Economics Transportation Business of slavery Banking

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Economics / Transportation / Business of slavery
/ Banking
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Economics
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US Economy 1800-1860 I

• Most Americans worked as farmers, however changes
  begin to happen
• INDUSTRIAL REVOLUTION use of machines powered by
  sources other than humans or animals
• Northern emergence of factories in cities
  (industrial economy)
• Southern few factories mostly agrarian economy
  (cotton / tobacco)

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US Economy 1800-1860 II

• Post War of 1812 economy the US economy
  dramatically improved
• Market Revolution new generation of Americans
  make a living by
• 1. Buying and selling goods (merchants)
• 2. Borrowing and circulating money to collect
  interest (bankers)
• 3. Creating wealth (investors)

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SOUTH LEFT BEHIND

• Most economic changes between 1800 and 1860 occur
  in the North
• Biggest change INDUSTRIALIZATION
• The growth of industry
• Most industrial centers are in the North and near
  major rivers
• Why?
• Pennsylvania coal mining industry
• New England textile industry

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SAMUEL SLATER

• Immigrated to the US after learning how to build
  textile mills (Define)
• Using only his memory, he instructed workers to
  construct a textile plant in Pawtucket, Rhode
  Island in 1793
• Over the next 42 years in America
• Owned part or all of 13 textile factories
• Earned close to 1 million
• Impact by 1814 240 mills in PA, NY, NE

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NORTHERN ECONOMY I

• Land in New England was more productive if used
  for manufacturing
• The making of products by machinery
• Francis Cabot Lowell built the first centralized
  textile factory, meaning
• all the tasks involved in making one product were
  done in one place
• Impact Centralized factories were more
  profitable than farming and spread across to
  Northern cities in New York and Ohio in the
  1820s, 1830s, and 1840s

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NORTHERN ECONOMY II

• Market revolution leads to more changes
• Free enterprise system companies compete against
  each other to make as much money as possible
• This system is also called capitalism, which
  rewards people (with money) who find a better,
  faster, and more efficient way to run their
  business
• backbone of the current US economy

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NORTH RISE OF CITIES I

• Using the same principles of the Market
  revolution, Northern farmers were becoming more
  efficient as well ?
• People no longer needed to grow their own food
  and could now work in factories in urban areas
  (or cities)
• Americans moved to cities to work
• Increased sizes of cities in area population
• Population density amount of people within a
  given space

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NORTH RISE OF CITIES II

• 1810 6 of Americans lived in cities
• 1840 12 of Americans lived in cities
• Since most people worked all day there was need
  for public institutions like schools, hospitals,
  etc.
• Most lived in cheap, crowded, unsanitary
  apartments called tenements
• Most infamous The Five Points in NYC (featured
  in Gangs of New York)

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ELI WHITNEY

• Skilled inventor cotton gin and guns
• Interchangeable parts produced parts made to an
  exact standard
• Cotton Gin a machine that separated the seeds
  from the raw fiber of the cotton
• Impact by hand a worker could clean 1 pound of
  cotton per day with the gin operated by water
  power a worker could clean 1,000 pounds of cotton
  per day
• helped to increase production cotton

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COTTON GIN

• A machine that separated the seeds from the raw
  fiber of the cotton
• Invented by Eli Whitney
• Revolutionized cotton production in the South
  with four major impacts

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4 EFFECTS OF COTTON GIN

• Large demand for cotton means
• 1. Increased profits of cotton ? US exports
  boomed 6,000
• 2. Souths economy dependent on cotton ?
  possible problems?
• 3. Planters looking for new farm land ? move to
  new South (AL, MS, LA, TX)
• 4. The need for more labor ? slave population
  double from 70 K to 1.5 M

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KING COTTON

• Why Cotton?
• Cotton clothed all of America and Europe
• 1820 South produced 160 million pounds
• 1830 South produced 320 million pounds
• 1840 South produced over one billion pounds
• By 1860 Cotton (and cotton products) made up 2/3
  of all American exports
• Cotton created wealth for the South

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THE NEW SOUTH

• The South included 6 of the 13 colonies
• The old South included Delaware, Maryland,
  Virginia, North Carolina, South Carolina, and
  Georgia
• The New South included Kentucky, Tennessee,
  Alabama, Mississippi, Louisiana, Arkansas, and
  Texas
• While tobacco and rice did not grow well in the
  new South, cotton thrived

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SOUTH RURAL FACTORS

• South was mostly rural
• Made up of farms and countryside not cities
• Climate most areas warm and fertile
• 200 to 290 frost free days
• Plentiful rain ? fertile soil
• Southern cities develop gradually
• Major cities Charleston (SC), New Orleans (LA),
  and Richmond (VA)
• Few Southerners lived in cities or towns

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CAUSE OF CIVIL WAR?

• Economic differences linked to SECTIONALISM
• Thus the cotton gin helped keep the southern
  states a land of slavery and of farming, while
  the northern states became a land of free labor
  and of industry. - Pathways page 211
• Time after time, these fundamental differences
  between North and South would cause friction
  between the two regions. - Pathways page 211

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Sectional Specialization

• Northwest grain, dairy, meat, breweries, and
  slaughtering
• Northeast early industry and banks more cities
  and factories
• use Southern cotton to make goods
• South farming and slavery
• supply North cotton

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Transportation
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DO NOW DURING COLONIAL TIMES WHAT WAS THE
FASTEST FORM OF TRANSPORTATION AVAILABE?
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NEW TRANSPORTATION

• 1. STEAMBOATS
• 2. CANALS
• 3. ROADS / TURNPIKES
• 4. RAILROADS
• IMPACTS

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STEAMBOATS

• STEAM POWER first used to power textile
  factories
• Inventors used steam to power boats up major
  rivers (like the Mississippi River)
• Called STEAM BOATS
• MAJOR IMPACT Western
• farmers were able to send
• there goods to all markets

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CANALS MAN MADE RIVERS

• Waterways were the cheapest way to transport good
  and people.
• However not all areas were connected
• So innovators created man made rivers called
  CANALS
• Best known canal ERIE CANAL
• Connected Hudson River with Lake Erie
• IMPACT the Northwest was able to trade goods
  with the Northeast
• Map of canal on page 212

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ROADS / TURNPIKES

• Early roads carved out of forests and were
  extremely bumpy
• CUMBERLAND ROAD
• 1st federally built road and well constructed
• Stretched from Maryland to Ohio
• TURNPIKES
• Privately built roads
• Made money from collecting tolls, after paying
  workers would turn the pike (similar to the
  subways) to let the driver through

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RAILROADS (RRs)

• Developed first in England
• Used steam powered engine to create a STEAM
  LOCOMOTIVE
• Self-propelled vehicle which pulled RR cars
• First RR connected Baltimore and Ohio
• Known as the B O Railroad
• 1840 America has more tracks than any other
  country in the world
• Most RRs are located in the North

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IMPACT OF TRANSPORTATION

• Most canals and RRs in the North
• Another example of SECTIONALISM
• Improved communication
• More post offices and faster mail
• Newspapers now published daily
• Able to link an expanding country
• Improved literacy rate

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BANKING
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Rise of Banking Industry

• Banking Industry grew from economic changes
  during the Market Revolution
• Banks provided entrepreneurs, or businessmen,
  with capital, or money, that was used to start up
  new businesses
• Banks made money by charging interest for the
  loans it made
• Some banks were backed by the federal or state
  governments

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1800s CURRENCY

• National Govt did not print paper money
• Most people preferred being paid in specie (gold
  or silver coins)
• Most common form of money bank note
• Piece of paper issued by a bank
• Problem values of bank notes were unpredictable
  and often times a 100 notes were worth 50 or
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• Despite problems, banks helped to expand
  Americas economy in the 1800s

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Problems with Banking

• There were no laws that regulated banks
• Private accounts and loans were not insured
• Banks were not required to keep a certain amount
  of money in their bank
• PANICS occurred When banks lost money from bad
  loans, people with money in the bank panicked and
  took their money out of the bank.
• Panics led to depressions and public fear of
  the national bank

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Support for the Nat. Bank

• Biggest Supporter Alexander Hamilton
• Thought it would provide US with the ability to
  pay debts and make money
• McCulloch v. Maryland (1819)
• Supreme Court Chief Justice John Marshall ruled
  that Congress has the right to make all laws
  necessary and proper
• In addition, he ruled that states could not
  destroy the national bank through measures like
  taxation.

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Against the Nat. Bank

• Groups against the bank included Democrats,
  Southerners, Westerners, and farmers
• Biggest Antagonist Andrew Jackson
• Felt the bank was a monster
• Held the bank responsible for panics
• As President, Andrew Jackson vetoed the
  re-chartering the National Bank
• This action eliminated the Nat. Bank