28 Early Republic Economic Development
The growth of the American economy reshaped American life in the decades before the Civil War. Americans increasingly produced goods for sale, not for consumption. With a larger exchange network connected by improved transportations, the introduction of labor-saving technology, and the separation of the public and domestic spheres, the market revolution fulfilled the revolutionary generation’s expectations of progress but introduced troubling new trends. Class conflict, child labor, accelerated immigration, and the expansion of slavery followed. These strains required new family arrangements and forged new urban cultures.
American commerce had proceeded haltingly during the eighteenth century. American farmers increasingly exported foodstuffs to Europe as the French Revolutionary Wars devastated the continent between 1793 and 1815. America’s exports rose in value from $20.2 million in 1790 to $108.3 million by 1807. But while exports rose, exorbitant internal transportation costs hindered substantial economic development within the United States. In 1816, for instance, $9 could move one ton of goods across the Atlantic Ocean, but only 30 miles across land. An 1816 Senate Committee Report lamented that “the price of land carriage is too great” to allow the profitable production of American manufactures. But in the wake of the War of 1812, Americans rushed to build a new national infrastructure, new networks of roads, canals, and railroads. In his 1815 annual message to Congress, President James Madison stressed “the great importance of establishing throughout our country the roads and canals which can best be executed under national authority.” State governments continued to sponsor the greatest improvements in American transportation, but the federal government’s annual expenditures on internal improvements climbed to a yearly average of $1,323,000 by Andrew Jackson’s presidency.
State legislatures meanwhile pumped capital into the economy by chartering banks and the number of state-chartered banks skyrocketed from 1 in 1783, 266 in 1820, 702 in 1840, to 1,371 in 1860. European capital also helped to build American infrastructure. By 1844, one British traveler declared that “the prosperity of America, her railroads, canals, steam navigation, and banks, are the fruit of English capital.”
Economic growth, however, proceeded unevenly. Depressions devastated the economy in 1819, 1837, and 1857. Each followed rampant speculation—bubbles—in various commodities: land in 1819, land and slaves in 1837, and railroad bonds in 1857. But Americans refused to blame the logic of their new commercial system for these depressions. Instead, they kept pushing “to get forward.”
The so-called “Transportation Revolution” opened for Americans the vast lands west of the Appalachian Mountains. In 1810, for instance, before the rapid explosion of American infrastructure, Margaret Dwight left New Haven, Connecticut, in a wagon headed