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The Growth of the American Economy Previous Next
Digital History ID 3508


At the beginning of the 19th century, the United States was an overwhelmingly rural and agricultural nation. Ninety percent of the population in the Northeast and 95 percent of the people of the South lived on farms or in villages with fewer than 2,500 inhabitants. The nation's population was small and scattered over a vast geographical area--just 5.3 million in 1800, compared to Britain's 15 million and France's 27 million.

Transportation and communications had changed little over the previous half century. A coach ride between Boston and New York took three days; from New York to Philadelphia, two days. South of the Mason-Dixon line, the situation was far worse. Except for a single stagecoach that traveled between Charleston and Savannah, no public transportation of any kind could be found. It took 20 days to deliver a letter between Maine and Georgia.

American houses, clothing, and agricultural methods were surprisingly primitive. Fifty miles inland, half the houses were log cabins, lacking even glass windows. Farmers planted their crops in much the same way as their parents and grandparents. Few farmers practiced crop rotation or used fertilizers or drained fields. They made plows out of wood, allowed their swine to run loose, and left their cattle outside except on the coldest nights.

Manufacturing was also still quite backward. In rural areas, farm families grew their own food, produced their own soap and candles, wove their own blankets, and constructed their own furniture. The leading manufacturing industries, iron-making, textiles, and clothes-making, employed only about 15,000 people in mills or factories.

After the War of 1812, however, the American economy grew at an astonishing rate. The 25 years that followed Andrew Jackson's victory at New Orleans represented a critical period for the nation's economic growth. During these years the United States overcame a series of serious obstacles that had stood in the way of sustained economic expansion. The development of steamboats, canals, and ultimately railroads reduced transportation costs and speeded communications. The rapid growth of cities created expanding markets for industrial goods. Improvements in farming dramatically increased agricultural productivity, stimulated industrialization by paying for imports of machinery and manufactured goods, and freed many farm children to work in industry and commerce. A series of technological innovations, highlighted by the development of the "American System" of mass production and interchangeable parts, stimulated productivity.

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