In a very basic way water transformed the young economy of the U.S.

The power harnessed from these moving waters ran the new machines in factories that sprang up in the early 1800s.

After the War of 1812, the U.S. economy soared although most were farmers.

The market Revolution was fueled by the American genius for inventions.

Samuel Colt patented his revolving pistol in 1836.

In 1813 group of businessmen led by a Boston merchant named Francis
Cabot Lowell built a factory in Waltham,
Mass. to manufacture textiles.

Lowell’s was the world’s first truly centralized textile factory. All the tasks involved in making a product were carried out in one place.

From the 1820s to 1840s, manufacturing industries arose in
New England and become the backbone of the North’s economy.

In 1817, New England’s textile mills produced 4 million yards of cotton cloth. 1840 it was 323 million.

Free enterprise system --an economic system in which companies compete for profits.
This system, also is called capitalism.

In 1771, Adam Smith outlined the free enterprise system . He argued that businesses should follow the market forces of supply and demand rather that government regulation.
Free enterprise expanded greatly in the
United States during the early 1800s.
• Today’s concept of capitalism> The federal gov. and state gov. now play important roles in the economy, such as regulating business to protect workers and consumers. Yet free enterprise remains the heart of the American economy and the foundation of American prosperity.

For most
Americans,
“going to work” in the 1700s generally meant working in the home or around the farm.

In the 1800s the building of new factories sharply increased the demand for people to work outside the home.

Banks provided capital -wealth that can be invested to produce goods and make money.

The first banks appeared in the U.S. in the 1780-90s. By the 1830s hundreds of new banks were built.

In the 1800s, states did not restrict bank’s runaway lending. The new banks often made bad loans to people who could not repay them.

The gov. did not issue paper money.
Most preferred coins, gold, or silver.

The most common form of money was the bank note-a piece of paper that banks issued to their customers.

• http://www.ecusd7.org/ehs/ehsstaff/jparki n/academics/american_history/fall_semes ter/V-
Expansion_Sectionalism_&_Reform_182
0-1841/8-Market_Revolution/8a-
Market_Economy.ppt
.