The Market Revolution and Sectional Economies

1. The Market Revolution and Sectional Economies By Clay Finley

2. What You Should Learn From This PowerPoint • The Market Revolution changed America from a primarily subsistence and barter economy to an economy that relied on credit and long distance trade • The Market Revolution changed the everyday lives of most Americans • The North developed into a more business and trade oriented economy while the south relied on cash crops and the slave trade • Differing economies in the North and South led to conflicting views about legislation and a feeling of animosity between the two regions

3. Prior to the Market Revolution • In the early 1800’s most households consumed what they produced and sold only small surpluses to nearby markets • Subsistence agriculture as well as extensive bartering were mainstays of the average American’s life • Mainly only planters near port-cities produced cash-crops • A majority of items were manufactured in the home

4. Transportation Revolution • Overland toll roads, such as the National Road failed to meet the need for cheap transportation over great distances • Rivers proved to the most effective mode of transportation • The invention of the Steamboat in 1807 led to more efficient river trade • Canals were needed to link the Great Lakes and several rivers with some of the coastal states • The Erie Canal was finished in 1825

6. Credit and Banking • Credit was essential to the Market Economy • Long-distance transactions involving credit and deferred payment required more money • The government could not keep up with the demand for more capital so private and state banks began issuing banknotes • Congress did not re-charter the Bank of the United States in 1811 and more state and private banks were created • These banks were under regulated and risky • The second BUS was established in 1816 to serve as a check on the state banks • An overextension of credit led to the Panic of 1819

8. Commercial Agriculture • Between 1800 and 1840 agricultural output increased at an annual rate of about 3 percent • Many of the crops were grown for sale rather than to be consumed at home • Technologies such as the iron plow and grain cradle made crops easier and cheaper to harvest • The availability of cheap, good land and changes in marketing were the most important reasons for the beginning of commercial agriculture

9. Grain Cradle

10. Early Industrialism • The “putting-out” system of manufacturing was when merchant capitalists paid people to create products in their own homes then picked up the product and took charge of distribution • This type of home manufacturing was mainly in the Northeast and primarily was performed by farming families trying to generate income during the growing off-seasons • Francis Cabot Lowell memorized how a power loom was constructed during his trip to England from 1810-1811 • A mill was built in America and the success of it and others like it led to a shift of investment capital from oceanic trade into manufacturing

11. Early Industrialism • The west also began to industrialize-Distilleries in Kentucky and Ohio produced corn whiskey at great profit • Industrialization did not lead to a complete change in the nation • In 1840 63.4 percent of the country’s labor force was employed in agriculture • 8.8 percent of workers worked directly in factory production • Although these numbers are not huge, they are a large change from 1810 when 83.7 percent worked in agriculture and only 3.2 percent worked directly in factory production

13. Market Economy • The market economy opened up vast amounts of wealth to the American populace, but at the same time increased anxiety due to boom-bust cycles • Economic opportunity increased for white males • The United States became a player on the global economic stage • The steady change from a semi-subsistence economy led to differing economies for different regions of the country

14. The Southern Economy

15. Slavery • The number of slaves tripled between 1810 and 1860 to nearly 4 million • The cotton growing areas of the South needed slaves in order to be profitable

16. The Internal Slave Trade • Due to rising slave prices and falling slave demand in the upper south, planters began to sell slaves for profit • This slave trade six to seven hundred thousand slaves farther south between 1815 and 1860 • The chances of a slave child in the upper south in 1820 to be “sold South” by 1860 was as high as 30 percent • Upper southerners such as Virginians, Kentuckians, and Marylanders were divided on whether they should industrialize or stick with the plantation economy

18. The Cotton Kingdom • Cash crops such as cotton increased the need for slavery • The cotton gin increased the profitability of cotton • Between 1792 and 1817 the South’s output of cotton rose from 13,000 bales to 461,000. 1.35 million by 1840 and 4.8 million by 1860 • By the 1850’s three quarters of the world’s cotton supply came from the south

20. Planters • Fewer than 1 percent of all whites owned more than fifty slaves • Although few in number, planters greatly influenced southern life • Class could be judged by the amount of slaves that one possessed • The planter elite was on top of the southern social hierarchy

21. Small Slaveholders • 88 Percent of all slaveholders in 1860 owned less than twenty slaves • Relations between owners and slaves was more intimate than on larger estates • Marginal slaveholders often fell into poverty and were forced to either sell their slaves or give them shorter rations

22. Yeoman Farmers • Majority of southern whites were yeoman farmers • They owned land and worked it themselves • Although they didn’t directly benefit from slavery most yeomen farmers defended the institution on some occasions because they had the dream of someday becoming wealthy enough to be a slave holder • Yeoman farmers viewed black servitude as a guarantee of their own liberty and independence

24. The Northern Economy and the Industrial Revolution

25. The Industrial Revolution • The Factory mod that had originated in the cotton mills of New England extended to other products • The gathering of a supervised workforce in a single place, the payment of cash to workers, and the use of interchangeable parts all led to the emerging factory production • In a factory standardized parts could be manufactured in bulk • Despite the increase of factories small workshops predominated in most industries

26. The Industrial Revolution • Technological advances revolutionized many industries • Elias Howe invented the sewing machine in 1846 and laid the groundwork for the ready to wear clothing industry • Despite industrialization factory workers still remained a small fraction of the workforce • 60 percent of the gainfully employed worked the land

27. Immigration Provides Labor • Between 1820 and 1840 700,000 immigrants arrived in the United States • Most were from the British Isles or continental Europe • Between 1840 and 1860 about 4.2 million people emigrated to America • Most immigrants ended up as wage workers in factories, mines, and construction camps

28. Northern Economy • The north had five times the amount of factories as the south • 90 percent of the nation’s skilled workers lived in the north • Immigrants provided an influx of labor that would stabilize skyrocketing wages • Manufacturing as well as semi-subsistence farming, trade, and ship building were staples of the northern economy

29. The Sectional Divide

30. Controversy Over Tariffs • Tariffs are tariffs placed on imported goods • Southerners mostly did not support increasing tariffs while northerners did • Southerners imported most of their goods and therefore did not want to increase the prices • Northerners had more manufacturing and wanted to decrease competition by increasing the price of imported goods • As more and more immigrants flocked to the north, thus increasing the northern representation in the House of Representatives, southerners began to fear that much of their legislation would be blocked

31. The Tariff of Abominations • Enacted in 1828 to protect northern manufacturers from being driven out of business by lower priced European goods • Southerners vehemently opposed the tariff because they did not wish to pay higher prices for goods that their region did not produce • The tariff would help lead to the Nullification Crisis

33. Wilmot Proviso • Proposed to ban African Americans—slave or free—from any territory gained by the Mexican War • Northerners wanted to preserve land for free whites • Many southerners wanted to gain more slave territory and therefore gain more pull in the national government as well as open up more fertile land

35. The Civil War • Economic differences led to ideological differences which eventually resulted in the Civil War • The market revolution and resulting sectional economies increased sectional anxiety and was a major catalyst for the Civil War