun in 1811 and completed in 1850, from Cumberland, Maryland, to Vandalia, Illinois, a distance of 700 miles.The federal goverment also financed the St. Mary's Falls ship canal linking Lake Huron and Lake Superior, build coastal lighthouses, dredged rivers and harbors, and, in the 1850s, contributed millions of acres of land to promoters of the Illinois Central Railroad connecting the Great Lakes with the Gulf of Mexico.All told, the government contribution to pre-Civil War investment was enormous.One scholar has estimated that by 1860 states, counties, and municipalities had spent about $400 million toward building the country's transportation network alone.And the federal government spent at least as much.If we add to this sum the millions expended by governments on schools, hospitals, and other vital public faciltites, and the value of the tariff and land grants, we can see that we must qualify strongly the myth of private enterprise as the sole engine of economic growth in pre-Civil War America.The Course of American Economic Growth: America, then, was endowed with stupendous natural resources, a skilled, acquisitive, and disciplined population, and values and institutions conducive to hard work, saving, and capital growth.How did these elements combine to produce an economic miracle?The Birth of King Cotton: Most people associate nineteenth-century economic growth with factories, forges, and mines. But agricultural progess was a vital part of the process.The outstanding advance in American agriculture before the Civil War was the opening of the "cotton kingdom."Toware the end of the eighteenth century several ingenious Englishmen develped machines to spin cotton yarn and weave it into fabric.By the 1790s the mills of Lancashire in northwest England were producing cheap cotton cloth for an ever-expanding world market.But where was the raw cotton to come from for the hungry mills? A small amount of cotton was grown on the Sea Islands off the South Carolina and Georgia coasts.Sea Island cotton has smooth fibers; its seeds could easily be removed by hand.But the region where it flourished was limited.Short-staple cotton would grow throughout the South's vast upland interior, but it had burr-like green seeds that required much hand labor to remove.It was not economical to grow, even in the slave South.Cotton cultivation remained confined to the narrow band of Carolina-Georgia coast.Yet the South badly needed a new cash crop. Tobacco, rice, and indigo had all suffered declining markets after independence.What could be done to make short-fiber cotton a practical replacement for the slumping older staples? The answer was provided by the Yankee Eli Whitney.In 1793, while visiting the Georgia plantation of Mrs. Nathanael Greene, widow of the Revolutionary War general, Whitney learned about the problem confronting southern planters.As a gesture of graditude to his gracious hostess, he put together a simple machine that would efficiently remove the sticky seeds from the upland cotton boll.Now a single laborere, using Whitney's new "gin" (from "engine"), could do the work of fifty hand cleaners.The gin, and cotton culture, quickly spread thoughout the lower South.Thousands of planters, white famers, and slaves migrated into western Georgia, Alabama, Mississippi, Lousiana, Arkansas, and east Texas to clear fileds and plant cotton.From about 2 million pounds in 1793, short-fiber cotton output shot up to 80 milion pounds by 1811.In 1859 the U.S. produced 5 million bales of 400 pounds each and had become the world's leading supplier of raw cotton.On the eve of the Civil War cotton was "king," and its realm spanned the region from North Carolina on the Atlantinc coast, 1,300 miles westward to central Texas, and from the gulf of Mexico to Tennessee.The North and West: If cotton was king in the South, wheat was king in the agricultural North.Grown since colonial times in almost every part of North America except New England and the deep South, it continued to be important in the Middle Atlantic states and the upper South after 1815.Thereafter, as canals and railroads made the prairies accessible, wheat growing moved westward.By 1859 Illinois, Indiana, Ohio, and Wisconsin had become the chief wheat-producing states.The soils of the new wheat region were especially fertile and the prairies that covered large parts of several northwestern states were practically treeless; farmers did not have to clear forest cover, an occupation that consumed much of their time in the middle states.The shift of wheat growing to the Midwest accordingly increased the output per capita of American agriculture and helped to supply expanding national markets at ever-lower costs.Labor was a problem in northern agriculture. There were generally enough hands for plowing, planting, and cultivating.But at harvest time, when the crop had to be gathered quickly, there was not enough labor to go around.In the 1830s Obed Hussey and Cyrus McCormick invented horse-drawn mechanical reapers to speed the process.A man with a hand-operated "cradel" could cut from three to four acres of ripe wheat a day; with the new machines he could harvest more than four times as much.By 1860 there were some 80,000 reapers worth $246 million, at work on the fields of the North and West, more than in the rest of the contemporary world.Land Policy: Land policies too encouraged agricultural productivity.Congress in these years was under constant pressure to provide family farms for the growing population by accelerating the conversion of public lands to private use.In 1800 it allowed settlers to buy land in tracts of 320 acres, or half the smallest parcel previously permietted, at a minimum of $2 an acre.The same law also gave the buyer four years to pay and provided a discount of 8 percent for cash.The Land Act of 1804 lowered the minimum price of $1.64 an acre and reduced the smallest amount purchasable to 160 acres.Federal land policies, however, were not consistent.The states and the federal government occasionally sold public land in large blocks, some of 100,000 acres or more.But these were not worked as great estates.Rather, they were bought by speculators, often on credit, and resold in small parcels to settlers.The system allowed free-wheeling businesspeople to make large profits, but even that did not prevent widespread ownership of land by people of small and middling means.Low land prices and easy credit combined to set off periodic waves of speculation in the West.Buyers with little capital placed claims to much larger amounts of land than they could ever expect to farm themselves in hopes of selling most of it for profit later.Meanwhile, they met their payments to the government by borrowing from the banks.To prevent widespread default Congress passed periodic relief acts that delayed collection of overdue payments.Such measures did not always help, however.When speculation got out of hand in 1819, the country experienced a major depression set off by panicky speculators trying to unload their land at a time when no one wanted to buy.The Panic of 1837 also stemmed in part from western land speculation.Not ever would-be farmer waited for land to be surveyed and put up for sale.Many cleared some unsurveyed acres and farmed illegally.Such "squatters" risked losing fences, barnes, houses, and the land itself when the tract they had settled and "improved" was finally offered for sale by the government.In 1830 champions of the squatters, led by Senator Thomas Hart Benton of Missouri, convinced Congress to pass the Pre-emption Act to allow those who had illegally occupied portions of the public domain on or before 1829 to buy up to 160 acres of land at the minimum price of $1.25 an acre before others were allowed to bid.In 1841 the time restrictions on the Pre-emption Act were removed.Land policy remained relatively unchanged for more than a decade after 1841.Benton and his collegues, joined at times by working-class leaders, continued to fight for a "homestead act" that would give land free to all bona fide settlers.But many easterners feared that free western lands would drain off eastern labor;southerners feared it would give the government an excuse to raise the tariff to offset the loss of land-sale revenues and also that it would encourage the growth of free states.The continued opposition of the South blocked a homestead law until 1862.Still, federal land policies overall accelerated the geographical expansion of the economy's agricultural sector.Farm Productivity: If agriculture had remained stagnant, rapid overall economic growth would not have been possible.While the reaper made farm labor more efficient and newly opened "virgin" lands yielded far more for each outlay of labor and capital than the older lands of the East, there was a serious downside to this agricultural expansion. It depleted centuries-long accumulations of top-soild nutrients wastefully.But is also churned out ever-cheaper wheat, pork, beef, fruits, vegetables, and fiber in a profusion seldom attained anywhere, anytime. Without this development there would not have been an "economic miracle."Steamboats and Roads: In some ways American geography favored the efficient, cheap transporation necessary for growth.The Mississippi River system combined with the Great Lakes made it possible for ships to penetrate deep into the vital interior of North America. But the lakes lacked lighthouses and port facilities and at several points were connected only by unnavigable rapids.As for the Mississippi system, flatboats and rafts could easily be floated down to New Orleans propelled by the current, but the trip upstream by poled keelboats required backbreaking labor and took far longer.Capitalists and inventors had been working on schemes to apply steam power to river navigation for some time, but not until Robert Fulton took up the quest, backed by the powerful Livingston family, did it become economically feasible.Soon steamboats were operating on schedule up and down the Husdon River.In 1811 the Fulton-Livingston interests, having already secured a legal monopoly of steamboat traffic in New York State waters, received an exclusive charter from the Lousiana territorial legislature to operate steamboats on the lower Mississippi.If unchecked, the Fulton group might have monopolized steamboat navigation on all the inland waters.However, the Supreme Court struck down these monopoly privileges in the case of Gibbons v. Ogden and opened up steamboat navigation to all investors.Entrepreneurs were not long in seizing the opportunity.By 1855 there were 727 steamboats on the western rivers with a combined capacity of 170,000 tons;many more plied the Great Lakes as well as the streams and coastal waters of the Gulf and the Atlantic.It had taken four months to pole a boat upstream from New Orleans to Louisville;by 1853 steamboats made it in under four and a half days.Freight rates on the same route in this period fell from an average of $5 per hundred pounds to under 15 cents.Impressive as the advances in inland navigation were, there still remained the problem of transportation where there were no natural waterways.Overland travelers during the colonial period had been forced to use narrow, mudddy, circuitous trails to move themselves and commodities.After 1800 a network of surfaced, all-weather roads for horses, carriages, and wagons began to appear, financed by tolls on users.The first major "turnpike" in the country was the Philadelphia-Lancaster Road in Pennsylvania opened in 1794.The entire country soon caught the road-building fever.In the Northeast private capital built most of the turnpikes;in the South and West state governments built the roads directly or bought stock in private turnpike companies.The federal government also joined in the rush, investing $7 million in the construction of the National Road.Canals: Though turnpikes reduced the cost and time of moving people and goods, transportation by land remained more expensive than by water.Where there were no navigable streams or lakes, the solution was canals.A few miles of artificial waterway were constructed in the Northeast just before the War of 1812.The real boom got under way in 1817, when the NY State legislature appropriated funds for constructing and enormously long canal between the Hudson River and Lake Erie, bypassing the Appalachian barrier to connect the Great Lakes with the Atlantic Ocean.The project was an impressive technical achievement.The state engineers learned on the job and improvised a score of new tools and techniques.In the end they moved millions of cubic yards of earth, constructed 83 locks, scores of stone aqueducts, and 363 miles of "ditch" 4 feet deep and 40 feet wide.The completed Erie Canal, opened by a colorful ceremoney in 1825, was an engineering marvel that astounded the world.Power for the canal boats was provided by horses and mules that treaded towpaths on either side of the waterway.A man or boy led the animals; another man at the tiller kept the boat in mid-channel and signaled passengers seated on top of the cabing to duck by blowing a horn when the vessel approached a low bridge.The canal was also an immesnse economic success.In 1817 the cost of shipping freight between NYC and Buffalo on Lake Erie was 19.2 cents a ton.By 1830 it was down to 3.4 cents.Freight rates to and from the upper Mississippi Vally also plummeted.By 1832 the canal was earning the state well over one million dollars yearly in tolls.The canal deflected much of the interior trade that had gone down the Mississippi and its tributaries and redirected it eastward to NYC, reinforcing its existing economic advantage over the nation's other business centers.New York's experience inevitably aroused the envy of merchants in the other Atlantic ports. Baltimore, Boston, Philadelphia, and Charleston businessmen now demanded that their states follow New York's lead.At the same time, promoters, speculators, farmers, and merchants in the Northwest saw that their region's prosperity depended on constructing canals to link up with the waterways built or proposed.The pressure on state governments soon got results. By the 1830s the dirt was flying all over the Northeast and Northwest as construction crews raced to create a great network of canals.In 1816 there were 100 miles of canals in the U.S.by 1840 over 3,300 miles of artificial waterways criss-crossed the Middle Atlantic states, southern New England, and the Old Northwest.Few canals built after 1825 were as successful as the Erie.Some never overcame difficult terrain and other engineering problems; others never attracted sufficient business to repay investors.Still others were built too late and were overtaken by the railroads, which provided quicker and less easily interrupted service.Nevertheless, the sharp decline in freight and passenger rates was a great boon to interregional trade.Western farmers found new outlets in the East for their wheat, corn, pork, beef, and other commodities.With transportation costs lower, the price of manufactured goods in the West fell, enabling eastern manufacturers to sell more to western customers.Everyone benefited.The Railroads Arrive: The railroads, too, encouraged growth.The early steam railroads were plagued by technical problems.Engines frequently broke down; boilers exploded.And even on a normal trip, passengers emerged from the cars neraly suffocated by smoke or with holes burned in their clothes from flying sparks.Rails were at first flat iron straps nailed to wooden beams. When these came loose, they sometimes curled up throught the floors of moving passenger cars, maiming or killing the occupants.Cattle that got in the way of trains caused derailmentsTraines moving rapidly over lightly ballasted rails and around sharp curves did not always stay on the track.Some of these problems were inevitable in so new a system, but accidents were also the resulf of makeshift construction imposed by the shortage of capital and the desire to build quickly.Gradually, railroad technology improved. All-iron rails, more substantial passenger cars, the "cow catcher" in front of the locomotive to push aside obstructions, more dependable boilers, and enlarged smokestacks to contain the hot sparks all made the railroads more efficient and more comfortable.To deal with the hairpin curves characteristic of American railraods, engineers developed loose-jointed engines and cars with wheels that swiveled to guide trains around turns.The first major American railroad was the Baltimore and Ohio, chartered in 1828.In 1833 the Charleston and Hamburg in South Carolina reached its terminus 136 miles from its starting point, making it the longest railroad in the world.By 1860 the country boasted some 30,000 miles of track, and passengers and freight could travel by rail from the Atlantic coast as far west as St. Joseph, Missouri, and from Portland, Maine, to New Orleans.The system was far from complete, and many communities remained without rail connections.Nevertheless, the accomplishment was impressive.The Factory System: Advances in agriculture and transportation contributed immensely to the pre-Civil War economic surge.But the most dynamic development of the antebellum economy was the rise of the factory system, initially in southern New England.There had been large workshops here and there in the colonial period, but none of these had brought together hundreds of "operatives" and expensive power-driven machinery under one roof to produce a single uniform product.The modern factory, copied from eighteenth-century English inventors and entrepreneurs in cotton textile manufactures, arrived in the U.S. soon after independence and in a rudimentary form.The first mill using water power to spin cotton yarn was probably the Beverly Cotton Manufactory of Massachusetts incorporated in 1789.in 1790 a skilled English mechanic, Samuel Slater, linked up with Almy and Brown, a concern with capital to invest descended from colonial candle-makers and West Indies traders.In 1790-1791 the firm opened the nation's first cotton spinning mill at Pawtucket, Rhode Island.Before long, the small state was covered with spinning mills that employed whole families, including women and young children, to tend the water-powered spindles.The Rhode Island mills produced only cotton yarn.For finished cloth skilled hand weaving was still needed, a labor-intensive and expensive process.The deficiency was made up in the second decade of the nineteenth century when Francis Cabot Lowell, a Boston merchant hard hit by Jefferson's embargo, visited Lanchashire, center of the flourishing British textile industry.Lowell took careful note of the latest power looms and carried the plans home in his head, prepared to build a loom superior to the original.Joining with other merchants, Lowell secured a corporation charter for the Boston Manufacturing Company. With their combined capital the promoters built a mill at a water power site in Waltham on the Charles River.The first cotton cloth came from the company's power looms in 1815 and proved superior to British imports.Between 1816 and 1826 the Boston Manufacturing Company averaged almost 19 percent profit a year.The promoters soon found they could not produce enough cloth at the limited Waltham power site to satisfy the demand and made plans for a complete new textile community alon the swift-flowing Merrimack.The new mills at Lowell, Massachusetts, were much larger than either the Waltham factory of the earlier spinning mills in Rhode Island.How could they attract enough labor for the new factories? The promoters turned to New England farm girls drawn to Lowell by promises of good wages and cheap, attractive dormitory housing built at company expense.The company also provided a lyceum, where the literate and pious young women could hear edifying lectures, and paid for a church and a minister.By the mid-1830s Lowell was a town of 18,000 people with schools, libraries, paved streets, churches, and health facilities.The mills themselves numbered some half-dozen, each separately incorporated, arranged in quadrangles surrounded by the simidetached houses of the townsfolk and the dormitories of the female workers.The Lowell system became famous even across the Atlantic. Distinguished foreign visitors made pigrimages to the town and were invariably impressed by what tey saw.The British novelist Charles Dickens, who had encountered at home the worst evils of industrialism, noted that the girls at Lowell wore "serviceable bonnets, good warm cloaks and shawls...,[were] healthy in appearance, many of them remarkably so . . .,[and had] the manners and deportment of young women, not of degraded brutes."What a contrast they made with the beaten, sickly workers and child laboreres of the mills of Lancashire and Birmingham!Unfortunately, the halcyon days did not last. During the "hungry forties," when the nation's economy slowed, conditions in the mills worsened.The girls' wages were cut, and when they protested, they were replaced with newly arrived Irish immigrants who were not so demanding.But for a time the Lowell system served as a showcase for the benefits of industrialization.Industrial Workers: Unequal Gains: In 1815, well before Lowell, the Erie Canal, and the Baltimore and Ohio Railroad, Americans were already a rich people by the standards of the day.During the next 35 years their average wealth and income increased impressively. One scholar believes that between the mid-1830s and the Civil War alone, annual GNP (gross national product, a dollar measure of all goods and services produced) more than doubled.Growth in per capita GNP was also high, as much as 2.5 % a year in the 1825-1837 period, for example.Yet it is clear that all Americans did not benefit equally from the economic surge. Clearly it enlarged the urban middle class by creating jobs not only for laboreres and factory operatives but also for engineers, clerks, bookkeepers, factory managers, and others.Most of these "white-collar" workers were native-born Americans whose familiarity with the English language and American ways gave them the pick of the new jobs.The industrial leap also created a new class of rich manufacturers, bankers, and railroad promoters. Many were "new" men who used the industrial transformation to lift themselves out of poverty.Samuel Slater, for one, had come to America in 1789 with almost nothing, he was worth $700,000 by 1829.But in fact, the economic growth of the 1815-1860 period was accompanied by growing inequality of economic condition. Studies of wealth ownership between the end of the colonial era and 1860 show a considerable increase in the proportion of houses, land, slaves, bank accounts, ships, equipment, factories, and other kinds of property, owned by the richest 10 % of the American people, compared with everyone else.Wages and Working Conditions: Leaving aside the South's slaves, taken as a whole, American wage earners made real economic gains during the generation preceding 1860.But while getting better individual circumstances varied widely.Relatively few married women worked for wages, but those who did were badly paid. When women teachers flocked to the new public schools, teachers' average wage levels fell.For traditional "women's work" the situation was similar.Female household servants in 1850 received, typically, a little over a dollar a week plus their room and board.Manufactureres of straw hats, ready-made clothes, and shoes relied on a large pool of poorly paid female workers, many employed part-time at home and paid "by the piece."These women often earned no more than 25 cents a day.(The Lowell girls were relatively affluent at $2.50 to $3 a week.)Many men were not much richer.In 1850 common laboreres - ditch diggers, stevedores, carters, and the like - received 61 cents a day with board, or 87 cents without board.Skilled labor was in shorter supply an so better rewarded. Blacksmiths earned about $1.10 a day in 1852.In 1847 a skilled iron founder in Pennsylvania could make as much as $30 per week.The Boston Manufacturing Company paid machinists up to $11 a week.To put these earnings in persepctive, the New York Tribune estimated in 1851 that a minimum budget of about $10 a week was needed to support a family of five in expensive NYC. This meant that an unskilled worker needed help from other family members, and they generally got it.In many families children were put to work at ten or twelve and earned enough to push total family incomes past the bare subsistence point.One scholar estimates that just after the Civil War family heads in Massachusetts earned just 57 percent of total family income; the rest came from the employed children.Though the income picture for labor is mixed, wage earners were clearly better off in the U.S. than in Europe. We know of one Irish immigrant construction worker who received wages of 75 cents a day plus board, including meat three times a day.Writing to his family in Ireland, however, he told them he at meat three times a week.When asked why he hid the truth, the man replied, "If I told them that, they'd never believe me."In fact, the abundance of cheap food, especially items seldom part of working-class diet in Europe, invariable astonished people accustomed to foreign practice.One immigrant expressed amazement at what his New York boardinghouse offered its patrons.Breakfast included "beef steaks, fish, has, ginger cakes, buckwheat cakes etc such a profusion as I never saw before at the breakfast tables."And at dinner there was even "a greater profusion than breakfast."But wages and income were not the whole story. Wage earners' lives were not easy. Work hours were long.The Lowell girls spent 12 hours a day, fewing in winter, more in summer.Foreigners, seeking to explain superior American wages, believed that Americans worked harder than their own compatriots.And they probably did.Though the pace of factory labor was more leisurely than today, it was difficult for people used to the slow rhythms of the nineteenth-century farm to adjust to the remoseless pace of the factory machines.Pre-Civil War workers and their families also experienced great insecurity. Occupational accidents were common, and when workers were injured, they usually lost their jobs.Men killed in the mines or factories left behind families who had to turn to meager private charities or begrudging public support.Beside industrial disaster, there was the uncertainty of employment.A bad harvest or a particularly hard winter often left agricultural workers destitute.Severe periodic depressions produced acute hardship among laborers and factory workers.During the hard times that began in 1819, an English traveler through the East and Northwest noted that he had "seen upwards of 1,500 men in quest of work within 11 months past." Again, following the 1837 and 1857 panics, unemployment forced many wage earners to ask for city and state relieft for themselves and their families.In 1857 there were food riots in several northern cities.Still another source of distress among workers was the downgrading of skills and the loss of independence that sometimes accompanied mechanization and the factory system. The fate of the Massachusetts shoemakers is a case in point.In the opening years of the nineteenth century they had been skilled, semi-independent craftsmen.Merchants brought them cut leather and paid them a given sum for each pair of shoes they sewed and finished in their "ten-footers," the ten-by-ten sheds they worked in behind their homes.These skilled craftsmen owned their own tools and often employed their wives and grown children to helop with the work.Not only were they well paid, they also enjoyed a sense of independence since they were subcontractors, not wage earners, and were the heads of their households, not only in a social and legal sense, but also in a direct economic way.Gradually, as the market for ready-made shoes, especially for southern slaves, expanded, the shoemakers' independence and incomes declined. Merchants divided the shoemaking process into smaller and simpler parts and "put out" the simplified work to unmarried young women in New England country villages.Eventually entrepreneurs intoduced power-driven machines that sewed heavy leather, enabling the merchants to establish factories where wage workers could use the expensive, capitalist-owned machines.By the eve of the Civil War the independent master craftsman working in his ten-footer had been replaced with semiskilled labor for weekly wages in factories.The Labor Movement: Clearly, many wage earners were unhappy with the new aggressive capitalism and the new factory system. In 1836 the young women at Lowell went on strick to protest a wage cut.In the end the owners won and the wage cut stuck.In 1860 the shoemakers of Lynn, Massachusetts, "turned out" to protest declining wages; before the strike ended, some 20,000 Massachusetts shoemakers had left their places at the machines.All through the antebellum period workers struck for higher wages or bettwe working conditions. Most of the strikes were unplanned uprisings in response to some unexpected blow such as a wage cut.But some grew out of long-standing grievances such as the sheer drudgery of factory life or the loss of worker independence.These grievances created a labor movement of considerable dimensions.The small community craft societies organized in the early 1800s expanded over the next 30 years into citywide labor unions, each representing a whole trade. Later, such local unions joined together into national organizations.But after the Panic of 1837 employers usually defeated the strikers by threatening to hire the many unemployed.Trade unions thereafter declined, and in the next two decades labor discontent generally was diverted from union organizing to political action and various reform movements.We must not exaggerate the extent of labor discontent during these years, however. The school system, as well as the churches, worked hard to instill the "work ethic" into the labor force, and on the whole they were successful.By and large the American workforce cooperated with economic growth.As one pre-1860 observer noted, in New England "every workman seems to be continually devising some new thing to assist him in his work, and there [is] a strong desire both with masters and workman . . . to be 'posted up' [that is, kept informed] in every improvement."Skilled English workingmen who came to American machine shops in the 1830s and 1840s were often startled to find that their American counterparts, rather than fighting the shop owners, were "fire eaters" whose "ravenous appetites for labor" made their own performance look bad.Several eminent students of American economic development are convinced that this cooperation was one of the most important elements in creating the pre-Civil War American economic miracle.
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PRINCETON REVIEW AP PRACTICE TEST 1 