4.5 Market Revolution: Industrialization

Before about 1815, most Americans grew or made much of what they needed and traded locally. The market revolution was the shift to an economy in which people produced goods to sell in distant markets and bought much of what they used. It depended on cheaper transportation, new technology, new ways of organizing work and new financial institutions like banks and corporations.

• Roads: the National Road, begun in 1811 in Cumberland, Maryland, reached Wheeling on the Ohio River by 1818 and later stretched farther west.
• Canals: the Erie Canal (1825) ran 363 miles from Albany on the Hudson River to Buffalo on Lake Erie. It cut the cost of shipping goods between the Great Lakes and New York City by roughly 90 percent and made New York the nation's leading port. Its success set off a canal-building boom.
• Steamboats: after Robert Fulton's Clermont (1807) proved steam travel on the Hudson, steamboats could carry goods upstream as well as down, transforming trade on the Mississippi and Ohio Rivers.
• Railroads: the Baltimore and Ohio Railroad began service in 1830. By 1850 the country had about 9,000 miles of track, and railroads were overtaking canals.
• Telegraph: Samuel Morse sent the first long-distance telegraph message from Washington to Baltimore in 1844. Messages that took days could now travel instantly.

In 1790 Samuel Slater, an English mechanic who memorized British textile machine designs, helped build the first successful water-powered cotton-spinning mill in America, in Pawtucket, Rhode Island. Later, a group of Boston investors organized by Francis Cabot Lowell, later called the Boston Associates, put all the steps of cloth-making under one roof, first at Waltham (1814). At Lowell, Massachusetts, from the 1820s, mills hired young, unmarried women from New England farms, the 'mill girls', who lived in supervised boardinghouses. When wages were cut, they organized strikes in 1834 and 1836.

Interchangeable parts, identical parts that could be swapped between products, made mass production and easy repairs possible. Eli Whitney promoted the idea for guns, though federal armories did much of the real development. Whitney's earlier invention, the cotton gin (1793), had a different impact: it made cotton growing hugely profitable and expanded slavery (4.13).

Farm tools improved too. John Deere's steel plow (1837) could cut the tough soil of the prairies, and Cyrus McCormick's mechanical reaper (patented 1834) let one farmer harvest far more wheat.

The market revolution linked regions in a national economy. The Northeast focused on manufacturing, trade and finance. The Northwest (today's Midwest) grew wheat, corn and livestock and shipped food east by canal and railroad. The South grew cotton with enslaved labor and shipped it to New England and British mills.

Over time, canals and railroads increasingly ran east–west, tying the Northwest more closely to the Northeast than to the South, which mattered politically in the 1850s.

The new economy also brought booms and busts. Panics, or financial crises, in 1819 and 1837 threw many people out of work.