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Social Development: North and South, The Market Revolution in the North

New England manufacturers, strict construction, old Northeast, internal improvements, new Northwest

By the 1820s, farmers no longer produced mainly for themselves and their neighbors, selling any excess production on international markets. Most Northern farms had become business operations. They specialized in a small range of marketable crops (grain, meat, dairy products) and sold the food they produced to an internal market made up of Americans who had moved to towns, cities, and industrial villages.

In turn, these urbanized and industrialized Northerners provided farmers with finished goods (hats, shoes, cotton cloth, furniture, tools) that had previously been made in rural households and neighborhoods or imported from Europe. With this self–sustaining internal market, the North stepped out of the old colonial relationship in which America produced food and raw materials for Europe (primarily Britain) in exchange for foreign finished goods. The northern United States was no longer on the colonial periphery of the world market economy. It was taking its place as part of the financial and industrial center.

This internal market revolution would have been impossible without dramatic improvements in transportation. After 1815 Congress repeatedly considered nationally planned and funded internal improvements. But these plans were voted down by congressmen who favored states’ rights and a strict construction of the Constitution—the notion that Congress could legislate only in areas explicitly granted to it by the Constitution. State governments took up the slack by building roads and canals themselves and by subsidizing private corporations that built them. The result was a system of roads, canals, and—by the 1840s and 1850s—railroads that reflected no single vision of a national system. Instead, the transportation map reflected the ambitions of the most prosperous and active states.

The first and most spectacular example was the Erie Canal, completed by the state of New York in 1825. It connected the Hudson River at Albany with Lake Erie at Buffalo. The canal provided farmers in western New York and in the sections of the Northwest that drained into the Great Lakes with a continuous water route east to New York City—and from there to national and international markets. Steamboats provided a similar service for farms in areas that drained into the Ohio and Mississippi rivers. The upriver trip from New Orleans to Louisville, Kentucky, had taken three to four months via keelboat before 1815. Steamboats cut that time to one month. In the 1850s railroads, although more expensive than water routes, brought the manufacturing towns and the food–producing farmers even closer together. These improvements quickly reduced the cost of transportation. The cost of moving farm produce and manufactured goods over long distances fell 95 percent between 1815 and 1860. With that drop, farmers could grow wheat in Indiana and sell it at a profit in New York City, while New England manufacturers could make work shoes and sell them to the farmers of Indiana. Transportation had transformed the old Northeast and the new Northwest into an integrated market society.



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