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Economic TransformationsChapter 8

Bank Debate

8% profits8 citiesopposed by Republicansexpired in 1811

Panic of 1819

2nd National Bankstate banks (246)

$68 million in bank notes shady operations

Causes

drop in farm prices (world)debts not paid

farmers, merchants bankruptcy

banks failedhostility toward banks

Market Revolution

Land Policies

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Transportation

Roads

TurnpikesNational Road – 1811-1852

Roads

Canals

Erie Canal - 1817363 miles completed 1825immigrant

workers5 mph

Benefits

cheap shipping20 days to 6cities grewfarming in NWcanal-building boom

SteamboatRobert Fulton

1807Clermont

“Fulton’s Folly”

Canals, Steamboats, Railroads

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Results

interregional transportationtravel time cut in ½benefit post office1860 – over 1000 on Miss. River

Railroads

1828 – 1st RR in USbenefits over canalsproblems1860 – 30,000 miles

RR LinesErie RRPA RRNY Central RRBaltimore & Ohio (B & O)

Increased Trade

lumber from NWwheat to Chicago to Eastlivestock (hogs)manufactured goods to West

Impact of RR’sJohn Deere – steel plow (1837)

mass production (Midwest) national system of commerceSouth – commitment to slavery

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Industrial Revolution

Industry in America1790 – 1820 aided by transportation

Industrial Revolution

Division of Labormodern factory

slaughterhouses (Cincinnati) specialized tasks “Porkopolis”

New Advancessteam enginesassembly linesCyrus McCormick - reaper

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TextilesBritish law100s of mechanics came to USSamuel Slater – 1789

Moses Brown, RI 1790 - cotton spinning mill “father of the Am. factory system”

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US Advantagesnatural resourcescotton, woolrivers - energy

British Advantageslow interest ratescheap shippingcheap labor

large population (landless)

Protection of Industry

1816 Tariff – 25%1824 – 35%1828 – 50%1833 – gradual reduction to 25%

Lowell System

Francis LowellBoston Mfg. Companynew, cheaper labor sourceyoung women – farm families

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American Inventors

Sellars Family – Phila.

US Patent Office 1820 – 200 per year 1840 – 4000 per year

Eli Whitney

Yale – tutor on GA cotton plantationmachine to

separate seeds

musket productionInterchangeable partscontracts during War of 1812

Cotton South

Slavery

Am. Revolution some fled with British some escaped freedom for taking up arms VA – manumission act in 1782

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Reasons

EnlightenmentQuakers

PA “gradual emancipation” law - 1780North – gradual emancipation

1784-1804

South

Resistanceinvestmentlabor“necessary evil”

maintain supremacy

“King Cotton”labor conditions deplorablewestern migration

Slavery GrowsChesapeake – tobaccoCarolina – riceLouisiana – sugar AL, MI, TX - cotton

Nation Expands

1803 – LA Purchase1830s – Indian lands (Southeast)1840s – Texas, Mexican Cession

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Need for SlavesAfter 1808

smuggled (through FL, then TX) Chesapeake – to Deep South

VA – 440,000 Upper South – 1 million

TransfersSale

Trade Networks

Coastal System Atlantic seaports young men to LA

Inland network to western states forced marches

slave trade crucial to Southern economy“universal resource to raise money”

labor slave trade

Familiesthreat of being sold1/3 of children under 14 separated75% marriages unbrokenmost children lived with 1 or 2

parentsstrong sense of family

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Paternalism“family”kindness to “loyal & worthy” slavestroublemakers soldmorality rarely questioned in South

Wage-working Societymaster/servant → boss/hired hand

Two categories self-employed craftsmen wage-earning workers

Labor Unions

illegal under US, BR common lawinterfered with authorityNational Trades’ Union – 1834

Labor Ideology

labor theory of value price reflects labor most $ to individual who produced it

1836 – 50 strikes - higher wages

Growth of Citiescommercial hubsPittsburgh, Cincinnati, New OrleansSt. Louis, Detroit, Chicago, BuffaloNew York City

immigrants manufacturing / trade

Largest Cities1. New York2. Philadelphia3. St. Louis4. Chicago

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Social Structure

South

3-tier structure planters yeoman – small farmers slaves

gang-labor system

Business Elitelarge share of nation’s wealthgov’t policies

Middle Classfarmers, mechanics, lawyersgrowing classfairly well offeducation“self-made man”

Urban Poorlaborerswage: 1/2 to 2/3 of mechanicsbarely afford food, rentlittle educationchildren workedtenements – slums