Industrialization in other countries: USA

Industrialization in other countries: USA

  • During the third quarter of the nineteenth century, France, Germany and Belgium made a clear jump from agricultural to self-sustaining industrial societies. Like Britain, they had embarked on a programme of sustained and regular economic growth that was to propel them into a New World of material wealth and prosperity. As yet they well still in Britain’s wake but they soon began to gain on her and by the end of the century had gained a position of near parity. Their success changed the political map of Europe and clearly established them as the leading economic and military powers on that continent and, indeed, in the struggle for world imperial domination.
  • Other once great nations, such as Russia, Austro-Hungary, Spain and Portugal, soon realised that they were being eclipsed by this new economic system and began, by the end of the century, to make every effort to themselves embrace change the new directions of wealth and power. However, they were slow to make progress and the real challenge to the supremacy of western Europe in the new industrial world came not from the older Eastern and Southern powers, but from across the Atlantic, in the new, upstart nation of the United States of America.

The Industrialisation of the United States of America:

  • The economic progress of the North America during the eighteenth and nineteenth centuries was absolutely unparalleled in history. There was hardly any point in those two hundred years when it did not enjoy the highest rate of growth in the world. For most of the first half of the period this growth was based on the exploitation of natural resources, agricultural and mineral, but from the early nineteenth century, industrialisation also became increasingly important.
  • By 1850 the U.S. was firmly established in a strong process of industrialisation and by 1900 it was not only a fully industrialised economy but also one of the world’s top three economic powers.
  • In the twentieth century its power has continued to grow, both absolutely and relatively, and for the last fifty years it has been unchallenged as easily the world’s most advanced and largest economy.
  • The profile of industrialisation in America is quite similar to that of western Europe, but for often very different reasons. Thus there was (1) slow industrial development during the eighteenth century; (2) a marked speeding up during the period of the European French and Napoleonic wars; (3) post war dislocation and de-industrialisation with the return of peace and renewed British competition; (4) recovery and sustained growth during the second quarter of the century – but the causes of the changes in pace were usually externally generated rather than the result of any inherent problem with the domestic economy or its socio-political-cultural context.

The Eighteenth Century:

  • From the 16th to the late eighteenth century, the north American continent was divided between a number of European empires – mainly the Spanish, French and Dutch. During the colonial period every aspect of American economic development was shaped by the “British Colonial System” which was gradually evolved in the context of mercantilist economic philosophies during the seventeenth century. In essence the policy assumed that colonies had only one reason for existence – to serve the “mother country”. They should do this by providing her with goods that she could not otherwise obtain – both for consumption and re-export – and by furnishing her with markets for her domestic industry. Thus the American colonies were encouraged to develop as food and raw material producers (most notably tobacco, rice, sugar, timber products) but discouraged from developing all but a narrow range of manufactures.
  • Although these constrictions generated rising frustrations among the colonists, who with increasing wealth and generational distance from England wanted more political freedom, they also brought many economic benefits, eg. privileged access to the rapidly expanding British market; access to the trading opportunities of the growing British Empire; and, perhaps most important of all, development in the context of a set of British cultural, social, and political institutions which were proving more conducive to private enterprise and capitalist expansion than any other system in the world at that time.(it is in this latter area that explanations are usually found for the wide differences in the economic performance of North and South America since the eighteenth century).
  • With successful revolution, the British were thrown out, the constrictions of the old colonial system removed, and American businessmen unleashed for independent development. However, at first things did not go well. The newly independent nation was suddenly awakened to the advantages that they previously had enjoyed. Without the protective defensive hand of the British, their very continued independence could be cast into doubt. At that point, however, things fortuitously took a sudden change for the better with the outbreak of general warfare in Europe.

The French and Napoleonic Wars 1794 to 1815:

  • War in Europe meant sea warfare, as the British, and the French and their allies, fought for control of the sea-lanes to their colonies and other long-distance markets. The British won and cut off the other European powers from their empires. The only way that trade and other links could be maintained was by means of neutral shipping. The Americans were more than pleased to accept this role, and American ports, particularly in New England, experienced a return to unparalleled commercial prosperity.
  • Markets for American primary products, particularly the large tobacco crop, also picked up. All available capital was channelled into planting, shipping and commerce – the supply of manufactured products was conveniently left to old British manufacturers, who had been keen to re-establish good relations after previous difficulties had been forgotten.
  • All went well until economic warfare in Europe replaced major military activities after 1806. First Napoleon and then Britain attempted to inflict injury with their respective Continental System and Orders in Council. While these had arguably beneficial effects on the process of “continental” industrialisation, they made life harder and harder for the neutrals that tried to sustain Europe’s external trade. America retaliated in 1807 with her own Embargo act. Relations with Britain gradually deteriorated until a second outbreak of war in 1812.
  • While economic and military warfare had disastrous consequences for American primary producers and mercantile and shipping interests, it created the first real opportunity for the development of large-scale domestic industry. As in continental Europe, the protective conditions fostered an explosion of industrial activity’ led by textiles and metal manufacturing. To a large degree this took the form of stimulating traditional, small-scale units of production, but Americans, unlike their continental counterparts, found it easier to learn from their British. Between 1805 and 1815, for example, 94 new cotton mills were built in New England, most of them, like Lowell’s famous Mill at Waltham, near Boston, employing the latest British spinning and weaving machinery. However, even these new enterprises had still relatively high costs and they found it hard to survive the return of peace and normal trading relations.

The Post-War Period 1815 to the Early 1820s:

  • In the immediate post-war period, a British import invasion, underpinned by their superior technology and with deliberate prices cut to wipe out future competitors, dealt a near lethal blow to the momentum of industrialisation. Many manufacturing companies were forced to close. Entrepreneurs turned away from industry and back towards primary production and commercial activity.
  • The population was increasing rapidly; the frontier had spilled across the Appellation mountain range and was racing across the mid-west; the nation was increasingly able to look inwards, at the exploitation of its own domestic potential, rather than outwards to the international economy that had dominated its earlier years. But there was one last great international opportunity to be taken – namely the supply of raw cotton to the insatiable appetite of the British and developing European textile industries. Throughout the 1810s, ‘20s, ‘30s, ‘40s, rapid economic growth in the nation as a whole was driven by the expansion of the cotton crop and the southern “Cotton Kingdom”.
  • However, the wider economy did not become totally unbalanced by the vast earnings potential of cotton. The southern plantations’ need for additional food supplies encouraged the expansion of commercial agriculture in the West, and the increasing wealth of both regions created a demand for manufactured goods that the Northeast could begin to supply alongside the British.

Revived Industrialisation 1820s – 1850s

  • Just as war had provided the protective market conditions to start a rush into manufacturing between 1812 and 1814, the introduction of a protective tariff in 1816 did much first to arrest the decline, then to initiate recovery, and finally to sponsor sustained industrial progress.
  • The “protective effect” of the tariff was progressively increased during following decades by a gradual reduction in manufactured goods prices – a process that was accelerated by a series of increases in the size of the duty itself. This meant that British manufacturers gradually abandoned the market for basic, low quality, utility goods – where profit margins were small – to American manufacturers and concentrated instead on the upper end of the market.
  • Together with various other stimuli, like resource abundance and high labour costs, this market structure was to initiate experiments with entirely new forms of mass production technology which were to lead to a new and characteristically American form of manufacture.
  • Just as important to fostering growth was the constant westward shift in the functional centre of the U.S. economy and the progressive improvement of domestic transport facilities. This greatly expanded the market faced by American producers while still providing a protective effect, in the form of relatively high transport costs, against the British. For example, to undercut the manufacturing companies producing agricultural machinery and frontier implements for local markets in the new western towns, such as Pittsburgh, British manufacturers had to not only jump over high tariff barriers but also to meet expensive sea and land transport costs – particularly in the critical early years of the pre-railway era (1820s and ‘30s). Under these conditions and with cotton production and earnings driving the economy forward, the west constantly taking in new resources, and the population booming with both high natural increase and immigration, it was difficult for manufacturers to fail.
  • By 1860, the cotton textile industry, based mainly in Northeast, had been almost entirely mechanised and was in no way inferior in its technology to that commonly used in England. In the iron industry, the adoption of the latest new British coal fuelled techniques in smelting and refining was retarded by the ready availability of traditional wood fuel.
  • America also began to produce it own new technologies, demonstrating the different market forces found there compared with Europe. The sewing machine, for example, developed by Howe, Singer and Wilson from the late 1840s, greatly facilitated the work of women in remote western farmsteads as well as revolutionising the shoe and garment trades in the production of utility products for working men.
  • During this long period of growth and change there were inevitably times of doubt and crisis, distortions brought by civil war and internal conflict, but America was the “land of the free”, where the entrepreneurial could flourish and the market was left to promote unrestrained social Darwinism. There’s was a roller-coaster of success.

Early Innovations In USA:

  • Thomas Somers and the Cabot Brothers founded the Beverly Cotton Manufactory in 1787, the first cotton mill in America, the largest cotton mill of its era, and a significant milestone in the research and development of cotton mills in the future. This mill was designed to use horse power, but the operators quickly learned that the horse-drawn platform was economically unstable, and had economic losses for years. Despite the losses, the Manufactory served as a playground of innovation, both in turning a large amount of cotton, but also developing the water-powered milling structure used in Slater’s Mill.
  • In 1793, Samuel Slater founded the Slater Mill in Rhode Island. He had learned of the new textile technologies as a boy apprentice in England, and defied laws against the emigration of skilled workers by leaving for New York in 1789, hoping to make money with his knowledge. After founding Slater’s Mill, he went on to own 13 textile mills.
  • Daniel Day established a wool carding mill in Massachusetts in 1809, the third woollen mill established in the US (The first was in Hartford, Connecticut)
  • The Blackstone River and its tributaries, which cover more than 45 miles from Worce ster, Massachusetts to Providence, Rhode Island, was the birthplace of America’s Industrial Revolution. At its peak over 1100 mills operated in this valley, including Slater’s mill, and with it the earliest beginnings of America’s Industrial and Technological Development.
  • Merchant Francis Cabot Lowell from Newburyport, Massachusetts memorised the design of textile machines on his tour of British factories in 1810. Realising that the War of 1812 had ruined his import business but that a demand for domestic finished cloth was emerging in America, on his return to the United States, he set up the Boston Manufacturing Company. After his death in 1817, his associates built America’s first planned factory town, which they named after him. Lowell, Massachusetts, using canals and 10,000 horsepower delivered by the Merrimack River, is considered by some as a major contributor to the success of the American Industrial Revolution.
  • The industrialization of the watch industry started 1854 also in Waltham, Massachusetts, at the Waltham Watch Company, with the development of machine tools, gauges and assembling methods adapted to the micro precision required for watches.

Industrialization and reform in USA– Second Industrial Revolution Era (1870-1916):

  • The  industrial  growth  that  began  in  the  United  States  in  the  early  1800’s continued steadily up to and through the American Civil War. Still, by the end of the  war,  the  typical American  industry  was  small. Hand labour remained widespread, limiting the production capacity of industry. Most businesses lacked the capital needed for business expansion.
  • After the Civil War, however, American industry changed dramatically. Machines replaced  hand labour  as  the  main  means  of  manufacturing, increasing  the production  capacity  of  industry tremendously.  A  new  nationwide  network  of railways  distributed  goods  far  and  wide. Inventors  developed new products  the public wanted, and businesses made the products in large quantities.  Investors and bankers supplied the huge amounts of money that business leaders needed to expand their operations.
  • The industrial growth centred chiefly on the North. The  war-torn  South  lagged behind  the  rest of  the  country  economically.
  • America’s  role  in  foreign  affairs  also  changed  during  the  late  1800’s  and  early 1900’s. The country built up its military strength and became a world power.

The rise of big business:

  • The  value  of  goods  produced  by  American  industry  increased  almost  tenfold between 1870  and  1916.  Many  interrelated  developments  contributed  to  this growth.

(a) Improved production methods

  • The use of machines in manufacturing spread throughout American industry after the  Civil  War. With  machines, workers could produce goods many times faster than they could by hand. The new large manufacturing firms hired hundreds, or even  thousands, of workers.
  • Each worker was  assigned a specific job in the production process. This system of organizing labourers, called the division of labour, also sped up production.

(b) Development of new products

  • Inventors created, and business leaders produced and sold, a variety of new products. The products included the typewriter (1867), barbed wire (1874), the telephone (1876), the phonograph  (early  form  of  record  player)  (1877),  the electric light (1879), and the petrol engine car (1885).

(c) Natural resources

  • America’s rich and varied  natural resources played a key role  in the rise  of  big business.  The nation’s  abundant  water  supply  helped  power  the  industrial machines. Forests provided timber for construction and wooden products. Miners took large quantities of coal and iron ore from the ground.

(d) A growing population

  • More  than  25  million  immigrants  entered  the  United  States  between  1870  and 1916. Immigration plus natural growth caused the U.S. population to more than double during the same period, rising from about 40 million to about 100 million.

(e) Distribution and communication

  • In  the  late  1800’s,  the  American  railway  system  became  a  nationwide transportation network. The total distance of all railway lines in operation in the United  States  soared from about 14,500  kilometres  in  1850  to  almost  320,000 kilometres  in  1900.
  • A  high  point  in  railway  development  came  in  1869,  when workers laid tracks that joined the Central Pacific and Union Pacific railways near Ogden, Utah. This event marked the  completion of  the  world’s  first transcontinental railway system. The system linked the United States by rail from coast to coast.
  • Mining companies used them to ship raw materials to factories over long distances quickly. Manufacturers  distributed  their  finished  products  by  rail  to  points throughout the country. The railways became highly profitable businesses for their owners.
  • In  1876, Alexander  Graham Bell invented the telephone. These developments, along with the telegraph, provided the quick communication that is vital to the smooth operation of big business.

(f) Investment and banking

  • The business boom triggered a sharp increase in investments in the stocks and bonds of corporations.  As  businesses  prospered,  people  eager  to  share  in  the profits  invested heavily. Their investments  provided  capital  that  companies needed to expand their operations.
  • New banks sprang up throughout the country. Banks  helped  finance  the  nation’s  economic growth  by  making  loans  to businesses.

Life during the industrial era:

  • The industrial boom had major effects on the lives of the American people. The availability of jobs  in  industries  drew  people  from  farms  to  cities  in  record numbers. In 1870, only about 25 per cent of the American people lived in urban areas. By 1916, the figure had reached almost 50 per cent.
  • The lives of people in the cities contrasted sharply. A  small  percentage  of  them  had enormous  wealth  and  enjoyed  lives  of  luxury. Below  them  economically,  the  larger  middle class  lived  comfortably.  But at  the bottom  of  the  economic  ladder,  a  huge  mass  of  city people  lived  in  extreme poverty.

(a) The wealthy

  • The business boom opened up many opportunities for financial gain. The economic activity  it generated  enabled  many  people  to  establish  successful  businesses, expand  existing  ones, and  profit  from  investments.

(b) The middle class

  • Other city people prospered enough to live lives of comfort, if not wealth. They included  owners of  small  businesses,  and  such  workers  as  factory  and  office managers. They became part of America’s growing middle class.

(c) The underprivileged

  • The labourers who toiled in factories, mills, and mines did not share in the benefits of  the economic  growth.  They  usually  worked  at  least  60  hours  a  week and had no fringe benefits.
  • As the nation’s population grew, so did the competition for jobs. The supply of workers outstripped  the  demand.  The  oversupply  of  workers  led  to  high unemployment. In addition, depressions slowed the economy to a near standstill in 1873, 1884, 1893, and 1907.
  • The everyday life of the city poor was dismal and drab. The poor lived crowded together in slums. Much of their housing consisted of cheap apartment buildings called tenements. The crowded slum neighborhoods bred crime. Overwork, poor sanitation,  and  inadequate  diet  left  slum  dwellers  vulnerable  to  disease.  Many poor  children  received  little  or  no  education,  because  they  had  to  work  to contribute to their families’ welfare.

(d) The farmers

  • American  farmers  also  suffered  hardships  after  the  Civil  War.  Advances  in agricultural equipment  and  techniques  had  enabled  most  of  the  farmers  to increase  their  production. However,  middlemen  between  the  farmers  and  the consumers  took  a  large  share  of  the money  earned  from  farm  products.  The middlemen included owners of railways, mills, and gins.

(e) Government

  • Political leaders strongly favoured business interests. Government  of  the  era  was  marked  by  widespread  corruption.  Corruption  also  flourished  in state and local government.

(f) The  Gilded  Age

  • American  author  Mark  Twain  called  the  era  of  industrialization “The Gilded Age.” Twain used this term to describe the culture of the newly rich of the period. Lacking tradition, the wealthy developed a showy culture supposedly based  on  the culture  of  upper-class Europeans.
  • Most Americans, however, had a far different idea of culture. They enjoyed fairs that exhibited industrial machines, the latest inventions, and other items related to  America’s  material  progress.  The  American  people  were  eager  spectators  at circuses, vaudeville shows, and sporting events. Baseball became so popular after 1900  that  it  was  called  the  national  pastime.  Also  after  1900,  a  new  kind  of entertainment, the cinema, began attracting public interest.


  • A strong spirit of reform swept through the United States during the late 1800’s and early 1900’s. Many Americans called for changes in the country’s economic, political, and social systems. They wanted to reduce poverty, improve the living conditions of the poor, and regulate big business. They worked to end corruption in government, make government more responsive to the people, and accomplish other  goals.
  • By  1917,  the  reformers  had  brought  about  many  changes.  Some reformers  called  themselves  progressives.  As  a  result,  the  period  of  American history from about 1890 to about 1917 is often called the Progressive Era.
  • Early  reform  efforts included movements  to  organize  labourers  and farmers. In 1886, skilled labourers formed the American Federation of Labor (AFL). Led by  Samuel  Gompers,  this  union  bargained  with  employers  and  gained  better wages  and  working  conditions  for  its  members.  Farmers  founded  the  National Grange  in  1867  and  Farmers’  Alliances  during  the  1870’s  and  1880’s.  These groups helped force railways to lower their charges for hauling farm products and assisted the farmers in other ways.
  • The drive for woman suffrage became strong after the Civil War. In 1869, Susan B.  Anthony and  Elizabeth  Cady  Stanton  founded  the  National  Woman  Suffrage Association. The Territory of Wyoming  gave  women  the  right  to  vote  the  same year. Soon, a few states allowed women to vote, but only in local elections.

The Progressive Era:

  • The outcry for reform increased sharply after 1890. Members of the clergy, social workers, and others studied life in the slums and reported on the awful living conditions there. Educators criticized the nation’s school system.
  • Increasingly,  unskilled  workers  resorted  to  strikes  in  an  attempt  to  gain concessions from their employers. Often, violence broke out between strikers and strikebreakers hired by the employers.
  • Socialists and others who opposed the U.S. economic system of capitalism supported the strikers and gained a large following.
  • As public support for reform grew, so did the political influence of the reformers. In 1891, farmers and some labourers formed the People’s, or Populist, Party. The Populists called for government action to help farmers and labourers. They gained a  large  following,  and  convinced  many  Democrats  and  Republicans  to  support reforms.
  • Reformers  won  control  of  many  city  and  some  state  governments.  They  also elected many people to Congress who favoured their views. In addition, the first three  presidents  elected  after  1900–Theodore  Roosevelt,  William  Howard  Taft, and Woodrow Wilson–supported certain reform laws.
  • Theodore Roosevelt, who became president in 1901, was a liberal Republican who called for a “square deal” for all Americans. Roosevelt became the first president to help labourers in a strike against employers. In 1902, the United Mine Workers struck for better wages and working conditions. Roosevelt asked the miners and the  mine  owners  to  settle  their  differences  through  arbitration,  but  the  mine owners refused. Angered, the president threatened to have the army take over the mines. The owners gave in, and reached a compromise with the miners.
  • Republican  William  Howard  Taft  succeeded  Roosevelt  in  1909.  Although  a conservative,  Taft  helped  further  the  cause  of  reform.  In  1912, Democrat Woodrow Wilson won the presidency. The  reform  movement  flourished  under  Wilson.  The  many  reform  measures passed  during  Wilson’s  presidency  included  the  Underwood  Tariff  Act  of  1913, which  lowered  a  high  tariff  that  protected  American  business  from  foreign competition.

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