Economic History, 1843-1857
The forces generating the market revolution had produced boom-bust cycles that had
periodically inhibited the economy's full growth potential. From 1843 to 1857, the market
economy showed what it could do without a major economic depression. The results were
impressive. In the 1844-1854 period, the total value of all commodities rose 69%. In the 1840s,
output per worker rose an average 10% in the 1850s, 23%. In part, it was simply a further
acceleration of the market economy after the 1837-1843 depression.
Commercial agriculture grew faster than ever. By 1846, the formerly protectionist
Northwest was exporting so much wheat to foreign markets that it became a free trade area and
voted for low tariffs in 1846. By 1850, the Northwest exceeded the Northeast in wheat
production with as the wheat growing areas moved into Wisconsin, Iowa, eastern Kansas and
Nebraska. The use of the mechanical reaper pushed wheat production from 30 million bushels in
1850 to 100 million in 1860. Meat packing and the production of corn and hogs was almost as
spectacular. In the South, in the 1840s, cotton production increased 60% and, in the 1850s,
increased 100%. The increasing productivity and profitability brought an increase in slave prices
as plantation owners, faced with labor shortage, competed with each other for workers. In the
1790s, a prime field hand sold for $300; by 1840, the amount was $1,000; and by 1860, $1,500.
Some of this price increase was simply inflation but the figures indicate that the prices were
The growth of regionally-specialized commercial agriculture was closely tied to the
development of a national system of transportation
and communication. The railroad network
created in the 1850s brought the railway system to full efficiency. In the 1840s, there were only
6,000 miles of track in the nation, by 1852, there were 12,000 miles; and, by 1860, there were
30,000 miles. By 1857, one billion dollars had been invested in railroads, two-thirds during
1850-1857. By the early 1850s, the completion of 5 trunk lines connecting Boston, New York,
Philadelphia, Baltimore, and Charleston with Ohio and Mississippi by way of Albany, Buffalo,
Pittsburgh, Wheeling, Atlanta, Chattanooga and on to Chicago, St Louis, and Memphis. One
could go from the Atlantic Coast to Chicago or St Louis in two days for $20. Numerous feeder
lines meant that even more locales could use railroad transportation.
American exports grew from $144 million dollars in 1850 to $334 million in 1860, but
imports were greater than exports . The trade deficit grew from $5 million in 1850 to $58 million
in 1860 and was met by the exportation of gold.
Immigration surged upwards, especially from Ireland and the German-speaking parts of Europe.
Before 1825, there were 10,000 immigrants yearly. By the mid-1840s, ten times as many or
100,000 a year were coming. By the early 1850s, the number had reached 400,000 a year. In the
1844-1854 period, 3 million immigrants came. They did factory work, the dirty work in railroad
and canal construction, domestic service, and any other jobs that they people who were already in
the US would not do them. The Germans tended to settle in the Mid West; the Irish tended to stay
in the Northeast. The Irish started displacing the women who worked in New England and other
Northeastern factories. So many came that strong resentment against them grew in many places.
A common expression about the Irish was "it's a good thing the wheelbarrow was invented; it
taught the Irish to walk on their hind legs."
Their coming to the United States helped grow the economy. Immigration is a subsidy of
the receiving country. Most people do not realize this. From the time a child is born until he or
she immigrants, people had to pay to raise that child. In other words, a capital investment is made.
When the person immigrates, then the country to which the person goes gets the benefit of that
capital investment while the sending company loses it. So immigration represents a source of
wealth for the receiving country. That immigrants tend to be healthy, ambitious people means
that the investment is worth a great deal to the receiving country.
The rounding out of the vast and lucrative market set the stage for the Industrial
Revolution to occur in the US. From the 1850s on, industry was the motor for economic
expansion. Large-scale factory production had been developing since the War of 1812. There was
such growth in the 1840s that, by 1850, the value of manufactured products exceeded the value of
agriculture. From 1850 to 1860, the value of manufactured goods went from just over $1 billion
to just under $2 billion. The value added by manufacture rose 157% from 1839-1849. From
1844-1854 it rose 134%.
Cotton textiles were the pioneer industry. Samuel Slater learned in his native Britain about
Arkwright's spinning and carding machines; he immigrated to the US in 1789 and built similar
machines from memory. In 1793, he created the first US cotton mill in Pawtucket, Rhode Island.
The industry boomed during the War of 1812 because demand increased and imports were
difficult to obtain. Successful merchants saw the profits and began investing money in
manufacturing. In Massachusetts in 1813, Francis Cabot Lowell headed a group who founded the
Boston Manufacturing Company in Waltham, Massachusetts with $600,000. It used an efficient
power loom and spinning machine he had created with another man. His mill was probably the
world's first mill in which were performed all operations converting raw cotton into finished cloth.
This system spread to wherever water power was available. It used the assembly line techniques
developed by Eli Whitney of Connecticut. The assembly line technique spread to other products,
hog butchering and packing being one example.
The iron industry grew to meet the demand for new machines. Railroads were big
consumers as the locomotives and railroad cars were made of iron and ran on iron rails. Iron was
strong and malleable as increasingly was used in machines.
By the 1840's , manufacturing was not as dependent upon waterfalls; stationary steam
engines allowed the location of factories in cities. With that development, cities began to grow
rapidly as working families flocked to them and others went to sell them products. By 1860,
greater New York City had over one million people. Sizable cities such as St Louis and Cincinnati
had come on the old frontier.
With the rise of industry came a new working class. Lowell hired farm and small town
girls to work in his factory. These Waltham Girls were carefully supervised at work and at leisure
so their parents would let them leave home. Many sought to earn enough for a dowry; others
supplemented the family income. For most industrial workers, wages were low, hours were long,
employment was tenuous, working conditions were hard, and living conditions were bad. Some
workers tried to organize unions to improve the situation but the constant stream on immigrants,
who would accept any condition, meant that unions were rarely effective.
As a greater percentage of men were working in factories rather than on farms, the ability
of men to raise their children declined. Farming allowed men to raise children, for he could keep
an eye on them, but, unless his child worked in the same factory, a father had little opportunity to
see his child. Often, the child worked under a foreman in a different place than the father.
Industrialization, although it had many social and economic benefits, meant that men who loved
their children had to leave them to others to raise.
Men, women, and children were willing to pay the price for the economy was the most
prosperous the country had ever seen. Farm work involved very long hours for everyone, hours
shortened only by darkness. Children had chores. One of the reasons to have children was that
they consumed less than they produced. Factory work differed because the work day did not
shorten or lengthen with the seasons. Here, too, most members of a family, if not the entire
family, worked. The payoff was a higher standard of living. Immigrants flocked to factories and
mines; the jobs that had to be done did not require much English. They also flocked to farming
communities which used free labor; they tended to stay away from the South since they did not
want to compete with slave labor.
With prosperity, people were generous; there seemed to be more than enough to go
around. Sectional tensions were at a low ebb. The US Congress gave away 18 million acres of
land to railroad companies between 1850 and 1860 to get transcontinental railroads built. The
South, which believed cotton was king, supported railroad construction because it wanted to get
cotton to markets. Industrial expansion did well even under the low tariff of 1846, which had been
supported by agrarian interests. Settlement was expanding as Americans went westward, some
across the Oregon Trail. The Mormons had to leave the US in 1846-47 to find refuge in Mexico
but the Mexican War (1846-48) swallowed Utah as part of the Mexican Cession. The gold strike
in 1849 near San Francisco encouraged thousands to go to California. The cotton frontier was
expanding westward into the Mississippi Delta region and further westward into eastern Texas.
Donald J. Mabry