Chapter 9
Transforming the Economy 18001860
The American Industrial Revolution
• Traditional Methods
– Outwork system and a division of labor – Work
was accomplished by farm families, labor was
divided through various stages
– Water powered mills
– 1830’s steam powered machines, thanks to a
“mineral based economy”
– Britain prohibits knowledge of machinery to leave
Samuel Slater
Moses Brown
Britain and the US Compared
Britain
• Import American cotton,
manufacture it, sell it back
to US at a discounted rate
• Larger population meant
greater access to cheap
labor
United States
• Abundance or natural
resources
• Congress passed a number of
high tariffs
• Improved on British
technology (Francis Cabot
Lowell – Boston
Manufacturing Co.)
• Used cheap women laborers
(Waltham-Lowell System)
• Undersold British rivals
American Mechanics and
Technological Innovation
• Franklin Institute in PA – encouraged technical
knowledge and innovation
• Eli Whitney – Cotton Gin
• Samuel F.B. Morse – telegraph
Wageworkers and the Labor
Movement
• Artisan-Republicanism – an ideology of
production based on liberty and equality
However…
• Outwork and factory system led wage earners
to be controlled by an employer
So…
• They attempt to create Unions
Unions
• Were technically illegal under “common law”
• Accused of attempting to injure employers by
raising wages
• Commonwealth v. Hunt – upheld the right of
workers to form unions and call strikes
• Feared wage earners were becomes slaves to a
“monied aristocracy” – est Labor Theory of Value
– price of goods reflects labor to build them and
the income should go to the producers
The Market Revolution
- increase in the exchange of goods and services
in market transactions. Reflected the
increased output of farms and factories, the
entrepreneurial activities of traders and
merchants, and the creation of transportation
in roads, canals, and railroads
Transportation
• Migration (peopling) West –
• Congress reduced the
price of federally owned
land
•Congress approved
funds for a National
Road
•States Chartered
companies to build
roads and tolls
•Erie Canal
•Robert Fulton’s
steamboat
•National Post Office to
ship money, letters, and
goods
Railways
• Linked Northeast with Midwest
• John Deere’s steel plow
• Linked Deep South to Northern Mills
– Trade in cotton made planters wealthy but did not
transform their economy like the Midwest, where
people invested in manufacturing
– Lacking cities, factories, and trained workers, the
South remained tied to agriculture
Urbanization
• Fastest growth in industrial towns
• Chicago – capitalized on the cities links to
rivers, canals, and railroads. Entrepreneurs
built warehouses, mills, packing plants, and
machine shops, creating work
• New York – Connection to foreign markets,
Erie Canal, brought “old and new” together