The transition from an agricultural to an industrial economy took more than a century in the United States, and entered its first phase from the 1790s through the 1830s. The shift from handmade to machine-made products began an era where increased productivity created a higher standard of living than had been known in the pre-industrial world.
The beginning of the American Industrial Revolution is often attributed to Samuel Slater who opened the first industrial mill in the United States in 1790 with a design that borrowed heavily from a British model. Slater's technology increased the speed with which cotton thread could be spun into yarn. While he introduced a vital new technology to the United States, the economic takeoff required several other elements before it would transform American life.
The chief breakthrough of the Industrial Revolution was the "factory system" where work was performed on a large scale in a single centralized location. The most famous mill town was Lowell, Massachusetts, which opened in 1823. The preferred labor were females because they paid the young girls less than men. These female workers, were called "Lowell Girls.”
The rise of wage labor at the heart of the Industrial Revolution exploited working people in new ways. The first strike among textile workers protesting wage and factory conditions occurred in 1824 and even the model mills of Lowell faced large strikes in the 1830s.
Dramatically increased production, like that in the New England's textile mills, were key parts of the Industrial Revolution, but required an expanded system of credit to help entrepreneurs secure credit and an improved transportation system for raw materials to reach the factories and manufactured goods to reach consumers.
Alexander Hamilton's Bank of the United States enjoyed great success, which led to the opening of branch offices in eight major cities by 1805. Although economically successful, a government-chartered national bank remained politically controversial. The key legal and governmental support for economic development in the early 19th century ultimately came at the state when the national bank closed; state governments responded by creating over 200 state-chartered banks. Rapid expansion of credit helped to exacerbate an economic collapse in 1819 that resulted in a six-year depression.
State support for internal transportation improvements lay at the heart of the nation's new political economy. Road, bridge, and especially canal building was an expensive venture, but most state politicians supported using government-granted legal privileges and funds to help create the infrastructure that would stimulate economic development.
The most famous state-led creation of the Market Revolution was undoubtedly New York's Erie Canal. Begun in 1817, the 364-mile man-made waterway flowed between Albany on the Hudson River and Buffalo on Lake Erie.
Source: Economic Growth and the Early Industrial Revolution
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