Chapter 8 Section 1

• A long term effort to increase production by using machines rather than the power of humans or animals
– Began in Britain in the
1700s
• Later spread to the U.S.

American inventions and new technologies that came about during the Industrial Revolution
• Steamboats, cotton gins, steam shovel, interchangeable parts, mechanized cotton mill, canning factory, internal combustion engine, electromagnet, etc…

• All parts of a product are made to an exact standard
– Products are no longer unique

• A machine that separates the seeds from raw cotton fibers
– 1 worker could now clean 1,000 pounds of cotton a day

• A license from the government giving an inventor the sole right to make, use, and sell an invention for a certain period of time

• A change in the way
American made, bought, and sold goods
– More Americans were buying and selling goods, and borrowing and circulating money

• The use of machinery to make products
– Began in New England with use of water power

• A central factory where all the tasks involved in making a product were carried out
– Using this method, a
New England textile mill produced 4 million yards of cloth in 1817 and increased to 323 million yards in 1840

What are the advantages of a centralized production process?
• Dramatically increased production
• Brought great prosperity to the economy in the North

• An economic system in which private companies compete for profits
– Also known as capitalism
• Rewards people who can find better, faster, and more efficient ways of running their business
– Encourages innovation and creating new industries, job and wealth

• A system in which a worker performs just one part of an entire production process
– Helped to maximize production

• Money that business spends in hopes of future gain
– New equipment, new buildings, new workers, etc…

The effects of manufacturing and investment capital on the U.S. economy.
• Made more goods available for purchase so money became more widely used
• Producers of goods were not the people that sold them
• Items people used to make themselves were now available for purchase

• A piece of paper that banks issued to their customers
– People used bank notes to pay for goods and services
– Could be exchanged for specie (gold or silver)

• Business owners were making enough money to improve and expand their businesses
• Economy expanded
• New wealth created

How did banks help create economic growth?
• Provided money entrepreneurs needed to build new factories or expand existing facilities
• Loaned out money that depositors had placed in banks
– These loans would be paid back with interest

Innovations in transportation, and two in communication.
• Transportation
– Steam power
– New canals
– New and better roads
– railroads
• Communication
– Newspapers
– Magazines
– More post offices