C HAP TER

9
Transforming the Economy
1800–1860

CHAPTER OUTLINE machines and assembly lines to produce

new types of products.
The following annotated chapter outline will help 6. Some Britons feared that American
you review the major topics covered in this chapter. manufacturers would “become exporters
I. The American Industrial Revolution not only to foreign countries, but even to
A. The Division of Labor and the Factory England.”
1. Two great changes defined the early- B. The Textile Industry and British Competition
nineteenth-century American economy: 1. American and British Advantages
the growth and mechanization of industry a. British textile manufacturers were
(the Industrial Revolution) and the particularly worried about American
expansion and integration of markets (the competition; Britain prohibited the
Market Revolution). export of textile machinery and the
2. Industrialization came to the United States emigration of mechanics who knew
between 1790 and 1860, as merchants and how to build it, but many British
manufacturers increased output of goods mechanics disguised themselves as
by reorganizing work and building ordinary laborers and set sail to the
factories. United States.
3. The outwork system was a more efficient b. Samuel Slater brought to America a
division of labor and lowered the price of design for an advanced cotton spinner;
goods, but it eroded workers’ control over its use in 1790 marked the advent of
the pace and conditions of work as well as the American Industrial Revolution.
their wages. c. American manufacturers could rely on
4. For tasks not suited to outwork, factories an abundance of natural resources,
were created where work was including cotton, wool, and water to
concentrated under one roof and divided power the factories sprouting along
into specialized tasks. rivers in the northeastern states.
5. Manufacturers used newly improved coal- d. British companies were better
burning stationary steam engines to power established and had less-expensive
their mills and used power-driven shipping rates, lower interest rates, and
cheaper labor.

1
2 C HAPTER 9 • T RANSFORMING THE E CONOMY

e. Congress passed protective legislation 2. The most important inventors in the

in 1816, 1824, and 1828, levying high Philadelphia region were members of the
taxes on imported goods; tariffs were Sellars family, who helped found the
reduced again in the 1830s. Franklin Institute of Philadelphia in 1824.
2. Better Machines, Cheaper Workers 3. Mechanic institutes were established in
a. American producers used two other other states, which disseminated technical
strategies to compete with their British knowledge and encouraged innovation; in
rivals. First, they improved on British 1820, the U.S. Patent Office issued about
technology; second, they found less two hundred patents each year, but by
expensive workers. 1860, it was awarding four thousand
b. American producers more effectively patents annually.
competed with their British rivals by 4. American mechanics pioneered the
improving British technology. Francis development of machine tools thus fueling
Cabot Lowell’s Boston Manufacturing the spread of the Industrial Revolution.
Company built the Waltham factory, 5. In the firearms industry, Eli Whitney and
the first American factory to perform others developed interchangeable and
all the clothmaking operations under precision-crafted parts that enabled large-
one roof at higher speeds than British scale production.
mills and with fewer workers. 6. Technological inventions resulted in more
c. The Boston Manufacturing Company efficient machines and sped up mass
pioneered a labor system that became production.
known as the Waltham-Lowell system, 7. The increased availability of machines
in which the company recruited farm allowed the American Industrial
women and girls as textile workers Revolution to come of age; the volume
who would work for low wages. and availability of output caused some
d. By the early 1830s, more than 40,000 products—Remington rifles, Singer
New England women worked in textile sewing machines, and Yale locks—to
mills. Mill owners provided rooms in become household names.
boardinghouses with evening cultural 8. After the 1851 Crystal Palace Exhibition
activities, enforced strict curfews, in London, Americans built factories in
prohibited alcoholic beverages, and Great Britain and soon dominated many
required church attendance. European markets.
e. Although some women found this D. Wageworkers and the Labor Movement
work oppressive, many gained a new 1. Free Workers Form Unions
sense of freedom and autonomy. a. The Industrial Revolution changed the
f. By combining improved technology, nature of work and workers’ lives.
female labor, and tariff protection, the Many American craft workers had
Boston Manufacturing Company sold developed an artisan republicanism, an
textiles at cheaper prices than British ideology of production based on the
companies. principles of liberty and equality. They
C. American Mechanics and Technological saw themselves as small-scale
Innovation producers, equal to one another and
1. By the 1820s, American-born craftsmen free to work for themselves.
had replaced British immigrants at the b. But as the outwork and factory systems
cutting edge of technological innovation. spread, more and more workers took
jobs as dependent wage earners.
 C HAPTER 9 • T RANSFORMING THE E CONOMY 3

c. Skilled workers, such as carpenters and the mills and were soon replaced by
masons, united through a strong trade impoverished Irish immigrants.
consciousness, created unions, and e. In 1857, surplus production and a
bargained with their employers, financial panic contributed to a
particularly with the hope of setting a recession, and urban unemployment
ten-hour workday. rose to 10 percent, reminding
d. By 1840, many trade workers and Americans of the social costs of
federal employees had won a ten-hour industrial production.
workday. II. The Market Revolution
e. Artisans whose occupations were A. The Transportation Revolution Forges
threatened by industrialization— Regional Ties
shoemakers, printers, and so on—were 1. Canals and Steamboats Shrink Distance
less successful, and some left their a. By the 1840s, the removal of Indians,
employers to set up specialized shops, generous federal land policies, and
resulting in the division of the desire for landownership enticed nearly
traditional artisan class into two 5 million people to move to the trans-
groups: self-employed craftsmen and Appalachian west.
wage-earning craftsmen. b. To connect new western settlements
f. Under English and American common with the east and encourage trade,
law, it was illegal for workers to form Congress appropriated funds for
unions or organize themselves for the construction of the National Road, and
purpose of raising wages, because they states established charter companies to
prevented other workers from hiring build toll roads, or turnpikes.
themselves out for whatever wages c. Interregional and government-funded
they wished. highways were still too slow and
2. Labor Ideology expensive to transport goods and crops
a. In 1830, journeymen banded together efficiently.
to form mutual benefit societies to seek d. Americans developed a water-borne
better conditions. In 1834, several trade transportation system of unprecedented
unions combined to form the National size, beginning with the government-
Trades Union. subsidized Erie Canal.
b. Although workers gained the public’s e. The New York canal project had three
support for their causes and things in its favor: the support of New
Commonwealth v. Hunt (1842) upheld York City merchants, the backing of
the right of workers to form unions and the governor, and the gentle landscape
call strikes in order to enforce closed- west of Albany.
shop agreements that limited f. The Erie Canal altered the region’s
employment to union members, many ecology as settlers cut trees to
judges continued to issue injunctions construct homes and to open land for
forbidding strikes. crops and pastures.
c. Union leaders devised a labor theory of g. The Erie Canal brought prosperity to
value and organized strikes for higher central and western New York, linked
wages. the economies of the Northeast and
d Women textile workers took similar Midwest, and prompted a national
labor actions; others refused to work in canal boom.
4 C HAPTER 9 • T RANSFORMING THE E CONOMY

h. Robert Fulton’s development of the did the more industrial northern

first American steamboat ensured the economy.
success of the water-borne B. The Growth of Cities and Towns
transportation system. 1. Because of the expansion of industry and
i. State and national governments trade, the urban population grew fourfold
encouraged the creation of this between 1820 and 1840.
interregional transportation, trade, and 2. The most rapid growth occurred in the
communication system through new industrial towns that sprang up along
subsidized construction; the Post the “fall line”—for example, Lowell,
Office Act of 1792 allowed letters and Massachusetts; Hartford, Connecticut;
banknotes to be carried from one end Trenton, New Jersey; and Wilmington,
of the country to the other, and the Delaware.
Supreme Court struck down state 3. Western commercial cities such as New
restrictions on commerce in Gibbons v. Orleans, Pittsburgh, Cincinnati, and
Ogden (1824). Chicago grew almost as rapidly because
2. Railroads Link the North and Midwest of their location at points where goods
a. The development of the railroad were transferred from one mode of
created ties between the Northeast and transport to another.
the Midwest, and by the 1860s, 4. As transportation hubs, several cities such
railroads became the main carriers of as St. Louis and Chicago also became
freight. major manufacturing centers.
b. Interregional railroad lines connecting 5. By 1860, the largest cities in the United
major Midwestern cities with adjacent States were New York, Philadelphia,
states turned Chicago into a Brooklyn, St. Louis, and Chicago, in that
transportation center. order.
c. Interregional trade grew by the 1840s 6. The old Atlantic seaports—Boston,
once midwestern entrepreneurs began Philadelphia, Baltimore, Charleston, and
to produce goods that vastly increased especially New York City—retained their
output—John Deere plows, importance for foreign commerce and,
McCormick and Hussey reapers—and increasingly, as centers of finance and
replaced products Americans had been small-scale manufacturing.
importing from Britain and the 7. New York’s growth stemmed primarily
Northeast. By 1847, entrepreneurs like from its control of foreign trade; by 1840,
Deere were creating factories that New York handled almost two-thirds of
relied on mass production to foreign imports and almost half of all
manufacture plows. foreign trade.
d. Improved trade and transportation III. New Social Classes and Cultures
networks allowed southerners to sell A. The Business Elite
their cotton to northeastern textile 1. The Industrial Revolution shattered the
plants and foreign markets. Most traditional rural social order and created a
southern investors concentrated their society composed of distinct regions,
resources in cotton and slaves. The classes, and cultures.
southern economy remained 2. In the large cities, the richest 1 percent of
predominantly agricultural and the population owned 40 percent of all
generated less per capita income than tangible property and an even larger share
of the stocks and bonds.
 C HAPTER 9 • T RANSFORMING THE E CONOMY 5

3. The government taxed tangible property 4. Many wage earners turned to alcohol as a
but almost never taxed stocks, bonds, or form of solace, and police were unable to
inheritances; thus government policies contain the lawlessness that erupted.
allowed the rich to accumulate even more D. The Benevolent Empire
wealth at the expense of the poor. 1. During the 1820s, Congregational and
4. The wealthiest families began to Presbyterian ministers joined with middle-
consciously set themselves apart, and class men and women to launch a program
many American cities became segregated of social reform and regulation.
communities divided geographically along 2. The Benevolent Empire targeted
the lines of class, race, and ethnicity. drunkenness and other social ills, but it
B. The Middle Class also set out to institutionalize charity and
1. The increased number of farmers, combat evil in a systematic fashion.
mechanics, manufacturers, merchants, and 3. The benevolent groups encouraged people
skilled professionals contributed to a to live well-disciplined lives, and they
growing middle class. established institutions to assist those in
2. A distinct middle-class urban culture need and to control people who were
emerged as the per capita income of threats to society.
Americans rose about 2.5 percent per year 4. Upper-class women were an important
between 1830 and 1857, and mass part of the Benevolent Empire through
production lowered prices. sponsorship of charitable organizations.
2. In addition to securing material comfort, 5. Some reformers believed that one of the
middle-class Americans also invested in greatest threats to morality was the decline
education for their children and stressed of the traditional Sabbath.
discipline, morality, and hard work. 6. Popular resistance or indifference limited
3. The business elite and the middle class the success of the Benevolent Empire.
celebrated work as the key to a higher E. Charles Grandison Finney: Revivalism and
standard of living for the nation and social Reform
mobility for the individual. 1. Evangelical Beliefs
4. The ideal of the self-made man became a a. Presbyterian minister Charles
central theme of American popular Grandison Finney conducted emotional
culture. revivals that stressed conversion rather
C. Urban Workers and the Poor than instruction; Finney’s ministry
1. The bottom 10 percent of the labor force, drew on and accelerated the Second
the casual workers, owned little or no Great Awakening.
property, and their jobs were b. Finney’s message that man was able to
unpredictable, seasonal, and dangerous. choose salvation was particularly
2. Other laborers had greater job security, attractive to the middle class, but it
but few prospered; many families sent also helped him to humble the pride of
their children out to work, and the death of the rich and relieve the shame of the
one parent often pushed the family into poor by celebrating their common
dire poverty. fellowship in Christ.
3. Over time, urban factory workers and c. The business elite joined Finney’s
unskilled laborers lived in well-defined movement, establishing savings banks
neighborhoods of crowded and Sunday schools for the poor and
boardinghouses or tiny apartments, often helping to provide relief for the
with filthy conditions. unemployed.
6 C HAPTER 9 • T RANSFORMING THE E CONOMY

d. Finney’s initiatives to create a c. The most prosperous immigrants were

harmonious community of morally the British, followed by the Germans;
disciplined Christians were not the poorest were from Ireland.
altogether effective; skilled workers d. Irish peasants and laborers, fleeing
argued for higher wages and better famine, took low-paying jobs, lived in
schools more than sermons and cheap tenement housing, and were
prayers, and his revival seldom usually the first to die when epidemics
attracted poor people, especially Irish hit cities.
Catholics. e. Many Germans and most Irish were
e. Revivalists from New England to the Catholics who fueled the growth of the
Midwest copied Finney’s evangelical Catholic Church in America; Catholic
message and techniques, and the institutions in turn allowed them to
movement swept through maintain their religion as well as their
Pennsylvania, North Carolina, ethnic identities.
Tennessee, and Indiana. 2. Nativism
2. Temperance a. Because of the Protestant religious
a. In a society with high alcohol fervor stirred up by the Second Great
consumption, the temperance Awakening, Catholic immigrants met
movement proved to be the most with widespread hostility; in 1834,
effective social reform. Samuel F. B. Morse published Foreign
b. The American Temperance Society Conspiracy Against the Liberties of the
adapted methods that worked well in United States, which warned of a
the revivals and helped the Catholic threat to American republican
consumption of spirits to fall institutions.
dramatically. b. Labor issues merged with anti-Catholic
c. Evangelical reformers celebrated sentiment: mobs of workers attacked
religion as the moral foundation of the Catholics, blaming them for high
American work ethic; religion and the unemployment and low wages.
ideology of social mobility held c. Social reformers often supported the
society together in the face of the anti-Catholic movement, hoping to
disarray created by the market prevent the diversion of tax resources
economy, industrial enterprise, and to Catholic schools and opposing
cultural diversity. alcohol abuse by Irish men.
F. Immigration and Cultural Conflict d. In most large northeastern cities,
1. Irish Poverty differences of class and culture led to
a. Between 1840 and 1860, millions of violence and split the North, similar to
immigrants—Irish, Germans, and the way that race and class divided the
Britons—poured into the United South.
States.
b. Most avoided the South, and many
Germans moved to states in the
Midwest, while poorer Germans and
most of the Irish settled in the
Northeast.