Increasing Industry in Early America

America was basically a country of farmers for much of the 19th century, but the War of 1812 had cut off the supply of many manufactured goods from Europe and encouraged the growth of domestic industry.

The rise of factories

In 1790, the first factory devoted to spinning cotton into thread opened in New England, and by 1815, there were 213 such factories.

Most goods were still produced and sold by individuals or small companies. But strides in manufacturing parts that could be interchanged to make assembling objects easier, the use of water- and steam-powered machinery, and increases in demands for American-made goods all helped foster growth in the nonagricultural segment of the economy.

Transportation gets rolling (well, floating)

As the market for goods increased, the need for a sound transportation system also grew. Congressional leaders such as Henry Clay and John C. Calhoun were eager for the federal government to lead the development of roads and waterways.

But Presidents Madison and Monroe balked, claiming that the Constitution limited the federal government’s public works efforts to projects that crossed state boundaries and not projects that were contained within a single state. Because most states didn’t have the money for big road-building projects, traveling or shipping by road remained a real pain in the back pocket.

On the water, however, things were a little different. One of the advantages of moving goods by water is that you can move a lot more with less effort — if you can get the water to go where you want to go and move in the direction you want.

The development of the steamboat opened two-way traffic on rivers, particularly the Mississippi, because cargo could go upstream against the current. And construction began in New York in 1817 on a remarkable engineering feat: the 363-mile-long Erie Canal, linking Lake Erie at Buffalo with the Hudson River and Atlantic Ocean.

Completed in 1825, the $7 million canal soon repaid its costs through tolls and brought prosperity to the entire region. It also sparked a nationwide canal-building boom as areas raced to link up major natural waterways with man-made ditches.

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