A New Nation, America from 1789 to 1860

 

If you study American history from 1789 to 1860 (just before the start of the Civil War), the political history is very complicated. But remember what caused most of this political conflict and uneasy compromises. The dynamic changes in the underlying economy. Two in particular – the spectacular increase in slave-produced cotton and the beginning of the Industrial Revolution. They were related.

 

What is the Industrial Revolution? At its heart is power-driven metal machinery producing huge quantities of goods. At first, the power was supplied by steam engines and water wheels. Later, in the 20^th century, electricity. All of this used huge amounts of fossil fuels – first coal, later oil and natural gas were addedew.

 

A trend that continued from colonial times – the unusual population growth of America. This is part of demographics, the study of populations. America has had spectacular population growth throughout its history, from 4 million people in 1790 to 30 million in 1860 to over 320 million today. Two reasons for this growth were high birth rates and open immigration. Also, Americans tended to be healthier than the people in most other countries, mostly because of plentiful food. This is an important part of the American story, as you saw in colonial history. 

 

There are lots of numbers when you talk about demographics, economic growth, and the Industrial Revolution. I’ll try to keep them to a minimum, hopefully just the more important ones. I also round up the numbers to make them easier to read.

 

The New Government, 1789-1798

 

After the Constitution was ratified and the structure of the new government was established, Americans voted in their first elected representatives in 1789. George Washington was elected president. He appointed Thomas Jefferson as Secretary of State (in charge of foreign affairs) and Alexander Hamilton as Secretary of the Treasury (financial affairs). James Madison, who wrote the first draft of the Constitution, became Speaker of the House of Representatives and established the structure and procedures in the House that are still used today.

 

The government faced many of the problems left over from the Revolution. Because of the fight with the British army, Americans did not want a large standing (permanent) army.  They saw a permanent army as a threat to their liberties. America could do this because there was no serious threat on the American continent. Also, they didn’t want to get involved in the European wars and political conflicts. “No entangling alliances” as Washington said. This foreign policy was possible because America was separated from Europe by the 3,000 miles of the Atlantic Ocean. 

 

This was not to be. What happened in Europe during this period would have a profound impact on American history.

 

The same year the U.S. government began, the French Revolution broke out. The French revolutionaries used similar ideas as the Americans. They wanted to destroy the power of the French king and the aristocracy. In 1793, they beheaded the king and queen and thousands of others. The other countries of Europe – all with kings – were appalled. They declared war on France. One of the countries was England. England would fight France, off and on, until 1815.

 

France was taken over by a general named Napoleon. He would fight until he eventually lost in 1815. Wars are expensive and Napoleon needed money. France had laid claim to part of America. But Napoleon, fighting large wars in Europe, knew he could not defend the land from west-moving Americans. In 1803, he offered the land to America. President Jefferson bought it for $11 million. It was called the Louisiana Purchase. It was the land between the Mississippi River and the Rockies. It doubled the size of the United States. Later, America acquired Florida from Spain.

 

Hamilton and Financing the Government

 

All governments must raise money to pay for government activities. But the U.S. government was limited in how it could raise money. The Constitution said the government could not tax American exports. No income taxes. The attempt to put a tax on goods, especially whiskey, led to riots and demonstrations that threatened the new government. What was left? Some revenue came in from land sales but not enough. Hamilton was given the task to solve this problem.

 

He was ready. He started life as a teenager working for a merchant in the Caribbean. After the Revolution, he spent years studying the history and workings of government finance. His options were limited but he came up with a brilliant (and controversial) plan. He would tax imports.

 

There was a larger problem. The currency issued during the Revolution (called Continentals) was worthless. The new government had to establish creditability, faith in any new currency. Hamilton’s idea was to buy back the Continentals at face value. In exchange, the government would issue government bonds that paid interest and could be redeemed (sold back to the government) in the future. The bonds could also be traded like money. How to pay for them? From the revenue that came from taxing imports. Hamilton figured that tariffs on imports would cover government expenses and the cost of redeeming the bonds. He was right.

 

I believe this was part of a larger plan he had. Hamilton saw the beginnings of the Industrial Revolution. He believed that manufacturing would be part of an economically strong country, as was happening in England.

 

In 1791, Hamilton helped found the Society for Establishing Useful Manufactures (S.U.M.), to harness the waterfall energy of the Great Falls of the Passaic River. The society founded Paterson, New Jersey, which became the start of the industrial revolution in America. The Great Falls would provide tremendous energy to drive many large water wheels that powered machinery. Paterson was America’s first industrial city and would be a major manufacturing center for over 150 years.

 

Hamilton’s grand plan:

·      Tax imports to raise revenue for the American government.

·      Develop manufacturing to produce goods for the domestic market.

·      Use manufacturing to drive American economic development and growth in addition to agriculture.

·      Develop a class of manufacturers, bankers, and merchants.

 

Hamilton’s vision was bitterly opposed by Jefferson and most Americans who thought about America’s future. Jefferson, when he was ambassador to France, saw the negative side of the beginnings of the Industrial Revolution in France and England. Dirty, crowded cities. Pollution. A degraded industrial labor force. Banking and finance. He saw all of this as a threat to a democracy based on independent, land-owning farmers.

 

These two different visions of the future would be the basis of later bitter political conflicts.

 

Slavery and Cotton

 

The issue of slavery was mostly ignored in the early years. 

 

Some people like Jefferson hoped that slavery would be unprofitable and wither away. This was not entirely wishful thinking.

 

Importing slaves became illegal at the end of 1807. The Virginia and Maryland tobacco industry, the largest user of slaves, was in permanent decline after the American Revolution. Planters turned to diversified agriculture, including grain crops like wheat and fruit orchards. It was not obvious that the same number of slaves were needed or that owning and supporting slaves was profitable in the new environment.

 

It is one of the great ironies of history that the beginning of the Industrial Revolution in England was responsible for the survival and expansion of slavery in America. The first large industry in England was the power-driven mechanical production of cotton cloth. This created a huge growing demand for cotton. Production of cotton cloth exploded after the war with French ended. It turned out that the largest and best growing area for the type of cotton that was best for machine production was in the American South.

 

Cotton production, 1790-1860

 

Small amounts of cotton had been planted and cultivated in the United States since before the American Revolution, mostly in the islands off the coast of South Carolina and Georgia. But there was a bottleneck to the rapid expansion of cotton growing. After the cotton was picked, the fibers had to be separated from the seeds. This was done by hand. Only about one pound of clean cotton could be produced per day. But, in 1793, a Connecticut mechanic name Eli Whitney was visiting Nathanael Greene’s widow in Georgia. He listened to the complaints of the local cotton growers. After tinkering for a few weeks, he invented the cotton gin. This was a fairly simple, hand-operated machine that could produce about seven pounds of cotton per day. Improvements increased output to about 50 pounds per day. By 1860, there were large power-driven cotton ginning factories.

 

Cotton planting expanded to the west very dramatically after 1815—all the way to Texas. Planters, growers, and slaves moved from the Eastern Seaboard throughout the South and then to the Mississippi River region. Planters who owned slaves took them with them, thus avoiding the largest cost of starting a large cotton plantation. 

 

The growth in cotton production was spectacular. Only about 1.5 million pounds were produced in 1790. Then, after the invention of Whitney’s cotton gin, output increased to 85 million pounds in 1810. By 1840, output rose to 830 million pounds, 10 times that of 1810. In 1860, the South produced the largest crop ever – over 2 billion pounds. 

 

It was by far the nation's main export, accounting for about 60% of the value of total exports. The South was producing about 2/3 of the world’s supply of cotton. 

 

What led to an expansion of slavery was the unexpected huge increase in demand for cotton, first in England and then in the cotton mills of New England. Cotton was grown elseward but nowhere else could a growing region produce the large and rapidly increasing amount of the type of cotton that manufactures demanded.

 

Railroads, 1830-1860

 

Starting in the 1830s, America built a large railroad network.

 

America began building railroads in the 1830s, right after England built the first railroad in 1830. By 1850, there was 8,600 miles of track. Then came a railroad-building boom. By 1860, there was 30,800 miles of track. America had by far more miles of track than any other country. New York had the most miles of track, followed by Ohio, Illinois, Pennsylvania, and Indiana. The southern states had about 1/3 of the total trackage.

 

Railroad locomotives and tracks were a huge spur to iron production and manufacturing. 

 

The Economic Integration of the Three Regions

 

The three regions of the American economy were becoming economically integrated but politically divided over the issue of slavery. America’s first large industry was also cotton cloth production in New England, with its own demand for Southern cotton. About 75% of Southern cotton was exported and 25% went to New England mills. Much of the cotton cloth output was used to make cheap clothing for slaves. The shoe factories of New England made most of the shoes worn by slaves. Southern families bought home furnishings from Northern factories. In addition, much of the cotton trade was financed by Northern bankers. Southern planters borrowed large amounts of money from Northern bankers to expand production by buying more land and more slaves.

 

Politicians and commentators debated the future of America. What no one foresaw was that these three parts of the economy of America were going to be connected.

 

What would tie the three regions together was the transportation revolution, based on high pressure steam engines that drove railroad locomotives and steamboats. 

 

Southern railroads and steamships brought cotton to Southern ports. By 1860, there were about 800 steamboats on the Mississippi. Ships, first sailing ships, later supplemented by steam ships, carried the cotton to New York. Transatlantic ships carried the cotton to England, mostly to Liverpool.

 

Northern farm families streamed into Ohio, Indiana, and Illinois in search of new farmland. These states had the biggest increase in population between 1850 and 1860. These farmers produced food for the increased population of Eastern cities and for exports. Produce went to market first through canals and then mostly by rail. Beside moving cotton to market, the greatly increase speed and capacity of railroad brought Western grain east and manufactured goods west. The new Western farms also supplied corn and pork to the Southern plantations, much of it sent south on Mississippi steamboats.

 

By 1860, America had three sources of economic growth:

 

Expansion of agriculture based on population growth, unlimited land for independent farmers and westward expansion. 

 

Expansion of slave-based cotton production. By 1860, Mississippi produced the most cotton, followed by Alabama and Louisiana.

 

By 1860, the Industrial Revolution in Americas was well on its way. More money was invested in cotton mills than in any other industry. The second largest manufacturing industry was the iron industry.

 

To the Civil War

 

The issue of slavery was the main cause of most of the political battles during this period, including the annexation of Texas and the war with Mexico to make Texas a slave state. There was a rise of anti-slavery sentiment in the North and West. Arguments were increasingly made for the abolition of slavery. There was effective propaganda, like Harriet Beecher Stowe’s book Uncle Tom’s Cabin. In response, the Southern defense of slavery became fierce – no compromises. Slave ownership and cotton production became the basis of the economy, political power, society, and culture of the South. 

 

There was a danger to the expansion of cotton production and slavery as more new states in the future would be “free soil” (no slavery) states than new slave states. The South would lose political power in the national government and might be threatened with the abolition of slavery. Arguments on both sides became very emotional. When Abraham Lincoln was elected president in 1860, the South saw him as a threat to the survival of slavery. Although he hated slavery, he did not advocate its elimination. He wanted to stop it spreading to new states. Southern planters believed they needed new land as old cotton lands wore out and produced less cotton per acre. The Civil War – the South’s attempt to leave the union – started even before Lincoln was inaugurated. 

 

The 1860 Census – the United States on the Eve of the Civil War

 

Total population – 31.4 million

White population – just under 27 million (86%)

Slave population – just under 4 million (13%)

Free blacks – just under 500,000 (1.6%)

       Does not exactly equal 100% because of rounding

 

Number of whites in the South – 5,800,000. This is the number of whites in the South in states that left the United States in the Civil War.

 

Number of whites in the North – 21,200,000. This includes slave states that did not leave the Union in the Civil War.

 

By 1860, despite continuing immigration, most Americans were native-born. Of the 27 million whites, about 4 million were foreign-born. Just under 75% of the immigrants came from Ireland (because of the famine) and the German States (Germany did not become a unified country until 1871). Of the black Americans, almost all were native-born. 

 

Remember there were about 700,000 slaves in 1790. Most of the increase came from the high birth rates in the number of slaves.

 

There were more slaves than whites in Mississippi and South Carolina. Slaves made up at least 40% of the total population in Alabama, Georgia, and Louisiana (almost 50%).

 

Almost 400,000 white families owned slaves. But most of them were owned by a small percent of the slave-owners. About 280,000 whites owned fewer than 10 slaves. At the other end, about 11,000 whites owned 50 slaves or more. 14 of them owned 500 slaves or more.

 

The sale and financing of the distribution of the Southern cotton crop was handled by Northern merchants and bankers, especially in New York City. That’s how the famous Lehman Bank got started. The Lehman family were cotton brokers in Alabama. They sent one son to New York to handle the brokerage and distribution of cotton. The business expanded to the financing of the cotton trade and eventually into banking.

 

providing the basis for the rapidly growing cotton textile industry in Britain and France, as well as the Northeastern United States. Cotton exports helped pay for the imports of machinery and iron rails.